Synovus Announces Earnings for the Third Quarter 2016

Diluted Earnings per Share of $0.51, up 21% vs. 3Q15

Adjusted Diluted Earnings per Share of $0.52, up 23% vs. 3Q15

COLUMBUS, Ga.--()--Synovus Financial Corp. (NYSE: SNV) today reported financial results for the quarter ended September 30, 2016.

Third Quarter Highlights

  • Net income available to common shareholders for the third quarter 2016 was $62.7 million or $0.51 per diluted share as compared to $57.9 million or $0.46 per diluted share for the previous quarter and $55.4 million or $0.42 per diluted share for the third quarter 2015.
    • Adjusted diluted earnings per share of $0.52 grew 23.0% from $0.42 for the third quarter 2015.
    • Return on average assets improved to 0.88% from 0.83% in the previous quarter and 0.81% in the third quarter 2015.
  • Total revenues1 of $294.1 million grew $4.8 million or 1.6% from the previous quarter and 7.0% from the third quarter 2015.
  • Synovus continued to achieve positive operating leverage which resulted in an improved adjusted efficiency ratio of 60.55% in the third quarter as compared to 61.54% in the previous quarter and 61.83% in the third quarter 2015.
  • Total loans grew $202.0 million or 3.5% annualized from the previous quarter and $1.40 billion or 6.4% as compared to the third quarter 2015.
  • Total average deposits grew $422.3 million or 7.1% annualized from the previous quarter and $1.17 billion or 5.1% as compared to the third quarter 2015.
  • Credit quality metrics improved with the NPL ratio declining to 0.64% from 0.67% in the previous quarter and 0.72% in the third quarter 2015.
  • Return on average common equity improved to 8.89% from 8.26% in the previous quarter and 7.64% in the third quarter 2015.
  • Return on average tangible common equity improved to 8.96% from 8.33% in the previous quarter and 7.70% in the third quarter 2015.
  • Effective September 29, 2016, the company entered into an accelerated share repurchase agreement (ASR) to repurchase $50 million of Synovus common stock. Upon settlement of the ASR scheduled on or before December 28, 2016, the $300 million share repurchase program will be complete.

“We were pleased with our third quarter performance, marked by strong earnings per share and revenue growth,” said Kessel Stelling, Synovus Chairman and CEO. “We continued to drive diversified loan growth in the quarter and, with the successful closing of the Entaire acquisition in October, we gained an additional entry point for expanded C&I relationships in the future. With another solid quarter behind us, our team remains committed to deepening customer relationships and enhancing profitability.”

Consolidated Financial Results

Balance Sheet

  • Total loans ended the quarter at $23.26 billion, up $202.0 million or 3.5% annualized from the previous quarter and up $1.40 billion or 6.4% as compared to the third quarter 2015.
    • Retail loans grew by $182.1 million or 15.7% annualized from the previous quarter and $648.3 million or 15.6% as compared to the third quarter 2015.
    • Commercial and industrial loans grew by $60.6 million or 2.2% annualized from the previous quarter and $490.0 million or 4.7% as compared to the third quarter 2015.
    • Commercial real estate loans declined by $42.1 million or 2.2% annualized from the previous quarter and grew $258.1 million or 3.6% as compared to the third quarter 2015.
  • Total average deposits for the quarter were $24.03 billion, and grew by $422.3 million or 7.1% annualized from the previous quarter and $1.17 billion or 5.1% as compared to the third quarter 2015.
    • Average core transaction accounts2 grew by $512.7 million or 12.1% annualized from the previous quarter and $1.26 billion or 7.8% as compared to the third quarter 2015.

Core Performance

  • Total revenues1 of $294.1 million grew $4.8 million or 1.6% from the previous quarter and 7.0% from the third quarter 2015.
  • Net interest income was $226.0 million, up $4.6 million or 2.1% from the previous quarter and 8.8% as compared to the third quarter 2015.
  • Net interest margin was 3.27%, unchanged from the previous quarter. Yield on earning assets was 3.71% and the effective cost of funds was 0.44%, both of which declined two basis points from the previous quarter.
  • Total non-interest income was $68.2 million, up $269 thousand or 0.4% compared to the previous quarter and 1.6% as compared to the third quarter 2015.
    • Core banking fees3 were $34.8 million, up $989 thousand or 2.9% from the previous quarter and down 0.6% as compared to the third quarter 2015.
    • Fiduciary and asset management fees, brokerage revenue, and insurance revenues of $19.6 million were down $250 thousand or 1.3% from the previous quarter and up 2.0% as compared to the third quarter 2015.
    • Mortgage banking income of $7.3 million was up $1.4 million or 23.4% from the previous quarter and 22.9% as compared to the third quarter 2015.
  • Total non-interest expense for the third quarter 2016 was $185.9 million, down $2.7 million or 1.5% from the previous quarter and up $8.0 million or 4.5% as compared to the third quarter 2015.
  • Adjusted non-interest expense for the third quarter 2016 was $183.9 million, up $1.5 million or 0.8% from the previous quarter and up $6.4 million or 3.6% as compared to the third quarter 2015.
    • Employment expense of $101.9 million increased $4.9 million or 5.0% from the previous quarter.
    • Advertising expense of $5.6 million decreased $1.8 million from the previous quarter.
    • Adjusted efficiency ratio for the third quarter was 60.55% as compared to 61.54% in the previous quarter and 61.83% in the third quarter 2015.
    • Efficiency ratio for the third quarter was 63.13% as compared to 65.11% in the previous quarter and 64.65% in the third quarter 2015.
  • On a year-to-date basis, adjusted non-interest expense of $545.6 million increased $16.5 million or 3.1% as compared to a year ago.

Credit Quality

  • Non-performing loans were $148.2 million at September 30, 2016, down $5.9 million or 3.8% from the previous quarter and down $9.5 million or 6.0% from September 30, 2015. The non-performing loan ratio was 0.64% at September 30, 2016, as compared to 0.67% at the end of the previous quarter and 0.72% at September 30, 2015.
  • Total non-performing assets were $179.1 million at September 30, 2016, down $8.3 million or 4.4% from the previous quarter and down $42.9 million or 19.3% from September 30, 2015. The non-performing asset ratio was 0.77% at September 30, 2016, as compared to 0.81% at the end of the previous quarter and 1.01% at September 30, 2015.
  • Net charge-offs were $6.9 million in the third quarter 2016, up $797 thousand or 13.0% from $6.1 million in the previous quarter. The annualized net charge-off ratio was 0.12% in the third quarter as compared to 0.11% in the previous quarter.
  • Total delinquencies (consisting of loans 30 or more days past due and still accruing) remain low at 0.27% of total loans at September 30, 2016 as compared to 0.24% the previous quarter and 0.18% at September 30, 2015.

Capital Ratios

  • Common Equity Tier 1 ratio was 9.97% at September 30, 2016 compared to 10.01% at June 30, 2016.
  • Tier 1 Capital ratio was 10.06% at September 30, 2016, unchanged from June 30, 2016.
  • Total Risk Based Capital ratio was 12.05% at September 30, 2016, unchanged from June 30, 2016.
  • Tier 1 Leverage ratio was 8.98% at September 30, 2016 compared to 9.10% at June 30, 2016.
  • Tangible Common Equity ratio was 9.28% at September 30, 2016 compared to 9.52% at June 30, 2016.

Third Quarter Earnings Conference Call

Synovus will host an earnings highlights conference call at 8:30 a.m. EDT on October 18, 2016. 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 investor.synovus.com/event. The replay will be archived for 12 months and will be available 30-45 minutes after the call.

Synovus Financial Corp.

Synovus Financial Corp. is a financial services company based in Columbus, Georgia, with approximately $30 billion in assets. Synovus provides commercial and retail banking, investment, and mortgage services to customers through 28 locally-branded divisions, 250 branches, and 332 ATMs in Georgia, Alabama, South Carolina, Florida, and Tennessee. Synovus Bank, a wholly owned subsidiary of Synovus, was recognized as one of America's Most Reputable Banks by American Banker and the Reputation Institute in 2016 and 2015. Synovus is on the web at synovus.com, on Twitter @synovus, and on LinkedIn at http://linkedin.com/company/synovus.

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 regarding deposits, loan growth and the net interest margin; expectations on our growth strategy, expense initiatives, capital management and future profitability; expectations on credit trends and key credit metrics; 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, 2015 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 adjusted diluted earnings per share; return on average tangible common equity; average core transaction deposit accounts; adjusted non-interest expense; adjusted efficiency ratio; tangible common equity ratio; and common equity Tier 1 (CET1) ratio (fully phased-in) 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 net income per common share, diluted; return on average common equity; total average deposits; total non-interest expense; efficiency ratio and total shareholders’ equity to total assets ratio, respectively.

Synovus believes that these non-GAAP financial measures provide meaningful additional information about Synovus to assist management, investors, and bank regulators in evaluating Synovus’ capital strength and the performance of its core business. Adjusted diluted earnings per share is a measure used by management to evaluate operating results exclusive of items that are not indicative of ongoing operations and impact period-to- period comparisons. The return on average tangible common equity is used by management to compare Synovus’ performance with other financial institutions because it calculates the return available to common shareholders without the impact of intangible assets and their related amortization, thereby allowing management to evaluate the performance of the business consistently. Average core transaction deposit accounts are a measure used by management to evaluate organic growth of deposits and the quality of deposits as a funding source. Adjusted non-interest expense and the adjusted efficiency ratio are measures utilized by management to measure the success of expense management initiatives focused on reducing recurring controllable operating costs. The tangible common equity ratio and common equity Tier 1 (CET1) ratio (fully phased-in) are used by management and bank regulators to assess the strength of our capital position. These non-GAAP financial measures should not be considered as substitutes for net income per diluted common share; return on average common equity; total average deposits; total non-interest income; total non-interest expense; efficiency ratio; and total shareholders’ equity to total assets ratio determined in accordance with GAAP and may not be comparable to other similarly titled measures at other companies.

The computations of adjusted diluted earnings per share; return on average tangible common equity; average core transaction deposit accounts; adjusted non-interest expense; adjusted efficiency ratio; tangible common equity ratio; and common equity Tier 1 (CET1) ratio (fully phased-in) and the reconciliation of these measures to net income per diluted common share; return on average common equity; total average deposits; total non-interest expense; efficiency ratio; and total shareholders’ equity to total assets ratio are set forth in the tables below.

1 Consists of net interest income and non-interest income excluding investment securities gains, net

2 Consists of non-interest bearing, NOW/Savings, and money market deposits

3 Include service charges on deposit accounts, bankcard fees, letter of credit fees, ATM fee income, line of credit non-usage fees, gains from sales of government guaranteed loans, and miscellaneous other service charges

     

Reconciliation of Non-GAAP Financial Measures

(dollars in thousands)

3Q16 2Q16 3Q15
 
Adjusted Diluted Earnings per Share
Net income available to common shareholders $ 62,686 57,898 55,369
(Subtract)/Add: Litigation contingency/settlement (recovery) expense* (189 ) - -
Add: Restructuring charges 1,243 5,841 69
Add: Merger-related expenses 550 - -
Tax effect of adjustments   (587 ) (2,138 ) (25 )
Adjusted net income available to common shareholders $ 63,703   61,601   55,413  
Weighted average common shares outstanding - diluted 123,604 125,699 132,297
Adjusted diluted earnings per share $ 0.52   0.49   0.42  
 
Return on Average Tangible Common Equity
Total average shareholders’ equity $ 2,932,513 2,946,697 3,002,428
Subtract: Average goodwill (24,431 ) (24,431 ) (24,431 )
Subtract: Average other intangible assets, net (226 ) (249 ) (758 )
Subtract: Average Series C Preferred Stock, no par value   (125,980 ) (125,980 ) (125,980 )
Average tangible common equity $ 2,781,876 2,796,037 2,851,259
Net income available to common shareholders annualized $ 249,377 232,866 219,671
Return on average tangible common equity 8.96 % 8.33 7.70
 
Average Core Transaction Deposit Accounts
Total average deposits $ 24,030,291 23,608,027 22,860,019
Subtract: Average brokered deposits (1,409,740 ) (1,337,001 ) (1,357,163 )
Subtract: Average time deposits excluding average SCM time deposits (3,153,366 ) (3,141,621 ) (3,274,406 )
Subtract: Average state, county, and municipal (SCM) deposits   (2,105,126 ) (2,280,038 ) (2,124,812 )
Average core transaction deposit accounts $ 17,362,059   16,849,367   16,103,638  

 

Reconciliation of Non-GAAP Financial Measures, continued

(dollars in thousands)

3Q16 2Q16 3Q15
 
Adjusted Non-interest Expense
Total non-interest expense $ 185,871 188,611 177,907
Subtract: Restructuring charges (1,243 ) (5,841 ) (69 )
Subtract: Visa indemnification charges (360 ) (360 ) (363 )
Add/(Subtract): Litigation contingency/settlement recovery (expense)* 189 - -
Subtract: Merger-related expenses   (550 ) -   -  
Adjusted non-interest expense $ 183,907   182,410   177,475  
 
Adjusted Efficiency Ratio
Adjusted non-interest expense $ 183,907 182,410 177,475
Subtract: Foreclosed real estate expense (2,725 ) (4,588 ) (4,503 )
Subtract: Other credit costs   (2,913 ) 445   (2,842 )
Adjusted non-interest expense excluding total credit costs $ 178,269   178,267   170,130  
Net interest income 226,007 221,449 207,790
Add: Tax equivalent adjustment 330 329 315
Add: Total non-interest income 68,155 67,886 67,059
Subtract: Investment securities gains, net   (59 ) -   -  
Total revenues $ 294,433   289,664   275,164  
Adjusted efficiency ratio   60.55 % 61.54   61.83  
 
Tangible common equity ratio
Total assets $ 29,727,096 29,459,691 28,167,135
Subtract: Goodwill (24,431 ) (24,431 ) (24,431 )
Subtract: Other intangible assets, net   (225 ) (228 ) (667 )
Tangible assets $ 29,702,440   29,435,032   28,142,037  
 
Total shareholders’ equity $ 2,906,659 2,951,659 3,017,116
Subtract: Goodwill (24,431 ) (24,431 ) (24,431 )
Subtract: Other intangible assets, net (225 ) (228 ) (667 )
Subtract: Series C Preferred Stock, no par value   (125,980 ) (125,980 ) (125,980 )
Tangible common equity $ 2,756,023   2,801,020   2,866,038  
Total shareholders’ equity to total assets ratio 9.78 % 10.02 % 10.71
Tangible common equity ratio 9.28 % 9.52 % 10.18
 
Common Equity Tier 1 (CET1) ratio (fully phased-in)
Common Equity Tier 1 (CET1) $ 2,596,233 2,616,181 2,637,462
Subtract: Adjustment related to capital components   (101,843 ) (114,588 ) (128,481 )
CET1 (fully phased-in) $ 2,494,390   2,501,593   2,508,981  
Total risk-weighted assets (fully phased-in) $ 26,289,626 26,373,430 25,142,523
Common Equity Tier 1 (CET1) ratio (fully phased-in)     9.49 %   9.49     9.98  
 

* Amounts for other periods presented herein are not reported separately as amounts are not material.

   

Synovus

 

 

INCOME STATEMENT DATA

Nine Months Ended

(Unaudited)

(Dollars in thousands, except per share data)

September 30,
 

2016

  2015   Change
 
Interest income $ 758,270 703,148 7.8 %
Interest expense 92,620 88,450 4.7
     
 
Net interest income 665,650 614,698 8.3
Provision for loan losses 21,741 13,990 55.4
     
 
Net interest income after provision for loan losses 643,909 600,708 7.2
     
 
Non-interest income:
Service charges on deposit accounts 60,772 59,621 1.9
Fiduciary and asset management fees 34,691 34,722 (0.1 )
Brokerage revenue 20,019 20,978 (4.6 )
Mortgage banking income 18,755 19,960 (6.0 )
Bankcard fees 24,988 24,910 0.3
Investment securities gains, net 126 2,710 (95.4 )
Other fee income 15,255 15,371 (0.8 )
Other non-interest income 24,582 23,474 4.7
     
 
Total non-interest income 199,188 201,746 (1.3 )
     
 
 
Non-interest expense:
Salaries and other personnel expense 300,364 285,394 5.2
Net occupancy and equipment expense 81,480 79,650 2.3
Third-party processing expense 34,033 31,858 6.8
FDIC insurance and other regulatory fees 20,100 20,315 (1.1 )
Professional fees 19,794 18,382 7.7
Advertising expense 15,358 11,797 30.2
Foreclosed real estate expense, net 9,998 18,350 (45.5 )
Merger-related expense 550 - nm
Visa indemnification charges 1,079 1,092 (1.2 )
Loss on early extinguishment of debt 4,735 - nm
Litigation settlement/contingency expense 2,511 4,400 (42.9 )
Restructuring charges, net 8,225 (33 ) nm
Other operating expenses 64,489 63,416   1.7  
 
Total non-interest expense 562,716 534,621 5.3
     
 
 
Income before income taxes 280,381 267,833 4.7
Income tax expense 102,148 100,149 2.0
 
     
Net income 178,233 167,684 6.3
 
Dividends on preferred stock 7,678 7,678   -  
 
 
Net income available to common shareholders $ 170,555 160,006   6.6   %
 
 
Net income per common share, basic $ 1.36 1.20 13.4 %
 
Net income per common share, diluted 1.36 1.20 13.5
 
Cash dividends declared per common share 0.36 0.30 20.0
 
Return on average assets 0.81 % 0.80 1 bp
Return on average common equity 8.07 7.40 67
 
 
Weighted average common shares outstanding, basic 125,076 133,120 (6.0 ) %
Weighted average common shares outstanding, diluted 125,712 133,876 (6.1 )
 
nm - not meaningful
bps - basis points
 
         
Synovus
 
INCOME STATEMENT DATA
(Unaudited)
(In thousands, except per share data) 2016   2015   3rd Quarter
Third Second First Fourth Third '16 vs. '15
Quarter   Quarter   Quarter   Quarter   Quarter   Change
 
Interest income $ 256,554 252,393 249,323 242,814 238,093 7.8 %
Interest expense 30,547   30,944 31,130 30,194 30,303 0.8  
 
 
Net interest income 226,007 221,449 218,193 212,620 207,790 8.8
Provision for loan losses 5,671   6,693 9,377 5,021 2,956 91.8  
 
 
Net interest income after provision for loan losses 220,336   214,756 208,816 207,599 204,834 7.6  
 
 
Non-interest income:
Service charges on deposit accounts 20,822 20,240 19,710 20,522 20,692 0.6
Fiduciary and asset management fees 11,837 11,580 11,274 11,206 11,308 4.7
Brokerage revenue 6,199 7,338 6,483 6,877 6,946 (10.8 )
Mortgage banking income 7,329 5,941 5,484 4,136 5,965 22.9
Bankcard fees 8,269 8,346 8,372 8,262 8,334 (0.8 )
Investment securities gains, net 59 - 67 58 - nm
Other fee income 5,171 5,280 4,804 5,798 5,521 (6.3 )
Other non-interest income 8,469   9,161 6,953 9,316 8,293 2.1  
 
 
Total non-interest income 68,155   67,886 63,147 66,175 67,059 1.6  
 
 
 
Non-interest expense:
Salaries and other personnel expense 101,945 97,061 101,358 95,524 94,341 8.1
Net occupancy and equipment expense 28,120 26,783 26,577 27,816 26,937 4.4
Third-party processing expense 11,219 11,698 11,116 10,993 10,844 3.5
FDIC insurance and other regulatory fees 6,756 6,625 6,719 6,776 6,591 2.5
Professional fees 6,486 6,938 6,369 8,265 6,371 1.8
Advertising expense 5,597 7,351 2,410 3,680 5,488 2.0
Foreclosed real estate expense, net 2,725 4,588 2,684 4,454 4,503 (39.5 )
Merger-related expense 550 - - - - nm
Visa indemnification charges 360 360 360 371 363 (0.8 )
Loss on early extinguishment of debt - - 4,735 1,533 - -
Litigation contingency/settlement (recovery) expense (189 ) - 2,700 710 - nm
Restructuring charges, net 1,243 5,841 1,140 69 69 nm
Other operating expenses 21,059   21,366 22,065 22,842 22,400 (6.0 )
 
Total non-interest expense 185,871   188,611 188,233 183,033 177,907 4.5  
 
 
 
Income before income taxes 102,620 94,031 83,730 90,741 93,986 9.2
Income tax expense 37,375   33,574 31,199 32,343 36,058 3.7  
 
 
Net income 65,245 60,457 52,531 58,398 57,928 12.6
 
Dividends on preferred stock 2,559   2,559 2,559 2,559 2,559 -  
 
Net income available to common shareholders $ 62,686   57,898 49,972 55,839 55,369 13.2   %
 
Net income per common share, basic $ 0.51 0.46 0.39 0.43 0.42 21.1 %
 
Net income per common share, diluted 0.51 0.46 0.39 0.43 0.42 21.2
 
Cash dividends declared per common share 0.12 0.12 0.12 0.12 0.10 20.0
 
Return on average assets * 0.88 % 0.83

 

0.73 0.81 0.81 7 bps
Return on average common equity * 8.89 8.26 7.06 7.67 7.64 125
 
Weighted average common shares outstanding, basic 122,924 125,100 127,227 130,354 131,516 (6.5 ) %
Weighted average common shares outstanding, diluted 123,604 125,699 127,857 131,197 132,297 (6.6 )
 
nm - not meaningful
bps - basis points
* - ratios are annualized
 
     
Synovus

 

       

BALANCE SHEET DATA

September 30, 2016 December 31, 2015 September 30, 2015
(Unaudited)
 
(In thousands, except share data)
 
ASSETS
Cash and cash equivalents $ 367,342 367,092 329,396
Interest bearing funds with Federal Reserve Bank 985,776 829,887 837,641
Interest earning deposits with banks 18,375 17,387 21,170

Federal funds sold and securities purchased under resale agreements

71,753 69,819 69,732
Trading account assets, at fair value 7,309 5,097 5,844
Mortgage loans held for sale, at fair value 95,769 59,275 73,623
Investment securities available for sale, at fair value 3,603,153 3,587,818 3,487,332
 
Loans, net of deferred fees and costs 23,262,887 22,429,565 21,864,309
Allowance for loan losses (253,817 ) (252,496 ) (250,900 )
Loans, net 23,009,070   22,177,069   21,613,409  
 
Premises and equipment, net 418,091 445,155 449,078
Goodwill 24,431 24,431 24,431
Other real estate 28,438 47,030 64,346
Deferred tax asset, net 395,795 511,948 526,492
Other assets 701,794   650,645   664,641  
 
Total assets $ 29,727,096   28,792,653   28,167,135  
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest bearing deposits $ 7,059,059 6,732,970 6,570,227
Interest bearing deposits, excluding brokered deposits 15,817,596 15,434,171 14,961,387
Brokered deposits 1,315,348   1,075,520   1,245,798  
 
Total deposits 24,192,003 23,242,661 22,777,412
 
Federal funds purchased and securities sold under repurchase agreements 195,025 177,025 135,475
Long-term debt 2,160,985 2,186,893 2,038,028
Other liabilities 272,424   185,878   199,104  
 
Total liabilities 26,820,437   25,792,457   25,150,019  
 
 
 
Shareholders' equity:
Series C Preferred Stock - no par value, 5,200,000 shares outstanding at September 30, 2016, December 31, 2015, and September 30, 2015 125,980 125,980 125,980
Common stock - $1.00 par value. 121,453,772 shares outstanding at September 30, 2016, 129,547,032 shares outstanding at December 31, 2015 and 130,632,731 shares outstanding at September 30, 2015 141,066 140,592 140,526
Additional paid-in capital 2,987,760 2,989,981 2,986,333
Treasury stock, at cost - 19,612,435 shares at September 30, 2016, 11,045,377 shares at December 31, 2015, and 9,892,877 shares at September 30, 2015 (654,014 ) (401,511 ) (364,428 )
Accumulated other comprehensive gain (loss) 5,165 (29,819 ) (6,092 )
Retained earnings 300,702   174,973   134,797  
Total shareholders' equity 2,906,659   3,000,196   3,017,116  
 
Total liabilities and shareholders' equity $ 29,727,096   28,792,653   28,167,135  
 
         
Synovus

 

   

AVERAGE BALANCES AND YIELDS/RATES (1)

(Unaudited)

(Dollars in thousands)

2016 2015
                     
Third Second First Fourth Third
Quarter Quarter Quarter Quarter Quarter
                     
Interest Earning Assets
   
Taxable investment securities (2) $ 3,544,933 3,529,030 3,537,131 3,481,184 3,380,543
Yield 1.83 % 1.89 1.91 1.85 1.76
 
Tax-exempt investment securities (2) (4) $ 2,943 3,491 4,091 4,352 4,509
Yield (taxable equivalent) 5.96 % 6.08 6.37 6.16 6.21
 
Trading account assets $ 5,493 3,803 5,216 8,067 7,278
Yield 0.93 % 1.27 1.65 2.24 1.84
 
Commercial loans (3) (4) $ 18,419,484 18,433,638 18,253,169 17,884,661 17,522,735
Yield 4.03 % 4.04 4.03 3.97 3.99
 
Consumer loans (3) $ 4,720,082 4,497,147 4,334,817 4,233,061 4,105,639
Yield 4.30 % 4.32 4.37 4.27 4.31
 
Allowance for loan losses $ (255,675 )     (251,101 )   (258,097 )   (252,049 )   (256,102 )
 
Loans, net (3) $ 22,883,891 22,679,684 22,329,889 21,865,673 21,372,272
Yield 4.14 % 4.15 4.15 4.08 4.10
 
Mortgage loans held for sale $ 87,524 72,477 63,339 50,668 69,438
Yield 3.32 % 3.59 3.72 3.84 3.82
 
Federal funds sold, due from Federal Reserve Bank,
and other short-term investments $ 998,565 907,615 885,939 1,081,604 1,380,686
Yield 0.48 % 0.47 0.47 0.27 0.24
 
Federal Home Loan Bank and Federal Reserve Bank stock (5) $ 70,570 77,571 80,679 66,790 71,852
Yield 4.99 % 5.15 3.82 5.08 4.71
                           
Total interest earning assets $ 27,593,919 27,273,670 26,906,284 26,558,338 26,286,578
Yield 3.71 % 3.73 3.73 3.63 3.60
                           
 
Interest Bearing Liabilities
   
 
Interest bearing demand deposits $ 4,274,117 4,233,310 4,198,738 4,117,116 3,955,803
Rate 0.16 % 0.18 0.17 0.17 0.18
 
Money market accounts $ 7,227,030 7,082,759 7,095,778 7,062,517 6,893,563
Rate 0.29 % 0.31 0.32 0.35 0.36
 
Savings deposits $ 797,961 746,225 722,172 692,536 685,813
Rate 0.07 % 0.06 0.07 0.06 0.06
 
Time deposits under $100,000 $ 1,248,294 1,262,280 1,279,811 1,307,601 1,338,994
Rate 0.64 % 0.64 0.65 0.65 0.66
 
Time deposits over $100,000 $ 2,030,242 2,016,116 2,006,302 2,033,193 2,086,851
Rate 0.88 % 0.89 0.89 0.88 0.88
 
Non maturing brokered deposits $ 634,596 451,398 315,006 297,925 221,817
Rate 0.29 % 0.39 0.48 0.31 0.31
 
Brokered time deposits $ 775,143 885,603 780,232 887,168 1,135,346
Rate 0.88   %   0.85     0.83     0.76     0.71  
 
Total interest bearing deposits $ 16,987,383 16,677,691 16,398,039 16,398,056 16,318,187
Rate 0.37 % 0.39 0.39 0.40 0.42
 
Federal funds purchased and securities sold under
repurchase agreements $ 247,378 221,276 177,921 158,810 207,894
Rate 0.09 % 0.09 0.10 0.08 0.09
 
Long-term debt $ 2,114,193 2,279,043 2,361,973 2,007,924 2,072,455
Rate 2.71 % 2.55 2.55 2.63 2.46
                           
 
Total interest bearing liabilities $ 19,348,954 19,178,010 18,937,933 18,564,790 18,598,536
Rate 0.63 % 0.65 0.66 0.65 0.65
                           
 
Non-interest bearing demand deposits $ 7,042,908 6,930,336 6,812,223 6,846,200 6,541,832
 
Effective cost of funds 0.44 % 0.46 0.46 0.45 0.46
                           
 
Net interest margin     3.27   %   3.27     3.27     3.18     3.14  
 
Taxable equivalent adjustment $ 330 329 305 311 315
 

(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

 

 
NON-PERFORMING LOANS COMPOSITION
(Unaudited)
(Dollars in thousands)
         
Total Total Total
Non-performing Non-performing 3Q16 vs. 2Q16 Non-performing 3Q16 vs. 3Q15
Loan Type Loans Loans % change (1) Loans % change
  September 30, 2016 June 30, 2016   September 30, 2015  
 
 
Multi-Family $ 3,912 4,070 (15.4 ) % $ 221 nm
Hotels 346 5,052 (370.6 ) 392 (11.7 ) %
Office Buildings 931 2,563 (253.3 ) 355 162.3
Shopping Centers 354 358 (4.4 ) - nm
Warehouses 1,108 1,128 (7.1 ) 397 179.1
Other Investment Property 2,233   978   nm 9,217   (75.8 )
 
Total Investment Properties 8,884 14,149 (148.0 ) 10,582 (16.0 )
 
 
1-4 Family Construction 304 304

-

- nm
1-4 Family Investment Mortgage 7,658 7,994 (16.7 ) 7,287 5.1
Residential Development 9,190   9,571   (15.8 ) 9,707   (5.3 )
 
Total 1-4 Family Properties 17,152 17,869 (16.0 ) 16,994 0.9
 
Land Acquisition 6,672   7,610   (49.0 ) 19,010   (64.9 )
 
Total Commercial Real Estate 32,708 39,628 (69.5 ) 46,586 (29.8 )
         
 
Commercial, Financial, and Agricultural 49,874 55,821 (42.4 ) 50,656 (1.5 )
Owner-Occupied 21,443   17,118   100.5   18,148   18.2  
 
Total Commercial & Industrial 71,317   72,939   (8.8 ) 68,804   3.7  
 
Home Equity Lines 19,815 16,912 68.3 16,263 21.8
Consumer Mortgages 21,284 21,895 (11.1 ) 24,154 (11.9 )
Credit Cards - - - - -
Other Retail Loans 3,031   2,698   49.1   1,833   65.4  
 
Total Retail 44,130   41,505   25.2   42,250   4.4  
 
 
Total $ 148,155   154,072   (15.3 ) % $ 157,640   (6.0 ) %
 
(1) Percentage change is annualized.
 
                             
 
LOANS OUTSTANDING BY TYPE COMPARISON
(Unaudited)
(Dollars in thousands)
Total Loans Total Loans 3Q16 vs. 2Q16 Total Loans 3Q16 vs. 3Q15
Loan Type September 30, 2016 June 30, 2016

% change (1)

September 30, 2015 % change
           
 
Multi-Family $ 1,553,275 1,528,192 6.5 % $ 1,345,687 15.4 %
Hotels 774,873 746,397 15.2 684,105 13.3
Office Buildings 1,575,190 1,559,631 4.0 1,388,965 13.4
Shopping Centers 917,284 926,147 (3.8 ) 944,690 (2.9 )
Warehouses 522,170 535,889 (10.2 ) 545,346 (4.2 )
Other Investment Property 626,674   624,405   1.4   648,783   (3.4 )
Total Investment Properties 5,969,466 5,920,661 3.3 5,557,576 7.4
 
1-4 Family Construction 193,791 208,871 (28.7 ) 176,442 9.8
1-4 Family Investment Mortgage 727,897 758,463 (16.0 ) 777,196 (6.3 )
Residential Development 149,366   160,446   (27.5 ) 158,120   (5.5 )
Total 1-4 Family Properties 1,071,054 1,127,780 (20.0 ) 1,111,758 (3.7 )
Land Acquisition 425,058   459,254   (29.6 ) 538,127   (21.0 )
Total Commercial Real Estate 7,465,578 7,507,695 (2.2 ) 7,207,461 3.6
 
Commercial, Financial, and Agricultural 6,544,629 6,596,835 (3.1 ) 6,260,563 4.5
Owner-Occupied 4,471,365   4,358,595   10.3   4,265,409   4.8  
Total Commercial & Industrial 11,015,994 10,955,430 2.2 10,525,972 4.7
 
Home Equity Lines 1,638,844 1,657,109 (4.4 ) 1,684,046 (2.7 )
Consumer Mortgages 2,243,154 2,132,114 20.7 1,888,456 18.8
Credit Cards 232,309 236,034 (6.3 ) 241,315 (3.7 )
Other Retail Loans 693,204   600,153   61.7   345,426   100.7  
Total Retail 4,807,511 4,625,410 15.7 4,159,243 15.6
Unearned Income (26,196 ) (27,627 ) (20.6 ) (28,367 ) (7.7 )
 
Total $ 23,262,887   23,060,908   3.5   % $ 21,864,309   6.4   %
 
 
(1) Percentage change is annualized.
 
           
Synovus

 

 
CREDIT QUALITY DATA
(Unaudited)
(Dollars in thousands) 2016 2015 3rd Quarter
Third Second First Fourth Third '16 vs. '15
Quarter   Quarter   Quarter Quarter   Quarter Change
 
Non-performing Loans $ 148,155 154,072 178,167 168,370 157,640 (6.0) %
Impaired Loans Held for Sale (1) 2,473 - - - - nm
Other Real Estate 28,438 33,289 38,462 47,030 64,346 (55.8)  
Non-performing Assets 179,066 187,361 216,629 215,400 221,986 (19.3)
 
Allowance for loan losses 253,817 255,076 254,516 252,496 250,900 1.2
 
Net Charge-Offs - Quarter 6,930 6,133 7,357 3,425 6,758 2.5
Net Charge-Offs / Average Loans - Quarter (2) 0.12 % 0.11 0.13 0.06 0.12
 
Non-performing Loans / Loans 0.64 0.67 0.78 0.75 0.72
Non-performing Assets / Loans, Other Loans Held for Sale & ORE 0.77 0.81 0.95 0.96 1.01
Allowance / Loans 1.09 1.11 1.12 1.13 1.15
 
Allowance / Non-performing Loans 171.32 165.56 142.85 149.96 159.16
Allowance / Non-performing Loans (3) 198.94 195.25 173.64 189.47 205.90
 
Past Due Loans over 90 days and Still Accruing $ 5,358 5,964 3,214 2,621 2,998 78.7
As a Percentage of Loans Outstanding 0.02 % 0.03 0.01 0.01 0.01
 
Total Past Due Loans and Still Accruing $ 61,781 55,716 63,852 47,912 39,350 57.0
As a Percentage of Loans Outstanding 0.27 % 0.24 0.28 0.21 0.18
 
Accruing Troubled Debt Restructurings (TDRs) $ 201,896 205,165 209,159 223,873 240,370 (16.0)
 
(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)      
September 30, 2016 June 30, 2016 September 30, 2015
 
 
Tier 1 Capital $ 2,620,379 2,627,572 2,637,462
Total Risk-Based Capital 3,136,814 3,146,897 2,990,099
Common Equity Tier 1 Ratio (transitional) 9.97 % 10.01 10.60
Common Equity Tier 1 Ratio (fully phased-in) 9.49 9.49 9.98
Tier 1 Capital Ratio 10.07 10.06 10.60
Total Risk-Based Capital Ratio 12.05 12.05 12.02
Tier 1 Leverage Ratio 8.98 9.10 9.45
Common Equity as a Percentage of Total Assets (2) 9.35 9.59 10.26
Tangible Common Equity as a Percentage of Tangible Assets (3) 9.28 9.52 10.18
Tangible Common Equity as a Percentage of Risk Weighted Assets (3) 10.58 10.72 11.52
Book Value Per Common Share (4) 22.89 22.78 22.13
Tangible Book Value Per Common Share (3) 22.69 22.58 21.91
 
 
(1) Current quarter regulatory capital information is preliminary.
(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.
 

Contacts

Synovus Financial Corp.
Media Contact
Lee Underwood, 706-644-0528
Media Relations
or
Investor Contact
Bob May, 706-649-3555
Investor Relations

Contacts

Synovus Financial Corp.
Media Contact
Lee Underwood, 706-644-0528
Media Relations
or
Investor Contact
Bob May, 706-649-3555
Investor Relations