Diluted Earnings per Share of $1.33 vs.
$1.21 in 3Q21
Adjusted Diluted Earnings per Share of $1.34
vs. $1.20 in 3Q21
Synovus Financial Corp. (NYSE: SNV) today reported financial
results for the quarter ended Sept. 30, 2022. “We demonstrated
ongoing progress this quarter as we continue to execute our
strategic growth plan,” said Synovus President and CEO Kevin Blair.
“Our strong third quarter performance is a result of increased
productivity, deepened, more profitable client relationships as
well as prudent expense management. Pre-provision net revenue of
$288 million, up 24% year over year, was driven by broad-based loan
growth and robust margin expansion. Credit quality was solid in the
third quarter, and capital remained at targeted levels as we
continued to utilize our strong earnings to support client loan
growth. We are confident in and committed to our path forward by
investing in our core and new business initiatives while
prioritizing credit, capital and liquidity management as we face
economic uncertainty ahead.”
Third Quarter 2022 Highlights
- Net income available to common shareholders of $194.8 million,
or $1.33 per diluted share, up $0.17 sequentially and up $0.12
compared to prior year.
- Total revenue of $582.2 million increased $59.6 million
sequentially, or 11%, and increased $82.3 million, or 16%, compared
to prior year, driven by strong loan growth and higher interest
rates.
- Pre-provision net revenue of $288.2 million increased $47.6
million sequentially, or 20%, and increased $55.4 million, or 24%,
compared to prior year.
- Period-end loans increased $1.37 billion sequentially, or 13%
annualized, with growth diversified across asset classes and
commercial business lines.
- Total deposits declined $1.34 billion sequentially, or 3%,
primarily resulting from higher-rate, non-bank liquidity
alternatives for clients, seasonality, and excess liquidity
deployment.
- Credit quality metrics continue to remain at strong levels with
sequential improvement in the NPA ratio, stable NPL and
criticized/classified loan ratios, and a historically low net
charge-off ratio.
- Maintained preliminary CET1 ratio of 9.51% as robust capital
generation continued to support client loan growth.
Third Quarter Summary
Reported
Adjusted
(dollars in thousands)
3Q22
2Q22
3Q21
3Q22
2Q22
3Q21
Net income available to common
shareholders
$
194,753
$
169,761
$
178,482
$
195,481
$
171,018
$
177,760
Diluted earnings per share
1.33
1.16
1.21
1.34
1.17
1.20
Total revenue
582,217
522,654
499,872
N/A
N/A
N/A
Total loans
42,571,458
41,204,780
38,341,030
N/A
N/A
N/A
Total deposits
47,697,564
49,034,700
47,688,419
N/A
N/A
N/A
Return on avg assets
1.39
%
1.26
%
1.34
%
1.39
%
1.27
%
1.33
%
Return on avg common equity
18.66
16.48
14.96
18.73
16.60
14.90
Return on avg tangible common equity
21.29
18.84
16.85
21.37
18.98
16.79
Net interest margin
3.49
3.22
3.01
N/A
N/A
N/A
Efficiency ratio-TE(1)(2)
50.41
53.87
53.34
49.98
53.43
52.96
NCO ratio-QTD
0.04
0.16
0.22
N/A
N/A
N/A
NPA ratio
0.32
0.33
0.45
N/A
N/A
N/A
(1) Taxable equivalent
(2) Adjusted tangible efficiency
ratio
Balance Sheet
Loans*
(dollars in millions)
3Q22
2Q22
Linked
Quarter
Change
Linked
Quarter
% Change
3Q21
Year/Year
Change
Year/Year
% Change
Commercial & industrial**
$
21,212.5
$
20,778.3
$
434.2
2
%
$
18,994.3
$
2,218.2
12
%
Commercial real estate
12,288.0
11,503.4
784.5
7
10,574.1
1,713.9
16
Consumer
9,071.0
8,923.0
147.9
2
8,772.7
298.3
3
Total loans
$
42,571.5
$
41,204.8
$
1,366.7
3
%
$
38,341.0
$
4,230.4
11
%
*Amounts may not total due to rounding
**Includes PPP balances of $42.8 million,
$86.7 million, and $782.2 million at 3Q22, 2Q22, and 3Q21,
respectively.
- Total loans ended the quarter at $42.57 billion, up $1.37
billion sequentially, or 13% annualized.
- Commercial and industrial (C&I) loans increased $434.2
million sequentially, led by broad based growth within our
Wholesale Banking segment and higher utilization from
commitments.
- CRE loans increased $784.5 million sequentially, led by growth
in multi-family loans and our Specialty Healthcare group in
addition to the impact of a slowdown in payoffs.
- Consumer loans increased $147.9 million sequentially led by
home equity and mortgage.
Deposits*
(dollars in millions)
3Q22
2Q22
Linked
Quarter
Change
Linked
Quarter
% Change
3Q21
Year/Year
Change
Year/Year
% Change
Non-interest-bearing DDA
$
15,373.7
$
15,781.1
$
(407.4
)
(3
)%
$
14,832.9
$
540.8
4
%
Interest-bearing DDA
5,776.8
6,327.1
(550.3
)
(9
)
6,056.0
(279.2
)
(5
)
Money market
12,918.6
13,793.0
(874.5
)
(6
)
14,267.4
(1,348.9
)
(9
)
Savings
1,470.1
1,498.7
(28.6
)
(2
)
1,380.4
89.7
6
Public funds
5,549.7
5,863.9
(314.2
)
(5
)
5,791.6
(241.9
)
(4
)
Time deposits
2,110.9
2,147.8
(36.8
)
(2
)
2,579.3
(468.4
)
(18
)
Brokered deposits
4,497.8
3,623.1
874.7
24
2,780.7
1,717.1
62
Total deposits
$
47,697.6
$
49,034.7
$
(1,337.1
)
(3
)%
$
47,688.4
$
9.1
—
%
*Amounts may not total due to rounding
- Total deposits ended the quarter at $47.70 billion, down $1.34
billion sequentially, impacted by higher-rate, non-bank liquidity
alternatives for clients, seasonality, and excess liquidity
deployment.
- Total deposit costs increased 23 bps sequentially to 0.38% and
were primarily impacted by the rising rate environment.
Income Statement Summary**
(in thousands, except per share data)
3Q22
2Q22
Linked
Quarter
Change
Linked
Quarter
% Change
3Q21
Year/Year
Change
Year/Year
% Change
Net interest income
$
477,919
$
425,388
$
52,531
12
%
$
384,917
$
93,002
24
%
Non-interest revenue
104,298
97,266
7,032
7
114,955
(10,657
)
(9
)
Non-interest expense
294,010
282,051
11,959
4
267,032
26,978
10
Provision for (reversal of) credit
losses
25,581
12,688
12,893
102
(7,868
)
33,449
nm
Income before taxes
$
262,626
$
227,915
$
34,711
15
%
$
240,708
$
21,918
9
%
Income tax expense
59,582
49,863
9,719
19
53,935
5,647
10
Preferred stock dividends
8,291
8,291
—
—
8,291
—
—
Net income available to common
shareholders
$
194,753
$
169,761
$
24,992
15
%
$
178,482
$
16,271
9
%
Weighted average common shares
outstanding, diluted
146,418
146,315
103
—
%
147,701
(1,283
)
(1
) %
Diluted earnings per share
$
1.33
$
1.16
$
0.17
15
$
1.21
$
0.12
10
Adjusted diluted earnings per share
1.34
1.17
0.17
15
1.20
0.14
12
Effective tax rate
22.69
%
21.88
%
22.41
%
** Amounts may not total due to
rounding
Core Performance
- Net interest income of $477.9 million was up $52.5 million
sequentially, or 12%, and increased $93.0 million, or 24%, compared
to prior year, driven by strong loan growth and higher rates.
- Net interest margin was 3.49%, up 27 bps sequentially, aided by
higher interest rates and deposit pricing discipline.
- Non-interest revenue increased $7.0 million, or 7%,
sequentially and decreased $10.7 million, or 9%, compared to prior
year.
- The quarter-over-quarter increase was largely due to a prior
quarter $7 million write-down on a minority fintech
investment.
- Year-over-year decline was primarily related to the continued
challenging residential mortgage banking environment and prior year
gains on equity investments, partially offset by increases in
wealth revenue, brokerage revenue, and card fee income
categories.
- Non-interest expense increased $12.0 million, or 4%,
sequentially and increased $27.0 million, or 10%, compared to prior
year. Adjusted non-interest expense increased $10.5 million, or 4%,
sequentially and increased $27.1 million, or 10%, compared to prior
year.
- Increases were primarily due to higher performance-based
incentives, merit-related salary increases, and operating costs
related to realized revenue growth and investments in new growth
initiatives.
- Credit quality ratios remain historically strong. The
non-performing loan and asset ratios were 0.29% and 0.32%,
respectively; the net charge-off ratio for the quarter was 0.04%,
and total past dues were 0.15% of total loans outstanding.
- Provision for credit losses of $25.6 million increased $12.9
million sequentially and increased $33.4 million compared to prior
year. Drivers of the increase included loan growth and a modest
increase in the allowance for credit losses coverage ratio (to
loans) of 2 bps sequentially, a result of deteriorating economic
conditions mostly offset by continued strong credit quality.
Capital Ratios
3Q22
2Q22
3Q21
Common equity Tier 1 capital (CET1)
ratio
9.51
%
*
9.46
%
9.58
%
Tier 1 capital ratio
10.58
*
10.56
10.79
Total risk-based capital ratio
12.44
*
12.43
12.92
Tier 1 leverage ratio
9.04
*
9.03
8.78
Tangible common equity ratio
5.52
6.26
7.68
* Ratios are preliminary.
Capital
- Preliminary CET1 ratio improved 5 bps during the quarter to
9.51%, and the preliminary total risk-based capital ratio of 12.44%
improved 1 bps from the previous quarter as capital generated
through earnings helped offset the impact of loan growth.
Third Quarter Earnings Conference Call
Synovus will host an earnings highlights conference call at 8:30
a.m. EDT on October 20, 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 $59 billion in
assets. Synovus provides commercial and consumer 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, capital
markets and international banking. Synovus has 254 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)
3Q22
2Q22
3Q21
Adjusted non-interest expense
Total non-interest expense
$
294,010
$
282,051
$
267,032
Subtract: Earnout liability
adjustments
—
—
243
Subtract/add: Restructuring charges
(956
)
1,850
(319
)
Subtract: Valuation adjustment to Visa
derivative
—
(3,500
)
—
Subtract/add: Fair value adjustment on
non-qualified deferred compensation
1,076
3,240
97
Adjusted non-interest expense
$
294,130
$
283,641
$
267,053
Reconciliation of Non-GAAP Financial
Measures, continued
(dollars in thousands)
3Q22
2Q22
3Q21
Adjusted tangible efficiency
ratio
Adjusted non-interest expense
$
294,130
$
283,641
$
267,053
Subtract: Amortization of intangibles
(2,118
)
(2,118
)
(2,379
)
Adjusted tangible non-interest expense
$
292,012
$
281,523
$
264,674
Net interest income
$
477,919
$
425,388
$
384,917
Add: Tax equivalent adjustment
972
960
736
Add: Total non-interest revenue
104,298
97,266
114,955
Total TE revenue
583,189
523,614
500,608
Add/subtract: Investment securities losses
(gains), net
—
—
(962
)
Subtract/add: Fair value adjustment on
non-qualified deferred compensation
1,076
3,240
97
Total adjusted revenue
$
584,265
$
526,854
$
499,743
Efficiency ratio-TE
50.41
%
53.87
%
53.34
%
Adjusted tangible efficiency ratio
49.98
53.43
52.96
Adjusted return on average
assets
Net income
$
203,044
$
178,052
$
186,773
Add: Earnout liability adjustments
—
—
(243
)
Add/subtract: Restructuring charges
956
(1,850
)
319
Add: Valuation adjustment to Visa
derivative
—
3,500
—
Add/subtract: Investment securities losses
(gains), net
—
—
(962
)
Add/subtract: Tax effect of adjustments
(1)
(228
)
(393
)
164
Adjusted net income
$
203,772
$
179,309
$
186,051
Net income annualized
$
805,555
$
714,165
$
741,002
Adjusted net income annualized
$
808,443
$
719,206
$
738,137
Total average assets
$
58,055,979
$
56,536,940
$
55,326,260
Return on average assets
1.39
%
1.26
%
1.34
%
Adjusted return on average assets
1.39
1.27
1.33
Adjusted net income available to common
shareholders and adjusted diluted earnings per share
Net income available to common
shareholders
$
194,753
$
169,761
$
178,482
Add: Earnout liability adjustments
—
—
(243
)
Add/subtract: Restructuring charges
956
(1,850
)
319
Add: Valuation adjustment to Visa
derivative
—
3,500
—
Add/subtract: Investment securities losses
(gains), net
—
—
(962
)
Add/subtract: Tax effect of adjustments
(1)
(228
)
(393
)
164
Adjusted net income available to common
shareholders
$
195,481
$
171,018
$
177,760
Weighted average common shares
outstanding, diluted
146,418
146,315
147,701
Diluted earnings per share
$
1.33
$
1.16
$
1.21
Adjusted diluted earnings per share
1.34
1.17
1.20
Reconciliation of Non-GAAP Financial
Measures, continued
(dollars in thousands)
3Q22
2Q22
3Q21
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
$
194,753
$
169,761
$
178,482
Subtract/add: Earnout liability
adjustments
—
—
(243
)
Add/subtract: Restructuring charges
956
(1,850
)
319
Add: Valuation adjustment to Visa
derivative
—
3,500
—
Add/subtract: Investment securities losses
(gains), net
—
—
(962
)
Add/subtract: Tax effect of adjustments
(1)
(228
)
(393
)
164
Adjusted net income available to common
shareholders
$
195,481
$
171,018
$
177,760
Adjusted net income available to common
shareholders annualized
$
775,550
$
685,951
$
705,243
Add: Amortization of intangibles,
annualized net of tax
6,401
6,471
7,050
Adjusted net income available to common
shareholders excluding amortization of intangibles annualized
$
781,951
$
692,422
$
712,293
Net income available to common
shareholders annualized
$
772,661
$
680,910
$
708,108
Add: Amortization of intangibles,
annualized net of tax
6,401
6,471
7,050
Net income available to common
shareholders excluding amortization of intangibles annualized
$
779,062
$
687,381
$
715,158
Total average shareholders' equity less
preferred stock
$
4,141,516
$
4,132,536
$
4,734,754
Subtract: Goodwill
(452,390
)
(452,390
)
(452,390
)
Subtract: Other intangible assets, net
(30,214
)
(32,387
)
(39,109
)
Total average tangible shareholders'
equity less preferred stock
$
3,658,912
$
3,647,759
$
4,243,255
Return on average common equity
18.66
%
16.48
%
14.96
%
Adjusted return on average common
equity
18.73
16.60
14.90
Return on average tangible common
equity
21.29
18.84
16.85
Adjusted return on average tangible common
equity
21.37
18.98
16.79
(dollars in thousands)
September 30,
2022
June 30,
2022
December 31,
2021
September 30,
2021
Tangible common equity ratio
Total assets
$
58,639,522
$
57,382,745
$
57,317,226
$
55,509,129
Subtract: Goodwill
(452,390
)
(452,390
)
(452,390
)
(452,390
)
Subtract: Other intangible assets, net
(29,242
)
(31,360
)
(35,596
)
(37,975
)
Tangible assets
$
58,157,890
$
56,898,995
$
56,829,240
$
55,018,764
Total shareholders’ equity
$
4,229,715
$
4,584,438
$
5,296,800
$
5,252,802
Subtract: Goodwill
(452,390
)
(452,390
)
(452,390
)
(452,390
)
Subtract: Other intangible assets, net
(29,242
)
(31,360
)
(35,596
)
(37,975
)
Subtract: Preferred Stock, no par
value
(537,145
)
(537,145
)
(537,145
)
(537,145
)
Tangible common equity
$
3,210,938
$
3,563,543
$
4,271,669
$
4,225,292
Total shareholders’ equity to total assets
ratio
7.21
%
7.99
%
9.24
%
9.46
%
Tangible common equity ratio
5.52
6.26
7.52
7.68
(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)
Nine Months Ended September
30,
2022
2021
22 vs '21
% Change
Interest income
$
1,421,133
$
1,235,064
15
%
Interest expense
125,578
94,430
33
Net interest income
1,295,555
1,140,634
14
Provision for (reversal of) credit
losses
49,669
(51,041
)
nm
Net interest income after provision for
credit losses
1,245,886
1,191,675
5
Non-interest revenue:
Service charges on deposit accounts
69,428
64,089
8
Fiduciary and asset management fees
59,577
56,545
5
Card fees
45,946
38,538
19
Brokerage revenue
47,038
41,644
13
Mortgage banking income
14,922
47,312
(68
)
Capital markets income
19,704
18,929
4
Income from bank-owned life insurance
22,514
22,851
(1
)
Investment securities gains (losses),
net
—
(1,028
)
nm
Other non-interest revenue
27,768
44,117
(37
)
Total non-interest revenue
306,897
332,997
(8
)
Non-interest expense:
Salaries and other personnel expense
499,081
482,408
3
Net occupancy, equipment, and software
expense
129,538
126,442
2
Third-party processing and other
services
65,486
63,897
2
Professional fees
26,094
23,771
10
FDIC insurance and other regulatory
fees
20,851
16,338
28
Restructuring charges
(7,318
)
1,265
nm
Other operating expenses
114,779
90,576
27
Total non-interest expense
848,511
804,697
5
Income before income taxes
704,272
719,975
(2
)
Income tax expense
152,140
159,910
(5
)
Net income
552,132
560,065
(1
)
Less: Preferred stock dividends
24,872
24,872
—
Net income available to common
shareholders
$
527,260
$
535,193
(1
)%
Net income per common share, basic
$
3.63
$
3.63
0
%
Net income per common share, diluted
3.60
3.59
0
Cash dividends declared per common
share
1.02
0.99
3
Return on average assets *
1.29
%
1.37
%
(8) bps
Return on average common equity *
16.37
15.37
100
Weighted average common shares
outstanding, basic
145,329
147,622
(2
)%
Weighted average common shares
outstanding, diluted
146,465
149,069
(2
)
nm - not meaningful
bps - basis points
* - ratios are annualized
Synovus
INCOME STATEMENT DATA
(Unaudited)
(Dollars in thousands, except per share
data)
2022
2021
Third
Quarter
Third
Quarter
Second
Quarter
First
Quarter
Fourth
Quarter
Third
Quarter
'22 vs '21
% Change
Interest income
$
551,299
453,772
416,062
418,279
412,504
34
%
Interest expense
73,380
28,384
23,814
25,966
27,587
166
Net interest income
477,919
425,388
392,248
392,313
384,917
24
Provision for (reversal of) credit
losses
25,581
12,688
11,400
(55,210
)
(7,868
)
nm
Net interest income after provision for
credit losses
452,338
412,700
380,848
447,523
392,785
15
Non-interest revenue:
Service charges on deposit accounts
23,398
23,491
22,539
22,221
22,641
3
Fiduciary and asset management fees
19,201
20,100
20,277
20,602
19,786
(3
)
Card fees
15,101
16,089
14,756
12,861
13,238
14
Brokerage revenue
17,140
15,243
14,655
14,795
14,745
16
Mortgage banking income
5,065
3,904
5,953
7,059
11,155
(55
)
Capital markets income
6,839
7,393
5,472
7,188
8,089
(15
)
Income from bank-owned life insurance
6,792
9,165
6,556
15,168
6,820
—
Investment securities gains (losses),
net
—
—
—
230
962
nm
Other non-interest revenue
10,762
1,881
15,126
16,944
17,519
(39
)
Total non-interest revenue
104,298
97,266
105,334
117,068
114,955
(9
)
Non-interest expense:
Salaries and other personnel expense
173,334
161,063
164,684
167,018
160,364
8
Net occupancy, equipment, and software
expense
43,462
43,199
42,877
42,780
43,483
—
Third-party processing and other
services
22,539
21,952
20,996
22,791
19,446
16
Professional fees
6,755
10,865
8,474
9,014
6,739
—
FDIC insurance and other regulatory
fees
7,707
6,894
6,250
6,016
5,212
48
Restructuring charges
956
(1,850
)
(6,424
)
5,958
319
nm
Other operating expenses
39,257
39,928
35,593
41,630
31,469
25
Total non-interest expense
294,010
282,051
272,450
295,207
267,032
10
Income before income taxes
262,626
227,915
213,732
269,384
240,708
9
Income tax expense
59,582
49,863
42,695
68,983
53,935
10
Net income
203,044
178,052
171,037
200,401
186,773
9
Less: Preferred stock dividends
8,291
8,291
8,291
8,291
8,291
—
Net income available to common
shareholders
$
194,753
169,761
162,746
192,110
178,482
9
%
Net income per common share, basic
$
1.34
1.17
1.12
1.32
1.22
10
%
Net income per common share, diluted
1.33
1.16
1.11
1.31
1.21
10
Cash dividends declared per common
share
0.34
0.34
0.34
0.33
0.33
3
Return on average assets *
1.39
%
1.26
1.22
1.40
1.34
5 bps
Return on average common equity *
18.66
16.48
14.20
16.11
14.96
370
Weighted average common shares
outstanding, basic
145,386
145,328
145,273
145,316
146,308
(1
)%
Weighted average common shares
outstanding, diluted
146,418
146,315
146,665
146,793
147,701
(1
)
nm - not meaningful
bps - basis points
* - ratios are annualized
Synovus
BALANCE SHEET DATA
September 30,
2022
December 31,
2021
September 30,
2021
(Unaudited)
(In thousands, except share data)
ASSETS
Cash and due from banks
$
516,163
$
432,925
$
483,035
Interest-bearing funds with Federal
Reserve Bank
1,260,748
2,479,006
2,103,497
Interest earning deposits with banks
32,445
25,535
23,261
Federal funds sold and securities
purchased under resale agreements
58,448
72,387
77,627
Cash, cash equivalents, and restricted
cash
1,867,804
3,009,853
2,687,420
Investment securities available for sale,
at fair value
9,587,508
10,918,329
10,481,071
Loans held for sale ($56,517, $108,198,
and $152,258 measured at fair value, respectively)
696,450
750,642
550,948
Loans, net of deferred fees and costs
42,571,458
39,311,958
38,341,030
Allowance for loan losses
(421,359
)
(427,597
)
(492,243
)
Loans, net
42,150,099
38,884,361
37,848,787
Cash surrender value of bank-owned life
insurance
1,084,060
1,068,616
1,065,256
Premises, equipment, and software, net
376,823
407,241
423,933
Goodwill
452,390
452,390
452,390
Other intangible assets, net
29,242
35,596
37,975
Other assets
2,395,146
1,790,198
1,961,349
Total assets
$
58,639,522
$
57,317,226
$
55,509,129
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest-bearing deposits
$
16,359,551
$
16,392,653
$
15,787,882
Interest-bearing deposits
31,338,013
33,034,623
31,900,537
Total deposits
47,697,564
49,427,276
47,688,419
Federal funds purchased and securities
sold under repurchase agreements
240,210
264,133
262,548
Long-term debt
4,434,327
1,204,229
1,203,761
Other liabilities
2,037,706
1,124,788
1,101,599
Total liabilities
54,409,807
52,020,426
50,256,327
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 170,097,791, 169,383,758, and
169,170,589; outstanding 145,442,933, 145,010,086, and
145,483,994
170,098
169,384
169,171
Additional paid-in capital
3,916,729
3,894,109
3,883,289
Treasury stock, at cost – 24,654,858,
24,373,672, and 23,686,595 shares
(944,484
)
(931,497
)
(898,707
)
Accumulated other comprehensive income
(loss), net
(1,534,314
)
(82,321
)
(5,462
)
Retained earnings
2,084,541
1,709,980
1,567,366
Total shareholders’ equity
4,229,715
5,296,800
5,252,802
Total liabilities and shareholders'
equity
$
58,639,522
$
57,317,226
$
55,509,129
Synovus
AVERAGE BALANCES, INTEREST, AND
YIELDS/RATES
(Unaudited)
Third Quarter 2022
Second Quarter 2022
Third 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)
$
32,836,799
$
384,995
4.65
%
$
31,870,387
$
308,442
3.88
%
$
28,984,837
$
285,445
3.91
%
Consumer loans (1) (2)
8,931,573
94,425
4.21
8,720,488
83,826
3.86
8,549,296
84,615
3.94
Less: Allowance for loan losses
(419,160
)
—
—
(415,372
)
—
—
(514,828
)
—
—
Loans, net
41,349,212
479,420
4.60
40,175,503
392,268
3.92
37,019,305
370,060
3.97
Investment securities available for
sale
11,126,705
53,550
1.93
11,153,091
50,312
1.81
9,876,651
35,876
1.45
Trading account assets
16,771
81
1.93
11,987
73
2.44
5,192
15
1.15
Other earning assets(4)
1,012,717
5,791
2.24
813,028
1,660
0.81
3,271,501
1248
0.15
FHLB and Federal Reserve Bank stock
244,879
1,412
2.31
179,837
1,820
4.05
159,741
501
1.26
Mortgage loans held for sale
66,601
862
5.18
85,299
921
4.32
196,032
1,410
2.88
Other loans held for sale
892,805
11,155
4.89
725,762
7,678
4.19
527,736
4,130
3.06
Total interest earning assets
54,709,690
$
552,271
4.01
%
53,144,507
$
454,732
3.43
%
51,056,158
$
413,240
3.22
%
Cash and due from banks
557,537
538,647
611,783
Premises and equipment
383,189
385,457
447,046
Other real estate
2,398
11,439
1,513
Cash surrender value of bank-owned life
insurance
1,080,914
1,077,231
1,061,478
Other assets(5)
1,322,251
1,379,659
2,148,282
Total assets
$
58,055,979
$
56,536,940
$
55,326,260
Liabilities and Shareholders'
Equity
Interest-bearing liabilities:
Interest-bearing demand deposits
$
8,436,922
$
5,782
0.27
%
$
9,513,334
$
3,598
0.15
%
$
8,463,325
$
2,192
0.10
%
Money market accounts
15,411,450
20,696
0.53
15,328,395
6,850
0.18
15,597,723
6,081
0.15
Savings deposits
1,508,312
84
0.02
1,506,195
72
0.02
1,377,089
60
0.02
Time deposits
2,270,163
2,428
0.42
2,829,684
1,688
0.24
3,424,028
3,572
0.41
Brokered deposits
3,899,669
17,927
1.82
2,878,536
6,293
0.88
2,859,123
4,181
0.58
Federal funds purchased and securities
sold under repurchase agreements
240,412
641
1.04
246,737
219
0.35
202,525
36
0.07
Other short-term borrowings
702,443
3,666
2.04
478,469
896
0.74
—
—
—
Long-term debt
2,656,939
22,156
3.29
878,413
8,768
3.99
1,203,500
11,465
3.81
Total interest-bearing liabilities
35,126,310
$
73,380
0.81
%
33,659,763
$
28,384
0.33
%
33,127,313
$
27,587
0.33
%
Non-interest-bearing demand deposits
16,904,353
16,959,850
15,755,929
Other liabilities
1,346,655
1,247,646
1,171,119
Shareholders' equity
4,678,661
4,669,681
5,271,899
Total liabilities and shareholders'
equity
$
58,055,979
$
56,536,940
$
55,326,260
Net interest income and net interest
margin, taxable equivalent (6)
$
478,891
3.49
%
$
426,348
3.22
%
$
385,653
3.01
%
Less: taxable-equivalent adjustment
972
960
736
Net interest income
$
477,919
$
425,388
$
384,917
(1)
Average loans are shown net of deferred
fees and costs. NPLs are included.
(2)
Interest income includes net loan fees as
follows: Third Quarter 2022 — $11.9 million, Second Quarter 2022 —
$13.0 million, and Third Quarter 2021 — $30.4 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
$(1.06) billion, $(923.1) million, and $66.6 million for the Third
Quarter 2022, Second Quarter 2022, and Third 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)
Nine Months Ended September
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)
$
31,828,932
$
974,024
4.09
%
$
29,611,970
$
864,322
3.90
%
Consumer loans (1) (2)
8,749,927
259,619
3.95
8,466,505
251,081
3.95
Less: Allowance for loan losses
(419,478
)
(558,336
)
Loans, net
40,159,381
1,233,643
4.11
37,520,139
1,115,403
3.97
Investment securities available for
sale
11,179,378
151,111
1.80
9,171,573
98,631
1.43
Trading account assets
12,640
193
2.04
3,703
44
1.60
Other earning assets(4)
1,245,102
8,267
0.88
2,940,049
2,705
0.12
FHLB and Federal Reserve Bank stock
195,238
3,917
2.67
158,921
1,971
1.65
Mortgage loans held for sale
85,126
2,665
4.17
228,458
4,926
2.87
Other loans held for sale
739,627
24,133
4.30
600,776
13,685
3.00
Total interest earning assets
53,616,492
$
1,423,929
3.55
%
50,623,619
$
1,237,365
3.27
%
Cash and due from banks
548,322
567,702
Premises and equipment
389,083
453,339
Other real estate
8,498
1,579
Cash surrender value of bank-owned life
insurance
1,076,381
1,056,257
Other assets(5)
1,515,226
2,145,850
Total assets
$
57,154,002
$
54,848,346
Liabilities and Shareholders'
Equity
Interest-bearing liabilities:
Interest-bearing demand deposits
$
9,162,519
$
11,752
0.17
%
$
8,544,720
$
7,606
0.12
%
Money market accounts
15,592,834
32,896
0.28
15,475,212
21,994
0.19
Savings deposits
1,491,893
223
0.02
1,310,470
164
0.02
Time deposits
2,700,505
6,254
0.31
3,787,892
15,507
0.55
Brokered deposits
3,192,848
27,952
1.17
3,093,485
15,204
0.66
Federal funds purchased and securities
sold under repurchase agreements
227,335
871
0.51
205,316
104
0.07
Other short-term borrowings
397,744
4,561
1.51
—
—
—
Long-term debt
1,512,059
41,069
3.61
1,203,054
33,851
3.75
Total interest-bearing liabilities
34,277,737
$
125,578
0.48
%
33,620,149
$
94,430
0.37
%
Non-interest-bearing demand deposits
16,786,794
14,885,880
Other liabilities
1,247,020
1,149,209
Shareholders' equity
4,842,451
5,193,108
Total liabilities and shareholders'
equity
$
57,154,002
$
54,848,346
Net interest income, taxable equivalent
net interest margin (6)
$
1,298,351
3.24
%
$
1,142,935
3.02
%
Less: taxable-equivalent adjustment
2,796
2,301
Net interest income
$
1,295,555
$
1,140,634
(1)
Average loans are shown net of deferred
fees and costs. NPLs are included.
(2)
Interest income includes net loan fees as
follows: 2022 — $45.6 million and 2021 — $90.8 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
$(747.7) million and $73.1 million for the nine months ended
September 30, 2022 and 2021, respectively.
(6)
The net interest margin is calculated by
dividing net interest income-taxable equivalent 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
September 30, 2022
June 30, 2022
% Change
September 30, 2021
% Change
Commercial, Financial, and
Agricultural
$
13,254,966
$
13,018,089
2
%
$
11,864,362
12
%
Owner-Occupied
7,957,550
7,760,236
3
7,129,926
12
Total Commercial &
Industrial
21,212,516
20,778,325
2
18,994,288
12
Multi-Family
2,949,172
2,547,706
16
2,197,139
34
Hotels
1,712,016
1,597,930
7
1,441,414
19
Office Buildings
2,945,771
2,680,399
10
2,341,316
26
Shopping Centers
1,441,385
1,458,902
(1
)
1,570,020
(8
)
Warehouses
943,961
811,738
16
687,496
37
Other Investment Property
1,246,099
1,311,373
(5
)
1,244,904
—
Total Investment Properties
11,238,404
10,408,048
8
9,482,289
19
1-4 Family Construction
249,840
234,379
7
191,906
30
1-4 Family Investment Mortgage
389,787
407,476
(4
)
421,968
(8
)
Total 1-4 Family Properties
639,627
641,855
—
613,874
4
Commercial Development
92,159
109,764
(16
)
103,512
(11
)
Residential Development
119,019
156,816
(24
)
186,033
(36
)
Land Acquisition
198,756
186,934
6
188,378
6
Land and Development
409,934
453,514
(10
)
477,923
(14
)
Total Commercial Real Estate
12,287,965
11,503,417
7
10,574,086
16
Consumer Mortgages
5,166,928
5,124,523
1
5,108,457
1
Home Equity
1,708,246
1,579,218
8
1,359,688
26
Credit Cards
197,978
194,290
2
199,700
(1
)
Other Consumer Loans
1,997,825
2,025,007
(1
)
2,104,811
(5
)
Total Consumer
9,070,977
8,923,038
2
8,772,656
3
Total
$
42,571,458
$
41,204,780
3
%
$
38,341,030
11
%
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, 2022
June 30, 2022
% Change
September 30, 2021
% Change
Commercial, Financial, and
Agricultural
$
59,275
$
48,601
22
%
$
77,349
(23
) %
Owner-Occupied
8,433
11,398
(26
)
13,134
(36
)
Total Commercial &
Industrial
67,708
59,999
13
90,483
(25
)
Multi-Family
2,550
2,598
(2
)
2,396
6
Office Buildings
884
1,796
(51
)
2,488
(64
)
Shopping Centers
742
750
(1
)
932
(20
)
Warehouses
223
924
(76
)
302
(26
)
Other Investment Property
641
1,302
(51
)
624
3
Total Investment Properties
5,040
7,370
(32
)
6,742
(25
)
1-4 Family Construction
55
55
—
522
(89
)
1-4 Family Investment Mortgage
3,036
3,063
(1
)
2,364
28
Total 1-4 Family Properties
3,091
3,118
(1
)
2,886
7
Commercial Development
422
432
(2
)
463
(9
)
Residential Development
267
399
(33
)
449
(41
)
Land Acquisition
980
1,093
(10
)
1,024
(4
)
Land and Development
1,669
1,924
(13
)
1,936
(14
)
Total Commercial Real Estate
9,800
12,412
(21
)
11,564
(15
)
Consumer Mortgages
32,527
22,857
42
37,541
(13
)
Home Equity
7,121
8,100
(12
)
8,702
(18
)
Other Consumer Loans
4,938
5,656
(13
)
7,175
(31
)
Total Consumer
44,586
36,613
22
53,418
(17
)
Total
$
122,094
$
109,024
12
%
$
155,465
(21
) %
Synovus
CREDIT QUALITY DATA
(Unaudited)
(Dollars in thousands)
2022
2021
Third
Quarter
Third
Second
First
Fourth
Third
'22 vs '21
Quarter
Quarter
Quarter
Quarter
Quarter
% Change
Non-performing Loans (NPLs)
$
122,094
109,024
132,131
131,042
155,465
(21
) %
Impaired Loans Held for Sale
447
—
—
—
—
nm
Other Real Estate and Other Assets
15,320
26,759
26,759
27,137
16,883
(9
)
Non-performing Assets (NPAs)
137,861
135,783
158,890
158,179
172,348
(20
)
Allowance for Loan Losses (ALL)
421,359
407,837
414,956
427,597
492,243
(14
)
Reserve for Unfunded Commitments
57,936
50,559
47,317
41,885
42,971
35
Allowance for Credit Losses (ACL)
479,295
458,396
462,273
469,482
535,214
(10
)
Net Charge-Offs - Quarter
4,682
16,565
18,609
10,522
20,516
Net Charge-Offs - YTD
39,856
35,174
18,609
77,788
67,266
Net Charge-Offs / Average Loans - Quarter
(1)
0.04
%
0.16
0.19
0.11
0.22
Net Charge-Offs / Average Loans - YTD
(1)
0.13
0.18
0.19
0.20
0.24
NPLs / Loans
0.29
0.26
0.33
0.33
0.41
NPAs / Loans, ORE and specific other
assets
0.32
0.33
0.40
0.40
0.45
ACL/Loans
1.13
1.11
1.15
1.19
1.40
ALL/Loans
0.99
0.99
1.03
1.09
1.28
ACL/NPLs
392.56
420.45
349.86
358.27
344.27
ALL/NPLs
345.11
374.08
314.05
326.31
316.63
Past Due Loans over 90 days and Still
Accruing
$
3,443
2,251
3,067
6,770
5,960
(42
)
As a Percentage of Loans Outstanding
0.01
%
0.01
0.01
0.02
0.02
Total Past Due Loans and Still
Accruing
$
63,545
56,160
45,385
57,565
60,817
4
As a Percentage of Loans Outstanding
0.15
%
0.14
0.11
0.15
0.16
Accruing Troubled Debt Restructurings
(TDRs)
$
118,755
164,101
145,957
119,804
126,055
(6
)
(1) Ratio is annualized.
SELECTED CAPITAL INFORMATION
(1)
(Unaudited)
(Dollars in thousands)
September 30,
2022
December 31,
2021
September 30,
2021
Common Equity Tier 1 Capital Ratio
9.51
%
9.50
9.58
Tier 1 Capital Ratio
10.58
10.66
10.79
Total Risk-Based Capital Ratio
12.44
12.61
12.92
Tier 1 Leverage Ratio
9.04
8.72
8.78
Total Shareholders' Equity as a Percentage
of Total Assets
7.21
9.24
9.46
Tangible Common Equity Ratio (2) (4)
5.52
7.52
7.68
Book Value Per Common Share (3)
$
25.39
32.82
32.41
Tangible Book Value Per Common Share
(2)
22.08
29.46
29.04
(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/20221019005933/en/
Media Contact Audria Belton Media Relations
media@synovus.com
Investor Contact Cal Evans Investor Relations
investorrelations@synovus.com
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