SNV Synovus Financial Corporation

Diluted Earnings per Share of $0.46, up 15.6% vs. 2Q15

Adjusted Diluted Earnings per Share of $0.49, up 16.9% vs. 2Q15

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

Second Quarter Highlights

• Net income available to common shareholders for the second quarter 2016 was $57.9 million or $0.46 per diluted share as compared to $50.0 million, or $0.39 per diluted share for the previous quarter and $53.2 million, or $0.40 per diluted share for the second quarter 2015.
  • Adjusted diluted earnings per share of $0.49 grew 16.9% from $0.42 for the second quarter 2015.
• Total loans grew $302.7 million or 5.3% annualized from the previous quarter and $1.57 billion or 7.3% as compared to the second quarter 2015.
• Total average deposits grew $397.8 million or 6.9% annualized from the previous quarter and $1.14 billion or 5.1% as compared to the second quarter 2015.
• Total revenues1 of $289.3 million grew $8.1 million or 2.9% from the previous quarter and 7.0% from the second quarter 2015.
• Credit quality metrics improved with the NPL ratio declining to 0.67% from 0.78% in the previous quarter and 0.81% in the second quarter 2015.
• The company continued to execute on the $300 million repurchase program announced in October 2015, acquiring $60.5 million of common stock in the second quarter.
  • From October 2015 through July 18, 2016, the company has repurchased $236.2 million of common stock, reducing total share count by 8.0 million.

“Our second quarter results demonstrate continued solid performance, including strong revenue growth and further diversification of our loan portfolio with increases in both C&I and consumer lending,” said Kessel D. Stelling, Synovus Chairman and CEO. “We were also pleased during the second quarter to be named by American Banker and the Reputation Institute as one of the nation’s most reputable banks. This recognition further demonstrates our team’s commitment to exceptional service, and further validates that our relationship-centered model is a highly-valued competitive differentiator. We were especially pleased with the number one ranking by non-customers, which we believe signals a strong opportunity to gain market share.”

Balance Sheet

• Total loans ended the quarter at $23.06 billion, up $302.7 million or 5.3% annualized from the previous quarter and up $1.57 billion or 7.3% as compared to the second quarter 2015.
  • Retail loans grew by $261.0 million from the previous quarter, or 24.1% annualized.
  • Commercial and industrial loans grew by $146.0 million from the previous quarter, or 5.4% annualized.
  • Commercial real estate loans declined $105.9 million from the previous quarter, or 5.6% annualized.
• Total average deposits for the quarter were $23.61 billion, and grew by $397.8 million or 6.9% annualized from the previous quarter and $1.14 billion or 5.1% as compared to the second quarter 2015.
  • Average core deposits for the quarter grew by $156.0 million or 2.8% annualized from the previous quarter and $1.36 billion or 6.5% as compared to the second quarter 2015.
  • Average core deposits, excluding state, county, and municipal deposits, grew by $316.7 million or 6.5% annualized from the previous quarter and $1.36 billion or 7.3% as compared to the second quarter 2015.

Core Performance

• Total revenues1 were $289.3 million for the second quarter 2016, up $8.1 million or 2.9% from the previous quarter and up 7.0% as compared to the second quarter 2015.
• Net interest income was $221.4 million for the second quarter 2016, up $3.3 million or 1.5% from the previous quarter and up 8.7% as compared to the second quarter 2015.
• Net interest margin was 3.27%, unchanged from the previous quarter. Yield on earning assets was 3.73% and the effective cost of funds was 0.46% for the second quarter 2016, both unchanged from the previous quarter.
• Total non-interest income was $67.9 million, up $4.7 million or 7.5% compared to the previous quarter and down 1.4% as compared to the second quarter 2015.
  • Adjusted non-interest income increased $4.8 million or 7.6% compared to the previous quarter and 1.6% as compared to the second quarter 2015.
  • Core banking fees2 were $33.8 million, up $488 thousand or 1.5% from the previous quarter, primarily driven by higher service charges on deposits, which were $530 thousand.
  • Financial Management Services revenues, consisting primarily of fiduciary and asset management fees and brokerage revenue, increased $1.5 million, or 8.1% from the previous quarter.
  • Mortgage banking income increased $457 thousand, or 8.3% from the previous quarter.
  • Other non-interest income increased $2.2 million from the previous quarter, primarily driven by a $900 thousand net gain from private equity investments as compared to a $390 thousand net loss in the previous quarter.
• Total non-interest expense for the second quarter of 2016 was $188.6 million, up $377 thousand from the previous quarter and up $10.8 million or 6.1% as compared to the second quarter of 2015.
• Adjusted non-interest expense for the second quarter 2016 was $182.4 million, up $3.1 million or 1.7% from the previous quarter and up $9.4 million or 5.4% as compared to the second quarter 2015.
  • Employment expense of $97.1 million decreased $4.3 million or 4.2% from the previous quarter, reflecting seasonal decline in payroll taxes.
  • Advertising expense of $7.4 million increased $4.9 million from the previous quarter as a result of resuming brand awareness activities.
  • Foreclosed real estate expense of $4.6 million increased $1.9 million from the previous quarter.
• Adjusted efficiency ratio for the second quarter was 61.54% as compared to 61.92% the previous quarter and 61.62% in the second quarter of 2015.

Credit Quality

Improvement in credit quality continued.

• Non-performing loans were $154.1 million at June 30, 2016, down $24.1 million or 13.5% from the previous quarter, and down $19.6 million or 11.3% from June 30, 2015. The non-performing loan ratio was 0.67% at June 30, 2016, as compared to 0.78% at the end of the previous quarter and 0.81% at June 30, 2015.
• Total non-performing assets were $187.4 million at June 30, 2016, down $29.3 million or 13.5% from the previous quarter, and down $52.7 million or 22.0% from June 30, 2015. The non-performing asset ratio was 0.81% at June 30, 2016, as compared to 0.95% at the end of the previous quarter and 1.11% at June 30, 2015.
• Net charge-offs were $6.1 million in the second quarter 2016, down $1.2 million or 16.6% from $7.4 million in the previous quarter. The annualized net charge-off ratio was 0.11% in the second quarter as compared to 0.13% in the previous quarter.
• Total delinquencies (consisting of loans 30 or more days past due and still accruing) remain low at 0.24% of total loans at June 30, 2016 as compared to 0.28% the previous quarter and 0.24% at June 30, 2015.

Capital Ratios

Capital ratios remained strong and include the impact of common stock repurchases completed through June 30, 2016 and phase-out of sub-debt maturing in the second quarter 2017.

• Common Equity Tier 1 ratio was 10.02% at June 30, 2016 compared to 10.04% at March 31, 2016.
• Tier 1 Capital ratio was 10.06% at June 30, 2016 compared to 10.04% at March 31, 2016.
• Total Risk Based Capital ratio was 12.05% at June 30, 2016 compared to 12.25% at March 31, 2016.
• Tier 1 Leverage ratio was 9.10% at June 30, 2016 compared to 9.15% at March 31, 2016.
• Tangible Common Equity ratio was 9.52% at June 30, 2016 compared to 9.62% at March 31, 2016.

Second Quarter Earnings Conference Call

Synovus will host an earnings highlights conference call at 8:30 a.m. EDT on July 19, 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/events. 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 $29 billion in assets. Synovus provides commercial and retail banking, investment, and mortgage services to customers through 28 locally-branded divisions, 253 branches, and 335 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, 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 average core deposits; average core deposits excluding average state, county, and municipal deposits; tangible common equity ratio; common equity Tier 1 (CET1) ratio (fully phased-in); adjusted diluted earnings per share; adjusted non-interest income; adjusted non-interest expense; and adjusted efficiency ratio 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; net income per diluted common share; total non-interest income; total non-interest expense, and efficiency 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. Average core deposits and average core deposits excluding state, county, and municipal deposits are measures used by management to evaluate organic growth of deposits and the quality of deposits as a funding source. 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. 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. Adjusted non-interest income is a measure used by management to evaluate non-interest income exclusive of net investment securities gains. 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. These non-GAAP financial measures should not be considered as substitutes for total average deposits; total shareholders’ equity to total assets ratio; net income per diluted common share; total non-interest income; total non-interest expense; and efficiency ratio 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; tangible common equity ratio; common equity Tier 1 (CET1) ratio (fully phased-in); adjusted diluted earnings per share; 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; net income per diluted common share; total non-interest income; total non-interest expense; and efficiency ratio are set forth in the tables below.

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

2 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) 2Q16     1Q16     2Q15   Average core deposits Average core deposits excluding state, county, and municipal deposits Total average deposits $ 23,608,027 23,210,263 22,466,102 Subtract: Average brokered deposits   (1,337,001 ) (1,095,239 ) (1,555,931 ) Average core deposits   22,271,026   22,115,024   20,910,171   Subtract: Average state, county, and municipal deposits   (2,280,038 ) (2,440,749 ) (2,277,783 ) Average core deposits excluding state, county, and

municipal deposits

$ 19,990,988     19,674,275   18,632,388     Tangible common equity ratio Total assets $ 29,459,691 29,171,257 28,205,870 Subtract: Goodwill (24,431 ) (24,431 ) (24,431 ) Subtract: Other intangible assets, net   (228 ) (277 ) (863 ) Tangible assets $ 29,435,032   29,146,549   28,180,576     Total shareholders’ equity $ 2,951,659 2,953,268 3,006,157

Subtract: Goodwill

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

Subtract: Other intangible assets, net

(228 ) (277 ) (863 )

Subtract: Series C Preferred Stock, no par value

  (125,980 ) (125,980 ) (125,980 ) Tangible common equity $ 2,801,020   2,802,580   2,854,883   Total shareholders’ equity to total assets ratio 10.02 % 10.12 % 10.66 Tangible common equity ratio 9.52 % 9.62 % 10.13   Common Equity Tier 1 (CET1) ratio (fully phased-in) Common Equity Tier 1 (CET1) $ 2,615,939 2,609,191 2,615,827 Adjustment related to capital components   (114,751 ) (125,980 ) (125,729 ) CET1 (fully phased-in) $ 2,501,188   2,483,211   2,490,098   Total risk-weighted assets (fully phased-in) $ 26,368,883 26,231,764 24,673,795 Common Equity Tier 1 (CET1) ratio (fully phased-in) 9.49 % 9.47 % 10.09 %  

Reconciliation of Non-GAAP Financial Measures, continued

(dollars in thousands) 2Q16 1Q16 2Q15  

Adjusted Non-interest Income

Total non-interest income $ 67,886 63,147 68,832 Subtract: Investment securities gains, net   -   (67 ) (1,985 ) Adjusted non-interest income $ 67,886   63,080   66,847     Adjusted Diluted Earnings per Share Net income available to common shareholders $ 57,898 49,972 53,234 Add: Litigation contingency expense(1) - 2,700 4,400 Add: Restructuring charges 5,841 1,140 5 Add: Loss on early extinguishment of debt - 4,735 - Tax effect of adjustments   (2,138 ) (3,138 ) (1,612 ) Adjusted net income available to common shareholders $ 61,601   55,409   56,027   Weighted average common shares outstanding - diluted 125,699 127,857 133,625 Adjusted diluted earnings per share $ 0.49   0.43   0.42     Adjusted Non-interest Expense Total non-interest expense $ 188,611 188,233 177,806 Subtract: Restructuring charges (5,841 ) (1,140 ) (5 ) Subtract: Visa indemnification charges (360 ) (360 ) (354 ) Subtract: Loss on early extinguishment of debt - (4,735 ) - Subtract: Litigation contingency expense(1)   -   (2,700 ) (4,400 ) Adjusted non-interest expense $ 182,410   179,298   173,047     Adjusted Efficiency Ratio Adjusted non-interest expense $ 182,410 179,298 173,047 Subtract: Other credit costs(2)   (4,143 ) (4,950 ) (6,175 ) Adjusted non-interest expense excluding other credit costs $ 178,267   174,348   166,872   Net interest income 221,449 218,193 203,644 Add: Tax equivalent adjustment 329 305 330 Add: Total non-interest income 67,886 63,147 68,832 Subtract: Investment securities gains, net   -   (67 ) (1,985 ) Total revenues $ 289,664   281,578   270,821   Adjusted efficiency ratio   61.54 % 61.92   61.62                        

(1) Amounts for other periods presented herein are not reported separately as amounts are not material.

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

 

Synovus

  INCOME STATEMENT DATA       Six Months Ended (Unaudited)         (Dollars in thousands, except per share data) June 30,   2016 2015 Change   Interest income $ 501,716 465,055 7.9 % Interest expense   62,073 58,148   6.8     Net interest income 439,643 406,907 8.0 Provision for loan losses   16,070 11,034   45.6     Net interest income after provision for loan losses   423,573 395,873   7.0     Non-interest income: Service charges on deposit accounts 39,950 38,928 2.6 Fiduciary and asset management fees 22,854 23,414 (2.4 ) Brokerage revenue 13,821 14,032 (1.5 ) Mortgage banking income 11,425 13,995 (18.4 ) Bankcard fees 16,718 16,576 0.9 Investment securities gains, net 67 2,710 (97.5 ) Other fee income 10,084 9,851 2.4 Other non-interest income   16,114 15,181   6.1     Total non-interest income   131,033 134,687   (2.7 )     Non-interest expense: Salaries and other personnel expense 198,419 191,054 3.9 Net occupancy and equipment expense 53,360 52,713 1.2 Third-party processing expense 22,814 21,015 8.6 FDIC insurance and other regulatory fees 13,344 13,725 (2.8 ) Professional fees 13,307 12,011 10.8 Advertising expense 9,761 6,309 54.7 Foreclosed real estate expense, net 7,272 13,847 (47.5 ) Visa indemnification charges 720 729 (1.2 ) Loss on early extinguishment of debt 4,735 - nm Litigation contingency expense 2,700 4,400 (38.6 ) Restructuring charges, net 6,981 (102 ) nm Other operating expenses   43,431 41,012   5.9     Total non-interest expense   376,844 356,713   5.6       Income before income taxes 177,762 173,847 2.3 Income tax expense   64,773 64,091   1.1     Net income 112,989 109,756 2.9   Dividends on preferred stock   5,119 5,119   -       Net income available to common shareholders $ 107,870 104,637   3.1 %     Net income per common share, basic $ 0.85 0.78 8.8 %   Net income per common share, diluted 0.85 0.78 9.5   Cash dividends declared per common share 0.24 0.20 20.0   Return on average assets

0.78%

0.80

(2) bps

Return on average common equity 7.66 7.27 39     Weighted average common shares outstanding, basic 126,164 133,935 (5.8 )% Weighted average common shares outstanding, diluted 126,778 134,678 (5.9 )   nm - not meaningful bps - basis points                             Synovus

 

  INCOME STATEMENT DATA (Unaudited) (In thousands, except per share data) 2016    

 

 

 

2015

          2nd Quarter Second First Fourth Third Second '16 vs. '15 Quarter     Quarter     Quarter     Quarter     Quarter     Change   Interest income $ 252,393 249,323 242,814 238,093 233,654 8.0 % Interest expense   30,944   31,130 30,194 30,303 30,010 3.1       Net interest income 221,449 218,193 212,620 207,790 203,644 8.7 Provision for loan losses   6,693   9,377 5,021 2,956 6,636 0.9       Net interest income after provision for loan losses   214,756   208,816 207,599 204,834 197,008 9.0       Non-interest income: Service charges on deposit accounts 20,240 19,710 20,522 20,692 19,795 2.2 Fiduciary and asset management fees 11,580 11,274 11,206 11,308 11,843 (2.2 ) Brokerage revenue 7,338 6,483 6,877 6,946 6,782 8.2 Mortgage banking income 5,941 5,484 4,136 5,965 7,511 (20.9 ) Bankcard fees 8,346 8,372 8,262 8,334 8,499 (1.8 ) Investment securities gains, net - 67 58 - 1,985 nm Other fee income 5,280 4,804 5,798 5,521 4,605 14.7 Other non-interest income   9,161   6,953 9,316 8,293 7,812 17.3       Total non-interest income   67,886   63,147 66,175 67,059 68,832 (1.4 )       Non-interest expense: Salaries and other personnel expense 97,061 101,358 95,524 94,341 94,565 2.6 Net occupancy and equipment expense 26,783 26,577 27,816 26,937 26,541 0.9 Third-party processing expense 11,698 11,116 10,993 10,844 10,672 9.6 FDIC insurance and other regulatory fees 6,625 6,719 6,776 6,591 6,767 (2.1 ) Professional fees 6,938 6,369 8,265 6,371 6,417 8.1 Advertising expense 7,351 2,410 3,680 5,488 2,865 156.6 Foreclosed real estate expense, net 4,588 2,684 4,454 4,503 4,351 5.4 Visa indemnification charges 360 360 371 363 354 1.7 Loss on early extinguishment of debt - 4,735 1,533 - - nm Litigation contingency/settlement expenses - 2,700 710 - 4,400 nm Restructuring charges, net 5,841 1,140 69 69 5 nm Other operating expenses   21,366   22,065 22,842 22,400 20,869 2.4     Total non-interest expense   188,611   188,233 183,033 177,907 177,806 6.1         Income before income taxes 94,031 83,730 90,741 93,986 88,034 6.8 Income tax expense   33,574   31,199 32,343 36,058 32,242 4.1       Net income 60,457 52,531 58,398 57,928 55,792 8.4   Dividends on preferred stock   2,559   2,559 2,559 2,559 2,559 -     Net income available to common shareholders $ 57,898   49,972 55,839 55,369 53,233 8.8 %   Net income per common share, basic $ 0.46 0.39 0.43 0.42 0.40 15.6 %   Net income per common share, diluted 0.46 0.39 0.43 0.42 0.40 15.6   Cash dividends declared per common share 0.12 0.12 0.12 0.10 0.10 20.0   Return on average assets * 0.83 % 0.73 0.81 0.81 0.80

3 bps

Return on average common equity * 8.26 7.06 7.67 7.64 7.39 87   Weighted average common shares outstanding, basic 125,100 127,227 130,354 131,516 132,947 (5.9 )% Weighted average common shares outstanding, diluted 125,699 127,857 131,197 132,297 133,625 (5.9 )   nm - not meaningful bps - basis points * - ratios are annualized     Synovus                     BALANCE SHEET DATA June 30, 2016 December 31, 2015 June 30, 2015 (Unaudited)   (In thousands, except share data)   ASSETS Cash and cash equivalents $ 377,334 367,092 360,832 Interest bearing funds with Federal Reserve Bank 904,406 829,887 1,289,205 Interest earning deposits with banks 24,541 17,387 18,694

Federal funds sold and securities purchased under resale agreements

77,685 69,819 72,487 Trading account assets, at fair value 1,001 5,097 11,973 Mortgage loans held for sale, at fair value 87,824 59,275 98,202 Investment securities available for sale, at fair value 3,580,359 3,587,818 3,354,673   Loans, net of deferred fees and costs 23,060,908 22,429,565 21,494,869 Allowance for loan losses   (255,076 ) (252,496 ) (254,702 ) Loans, net   22,805,832   22,177,069   21,240,167     Premises and equipment, net 424,967 445,155 445,579 Goodwill 24,431 24,431 24,431 Other real estate 33,289 47,030 66,449 Deferred tax asset, net 425,160 511,948 571,402 Other assets   692,862   650,645   650,984     Total assets $ 29,459,691   28,792,653   28,205,078       LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Deposits: Non-interest bearing deposits $ 6,934,443 6,732,970 6,421,815 Interest bearing deposits, excluding brokered deposits 15,495,318 15,434,171 14,775,216 Brokered deposits   1,496,161   1,075,520   1,452,150     Total deposits 23,925,922 23,242,661 22,649,181   Federal funds purchased and securities sold under repurchase agreements 247,179 177,025 188,285 Long-term debt 2,135,892 2,186,893 2,138,427 Other liabilities   199,039   185,878   223,028     Total liabilities   26,508,032   25,792,457   25,198,920         Shareholders' equity: Series C Preferred Stock - no par value, 5,200,000 shares outstanding at June 30, 2016, December 31, 2015, and June 30, 2015 125,980 125,980 125,980 Common stock - $1.00 par value. 124,047,659 shares outstanding at June 30, 2016, 129,547,032 shares outstanding at December 31, 2015 and 132,257,577 shares outstanding at June 30, 2015 141,008 140,592 140,425 Additional paid-in capital 2,993,985 2,989,981 2,981,434 Treasury stock, at cost - 16,959,977 shares at June 30, 2016, 11,045,377 shares at December 31, 2015, and 8,167,677 shares at June 30, 2015 (573,058 ) (401,511 ) (311,859 ) Accumulated other comprehensive gain (loss) 11,005 (29,819 ) (22,323 ) Retained earnings   252,739   174,973   92,500   Total shareholders' equity   2,951,659   3,000,196   3,006,157     Total liabilities and shareholders' equity $ 29,459,691   28,792,653   28,205,078                           Synovus

 

  AVERAGE BALANCES AND YIELDS/RATES (1) (Unaudited) (Dollars in thousands) 2016     2015 Second First Fourth Third Second Quarter     Quarter     Quarter     Quarter     Quarter Interest Earning Assets Taxable investment securities (2) $ 3,529,030 3,537,131 3,481,184 3,380,543 3,165,513 Yield 1.89 % 1.91 1.85 1.76 1.79   Tax-exempt investment securities (2) (4) $ 3,491 4,091 4,352 4,509 4,595 Yield (taxable equivalent) 6.08 % 6.37 6.16 6.21 6.15   Trading account assets $ 3,803 5,216 8,067 7,278 12,564 Yield 1.27 % 1.65 2.24 1.84 3.72   Commercial loans (3) (4) $ 18,433,638 18,253,169 17,884,661 17,522,735 17,297,130 Yield 4.04 % 4.03 3.97 3.99 4.01   Consumer loans (3) $ 4,497,147 4,334,817 4,233,061 4,105,639 3,986,151 Yield 4.32 % 4.37 4.27 4.31 4.37   Allowance for loan losses $ (251,101 )     (258,097 )     (252,049 )     (256,102 )     (254,177 )   Loans, net (3) $ 22,679,684 22,329,889 21,865,673 21,372,272 21,029,104 Yield 4.15 % 4.15 4.08 4.10 4.14   Mortgage loans held for sale $ 72,477 63,339 50,668 69,438 90,419 Yield 3.59 % 3.72 3.84 3.82 3.39  

 

Federal funds sold, due from Federal Reserve Bank, and other short-term investments

$ 907,615 885,939 1,081,604 1,380,686 1,590,114 Yield 0.47 % 0.47 0.27 0.24 0.24   Federal Home Loan Bank and Federal Reserve Bank stock (5) $ 77,571 80,679 66,790 71,852 76,091 Yield         5.15 %     3.82       5.08       4.71       4.57     Total interest earning assets $ 27,273,670 26,906,284 26,558,338 26,286,578 25,968,400 Yield         3.73 %     3.73       3.63       3.60       3.61       Interest Bearing Liabilities     Interest bearing demand deposits $ 4,233,310 4,198,738 4,117,116 3,955,803 3,919,401 Rate 0.18 % 0.17 0.17 0.18 0.18   Money market accounts $ 7,082,759 7,095,778 7,062,517 6,893,563 6,466,610 Rate 0.31 % 0.32 0.35 0.36 0.35   Savings deposits $ 746,225 722,172 692,536 685,813 675,260 Rate 0.06 % 0.07 0.06 0.06 0.06   Time deposits under $100,000 $ 1,262,280 1,279,811 1,307,601 1,338,994 1,351,299 Rate 0.64 % 0.65 0.65 0.66 0.68   Time deposits over $100,000 $ 2,016,116 2,006,302 2,033,193 2,086,851 2,061,434 Rate 0.89 % 0.89 0.88 0.88 0.88   Non maturing brokered deposits $ 451,398 315,006 297,925 221,817 185,909 Rate 0.39 % 0.48 0.31 0.31 0.31   Brokered time deposits $ 885,603 780,232 887,168 1,135,346 1,370,022 Rate   0.85 % 0.83   0.76   0.71   0.67     Total interest bearing deposits $ 16,677,691 16,398,039 16,398,056 16,318,187 16,029,935 Rate 0.39 % 0.39 0.40 0.42 0.42  

 

Federal funds purchased and securities sold under repurchase agreements

$ 221,276 177,921 158,810 207,894 232,531 Rate 0.09 % 0.10 0.08 0.09 0.08   Long-term debt $ 2,279,043 2,361,973 2,007,924 2,072,455 2,172,765 Rate         2.55 %     2.55       2.63       2.46       2.39     Total interest bearing liabilities $ 19,178,010 18,937,933 18,564,790 18,598,536 18,435,231 Rate         0.65 %     0.66       0.65       0.65       0.65       Non-interest bearing demand deposits $ 6,930,336 6,812,223 6,846,200 6,541,832 6,436,167   Effective cost of funds         0.46 %     0.46       0.45       0.46       0.46       Net interest margin         3.27 %     3.27       3.18       3.14       3.15     Taxable equivalent adjustment $ 329 305 311 315 330

 

(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)           June 30, 2016       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 $ 1,528,192 6.6 % $ 4,070 2.6 % Hotels 746,397 3.2 5,052 3.3 Office Buildings 1,559,631 6.8 2,563 1.7 Shopping Centers 926,147 4.0 358 0.2 Warehouses 535,889 2.3 1,128 0.7 Other Investment Property   624,405   2.7     978     0.7     Total Investment Properties 5,920,661 25.6 14,149 9.2     1-4 Family Construction 208,871 0.9 304 0.2 1-4 Family Investment Mortgage 758,463 3.3 7,994 5.2 Residential Development   160,446   0.7     9,571     6.2     Total 1-4 Family Properties 1,127,780 4.9 17,869 11.6     Land Acquisition   459,254   2.0     7,610     4.9     Total Commercial Real Estate   7,507,695   32.5     39,628     25.7     Commercial, Financial, and Agricultural 6,596,835 28.5 55,821 36.2 Owner-Occupied   4,358,595   18.9     17,118     11.1     Total Commercial & Industrial   10,955,430   47.4     72,939     47.3     Home Equity Lines 1,657,109 7.2 16,912 11.0 Consumer Mortgages 2,132,114 9.2 21,895 14.2 Credit Cards 236,034 1.1 - - Other Retail Loans   600,153   2.6     2,698     1.8     Total Retail   4,625,410   20.1     41,505     27.0     Unearned Income   (27,627 ) -     -     -     Total $ 23,060,908   100.0 % $ 154,072     100.0 %     LOANS OUTSTANDING BY TYPE COMPARISON (Unaudited) (Dollars in thousands)           Total Loans 2Q16 vs. 1Q16 2Q16 vs. 2Q15 Loan Type June 30, 2016 March 31, 2016 % change (1) June 30, 2015 % change     Multi-Family $ 1,528,192 1,524,850 0.9 % $ 1,286,747 18.8 % Hotels 746,397 718,640 15.5 663,286 12.5 Office Buildings 1,559,631 1,557,608 0.5 1,348,234 15.7 Shopping Centers 926,147 963,520 (15.6 ) 917,678 0.9 Warehouses 535,889 568,662 (23.2 ) 524,525 2.2 Other Investment Property 624,405 649,865 (15.8 ) 662,924 (5.8 )             Total Investment Properties 5,920,661 5,983,145 (4.2 ) 5,403,394 9.6     1-4 Family Construction 208,871 211,312 (4.6 ) 163,866 27.5 1-4 Family Investment Mortgage 758,463 787,354 (14.8 ) 788,704 (3.8 ) Residential Development   160,446   161,942     (3.7 )   161,130   (0.4 )   Total 1-4 Family Properties 1,127,780 1,160,608 (11.4 ) 1,113,700 1.3   Land Acquisition   459,254   469,882     (9.1 )   554,501   (17.2 )   Total Commercial Real Estate   7,507,695   7,613,635     (5.6 )   7,071,595   6.2     Commercial, Financial, and Agricultural 6,596,835 6,537,253 3.7 6,243,259 5.7 Owner-Occupied   4,358,595   4,272,219     8.1     4,161,268   4.7     Total Commercial & Industrial   10,955,430   10,809,472     5.4     10,404,527   5.3     Home Equity Lines 1,657,109 1,669,406 (3.0 ) 1,683,651 (1.6 ) Consumer Mortgages 2,132,114 1,970,193 33.1 1,793,752 18.9 Credit Cards 236,034 232,554 6.0 246,724 (4.3 ) Other Retail Loans   600,153   492,274     88.1     323,741   85.4     Total Retail   4,625,410   4,364,427     24.1     4,047,868   14.3     Unearned Income   (27,627 ) (29,331 )   (23.4 )   (29,121 ) (5.1 )   Total $ 23,060,908   22,758,203     5.3 % $ 21,494,869   7.3 %   (1) Percentage change is annualized.                             Synovus

 

  CREDIT QUALITY DATA (Unaudited) (Dollars in thousands) 2016 2015 2nd Quarter Second First Fourth Third Second '16 vs. '15 Quarter     Quarter     Quarter     Quarter     Quarter Change   Non-performing Loans $ 154,072 178,167 168,370 157,640 173,638 (11.3 )% Other Real Estate   33,289   38,462 47,030 64,346 66,449 (49.9 ) Non-performing Assets 187,361 216,629 215,400 221,986 240,087 (22.0 )   Allowance for loan losses 255,076 254,516 252,496 250,900 254,702 0.1   Net Charge-Offs - Quarter 6,133 7,357 3,425 6,758 5,306 15.6 Net Charge-Offs / Average Loans - Quarter (1) 0.11 % 0.13 0.06 0.12 0.10   Non-performing Loans / Loans 0.67 0.78 0.75 0.72 0.81 Non-performing Assets / Loans, Other Loans Held for Sale & ORE 0.81 0.95 0.96 1.01 1.11 Allowance / Loans 1.11 1.12 1.13 1.15 1.18   Allowance / Non-performing Loans 165.56 142.85 149.96 159.16 146.69 Allowance / Non-performing Loans (2) 195.25 173.64 189.47 205.90 202.08   Past Due Loans over 90 days and Still Accruing $ 5,964 3,214 2,621 2,998 4,832 23.4 As a Percentage of Loans Outstanding 0.03 % 0.01 0.01 0.01 0.02   Total Past Due Loans and Still Accruing $ 55,716 63,852 47,912 39,350 50,860 9.5 As a Percentage of Loans Outstanding 0.24 % 0.28 0.21 0.18 0.24   Accruing Troubled Debt Restructurings (TDRs) $ 205,165 209,159 223,873 240,370 268,542 (23.6 )   (1) Ratio is annualized. (2) Excludes non-performing loans for which the expected loss has been charged off.                                               SELECTED CAPITAL INFORMATION (1) (Unaudited) (Dollars in thousands)       June 30, 2016 March 31, 2016 June 30, 2015     Tier 1 Capital $ 2,627,574 2,609,191 2,615,827 Total Risk-Based Capital 3,146,898 3,183,901 2,971,518 Common Equity Tier 1 Ratio (transitional) 10.02 % 10.04 10.73 Common Equity Tier 1 Ratio (fully phased-in) 9.49 9.47 10.09 Tier 1 Capital Ratio 10.06 10.04 10.73 Total Risk-Based Capital Ratio 12.05 12.25 12.18 Tier 1 Leverage Ratio 9.10 9.15 9.48 Common Equity as a Percentage of Total Assets (2) 9.59 9.69 10.21 Tangible Common Equity as a Percentage of Tangible Assets (3) 9.52 9.62 10.13 Tangible Common Equity as a Percentage of Risk Weighted Assets (3) 10.72 10.78 11.71 Book Value Per Common Share (4) 22.78 22.47 21.78 Tangible Book Value Per Common Share (3) 22.58 22.27 21.59  

(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.

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Synovus Financial Corp.Media ContactLee Underwood, 706-644-0528Media RelationsorInvestor ContactBob May, 706-649-3555Investor Relations