Diluted Earnings per Share of $0.60, up 29.6%
vs. 2Q16
Synovus Financial Corp. (NYSE: SNV) today reported financial
results for the quarter ended June 30, 2017.
Second Quarter Highlights
- Net income available to common
shareholders was $73.4 million or $0.60 per diluted share as
compared to $69.3 million or $0.56 per diluted share for the first
quarter 2017 and $57.9 million or $0.46 per diluted share for the
second quarter 2016.
- Return on average assets was 1.00%, up
4 basis points from the previous quarter and up 17 basis points
from the second quarter 2016.
- Return on average common equity was
10.34%, up 37 basis points from the previous quarter and up 208
basis points from the second quarter 2016.
- Total average loans grew $314.0 million
or 5.2% annualized from the previous quarter and $1.42 billion or
6.2% as compared to the second quarter 2016.
- Total average deposits grew $72.9
million or 1.2% annualized from the previous quarter and $1.38
billion or 5.9% as compared to the second quarter 2016.
- Credit quality metrics remained
favorable with a non-performing asset ratio of 73 basis points,
down 4 basis points from the previous quarter and down 8 basis
points from the second quarter 2016.
- Total revenues1 were $319.8 million, up
$15.7 million or 5.2% from the previous quarter and 10.5% from the
second quarter 2016.
- Net interest margin was 3.51%, up 9
basis points from the previous quarter and up 24 basis points from
the second quarter 2016.
- Efficiency ratio2 of 59.90% improved
from 64.84% the previous quarter and 65.11% in the second quarter
2016.
“We are pleased with our second quarter performance, highlighted
by a 30 percent year-over-year increase in earnings per share,”
said Kessel Stelling, Synovus chairman and CEO. “Profitability
continued to improve as we delivered a 1 percent return on assets
and an efficiency ratio below 60 percent for the quarter. We also
celebrated being named ‘Most Reputable Bank’ by American Banker
magazine and the Reputation Institute. Our team is honored by this
recognition from both customers and non-customers, and further
energized about our transition to a unified Synovus brand in
2018.”
Balance Sheet
- Total loans ended the quarter at $24.43
billion, up $172.0 million or 2.8% annualized from the previous
quarter and up $1.37 billion or 5.9% as compared to the second
quarter 2016.
- Commercial and industrial loans grew by
$10.1 million or 0.3% annualized from the previous quarter and
$795.5 million or 7.3% as compared to the second quarter 2016.
- Consumer loans grew by $207.2 million
or 16.3% annualized from the previous quarter and $666.0 million or
14.4% as compared to the second quarter 2016.
- Commercial real estate loans declined
by $45.0 million or 2.4% annualized from the previous quarter and
declined $93.4 million or 1.2% as compared to the second quarter
2016.
- Total average loans were $24.35
billion, up $314.0 million or 5.2% annualized from the previous
quarter and $1.42 billion or 6.2% as compared to the second quarter
2016.
- Total average deposits were $24.99
billion, up $72.9 million or 1.2% annualized from the previous
quarter and $1.38 billion or 5.9% as compared to the second quarter
2016.
- Average core transaction deposits3 grew
$261.3 million or 5.8% annualized from the previous quarter and
$1.56 billion or 9.3% as compared to the second quarter 2016.
Core Performance
- Total revenues1 were $319.8 million, up
$15.7 million or 5.2% from the previous quarter and 10.5% from the
second quarter 2016.
- Net interest income was $251.1 million,
up $11.2 million or 4.7% from the previous quarter and 13.4% from
the second quarter 2016.
- Net interest margin was 3.51%, up 9
basis points from the previous quarter. Yield on earning assets was
3.99%, up 11 basis points from the previous quarter, and the
effective cost of funds was 0.48%, up 2 basis points from the
previous quarter.
- Total non-interest income was $68.7
million, down $3.2 million or 4.4% compared to the previous quarter
and up 1.2% from second quarter 2016.
- Adjusted non-interest income was $70.1
million, up $4.1 million or 6.2% from the previous quarter and up
3.4% as compared to the second quarter 2016.
- Core banking fees4 were $34.2 million,
up $1.5 million or 4.6% from the previous quarter and 1.3% from the
second quarter 2016.
- Fiduciary and asset management fees,
brokerage revenue, and insurance revenues were $20.8 million, up
$114 thousand or 0.5% from the previous quarter and 5.0% from the
second quarter 2016.
- Mortgage banking income was $5.8
million, unchanged from the previous quarter and down 2.6% from the
second quarter 2016.
- Total non-interest expense was $191.7
million, down $5.6 million or 2.9% from the previous quarter and up
1.7% from the second quarter 2016.
- First quarter 2017 and second quarter
2016 included restructuring charges of $6.5 million and $5.8
million, respectively.
- Adjusted non-interest expense was
$191.4 million, up $837 thousand or 0.4% from the previous quarter
and 5.0% from the second quarter 2016.
- Employment expense of $105.2 million
decreased $2.0 million or 1.8% from the previous quarter and
increased 8.4% from the second quarter 2016.
- Occupancy and equipment expense of
$29.9 million increased $602 thousand or 2.1% from the previous
quarter and 11.8% from the second quarter 2016.
- Other expenses of $56.6 million
decreased $4.3 million or 7.0% from the previous quarter and
decreased 12.6% from the second quarter 2016.
- Efficiency ratio2 was 59.90% as
compared to 64.84% in the previous quarter and 65.11% in the second
quarter 2016.
- Adjusted efficiency ratio was 59.56% as
compared to 62.25% in the previous quarter and 63.00% in the second
quarter 2016.
Credit Quality
- Non-performing loans were $159.3
million at June 30, 2017, up $951 thousand from March 31, 2017 and
up $5.2 million from June 30, 2016. The non-performing loan ratio
was 0.65% at June 30, 2017, unchanged compared to March 31, 2017
and down from 0.67% at June 30, 2016.
- Total non-performing assets were $178.9
million at June 30, 2017, down $8.3 million from March 31, 2017 and
down $8.4 million from June 30, 2016. The non-performing asset
ratio was 0.73% at June 30, 2017, as compared to 0.77% at March 31,
2017 and 0.81% at June 30, 2016.
- Net charge-offs were $15.7 million in
the second quarter 2017, up $8.8 million from $6.9 million in the
previous quarter and up $9.5 million from $6.1 million in the
second quarter 2016. The annualized net charge-off ratio was 0.26%
in the second quarter as compared to 0.12% in the previous quarter
and 0.11% in the second quarter 2016.
- Total delinquencies (consisting of
loans 30 or more days past due and still accruing) remained low at
0.27% of total loans at June 30, 2017 as compared to 0.26% at March
31, 2017 and 0.24% at June 30, 2016.
Capital Ratios
- Ratios reflect repurchase of $30.2
million in common stock during the second quarter 2017.
- Common Equity Tier 1 ratio was 10.02%
at June 30, 2017 compared to 9.86% at March 31, 2017.
- Tier 1 Capital ratio was 10.36% at June
30, 2017 compared to 10.18% at March 31, 2017.
- Total Risk Based Capital ratio was
12.24% at June 30, 2017 compared to 12.09% at March 31, 2017.
- Tier 1 Leverage ratio was 9.29% at June
30, 2017 compared to 9.13% at March 31, 2017.
- Tangible Common Equity ratio was 9.15%
at June 30, 2017 compared to 9.04% at March 31, 2017.
Second Quarter Earnings Conference Call
Synovus will host an earnings highlights conference call at 8:30
a.m. EDT on July 18, 2017. 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 $31 billion in assets.
Synovus provides commercial and retail banking, investment, and
mortgage services through 248 branches in Georgia, Alabama, South
Carolina, Florida, and Tennessee. Synovus Bank, a wholly owned
subsidiary of Synovus, was recognized as the “Most Reputable Bank”
by American Banker and the Reputation Institute in 2017, and was
named “Best Regional Bank, Southeast” by MONEY Magazine for
2016-17. 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, strategic transactions, our brand 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, 2016 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 average core transaction deposits; adjusted
non-interest income; 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 total average deposits; total
non-interest income; total non-interest expense; efficiency ratio;
return on average common equity 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’
operating results, financial strength and capitalization, and the
performance of its business and the strength of its capital
position, but they have inherent limitations as analytical tools
and should not be considered in isolation or as a substitute for
analyses of results as reported under GAAP. Average core
transaction deposits are a measure used by management to evaluate
organic growth of deposits and the quality of deposits as a funding
source. Adjusted non-interest income is a measure utilized by
management to measure non-interest income exclusive of net
investment securities gains and decrease in fair value of private
equity investments, net. 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 be considered as additional views of the way our financial
measures are affected by significant items and other factors, and
since they are not required to be uniformly applied, they may not
be comparable to other similarly titled measures at other companies
and should not be considered as substitutes for total average
deposits; total non-interest income; total non-interest expense;
efficiency ratio; return on average common equity 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 average core transaction deposits; adjusted
non-interest income; 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 total average deposits; total non-interest income;
total non-interest expense; efficiency ratio; return on average
common equity; and total shareholders’ equity to total assets ratio
are set forth in the tables below.
1 Consist of net interest income and non-interest income
excluding net investment securities gains.2 Non-interest expense as
a percentage of the sum of net interest income (fully taxable
equivalent basis) and non-interest income excluding net investment
securities gains/losses.3 Consist of non-interest bearing,
NOW/Savings, and money market deposits excluding SCMs and brokered
deposits.4 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)
2Q17
1Q17
2Q16
Average Core Transaction Deposits Total
average deposits $ 24,991,708 24,918,855 23,608,027
Subtract: Average brokered deposits (1,379,559 ) (1,380,786 )
(1,337,001 ) Subtract: Average time deposits excluding average SCM
time deposits (3,151,333 ) (3,151,888 ) (3,141,621 ) Subtract:
Average state, county, and municipal (SCM) deposits
(2,051,646 )
(2,238,324 ) (2,280,038
) Average core transaction deposits
$
18,409,170 18,147,857
16,849,367 Adjusted
Non-interest Income Total non-interest income $ 68,701 71,839
67,886 Subtract/add: Investment securities gains (losses), net 1
(7,668 ) - Subtract/add: (Decrease) increase in fair value of
private equity investments, net
1,352
1,814 (113 )
Adjusted non-interest income
$ 70,054
65,985 67,773
Adjusted Non-interest Expense Total non-interest
expense $ 191,747 197,388 188,611 Subtract: Restructuring charges
(13 ) (6,511 ) (5,841 ) Subtract: Fair value adjustment to Visa
derivative - - (360 ) Subtract: Merger-related expense - (86 ) -
Subtract: Amortization of intangibles
(292
) (183 )
- Adjusted non-interest expense
$ 191,442
190,608 182,410
Adjusted Efficiency Ratio Adjusted non-interest expense $
191,442 190,608 182,410 Net interest income 251,097 239,927 221,449
Add: Tax equivalent adjustment 298 309 329 Add: Total non-interest
income 68,701 71,839 67,886 Subtract/add: Decrease (increase) in
fair value of private equity investments, net 1,352 1,814
(113
)
Subtract/add: Investment securities gains (losses), net
1 (7,668 )
- Total revenues $ 321,449
306,221 289,551 Adjusted efficiency ratio
59.56
% 62.25 63.00
Reconciliation of Non-GAAP Financial
Measures, continued
(dollars in thousands)
2Q17
1Q17
2Q16
Tangible common equity ratio Total assets $
30,687,966 30,679,589 29,459,691 Subtract: Goodwill (57,092 )
(57,010 ) (24,431 ) Subtract: Other intangible assets, net
(11,843 ) (12,137
) (228 ) Tangible assets
$ 30,619,031
30,610,442 29,435,032
Total shareholders’ equity $ 2,997,947 2,962,127 2,951,659
Subtract: Goodwill (57,092 ) (57,010 ) (24,431 ) Subtract: Other
intangible assets, net (11,843 ) (12,137 ) (288 ) Subtract: Series
C Preferred Stock, no par value
(125,980
) (125,980 )
(125,980 ) Tangible common equity
$ 2,803,032
2,767,000 2,800,960
Tangible common equity ratio 9.15 % 9.04 9.52
Common Equity Tier 1 (CET1) ratio
(fully phased-in)
Common Equity Tier 1 (CET1) $ 2,733,823 2,672,649 2,615,939
Adjustment related to capital components
(31,913 ) (39,834
) (114,751 ) CET1 (fully
phased-in)
$ 2,701,910
2,632,815 2,501,188 Total
risk-weighted assets (fully phased-in) $ 27,528,806 27,332,093
26,363,698 Common Equity Tier 1 (CET1) ratio (fully phased-in) 9.81
% 9.63 9.49
Synovus
INCOME STATEMENT DATA
(Unaudited)
Six Months Ended
(Dollars in thousands, except per share data)
June 30,
2017 2016
Change Interest income
$ 557,911 501,716 11.2
% Interest expense
66,887 62,073 7.8
Net interest income
491,024 439,643 11.7
Provision for loan losses
18,934 16,070 17.8
Net interest income after provision for loan
losses
472,090 423,573 11.5
Non-interest income: Service charges on deposit accounts
39,593 39,950 (0.9 ) Fiduciary and asset management fees
24,676 22,854 8.0 Brokerage revenue
14,436 13,821 4.4
Mortgage banking income
11,548 11,425 1.1 Bankcard fees
16,438 16,718 (1.7 ) Investment securities gains, net
7,667 67 nm (Decrease) increase in fair value of private
equity investments, net
(3,166 ) (278 ) nm Other fee
income
11,033 10,084 9.4 Other non-interest income
18,314 16,392 11.7 Total
non-interest income
140,539 131,033 7.3
Non-interest expense: Salaries and other
personnel expense
212,404 198,419 7.0 Net occupancy and
equipment expense
59,264 53,360 11.1 Third-party processing
expense
26,223 22,814 14.9 FDIC insurance and other
regulatory fees
13,645 13,344 2.3 Professional fees
12,907 13,307 (3.0 ) Advertising expense
11,258 9,761
15.3 Foreclosed real estate expense, net
3,582 7,272 (50.7 )
Earnout liability adjustments
1,707 - nm Merger-related
expense
86 - nm Amortization of intangibles
475 121
292.6 Fair value adjustment to Visa derivative
- 720 nm Loss
on early extinguishment of debt
- 4,735 nm Litigation
settlement expense
- 2,700 nm Restructuring charges, net
6,524 6,981 (6.5 ) Other operating expenses
41,058 43,310 (5.2 ) Total non-interest
expense
389,133 376,844 3.3
Income before income taxes
223,496 177,762
25.7 Income tax expense
75,635 64,773 16.8
Net income
147,861 112,989 30.9
Dividends on preferred stock
5,119 5,119
- Net income available to common
shareholders
$ 142,742 107,870 32.3 %
Net income per common share, basic
$
1.17 0.85 37.4 % Net income per common share, diluted
1.16 0.85 36.5 Cash dividends declared per common
share
0.30 0.24 25.0 Return on average assets
0.98 % 0.78
20
bps
Return on average common equity
10.16 7.66 250
Weighted average common shares outstanding, basic
122,251
126,164 (3.1 )% Weighted average common shares outstanding, diluted
123,042 126,778 (2.9 )
nm - not meaningful
bps - basis points
Synovus
INCOME STATEMENT DATA (Unaudited) (In thousands,
except per share data)
2017
2016 2nd Quarter
Second
First Fourth Third Second
'17 vs. '16
Quarter Quarter
Quarter Quarter Quarter
Change Interest income $
285,510
272,401 264,534 256,554 252,393 13.1 % Interest expense
34,413 32,474 31,004 30,547
30,944 11.2 Net interest income
251,097
239,927 233,530 226,007 221,449 13.4 Provision for loan losses
10,260 8,674 6,259 5,671
6,693 53.3 Net interest income after provision
for loan losses
240,837 231,253 227,271
220,336 214,756 12.1
Non-interest income: Service charges on deposit accounts
19,820 19,774 20,653 20,822 20,240 (2.1 ) Fiduciary and
asset management fees
12,524 12,151 11,903 11,837 11,580 8.2
Brokerage revenue
7,210 7,226 7,009 6,199 7,338 (1.7 )
Mortgage banking income
5,784 5,766 5,504 7,329 5,941 (2.6 )
Bankcard fees
8,253 8,185 8,330 8,269 8,346 (1.1 )
Investment securities gains (losses), net
(1 ) 7,668
5,885 59 - nm (Decrease) increase in fair value of private equity
investments, net
(1,352 ) (1,814 ) (499 ) (249 ) 113
nm Other fee income
6,164 4,868 4,965 5,171 5,280 16.7 Other
non-interest income
10,299 8,015 10,256
8,718 9,048 13.8 Total
non-interest income
68,701 71,839
74,006 68,155 67,886 1.2
Non-interest expense: Salaries and other personnel
expense
105,213 107,191 101,662 101,945 97,061 8.4 Net
occupancy and equipment expense
29,933 29,331 27,867 28,120
26,783 11.8 Third-party processing expense
13,620 12,603
12,287 11,219 11,698 16.4 FDIC insurance and other regulatory fees
6,875 6,770 6,614 6,756 6,625 3.8 Professional fees
7,551 5,355 6,904 6,486 6,938 8.8 Advertising expense
5,346 5,912 4,905 5,597 7,351 (27.3 ) Foreclosed real estate
expense, net
1,448 2,134 2,840 2,725 4,588 (68.4 ) Earnout
liability adjustments
1,707 - - - - nm Merger-related
expense
- 86 1,086 550 - nm Amortization of intangibles
292 183 400 - - nm Fair value adjustment to Visa derivative
- - 4,716 360 360 nm Litigation settlement (recovery)
expense
- - - (189 ) - nm Restructuring charges, net
13 6,511 42 1,243 5,841 nm Other operating expenses
19,749 21,312 23,886 21,059
21,366 (7.6 ) Total non-interest expense
191,747 197,388 193,209 185,871
188,611 1.7 Income before
income taxes
117,791 105,704 108,068 102,620 94,031 25.3
Income tax expense
41,788 33,847 39,519
37,375 33,574 24.5 Net income
76,003 71,857 68,549 65,245 60,457 25.7 Dividends on
preferred stock
2,559 2,559 2,559
2,559 2,559 - Net income available to
common shareholders $
73,444 69,298 65,990
62,686 57,898 26.9 % Net income per common
share, basic $
0.60 0.57 0.54 0.51 0.46 29.9 % Net
income per common share, diluted
0.60 0.56 0.54 0.51 0.46
29.6 Cash dividends declared per common share
0.15
0.15 0.12 0.12 0.12 25.0 Return on average assets *
1.00
%
0.96 0.90 0.88 0.83
17
bps
Return on average common equity *
10.34 9.97 9.42 8.89 8.26
208 Weighted average common shares outstanding, basic
122,203 122,300 122,341 122,924 125,100 (2.3 )% Weighted
average common shares outstanding, diluted
123,027 123,059
123,187 123,604 125,699 (2.1 )
nm - not meaningful
bps - basis points
* - ratios are annualized
Synovus
BALANCE SHEET
DATA June 30, 2017 December 31, 2016 June 30, 2016
(Unaudited) (In thousands, except share data)
ASSETS Cash and cash equivalents $
377,213 395,175 377,334
Interest bearing funds with Federal Reserve Bank
468,148
527,090 904,406 Interest earning deposits with banks
6,012
18,720 24,541
Federal funds sold and securities
purchased under resale agreements
46,847 58,060 77,685 Trading account assets, at fair value
3,045 9,314 1,001 Mortgage loans held for sale, at fair
value
61,893 51,545 87,824 Investment securities available
for sale, at fair value
3,827,058 3,718,195 3,580,359
Loans, net of deferred fees and costs
24,430,512 23,856,391
23,060,908 Allowance for loan losses
(248,095) (251,758)
(255,076) Loans, net
24,182,417 23,604,633 22,805,832
Premises and equipment, net
416,364 417,485 424,967 Goodwill
57,092 59,678 24,431 Other intangible assets
11,843
13,223 228 Other real estate
19,476 22,308 33,289 Deferred
tax asset, net
320,403 395,356 425,160 Other assets
890,155 813,220 692,634 Total assets
$
30,687,966 30,104,002 29,459,691 LIABILITIES AND
SHAREHOLDERS' EQUITY Liabilities: Deposits: Non-interest bearing
deposits $
7,363,476 7,085,804 6,934,443 Interest bearing
deposits, excluding brokered deposits
16,387,032 16,183,273
15,495,318 Brokered deposits
1,468,308 1,378,983 1,496,161
Total deposits
25,218,816 24,648,060 23,925,922
Federal funds purchased and securities
sold under repurchase agreements
150,379
159,699 247,179 Long-term debt
2,107,245 2,160,881 2,135,892
Other liabilities
213,579 207,438 199,039 Total
liabilities
27,690,019 27,176,078 26,508,032
Shareholders' equity:
Series C Preferred Stock - no par value,
5,200,000 shares outstanding at June 30, 2017, December 31, 2016,
and June 30, 2016
125,980
125,980 125,980
Common stock - $1.00 par value.
121,661,092 shares outstanding at June 30, 2017, 122,266,106 shares
outstanding at December 31, 2016, and 124,047,659 shares
outstanding at June 30, 2016
142,499
142,026 141,008 Additional paid-in capital
3,029,754
3,028,405 2,993,985
Treasury stock, at cost - 20,837,814
shares at June 30, 2017, 19,759,614 shares at December 31, 2016,
and 16,959,977 shares at June 30, 2016
(709,944)
(664,595) (573,058) Accumulated other comprehensive income
(loss)
(47,865) (55,659) 11,005 Retained earnings
457,523 351,767 252,739 Total shareholders' equity
2,997,947 2,927,924 2,951,659 Total liabilities and
shareholders' equity $
30,687,966 30,104,002 29,459,691
Synovus
AVERAGE BALANCES AND YIELDS/RATES (1) (Unaudited)
(Dollars in thousands)
2017
2016
Second First
Fourth Third Second
Quarter
Quarter Quarter Quarter
Quarter Interest Earning Assets Taxable
investment securities (2) $
3,844,688 3,841,556 3,643,510
3,544,933 3,529,030 Yield
2.11 % 2.06 1.92 1.83 1.89
Tax-exempt investment securities (2) (4) $
340 2,730 2,824
2,943 3,491 Yield (taxable equivalent)
6.87 % 5.81 5.82 5.96
6.08 Trading account assets $
3,667 6,443 6,799 5,493
3,803 Yield
2.28 % 1.72 2.63 0.93 1.27 Commercial
loans (3) (4) $
19,137,733 19,043,384 18,812,659 18,419,484
18,433,638 Yield
4.27 % 4.16 4.05 4.03 4.04 Consumer
loans (3) $
5,215,258 4,992,683 4,911,149 4,720,082
4,497,147 Yield
4.49 % 4.40 4.27 4.30 4.32 Allowance
for loan losses $
(251,219 ) (253,927 )
(253,713 ) (255,675 )
(251,101 ) Loans, net (3) $
24,101,772 23,782,140
23,470,095 22,883,891 22,679,684 Yield
4.36 % 4.25 4.14 4.14
4.15 Mortgage loans held for sale $
52,224 46,554
77,652 87,524 72,477 Yield
3.87 % 4.01 3.51 3.32 3.59
Federal funds sold, due from Federal Reserve Bank, and other
short-term investments $
561,503 654,322 982,355 998,565
907,614 Yield
1.00 % 0.77 0.49 0.48 0.47 Federal Home
Loan Bank and Federal Reserve Bank stock (5) $
177,323
170,844 121,079 70,570 77,571 Yield
2.99 % 3.42 3.75 4.99
5.15 Total interest earning assets $
28,741,517
28,504,589 28,304,314 27,593,919 27,273,670 Yield
3.99 % 3.88
3.73 3.71 3.73
Interest Bearing Liabilities Interest bearing
demand deposits $
4,837,053 4,784,329 4,488,135 4,274,117
4,233,310 Rate
0.23 % 0.19 0.16 0.16 0.18 Money
market accounts $
7,427,562 7,424,627 7,359,067 7,227,030
7,082,759 Rate
0.32 % 0.31 0.29 0.29 0.31 Savings
deposits $
805,019 909,660 908,725 797,961 746,225 Rate
0.04 % 0.11 0.12 0.07 0.06 Time deposits under
$100,000 $
1,202,746 1,215,593 1,229,809 1,248,294 1,262,280
Rate
0.67 % 0.64 0.64 0.64 0.64 Time deposits over
$100,000 $
2,040,924 2,029,713 2,014,564 2,030,242 2,016,116
Rate
0.94 % 0.92 0.90 0.88 0.89 Non maturing brokered
deposits $
564,043 619,627 638,779 634,596 451,398 Rate
0.54 % 0.41 0.31 0.29 0.39 Brokered time deposits $
815,515 761,159 742,153 775,143 885,603 Rate
0.94 % 0.92 0.90
0.88 0.85 Total
interest bearing deposits $
17,692,862 17,744,708 17,381,232
16,987,383 16,677,691 Rate
0.41 % 0.39 0.37 0.37 0.39
Federal funds purchased and securities sold under repurchase
agreements $
183,400 176,854 219,429 247,378 221,276 Rate
0.10 % 0.09 0.08 0.09 0.09 Long-term debt $
2,270,452 2,184,072 2,190,716 2,114,193 2,279,043 Rate
2.83 % 2.83 2.65 2.71 2.55 Total interest bearing
liabilities $
20,146,714 20,105,634 19,791,377 19,348,954
19,178,010 Rate
0.68 %
0.65 0.62
0.63 0.65 Non-interest bearing
demand deposits $
7,298,845 7,174,146 7,280,033 7,042,908
6,930,336 Effective cost of funds
0.48 % 0.46 0.44
0.44 0.46
Net interest margin
3.51
% 3.42 3.29
3.27 3.27 Taxable equivalent
adjustment $
298 309 322 330 329 (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 2Q17 vs. 1Q17 Non-performing 2Q17 vs. 2Q16 Loan Type
Loans Loans % change (1) Loans % change
June 30,
2017 March 31, 2017 June 30, 2016
Multi-Family $
1,621 1,556 16.8 % $ 4,070 nm Hotels
376 323 65.8 5,052 (92.6 )% Office Buildings
326 185
305.7 2,563 (87.3 ) Shopping Centers
161 - nm 358 nm
Warehouses
41 226 (328.3 ) 1,128 (96.4 ) Other Investment
Property
1,187 750 233.7 580
104.7
Total Investment Properties 3,712 3,040 88.7 13,751
(73.0 ) 1-4 Family Construction
- 306 (401.1 )
304 (100.0 ) 1-4 Family Investment Mortgage
8,535
8,497 1.8 7,994 6.8
Total 1-4 Family Properties 8,535 8,803 (12.2 ) 8,298
2.9 Commercial Development
269 205 125.2 398 (32.4 )
Residential Development
5,585 9,033 (153.1 ) 9,571 (41.6 )
Land Acquisition
5,077 5,114 (2.9 )
7,610 (33.3 )
Land and Development
10,931 14,352 (95.6 ) 17,579
(37.8 )
Total Commercial Real Estate 23,178
26,195 (46.2 ) 39,628 (41.5 )
Commercial, Financial, and Agricultural
69,550 60,381 60.9 55,821 24.6 Owner-Occupied
24,918
26,564 (24.9 ) 17,118 45.6
Total Commercial & Industrial 94,468
86,945 34.7 72,939 29.5
Home Equity Lines
20,648 22,918 (39.7 ) 16,912 22.1 Consumer
Mortgages
18,035 19,874 (37.1 ) 21,895 (17.6 ) Credit Cards
- - nm - nm Other Consumer Loans
2,988 2,434
91.3 2,698 10.7
Total Consumer 41,671 45,226 (31.5 )
41,505 0.4
Total $
159,317 158,366 2.4 % $ 154,072 3.4 %
(1) Percentage change is annualized.
LOANS OUTSTANDING BY TYPE COMPARISON (Unaudited)
(Dollars in thousands)
Total Loans Total Loans 2Q17 vs. 1Q17
Total Loans 2Q17 vs. 2Q16 Loan Type
June 30, 2017 March 31,
2017 % change (1) June 30, 2016 % change
Multi-Family $
1,724,917
1,638,250 21.2 % $ 1,528,191 12.9 % Hotels
835,110 794,685
20.4 746,397 11.9 Office Buildings
1,567,984 1,581,460 (3.4
) 1,559,631 0.5 Shopping Centers
864,868 902,954 (16.9 )
926,147 (6.6 ) Warehouses
467,369 504,619 (29.6 ) 535,889
(12.8 ) Other Investment Property
575,415 594,084
(12.6 ) 554,715 3.7
Total Investment
Properties 6,035,663 6,016,052 1.3 5,850,970 3.2
1-4 Family Construction
198,419 203,151 (9.3 ) 208,871 (5.0
) 1-4 Family Investment Mortgage
637,201 658,120
(12.7 ) 758,463 (16.0 )
Total 1-4 Family
Properties 835,620 861,271 (11.9 ) 967,334 (13.6 )
Commercial Development
59,299 58,537 5.2 69,691 (14.9
) Residential Development
118,032 130,653 (38.7 ) 160,446
(26.4 ) Land Acquisition
365,657 392,710 (27.6
) 459,254 (20.4 )
Land and Development
542,988 581,900 (26.8 ) 689,391
(21.2 )
Total Commercial Real Estate 7,414,271
7,459,223 (2.4 ) 7,507,695 (1.2 )
Commercial, Financial, and Agricultural
7,000,573 7,056,032 (3.2 ) 6,596,835 6.1 Owner-Occupied
4,750,335 4,684,734 5.6
4,358,595 9.0
Total Commercial &
Industrial 11,750,908 11,740,766 0.3
10,955,430 7.3 Home Equity Lines
1,563,167 1,587,102 (6.0 ) 1,657,109 (5.7 ) Consumer
Mortgages
2,470,665 2,350,730 20.5 2,132,114 15.9 Credit
Cards
225,900 224,349 2.8 236,034 (4.3 ) Other Consumer
Loans
1,031,639 922,018 47.7
600,153 71.9
Total Consumer 5,291,371
5,084,199 16.3 4,625,410 14.4
Unearned Income (26,038 ) (25,720 ) 5.0
(27,627 ) (5.8 )
Total $
24,430,512 24,258,468 2.8 % $ 23,060,908
5.9 % (1) Percentage change is annualized.
Synovus
CREDIT QUALITY DATA (Unaudited) (Dollars in
thousands)
2017 2016
2nd Quarter
Second First Fourth
Third Second '17 vs. '16
Quarter
Quarter Quarter Quarter Quarter Change
Non-performing Loans $
159,317 158,366 153,378 148,155
154,072 3.4 % Impaired Loans Held for Sale (1)
127 8,442 -
2,473 - nm Other Real Estate
19,476 20,425
22,308 28,438 33,289 (41.5 ) Non-performing Assets
178,920
187,233 175,686 179,066 187,361 (4.5 ) Allowance for loan
losses
248,095 253,514 251,758 253,817 255,076 (2.7 )
Net Charge-Offs - Quarter
15,678 6,919 8,319 6,930 6,133
155.6 Net Charge-Offs - YTD
22,597 6,919 28,739 20,420
13,490 67.5 Net Charge-Offs / Average Loans - Quarter (2)
0.26 % 0.12 0.14 0.12 0.11 Net Charge-Offs / Average Loans -
YTD (2)
0.19 0.12 0.12 0.12 0.12 Non-performing Loans
/ Loans
0.65 0.65 0.64 0.64 0.67 Non-performing Assets /
Loans, Other Loans Held for Sale & ORE
0.73 0.77 0.74
0.77 0.81 Allowance / Loans
1.02 1.05 1.06 1.09 1.11
Allowance / Non-performing Loans
155.72 160.08 164.14 171.32
165.56 Allowance / Non-performing Loans (3)
217.07 204.94
202.01 198.94 195.25 Past Due Loans over 90 days and Still
Accruing $
4,550 2,777 3,135 5,358 5,964 (23.7 ) As a
Percentage of Loans Outstanding
0.02 % 0.01 0.01 0.02 0.03
Total Past Due Loans and Still Accruing $
66,788
62,137 65,106 61,781 55,716 19.9 As a Percentage of Loans
Outstanding
0.27 % 0.26 0.27 0.27 0.24 Accruing
Troubled Debt Restructurings (TDRs) $
167,395 172,421
195,776 201,896 205,165 (18.4 )
(1) Represent only impaired loans that
have been specifically identified to be sold. Impaired loans held
for sale are carried at the lower of cost or fair value, less costs
to sell, based primarily on estimated sales proceeds net of selling
costs.
(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)
June 30, 2017
December 31,
2016
June 30, 2016 Tier 1 Capital $
2,827,892
2,685,880 2,627,574 Total Risk-Based Capital
3,338,707
3,201,268 3,146,898 Common Equity Tier 1 Ratio (transitional)
10.02 % 9.96 10.01 Common Equity Tier 1 Ratio (fully
phased-in)
9.81 9.51 9.49 Tier 1 Capital Ratio
10.36
10.07 10.06 Total Risk-Based Capital Ratio
12.24 12.01 12.05
Tier 1 Leverage Ratio
9.29 8.99 9.10
Common Equity as a Percentage of Total
Assets (2)
9.36 9.31 9.59 Tangible Common Equity as a Percentage of
Tangible Assets (3)
9.15 9.09 9.52 Tangible Common Equity as
a Percentage of Risk Weighted Assets (3)
10.27 10.24 10.72
Book Value Per Common Share (4) $
23.61 22.92 22.78
Tangible Book Value Per Common Share
(3)
23.04 22.32 22.58 (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. impact of unexercised tangible
equity units (tMEDs).
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170718005663/en/
Synovus Financial Corp.Investor
Contact:Bob May, 706-649-3555orMedia Contact:Lee Underwood,
706-644-0528
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