Diluted Earnings per Share of $0.23 vs. $0.54
in 4Q16
Adjusted Diluted Earnings per Share of $0.72
vs. $0.54 in 4Q16
Synovus Financial Corp. (NYSE: SNV) today reported financial
results for the quarter and year ended December 31, 2017.
Net income available to common shareholders for the fourth
quarter 2017 was $27.0 million or $0.23 per diluted share as
compared to $95.4 million or $0.78 per diluted share for the third
quarter 2017 and $66.0 million or $0.54 per diluted share for the
fourth quarter 2016. Fourth quarter 2017 results include a $23.2
million loss on early extinguishment of debt, as well as a $47.2
million charge related to Federal tax reform.1 Adjusted earnings
per diluted share for the fourth quarter 2017 was $0.72, a 10.7%
increase from the third quarter 2017 and a 32.4% increase from the
fourth quarter 2016.
2017 Highlights
- Net income available to common
shareholders for 2017 was $265.2 million or $2.17 per diluted share
as compared to $236.5 million or $1.89 per diluted share for 2016.
Diluted EPS grew 15.0% for 2017 compared to 2016.
- Adjusted earnings per diluted share for
2017 was $2.53 as compared to $1.98 for 2016, an increase of
27.7%.
- Return on average assets for 2017 was
0.89%, an increase of 5 basis points from 2016.
- Adjusted return on average assets for
2017 was 1.04%, an increase of 16 basis points from 2016.
- Return on average common equity for
2017 was 9.32%, an increase of 91 basis points from 2016.
- Adjusted return on average common
equity for 2017 was 10.86%, an increase of 204 basis points from
2016.
- Total average loans for the year grew
$1.28 billion or 5.5% as compared to 2016.
- Total loans ended the year at $24.79
billion, a $931.1 million or 3.9% increase from 2016.
- Total average deposits grew $1.49
billion or 6.3% as compared to 2016.
- Efficiency ratio of 59.95% improved 479
basis points from 2016.
- Adjusted efficiency ratio of 59.87%
improved 280 basis points from 2016.
- Non-performing loans of $115.6 million
at December 31, 2017, declined 24.7% from December 31, 2016, and
the non-performing loan ratio declined 17 basis points from
December 31, 2016, to 0.47% at December 31, 2017.
- Returned $244.5 million to common
shareholders during 2017 through $175.1 million in common share
repurchases and $69.4 million in common stock dividends.
- Common Equity Tier 1 ratio was 9.99% at
December 31, 2017, compared to 9.96% at December 31, 2016.
- Completed the Cabela’s transaction
effective September 25, 2017.
- Completed the transition to a
single-bank operating environment and began transitioning to a
single brand — Synovus — across all markets.
“2017 was another outstanding year for Synovus, with strong
financial and operating results,” said Kessel Stelling, Synovus
chairman and CEO. “We achieved a number of long-term goals,
including double-digit earnings-per-share growth, 1-plus percent
adjusted ROA, and an efficiency ratio below 60 percent. The year
was highlighted by our ranking as the country’s most reputable bank
by Reputation Institute and American Banker, successful completion
of the Cabela’s transaction, and implementation of a single-bank
operating environment. We are pleased to begin 2018 by announcing a
67 percent increase in our common dividend, and our team is
energized as we intensify our focus on improving the customer
experience and complete the transition to a unified Synovus
brand.”
Fourth Quarter Financial Results
Balance Sheet
- Total loans ended the quarter at $24.79
billion, up $300.1 million or 4.9% annualized from the previous
quarter and up $931.1 million or 3.9% as compared to the fourth
quarter 2016.
- Commercial and industrial loans grew by
$297.7 million or 10.1% annualized from the previous quarter and
$479.8 million or 4.2% as compared to the fourth quarter 2016.
- Consumer loans grew by $296.3 million
or 21.2% annualized from the previous quarter and $889.4 million or
17.9% as compared to the fourth quarter 2016.
- Commercial real estate loans declined
by $292.8 million or 16.1% annualized from the previous quarter and
$438.8 million or 6.0% as compared to the fourth quarter 2016.
- Total average deposits for the quarter
were $26.29 billion, up $999.1 million or 15.7% annualized from the
previous quarter and up $1.62 billion or 6.6% as compared to the
fourth quarter 2016.
- Average core transaction accounts2 grew
by $188.6 million or 4.0% annualized from the previous quarter and
$1.02 billion or 5.7% as compared to the fourth quarter 2016.
Core Performance
- Total revenues were $339.1 million
compared to $398.0 million the previous quarter and $307.5 million
for the fourth quarter 2016.
- Total adjusted revenues were $339.2
million, up $7.9 million or 2.4% from the previous quarter and up
12.1% from the fourth quarter 2016.
- Net interest income was $269.7 million,
up $7.1 million or 2.7% from the previous quarter and up 15.5% from
the fourth quarter 2016.
- Net interest margin was 3.65%, up 2
basis points from the previous quarter. Yield on earning assets was
4.15%, up 4 basis points from the previous quarter, and the
effective cost of funds was 0.50%, up 2 basis points from the
previous quarter.
- Total non-interest income was $69.4
million, down $66.1 million from the previous quarter and down $4.7
million from the fourth quarter 2016.
- Third quarter 2017 non-interest income
included the $75.0 million Cabela’s transaction fee, partially
offset by $8.0 million in investment securities losses. Fourth
quarter 2016 non-interest income included investment securities
gains of $5.9 million.
- Adjusted non-interest income was $69.3
million, an increase of $835 thousand or 1.2% from the previous
quarter and up 0.9% as compared to the fourth quarter 2016.
- Core banking fees3 were $33.0 million,
down $121 thousand or 0.4% from the previous quarter and down 6.9%
from the fourth quarter 2016.
- Fiduciary and asset management fees,
brokerage revenue, and insurance revenues were $21.8 million, up
$599 thousand or 2.8% from the previous quarter and 7.1% as
compared to the fourth quarter 2016.
- Mortgage banking income was $5.6
million, up $42 thousand or 0.7% from the previous quarter and up
2.6% as compared to the fourth quarter 2016.
- Total non-interest expense was $226.5
million, up $20.9 million or 10.2% from the previous quarter and up
17.2% as compared to the fourth quarter 2016.
- Fourth quarter 2017 total non-interest
expense includes a $23.2 million loss from the redemption of $300
million senior debt. Third quarter 2017 included other real estate
and other impairment charges totaling $8.8 million.
- Efficiency ratio for the fourth quarter
2017 was 66.77% as compared to 50.62% in the previous quarter and
63.98% in the fourth quarter 2016.
- Adjusted non-interest expense was
$201.1 million, up $7.0 million or 3.6% from the previous quarter
and up 7.6% as compared to the fourth quarter 2016.
- The sequential quarter increase
includes a $4.5 million increase in advertising, a one-time $1
thousand cash award to non-bonus plan participants totaling $3.3
million, and asset impairment charges on held for sale assets of
$2.5 million.
- Adjusted efficiency ratio for the
fourth quarter 2017 was 59.29% as compared to 58.59% in the
previous quarter and 61.81% in the fourth quarter 2016.
Credit Quality
- Non-performing loans were $115.6
million at December 31, 2017, up $17.7 million or 18.1% from the
previous quarter and down $37.8 million or 24.7% from December 31,
2016. The non-performing loan ratio was 0.47% at December 31, 2017,
as compared to 0.40% at the end of the previous quarter and 0.64%
at December 31, 2016.
- Total non-performing assets were $130.6
million at December 31, 2017, down $8.0 million or 5.8% from the
previous quarter and down $45.1 million or 25.7% from December 31,
2016. The non-performing asset ratio was 0.53% at December 31,
2017, as compared to 0.57% at the end of the previous quarter and
0.74% at December 31, 2016.
- Net charge-offs were $9.0 million in
the fourth quarter 2017, down $29.1 million or 76.4% from $38.1
million in the previous quarter. The annualized net charge-off
ratio was 0.15% in the fourth quarter as compared to 0.62% in the
previous quarter.
- Third quarter 2017 net charge-offs
included $34.2 million related to loans transferred to
held-for-sale.
- Total delinquencies (consisting of
loans 30 or more days past due and still accruing) declined to
0.21% of total loans at December 31, 2017, as compared to 0.35% the
previous quarter and 0.27% at December 31, 2016.
Capital Ratios
- Common Equity Tier 1 ratio was 9.99% at
December 31, 2017, compared to 10.06% at September 30, 2017.
- Tier 1 Capital ratio was 10.38% at
December 31, 2017, compared to 10.43% at September 30, 2017.
- Total Risk Based Capital ratio was
12.23% at December 31, 2017, compared to 12.30% at September 30,
2017.
- Tier 1 Leverage ratio was 9.19% at
December 31, 2017, compared to 9.34% at September 30, 2017.
- Tangible Common Equity ratio was 8.88%
at December 31, 2017, unchanged from September 30, 2017.
Capital Management
- During the fourth quarter, the Company
repurchased $39.2 million in common stock as part of the $200
million share repurchase program authorized in the fourth quarter
2016. Share repurchases in 2017 totaled $175.1 million and resulted
in a reduction of 4.0 million shares, a 3.3% share count reduction
from December 31, 2016.
- Additionally, the Board of Directors
authorized a new share repurchase program of up to $150 million of
the Company’s common stock to be executed during 2018.
- The Board of Directors also approved a
67% increase in the Company’s quarterly common stock dividend from
$0.15 to $0.25 per share, effective with the quarterly dividend
payable in April 2018.
Fourth Quarter Earnings Conference Call
Synovus will host an earnings highlights conference call at 8:30
a.m. EDT on January 23, 2018. 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 $31 billion in
assets. Synovus provides commercial and retail banking, investment,
and mortgage services through 250 branches in Georgia, Alabama,
South Carolina, Florida, and Tennessee. Synovus Bank, a wholly
owned subsidiary of Synovus, was recognized as the “Most Reputable
Bank” by American Banker and the Reputation Institute in 2017.
Synovus is on the web at synovus.com, on Twitter @synovus, and on
LinkedIn at http://linkedin.com/company/synovus.
1 Certain components related to Federal tax reform impact are
considered reasonable estimates or provisional amounts as defined
by SEC Staff Accounting Bulletin No. 118. These amounts could be
adjusted during the measurement period ending December 31,
2018.
2 Consist of non-interest bearing, NOW/Savings, and money market
deposits excluding SCMs.
3 Include service charges on deposit accounts, bankcard fees,
letter of credit fees, ATM fee income, line of credit non-usage
fees, gains from sales of government guaranteed loans, and
miscellaneous other service charges.
Forward-Looking Statements
This press release and certain of our other filings with the
Securities and Exchange Commission contain statements that
constitute “forward-looking statements” within the meaning of, and
subject to the protections of, Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. All statements other than
statements of historical fact are forward-looking statements. You
can identify these forward-looking statements through Synovus’ use
of words such as “believes,” “anticipates,” “expects,” “may,”
“will,” “assumes,” “should,” “predicts,” “could,” “would,”
“intends,” “targets,” “estimates,” “projects,” “plans,” “potential”
and other similar words and expressions of the future or otherwise
regarding the outlook for Synovus’ future business and financial
performance and/or the performance of the banking industry and
economy in general. These forward-looking statements include, among
others, our expectations regarding deposits, loan growth and the
net interest margin; expectations on our growth strategy, expense
initiatives, capital management and future profitability;
expectations on credit trends and key credit metrics; and the
assumptions underlying our expectations. Prospective investors are
cautioned that any such forward-looking statements are not
guarantees of future performance and involve known and unknown
risks and uncertainties which may cause the actual results,
performance or achievements of Synovus to be materially different
from the future results, performance or achievements expressed or
implied by such forward-looking statements. Forward-looking
statements are based on the information known to, and current
beliefs and expectations of, Synovus’ management and are subject to
significant risks and uncertainties. Actual results may differ
materially from those contemplated by such forward-looking
statements. A number of factors could cause actual results to
differ materially from those contemplated by the forward-looking
statements in this press release. Many of these factors are beyond
Synovus’ ability to control or predict.
These forward-looking statements are based upon information
presently known to Synovus’ management and are inherently
subjective, uncertain and subject to change due to any number of
risks and uncertainties, including, without limitation, the risks
and other factors set forth in Synovus’ filings with the Securities
and Exchange Commission, including its Annual Report on Form 10-K
for the year ended December 31, 2016, under the captions
“Cautionary Notice Regarding Forward-Looking Statements” and “Risk
Factors” and in Synovus’ quarterly reports on Form 10-Q and current
reports on Form 8-K. We believe these forward-looking statements
are reasonable; however, undue reliance should not be placed on any
forward-looking statements, which are based on current expectations
and speak only as of the date that they are made. We do not assume
any obligation to update any forward-looking statements as a result
of new information, future developments or otherwise, except as
otherwise may be required by law.
Non-GAAP Financial Measures
The measures entitled adjusted non-interest income; adjusted
non-interest expense; adjusted total revenues; adjusted efficiency
ratio; adjusted net income per common share, diluted; adjusted
return on average assets; adjusted return on average common equity;
adjusted return on average tangible common equity; average core
deposits; average core transaction deposits; tangible common equity
to tangible assets ratio; and common equity Tier 1 (CET1) ratio
(fully phased-in); 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
income; total non-interest expense; total revenues; efficiency
ratio; net income per common share, diluted; return on average
assets; return on average common equity; total average deposits;
the ratio of total shareholders' equity to total assets; and the
CET1 ratio; 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 total revenues and
adjusted non-interest income are measures used by management to
evaluate total revenue and non-interest income exclusive of net
investment securities gains/losses, changes in fair value of
private equity investments, net, and the Cabela's transaction fee.
Adjusted non-interest expense and the adjusted efficiency ratio are
measures utilized by management to measure the success of expense
management initiatives focused on reducing recurring controllable
operating costs. Adjusted net income per common share, diluted,
adjusted return on average assets, and adjusted return on average
common equity are measurements used by management to evaluate
operating results exclusive of items that are not indicative of
ongoing operations and impact period-to-period comparisons. Average
core deposits and average core transaction deposits are measures
used by management to evaluate organic growth of deposits and the
quality of deposits as a funding source. The adjusted return on
average tangible common equity is a measure 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 to tangible assets ratio and common equity Tier 1 (CET1)
ratio (fully phased-in) are used by management and bank regulators
to assess the strength of our capital position. The computations of
these measures are set forth in the tables below.
Reconciliation of Non-GAAP Financial Measures
(dollars in thousands)
4Q17
3Q17
4Q16
2017
2016
Adjusted non-interest income
Total non-interest income $ 69,352 135,435 74,006 345,327 273,194
Subtract: Cabela’s transaction fee - (75,000 ) - (75,000 ) -
Add/subtract: Investment securities losses (gains), net - 7,956
(5,885 ) 289 (6,011 ) Subtract/add: (Increase)/decrease in fair
value of private equity investments, net
(100
) 27 499
3,093 1,026 Adjusted
non-interest income
$ 69,252
68,418 68,620
273,709 268,209
Adjusted non-interest expense Total non-interest expense $
226,534 205,646 193,209 821,313 755,923 Subtract: 3Q17 discounts to
fair value for completed or planned ORE accelerated dispositions -
(7,082 ) - (7,082 ) - Subtract: 3Q17 asset impairment charges
related to accelerated disposition of corporate real estate and
other properties - (1,168 ) - (1,168 ) - Subtract: Earnout
liability adjustments (1,700 ) (2,059 ) - (3,759 ) - Add/subtract:
Restructuring charges, net 29 (519 ) (42 ) (7,014 ) (8,267 )
Subtract: Loss on early extinguishment of debt, net (23,160 ) - -
(23,160 ) (4,735 ) Subtract: Fair value adjustment to Visa
derivative - - (4,716 ) - (5,795 ) Subtract: Litigation
settlement/contingency expense (300 ) (401 ) - (701 ) (2,511 )
Subtract: Merger-related expense - (23 ) (1,086 ) (110 ) (1,636 )
Subtract: Amortization of intangibles
(292
) (292 ) (400
) (1,059 ) (521
) Adjusted non-interest expense
$
201,111 194,102
186,965 777,260
732,458
Adjusted efficiency ratio
Adjusted non-interest expense $ 201,111 194,102 186,965 777,260
732,458 Net interest income 269,713 262,572 233,530 1,023,309
899,180 Add: Tax equivalent adjustment 234 283 322 1,124 1,285 Add:
Total non-interest income 69,352 135,435 74,006 345,327 273,194
Add/subtract: Investment securities losses (gains), net
- 7,956 (5,885
) 289 (6,011
) Total FTE revenues 339,299 406,246 301,973 1,370,049
1,167,648 Subtract: Cabela’s transaction fee - (75,000 ) - (75,000
) - Subtract/add: (Increase)/decrease in fair value of private
equity investments, net
(100 )
27 499 3,093
1,026 Adjusted total revenues $ 339,199
331,273 302,472 1,298,142 1,168,674 Efficiency ratio 66.77 % 50.62
63.98 59.95 64.74 Adjusted efficiency ratio
59.29 % 58.59
61.81 59.87
62.67
Reconciliation of Non-GAAP Financial
Measures,
continued
(dollars in thousands)
4Q17
3Q17
4Q16
2017
2016
Adjusted net income per common share, diluted Net
income available to common shareholders $ 27,046 95,448 65,990
265,236 236,546 Add: Earnout liability adjustments 1,700 2,059 -
3,759 - Add: Income tax expense related to effect of Federal Tax
Reform 47,181 - - 47,181 - Add: Merger-related expense - 23 1,086
110 1,636 Add: Fair value adjustment to VISA derivative - - 4,716 -
5,795 Add: Litigation settlement/contingency expense 300 401 - 701
2,511 Subtract/add: Restructuring charges, net (29) 519 42 7,014
8,267 Add: Amortization of intangibles 292 292 400 1,059 521 Add:
Loss on early extinguishment of debt, net 23,160 - - 23,160 4,735
Add: 3Q17 provision expense on loans transferred to held-for-sale -
27,710 - 27,710 - Add: 3Q17 discounts to fair value for completed
or planned ORE accelerated dispositions - 7,082 - 7,082 - Add: 3Q17
asset impairment charges related to accelerated disposition of
corporate real estate and other properties - 1,168 - 1,168 -
Add/subtract: Investment securities losses (gains), net - 7,956
(5,885) 289 (6,011) Subtract/add: (Increase)/decrease in fair value
of private equity investments, net (100) 27 499 3,093 1,026
Subtract: Cabela’s transaction fee - (75,000) - (75,000) -
Subtract: Income tax benefit related to pre-2017 R&D credits
and state taxes (4,847) - - (4,847) - Add/subtract: Tax effect of
adjustments
(8,740) 11,034
(318) 1,337 (6,838) Adjusted
net income $ 85,963 78,719 66,530 309,052 248,188 Weighted average
common shares outstanding- diluted 120,182 121,814 123,187 122,012
125,078 Adjusted net income per common share, diluted
$ 0.72 0.65
0.54 2.53 1.98
Reconciliation of Non-GAAP Financial
Measures, continued
(dollars in thousands)
4Q17
3Q17
4Q16
2017
2016
Adjusted return on average assets Net income $ 29,605
98,007 68,549 275,474 246,784 Add: Earnout liability adjustments
1,700 2,059 - 3,759 - Add: Income tax expense related to effect of
Federal Tax Reform 47,181 - - 47,181 - Add: Merger-related expense
- 23 1,086 110 1,636 Add: Fair value adjustment to VISA derivative
- - 4,716 - 5,795 Add: Litigation settlement/contingency expense
300 401 - 701 2,511 Subtract/add: Restructuring charges, net (29 )
519 42 7,014 8,267 Add: Amortization of intangibles 292 292 400
1,059 521 Add: Loss on early extinguishment of debt, net 23,160 - -
23,160 4,735 Add: 3Q17 provision expense on loans transferred to
held-for-sale - 27,710 - 27,710 - Add: 3Q17 discounts to fair value
for completed or planned ORE accelerated dispositions - 7,082 -
7,082 - Add: 3Q17 asset impairment charges related to accelerated
disposition of corporate real estate and other properties - 1,168 -
1,168 - Subtract/add: Investment securities losses (gains), net -
7,956 (5,885 ) 289 (6,011 ) Subtract/add: (Increase)/decrease in
fair value of private equity investments, net (100 ) 27 499 3,093
1,026 Subtract: Cabela’s transaction fee - (75,000 ) - (75,000 ) -
Subtract: Income tax benefit related to pre-2017 R&D credits
and state taxes (4,847 ) - - (4,847 ) - Subtract/add: Tax effect of
adjustments
(8,740 )
11,034 (318 )
1,337 (6,838 )
Adjusted net income $ 88,522 81,278 69,089 319,290 258,426 Net
income annualized $ 351,201 322,462 274,854 319,290 258,426
Total average assets $ 31,388,724 30,678,388 30,207,257 30,787,289
29,480,972 Adjusted return on average assets
1.12 % 1.05
0.91 1.04 0.88
Reconciliation of Non-GAAP Financial
Measures, continued
(dollars in thousands)
4Q17
3Q17
4Q16
2017
2016
Adjusted return on average common equity Net income
available to common shareholders $ 27,046 95,448 65,990 265,236
236,546 Add: Earnout liability adjustments 1,700 2,059 - 3,759 -
Add: Income tax expense related to effect of Federal Tax Reform
47,181 - - 47,181 - Add: Merger-related expense - 23 1,086 110
1,636 Add: Fair value adjustment to VISA derivative - - 4,716 -
5,795 Add/subtract: Litigation settlement/ contingency expense 300
401 - 701 2,511 Subtract/add: Restructuring charges, net (29 ) 519
42 7,014 8,267 Add: Amortization of intangibles 292 292 400 1,059
521 Add: Loss on early extinguishment of debt, net 23,160 - -
23,160 4,735 Add: 3Q17 provision expense on loans transferred to
held-for-sale - 27,710 - 27,710 - Add: 3Q17 discounts to fair value
for completed or planned ORE accelerated dispositions 7,082 - 7,082
- Add: 3Q17 asset impairment charges related to accelerated
disposition of corporate real estate and other properties - 1,168 -
1,168 - Add/subtract: Investment securities losses (gains), net -
7,956 (5,885 ) 289 (6,011 ) Subtract/add: (Increase)/decrease in
fair value of private equity investments, net (100 ) 27 499 3,093
1,026 Subtract: Cabela’s transaction fee - (75,000 ) - (75,000 ) -
Subtract: Income tax benefit related to pre-2017 R&D credits
and state taxes (4,847 ) - - (4,847 ) - Add/subtract: Tax effect of
adjustments
(8,740 )
11,034 (318 )
1,337 (6,838 )
Adjusted net income $ 85,963 78,719 66,530 309,052 248,188
Net income annualized $ 341,049 312,309 264,674 309,052 248,188
Total average shareholders’ equity less preferred stock $ 2,851,523
2,859,491 2,786,707 2,844,570 2,813,526 Subtract: Goodwill (57,315
) (57,167 ) (55,144 ) (57,779 ) (32,151 )
Subtract: Other intangibles assets,
net
(11,353 ) (11,648 ) (233 ) (12,030 ) (269 ) Total average
tangible shareholders’ equity less preferred stock $ 2,782,855
2,790,676 2,731,330 2,774,761 2,781,106 Adjusted return on average
common equity
11.96
%
10.92
9.50
10.86
8.82
Adjusted return on average tangible common equity
12.26
%
11.19
9.69
11.14
8.92
Reconciliation of
Non-GAAP Financial Measures,
continued
(dollars in thousands)
4Q17
3Q17
4Q16
Tangible common equity to tangible
assets ratio
Total assets $ 31,221,837 31,642,123 30,104,002 Subtract: Goodwill
(57,315 ) (57,315 ) (59,678 ) Subtract: Other intangible assets,
net
(11,254 ) (11,548
) (13,223 ) Tangible assets
$ 31,153,268
31,573,260 30,031,101
Total shareholders’ equity $ 2,961,566 2,997,078 2,927,924
Subtract: Goodwill (57,315 ) (57,315 ) (59,678 ) Subtract: Other
intangible assets, net (11,254 ) (11,548 ) (13,223 ) Subtract:
Series C Preferred Stock
(125,980
) (125,980 )
(125,980 ) Tangible common equity
$ 2,767,017 2,802,235
2,729,043 Total shareholder’s equity to
total assets ratio 9.49 % 9.47 9.73 Tangible common equity to
tangible assets ratio 8.88 % 8.88 9.09
Average
core deposits and average core transaction deposits Total
average deposits $ 26,286,009 25,286,919 24,661,265 Subtract:
Average brokered deposits
(2,198,333
) (1,530,889 )
(1,380,931 ) Average core deposits
24,087,676 23,756,030 23,280,334 Subtract: Average time deposits
excluding average SCM time deposits (3,084,272 ) (3,160,915 )
(3,147,620 ) Subtract: Average state, county, and municipal (SCM)
deposits
(2,211,686 )
(1,991,954 ) (2,356,567
) Average core transaction deposits
$
18,791,718 18,603,161
17,776,147 Common equity Tier
1 (CET1) ratio (fully phased-in) Common Equity Tier 1 (CET1) $
2,763,170 Subtract: Adjustment related to capital components
(17,147 ) CET1 (fully phased-in)
$ 2,746,023 Total risk-weighted
assets $ 27,672,344 Total risk-weighted assets (fully phased-in) $
27,787,437 Common equity Tier 1 (CET 1) ratio 9.99 % Common Equity
Tier 1 (CET1) ratio (fully phased-in) 9.88 %
Synovus
INCOME STATEMENT DATA Twelve Months Ended
(Unaudited) (Dollars in thousands, except per share data)
December 31, 2017 2016
Change Interest income
$
1,162,497 1,022,803 13.7 % Interest expense
139,188 123,623 12.6 Net
interest income
1,023,309 899,180 13.8 Provision for loan
losses
67,185 28,000 139.9
Net interest income after provision for loan losses
956,124 871,180 9.8 Non-interest
income: Service charges on deposit accounts
79,801 81,425
(2.0 ) Fiduciary and asset management fees
50,485 46,594 8.4
Brokerage revenue
29,705 27,028 9.9 Mortgage banking income
22,798 24,259 (6.0 ) Bankcard fees
32,232 33,318 (3.3
) Cabela's transaction fee
75,000 - nm Investment securities
(losses) gains, net
(289 ) 6,011 nm Decrease in fair
value of private equity investments, net
(3,093 )
(1,026 ) nm Other fee income
20,168 20,220 (0.3 ) Other
non-interest income
38,520 35,365 8.9
Total non-interest income
345,327
273,194 26.4 Non-interest expense:
Salaries and other personnel expense
433,321 402,026 7.8 Net
occupancy and equipment expense
119,964 109,347 9.7
Third-party processing expense
54,708 46,320 18.1 FDIC
insurance and other regulatory fees
27,011 26,714 1.1
Professional fees
26,232 26,698 (1.7 ) Advertising expense
22,948 20,264 13.2 Foreclosed real estate expense, net
12,540 12,838 (2.3 ) Earnout liability adjustments
5,466 - nm Merger-related expense
110 1,636 nm
Amortization of intangibles
1,059 521 nm Fair value
adjustment to Visa derivative
- 5,795 nm Loss on early
extinguishment of debt, net
23,160 4,735 nm Litigation
settlement/contingency expense
701 2,511 nm Restructuring
charges, net
7,014 8,267 (15.2 ) Other operating expenses
87,079 88,251 (1.3 ) Total
non-interest expense
821,313 755,923
8.7 Income before income taxes
480,138 388,451
23.6 Income tax expense
204,664 141,667
44.5 Net income
275,474 246,784 11.6
Dividends on preferred stock
10,238 10,238
- Net income available to common shareholders
$ 265,236 236,546 12.1 % Net
income per common share, basic
$ 2.19 1.90 15.1 %
Net income per common share, diluted
2.17 1.89 14.9
Cash dividends declared per common share
0.60 0.48
25.0 Return on average assets
0.89 % 0.84
5
bps
Return on average common equity
9.32 8.41 91 Weighted
average common shares outstanding, basic
121,162 124,389
(2.6 )% Weighted average common shares outstanding, diluted
122,012 125,078 (2.5 ) nm - not meaningful bps -
basis points
Synovus INCOME
STATEMENT DATA (Unaudited) (In thousands, except per
share data) 2017 2016 Fourth Quarter
Fourth Third Second First Fourth '17 vs. '16
Quarter Quarter Quarter
Quarter Quarter Change
Interest income $
306,934 297,652 285,510 272,401
264,534 16.0 % Interest expense
37,221 35,080
34,413 32,474 31,004 20.1
Net interest income
269,713 262,572 251,097 239,927 233,530
15.5 Provision for loan losses
8,565 39,686
10,260 8,674 6,259 36.8
Net interest income after provision for loan losses
261,148
222,886 240,837 231,253
227,271 14.9 Non-interest income:
Service charges on deposit accounts
19,952 20,255 19,820
19,774 20,653 (3.4 ) Fiduciary and asset management fees
13,195 12,615 12,524 12,151 11,903 10.9 Brokerage revenue
7,758 7,511 7,210 7,226 7,009 10.7 Mortgage banking income
5,645 5,603 5,784 5,766 5,504 2.6 Bankcard fees
7,893
7,901 8,253 8,185 8,330 (5.2 ) Cabela's transaction fee
-
75,000 - - - nm Investment securities (losses) gains, net
-
(7,956 ) (1 ) 7,668 5,885 nm Increase/(decrease) in fair value of
private equity investments, net
100 (27 ) (1,352 ) (1,814 )
(499 ) nm Other fee income
4,042 5,094 6,164 4,868 4,965
(18.6 ) Other non-interest income
10,767 9,439
10,299 8,015 10,256 5.0
Total non-interest income
69,352 135,435
68,701 71,839 74,006 (6.3 )
Non-interest expense: Salaries and other
personnel expense
111,243 109,675 105,213 107,191 101,662
9.4 Net occupancy and equipment expense
30,126 30,573 29,933
29,331 27,867 8.1 Third-party processing expense
14,827
13,659 13,620 12,603 12,287 20.7 FDIC insurance and other
regulatory fees
6,288 7,078 6,875 6,770 6,614 (4.9 )
Professional fees
6,183 7,141 7,551 5,355 6,904 (10.4 )
Advertising expense
8,081 3,610 5,346 5,912 4,905 64.8
Foreclosed real estate expense, net
1,693 7,265 1,448 2,134
2,840 (40.4 ) Earnout liability adjustments
1,700 2,059
1,707 - - nm Merger-related expense
- 23 - 86 1,086 nm
Amortization of intangibles
292 292 292 183 400 (27.0 ) Fair
value adjustment to Visa derivative
- - - - 4,716 nm Loss on
early extinguishment of debt
23,160 - - - - nm Litigation
settlement expense
300 401 - - - nm Restructuring charges,
net
(29 ) 519 13 6,511 42 nm Other operating expenses
22,670 23,351 19,749 21,312
23,886 (5.1 ) Total non-interest expense
226,534 205,646 191,747 197,388
193,209 17.2
Income before income taxes
103,966 152,675 117,791 105,704
108,068 (3.8 ) Income tax expense
74,361 54,668
41,788 33,847 39,519 88.2
Net income
29,605 98,007 76,003 71,857 68,549 (56.8 )
Dividends on preferred stock
2,559 2,559
2,559 2,559 2,559 - Net
income available to common shareholders $
27,046
95,448 73,444 69,298 65,990 (59.0 ) %
Net income per common share, basic $
0.23 0.79 0.60
0.57 0.54 (58.0 ) % Net income per common share, diluted
0.23 0.78 0.60 0.56 0.54 (58.0 ) Cash dividends
declared per common share
0.15 0.15 0.15 0.15 0.12 25.0
Return on average assets *
0.37 % 1.27 1.00 0.96 0.90
(53 )
bps
Return on average common equity *
3.76 13.24 10.34 9.97 9.42
(566 ) Weighted average common shares outstanding, basic
119,282 120,900 122,203 122,300 122,341 (2.5 ) % Weighted
average common shares outstanding, diluted
120,182 121,814
123,027 123,059 123,187 (2.4 ) nm - not meaningful bps -
basis points * - ratios are annualized
Synovus BALANCE SHEET
DATA December 31, 2017 September 30, 2017 December 31,
2016
(Unaudited) (In thousands, except share data)
ASSETS Cash and cash equivalents $
397,848 386,459
395,175 Interest bearing funds with Federal Reserve Bank
460,928 1,297,581 527,090 Interest earning deposits with
banks
26,311 6,047 18,720
Federal funds sold and securities
purchased under resale agreements
47,846 48,820 58,060 Trading account assets, at fair value
3,820 12,329 9,314 Mortgage loans held for sale, at fair
value
48,024 54,072 51,545 Other loans held for sale
11,356 31,253 - Investment securities available for sale, at
fair value
3,987,069 3,825,443 3,718,195 Loans, net
of deferred fees and costs
24,787,464 24,487,360 23,856,391
Allowance for loan losses
(249,268 ) (249,683 )
(251,758 ) Loans, net
24,538,196 24,237,677
23,604,633 Premises and equipment, net
426,813
423,245 417,485 Goodwill
57,315 57,315 59,678 Other
intangible assets
11,254 11,548 13,223 Other real estate
3,758 10,551 22,308 Deferred tax asset, net
165,788
272,052 395,356 Other assets
1,035,511 967,731
813,220 Total assets $
31,221,837
31,642,123 30,104,002 LIABILITIES AND
SHAREHOLDERS' EQUITY Liabilities: Deposits: Non-interest bearing
deposits $
7,686,339 7,302,682 7,085,804 Interest bearing
deposits, excluding brokered deposits
16,500,436 16,420,319
16,183,273 Brokered deposits
1,961,125 2,463,227
1,378,983 Total deposits
26,147,900
26,186,228 24,648,060
Federal funds purchased and securities
sold under repurchase agreements
161,190 141,539 159,699 Long-term debt
1,706,138
1,882,607 2,160,881 Other liabilities
245,043 434,671
207,438 Total liabilities
28,260,271
28,645,045 27,176,078
Shareholders' equity: Series C Preferred Stock - no par value,
5,200,000 shares outstanding at December 31, 2017, September 30,
2017, and December 31, 2016
125,980 125,980 125,980 Common
stock - $1.00 par value. 118,897,295 shares outstanding at December
31, 2017, 119,566,625 shares outstanding at September 30, 2017, and
122,266,106 shares outstanding at December 31, 2016
142,678
142,525 142,026 Additional paid-in capital
3,043,129
3,033,682 3,028,405 Treasury stock, at cost - 23,780,154 shares at
December 31, 2017, 22,958,514 shares at September 30, 2017, and
19,759,614 shares at December 31, 2016
(839,674 )
(800,509 ) (664,595 ) Accumulated other comprehensive loss
(54,754 ) (39,596 ) (55,659 ) Retained earnings
544,207 534,996 351,767 Total
shareholders' equity
2,961,566 2,997,078
2,927,924 Total liabilities and shareholders' equity
$
31,221,837 31,642,123 30,104,002
Synovus
AVERAGE BALANCES AND YIELDS/RATES (1)
(Unaudited) (Dollars in thousands)
2017
2016
Fourth Third Second First Fourth
Quarter
Quarter Quarter Quarter Quarter
Interest Earning Assets Taxable investment securities (2) $
3,937,278 3,786,436 3,844,688 3,841,556 3,643,510 Yield
2.29 % 2.11 2.11 2.06 1.92 Tax-exempt investment
securities (2) (4) $
180 259 340 2,730 2,824 Yield (taxable
equivalent)
7.97 % 7.86 6.87 5.81 5.82 Trading
account assets $
7,360 7,823 3,667 6,443 6,799 Yield
2.78 % 2.09 2.28 1.72 2.63 Commercial loans (3) (4) $
18,935,774 19,059,936 19,137,733 19,043,384 18,812,659 Yield
4.49 % 4.41 4.27 4.16 4.05 Consumer loans (3) $
5,704,629 5,440,765 5,215,258 4,992,683 4,911,149 Yield
4.54 % 4.55 4.49 4.40 4.27 Allowance for loan losses
$
(252,319) (249,248) (251,219)
(253,927) (253,713) Loans, net (3) $
24,388,084 24,251,453 24,101,772 23,782,140 23,470,095 Yield
4.55 % 4.49 4.36 4.25 4.14 Mortgage loans held for
sale $
45,353 52,177 52,224 46,554 77,652 Yield
3.96
% 3.88 3.87 4.01 3.51
Federal funds sold, due from Federal
Reserve Bank, and other short-term investments
$
922,296 543,556 561,503 654,322 982,355 Yield
1.31
% 1.23 1.00 0.77 0.49 Federal Home Loan Bank and Federal
Reserve Bank stock (5) $
159,455 175,263 177,323 170,844
121,079 Yield
4.03 % 3.50 2.99 3.42 3.75
Total interest earning assets $
29,460,006 28,816,967 28,741,517 28,504,589 28,304,314 Yield
4.15 % 4.11 3.99 3.88 3.73
Interest Bearing Liabilities
Interest bearing demand deposits $
4,976,239 4,868,372
4,837,053 4,784,329 4,488,135 Rate
0.28 % 0.27 0.23 0.19
0.16 Money market accounts $
7,514,992 7,528,036
7,427,562 7,424,627 7,359,067 Rate
0.36 % 0.34 0.32 0.31
0.29 Savings deposits $
804,853 803,184 805,019
909,660 908,725 Rate
0.03 % 0.03 0.04 0.11 0.12 Time
deposits under $100,000 $
1,166,413 1,183,582 1,202,746
1,215,593 1,229,809 Rate
0.70 % 0.68 0.67 0.64 0.64
Time deposits over $100,000 $
2,004,031 2,067,347 2,040,924
2,029,713 2,014,564 Rate
0.99 % 0.97 0.94 0.92 0.90
Non maturing brokered deposits $
546,413 547,466 564,043
619,627 638,779 Rate
0.81 % 0.73 0.54 0.41 0.31
Brokered time deposits $
1,651,920 983,423 815,515 761,159
742,153 Rate
1.63 % 1.16 0.94 0.92
0.90 Total interest bearing deposits $
18,664,861 17,981,410 17,692,862 17,744,708 17,381,232 Rate
0.54 % 0.46 0.41 0.39 0.37
Federal funds purchased and securities
sold under repurchase agreements
$
184,369 191,585 183,400 176,854 219,429 Rate
0.15 %
0.08 0.10 0.09 0.08 Long-term debt $
1,713,982
1,985,175 2,270,452 2,184,072 2,190,716 Rate
2.67 % 2.81
2.83 2.83 2.65
Total
interest bearing liabilities $
20,563,212 20,158,170
20,146,714 20,105,634 19,791,377 Rate
0.72 % 0.69 0.68 0.65
0.62
Non-interest bearing
demand deposits $
7,621,147 7,305,508 7,298,845 7,174,146
7,280,033 Effective cost of funds
0.50 % 0.48 0.48
0.46 0.44
Net interest
margin
3.65 % 3.63 3.51
3.42 3.29 Taxable equivalent adjustment $
234
283 298 309 322 (1) Yields and rates are annualized. (2)
Excludes net unrealized gains and losses. (3) Average loans are
shown net of unearned income. Non-performing loans are included.
(4) Reflects taxable-equivalent
adjustments, using the statutory federal income tax rate of 35%, in
adjusting interest on tax-exempt loans and investment securities to
a taxable-equivalent basis.
(5) Included as a component of Other Assets on the consolidated
balance sheet
Synovus
NON-PERFORMING LOANS COMPOSITION (Unaudited)
(Dollars in thousands)
Total Total Total
Non-performing Non-performing 4Q17
vs. 3Q17 Non-performing 4Q17 vs. 4Q16 Loan Type
Loans Loans
% change Loans % change
December 31, 2017 September
30, 2017 December 31, 2016
Multi-Family $
1,241 1,096 13.2 % $ 1,853 (33.0 ) %
Hotels
- - - 335 nm Office Buildings
1,532 234 nm
1,380 11.0 Shopping Centers
165 327 (49.5 ) 354 (53.4 )
Warehouses
226 38 494.7 592 (61.8 ) Other Investment
Property
640 367 74.4 754 (15.1
)
Total Investment Properties 3,804 2,062 84.5 5,268
(27.8 ) 1-4 Family Construction
- - - 305 nm
1-4 Family Investment Mortgage
2,849 2,712 5.1
8,809 (67.7 )
Total 1-4 Family
Properties 2,849 2,712 5.1 9,114 (68.7 )
Commercial Development
45 47 (4.3 ) 168 (73.2 ) Residential
Development
3,257 4,720 (31.0 ) 8,994 (63.8 ) Land
Acquisition
2,495 2,161 15.5 7,071
(64.7 )
Land and Development 5,797
6,928 (16.3 ) 16,233 (64.3 )
Total
Commercial Real Estate 12,450 11,702 6.4
30,615 (59.3 ) Commercial, Financial, and
Agricultural
70,130 58,139 20.6 59,074 18.7 Owner-Occupied
6,654 3,960 68.0 16,503 (59.7 )
Total Commercial & Industrial 76,784
62,099 23.6 75,577 1.6
Home Equity Lines
17,455 15,638 11.6 21,551 (19.0 ) Consumer
Mortgages
7,203 6,332 13.8 22,681 (68.2 ) Other Consumer
Loans
1,669 2,067 (19.3 ) 2,954 (43.5 )
Total Consumer 26,327 24,037 9.5
47,186 (44.2 )
Total $
115,561 97,838 18.1
% $ 153,378 (24.7 ) %
LOANS OUTSTANDING BY TYPE COMPARISON
(Unaudited) (Dollars in thousands)
Total Loans
Total Loans 4Q17 vs. 3Q17 Total Loans 4Q17 vs. 4Q16 Loan Type
December 31, 2017 September 30, 2017
% change (1)
December 31, 2016 % change
Multi-Family $
1,492,159
1,636,449 (35.0 ) % $ 1,568,234 (4.9 ) % Hotels
741,703
832,990 (43.5 ) 748,951 (1.0 ) Office Buildings
1,499,834
1,548,317 (12.4 ) 1,539,516 (2.6 ) Shopping Centers
791,311
840,367 (23.2 ) 964,325 (17.9 ) Warehouses
581,410 522,925
44.4 515,112 12.9 Other Investment Property
563,648
544,049 14.3 533,123 5.7
Total
Investment Properties 5,670,065 5,925,097 (17.1 )
5,869,261 (3.4 ) 1-4 Family Construction
198,200
195,273 5.9 190,477 4.1 1-4 Family Investment Mortgage
583,419 600,535 (11.3 ) 698,076 (16.4 )
Total 1-4 Family Properties 781,619 795,808 (7.1 )
888,553 (12.0 ) Commercial Development
70,062 66,521
21.1 70,250 (0.3 ) Residential Development
114,079 117,878
(12.8 ) 136,514 (16.4 ) Land Acquisition
299,463
322,813 (28.7 ) 409,534 (26.9 )
Land and
Development 483,604 507,212 (18.5 )
616,298 (21.5 )
Total Commercial Real Estate
6,935,288 7,228,117 (16.1 ) 7,374,112
(6.0 ) Commercial, Financial, and Agricultural
7,179,487 6,961,709 12.4 6,909,036 3.9 Owner-Occupied
4,844,163 4,764,240 6.7 4,634,770
4.5
Total Commercial & Industrial
12,023,650 11,725,949 10.1 11,543,806
4.2 Home Equity Lines
1,514,227
1,528,889 (3.8 ) 1,617,265 (6.4 ) Consumer Mortgages
2,633,503 2,557,680 11.8 2,296,604 14.7 Credit Cards
232,676 225,725 12.2 232,413 0.1 Other Consumer Loans
1,473,451 1,245,278 72.7 818,182
80.1
Total Consumer 5,853,857 5,557,572
21.2 4,964,464 17.9
Unearned
Income (25,331 ) (24,278 ) 17.2 (25,991 )
(2.5 )
Total $
24,787,464 24,487,360
4.9 % $ 23,856,391 3.9 %
(1) Percentage change is annualized.
Synovus
CREDIT QUALITY DATA
(Unaudited) (Dollars in thousands)
2017 2016 4th
Quarter
Fourth Third Second First Fourth '17 vs. '16
Quarter Quarter Quarter Quarter Quarter
Change Non-performing Loans $
115,561 97,838 159,317
158,366 153,378 (24.7) % Impaired Loans Held for Sale (1)
11,278 30,197 127 8,442 - nm Other Real Estate
3,758
10,551 19,476 20,425 22,308 (83.2) Non-performing Assets
130,597 138,586 178,920 187,233 175,686 (25.7)
Allowance for loan losses
249,268 249,683 248,095 253,514
251,758 (1.0) Net Charge-Offs - Quarter
8,979 38,099
15,678 6,919 8,319 Net Charge-Offs - YTD
69,675 60,695
22,597 6,919 28,739 Net Charge-Offs / Average Loans - Quarter (2)
0.15 % 0.62 0.26 0.12 0.14 Net Charge-Offs / Average Loans -
YTD (2)
0.29 0.33 0.19 0.12 0.12 Non-performing Loans
/ Loans
0.47 0.40 0.65 0.65 0.64 Non-performing Assets /
Loans, Other Loans Held for Sale & ORE
0.53 0.57 0.73
0.77 0.74 Allowance / Loans
1.01 1.02 1.02 1.05 1.06
Allowance / Non-performing Loans
215.70 255.20 155.72 160.08
164.14 Allowance / Non-performing Loans (3)
238.44 336.35
217.07 204.94 202.01 Past Due Loans over 90 days and Still
Accruing $
4,414 5,685 4,550 2,777 3,135 40.8 As a
Percentage of Loans Outstanding
0.02 % 0.02 0.02 0.01 0.01
Total Past Due Loans and Still Accruing $
52,032
84,853 66,788 62,137 65,106 (20.1) As a Percentage of Loans
Outstanding
0.21 % 0.35 0.27 0.26 0.27 Accruing
Troubled Debt Restructurings (TDRs) $
151,271 166,918
167,395 172,421 195,776 (22.7)
(1) Represent only impaired loans that
have been specifically identified to be sold. Impaired loans held
for sale are carried at the lower of cost or fair value, less costs
to sell, based primarily on estimated sales proceeds net of selling
costs.
(2) Ratio is annualized. (3) Excludes non-performing loans for
which the expected loss has been charged off.
SELECTED CAPITAL INFORMATION (1)
(Unaudited) (Dollars in thousands)
December 31,2017
September 30,2017
December 31,2016
Tier 1 Capital $
2,872,003 2,849,580 2,685,880
Total Risk-Based Capital
3,383,083 3,362,127 3,201,268
Common Equity Tier 1 Ratio (transitional)
9.99 % 10.06 9.96
Common Equity Tier 1 Ratio (fully phased-in)
9.88 9.88 9.51
Tier 1 Capital Ratio
10.38 10.43 10.07 Total Risk-Based
Capital Ratio
12.23 12.30 12.01 Tier 1 Leverage Ratio
9.19 9.34 8.99 Common Equity as a Percentage of Total Assets
(2)
9.08 9.07 9.31 Tangible Common Equity as a Percentage of
Tangible Assets (3)
8.88 8.88 9.09 Tangible Common Equity as
a Percentage of Risk Weighted Assets (3)
10.00 10.24 10.24
Book Value Per Common Share (4) $
23.85 24.01 22.92 Tangible
Book Value Per Common Share (3)
23.27 23.44 22.32
(1) Current quarter regulatory capital information is
preliminary. (2) Common equity consists of Total Shareholders'
Equity less Preferred Stock. (3) Excludes the carrying value of
goodwill and other intangible assets from common equity and total
assets. (4) Book Value Per Common Share consists of Total
Shareholders' Equity less Preferred Stock divided by total common
shares outstanding.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20180123005597/en/
Synovus Financial Corp.Media
ContactLee Underwood, 706-644-0528Media
RelationsorInvestor
ContactSteve Adams, 706-641-6462Investor Relations
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