Diluted Earnings per Share of $1.21 vs.
$0.56 in 3Q20
Adjusted Diluted Earnings per Share of $1.20
vs. $0.89 in 3Q20
Synovus Financial Corp. (NYSE: SNV) today reported financial
results for the quarter ended September 30, 2021.
Third Quarter 2021 Highlights
- Net income available to common shareholders of $178.5 million
or $1.21 per diluted share, up $0.02 sequentially and up $0.65
compared to prior year.
- Adjusted diluted EPS of $1.20, unchanged sequentially and up
$0.31 compared to prior year.
- Period-end loans increased $105.0 million sequentially, or
$922.7 million excluding Paycheck Protection program (PPP) loans.
- PPP loans declined $817.7 million sequentially.
- Core transaction deposits (non-interest bearing, NOW/savings,
and money market deposits excluding public and brokered funds)
increased $1.03 billion or 3% sequentially.
- Total deposit costs of 0.13% down 3 bps sequentially due to
ongoing repricing and product remixing.
- Net interest income of $384.9 million increased $3.1 million
sequentially as asset growth, reduced deposit costs, and a higher
day count more than offset continued fixed-rate repricing and the
slight reduction in LIBOR.
- Net interest margin of 3.01%, down 1 bp sequentially.
- Non-interest revenue increased $7.9 million as broad-based
growth helped to offset continued normalization of net mortgage
revenue.
- Adjusted non-interest revenue increased $8.1 million.
- Non-interest expense decreased $3.5 million sequentially as
reductions in third-party processing and other services offset
increases in other areas such as net occupancy, equipment, and
software expense.
- Adjusted non-interest expense decreased $1.2 million
sequentially.
- Pre-provision net revenue of $232.8 million increased $14.4
million sequentially as total revenue increased $10.9 million and
non-interest expense decreased $3.5 million.
- Reversal of provision for credit losses of $7.9 million,
primarily from a more favorable economic outlook.
- Allowance for credit losses coverage ratio (to loans) of 1.40%,
or 1.42% excluding PPP loans.
- Credit quality metrics remain relatively stable, near
historical lows. The net charge-off ratio declined 6 bps from prior
quarter to 0.22%; the non-performing loan and asset ratios each
fell 1 bp to 0.41% and 0.45%, respectively; and criticized and
classified loans declined 22%.
- Preliminary CET1 ratio declined 12 bps sequentially to 9.63%,
with strong core earnings helping offset the decline from deploying
capital for balance sheet growth and returning capital to
shareholders.
- Includes $74.6 million in share repurchases at an average price
of $42.00.
- Achieved pre-tax run rate benefit of approximately $100 million
at the end of the quarter from a combination of revenue and expense
initiatives under Synovus Forward, which is designed to make
Synovus a more efficient, profitable, and nimble organization.
- On track to achieve an aggregate $175 million pre-tax run rate
benefit by the end of 2022.
Third Quarter Summary
Reported
Adjusted
(dollars in thousands)
3Q21
2Q21
3Q20
3Q21
2Q21
3Q20
Net income available to common
shareholders
$
178,482
$
177,909
$
83,283
$
177,760
$
178,969
$
131,364
Diluted earnings per share
1.21
1.19
0.56
1.20
1.20
0.89
Total loans
38,341,030
38,236,018
39,549,847
N/A
N/A
N/A
Total deposits
47,688,419
47,171,962
44,665,904
N/A
N/A
N/A
Total TE(1) revenue
500,608
489,738
492,357
499,743
488,612
492,851
Return on avg assets
1.34
%
1.36
%
0.69
%
1.33
%
1.37
%
1.05
%
Return on avg common equity
14.96
15.40
7.28
14.90
15.50
11.48
Return on avg tangible common equity
16.85
17.41
8.46
16.79
17.52
13.24
Net interest margin
3.01
3.02
3.10
N/A
N/A
N/A
Efficiency ratio-TE(1)
53.34
55.24
64.31
52.96
54.41
53.83
NCO ratio
0.22
0.28
0.29
N/A
N/A
N/A
NPA ratio
0.45
0.46
0.49
N/A
N/A
N/A
(1) Taxable equivalent
“Our third quarter story was shaped by an intense focus on
growth, and we are pleased with the results,” said Kevin Blair,
Synovus president and CEO. “Loans, excluding PPP, grew $923
million, core transaction deposits were up $1.0 billion, and
pre-provision net revenue increased 7 percent versus the second
quarter. Our ongoing Synovus Forward initiatives reached a pre-tax
run rate benefit of $100 million by quarter end and we are
executing on an additional $75 million of benefits to be delivered
by the end of 2022. Synovus Forward represents our ongoing
innovation and profitable growth mindset, guiding our efforts to
deliver sustainable, top quartile financial performance and
enabling us to invest in areas with long-term benefit. With these
strategic investments, combined with the momentum we are
experiencing in our core businesses, our team is confident in our
ability to continue to deliver as we build the bank of the
future.”
Balance Sheet
Loans*
(dollars in millions)
3Q21
2Q21
Linked Quarter Change
Linked Quarter %
Change
3Q20
Year/Year Change
Year/Year % Change
Commercial & industrial
$
18,934.8
$
19,150.1
$
(215.3
)
(1
)%
$
20,123.6
$
(1,188.9
)
(6
)%
Commercial real estate
10,540.3
10,361.1
179.2
2
10,736.1
(195.8
)
(2
)
Consumer
8,866.0
8,724.8
141.1
2
8,690.1
175.8
2
Total loans
$
38,341.0
$
38,236.0
$
105.0
—
%
$
39,549.8
$
(1,208.9
)
(3
)%
*Amounts may not total due to rounding
- Total loans ended the quarter at $38.34 billion, up $105.0
million sequentially, or $922.7 million excluding PPP loans.
- Commercial and industrial (C&I) loans declined $215.3
million sequentially, led by a decline in PPP loan balances of
$817.7 million.
- C&I loan growth of $602.3 million excluding PPP balance
changes despite line utilization remaining near historic lows at
39%.
- CRE loans increased $179.2 million, primarily in the
income-producing real estate portfolio.
- Consumer loans increased $141.1 million sequentially, with
growth of $266.5 million in third-party consumer lending offsetting
declines in consumer mortgages and HELOCs of $92.3 million and
$50.0 million, respectively.
Deposits*
(dollars in millions)
3Q21
2Q21
Linked Quarter Change
Linked Quarter %
Change
3Q20
Year/Year Change
Year/Year % Change
Non-interest-bearing DDA
$
14,832.9
$
14,342.6
$
490.3
3
%
$
12,129.8
$
2,703.2
22
%
Interest-bearing DDA
6,056.0
5,839.8
216.2
4
5,291.1
764.8
14
Money market
14,267.4
13,983.1
284.3
2
12,441.3
1,826.1
15
Savings
1,380.4
1,341.5
39.0
3
1,126.0
254.4
23
Public funds
5,791.6
5,804.9
(13.3
)
—
5,791.9
(0.4
)
—
Time deposits
2,579.3
2,891.1
(311.8
)
(11
)
3,976.5
(1,397.1
)
(35
)
Brokered deposits
2,780.7
2,969.0
(188.3
)
(6
)
3,909.3
(1,128.6
)
(29
)
Total deposits
$
47,688.4
$
47,172.0
$
516.5
1
%
$
44,665.9
$
3,022.5
7
%
*Amounts may not total due to rounding
- Total deposits ended the quarter at $47.69 billion, up $516.5
million sequentially.
- Core transaction deposits increased $1.03 billion or 3%
sequentially.
- Broad-based growth in DDA, NOW, MMA, and savings accounts
supported strategic declines in higher cost deposits.
- Total deposit costs declined 3 bps sequentially to 0.13%.
Income Statement Summary**
(in thousands, except per share data)
3Q21
2Q21
Linked Quarter Change
Linked Quarter %
Change
3Q20
Year/Year Change
Year/Year % Change
Net interest income
$
384,917
$
381,860
$
3,057
1
%
$
376,990
$
7,927
2
%
Non-interest revenue
114,955
107,087
7,868
7
114,411
544
—
Non-interest expense
267,032
270,531
(3,499
)
(1
)
316,655
(49,623
)
(16
)
(Reversal of) provision for credit
losses
(7,868
)
(24,598
)
16,730
68
43,383
(51,251
)
nm
Income before taxes
$
240,708
$
243,014
$
(2,306
)
(1
)%
$
131,363
$
109,345
83
%
Income tax expense
53,935
56,814
(2,879
)
(5
)
39,789
14,146
36
Preferred stock dividends
8,291
8,291
—
—
8,291
—
—
Net income available to common
shareholders
$
178,482
$
177,909
$
573
—
%
$
83,283
$
95,199
114
%
Weighted average common shares
outstanding, diluted
147,701
149,747
(2,046
)
(1
)%
147,976
(275
)
—
%
Diluted earnings per share
$
1.21
$
1.19
$
0.02
2
$
0.56
$
0.65
116
Adjusted diluted earnings per share
1.20
1.20
—
—
0.89
0.31
35
** Amounts may not total due to
rounding
Core Performance
- Net interest income of $384.9 million increased $3.1 million
sequentially as asset growth and reduced deposit costs more than
offset continued fixed-rate repricing and the slight reduction in
LIBOR.
- Net PPP fee accretion of $21.3 million, up $0.9 million
sequentially.
- Net interest margin was 3.01%, down 1 bp sequentially.
- Non-interest revenue increased $7.9 million, or 7%
sequentially. Adjusted non-interest revenue increased $8.1 million,
or 8% sequentially, and decreased $0.8 million, or 1% compared to
prior year.
- Broad-based growth including $4.8 million in capital markets
income helped offset normalization of net mortgage revenue, which
declined $2.7 million sequentially.
- Non-interest expense decreased $3.5 million, or 1%
sequentially. Adjusted non-interest expense decreased $1.2 million
sequentially.
- Declines in third-party processing and other services of $5.0
million offset an increase in additional project spend that
contributed to the $1.7 million increase in net occupancy,
equipment, and software expense.
- Pre-provision net revenue of $232.8 million increased $14.4
million sequentially as total revenue increased $10.9 million and
non-interest expense decreased $3.5 million.
- Reversal of provision for credit losses of $7.9 million from
the provision expense associated with strong loan growth being more
than offset by a reduction in life of loan loss estimates;
allowance for credit losses coverage ratio (to loans) of 1.40%, or
1.42% excluding PPP loans.
- Tax expense was $53.9 million, a decrease of $2.9 million
sequentially due to lower taxable income and favorable changes in
discrete items.
- Year-to-date effective tax rate of 22.21%.
Capital Ratios
3Q21
2Q21
3Q20
Common equity Tier 1 capital (CET1)
ratio
9.63
%
*
9.75
%
9.30
%
Tier 1 capital ratio
10.83
*
11.00
10.57
Total risk-based capital ratio
12.96
*
13.25
13.16
Tier 1 leverage ratio
8.82
*
8.72
8.48
Tangible common equity ratio
7.68
7.73
7.67
* Ratios are preliminary.
Capital
- Preliminary CET1 ratio declined 12 bps during the quarter to
9.63% as strong core performance helped offset the impact of asset
growth and $74.6 million in share repurchases at an average price
of $42.00.
- Total risk-based capital ratio of 12.96% declined 29 bps from
the prior quarter following a reduction in the Allowance for Credit
Losses.
Third Quarter Earnings Conference Call
Synovus will host an earnings highlights conference call at 8:30
a.m. EDT on October 19, 2021. 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. is a financial services company
based in Columbus, Georgia, with approximately $56 billion in
assets. Synovus provides commercial and retail banking, investment,
and mortgage services through 283 branches in Alabama, Florida,
Georgia, South Carolina, and Tennessee. Synovus Bank, a wholly
owned subsidiary of Synovus, has been recognized as one of the
country's “Most Reputable Banks” by American Banker and the
Reputation Institute. Synovus is on the web at synovus.com, and on
Twitter, Facebook, LinkedIn, and Instagram.
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 our future operating and financial
performance; expectations on our growth strategy, expense and
revenue initiatives, capital management, balance sheet management,
and future profitability; expectations on credit quality and
performance; 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, 2020, 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.
Non-GAAP Financial Measures
The measures entitled adjusted non-interest revenue; adjusted
non-interest expense; total adjusted revenue; adjusted tangible
efficiency ratio; pre-provision net revenue; adjusted net income
available to common shareholders; adjusted diluted earnings per
share; adjusted return on average assets; adjusted return on
average common equity; return on average tangible common equity;
adjusted return on average tangible common equity; and tangible
common equity ratio are not measures recognized under GAAP and
therefore are considered non-GAAP financial measures. The most
comparable GAAP measures to these measures are total non-interest
revenue; total non-interest expense; total TE revenue; efficiency
ratio-TE; income before income taxes; net income available to
common shareholders; diluted earnings per share; return on average
assets; return on average common equity; and the ratio of total
shareholders' equity to total assets, respectively.
Management believes that these non-GAAP financial measures
provide meaningful additional information about Synovus to assist
management and investors in evaluating Synovus’ operating results,
financial strength, the performance of its business, and the
strength of its capital position. However, these non-GAAP financial
measures have inherent limitations as analytical tools and should
not be considered in isolation or as a substitute for analyses of
operating results or capital position as reported under GAAP. The
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. Total adjusted revenue and
adjusted non-interest revenue are measures used by management to
evaluate total TE revenue and non-interest revenue exclusive of net
investment securities gains (losses), gain on sale and changes in
the fair value of private equity investments, net, and fair value
adjustment on non-qualified deferred compensation. Adjusted
non-interest expense and the adjusted tangible efficiency ratio are
measures utilized by management to measure the success of expense
management initiatives focused on reducing recurring controllable
operating costs. Pre-provision net revenue is used by management to
evaluate income before income taxes exclusive of (reversal of)
provision for credit losses. Adjusted net income available to
common shareholders, adjusted diluted earnings per share, adjusted
return on average assets, and adjusted return on average common
equity are measures used by management to evaluate operating
results exclusive of items that are not indicative of ongoing
operations and impact period-to-period comparisons. Return on
average tangible common equity and adjusted return on average
tangible common equity are measures 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. The tangible common equity ratio is used by
management to assess the strength of our capital position. The
computations of these measures are set forth in the tables
below.
Reconciliation of Non-GAAP Financial
Measures
(dollars in thousands)
3Q21
2Q21
3Q20
Adjusted non-interest revenue
Total non-interest revenue
$
114,955
$
107,087
$
114,411
Subtract/add: Investment securities
(gains) losses, net
(962
)
—
1,550
Subtract: Fair value increase of private
equity investments
—
—
(260
)
Add/subtract: Fair value adjustment on
non-qualified deferred compensation
97
(1,126
)
(796
)
Adjusted non-interest revenue
$
114,090
$
105,961
$
114,905
Adjusted non-interest expense
Total non-interest expense
$
267,032
$
270,531
$
316,655
Add/subtract: Earnout liability
adjustment
243
(750
)
—
Subtract: Goodwill impairment
—
—
(44,877
)
Subtract: Restructuring charges
(319
)
(415
)
(2,882
)
Subtract: Loss on early extinguishment of
debt, net
—
—
(154
)
Add/subtract: Fair value adjustment on
non-qualified deferred compensation
97
(1,126
)
(796
)
Adjusted non-interest expense
$
267,053
$
268,240
$
267,946
Reconciliation of Non-GAAP Financial
Measures, continued
(dollars in thousands)
3Q21
2Q21
3Q20
Total adjusted revenue and adjusted
tangible efficiency ratio
Adjusted non-interest expense
$
267,053
$
268,240
$
267,946
Subtract: Amortization of intangibles
(2,379
)
(2,379
)
(2,640
)
Adjusted tangible non-interest expense
$
264,674
$
265,861
$
265,306
Net interest income
$
384,917
$
381,860
$
376,990
Add: Tax equivalent adjustment
736
791
956
Add: Total non-interest revenue
114,955
107,087
114,411
Total TE revenue
500,608
489,738
492,357
Subtract/add: Investment securities
(gains) losses, net
(962
)
—
1,550
Subtract: Fair value increase of private
equity investments
—
—
(260
)
Add/subtract: Fair value adjustment on
non-qualified deferred compensation
97
(1,126
)
(796
)
Total adjusted revenue
$
499,743
$
488,612
$
492,851
Efficiency ratio-TE
53.34
%
55.24
%
64.31
%
Adjusted tangible efficiency ratio
52.96
54.41
53.83
Pre-provision net revenue
Net interest income
$
384,917
$
381,860
$
376,990
Add: Total non-interest revenue
114,955
107,087
114,411
Subtract: Total non-interest expense
267,032
270,531
316,655
Pre-provision net revenue
$
232,840
$
218,416
$
174,746
Adjusted return on average assets
Net income
$
186,773
$
186,200
$
91,574
Subtract/add: Earnout liability
adjustment
(243
)
750
—
Add: Goodwill impairment
—
—
44,877
Add: Restructuring charges
319
415
2,882
Add: Loss on early extinguishment of debt,
net
—
—
154
Subtract/add: Investment securities
(gains) losses, net
(962
)
—
1,550
Subtract: Fair value increase of private
equity investments
—
—
(260
)
Add/subtract: Tax effect of adjustments
(1)
164
(105
)
(1,122
)
Adjusted net income
$
186,051
$
187,260
$
139,655
Net income annualized
$
741,002
$
746,846
$
364,305
Adjusted net income annualized
$
738,137
$
751,098
$
555,584
Total average assets
$
55,326,260
$
55,017,771
$
53,138,334
Return on average assets
1.34
%
1.36
%
0.69
%
Adjusted return on average assets
1.33
1.37
1.05
Adjusted net income available to common
shareholders and adjusted diluted earnings per share
Net income available to common
shareholders
$
178,482
$
177,909
$
83,283
Subtract/add: Earnout liability
adjustment
(243
)
750
—
Add: Goodwill Impairment
—
—
44,877
Add: Restructuring charges
319
415
2,882
Add: Loss on early extinguishment of debt,
net
—
—
154
Subtract/add: Investment securities
(gains) losses, net
(962
)
—
1,550
Subtract: Fair value increase of private
equity investments
—
—
(260
)
Add/subtract: Tax effect of adjustments
(1)
164
(105
)
(1,122
)
Adjusted net income available to common
shareholders
$
177,760
$
178,969
$
131,364
Weighted average common shares
outstanding, diluted
147,701
149,747
147,976
Diluted earnings per share
$
1.21
$
1.19
$
0.56
Adjusted diluted earnings per share
1.20
1.20
0.89
Reconciliation of Non-GAAP Financial
Measures, continued
(dollars in thousands)
3Q21
2Q21
3Q20
Adjusted return on average common
equity, return on average tangible common equity, and adjusted
return on average tangible common equity
Net income available to common
shareholders
$
178,482
$
177,909
$
83,283
Subtract/add: Earnout liability
adjustment
(243
)
750
—
Add: Goodwill impairment
—
—
44,877
Add: Restructuring charges
319
415
2,882
Add: Loss on early extinguishment of debt,
net
—
—
154
Subtract/add: Investment securities
(gains) losses, net
(962
)
—
1,550
Subtract: Fair value increase of private
equity investments
—
—
(260
)
Add/subtract: Tax effect of adjustments
(1)
164
(105
)
(1,122
)
Adjusted net income available to common
shareholders
$
177,760
$
178,969
$
131,364
Adjusted net income available to common
shareholders annualized
$
705,243
$
717,843
$
522,600
Add: Amortization of intangibles,
annualized net of tax
7,050
7,128
7,782
Adjusted net income available to common
shareholders excluding amortization of intangibles annualized
$
712,293
$
724,971
$
530,382
Net income available to common
shareholders annualized
$
708,108
$
713,591
$
331,322
Add: Amortization of intangibles,
annualized net of tax
7,050
7,128
7,782
Net income available to common
shareholders excluding amortization of intangibles annualized
$
715,158
$
720,719
$
339,104
Total average shareholders' equity less
preferred stock
$
4,734,754
$
4,632,568
$
4,553,159
Subtract: Goodwill
(452,390
)
(452,390
)
(497,267
)
Subtract: Other intangible assets, net
(39,109
)
(41,399
)
(49,075
)
Total average tangible shareholders'
equity less preferred stock
$
4,243,255
$
4,138,779
$
4,006,817
Return on average common equity
14.96
%
15.40
%
7.28
%
Adjusted return on average common
equity
14.90
15.50
11.48
Return on average tangible common
equity
16.85
17.41
8.46
Adjusted return on average tangible common
equity
16.79
17.52
13.24
Reconciliation of Non-GAAP Financial
Measures, continued
(dollars in thousands)
September 30, 2021
June 30, 2021
September 30, 2020
Tangible common equity ratio
Total assets
$
55,509,129
$
54,938,659
$
53,040,538
Subtract: Goodwill
(452,390
)
(452,390
)
(452,390
)
Subtract: Other intangible assets, net
(37,975
)
(40,354
)
(47,752
)
Tangible assets
$
55,018,764
$
54,445,915
$
52,540,396
Total shareholders’ equity
$
5,252,802
$
5,237,714
$
5,064,542
Subtract: Goodwill
(452,390
)
(452,390
)
(452,390
)
Subtract: Other intangible assets, net
(37,975
)
(40,354
)
(47,752
)
Subtract: Preferred Stock, no par
value
(537,145
)
(537,145
)
(537,145
)
Tangible common equity
$
4,225,292
$
4,207,825
$
4,027,255
Total shareholders’ equity to total assets
ratio
9.46
%
9.53
%
9.55
%
Tangible common equity ratio
7.68
7.73
7.67
(1) An assumed marginal tax rate of 25.3%
for 2021 and 25.9% for 2020 was applied.
INCOME STATEMENT DATA
(Unaudited)
(Dollars in thousands, except per share
data)
Nine Months Ended
2021
2020
'21 vs '20
% Change
Interest income
$
1,235,064
$
1,371,016
(10
)%
Interest expense
94,430
244,200
(61
)
Net interest income
1,140,634
1,126,816
1
(Reversal of) provision for credit
losses
(51,041
)
343,956
nm
Net interest income after provision for
credit losses
1,191,675
782,860
52
Non-interest revenue:
Service charges on deposit accounts
64,089
54,069
19
Fiduciary and asset management fees
56,545
46,009
23
Card fees
38,538
30,959
24
Brokerage revenue
41,644
32,987
26
Mortgage banking income
47,312
66,987
(29
)
Capital markets income
18,929
22,984
(18
)
Income from bank-owned life insurance
22,851
21,572
6
Investment securities (losses) gains,
net
(1,028
)
76,594
nm
Other non-interest revenue
44,117
39,591
11
Total non-interest revenue
332,997
391,752
(15
)
Non-interest expense:
Salaries and other personnel expense
482,408
464,268
4
Net occupancy, equipment, and software
expense
126,442
125,475
1
Third-party processing and other
services
63,897
67,193
(5
)
Professional fees
23,771
39,358
(40
)
FDIC insurance and other regulatory
fees
16,338
18,922
(14
)
Other operating expenses
91,841
161,860
(43
)
Total non-interest expense
804,697
877,076
(8
)
Income before income taxes
719,975
297,536
142
Income tax expense
159,910
74,250
115
Net income
560,065
223,286
151
Less: Preferred stock dividends
24,872
24,872
—
Net income available to common
shareholders
$
535,193
$
198,414
170
%
Net income per common share, basic
$
3.63
$
1.35
169
%
Net income per common share, diluted
3.59
1.34
168
Cash dividends declared per common
share
0.99
0.99
—
Return on average assets *
1.37
%
0.58
%
79
bps
Return on average common equity *
15.37
5.87
950
Weighted average common shares
outstanding, basic
147,622
147,304
0
%
Weighted average common shares
outstanding, diluted
149,069
148,037
1
nm - not meaningful
bps - basis points
* - ratios are annualized
Synovus
INCOME STATEMENT DATA
(Unaudited)
(Dollars in thousands, except per share
data)
2021
2020
Third Quarter
Third Quarter
Second Quarter
First Quarter
Fourth Quarter
Third Quarter
'21 vs '20
% Change
Interest income
$
412,504
412,743
409,817
433,479
435,550
(5
)%
Interest expense
27,587
30,883
35,960
47,547
58,560
(53
)
Net interest income
384,917
381,860
373,857
385,932
376,990
2
(Reversal of) provision for credit
losses
(7,868
)
(24,598
)
(18,575
)
11,066
43,383
nm
Net interest income after provision for
credit losses
392,785
406,458
392,432
374,866
333,607
18
Non-interest revenue:
Service charges on deposit accounts
22,641
21,414
20,033
19,063
17,813
27
Fiduciary and asset management fees
19,786
18,805
17,954
17,242
15,885
25
Card fees
13,238
13,304
11,996
11,743
10,823
22
Brokerage revenue
14,745
13,926
12,974
11,794
10,604
39
Mortgage banking income
11,155
13,842
22,315
24,426
31,229
(64
)
Capital markets income
8,089
3,335
7,505
4,352
5,690
42
Income from bank-owned life insurance
6,820
7,188
8,843
9,725
7,778
(12
)
Investment securities gains (losses),
net
962
—
(1,990
)
2,337
(1,550
)
nm
Other non-interest revenue
17,519
15,273
11,326
14,079
16,139
9
Total non-interest revenue
114,955
107,087
110,956
114,761
114,411
—
Non-interest expense:
Salaries and other personnel expense
160,364
160,567
161,477
153,946
154,994
3
Net occupancy, equipment, and software
expense
43,483
41,825
41,134
44,183
41,554
5
Third-party processing and other
services
19,446
24,419
20,032
20,799
21,827
(11
)
Professional fees
6,739
7,947
9,084
17,541
13,377
(50
)
FDIC insurance and other regulatory
fees
5,212
5,547
5,579
6,288
6,793
(23
)
Other operating expenses
31,788
30,226
29,828
59,741
78,110
(59
)
Total non-interest expense
267,032
270,531
267,134
302,498
316,655
(16
)
Income before income taxes
240,708
243,014
236,254
187,129
131,363
83
Income tax expense
53,935
56,814
49,161
36,720
39,789
36
Net income
186,773
186,200
187,093
150,409
91,574
104
Less: Preferred stock dividends
8,291
8,291
8,291
8,291
8,291
—
Net income available to common
shareholders
$
178,482
177,909
178,802
142,118
83,283
114
%
Net income per common share, basic
$
1.22
1.20
1.20
0.96
0.57
114
%
Net income per common share, diluted
1.21
1.19
1.19
0.96
0.56
116
Cash dividends declared per common
share
0.33
0.33
0.33
0.33
0.33
—
Return on average assets *
1.34
%
1.36
1.40
1.11
0.69
65
bps
Return on average common equity *
14.96
15.40
15.77
12.31
7.28
768
0.31
Weighted average common shares
outstanding, basic
146,308
148,113
148,467
147,744
147,314
(1
)%
Weighted average common shares
outstanding, diluted
147,701
149,747
149,780
148,725
147,976
—
nm - not meaningful
bps - basis points
* - ratios are annualized
Synovus
BALANCE SHEET DATA
September 30, 2021
December 31, 2020
September 30, 2020
(Unaudited)
(In thousands, except share data)
ASSETS
Cash and due from banks
$
483,035
$
531,579
$
578,026
Interest-bearing funds with Federal
Reserve Bank
2,103,497
3,586,565
1,266,313
Interest earning deposits with banks
23,261
20,944
20,929
Federal funds sold and securities
purchased under resale agreements
77,627
113,829
120,095
Cash, cash equivalents, and restricted
cash
2,687,420
4,252,917
1,985,363
Investment securities available for sale,
at fair value
10,481,071
7,962,438
7,566,525
Loans held for sale ($152,258, $216,647,
and $285,899 measured at fair value, respectively)
550,948
760,123
745,160
Loans, net of deferred fees and costs
38,341,030
38,252,984
39,549,847
Allowance for loan losses
(492,243
)
(605,736
)
(603,800
)
Loans, net
37,848,787
37,647,248
38,946,047
Cash surrender value of bank-owned life
insurance
1,065,256
1,049,373
1,044,046
Premises, equipment, and software, net
441,605
463,959
471,208
Goodwill
452,390
452,390
452,390
Other intangible assets, net
37,975
45,112
47,752
Other assets
1,943,677
1,760,599
1,782,047
Total assets
$
55,509,129
$
54,394,159
$
53,040,538
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest-bearing deposits
$
15,787,882
$
13,477,854
$
13,075,081
Interest-bearing deposits
31,900,537
33,213,717
31,590,823
Total deposits
47,688,419
46,691,571
44,665,904
Federal funds purchased and securities
sold under repurchase agreements
262,548
227,922
202,344
Other short-term borrowings
—
7,717
400,000
Long-term debt
1,203,761
1,202,494
1,628,385
Other liabilities
1,101,599
1,103,121
1,079,363
Total liabilities
50,256,327
49,232,825
47,975,996
Shareholders' equity:
Preferred stock - no par value. Authorized
100,000,000 shares; issued 22,000,000
537,145
537,145
537,145
Common stock - $1.00 par value. Authorized
342,857,143 shares; issued 169,170,589, 168,132,522, and
167,410,950; outstanding 145,483,994, 148,039,495, and
147,317,923
169,171
168,133
167,411
Additional paid-in capital
3,883,289
3,851,208
3,832,142
Treasury stock, at cost – 23,686,595,
20,093,027, and 20,093,027 shares
(898,707
)
(731,806
)
(731,806
)
Accumulated other comprehensive (loss)
income, net
(5,462
)
158,635
174,914
Retained earnings
1,567,366
1,178,019
1,084,736
Total shareholders’ equity
5,252,802
5,161,334
5,064,542
Total liabilities and shareholders'
equity
$
55,509,129
$
54,394,159
$
53,040,538
Synovus
AVERAGE BALANCES AND YIELDS/RATES
(1)
(Unaudited)
2021
2020
(Dollars in thousands)
Third
Second
First
Fourth
Third
Quarter
Quarter
Quarter
Quarter
Quarter
Interest Earning Assets
Investment securities (2) (4)
$
9,876,651
9,184,691
8,437,563
7,493,822
7,227,400
Yield
1.45
%
1.45
1.40
2.07
2.39
Trading account assets (5)
$
5,192
2,831
3,063
8,496
5,391
Yield
1.15
%
1.15
2.81
1.03
1.69
Commercial loans (3) (4)
$
28,891,164
29,849,029
29,844,491
30,363,102
30,730,135
Yield
3.91
%
3.86
3.95
3.96
3.80
Consumer loans (3)
$
8,642,969
8,647,448
8,367,776
8,521,449
9,032,437
Yield
3.93
%
3.94
3.98
4.00
4.08
Allowance for loan losses
$
(514,828
)
(561,242
)
(599,872
)
(595,547
)
(591,098
)
Loans, net (3)
$
37,019,305
37,935,235
37,612,395
38,289,004
39,171,474
Yield
3.97
%
3.93
4.02
4.03
3.92
Mortgage loans held for sale
$
196,032
242,940
246,962
309,278
244,952
Yield
2.88
%
3.06
2.68
2.74
2.92
Other loans held for sale
$
527,736
615,301
660,753
544,301
493,940
Yield
3.06
%
3.05
2.91
2.81
3.61
Federal funds sold, due from Federal
Reserve Bank, and other short-term investments
$
3,271,501
2,705,819
2,838,063
2,716,645
1,265,880
Yield
0.15
%
0.11
0.10
0.10
0.11
Federal Home Loan Bank and Federal Reserve
Bank Stock (5)
$
159,741
159,340
157,657
162,537
200,923
Yield
1.26
%
2.01
1.69
2.64
2.73
Total interest earning assets
$
51,056,158
50,846,157
49,956,456
49,524,083
48,609,960
Yield
3.22
%
3.26
3.32
3.49
3.58
Interest-Bearing Liabilities
Interest-bearing demand deposits
$
8,463,325
8,601,262
8,570,753
8,531,415
7,789,095
Rate
0.10
%
0.11
0.14
0.16
0.19
Money Market accounts
$
15,597,723
15,476,262
15,348,916
14,411,860
13,272,972
Rate
0.15
%
0.19
0.23
0.26
0.36
Savings deposits
$
1,377,089
1,333,297
1,219,288
1,147,667
1,114,956
Rate
0.02
%
0.02
0.02
0.01
0.02
Time deposits under $100,000
$
993,284
1,077,931
1,161,306
1,239,592
1,379,923
Rate
0.33
%
0.41
0.56
0.74
1.03
Time deposits over $100,000
$
2,430,744
2,714,451
2,993,996
3,302,959
3,863,821
Rate
0.45
%
0.56
0.74
1.03
1.44
Other brokered deposits
$
1,862,346
1,901,097
1,950,582
1,978,393
1,912,114
Rate
0.21
%
0.19
0.20
0.23
0.23
Brokered time deposits
$
996,777
1,156,510
1,418,751
1,795,982
2,232,940
Rate
1.27
%
1.35
1.50
1.60
1.59
Total interest-bearing deposits
$
31,721,288
32,260,810
32,663,592
32,407,868
31,565,821
Rate
0.20
%
0.24
0.31
0.39
0.54
Federal funds purchased and securities
sold under repurchase agreements
$
202,525
204,053
209,448
174,316
180,342
Rate
0.07
%
0.07
0.07
0.07
0.09
Other short-term borrowings
$
—
—
—
—
46,739
Rate
—
%
—
—
—
1.12
Long-term debt
$
1,203,500
1,203,038
1,202,613
1,552,791
2,234,665
Rate
3.81
%
3.82
3.63
3.96
2.71
Total interest-bearing liabilities
$
33,127,313
33,667,901
34,075,653
34,134,975
34,027,567
Rate
0.33
%
0.36
0.42
0.55
0.68
Non-interest-bearing demand deposits
$
15,755,929
15,088,836
13,791,286
13,566,112
12,773,676
Cost of funds
0.22
%
0.25
0.30
0.40
0.50
Effective cost of funds(6)
0.21
%
0.24
0.28
0.37
0.48
Net interest margin
3.01
%
3.02
3.04
3.12
3.10
Taxable equivalent adjustment (4)
$
736
791
774
821
956
(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 21%, 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.
(6) Includes the impact of
non-interest-bearing capital funding sources.
Synovus
LOANS OUTSTANDING BY TYPE
(Unaudited)
Total Loans
Total Loans
Linked Quarter
Total Loans
Year/Year
(Dollars in thousands)
Loan Type
September 30, 2021
June 30, 2021
% Change
September 30, 2020
% Change
Commercial, Financial, and
Agricultural
$
11,771,037
$
12,085,534
(3
)%
$
12,931,095
(9
)%
Owner-Occupied
7,163,751
7,064,599
1
7,192,543
—
Total Commercial &
Industrial
18,934,788
19,150,133
(1
)
20,123,638
(6
)
Multi-Family
2,197,139
2,086,641
5
2,359,112
(7
)
Hotels
1,441,414
1,411,443
2
1,407,238
2
Office Buildings
2,341,316
2,340,378
—
2,260,240
4
Shopping Centers
1,570,020
1,645,275
(5
)
1,736,210
(10
)
Warehouses
687,496
657,699
5
728,446
(6
)
Other Investment Property
1,211,078
1,076,577
12
942,962
28
Total Investment Properties
9,448,463
9,218,013
2
9,434,208
—
1-4 Family Construction
191,906
174,009
10
180,277
6
1-4 Family Investment Mortgage
421,968
462,335
(9
)
474,473
(11
)
Total 1-4 Family Properties
613,874
636,344
(4
)
654,750
(6
)
Commercial Development
103,512
120,683
(14
)
111,403
(7
)
Residential Development
186,033
164,950
13
259,617
(28
)
Land Acquisition
188,378
221,061
(15
)
276,085
(32
)
Land and Development
477,923
506,694
(6
)
647,105
(26
)
Total Commercial Real Estate
10,540,260
10,361,051
2
10,736,063
(2
)
Consumer Mortgages
5,108,499
5,200,762
(2
)
5,664,686
(10
)
Home Equity Lines
1,308,254
1,358,211
(4
)
1,629,482
(20
)
Credit Cards
293,026
285,508
3
264,829
11
Other Consumer Loans
2,156,203
1,880,353
15
1,131,149
91
Total Consumer
8,865,982
8,724,834
2
8,690,146
2
Total
$
38,341,030
$
38,236,018
—
%
$
39,549,847
(3
)%
NON-PERFORMING LOANS
COMPOSITION
(Unaudited)
Total Non-performing
Loans
Total Non-performing Loans
Linked Quarter
Total Non-performing Loans
Year/Year
(Dollars in thousands)
Loan Type
September 30, 2021
June 30, 2021
% Change
September 30, 2020
% Change
Commercial, Financial, and
Agricultural
$
77,349
$
70,943
9
%
$
95,365
(19
)%
Owner-Occupied
13,134
13,155
—
20,261
(35
)
Total Commercial &
Industrial
90,483
84,098
8
115,626
(22
)
Multi-Family
2,396
2,407
—
157
nm
Office Buildings
2,488
1,618
54
27,608
(91
)
Shopping Centers
932
124
652
257
263
Warehouses
302
218
39
—
nm
Other Investment Property
624
407
53
238
162
Total Investment Properties
6,742
4,774
41
28,260
(76
)
1-4 Family Construction
522
548
(5
)
1,556
(66
)
1-4 Family Investment Mortgage
2,364
1,927
23
1,815
30
Total 1-4 Family Properties
2,886
2,475
17
3,371
(14
)
Commercial Development
463
560
(17
)
833
(44
)
Residential Development
449
451
—
648
(31
)
Land Acquisition
1,024
1,029
—
910
13
Land and Development
1,936
2,040
(5
)
2,391
(19
)
Total Commercial Real Estate
11,564
9,289
24
34,022
(66
)
Consumer Mortgages
37,541
51,376
(27
)
7,433
405
Home Equity Lines
8,688
8,938
(3
)
10,297
(16
)
Other Consumer Loans
7,189
7,327
(2
)
1,459
393
Total Consumer
53,418
67,641
(21
)
19,189
178
Total
$
155,465
$
161,028
(3
)%
$
168,837
(8
)%
Synovus
CREDIT QUALITY DATA
(Unaudited)
(Dollars in thousands)
2021
2020
Third Quarter
Third
Second
First
Fourth
Third
'21 vs '20
Quarter
Quarter
Quarter
Quarter
Quarter
% Change
Non-performing Loans (NPLs)
$
155,465
161,028
155,169
151,079
168,837
(8
)%
Impaired Loans Held for Sale
—
—
23,590
23,590
—
nm
Other Real Estate and Other Assets
16,883
16,806
16,849
17,394
23,280
(27
)
Non-performing Assets (NPAs)
172,348
177,834
195,608
192,063
192,117
(10
)
Allowance for Loan Losses (ALL)
492,243
516,708
563,214
605,736
603,800
(18
)
Reserve for Unfunded Commitments
42,971
46,890
51,528
47,785
60,794
(29
)
Allowance for Credit Losses (ACL)
535,214
563,598
614,742
653,521
664,594
(19
)
Net Charge-Offs - Quarter
20,516
26,547
20,204
22,139
28,466
Net Charge-Offs - YTD
67,266
46,750
20,204
94,712
72,573
Net Charge-Offs / Average Loans - Quarter
(1)
0.22
%
0.28
0.21
0.23
0.29
Net Charge-Offs / Average Loans - YTD
(1)
0.24
0.24
0.21
0.24
0.25
NPLs / Loans
0.41
0.42
0.40
0.39
0.43
NPAs / Loans, ORE and specific other
assets
0.45
0.46
0.50
0.50
0.49
ACL/Loans
1.40
1.47
1.58
1.71
1.68
ALL/Loans
1.28
1.35
1.45
1.58
1.53
ACL/NPLs
344.27
350.00
396.18
432.57
393.63
ALL/NPLs
316.63
320.88
362.97
400.94
357.62
Past Due Loans over 90 days and Still
Accruing
$
5,960
4,415
3,804
4,117
7,512
(21
)
As a Percentage of Loans Outstanding
0.02
%
0.01
0.01
0.01
0.02
Total Past Due Loans and Still
Accruing
$
60,817
49,321
45,693
47,349
57,316
6
As a Percentage of Loans Outstanding
0.16
%
0.13
0.12
0.12
0.14
Accruing Troubled Debt Restructurings
(TDRs)
$
126,055
124,528
129,776
134,972
163,511
(23
)
(1) Ratio is annualized.
SELECTED CAPITAL INFORMATION
(1)
(Unaudited)
(Dollars in thousands)
September 30, 2021
December 31, 2020
September 30, 2020
Tier 1 Capital
$
4,836,672
4,572,010
4,450,547
Total Risk-Based Capital
5,788,290
5,604,230
5,536,918
Common Equity Tier 1 Capital Ratio
9.63
%
9.66
9.30
Tier 1 Capital Ratio
10.83
10.95
10.57
Total Risk-Based Capital Ratio
12.96
13.42
13.16
Tier 1 Leverage Ratio
8.82
8.50
8.48
Common Equity as a Percentage of Total
Assets (2)
8.50
8.51
8.54
Tangible Common Equity Ratio (3) (5)
7.68
7.66
7.67
Book Value Per Common Share (4)
$
32.41
31.24
30.73
Tangible Book Value Per Common Share
(3)
29.04
27.88
27.34
(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.
(5) See "Non-GAAP Financial Measures" of
this report for applicable reconciliation.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211019005582/en/
Media Contact Alison Dowe Media Relations (706)
641-3781
Investor Contact Kevin Brown Investor Relations (706)
641-6500
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