Diluted Earnings per Share of $1.16 vs.
$1.19 in 2Q21
Adjusted Diluted Earnings per Share of $1.17
vs. $1.20 in 2Q21
Synovus Financial Corp. (NYSE: SNV) today reported financial
results for the quarter ended June 30, 2022. "We are pleased with
our second quarter results and financial metrics, which reflect the
efforts of our team to expand client relationships and attract new
business," said Synovus President and CEO Kevin Blair. "Revenues of
$523 million, up 7 percent year-over-year, were driven by our
fourth consecutive quarter of annualized double-digit loan growth,
excluding PPP, and 22 basis points of margin expansion during the
quarter. Our ongoing focus on growing core operating deposit
relationships led to another quarter of account growth, as well as
non-interest bearing deposit growth of $254 million. We also
acknowledge the strength of our client base, with credit metrics at
historically low levels and average operating liquidity up more
than 40 percent on average compared to pre-pandemic levels. Despite
the increasing uncertainty presented by economic risks, we have
continued to prudently invest in our core businesses as well as new
business initiatives, which will serve as ongoing sources of
growth. I am confident in our ability to guide both our company and
clients through the present environment while building an even
stronger bank for the future."
Second Quarter 2022 Highlights
- Net income available to common shareholders of $169.8 million,
or $1.16 per diluted share, up $0.05 sequentially and down $0.03
compared to prior year.
- Adjusted diluted EPS of $1.17, up $0.09 sequentially and down
$0.03 compared to prior year. Year-over-year decline was primarily
due to prior year benefit from reversal of provision for credit
losses.
- Total revenue of $522.7 million increased $33.7 million, or 7%,
compared to prior year.
- Total revenue, excluding Paycheck Protection program (PPP)
fees, of $519.0 million increased $50.4 million, or 11%, compared
to prior year.
- Period-end loans increased $1.04 billion sequentially, and
$1.15 billion, or 12% annualized, excluding PPP loans.
- Credit quality metrics remain at historically low levels with
sequential improvement in the NPA, NPL, and criticized/classified
loans ratios.
Second Quarter Summary
Reported
Adjusted
(dollars in thousands)
2Q22
1Q22
2Q21
2Q22
1Q22
2Q21
Net income available to common
shareholders
$
169,761
$
162,746
$
177,909
$
171,018
$
158,368
$
178,969
Diluted earnings per share
1.16
1.11
1.19
1.17
1.08
1.20
Total revenue
522,654
497,582
488,947
N/A
N/A
N/A
Total loans
41,204,780
40,169,150
38,236,018
N/A
N/A
N/A
Total deposits
49,034,700
48,656,244
47,171,962
N/A
N/A
N/A
Return on avg assets
1.26
%
1.22
%
1.36
%
1.27
%
1.19
%
1.37
%
Return on avg common equity
16.48
14.20
15.40
16.60
13.82
15.50
Return on avg tangible common equity
18.84
16.02
17.41
18.98
15.59
17.52
Net interest margin
3.22
3.00
3.02
N/A
N/A
N/A
Efficiency ratio-TE(1)
53.87
54.66
55.24
53.43
55.50
54.41
NCO ratio-QTD
0.16
0.19
0.28
N/A
N/A
N/A
NPA ratio
0.33
0.40
0.46
N/A
N/A
N/A
(1) Taxable equivalent
Balance Sheet
Loans*
(dollars in millions)
2Q22
1Q22
Linked Quarter Change
Linked Quarter %
Change
2Q21
Year/Year Change
Year/Year % Change
Commercial & industrial
$
20,778.3
$
20,352.3
$
426.0
2
%
$
19,239.4
$
1,538.9
8
%
Commercial real estate
11,503.4
11,145.3
358.1
3
10,361.1
1,142.4
11
Consumer
8,923.0
8,671.5
251.5
3
8,635.5
287.5
3
Total loans
$
41,204.8
$
40,169.2
$
1,035.6
3
%
$
38,236.0
$
2,968.8
8
%
*Amounts may not total due to rounding
- Total loans ended the quarter at $41.20 billion, up $1.04
billion sequentially, and $1.15 billion, or 12% annualized,
excluding PPP loans.
- Commercial and industrial (C&I) loans increased $426.0
million sequentially, led by broad based growth within our
Wholesale Banking segment, partially offset by declines in PPP loan
balances of $116.2 million.
- CRE loans increased $358.1 million sequentially, led by
multi-family loans in addition to our Specialty Healthcare
group.
- Consumer loans increased $251.5 million sequentially across
multiple products including home equity and mortgage.
Deposits*
(dollars in millions)
2Q22
1Q22
Linked Quarter Change
Linked Quarter %
Change
2Q21
Year/Year Change
Year/Year % Change
Non-interest-bearing DDA
$
15,781.1
$
15,526.7
$
254.4
2
%
$
14,342.6
$
1,438.5
10
%
Interest-bearing DDA
6,327.1
6,685.4
(358.3
)
(5
)
5,839.8
487.2
8
Money market
13,793.0
14,596.9
(803.9
)
(6
)
13,983.1
(190.1
)
(1
)
Savings
1,498.7
1,476.7
22.0
1
1,341.5
157.3
12
Public funds
5,863.9
6,048.7
(184.8
)
(3
)
5,804.9
59.0
1
Time deposits
2,147.8
2,284.2
(136.4
)
(6
)
2,891.1
(743.3
)
(26
)
Brokered deposits
3,623.1
2,037.7
1,585.4
78
2,969.0
654.2
22
Total deposits
$
49,034.7
$
48,656.2
$
378.5
1
%
$
47,172.0
$
1,862.7
4
%
*Amounts may not total due to rounding
- Total deposits ended the quarter at $49.03 billion, up $378.5
million sequentially, impacted by seasonal effects and rate-driven
outflows of $803.9 million and $358.3 million, respectively, in
money-market and interest-bearing demand deposit accounts and
offset by the use of brokered deposits as a cost-effective balance
sheet and liquidity management tool.
- Total non-interest-bearing deposits are now 35% of core
deposits (total deposits excluding brokered deposits).
- Total deposit costs increased 4 bps sequentially to 0.15% and
were impacted by the rising rate environment.
Income Statement Summary**
(in thousands, except per share data)
2Q22
1Q22
Linked Quarter Change
Linked Quarter %
Change
2Q21
Year/Year Change
Year/Year % Change
Net interest income
$
425,388
$
392,248
$
33,140
8
%
$
381,860
$
43,528
11
%
Non-interest revenue
97,266
105,334
(8,068
)
(8
)
107,087
(9,821
)
(9
)
Non-interest expense
282,051
272,450
9,601
4
270,531
11,520
4
Provision for (reversal of) credit
losses
12,688
11,400
1,288
11
(24,598
)
37,286
nm
Income before taxes
$
227,915
$
213,732
$
14,183
7
%
$
243,014
$
(15,099
)
(6
)%
Income tax expense
49,863
42,695
7,168
17
56,814
(6,951
)
(12
)
Preferred stock dividends
8,291
8,291
—
—
8,291
—
—
Net income available to common
shareholders
$
169,761
$
162,746
$
7,015
4
%
$
177,909
$
(8,148
)
(5
)%
Weighted average common shares
outstanding, diluted
146,315
146,665
(350
)
—
%
149,747
(3,432
)
(2
)%
Diluted earnings per share
$
1.16
$
1.11
$
0.05
5
$
1.19
$
(0.03
)
(3
)
Adjusted diluted earnings per share
1.17
1.08
0.09
8
1.20
(0.03
)
(3
)
** Amounts may not total due to
rounding
Core Performance
- Net interest income of $425.4 million was up $33.1 million
sequentially and increased $43.5 million, or 11%, compared to prior
year, driven by strong loan growth and higher rates.
- PPP fees of $3.7 million, down $3.2 million sequentially and
down $16.7 million year-over-year.
- Net interest margin was 3.22%, up 22 bps sequentially, aided by
higher interest rates, lower cash balances, and slower deposit
repricing.
- Non-interest revenue decreased $8.1 million, or 8%,
sequentially and decreased $9.8 million, or 9%, compared to prior
year.
- Quarter-over-quarter and year-over-year declines were primarily
related to a $7 million write-down on a minority fintech investment
and a challenging mortgage banking environment, partially offset by
increases in wealth revenue, capital markets, and card fee income
categories.
- Non-interest expense increased $9.6 million, or 4%,
sequentially and increased $11.5 million, or 4%, compared to prior
year. Adjusted non-interest expense increased $4.1 million, or 1%,
sequentially and increased $15.4 million, or 6%, compared to prior
year.
- Year-over-year increase was primarily due to incentives and
costs associated with elevated performance, merit increases, new
business initiatives, and infrastructure investments.
- Credit quality ratios remain near historical lows. Both the
non-performing loan and asset ratios improved to 0.26% and 0.33%,
respectively; the net charge-off ratio for the quarter was 0.16%,
and total past dues were 0.14% of total loans outstanding.
- Provision for credit losses of $12.7 million increased $1.3
million sequentially; allowance for credit losses coverage ratio
(to loans) of 1.11% declined 4 bps sequentially. Drivers of the
decline included our strong credit performance, including reduction
of NPLs, and quality and mix of new originations, offset by an
uncertain and generally negative economic outlook.
- The effective tax rate was 21.88% for the quarter.
Capital Ratios
2Q22
1Q22
2Q21
Common equity Tier 1 capital (CET1)
ratio
9.46
%
*
9.49
%
9.75
%
Tier 1 capital ratio
10.56
*
10.63
11.00
Total risk-based capital ratio
12.43
*
12.56
13.25
Tier 1 leverage ratio
9.03
*
8.87
8.72
Tangible common equity ratio
6.26
6.80
7.73
* Ratios are preliminary.
Capital
- Preliminary CET1 ratio declined 3 bps during the quarter to
9.46%, and the preliminary total risk-based capital ratio of 12.43%
declined 13 bps from the previous quarter as capital generated
through earnings helped offset the impact of loan growth.
Second Quarter Earnings Conference Call
Synovus will host an earnings highlights conference call at 8:30
a.m. EDT on July 21, 2022. 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 $57 billion in
assets. Synovus provides commercial and retail banking and a full
suite of specialized products and services, including private
banking, treasury management, wealth management, mortgage services,
premium finance, asset-based lending, structured lending, and
international banking through 261 branches in Georgia, Alabama,
South Carolina, Florida, and Tennessee. Synovus is a Great Place to
Work-Certified Company and 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, 2021, 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 expense; adjusted
tangible efficiency ratio; 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 expense; efficiency ratio-TE;
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. 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.
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)
2Q22
1Q22
2Q21
Adjusted non-interest expense
Total non-interest expense
$
282,051
$
272,450
$
270,531
Subtract: Earnout liability
adjustments
—
—
(750
)
Subtract/add: Restructuring charges
1,850
6,424
(415
)
Subtract: Valuation adjustment to Visa
derivative
(3,500
)
—
—
Subtract: Loss on early extinguishment of
debt, net
—
(677
)
—
Subtract/add: Fair value adjustment on
non-qualified deferred compensation
3,240
1,295
(1,126
)
Adjusted non-interest expense
$
283,641
$
279,492
$
268,240
Reconciliation of Non-GAAP Financial
Measures, continued
(dollars in thousands)
2Q22
1Q22
2Q21
Adjusted tangible efficiency
ratio
Adjusted non-interest expense
$
283,641
$
279,492
$
268,240
Subtract: Amortization of intangibles
(2,118
)
(2,118
)
(2,379
)
Adjusted tangible non-interest expense
$
281,523
$
277,374
$
265,861
Net interest income
$
425,388
$
392,248
$
381,860
Add: Tax equivalent adjustment
960
865
791
Add: Total non-interest revenue
97,266
105,334
107,087
Total TE revenue
523,614
498,447
489,738
Subtract/add: Fair value adjustment on
non-qualified deferred compensation
3,240
1,295
(1,126
)
Total adjusted revenue
$
526,854
$
499,742
$
488,612
Efficiency ratio-TE
53.87
%
54.66
%
55.24
%
Adjusted tangible efficiency ratio
53.43
55.50
54.41
Adjusted return on average
assets
Net income
$
178,052
$
171,037
$
186,200
Add: Earnout liability adjustments
—
—
750
Add/subtract: Restructuring charges
(1,850
)
(6,424
)
415
Add: Valuation adjustment to Visa
derivative
3,500
—
—
Add: Loss on early extinguishment of debt,
net
—
677
—
Add/subtract: Tax effect of adjustments
(1)
(393
)
1,369
(105
)
Adjusted net income
$
179,309
$
166,659
$
187,260
Net income annualized
$
714,165
$
693,650
$
746,846
Adjusted net income annualized
$
719,206
$
675,895
$
751,098
Total average assets
$
56,536,940
$
56,855,898
$
55,017,771
Return on average assets
1.26
%
1.22
%
1.36
%
Adjusted return on average assets
1.27
1.19
1.37
Adjusted net income available to common
shareholders and adjusted diluted earnings per share
Net income available to common
shareholders
$
169,761
$
162,746
$
177,909
Add: Earnout liability adjustments
—
—
750
Add/subtract: Restructuring charges
(1,850
)
(6,424
)
415
Add: Valuation adjustment to Visa
derivative
3,500
—
—
Add: Loss on early extinguishment of debt,
net
—
677
—
Add/subtract: Tax effect of adjustments
(1)
(393
)
1,369
(105
)
Adjusted net income available to common
shareholders
$
171,018
$
158,368
$
178,969
Weighted average common shares
outstanding, diluted
146,315
146,665
149,747
Diluted earnings per share
$
1.16
$
1.11
$
1.19
Adjusted diluted earnings per share
1.17
1.08
1.20
Reconciliation of Non-GAAP Financial
Measures, continued
(dollars in thousands)
2Q22
1Q22
2Q21
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
$
169,761
$
162,746
$
177,909
Add: Earnout liability adjustments
—
—
750
Add/subtract: Restructuring charges
(1,850
)
(6,424
)
415
Add: Valuation adjustment to Visa
derivative
3,500
—
—
Add: Loss on early extinguishment of debt,
net
—
677
—
Add/subtract: Tax effect of adjustments
(1)
(393
)
1,369
(105
)
Adjusted net income available to common
shareholders
$
171,018
$
158,368
$
178,969
Adjusted net income available to common
shareholders annualized
$
685,951
$
642,270
$
717,843
Add: Amortization of intangibles,
annualized net of tax
6,471
6,543
7,128
Adjusted net income available to common
shareholders excluding amortization of intangibles annualized
$
692,422
$
648,813
$
724,971
Net income available to common
shareholders annualized
$
680,910
$
660,025
$
713,591
Add: Amortization of intangibles,
annualized net of tax
6,471
6,543
7,128
Net income available to common
shareholders excluding amortization of intangibles annualized
$
687,381
$
666,568
$
720,719
Total average shareholders' equity less
preferred stock
$
4,132,536
$
4,647,426
$
4,632,568
Subtract: Goodwill
(452,390
)
(452,390
)
(452,390
)
Subtract: Other intangible assets, net
(32,387
)
(34,576
)
(41,399
)
Total average tangible shareholders'
equity less preferred stock
$
3,647,759
$
4,160,460
$
4,138,779
Return on average common equity
16.48
%
14.20
%
15.40
%
Adjusted return on average common
equity
16.60
13.82
15.50
Return on average tangible common
equity
18.84
16.02
17.41
Adjusted return on average tangible common
equity
18.98
15.59
17.52
(dollars in thousands)
June 30, 2022
March 31, 2022
December 31, 2021
June 30, 2021
Tangible common equity ratio
Total assets
$
57,382,745
$
56,419,549
$
57,317,226
$
54,938,659
Subtract: Goodwill
(452,390
)
(452,390
)
(452,390
)
(452,390
)
Subtract: Other intangible assets, net
(31,360
)
(33,478
)
(35,596
)
(40,354
)
Tangible assets
$
56,898,995
$
55,933,681
$
56,829,240
$
54,445,915
Total shareholders’ equity
$
4,584,438
$
4,824,635
$
5,296,800
$
5,237,714
Subtract: Goodwill
(452,390
)
(452,390
)
(452,390
)
(452,390
)
Subtract: Other intangible assets, net
(31,360
)
(33,478
)
(35,596
)
(40,354
)
Subtract: Preferred Stock, no par
value
(537,145
)
(537,145
)
(537,145
)
(537,145
)
Tangible common equity
$
3,563,543
$
3,801,622
$
4,271,669
$
4,207,825
Total shareholders’ equity to total assets
ratio
7.99
%
8.55
%
9.24
%
9.53
%
Tangible common equity ratio
6.26
6.80
7.52
7.73
(1) An assumed marginal tax rate of 23.8%
for 2022 and 25.3% for 2021 was applied.
Synovus
INCOME STATEMENT DATA
(Unaudited)
(Dollars in thousands, except per share
data)
Six Months Ended June
30,
2022
2021
22 vs '21
% Change
Interest income
$
869,834
$
822,560
6
%
Interest expense
52,199
66,844
(22
)
Net interest income
817,635
755,716
8
Provision for (reversal of) credit
losses
24,088
(43,173
)
nm
Net interest income after provision for
credit losses
793,547
798,889
(1
)
Non-interest revenue:
Service charges on deposit accounts
46,030
41,448
11
Fiduciary and asset management fees
40,377
36,759
10
Card fees
30,846
25,300
22
Brokerage revenue
29,898
26,899
11
Mortgage banking income
9,857
36,157
(73
)
Capital markets income
12,864
10,840
19
Income from bank-owned life insurance
15,722
16,031
(2
)
Investment securities gains (losses),
net
—
(1,990
)
nm
Other non-interest revenue
17,006
26,599
(36
)
Total non-interest revenue
202,600
218,043
(7
)
Non-interest expense:
Salaries and other personnel expense
325,747
322,044
1
Net occupancy, equipment, and software
expense
86,076
82,959
4
Third-party processing and other
services
42,947
44,451
(3
)
Professional fees
19,338
17,031
14
FDIC insurance and other regulatory
fees
13,144
11,127
18
Restructuring charges
(8,274
)
946
nm
Other operating expenses
75,523
59,107
28
Total non-interest expense
554,501
537,665
3
Income before income taxes
441,646
479,267
(8
)
Income tax expense
92,558
105,975
(13
)
Net income
349,088
373,292
(6
)
Less: Preferred stock dividends
16,581
16,581
—
Net income available to common
shareholders
$
332,507
$
356,711
(7
)%
Net income per common share, basic
$
2.29
$
2.41
(5
)%
Net income per common share, diluted
2.27
2.38
(5
)
Cash dividends declared per common
share
0.68
0.66
3
Return on average assets *
1.24
%
1.38
%
(14
) bps
Return on average common equity *
15.28
15.58
(30
)
Weighted average common shares
outstanding, basic
145,301
148,289
(2
)%
Weighted average common shares
outstanding, diluted
146,489
149,764
(2
)
nm - not meaningful
bps - basis points
* - ratios are annualized
Synovus
INCOME STATEMENT DATA
(Unaudited)
(Dollars in thousands, except per share
data)
2022
2021
Second Quarter
Second Quarter
First Quarter
Fourth Quarter
Third Quarter
Second Quarter
'22 vs '21
% Change
Interest income
$
453,772
416,062
418,279
412,504
412,743
10
%
Interest expense
28,384
23,814
25,966
27,587
30,883
(8
)
Net interest income
425,388
392,248
392,313
384,917
381,860
11
Provision for (reversal of) credit
losses
12,688
11,400
(55,210
)
(7,868
)
(24,598
)
nm
Net interest income after provision for
credit losses
412,700
380,848
447,523
392,785
406,458
2
Non-interest revenue:
Service charges on deposit accounts
23,491
22,539
22,221
22,641
21,414
10
Fiduciary and asset management fees
20,100
20,277
20,602
19,786
18,805
7
Card fees
16,089
14,756
12,861
13,238
13,304
21
Brokerage revenue
15,243
14,655
14,795
14,745
13,926
9
Mortgage banking income
3,904
5,953
7,059
11,155
13,842
(72
)
Capital markets income
7,393
5,472
7,188
8,089
3,335
122
Income from bank-owned life insurance
9,165
6,556
15,168
6,820
7,188
28
Investment securities gains (losses),
net
—
—
230
962
—
nm
Other non-interest revenue
1,881
15,126
16,944
17,519
15,273
(88
)
Total non-interest revenue
97,266
105,334
117,068
114,955
107,087
(9
)
Non-interest expense:
Salaries and other personnel expense
161,063
164,684
167,018
160,364
160,567
—
Net occupancy, equipment, and software
expense
43,199
42,877
42,780
43,483
41,825
3
Third-party processing and other
services
21,952
20,996
22,791
19,446
24,419
(10
)
Professional fees
10,865
8,474
9,014
6,739
7,947
37
FDIC insurance and other regulatory
fees
6,894
6,250
6,016
5,212
5,547
24
Restructuring charges
(1,850
)
(6,424
)
5,958
319
415
nm
Other operating expenses
39,928
35,593
41,630
31,469
29,811
34
Total non-interest expense
282,051
272,450
295,207
267,032
270,531
4
Income before income taxes
227,915
213,732
269,384
240,708
243,014
(6
)
Income tax expense
49,863
42,695
68,983
53,935
56,814
(12
)
Net income
178,052
171,037
200,401
186,773
186,200
(4
)
Less: Preferred stock dividends
8,291
8,291
8,291
8,291
8,291
—
Net income available to common
shareholders
$
169,761
162,746
192,110
178,482
177,909
(5
)%
Net income per common share, basic
$
1.17
1.12
1.32
1.22
1.20
(3
)%
Net income per common share, diluted
1.16
1.11
1.31
1.21
1.19
(3
)
Cash dividends declared per common
share
0.34
0.34
0.33
0.33
0.33
3
Return on average assets *
1.26
%
1.22
1.40
1.34
1.36
(10
) bps
Return on average common equity *
16.48
14.20
16.11
14.96
15.40
108
Weighted average common shares
outstanding, basic
145,328
145,273
145,316
146,308
148,113
(2
)%
Weighted average common shares
outstanding, diluted
146,315
146,665
146,793
147,701
149,747
(2
)
nm - not meaningful
bps - basis points
* - ratios are annualized
Synovus
BALANCE SHEET DATA
June 30, 2022
December 31, 2021
June 30, 2021
(Unaudited)
(In thousands, except share data)
ASSETS
Cash and due from banks
$
583,323
$
432,925
$
560,396
Interest-bearing funds with Federal
Reserve Bank
1,023,030
2,479,006
2,598,213
Interest earning deposits with banks
29,139
25,535
21,513
Federal funds sold and securities
purchased under resale agreements
29,568
72,387
82,554
Cash, cash equivalents, and restricted
cash
1,665,060
3,009,853
3,262,676
Investment securities available for sale,
at fair value
9,889,850
10,918,329
9,442,170
Loans held for sale ($76,864, $108,198,
and $202,216 measured at fair value, respectively)
917,679
750,642
750,916
Loans, net of deferred fees and costs
41,204,780
39,311,958
38,236,018
Allowance for loan losses
(407,837
)
(427,597
)
(516,708
)
Loans, net
40,796,943
38,884,361
37,719,310
Cash surrender value of bank-owned life
insurance
1,078,703
1,068,616
1,059,235
Premises, equipment, and software, net
383,060
407,241
446,447
Goodwill
452,390
452,390
452,390
Other intangible assets, net
31,360
35,596
40,354
Other assets
2,167,700
1,790,198
1,765,161
Total assets
$
57,382,745
$
57,317,226
$
54,938,659
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest-bearing deposits
$
16,876,710
$
16,392,653
$
15,345,629
Interest-bearing deposits
32,157,990
33,034,623
31,826,333
Total deposits
49,034,700
49,427,276
47,171,962
Federal funds purchased and securities
sold under repurchase agreements
345,242
264,133
194,786
Long-term debt
1,804,104
1,204,229
1,203,293
Other liabilities
1,614,261
1,124,788
1,130,904
Total liabilities
52,798,307
52,020,426
49,700,945
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 170,012,527, 169,383,758, and
169,107,609; outstanding 145,357,669, 145,010,086, and
147,071,532
170,013
169,384
169,108
Additional paid-in capital
3,908,118
3,894,109
3,872,949
Treasury stock, at cost – 24,654,858,
24,373,672, and 22,036,077 shares
(944,484
)
(931,497
)
(824,197
)
Accumulated other comprehensive income
(loss), net
(1,026,705
)
(82,321
)
45,726
Retained earnings
1,940,351
1,709,980
1,436,983
Total shareholders’ equity
4,584,438
5,296,800
5,237,714
Total liabilities and shareholders'
equity
$
57,382,745
$
57,317,226
$
54,938,659
Synovus
AVERAGE BALANCES, INTEREST, AND
YIELDS/RATES
(Unaudited)
Second Quarter 2022
First Quarter 2022
Second Quarter 2021
(dollars in thousands)
Average Balance
Interest
Yield/ Rate
Average Balance
Interest
Yield/ Rate
Average Balance
Interest
Yield/ Rate
Assets
Interest earning assets:
Commercial loans (1) (2) (3)
$
31,870,387
$
308,442
3.88
%
$
30,756,752
$
280,588
3.70
%
$
29,936,751
$
287,677
3.85
%
Consumer loans (1) (2)
8,720,488
83,826
3.86
8,594,009
81,368
3.81
8,559,726
84,402
3.94
Less: Allowance for loan losses
(415,372
)
—
—
(423,953
)
—
—
(561,242
)
—
—
Loans, net
40,175,503
392,268
3.92
38,926,808
361,956
3.76
37,935,235
372,079
3.93
Investment securities available for
sale
11,153,091
50,312
1.81
11,259,800
47,250
1.68
9,184,691
33,298
1.45
Trading account assets
11,987
73
2.44
9,078
39
1.73
2,831
8
1.15
Other earning assets(4)
813,028
1,660
0.81
1,919,531
815
0.17
2,705,819
740
0.11
FHLB and Federal Reserve Bank stock
179,837
1,820
4.05
160,065
685
1.71
159,340
800
2.01
Mortgage loans held for sale
85,299
921
4.32
103,887
882
3.40
242,940
1,859
3.06
Other loans held for sale
725,762
7,678
4.19
597,062
5,300
3.55
615,301
4,750
3.05
Total interest earning assets
53,144,507
$
454,732
3.43
%
52,976,231
$
416,927
3.18
%
50,846,157
$
413,534
3.26
%
Cash and due from banks
538,647
548,684
571,561
Premises and equipment
385,457
398,774
452,652
Other real estate
11,439
11,759
1,406
Cash surrender value of bank-owned life
insurance
1,077,231
1,070,886
1,055,663
Other assets(5)
1,379,659
1,849,564
2,090,332
Total assets
$
56,536,940
$
56,855,898
$
55,017,771
Liabilities and Shareholders'
Equity
Interest-bearing liabilities:
Interest-bearing demand deposits
$
9,513,334
$
3,598
0.15
%
$
9,549,527
$
2,372
0.10
%
$
8,601,262
$
2,441
0.11
%
Money market accounts
15,328,395
6,850
0.18
16,045,627
5,349
0.14
15,476,262
7,181
0.19
Savings deposits
1,506,195
72
0.02
1,460,648
67
0.02
1,333,297
55
0.02
Time deposits
2,829,684
1,688
0.24
3,009,795
2,138
0.29
3,792,382
4,894
0.52
Brokered deposits
2,878,536
6,293
0.88
2,788,124
3,733
0.54
3,057,607
4,799
0.63
Federal funds purchased and securities
sold under repurchase agreements
246,737
219
0.35
194,352
11
0.02
204,053
35
0.07
Other short-term borrowings
478,469
896
0.74
4,653
—
—
—
—
—
Long-term debt
878,413
8,768
3.99
982,423
10,144
4.13
1,203,038
11,478
3.82
Total interest-bearing liabilities
33,659,763
$
28,384
0.33
%
34,035,149
$
23,814
0.28
%
33,667,901
$
30,883
0.36
%
Non-interest-bearing demand deposits
16,959,850
16,491,643
15,088,836
Other liabilities
1,247,646
1,144,535
1,091,321
Shareholders' equity
4,669,681
5,184,571
5,169,713
Total liabilities and shareholders'
equity
$
56,536,940
$
56,855,898
$
55,017,771
Net interest income and net interest
margin, taxable equivalent (6)
$
426,348
3.22
%
$
393,113
3.00
%
$
382,651
3.02
%
Less: taxable-equivalent adjustment
960
865
791
Net interest income
$
425,388
$
392,248
$
381,860
(1)
Average loans are shown net of deferred
fees and costs. NPLs are included.
(2)
Interest income includes net loan fees as
follows: Second Quarter 2022 — $13.0 million, First Quarter 2022 —
$20.7 million, and Second Quarter 2021 — $28.5 million.
(3)
Reflects taxable-equivalent adjustments,
using the statutory federal tax rate of 21%, in adjusting interest
on tax-exempt loans and investment securities to a
taxable-equivalent basis.
(4)
Includes interest-bearing funds with
Federal Reserve Bank, interest earning deposits with banks, and
federal funds sold and securities purchased under resale
agreements.
(5)
Includes average net unrealized
gains/(losses) on investment securities available for sale of
$(923.1) million, $(247.4) million, and $37.0 million for the
Second Quarter 2022, First Quarter 2022, and Second Quarter 2021,
respectively.
(6)
The net interest margin is calculated by
dividing annualized net interest income-taxable equivalent by
average total interest earning assets.
Synovus
AVERAGE BALANCES, INTEREST, AND
YIELDS/RATES
(Unaudited)
Six Months Ended June
30,
2022
2021
(dollars in thousands)
Average Balance
Interest
Yield/ Rate
Average Balance
Interest
Yield/ Rate
Assets
Interest earning assets:
Commercial loans (1) (2) (3)
$
31,316,646
$
589,029
3.79
%
$
29,930,734
$
578,877
3.90
%
Consumer loans (1) (2)
8,657,598
165,194
3.83
8,424,423
166,466
3.97
Less: Allowance for loan losses
(419,639
)
(580,450
)
Loans, net
39,554,605
754,223
3.84
37,774,707
745,343
3.97
Investment securities available for
sale
11,206,150
97,562
1.74
8,813,191
62,755
1.42
Trading account assets
10,540
112
2.13
2,947
30
2.01
Other earning assets(4)
1,363,223
2,475
0.36
2,771,576
1,458
0.10
FHLB and Federal Reserve Bank stock
170,006
2,505
2.95
158,503
1,468
1.85
Mortgage loans held for sale
94,542
1,803
3.81
244,940
3,516
2.87
Other loans held for sale
661,768
12,978
3.90
637,901
9,555
2.98
Total interest earning assets
53,060,834
$
871,658
3.31
%
50,403,765
$
824,125
3.29
%
Cash and due from banks
543,638
545,295
Premises and equipment
392,079
456,537
Other real estate
11,598
1,613
Cash surrender value of bank-owned life
insurance
1,074,076
1,053,603
Other assets(5)
1,613,313
2,144,615
Total assets
$
56,695,538
$
54,605,428
Liabilities and Shareholders'
Equity
Interest-bearing liabilities:
Interest-bearing demand deposits
$
9,531,330
$
5,970
0.13
%
$
8,586,092
$
5,414
0.13
%
Money market accounts
15,685,030
12,199
0.16
15,412,941
15,911
0.21
Savings deposits
1,483,547
139
0.02
1,276,608
105
0.02
Time deposits
2,919,242
3,826
0.26
3,972,840
11,936
0.61
Brokered deposits
2,833,580
10,026
0.71
3,212,608
11,023
0.69
Federal funds purchased and securities
sold under repurchase agreements
220,689
230
0.21
206,735
69
0.07
Other short-term borrowings
242,870
896
0.73
—
—
—
Long-term debt
930,131
18,913
4.07
1,202,827
22,386
3.73
Total interest-bearing liabilities
33,846,419
$
52,199
0.31
%
33,870,651
$
66,844
0.39
%
Non-interest-bearing demand deposits
16,727,040
14,443,645
Other liabilities
1,196,375
1,138,073
Shareholders' equity
4,925,704
5,153,059
Total liabilities and shareholders'
equity
$
56,695,538
$
54,605,428
Net interest income, taxable equivalent
net interest margin (6)
$
819,459
3.11
%
$
757,281
3.03
%
Less: taxable-equivalent adjustment
1,824
1,565
Net interest income
$
817,635
$
755,716
(1)
Average loans are shown net of deferred
fees and costs. NPLs are included.
(2)
Interest income includes net loan fees as
follows: 2022 — $33.7 million and 2021 — $60.4 million.
(3)
Reflects taxable-equivalent adjustments,
using the statutory federal tax rate of 21%, in adjusting interest
on tax-exempt loans and investment securities to a
taxable-equivalent basis.
(4)
Includes interest-bearing funds with
Federal Reserve Bank, interest earning deposits with banks, and
federal funds sold and securities purchased under resale
agreements.
(5)
Includes average net unrealized
gains/(losses) on investment securities available for sale of
$(587.1) million and $76.3 million for the six months ended June
30, 2022 and 2021, respectively.
(6)
The net interest margin is calculated by
dividing net interest income-TE by average total interest earning
assets.
Synovus
LOANS OUTSTANDING BY TYPE
(Unaudited)
Total Loans
Total Loans
Linked Quarter
Total Loans
Year/Year
(Dollars in thousands)
Loan Type
June 30, 2022
March 31, 2022
% Change
June 30, 2021
% Change
Commercial, Financial, and
Agricultural
$
13,018,089
$
12,659,611
3
%
$
12,174,835
7
%
Owner-Occupied
7,760,236
7,692,714
1
7,064,599
10
Total Commercial &
Industrial
20,778,325
20,352,325
2
19,239,434
8
Multi-Family
2,547,706
2,288,497
11
2,086,641
22
Hotels
1,597,930
1,593,983
—
1,411,443
13
Office Buildings
2,680,399
2,521,381
6
2,340,378
15
Shopping Centers
1,458,902
1,500,768
(3
)
1,611,249
(9
)
Warehouses
811,738
814,756
—
657,699
23
Other Investment Property
1,311,373
1,327,760
(1
)
1,110,603
18
Total Investment Properties
10,408,048
10,047,145
4
9,218,013
13
1-4 Family Construction
234,379
229,038
2
174,009
35
1-4 Family Investment Mortgage
407,476
391,636
4
462,335
(12
)
Total 1-4 Family Properties
641,855
620,674
3
636,344
1
Commercial Development
109,764
102,757
7
120,683
(9
)
Residential Development
156,816
193,580
(19
)
164,950
(5
)
Land Acquisition
186,934
181,162
3
221,061
(15
)
Land and Development
453,514
477,499
(5
)
506,694
(10
)
Total Commercial Real Estate
11,503,417
11,145,318
3
10,361,051
11
Consumer Mortgages
5,124,523
5,052,003
1
5,200,718
(1
)
Home Equity
1,579,218
1,416,341
11
1,395,717
13
Credit Cards
194,290
188,247
3
196,207
(1
)
Other Consumer Loans
2,025,007
2,014,916
1
1,842,891
10
Total Consumer
8,923,038
8,671,507
3
8,635,533
3
Total
$
41,204,780
$
40,169,150
3
%
$
38,236,018
8
%
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
June 30, 2022
March 31, 2022
% Change
June 30, 2021
% Change
Commercial, Financial, and
Agricultural
$
48,601
$
64,888
(25
)%
$
70,943
(31
)%
Owner-Occupied
11,398
10,854
5
13,155
(13
)
Total Commercial &
Industrial
59,999
75,742
(21
)
84,098
(29
)
Multi-Family
2,598
2,639
(2
)
2,406
8
Office Buildings
1,796
2,205
(19
)
1,618
11
Shopping Centers
750
915
(18
)
124
505
Warehouses
924
482
92
218
324
Other Investment Property
1,302
1,047
24
408
219
Total Investment Properties
7,370
7,288
1
4,774
54
1-4 Family Construction
55
55
—
548
(90
)
1-4 Family Investment Mortgage
3,063
2,187
40
1,927
59
Total 1-4 Family Properties
3,118
2,242
39
2,475
26
Commercial Development
432
625
(31
)
560
(23
)
Residential Development
399
407
(2
)
451
(12
)
Land Acquisition
1,093
1,021
7
1,029
6
Land and Development
1,924
2,053
(6
)
2,040
(6
)
Total Commercial Real Estate
12,412
11,583
7
9,289
34
Consumer Mortgages
22,857
29,997
(24
)
51,376
(56
)
Home Equity
8,100
8,854
(9
)
8,952
(10
)
Other Consumer Loans
5,656
5,955
(5
)
7,313
(23
)
Total Consumer
36,613
44,806
(18
)
67,641
(46
)
Total
$
109,024
$
132,131
(17
)%
$
161,028
(32
)%
Synovus
CREDIT QUALITY DATA
(Unaudited)
(Dollars in thousands)
2022
2021
Second Quarter
Second
First
Fourth
Third
Second
'22 vs '21
Quarter
Quarter
Quarter
Quarter
Quarter
% Change
Non-performing Loans (NPLs)
$
109,024
132,131
131,042
155,465
161,028
(32
)%
Impaired Loans Held for Sale
—
—
—
—
—
nm
Other Real Estate and Other Assets
26,759
26,759
27,137
16,883
16,806
59
Non-performing Assets (NPAs)
135,783
158,890
158,179
172,348
177,834
(24
)
Allowance for Loan Losses (ALL)
407,837
414,956
427,597
492,243
516,708
(21
)
Reserve for Unfunded Commitments
50,559
47,317
41,885
42,971
46,890
8
Allowance for Credit Losses (ACL)
458,396
462,273
469,482
535,214
563,598
(19
)
Net Charge-Offs - Quarter
16,566
18,609
10,522
20,516
26,546
Net Charge-Offs - YTD
35,175
18,609
77,788
67,266
46,750
Net Charge-Offs / Average Loans - Quarter
(1)
0.16
%
0.19
0.11
0.22
0.28
Net Charge-Offs / Average Loans - YTD
(1)
0.18
0.19
0.20
0.24
0.24
NPLs / Loans
0.26
0.33
0.33
0.41
0.42
NPAs / Loans, ORE and specific other
assets
0.33
0.40
0.40
0.45
0.46
ACL/Loans
1.11
1.15
1.19
1.40
1.47
ALL/Loans
0.99
1.03
1.09
1.28
1.35
ACL/NPLs
420.45
349.86
358.27
344.27
350.00
ALL/NPLs
374.08
314.05
326.31
316.63
320.88
Past Due Loans over 90 days and Still
Accruing
$
2,251
3,067
6,770
5,960
4,415
(49
)
As a Percentage of Loans Outstanding
0.01
%
0.01
0.02
0.02
0.01
Total Past Due Loans and Still
Accruing
$
56,160
45,385
57,565
60,817
49,321
14
As a Percentage of Loans Outstanding
0.14
%
0.11
0.15
0.16
0.13
Accruing Troubled Debt Restructurings
(TDRs)
$
164,101
145,957
119,804
126,055
124,528
32
(1) Ratio is annualized.
SELECTED CAPITAL INFORMATION
(1)
(Unaudited)
(Dollars in thousands)
June 30, 2022
December 31, 2021
June 30, 2021
Common Equity Tier 1 Capital Ratio
9.46
%
9.50
9.75
Tier 1 Capital Ratio
10.56
10.66
11.00
Total Risk-Based Capital Ratio
12.43
12.61
13.25
Tier 1 Leverage Ratio
9.03
8.72
8.72
Total Shareholders' Equity as a Percentage
of Total Assets
7.99
9.24
9.53
Tangible Common Equity Ratio (2) (4)
6.26
7.52
7.73
Book Value Per Common Share (3)
$
27.84
32.82
31.96
Tangible Book Value Per Common Share
(2)
24.52
29.46
28.61
(1) Current quarter regulatory capital
information is preliminary.
(2) Excludes the carrying value of
goodwill and other intangible assets from common equity and total
assets.
(3) Book Value Per Common Share consists
of Total Shareholders' Equity less Preferred Stock divided by total
common shares outstanding.
(4) See "Non-GAAP Financial Measures" of
this report for applicable reconciliation.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220720006051/en/
Media Contact Audria Belton Media Relations (706)
644-0528
Investor Contact Cal Evans Investor Relations (706)
641-6500
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