Synovus Announces Earnings for the First Quarter

Diluted Earnings per Share increased 15.2% as compared to 1Q14

COLUMBUS, Ga.--()--Synovus Financial Corp. (NYSE: SNV) today reported financial results for the quarter ended March 31, 2015.

First Quarter Highlights

  • Net income available to common shareholders for the first quarter 2015 was $51.4 million or $0.38 per diluted share as compared to $50.6 million, or $0.37 per diluted share for the previous quarter and $45.9 million, or $0.33 per diluted share for the first quarter 2014.
  • Total average loans grew $254.1 million or 4.9% annualized from the previous quarter and $1.03 billion or 5.1% as compared to the first quarter 2014.
  • Average core deposits grew $286.6 million or 5.9% annualized from the previous quarter and $529.8 million or 2.7% as compared to the first quarter 2014.
  • Adjusted pre-tax, pre-credit costs income was $101.0 million for the first quarter 2015, an increase of $1.4 million from $99.6 million for the previous quarter and an increase of $4.5 million or 4.7% as compared to the first quarter 2014.
  • The company continued to return capital to shareholders during the quarter, acquiring an additional $59.1 million of common stock. Since October 2014 through April 20, 2015, the company has repurchased $160.0 million of common stock, reducing total share count by 6.0 million or 4.3%.

"Growth in average loans and core deposits, continued improvement in credit quality, and a disciplined focus on expense management contributed to a solid first quarter,” said Kessel D. Stelling, Synovus Chairman and CEO. “Investments in key talent as well as new and existing business lines continue to pay dividends as evidenced by revenue growth in mortgage banking, brokerage, and SBA lending. Our senior housing, equipment finance, and medical office specialty lines also experienced significant loan growth during the quarter. As we move forward, our team remains committed to improving the customer experience and building a more profitable, efficient, and competitive bank.”

Balance Sheet

  • Total loans ended the quarter at $21.11 billion, up $8.5 million from the previous quarter and up $947.2 million or 4.7% as compared to the first quarter 2014.
    • Commercial and industrial loans grew by $33.8 million from the previous quarter and $346.6 million or 3.5% as compared to the first quarter 2014.
    • Commercial real estate loans declined by $13.2 million from the previous quarter and increased by $319.8 million or 4.9% as compared to the first quarter 2014.
      • Residential C&D and land acquisition portfolios declined by $19.4 million.
    • Retail loans declined by $13.4 million from the previous quarter and increased by $281.8 million or 7.7% as compared to the first quarter 2014.
  • Total average loans grew $254.1 million or 4.9% annualized from the previous quarter and $1.03 billion or 5.1% as compared to the first quarter 2014.
  • Total average deposits for the quarter were $21.62 billion, and grew by $279.0 million or 5.3% annualized from the previous quarter and $889.8 million or 4.3% as compared to the first quarter 2014.
  • Average core deposits for the quarter were $20.02 billion, and grew by $286.6 million or 5.9% annualized from the previous quarter and $529.8 million or 2.7% as compared to the first quarter 2014.
  • Average core deposits, excluding state, county, and municipal deposits, grew by $247.1 million or 5.7% annualized from the previous quarter and $670.7 million or 3.9% as compared to the first quarter 2014.
    • Average non-interest bearing demand deposit accounts increased 4.5% annualized from the previous quarter and 10.8% as compared to the first quarter 2014.
    • Average money market deposits increased 10.1% annualized from the previous quarter and 2.9% as compared to the first quarter 2014.

Core Performance

Adjusted pre-tax, pre-credit costs income was $101.0 million for the first quarter 2015, an increase of $1.4 million from $99.6 million for the previous quarter and an increase of $4.5 million or 4.7% as compared to the first quarter 2014.

  • Net interest income was $203.3 million for the first quarter 2015, down $4.2 million from $207.5 million in the previous quarter and up $2.7 million or 1.4% as compared to the first quarter 2014.
  • The net interest margin declined six basis points to 3.28% compared to 3.34% in the previous quarter. The yield on earning assets was 3.73%, five basis points lower than the previous quarter, and the effective cost of funds increased 1 basis point to 0.45%.
  • Adjusted non-interest income was $65.1 million, up $580 thousand or 0.9% compared to $64.5 million for the previous quarter and up $2.1 million or 3.3% as compared to the first quarter 2014.
    • Mortgage banking income increased $1.6 million or 32.5% from the previous quarter, driven by an 18.6% increase in production.
    • Financial Management Services revenues, consisting primarily of fiduciary and asset management fees and brokerage revenue, increased $690 thousand or 3.5% from the previous quarter, driven by a $363 thousand or 5.3% increase in brokerage revenue.
    • Core banking fees1 were $31.5 million, down $1.5 million or 4.6% from the previous quarter, driven by seasonality.
    • Gains from the sale of SBA loans of $1.5 million were up $829 thousand from the previous quarter.
  • Total non-interest expense for the first quarter 2015 was $178.9 million, down $6.0 million from the previous quarter and down $5.3 million or 2.9% as compared to the first quarter 2014.
  • Adjusted non-interest expense for the first quarter 2015 was $167.4 million, down $5.0 million or 2.9% from the previous quarter and flat as compared to the first quarter 2014.
    • Employment expense of $96.5 million increased $4.4 million from the previous quarter driven by seasonally higher employment taxes.
    • Professional fees of $5.6 million decreased $2.4 million from the previous quarter.
    • Advertising expense of $3.4 million decreased $4.7 million from the previous quarter.
    • FDIC insurance and other regulatory fees of $7.0 million decreased $1.2 million from the previous quarter.

Credit Quality

Broad-based improvement in credit quality continued.

  • Total credit costs were $15.7 million in the first quarter 2015 compared to $16.4 million in the previous quarter.
  • Non-performing loans, excluding loans held for sale, were $194.2 million at March 31, 2015, down $3.5 million or 1.8% from the previous quarter, and down $190.1 million or 49.5% from March 31, 2014. The non-performing loan ratio was 0.92% at March 31, 2015, compared to 0.94% at the end of the previous quarter and 1.91% at March 31, 2014.
  • Total non-performing assets were $270.1 million at March 31, 2015, down $16.7 million or 5.8% from the previous quarter, and down $228.1 million or 45.8% from March 31, 2014. The non-performing asset ratio was 1.28% at March 31, 2015, compared to 1.35% at the end of the previous quarter and 2.46% at March 31, 2014.
  • Total delinquencies (consisting of loans 30 or more days past due and still accruing) remain low at 0.27% of total loans at March 31, 2015 compared to 0.24% the previous quarter and 0.37% at March 31, 2014. Total loans past due 90 days or more and still accruing were 0.02% of total loans at March 31, 2015, unchanged from December 31, 2014 and compared to 0.03% at March 31, 2014.
  • Net charge-offs were $12.3 million in the first quarter 2015, down $3.9 million or 24.1% from $16.3 million in the previous quarter. The annualized net charge-off ratio was 0.23% in the first quarter compared to 0.31% in the previous quarter.

1 Include service charges on deposit accounts, bankcard fees, letter of credit fees, ATM fee income, line of credit non-usage fees, and miscellaneous other service charges.

Capital Ratios

Capital ratios remained strong and include the impact of common stock repurchases completed through March 31, 2015. March 31, 2015 ratios are Basel III transitional, and ratios prior to March 31, 2015 were based on Basel I rules.

  • Common Equity Tier 1 ratio was 10.78% at March 31, 2015.
  • Tier 1 Capital ratio was 10.78% at March 31, 2015 compared to 10.86% at December 31, 2014.
  • Total Risk Based Capital ratio was 12.64% at March 31, 2015 compared to 12.75% at December 31, 2014.
  • Tier 1 Leverage ratio was 9.65% at March 31, 2015 compared to 9.67% at December 31, 2014.
  • Tangible Common Equity ratio was 10.43% at March 31, 2015 compared to 10.69% at December 31, 2014.

First Quarter Earnings Conference Call

Synovus will host an earnings highlights conference call at 8:30 a.m. EDT on April 21, 2015. The earnings call will be accompanied by a slide presentation. Shareholders and other interested parties may listen to this conference call via simultaneous Internet broadcast. For a link to the webcast, go to www.synovus.com/webcasts. You may download RealPlayer or Windows Media Player (free download available) prior to accessing the actual call or the replay. The replay will be archived for 12 months and will be available 30-45 minutes after the call.

About Synovus

Synovus Financial Corp. is a financial services company based in Columbus, Georgia with approximately $28 billion in assets. Synovus provides commercial and retail banking, investment, and mortgage services to customers through 28 locally-branded divisions, 258 branches, and 343 ATMs in Georgia, Alabama, South Carolina, Florida, and Tennessee. See Synovus on the web at synovus.com.

Forward-Looking Statements

This press release and certain of our other filings with the Securities and Exchange Commission contain statements that constitute “forward-looking statements” within the meaning of, and subject to the protections of, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are forward-looking statements. You can identify these forward-looking statements through Synovus’ use of words such as “believes,” “anticipates,” “expects,” “may,” “will,” “assumes,” “should,” “predicts,” “could,” “would,” “intends,” “targets,” “estimates,” “projects,” “plans,” “potential” and other similar words and expressions of the future or otherwise regarding the outlook for Synovus’ future business and financial performance and/or the performance of the banking industry and economy in general. These forward-looking statements include, among others, our expectations on credit trends and key credit metrics; expectations regarding deposits, loan growth and the net interest margin; expectations on our growth strategy, expense initiatives, and future profitability, and the assumptions underlying our expectations. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve known and unknown risks and uncertainties which may cause the actual results, performance or achievements of Synovus to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are based on the information known to, and current beliefs and expectations of, Synovus’ management and are subject to significant risks and uncertainties. Actual results may differ materially from those contemplated by such forward-looking statements. A number of factors could cause actual results to differ materially from those contemplated by the forward-looking statements in this press release. Many of these factors are beyond Synovus’ ability to control or predict.

These forward-looking statements are based upon information presently known to Synovus’ management and are inherently subjective, uncertain and subject to change due to any number of risks and uncertainties, including, without limitation, the risks and other factors set forth in Synovus’ filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2014 under the captions “Cautionary Notice Regarding Forward-Looking Statements” and “Risk Factors” and in Synovus’ quarterly reports on Form 10-Q and current reports on Form 8-K. We believe these forward-looking statements are reasonable; however, undue reliance should not be placed on any forward-looking statements, which are based on current expectations and speak only as of the date that they are made. We do not assume any obligation to update any forward-looking statements as a result of new information, future developments or otherwise, except as otherwise may be required by law.

Use of Non-GAAP Financial Measures

The measures entitled average core deposits; average core deposits excluding average state, county, and municipal deposits; average non-interest bearing demand deposit accounts (DDAs) excluding average state, county, and municipal non-interest bearing DDAs; average money market deposits excluding average state, county, and municipal money market deposits; tangible common equity to tangible assets ratio; adjusted pre-tax, pre-credit costs income; adjusted non-interest income; and adjusted non-interest expense are not measures recognized under U.S. generally accepted accounting principles (GAAP) and therefore are considered non-GAAP financial measures. The most comparable GAAP measures are total average deposits; total shareholders’ equity to total assets ratio; income before income taxes; total non-interest income; and total non-interest expense, respectively.

Synovus believes that these non-GAAP financial measures provide meaningful additional information about Synovus to assist management and investors in evaluating Synovus’ capital strength and the performance of its core business. These non-GAAP financial measures should not be considered as substitutes for total average deposits; total shareholders’ equity to total assets ratio; income before income taxes; total non-interest income; and total non-interest expense determined in accordance with GAAP and may not be comparable to other similarly titled measures at other companies.

The computations of average core deposits; average core deposits excluding average state, county, and municipal deposits; average non-interest bearing DDAs excluding average state, county, and municipal non-interest bearing DDAs; average money market deposits excluding average state, county, and municipal money market deposits; tangible common equity to tangible assets ratio; adjusted pre-tax, pre-credit costs income; adjusted non-interest income; and adjusted non-interest expense; and the reconciliation of these measures to total average deposits; total shareholders’ equity to total assets ratio; income before income taxes; total non-interest income; and total non-interest expense are set forth in the tables below.

           
                       
Reconciliation of Non-GAAP Financial Measures
(dollars in thousands) 1Q15   4Q14   3Q14   2Q14   1Q14
 
Average core deposits
Average core deposits excluding state, county, and municipal deposits
Average non-interest bearing demand deposit accounts (DDAs) excluding average state, county, and municipal non-interest bearing DDAs
Average money market deposits excluding average state, county, and municipal money market deposits
Average total deposits $ 21,615,049 21,336,007 20,938,587 20,863,706 20,725,259
Subtract: Average brokered deposits   (1,594,822 ) (1,602,354 ) (1,494,620 ) (1,401,167 ) (1,234,847 )
Average core deposits   20,020,227   19,733,653   19,443,967   19,462,539   19,490,412  
Subtract: Average state, county, and municipal deposits   (2,224,193 ) (2,184,757 ) (2,045,817 ) (2,268,852 ) (2,365,096 )

Average core deposits excluding state, county, and municipal deposits

$

17,796,034

  17,548,896   17,398,150   17,193,687   17,125,316  
 
Average non-interest bearing DDAs $ 6,108,558 6,110,047 5,765,287 5,824,592 5,537,090
Subtract: Average state, county, and municipal non-interest bearing DDAs   (734,177 ) (794,852 ) (743,145 ) (654,228 ) (685,070 )
Average non-interest bearing DDAs excluding average state, county, and municipal non-interest bearing DDAs $ 5,374,381   5,315,195   5,022,142   5,170,364   4,852,020  
 
Average money market deposits $ 6,210,704 6,009,897 6,033,523 6,044,138 6,077,357
Subtract: Average state, county, and municipal money market deposits   (415,800 ) (356,343 ) (397,480 ) (371,538 ) (444,170 )
Average money market deposits excluding average state, county, and municipal money market deposits $ 5,794,904   5,653,554   5,636,043   5,672,600   5,633,187  
 
Tangible common equity to tangible assets ratio
Total assets $ 27,633,784 27,051,231 26,519,110 26,627,290 26,435,426
Subtract: Goodwill (24,431 ) (24,431 ) (24,431 ) (24,431 ) (24,431 )
Subtract: Other intangible assets, net   (1,061 ) (1,265 ) (1,471 ) (1,678 ) (1,883 )
Tangible assets   27,608,292   27,025,535   26,493,208   26,601,181   26,409,112  
 
Total shareholders’ equity 3,030,635 3,041,270 3,076,545 3,053,051 2,998,496

Subtract: Goodwill

(24,431 ) (24,431 ) (24,431 ) (24,431 ) (24,431 )

Subtract: Other intangible assets, net

(1,061 ) (1,265 ) (1,471 ) (1,678 ) (1,883 )

Subtract: Series C Preferred Stock, no par value

  (125,980 ) (125,980 ) (125,980 ) (125,980 ) (125,980 )
Tangible common equity $ 2,879,163   2,889,594   2,924,663   2,900,962   2,846,202  
Total shareholders’ equity to total assets ratio 10.97 % 11.24 % 11.60 11.47 11.34
Tangible common equity to tangible assets ratio 10.43 % 10.69 % 11.04 10.91 10.78
                       

 

Reconciliation of Non-GAAP Financial Measures, continued

(dollars in thousands) 1Q15   4Q14 3Q14 2Q14 1Q14
 
Adjusted Pre-tax, Pre-credit Costs Income
Income before income taxes $ 85,812 78,928 72,656 73,950 77,024
Add: Provision for losses on loans 4,397 8,193 3,843 12,284 9,511
Add: Other credit costs(1) 11,272 8,213 11,858 4,635 8,128
Add: Restructuring charges (107 ) 3,484 809 7,716 8,577
Add: Litigation settlement expenses (24) - 463 12,349 - -
Subtract: Investment securities gains, net (725 ) - - - (1,331 )
Add: Visa indemnification charges 375 310 1,979 356 396
Subtract: Gain on sale of Memphis branches, net (3)   -   -   -   -   (5,789 )
Pre-tax, pre-credit costs income $ 101,025   99,591   103,494   98,941   96,516  
 

Adjusted Non-interest Income

Total non-interest income $ 65,854 64,549 63,985 63,388 70,182
Subtract: Investment securities gains, net (725 ) - - - (1,331 )
Subtract: Gain on sale of Memphis branches, net(3)   -   -   -   -   (5,789 )
Adjusted non-interest income $ 65,129   64,549   63,985   63,388   63,062  
 
Adjusted Non-interest Expense
Total non-interest expense $ 178,908 184,883 193,749 182,205 184,161
Subtract: Other credit costs(1) (11,272 ) (8,213 ) (11,858 ) (4,635 ) (8,128 )
Subtract: Restructuring charges 107 (3,484 ) (809 ) (7,716 ) (8,577 )
Subtract: Visa indemnification charges (375 ) (310 ) (1,979 ) (356 ) (396 )
Subtract: Litigation settlement expenses (2)   -   (463 ) (12,349 ) -   -  
Adjusted non-interest expense $ 167,367   172,413   166,754   169,498   167,060  
                       

(1) Other credit costs consist primarily of foreclosed real estate expense, net.

(2) Amounts consist of litigation settlement expenses with respect to certain legal matters. Amounts for other periods presented herein are not reported separately as amounts are not material.

(3) Consists of gain, net of associated costs, from the sale of certain loans, premises, deposits, and other assets and liabilities of the Memphis, Tennessee branches of Trust One Bank, a division of Synovus Bank.

         
Synovus
 
INCOME STATEMENT DATA
(Unaudited)
(In thousands, except per share data) 2015

 

2014

1st Quarter
                       
First Fourth Third Second First '15 vs. '14
Quarter   Quarter   Quarter   Quarter   Quarter   Change  
 
Interest income $ 231,401 234,703 233,394 232,213 228,382 1.3 %
Interest expense 28,138   27,248 27,131 27,162 27,868 1.0  
 
 
Net interest income 203,263 207,455 206,263 205,051 200,514 1.4
Provision for loan losses 4,397   8,193 3,843 12,284 9,511 (53.8 )
 
 
Net interest income after provision for loan losses 198,866   199,262 202,420 192,767 191,003 4.1  
 
 
Non-interest income:
Service charges on deposit accounts 19,133 20,287 20,159 19,238 19,214 (0.4 )
Fiduciary and asset management fees 11,571 11,690 11,207 11,296 11,033 4.9
Brokerage revenue 7,251 6,887 7,281 6,707 6,213 16.7
Mortgage banking income 6,484 4,895 4,665 5,283 3,511 84.7
Bankcard fees 8,077 8,536 8,182 8,695 7,518 7.4
Investment securities gains, net 725 - - - 1,331 (45.5 )
Other fee income 5,246 4,635 4,704 4,928 4,863 7.9
Gain on sale of Memphis branches, net (1) - - - - 5,789 nm
Other non-interest income 7,367   7,619 7,787 7,241 10,710 (31.2 )
 
 
Total non-interest income 65,854   64,549 63,985 63,388 70,182 (6.2 )
 
Non-interest expense:
Salaries and other personnel expense 96,488 92,049 93,870 92,540 93,445 3.3
Net occupancy and equipment expense 26,172 26,370 26,956 26,425 26,056 0.4
Third-party processing expense 10,343 10,437 10,044 9,464 10,097 2.4
FDIC insurance and other regulatory fees 6,957 8,262 8,013 8,049 9,719 (28.4 )
Professional fees 5,594 8,013 2,526 8,224 7,677 (27.1 )
Advertising expense 3,443 8,102 7,177 6,281 2,477 39.0
Foreclosed real estate expense, net 9,496 6,502 9,074 4,063 5,681 67.2
Visa indemnification charges 375 310 1,979 356 396 (5.3 )
Litigation settlement expenses (2) - 463 12,349 - - -
Restructuring charges, net (107 ) 3,484 809 7,716 8,577 nm
Other operating expenses 20,147   20,891 20,952 19,087 20,036 0.6  
 
Total non-interest expense 178,908   184,883 193,749 182,205 184,161 (2.9 )
 
 
 
Income before income taxes 85,812 78,928 72,656 73,950 77,024 11.4
Income tax expense 31,849   25,757 25,868 27,078 28,608 11.3  
 
 
Net income 53,963 53,171 46,788 46,872 48,416 11.5
 
Dividends on preferred stock 2,559   2,559 2,559 2,559 2,559 -  
 
Net income available to common shareholders $ 51,404   50,612 44,229 44,313 45,857 12.1   %
 
Net income per common share, basic (3) $ 0.38 0.37 0.32 0.32 0.33 15.4 %
 
Net income per common share, diluted (3) 0.38 0.37 0.32 0.32 0.33 15.2
 
Cash dividends declared per common share (3) 0.10 0.10 0.07 0.07 0.07 42.9
 
Return on average assets 0.80 % 0.79 0.70 0.71 0.75 6.7
Return on average common equity 7.16 6.89 5.97 6.14 6.52 9.8
 
Weighted average common shares outstanding, basic (3) 134,933 137,031 139,043 138,991 138,932 (2.9 ) %

Weighted average common shares outstanding, diluted (3)

135,744 137,831 139,726 139,567 139,504 (2.7 )
 
nm - not meaningful
* - ratios are annualized
 
(1 )

Consists of gain, net of associated costs, from the 1Q14 sale of certain loans, premises, deposits, and other assets and liabilities of the Memphis, Tennessee branches of Trust One Bank, a division of Synovus Bank.

(2 )

Amounts consist of litigation settlement expenses with respect to certain legal matters. Amounts for other periods presented herein are not reported separately as amounts are not material.

(3 ) Share and per share data for 1Q14 has been restated to reflect the 1-for-7 reverse stock split which was effective on May 16, 2014.
         
Synovus
     
BALANCE SHEET DATA March 31, 2015 December 31, 2014 March 31, 2014
(Unaudited)
 
(In thousands, except share data)
 
ASSETS
Cash and cash equivalents $ 429,338 485,489 460,618
Interest bearing funds with Federal Reserve Bank 1,263,886 721,362 884,743
Interest earning deposits with banks 6,871 11,810 9,139

Federal funds sold and securities purchased under resale agreements

80,772 73,111 76,097
Trading account assets, at fair value 20,002 13,863 17,808
Mortgage loans held for sale, at fair value 89,245 63,328 50,390
Investment securities available for sale, at fair value 3,130,041 3,041,406 3,132,402
 
Loans, net of deferred fees and costs 21,106,213 21,097,699 20,159,004
Allowance for loan losses (253,371) (261,317) (300,871)
Loans, net 20,852,842 20,836,382 19,858,133
 
Premises and equipment, net 451,843 455,235 467,375
Goodwill 24,431 24,431 24,431
Other real estate 74,791 85,472 110,757
Deferred tax asset, net 589,190 622,464 712,130
Other assets 620,532 616,878 631,403
 
Total assets $ 27,633,784 27,051,231 26,435,426
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest bearing deposits $ 6,251,393 6,228,472 5,870,570
Interest bearing deposits, excluding brokered deposits 14,251,510 13,660,830 13,714,382
Brokered deposits 1,604,946 1,642,398 1,365,939
 
Total deposits 22,107,849 21,531,700 20,950,891
 
Federal funds purchased and securities sold under repurchase agreements 125,323 126,916 164,946
Long-term debt 2,189,769 2,140,319 2,106,980
Other liabilities 180,208 211,026 214,113
 
Total liabilities 24,603,149 24,009,961 23,436,930
 
 
 
Shareholders' equity:
Series C Preferred Stock - no par value, 5,200,000 shares outstanding at March 31, 2015, December 31, 2014, and March 31, 2014 125,980 125,980 125,980

Common stock - $1.00 par value. 133,929,630 shares outstanding at March 31, 2015, 136,122,843 shares outstanding at December 31, 2014, and 138,972,324 shares outstanding at March 31, 2014 (1)

140,329 139,950 139,786
Additional paid-in capital 2,976,882 2,960,825 2,976,193

Treasury stock, at cost - 6,399,177 shares at March 31, 2015, 3,827,579 shares at December 31, 2014, and 813,350 at March 31, 2014 (1)

(261,402) (187,774) (114,176)
Accumulated other comprehensive loss, net (3,651) (12,605) (30,463)
Retained earnings (deficit) 52,497 14,894 (98,824)
Total shareholders' equity 3,030,635 3,041,270 2,998,496
 
Total liabilities and shareholders' equity $ 27,633,784 27,051,231 26,435,426
 
(1) Share and per share data for 1Q14 has been restated to reflect the 1-for-7 reverse stock split which was effective on May 16, 2014.
         
Synovus
   
AVERAGE BALANCES AND YIELDS/RATES (1)
(Unaudited)
(Dollars in thousands)
2015

 

2014

                     
First Fourth Third Second First
Quarter Quarter Quarter Quarter Quarter
                     

Interest Earning Assets

 
Taxable investment securities (2) $ 2,998,597 3,027,769 3,035,940 3,091,537 3,181,678
Yield 1.85 % 1.85 1.84 1.87 1.91
 
Tax-exempt investment securities (2) (4) $ 4,967 5,030 5,168 5,781 6,421
Yield (taxable equivalent) 6.21 % 6.19 6.21 6.23 6.24
 
Trading account assets $ 14,188 12,879 16,818 16,011 20,346
Yield 3.02 % 3.08 2.52 2.25 3.16
 
Commercial loans (3) (4) $ 17,176,641 16,956,294 16,603,287 16,673,930 16,451,594
Yield 4.06 % 4.09 4.17 4.19 4.21
 
Consumer loans (3) $ 3,929,188 3,895,397 3,814,160 3,695,010 3,628,347
Yield 4.45 % 4.42 4.44 4.51 4.53
 
Allowance for loan losses $ (257,167)     (268,659)   (274,698)   (293,320)   (307,078)
 
Loans, net (3) $ 20,848,662 20,583,032 20,142,749 20,075,620 19,772,863
Yield 4.19 % 4.22 4.29 4.32 4.34
 
Mortgage loans held for sale $ 64,507 60,892 70,766 59,678 38,699
Yield 3.92 % 3.84 3.96 4.13 4.15
 
Federal funds sold, due from Federal Reserve Bank,
and other short-term investments $ 1,123,250 898,871 974,363 843,018 935,300
Yield 0.24 % 0.23 0.23 0.23 0.23
 

Federal Home Loan Bank and Federal Reserve Bank stock (5)

$ 80,813 75,547 78,131 76,172 82,585
Yield 3.90 % 4.53 3.57 4.15 3.21
                           
Total interest earning assets $ 25,134,984 24,664,020 24,323,935 24,167,817 24,037,892
Yield 3.73 % 3.78 3.81 3.86 3.86
                           
 
Interest Bearing Liabilities
   
 
Interest bearing demand deposits $ 3,800,476 3,781,389 3,722,599 3,830,956 3,878,590
Rate 0.19 % 0.19 0.19 0.19 0.19
 
Money market accounts $ 6,210,704 6,009,897 6,044,138 6,033,523 6,077,357
Rate 0.32 % 0.29 0.29 0.31 0.32
 
Savings deposits $ 649,597 638,813 645,654 644,103 616,962
Rate 0.05 % 0.07 0.07 0.09 0.10
 
Time deposits under $100,000 $ 1,324,513 1,315,905 1,335,848 1,364,322 1,423,487
Rate 0.61 % 0.57 0.56 0.57 0.59
 
Time deposits over $100,000 $ 1,926,380 1,877,602 1,871,136 1,824,349 1,956,925
Rate 0.80 % 0.76 0.75 0.74 0.76
 
Brokered money market accounts $ 181,754 191,103 174,538 184,233 207,681
Rate 0.30 % 0.28 0.27 0.27 0.26
 
Brokered time deposits $ 1,413,068 1,411,252 1,320,082 1,216,934 1,027,167
Rate 0.63 %   0.58   0.52   0.51   0.62
 
Total interest bearing deposits $ 15,506,492 15,225,961 15,113,995 15,098,420 15,188,169
Rate 0.39 % 0.36 0.35 0.36 0.38
 
Federal funds purchased and securities sold under
repurchase agreements $ 222,658 186,993 171,429 219,490 215,027
Rate 0.08 % 0.07 0.08 0.13 0.14
 
Long-term debt $ 2,207,215 2,084,636 2,142,705 2,099,578 2,156,836
Rate 2.41 % 2.55 2.54 2.58 2.52
                           
 
Total interest bearing liabilities $ 17,936,365 17,497,590 17,428,129 17,417,488 17,560,032
Rate 0.63 % 0.62 0.62 0.62 0.64
                           
 
Non-interest bearing demand deposits $ 6,108,558 6,110,047 5,824,592 5,765,287 5,537,090
 
Effective cost of funds 0.45 % 0.44 0.44 0.45 0.47
                           
 
Net interest margin     3.28 %   3.34   3.37   3.41   3.39
 
Taxable equivalent adjustment $ 349 372 408 443 455
 
(1) Yields and rates are annualized.
(2) Excludes net unrealized gains and losses.
(3) Average loans are shown net of unearned income. Non-performing loans are included.

(4) Reflects taxable-equivalent adjustments, using the statutory federal income tax rate of 35%, in adjusting interest on tax-exempt loans and investment securities to a taxable-equivalent basis.

(5) Included as a component of Other Assets on the consolidated balance sheet
       
Synovus
 
 
LOANS OUTSTANDING AND NON-PERFORMING LOANS COMPOSITION
(Unaudited)
(Dollars in thousands)
 
 
March 31, 2015
                   
 
Loans as a % Total

Non-performing Loans

of Total Loans Non-performing as a % of Total
Loan Type Total Loans Outstanding Loans Nonperforming Loans
 
 
 
Multi-Family $ 1,227,449 5.8 % $ 223 0.1 %
Hotels 635,646 3.0 417 0.2
Office Buildings 1,282,294 6.1 486 0.3
Shopping Centers 876,667 4.2 5,237 2.7
Commercial Development 123,679 0.6 11,644 6.0
Warehouses 533,387 2.5 412 0.2
Other Investment Property 544,941 2.6 1,361 0.7
       
 
Total Investment Properties 5,224,063 24.8 19,780 10.2
 
 
1-4 Family Construction 153,272 0.7 297 0.2
1-4 Family Investment Mortgage 800,648 3.8 9,573 4.9
Residential Development 169,695 0.8 12,956 6.7
       
 
Total 1-4 Family Properties 1,123,615 5.3 22,826 11.8
 
 
Land Acquisition 559,337 2.6 31,444 16.2
       
 
Total Commercial Real Estate 6,907,015 32.7 74,050 38.2
       
 
Commercial, Financial, and Agricultural 6,218,171 29.4 42,060 21.6
Owner-Occupied 4,089,663 19.4 31,626 16.3
       
 
Total Commercial & Industrial 10,307,834 48.8 73,686 37.9
       
 
Home Equity Lines 1,672,038 7.9 18,933 9.7
Consumer Mortgages 1,702,388 8.1 25,351 13.1
Credit Cards 242,257 1.2 - -
Other Retail Loans 304,049 1.4 2,212 1.1
       
 
Total Retail 3,920,732 18.6 46,496 23.9
       
 
Unearned Income (29,368) (0.1) - nm
       
 
Total $ 21,106,213 100.0 % $ 194,232 100.0 %
 
 
LOANS OUTSTANDING BY TYPE COMPARISON
(Unaudited)
(Dollars in thousands)
         
Total Loans 1Q15 vs. 4Q14 1Q15 vs. 1Q14
Loan Type March 31, 2015 December 31, 2014 % change (1) March 31, 2014 % change
           
 
 
Multi-Family $ 1,227,449 1,205,095 7.5 % 988,290 24.2 %
Hotels 635,646 698,746 (36.6) 702,934 (9.6)
Office Buildings 1,282,294 1,192,600 30.5 964,129 33.0
Shopping Centers 876,667 881,821 (2.4) 850,649 3.1
Commercial Development 123,679 121,990 5.6 149,038 (17.0)
Warehouses 533,387 561,508 (20.3) 574,059 (7.1)
Other Investment Property 544,941 548,011 (2.3) 514,084 6.0
         
 
Total Investment Properties 5,224,063 5,209,771 1.1 4,743,183 10.1
 
 
1-4 Family Construction 153,272 148,821 12.1 141,060 8.7
1-4 Family Investment Mortgage 800,648 808,770 (4.1) 841,942 (4.9)
Residential Development 169,695 177,216 (17.2) 186,558 (9.0)
         
 
Total 1-4 Family Properties 1,123,615 1,134,807 (4.0) 1,169,560 (3.9)
 
Land Acquisition 559,337 575,670 (11.5) 674,511 (17.1)
         
 
Total Commercial Real Estate 6,907,015 6,920,248 (0.8) 6,587,254 4.9
         
 
Commercial, Financial, and Agricultural 6,218,171 6,224,348 (0.4) 5,960,435 4.3
Owner-Occupied 4,089,663 4,049,725 4.0 4,000,847 2.2
         
 
Total Commercial & Industrial 10,307,834 10,274,073 1.3 9,961,282 3.5
         
 
Home Equity Lines 1,672,038 1,683,998 (2.9) 1,601,757 4.4
Consumer Mortgages 1,702,388 1,694,061 2.0 1,504,213 13.2
Credit Cards 242,257 253,649 (18.2) 253,149 (4.3)
Other Retail Loans 304,049 302,460 2.1 279,785 8.7
         
 
Total Retail 3,920,732 3,934,168 (1.4) 3,638,904 7.7
         
 
Unearned Income (29,368) (30,790) (18.7) (28,436) 3.3
         
 
Total $ 21,106,213 21,097,699 0.2 % 20,159,004 4.7 %
 
(1) Percentage change is annualized.
         
Synovus
 
CREDIT QUALITY DATA
(Unaudited)
(Dollars in thousands)

 

 

 

2015

     

2014

   

1st Quarter

First Fourth Third Second First '15 vs. '14
Quarter   Quarter   Quarter   Quarter   Quarter Change
 
Non-performing Loans $ 194,232 197,757 242,382 259,547 384,324 (49.5) %
Other Loans Held for Sale (1) 1,082 3,606 338 2,045 3,120 (65.3)
Other Real Estate 74,791 85,472 81,636 101,533 110,757 (32.5)  
Non-performing Assets 270,105 286,835 324,356 363,125 498,201 (45.8)
 
Allowance for Loan Losses 253,371 261,317 269,376 277,783 300,871 (15.8)
 
Net Charge-Offs - Quarter 12,343 16,253 12,250 35,371 15,181 (18.7)
Net Charge-Offs / Average Loans - Quarter (2) 0.23 % 0.31 0.24 0.69 0.30
 
Non-performing Loans / Loans 0.92 0.94 1.18 1.27 1.91
Non-performing Assets / Loans, Other Loans Held for Sale & ORE 1.28 1.35 1.57 1.77 2.46
Allowance / Loans 1.20 1.24 1.31 1.36 1.49
 
Allowance / Non-performing Loans 130.45 132.14 111.14 107.03 78.29
Allowance / Non-performing Loans (3) 197.55 197.22 176.47 177.62 100.16
 
Past Due Loans over 90 days and Still Accruing $ 5,025 4,637 4,067 4,798 6,563 (23.4) %
As a Percentage of Loans Outstanding 0.02 % 0.02 0.02 0.02 0.03
 
Total Past Dues Loans and Still Accruing $ 57,443 51,251 72,712 60,428 75,038 (23.4)
As a Percentage of Loans Outstanding 0.27 % 0.24 0.35 0.30 0.37
 
Accruing Troubled Debt Restructurings (TDRs) $ 313,362 348,427 408,737 444,108 495,390 (36.7)
 
(1) Represent impaired loans that are intended to be sold. Held for sale loans are carried at the lower of cost or fair value, less costs to sell.
(2) Ratio is annualized.
(3) Excludes non-performing loans for which the expected loss has been charged off.
 
                             
 
 
SELECTED CAPITAL INFORMATION (1)
(Unaudited)
(Dollars in thousands)      
March 31, 2015 December 31, 2014 March 31, 2014
 
Capital Rules in effect: Basel III Basel I Basel I
 
Tier 1 Capital $ 2,588,710 2,543,625 2,430,790
Total Risk-Based Capital 3,035,644 2,987,406 2,981,130
Common Equity Tier 1 Ratio (transitional) 10.78 % na na
Common Equity Tier 1 Ratio (fully phased-in) 10.12 na na
Tier 1 Common Equity Ratio na 10.28 10.24
Tier 1 Capital Ratio 10.78 10.86 10.85
Total Risk-Based Capital Ratio 12.64 12.75 13.31
Tier 1 Leverage Ratio 9.65 9.67 9.46
Common Equity as a Percentage of Total Assets (2) 10.51 10.78 10.87
Tangible Common Equity as a Percentage of Tangible Assets (3) 10.43 10.69 10.78
Tangible Common Equity as a Percentage of Risk Weighted Assets (3) 11.99 12.33 12.70
Book Value Per Common Share (4)(5) 21.69 21.42 20.67
Tangible Book Value Per Common Share (3)(5) 21.50 21.23 20.48
 
 

(1) Current quarter regulatory capital information is preliminary. March 31, 2015 regulatory capital ratios determined under Basel III capital rules. Prior period ratios were determined under Basel I capital rules.

(2) Common equity consists of Total Shareholders' Equity less Preferred Stock.
(3) Excludes the carrying value of goodwill and other intangible assets from common equity and total assets.
(4) Book Value Per Common Share consists of Total Shareholders' Equity less Preferred Stock divided by total common shares outstanding.
(5) Per share data for 1Q14 has been restated to reflect the 1-for-7 reverse stock split which was effective on May 16, 2014.

Contacts

Synovus Financial Corp.
Media Relations:
Greg Hudgison, 706-644-0528
or
Investor Relations:
Bob May, 706-649-3555

Contacts

Synovus Financial Corp.
Media Relations:
Greg Hudgison, 706-644-0528
or
Investor Relations:
Bob May, 706-649-3555