Diluted Earnings per Share of $1.35 vs.
$1.33 in 3Q22
Adjusted Diluted Earnings per Share of $1.35
vs. $1.34 in 3Q22
Synovus Financial Corp. (NYSE: SNV) today reported financial
results for the quarter and year ended Dec. 31, 2022. "Our 2022
financial results validated the resiliency of our business model
and our team's ability to successfully execute on key strategic
growth initiatives while delivering top quartile returns and
efficiency," said Kevin Blair, Synovus chairman, CEO and president.
"With pre-provision net revenue up 19%, the year was shaped by
broad-based growth and stability in our core banking franchise that
enabled investments in new sources of growth and enhancements to
the client experience. Our commonsense approach to expense, credit,
and capital management positions us for continued growth while
remaining flexible as economic volatility persists. 2023 is a year
of focused execution that will continue to drive profitable growth,
enhanced service quality, and deeper client relationships. And as
we also navigate uncertain economic terrain, risk profile
resiliency, broad-based deposit generation, and strong credit
vigilance remain top priorities. We're confident in the strength of
our footprint, talent, and ability to execute, which will translate
into achieving our stated near-term and long-term financial
targets."
2022 Highlights
- Net income available to common shareholders for 2022 was $724.7
million, or $4.95 per diluted share, as compared to $727.3 million,
or $4.90 per diluted share, for 2021.
- Pre-provision net revenue of $1.05 billion increased $165.6
million, or 19%, largely driven by robust net interest income
growth that was fueled by strong loan growth and an overall asset
sensitive position given rising interest rates.
- Adjusted pre-provision net revenue excluding Paycheck
Protection Program (PPP) revenue of $1.04 billion increased $233.0
million, or 29%.
- Period-end loans increased $4.79 billion, or 12%, excluding PPP
loans, with broad-based growth across asset classes led by
commercial lines of business.
- Period-end deposits declined $555.7 million, or 1%, impacted by
increasing pricing pressures; however, overall deposit costs
benefited from prudent pricing strategy and an extended lag on
deposit pricing.
- Credit metrics including non-performing loan, non-performing
asset, and net charge-off ratios are at or near historically low
levels.
- Provision for credit losses of $84.6 million in 2022 compared
to a reversal of credit losses of $106.3 million for the prior
year. 2022 results reflect a deterioration in the economic outlook
for 2023 and 2024 and strong loan growth, while prior year results
benefited from an improvement in the economic outlook as the
effects of the COVID-19 pandemic began to subside.
- Preliminary year-end CET1 ratio of 9.63% increased to upper
half of target operating range of 9.25% to 9.75%.
- Continued progress on key strategic initiatives as pre-tax run
rate benefit of $175 million Synovus Forward initiative was
achieved.
Fourth Quarter 2022 Highlights
- Net income available to common shareholders was $197.5 million,
or $1.35 per diluted share, up $0.02 sequentially and up $0.04
compared to the fourth quarter 2021.
- Total revenue of $603.8 million increased $21.6 million, or 4%,
sequentially and was up $94.4 million, or 19%, compared to the
fourth quarter 2021.
- Pre-provision net revenue of $294.8 million increased $6.6
million, or 2%, sequentially and was up $80.6 million, or 38%,
compared to the fourth quarter 2021.
- Period-end loans increased $1.14 billion, or 3%, representing a
growth rate of 11% annualized, our sixth consecutive quarter of
annualized double-digit loan growth.
- Period-end deposits grew $1.17 billion, or 2%, sequentially.
- Core deposits increased $372.8 million, or 1%,
sequentially.
- Credit quality metrics remained stable from the previous
quarter and included a quarter-end non-performing loan ratio of
0.29%, non-performing asset ratio of 0.33%, and a quarterly net
charge-off ratio of 0.12%.
- Preliminary CET1 ratio of 9.63% grew 11 bps sequentially as
capital generation continued to support client loan growth.
Fourth Quarter 2022 Summary
Reported
Adjusted
(dollars in thousands)
4Q22
3Q22
4Q21
4Q22
3Q22
4Q21
Net income available to common
shareholders
$
197,479
$
194,753
$
192,110
$
197,576
$
195,481
$
198,373
Diluted earnings per share
1.35
1.33
1.31
1.35
1.34
1.35
Total revenue
603,785
582,217
509,381
N/A
N/A
N/A
Total loans
43,716,353
42,571,458
39,311,958
N/A
N/A
N/A
Total deposits
48,871,559
47,697,564
49,427,276
N/A
N/A
N/A
Return on avg assets
1.38
%
1.39
%
1.40
%
1.39
%
1.39
%
1.44
%
Return on avg common equity
20.93
18.66
16.11
20.94
18.73
16.64
Return on avg tangible common equity
24.21
21.29
18.14
24.22
21.37
18.72
Net interest margin
3.60
3.49
2.96
N/A
N/A
N/A
Efficiency ratio-TE(1)(2)
51.08
50.41
57.85
50.58
49.98
55.64
NCO ratio-QTD
0.12
0.04
0.11
N/A
N/A
N/A
NPA ratio
0.33
0.32
0.40
N/A
N/A
N/A
(1) Taxable equivalent
(2) Adjusted tangible efficiency ratio
Balance Sheet
Loans*
(dollars in millions)
4Q22
3Q22
Linked Quarter Change
Linked Quarter %
Change
4Q21
Year/Year Change
Year/Year % Change
Commercial & industrial**
$
22,066.7
$
21,212.5
$
854.1
4
%
$
19,622.9
$
2,443.7
12
%
Commercial real estate
12,650.3
12,288.0
362.3
3
11,015.1
1,635.2
15
Consumer
8,999.4
9,071.0
(71.6
)
(1
)
8,673.9
325.5
4
Total loans
$
43,716.4
$
42,571.5
$
1,144.9
3
%
$
39,311.9
$
4,404.4
11
%
* Amounts may not total due to
rounding
** Includes PPP balances of $14.7 million,
$42.8 million, and $399.6 million at 4Q22, 3Q22, and 4Q21,
respectively.
- Total loans ended the quarter at $43.72 billion, up $1.14
billion sequentially, or 11% annualized, led by continued
diversified growth from commercial lines of business across
multiple industries and segments.
Deposits*
(dollars in millions)
4Q22
3Q22
Linked Quarter Change
Linked Quarter %
Change
4Q21
Year/Year Change
Year/Year % Change
Non-interest-bearing DDA
$
14,574.5
$
15,373.7
$
(799.3
)
(5
)%
$
15,242.8
$
(668.4
)
(4
)%
Interest-bearing DDA
5,761.4
5,776.8
(15.4
)
—
6,347.0
(585.6
)
(9
)
Money market
12,480.7
12,918.6
(437.9
)
(3
)
14,886.4
(2,405.7
)
(16
)
Savings
1,396.4
1,470.1
(73.7
)
(5
)
1,404.4
(8.0
)
(1
)
Public funds
6,635.6
5,549.7
1,085.9
20
6,284.6
351.0
6
Time deposits
2,724.1
2,110.9
613.1
29
2,427.1
297.0
12
Brokered deposits
5,299.0
4,497.8
801.2
18
2,835.0
2,464.0
87
Total deposits
$
48,871.6
$
47,697.6
$
1,174.0
2
%
$
49,427.3
$
(555.7
)
(1
)%
* Amounts may not total due to
rounding
- Total deposits ended the quarter at $48.87 billion, an increase
of $1.17 billion, or 2%, sequentially as focus on new deposit
production and seasonal benefit from public funds drove
growth.
- Total deposit costs increased 50 bps from the third quarter
2022 to 88 bps.
- Total deposit beta cycle to date through the fourth quarter
2022 of 21% reflects disciplined pricing strategy and benefit from
lag in deposit repricing.
Income Statement Summary*
(in thousands, except per share data)
4Q22
3Q22
Linked Quarter Change
Linked Quarter %
Change
4Q21
Year/Year Change
Year/Year % Change
Net interest income
$
501,346
$
477,919
$
23,427
5
%
$
392,313
$
109,033
28
%
Non-interest revenue
102,439
104,298
(1,859
)
(2
)
117,068
(14,629
)
(12
)
Non-interest expense
308,996
294,010
14,986
5
295,207
13,789
5
Provision for (reversal of) credit
losses
34,884
25,581
9,303
36
(55,210
)
90,094
nm
Income before taxes
$
259,905
$
262,626
$
(2,721
)
(1
)%
$
269,384
$
(9,479
)
(4
)%
Income tax expense
54,135
59,582
(5,447
)
(9
)
68,983
(14,848
)
(22
)
Preferred stock dividends
8,291
8,291
—
—
8,291
—
—
Net income available to common
shareholders
$
197,479
$
194,753
$
2,726
1
%
$
192,110
$
5,369
3
%
Weighted average common shares
outstanding, diluted
146,528
146,418
110
—
146,793
(265
)
—
Diluted earnings per share
$
1.35
$
1.33
$
0.02
2
%
$
1.31
$
0.04
3
%
Adjusted diluted earnings per share
$
1.35
$
1.34
$
0.01
1
%
$
1.35
$
—
—
%
Effective tax rate
20.83
%
22.69
%
25.61
%
* Amounts may not total due to
rounding
Core Performance
- Net interest income increased $23.4 million, or 5%, compared to
the prior quarter and was up $109.0 million, or 28%, compared to
the fourth quarter 2021, driven by loan growth, interest rate
increases, and disciplined deposit pricing.
- Net interest margin was 3.60%, up 11 bps from the previous
quarter.
- Non-interest revenue of $102.4 million decreased $1.9 million,
or 2%, sequentially and declined $14.6 million, or 12%, compared to
the fourth quarter 2021.
- Unfavorable valuation adjustments totaling $5.0 million for two
tax equity investment partnerships and continued lower mortgage
banking income from a challenging environment were somewhat offset
by growth in wealth revenue and card fees.
- Non-interest expense increased $15.0 million, or 5%,
sequentially and was up $13.8 million, or 5%, compared to the
fourth quarter 2021.
- Increases were primarily driven by a combination of
performance-related costs which align with financial performance,
investments in new business initiatives, and infrastructure
spend.
- Credit quality ratios remain historically strong. The
non-performing loan and asset ratios were stable at 0.29% and
0.33%, respectively; the net charge-off ratio for the quarter was
0.12%, in line with recent levels; and total past dues were 0.15%
of total loans outstanding.
- Provision for credit losses of $34.9 million increased $9.3
million sequentially and compares to a reversal of credit losses
for the fourth quarter 2021 of $55.2 million. The increases were
impacted by uncertain economic conditions, loan growth, and the
cessation of a third-party lending relationship.
- The allowance for credit losses coverage ratio (to loans) of
1.15% was up 2 bps sequentially and down 4 bps compared to the
prior year and reflects the positive performance in the loan
portfolio offset by a negative bias influencing future economic
scenario metrics.
Capital Ratios
4Q22
3Q22
4Q21
Common equity Tier 1 capital (CET1)
ratio
9.63
%
*
9.52
%
9.50
%
Tier 1 capital ratio
10.68
*
10.59
10.66
Total risk-based capital ratio
12.54
*
12.45
12.61
Tier 1 leverage ratio
9.07
*
9.04
8.72
Tangible common equity ratio
5.84
5.52
7.52
* Ratios are preliminary
Capital
- Preliminary CET1 ratio improved 11 bps sequentially to 9.63%,
and the preliminary total risk-based capital ratio of 12.54%
increased 9 bps from the prior quarter as capital generated from
earnings supported continued strong loan growth.
Fourth Quarter 2022 Earnings Conference Call
Synovus will host an earnings highlights conference call at 8:30
a.m. ET on Jan. 19, 2023. 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 $60 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 246 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 intended strategies, initiatives,
and other operational and execution goals; 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 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; tangible common equity ratio; and adjusted pre-provision
net revenue (PPNR) excluding PPP revenue are not measures
recognized under GAAP and therefore are considered non-GAAP
financial measures. The most comparable GAAP measures to these
measures are efficiency ratio-TE; net income available to common
shareholders; diluted earnings per share; return on average assets;
return on average common equity; the ratio of total shareholders'
equity to total assets; and PPNR, 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 tangible efficiency
ratio is a measure 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. Adjusted
PPNR ex. PPP revenue is used by management to evaluate
pre-provision net revenue exclusive of items that management
believes are not indicative of ongoing operations and impact
period-to-period comparisons including PPP revenue. The
computations of these measures are set forth in the tables
below.
Reconciliation of Non-GAAP Financial
Measures
(dollars in thousands)
4Q22
3Q22
4Q21
Adjusted tangible efficiency
ratio
Total non-interest expense
$
308,996
$
294,010
$
295,207
Subtract/add: Restructuring charges
2,372
(956
)
(5,958
)
Subtract: Valuation adjustment to Visa
derivative
(2,500
)
—
(2,656
)
Subtract/add: Fair value adjustment on
non-qualified deferred compensation
(1,557
)
1,076
(995
)
Adjusted non-interest expense
$
307,311
$
294,130
$
285,598
Subtract: Amortization of intangibles
(2,118
)
(2,118
)
(2,379
)
Adjusted tangible non-interest expense
$
305,193
$
292,012
$
283,219
Net interest income
$
501,346
$
477,919
$
392,313
Add: Taxable equivalent adjustment
1,131
972
884
Add: Total non-interest revenue
102,439
104,298
117,068
Total TE revenue
604,916
583,189
510,265
Subtract/add: Investment securities
(gains) losses, net
—
—
(230
)
Subtract/add: Fair value adjustment on
non-qualified deferred compensation
(1,557
)
1,076
(995
)
Adjusted revenue
$
603,359
$
584,265
$
509,040
Efficiency ratio-TE
51.08
%
50.41
%
57.85
%
Adjusted tangible efficiency ratio
50.58
49.98
55.64
Reconciliation of Non-GAAP Financial
Measures, continued
(in thousands, except per share data)
4Q22
3Q22
4Q21
Adjusted return on average
assets
Net income
$
205,770
$
203,044
$
200,401
Add/subtract: Restructuring charges
(2,372
)
956
5,958
Add: Valuation adjustment to Visa
derivative
2,500
—
2,656
Subtract/add: Investment securities
(gains) losses, net
—
—
(230
)
Subtract/add: Tax effect of
adjustments(1)
(31
)
(228
)
(2,121
)
Adjusted net income
$
205,867
$
203,772
$
206,664
Net income annualized
$
816,370
$
805,555
$
795,069
Adjusted net income annualized
$
816,755
$
808,443
$
819,917
Total average assets
$
58,963,417
$
58,055,979
$
56,911,929
Return on average assets
1.38
%
1.39
%
1.40
%
Adjusted return on average assets
1.39
1.39
1.44
Adjusted net income available to common
shareholders and adjusted net income per common share,
diluted
Net income available to common
shareholders
$
197,479
$
194,753
$
192,110
Add/subtract: Restructuring charges
(2,372
)
956
5,958
Add: Valuation adjustment to Visa
derivative
2,500
—
2,656
Subtract/add: Investment securities
(gains) losses, net
—
—
(230
)
Subtract/add: Tax effect of
adjustments(1)
(31
)
(228
)
(2,121
)
Adjusted net income available to common
shareholders
$
197,576
$
195,481
$
198,373
Weighted average common shares
outstanding, diluted
146,528
146,418
146,793
Net income per common share, diluted
$
1.35
$
1.33
$
1.31
Adjusted net income per common share,
diluted
1.35
1.34
1.35
Reconciliation of Non-GAAP Financial
Measures, continued
(dollars in thousands)
4Q22
3Q22
4Q21
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
$
197,479
$
194,753
$
192,110
Add/subtract: Restructuring charges
(2,372
)
956
5,958
Add: Valuation adjustment to Visa
derivative
2,500
—
2,656
Subtract/add: Investment securities
(gains) losses, net
—
—
(230
)
Subtract/add: Tax effect of
adjustments(1)
(31
)
(228
)
(2,121
)
Adjusted net income available to common
shareholders
$
197,576
$
195,481
$
198,373
Adjusted net income available to common
shareholders annualized
$
783,861
$
775,550
$
787,023
Add: Amortization of intangibles, tax
effected, annualized
6,358
6,401
7,050
Adjusted net income available to common
shareholders excluding amortization of intangibles annualized
$
790,219
$
781,951
$
794,073
Net income available to common
shareholders annualized
$
783,476
$
772,661
$
762,176
Add: Amortization of intangibles, tax
effected, annualized
6,358
6,401
7,050
Net income available to common
shareholders excluding amortization of intangibles annualized
$
789,834
$
779,062
$
769,226
Total average shareholders' equity less
preferred stock
$
3,742,927
$
4,141,516
$
4,730,828
Subtract: Goodwill
(452,390
)
(452,390
)
(452,390
)
Subtract: Other intangible assets, net
(28,174
)
(30,214
)
(36,805
)
Total average tangible shareholders'
equity less preferred stock
$
3,262,363
$
3,658,912
$
4,241,633
Return on average common equity
20.93
%
18.66
%
16.11
%
Adjusted return on average common
equity
20.94
18.73
16.64
Return on average tangible common
equity
24.21
21.29
18.14
Adjusted return on average tangible common
equity
24.22
21.37
18.72
Reconciliation of Non-GAAP Financial
Measures, continued
December 31,
September 30,
December 31,
(dollars in thousands)
2022
2022
2021
Tangible common equity ratio
Total assets
$
59,731,378
$
58,639,522
$
57,317,226
Subtract: Goodwill
(452,390
)
(452,390
)
(452,390
)
Subtract: Other intangible assets, net
(27,124
)
(29,242
)
(35,596
)
Tangible assets
$
59,251,864
$
58,157,890
$
56,829,240
Total shareholders’ equity
$
4,475,801
$
4,229,715
$
5,296,800
Subtract: Goodwill
(452,390
)
(452,390
)
(452,390
)
Subtract: Other intangible assets, net
(27,124
)
(29,242
)
(35,596
)
Subtract: Preferred stock, no par
value
(537,145
)
(537,145
)
(537,145
)
Tangible common equity
$
3,459,142
$
3,210,938
$
4,271,669
Total shareholders’ equity to total assets
ratio
7.49
%
7.21
%
9.24
%
Tangible common equity ratio
5.84
5.52
7.52
(1) An assumed marginal tax rate of 24.3%
for 4Q22, 23.8% for 3Q22, and 25.3% for 4Q21 was applied.
Reconciliation of Non-GAAP Financial
Measures, continued
(dollars in thousands)
2022
2021
Adjusted pre-provision net revenue
(PPNR) ex. PPP revenue
Net interest income
$
1,796,900
$
1,532,947
Add: Total non-interest revenue
409,336
450,066
Subtract: Total non-interest expense
(1,157,506
)
(1,099,904
)
Pre-provision net revenue
$
1,048,730
$
883,109
Net interest income
$
1,796,900
$
1,532,947
Add: Taxable equivalent adjustment
3,927
3,185
TE net interest income
1,800,827
1,536,132
Add: Total non-interest revenue
$
409,336
$
450,066
Total TE revenue
2,210,163
1,986,198
Subtract/add: Investment securities
(gains) losses, net
—
799
Subtract/add: Fair value adjustment on
non-qualified deferred compensation
4,054
(2,816
)
Adjusted revenue
$
2,214,217
$
1,984,181
Subtract: PPP revenue
(13,866
)
(94,733
)
Adjusted revenue ex. PPP revenue
$
2,200,351
$
1,889,448
Total non-interest expense
$
1,157,506
$
1,099,904
Subtract: Earnout liability
adjustments
—
(507
)
Subtract: Loss on early extinguishment of
debt
(677
)
—
Subtract/add: Restructuring charges
9,690
(7,223
)
Subtract: Valuation adjustment to Visa
derivative
(6,000
)
(2,656
)
Subtract/add: Fair value adjustment on
non-qualified deferred compensation
4,054
(2,816
)
Adjusted non-interest expense
$
1,164,573
$
1,086,702
Adjusted revenue ex. PPP revenue
$
2,200,351
$
1,889,448
Subtract: Adjusted non-interest
expense
(1,164,573
)
(1,086,702
)
Adjusted PPNR ex. PPP revenue
$
1,035,778
$
802,746
Synovus
INCOME STATEMENT DATA
(Unaudited)
Years Ended
(Dollars in thousands, except per share
data)
December 31,
2022
2021
% Change
Interest income
$
2,075,787
$
1,653,343
26
%
Interest expense
278,887
120,396
132
Net interest income
1,796,900
1,532,947
17
Provision for (reversal of) credit
losses
84,553
(106,251
)
nm
Net interest income after provision for
credit losses
1,712,347
1,639,198
4
Non-interest revenue:
Service charges on deposit accounts
93,067
86,310
8
Fiduciary and asset management fees
78,414
77,147
2
Card fees
61,833
51,399
20
Brokerage revenue
67,034
56,439
19
Mortgage banking income
17,476
54,371
(68
)
Capital markets income
26,702
26,118
2
Income from bank-owned life insurance
29,720
38,019
(22
)
Investment securities gains (losses),
net
—
(799
)
nm
Other non-interest revenue
35,090
61,062
(43
)
Total non-interest revenue
409,336
450,066
(9
)
Non-interest expense:
Salaries and other personnel expense
681,710
649,426
5
Net occupancy, equipment, and software
expense
174,730
169,222
3
Third-party processing and other
services
88,617
86,688
2
Professional fees
37,189
32,785
13
FDIC insurance and other regulatory
fees
29,083
22,355
30
Restructuring charges
(9,690
)
7,223
(234
)
Other operating expenses
155,867
132,205
18
Total non-interest expense
1,157,506
1,099,904
5
Income before income taxes
964,177
989,360
(3
)
Income tax expense
206,275
228,893
(10
)
Net income
757,902
760,467
—
Less: Preferred stock dividends
33,163
33,163
—
Net income available to common
shareholders
$
724,739
$
727,304
—
%
Net income per common share, basic
4.99
4.95
1
%
Net income per common share, diluted
4.95
4.90
1
Cash dividends declared per common
share
1.36
1.32
3
Return on average assets
1.32
%
1.37
%
(5) bps
Return on average common equity
17.41
15.56
185
Weighted average common shares
outstanding, basic
145,364
147,041
(1
)%
Weighted average common shares
outstanding, diluted
146,481
148,495
(1
)
nm - not meaningful
bps - basis points
Synovus
INCOME STATEMENT DATA
(Unaudited)
(Dollars in thousands, except per share
data)
2022
2021
Fourth Quarter
Fourth Quarter
Third Quarter
Second Quarter
First Quarter
Fourth Quarter
22 vs '21
% Change
Interest income
$
654,654
551,299
453,772
416,062
418,279
57
%
Interest expense
153,308
73,380
28,384
23,814
25,966
490
Net interest income
501,346
477,919
425,388
392,248
392,313
28
Provision for (reversal of) credit
losses
34,884
25,581
12,688
11,400
(55,210
)
nm
Net interest income after provision for
credit losses
466,462
452,338
412,700
380,848
447,523
4
Non-interest revenue:
Service charges on deposit accounts
23,639
23,398
23,491
22,539
22,221
6
Fiduciary and asset management fees
18,836
19,201
20,100
20,277
20,602
(9
)
Card fees
15,887
15,101
16,089
14,756
12,861
24
Brokerage revenue
19,996
17,140
15,243
14,655
14,795
35
Mortgage banking income
2,554
5,065
3,904
5,953
7,059
(64
)
Capital markets income
6,998
6,839
7,393
5,472
7,188
(3
)
Income from bank-owned life insurance
7,206
6,792
9,165
6,556
15,168
(52
)
Investment securities gains (losses),
net
—
—
—
—
230
nm
Other non-interest revenue
7,323
10,762
1,881
15,126
16,944
(57
)
Total non-interest revenue
102,439
104,298
97,266
105,334
117,068
(12
)
Non-interest expense:
Salaries and other personnel expense
182,629
173,334
161,063
164,684
167,018
9
Net occupancy, equipment, and software
expense
45,192
43,462
43,199
42,877
42,780
6
Third-party processing and other
services
23,130
22,539
21,952
20,996
22,791
1
Professional fees
11,096
6,755
10,865
8,474
9,014
23
FDIC insurance and other regulatory
fees
8,232
7,707
6,894
6,250
6,016
37
Restructuring charges
(2,372
)
956
(1,850
)
(6,424
)
5,958
(140
)
Other operating expenses
41,089
39,257
39,928
35,593
41,630
(1
)
Total non-interest expense
308,996
294,010
282,051
272,450
295,207
5
Income before income taxes
259,905
262,626
227,915
213,732
269,384
(4
)
Income tax expense
54,135
59,582
49,863
42,695
68,983
(22
)
Net income
205,770
203,044
178,052
171,037
200,401
3
Less: Preferred stock dividends
8,291
8,291
8,291
8,291
8,291
—
Net income available to common
shareholders
$
197,479
194,753
169,761
162,746
192,110
3
Net income per common share, basic
$
1.36
1.34
1.17
1.12
1.32
3
%
Net income per common share, diluted
1.35
1.33
1.16
1.11
1.31
3
Cash dividends declared per common
share
0.34
0.34
0.34
0.34
0.33
3
Return on average assets *
1.38
%
1.39
1.26
1.22
1.40
(2) bps
Return on average common equity *
20.93
18.66
16.48
14.20
16.11
482
Weighted average common shares
outstanding, basic
145,467
145,386
145,328
145,273
145,316
—
%
Weighted average common shares
outstanding, diluted
146,528
146,418
146,315
146,665
146,793
—
nm - not meaningful
bps - basis points
* - ratios are annualized
Synovus
BALANCE SHEET DATA
December 31, 2022
September 30, 2022
December 31, 2021
(Unaudited)
(In thousands, except share data)
ASSETS
Cash and due from banks
$
624,097
$
516,163
$
432,925
Interest-bearing funds with Federal
Reserve Bank
1,280,684
1,260,748
2,479,006
Interest earning deposits with banks
34,632
32,445
25,535
Federal funds sold and securities
purchased under resale agreements
38,367
58,448
72,387
Cash and cash equivalents
1,977,780
1,867,804
3,009,853
Investment securities available for sale,
at fair value
9,678,103
9,587,508
10,918,329
Loans held for sale ($51,136, $56,517, and
$108,198 measured at fair value,
respectively)
391,502
696,450
750,642
Loans, net of deferred fees and costs
43,716,353
42,571,458
39,311,958
Allowance for loan losses
(443,424
)
(421,359
)
(427,597
)
Loans, net
43,272,929
42,150,099
38,884,361
Cash surrender value of bank-owned life
insurance
1,089,280
1,084,060
1,068,616
Premises, equipment, and software, net
370,632
376,823
407,241
Goodwill
452,390
452,390
452,390
Other intangible assets, net
27,124
29,242
35,596
Other assets
2,471,638
2,395,146
1,790,198
Total assets
$
59,731,378
$
58,639,522
$
57,317,226
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest-bearing deposits
$
15,639,899
$
16,359,551
$
16,392,653
Interest-bearing deposits
33,231,660
31,338,013
33,034,623
Total deposits
48,871,559
47,697,564
49,427,276
Federal funds purchased and securities
sold under repurchase agreements
146,588
240,210
264,133
Other short-term borrowings
603,384
614,232
200
Long-term debt
4,109,597
4,434,327
1,204,229
Other liabilities
1,524,449
1,423,474
1,124,588
Total liabilities
55,255,577
54,409,807
52,020,426
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 170,141,492, 170,097,791, and
169,383,758; outstanding 145,486,634, 145,442,933, and
145,010,086
170,141
170,098
169,384
Additional paid-in capital
3,920,346
3,916,729
3,894,109
Treasury stock, at cost – 24,654,858,
24,654,858, and 24,373,672 shares
(944,484
)
(944,484
)
(931,497
)
Accumulated other comprehensive income
(loss), net
(1,442,117
)
(1,534,314
)
(82,321
)
Retained earnings
2,234,770
2,084,541
1,709,980
Total shareholders’ equity
4,475,801
4,229,715
5,296,800
Total liabilities and shareholders'
equity
$
59,731,378
$
58,639,522
$
57,317,226
Synovus
AVERAGE BALANCES, INTEREST, AND
YIELDS/RATES
(Unaudited)
2022
2021
(dollars in thousands)
Average Balance
Interest
Yield/ Rate
Average Balance
Interest
Yield/ Rate
Assets
Interest earning assets:
Commercial loans (1) (2) (3)
$
32,402,218
$
1,448,463
4.47
%
$
29,630,598
$
1,150,835
3.88
%
Consumer loans (1) (2)
8,823,424
361,524
4.10
8,520,247
334,917
3.93
Less: Allowance for loan losses
(421,506
)
—
—
(537,324
)
—
—
Loans, net
40,804,136
1,809,987
4.44
37,613,521
1,485,752
3.95
Investment securities available for
sale
11,208,886
209,951
1.87
9,603,343
140,077
1.46
Trading account assets
13,374
261
1.95
5,613
87
1.55
Other earning assets(4)
1,220,653
18,756
1.52
3,002,110
3,912
0.13
FHLB and Federal Reserve Bank stock
214,289
6,722
3.14
159,176
2,891
1.82
Mortgage loans held for sale
75,325
3,353
4.45
203,840
5,935
2.91
Other loans held for sale
682,961
30,684
4.43
580,162
17,874
3.04
Total interest earning assets
54,219,624
$
2,079,714
3.84
%
51,167,765
$
1,656,528
3.24
%
Cash and due from banks
574,250
561,170
Premises and equipment
385,622
445,333
Other real estate
6,356
1,522
Cash surrender value of bank-owned life
insurance
1,078,653
1,058,966
Other assets(5)
1,345,568
2,133,725
Total assets
$
57,610,073
$
55,368,481
Liabilities and Shareholders'
Equity
Interest-bearing liabilities:
Interest-bearing demand deposits
$
9,027,636
$
25,912
0.29
%
$
8,701,078
$
9,844
0.11
%
Money market accounts
15,385,765
79,567
0.52
15,607,034
27,556
0.18
Savings deposits
1,481,372
399
0.03
1,335,269
229
0.02
Time deposits
2,667,101
13,902
0.52
3,630,401
18,107
0.50
Brokered deposits
3,644,957
67,452
1.85
3,028,797
19,183
0.63
Federal funds purchased and securities
sold under repurchase agreements
205,753
1,308
0.63
210,949
128
0.06
Other short-term borrowings
466,254
10,945
2.32
8
—
—
Long-term debt
1,999,595
79,402
3.95
1,203,282
45,349
3.77
Total interest-bearing liabilities
34,878,433
$
278,887
0.78
%
33,716,818
$
120,396
0.35
%
Non-interest-bearing demand deposits
16,731,967
15,304,120
Other liabilities
1,298,972
1,135,565
Shareholders' equity
4,700,701
5,211,978
Total liabilities and shareholders'
equity
$
57,610,073
$
55,368,481
Net interest income, taxable equivalent
net interest margin (6)
$
1,800,827
3.34
%
$
1,536,132
3.01
%
Less: taxable-equivalent adjustment
3,927
3,185
Net interest income
$
1,796,900
$
1,532,947
(1) Average loans are shown net
of deferred fees and costs. NPLs are included.
(2) Interest income includes net
loan fees as follows: 2022 — $57.3 million and 2021 — $115.5
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 $(985.6) million and $46.0 million for the years ended
December 31, 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
AVERAGE BALANCES, INTEREST, AND
YIELDS/RATES
(Unaudited)
Fourth Quarter 2022
Third Quarter 2022
Fourth 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)
$
34,103,384
$
474,439
5.52
%
$
32,836,799
$
384,995
4.65
%
$
29,685,875
$
286,513
3.83
%
Consumer loans (1) (2)
9,041,520
101,905
4.50
8,931,573
94,425
4.21
8,679,722
83,836
3.85
Less: Allowance for loan losses
(427,525
)
—
—
(419,160
)
—
—
(474,972
)
—
—
Loans, net
42,717,379
576,344
5.36
41,349,212
479,420
4.60
37,890,625
370,349
3.88
Investment securities available for
sale
11,296,449
58,840
2.09
11,126,705
53,550
1.93
10,884,571
41,447
1.52
Trading account assets
15,552
68
1.75
16,771
81
1.93
11,280
42
1.50
Other earning assets(4)
1,148,099
10,490
3.58
1,012,717
5,791
2.24
3,186,271
1,208
0.15
FHLB and Federal Reserve Bank stock
270,822
2,805
4.14
244,879
1,412
2.31
159,933
919
2.30
Mortgage loans held for sale
46,240
688
5.95
66,601
862
5.18
130,786
1,009
3.09
Other loans held for sale
514,811
6,550
4.98
892,805
11,155
4.89
518,992
4,189
3.16
Total interest earning assets
56,009,352
$
655,785
4.65
%
54,709,690
$
552,271
4.01
%
52,782,458
$
419,163
3.16
%
Cash and due from banks
651,189
557,537
541,788
Premises and equipment
375,352
383,189
421,577
Other real estate
—
2,398
1,351
Cash surrender value of bank-owned life
insurance
1,085,394
1,080,914
1,067,004
Other assets(5)
842,130
1,322,251
2,097,751
Total assets
$
58,963,417
$
58,055,979
$
56,911,929
Liabilities and Shareholders'
Equity
Interest-bearing liabilities:
Interest-bearing demand deposits
$
8,627,386
$
14,160
0.65
%
$
8,436,922
$
5,782
0.27
%
$
9,165,054
$
2,238
0.10
%
Money market accounts
14,771,308
46,671
1.25
15,411,450
20,696
0.53
15,998,203
5,562
0.14
Savings deposits
1,450,153
176
0.05
1,508,312
84
0.02
1,408,858
65
0.02
Time deposits
2,567,979
7,648
1.18
2,270,163
2,428
0.42
3,163,062
2,600
0.33
Brokered deposits
4,986,542
39,500
3.14
3,899,669
17,927
1.82
2,836,841
3,979
0.56
Federal funds purchased and securities
sold under repurchase agreements
141,707
437
1.21
240,412
641
1.04
227,664
24
0.04
Other short-term borrowings
660,295
6,383
3.78
709,078
3,666
2.02
32
—
—
Long-term debt
3,446,306
38,333
4.39
2,656,939
22,156
3.29
1,203,959
11,498
3.82
Total interest-bearing liabilities
36,651,676
$
153,308
1.60
%
35,132,945
$
73,380
0.81
%
34,003,673
$
25,966
0.30
%
Non-interest-bearing demand deposits
16,569,275
16,904,353
16,545,203
Other liabilities
1,462,394
1,340,020
1,095,080
Shareholders' equity
4,280,072
4,678,661
5,267,973
Total liabilities and shareholders'
equity
$
58,963,417
$
58,055,979
$
56,911,929
Net interest income, taxable equivalent
net interest margin (6)
$
502,477
3.60
%
$
478,891
3.49
%
$
393,197
2.96
%
Less: taxable-equivalent adjustment
1,131
972
884
Net interest income
$
501,346
$
477,919
$
392,313
(1) Average loans are shown net
of deferred fees and costs. NPLs are included.
(2) Interest income includes net
loan fees as follows: Fourth Quarter 2022 — $11.7 million, Third
Quarter 2022 — $11.9 million, and Fourth Quarter 2021 — $24.7
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 $(1.69) billion, $(1.06) billion, and $(34.2) million for
the Fourth Quarter 2022, Third Quarter 2022, and Fourth 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
LOANS OUTSTANDING BY TYPE
(Unaudited)
(Dollars in thousands)
Loan Type
Total Loans December
31, 2022
Total Loans September
30, 2022
Linked Quarter %
Change
Total Loans December
31, 2021
Year/Year %
Change
Commercial, Financial, and
Agricultural
$
13,874,416
$
13,254,966
5
%
$
12,147,858
14
%
Owner-Occupied
8,192,240
7,957,550
3
7,475,066
10
Total Commercial &
Industrial
22,066,656
21,212,516
4
19,622,924
12
Multi-Family
3,134,571
2,949,172
6
2,129,424
47
Hotels
1,708,194
1,712,016
—
1,537,060
11
Office Buildings
3,011,911
2,945,771
2
2,511,058
20
Shopping Centers
1,403,928
1,441,385
(3
)
1,655,465
(15
)
Warehouses
1,035,152
943,961
10
801,639
29
Other Investment Property
1,350,291
1,246,099
8
1,268,130
6
Total Investment Properties
11,644,047
11,238,404
4
9,902,776
18
1-4 Family Construction
229,263
249,840
(8
)
206,881
11
1-4 Family Investment Mortgage
387,670
389,787
(1
)
438,588
(12
)
Total 1-4 Family Properties
616,933
639,627
(4
)
645,469
(4
)
Commercial Development
79,889
92,159
(13
)
102,790
(22
)
Residential Development
108,661
119,019
(9
)
171,820
(37
)
Land Acquisition
200,783
198,756
1
192,256
4
Land and Development
389,333
409,934
(5
)
466,866
(17
)
Total Commercial Real Estate
12,650,313
12,287,965
3
11,015,111
15
Consumer Mortgages
5,214,443
5,166,928
1
5,068,998
3
Home Equity Lines
1,757,038
1,708,246
3
1,361,419
29
Credit Cards
203,612
197,978
3
204,172
—
Other Consumer Loans
1,824,291
1,997,825
(9
)
2,039,334
(11
)
Total Consumer
8,999,384
9,070,977
(1
)
8,673,923
4
Total
$
43,716,353
$
42,571,458
3
%
$
39,311,958
11
%
NON-PERFORMING LOANS
COMPOSITION
(Unaudited)
(Dollars in thousands)
Loan Type
Total
Non-performing Loans
December 31, 2022
Total
Non-performing Loans
September 30, 2022
Linked Quarter %
Change
Total
Non-performing Loans
December 31, 2021
Year/Year %
Change
Commercial, Financial, and
Agricultural
$
59,307
$
59,275
—
%
$
61,787
(4
)%
Owner-Occupied
10,104
8,433
20
11,196
(10
)
Total Commercial &
Industrial
69,411
67,708
3
72,983
(5
)
Multi-Family
1,857
2,550
(27
)
2,380
(22
)
Office Buildings
309
884
(65
)
1,615
(81
)
Shopping Centers
735
742
(1
)
915
(20
)
Warehouses
223
223
—
223
—
Other Investment Property
349
641
(46
)
717
(51
)
Total Investment Properties
3,473
5,040
(31
)
5,850
(41
)
1-4 Family Construction
55
55
—
55
—
1-4 Family Investment Mortgage
3,067
3,036
1
4,508
(32
)
Total 1-4 Family Properties
3,122
3,091
1
4,563
(32
)
Commercial Development
—
422
(100
)
449
(100
)
Residential Development
267
267
—
446
(40
)
Land Acquisition
891
980
(9
)
1,023
(13
)
Land and Development
1,158
1,669
(31
)
1,918
(40
)
Total Commercial Real Estate
7,753
9,800
(21
)
12,331
(37
)
Consumer Mortgages
36,847
32,527
13
29,078
27
Home Equity Lines
6,830
7,121
(4
)
9,773
(30
)
Other Consumer Loans
7,220
4,938
46
6,877
5
Total Consumer
50,897
44,586
14
45,728
11
Total
$
128,061
$
122,094
5
%
$
131,042
(2
)%
Synovus
CREDIT QUALITY DATA
(Unaudited)
(Dollars in thousands)
2022
2021
Fourth Quarter
Fourth
Third
Second
First
Fourth
22 vs '21
Quarter
Quarter
Quarter
Quarter
Quarter
% Change
Non-performing Loans (NPL)
$
128,061
122,094
109,024
132,131
131,042
(2
)%
Impaired Loans Held for Sale
—
447
—
—
—
nm
Other Real Estate and Other Assets
15,320
15,320
26,759
26,759
27,137
(44
)
Non-performing Assets (NPAs)
143,381
137,861
135,783
158,890
158,179
(9
)
Allowance for Loan Losses (ALL)
443,424
421,359
407,837
414,956
427,597
4
Reserve for Unfunded Commitments
57,455
57,936
50,559
47,317
41,885
37
Allowance for Credit Losses (ACL)
500,879
479,295
458,396
462,273
469,482
7
Net Charge-Offs - Quarter
13,300
4,682
16,565
18,609
10,522
Net Charge-Offs - YTD
53,156
39,856
35,174
18,609
77,788
Net Charge-Offs / Average Loans - Quarter
(1)
0.12
%
0.04
0.16
0.19
0.11
Net Charge-Offs / Average Loans - YTD
(1)
0.13
0.13
0.18
0.19
0.20
NPLs / Loans
0.29
0.29
0.26
0.33
0.33
NPAs / Loans, ORE and specific other
assets
0.33
0.32
0.33
0.40
0.40
ACL/Loans
1.15
1.13
1.11
1.15
1.19
ALL/Loans
1.01
0.99
0.99
1.03
1.09
ACL/NPLs
391.13
392.56
420.45
349.86
358.27
ALL/NPLs
346.26
345.11
374.08
314.05
326.31
Past Due Loans over 90 days and Still
Accruing
$
3,373
3,443
2,251
3,067
6,770
(50
)
As a Percentage of Loans Outstanding
0.01
%
0.01
0.01
0.01
0.02
Total Past Due Loans and Still
Accruing
$
65,568
63,545
56,160
45,385
57,565
14
As a Percentage of Loans Outstanding
0.15
%
0.15
0.14
0.11
0.15
Accruing Troubled Debt Restructurings
(TDRs)
$
146,840
118,755
164,101
145,957
119,804
23
(1) Ratio is annualized.
SELECTED CAPITAL INFORMATION
(1)
(Unaudited)
(Dollars in thousands)
December 31, 2022
September 30, 2022
December 31, 2021
Tier 1 Capital
$
5,463,338
5,306,324
4,925,763
Total Risk-Based Capital
6,415,680
6,237,082
5,827,196
Common Equity Tier 1 Capital Ratio
9.63
%
9.52
9.50
Tier 1 Capital Ratio
10.68
10.59
10.66
Total Risk-Based Capital Ratio
12.54
12.45
12.61
Tier 1 Leverage Ratio
9.07
9.04
8.72
Total Shareholders’ Equity to Total Assets
Ratio
7.49
7.21
9.24
Tangible Common Equity Ratio(2)(4)
5.84
5.52
7.52
Book Value Per Common Share(3)
$
27.07
25.39
32.82
Tangible Book Value Per Common
Share(2)
23.78
22.08
29.46
(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" for
applicable reconciliation.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230117006199/en/
Media Contact Audria Belton Media Relations
media@synovus.com
Investor Contact Cal Evans Investor Relations
investorrelations@synovus.com
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