Diluted earnings per share of $0.60 vs.
$1.33 in 3Q22
Adjusted diluted earnings per share of $0.84
vs. $1.34 in 3Q22
Synovus Financial Corp. (NYSE: SNV) today reported financial
results for the quarter ended Sept. 30, 2023. “Our third quarter
financial results reflect agility and disciplined execution amid
complex market dynamics,” said Synovus Chairman, CEO and
President Kevin Blair. “While we navigate through this uncertain
economic landscape, our primary focus remains on strengthening and
growing our core client relationships and strategically positioning
Synovus for future growth. This includes efforts to optimize the
balance sheet as well as business mix. Our proactive measures taken
in the third quarter have further derisked the company by reducing
our wholesale funding ratio to 15% and elevating the CET1 ratio
beyond 10%, while also streamlining ongoing expenses. We are
confidently looking forward to a strong close for 2023, and we are
optimistic about the return to a stronger growth orientation as we
progress through 2024.”
Third Quarter 2023 Highlights
- Completed the previously announced sales of $338 million of
third-party consumer loans and $1.2 billion of medical office
building loans as well as the sale of asset management firm GLOBALT
to its management team.
- Total revenue of $550.3 million declined $31.9 million, or 5%,
compared to the third quarter 2022, driven by net interest income
decrease of 7%, partially offset by growth in client fee income,
excluding mortgage, of 5% year over year.
- Pre-provision net revenue of $196.8 million declined $91.4
million, or 32%, compared to the third quarter 2022, mostly driven
by increases in funding costs, losses on the aforementioned loan
sales and restructuring charges related to a voluntary early
retirement program.
- Period-end loans declined $673.6 million sequentially,
primarily driven by the $1.2 billion medical office building loans
sale.
- Total deposits increased $123.5 million sequentially, while
core deposits (excluding brokered deposits) grew $431.5 million, as
remixing began to slow.
- As expected, credit quality metrics continued to increase from
historically low levels and included a net charge-off ratio of
0.61% (driven by the previously disclosed medical office loan sale
and a shared national C&I credit), a 3 bps increase in the ACL
ratio to 1.22%, and non-performing loan and asset ratios both at
0.64%.
- The preliminary CET1 ratio of 10.13% increased 27 bps
sequentially as capital preservation remains the near-term priority
given persistent economic uncertainty.
Third Quarter Summary
Reported
Adjusted
(dollars in thousands)
3Q23
2Q23
3Q22
3Q23
2Q23
3Q22
Net income available to common
shareholders
$
87,423
$
165,819
$
194,753
$
122,770
$
169,526
$
195,481
Diluted earnings per share
0.60
1.13
1.33
0.84
1.16
1.34
Total revenue
550,298
567,807
582,217
550,552
567,347
584,265
Total loans
43,679,910
44,353,537
42,571,458
N/A
N/A
N/A
Total deposits
50,203,890
50,080,392
47,697,564
N/A
N/A
N/A
Return on avg assets
0.64
%
1.15
%
1.39
%
0.87
%
1.18
%
1.39
%
Return on avg common equity
8.2
15.5
18.7
11.5
15.8
18.7
Return on avg tangible common equity
9.7
17.7
21.3
13.5
18.1
21.4
Net interest margin
3.11
3.20
3.47
N/A
N/A
N/A
Efficiency ratio-TE(1)(2)
64.11
53.99
50.41
55.01
52.57
49.98
NCO ratio-QTD
0.61
0.24
0.04
N/A
N/A
N/A
NPA ratio
0.64
0.59
0.32
N/A
N/A
N/A
(1) Taxable equivalent
(2) Adjusted tangible efficiency ratio
Balance Sheet
Loans*
(dollars in millions)
3Q23
2Q23
Linked Quarter Change
Linked Quarter %
Change
3Q22
Year/Year Change
Year/Year % Change
Commercial & industrial
$
22,781.0
$
22,531.2
$
249.7
1
%
$
21,212.5
$
1,568.4
7
%
Commercial real estate
12,394.9
13,293.9
(899.0
)
(7
)
12,288.0
106.9
1
Consumer
8,504.1
8,528.4
(24.3
)
—
9,071.0
(566.9
)
(6
)
Total loans
$
43,679.9
$
44,353.5
$
(673.6
)
(2
)%
$
42,571.5
$
1,108.4
3
%
*Amounts may not total due to rounding
- Total loans ended the quarter at $43.68 billion, down $673.6
million sequentially, primarily driven by the $1.2 billion medical
office building loans sale.
- Commercial and industrial (C&I) loans rose $249.7 million
sequentially as activity in middle market commercial, Corporate and
Investment Banking, and specialty lines contributed to the
growth.
- CRE loans declined $899.0 million sequentially, driven by the
aforementioned medical office building loans sale partially offset
by draws on existing multi-family commitments and continued low
levels of pay-offs.
- Consumer loans declined $24.3 million sequentially, largely a
result of continued third-party contraction from sales as well as
runoff somewhat offset by growth in portfolio mortgages.
Deposits*
(dollars in millions)
3Q23
2Q23
Linked Quarter Change
Linked Quarter %
Change
3Q22
Year/Year Change
Year/Year % Change
Non-interest-bearing DDA
$
12,395.1
$
12,945.5
$
(550.4
)
(4
)%
$
15,373.7
$
(2,978.6
)
(19
)%
Interest-bearing DDA
6,276.1
6,255.3
20.8
—
5,777.7
498.4
9
Money market
10,786.3
10,803.7
(17.4
)
—
12,917.6
(2,131.3
)
(16
)
Savings
1,132.5
1,222.9
(90.4
)
(7
)
1,470.1
(337.6
)
(23
)
Public funds
6,885.7
7,031.4
(145.7
)
(2
)
5,549.7
1,336.0
24
Time deposits
6,506.4
5,291.8
1,214.6
23
2,110.9
4,395.5
208
Brokered deposits
6,221.8
6,529.8
(308.0
)
(5
)
4,497.8
1,724.0
38
Total deposits
$
50,203.9
$
50,080.4
$
123.5
—
%
$
47,697.6
$
2,506.3
5
%
*Amounts may not total due to rounding
- Total deposits ended the quarter at $50.20 billion, up $123.5
million sequentially, while core deposits (excluding brokered
deposits) grew $431.5 million.
- Time deposits growth was partially offset by a decline in
non-interest-bearing DDA deposits, a byproduct of cash deployment
of excess funds and continued pressures from the higher rate
environment, the rate of which has slowed.
- Total deposit costs increased 36 bps sequentially to 2.31% and
continued to be impacted by pricing lags on core interest-bearing
deposits (excluding brokered deposits) as well as the decline in
non-interest-bearing DDAs.
Income Statement Summary**
(in thousands, except per share data)
3Q23
2Q23
Linked Quarter Change
Linked Quarter %
Change
3Q22
Year/Year Change
Year/Year % Change
Net interest income
$
443,159
$
455,531
$
(12,372
)
(3
)%
$
477,919
$
(34,760
)
(7
)%
Non-interest revenue
107,139
112,276
(5,137
)
(5
)
104,298
2,841
3
Non-interest expense
353,532
307,181
46,351
15
294,010
59,522
20
Provision for (reversal of) credit
losses
72,572
38,881
33,691
87
25,581
46,991
184
Income before taxes
$
124,194
$
221,745
$
(97,551
)
(44
)%
$
262,626
$
(138,432
)
(53
)%
Income tax expense
27,729
47,801
(20,072
)
(42
)
59,582
(31,853
)
(53
)
Net income
96,465
173,944
(77,479
)
(45
)
203,044
(106,579
)
(52
)
Less: Net income (loss) attributable to
noncontrolling interest
(630
)
(166
)
(464
)
NM
—
(630
)
NM
Net income attributable to Synovus
Financial Corp.
97,095
174,110
(77,015
)
(44
)
203,044
(105,949
)
(52
)
Less: Preferred stock dividends
9,672
8,291
1,381
17
8,291
1,381
17
Net income available to common
shareholders
$
87,423
$
165,819
$
(78,396
)
(47
)%
$
194,753
$
(107,330
)
(55
)%
Weighted average common shares
outstanding, diluted
146,740
146,550
190
—
%
146,418
322
—
%
Diluted earnings per share
$
0.60
$
1.13
$
(0.53
)
(47
)
$
1.33
$
(0.73
)
(55
)
Adjusted diluted earnings per share
0.84
1.16
(0.32
)
(28
)
1.34
(0.50
)
(37
)
Effective tax rate
22.33
%
21.56
%
22.69
%
** Amounts may not total due to
rounding
Core Performance
- Net interest income of $443.2 million was down $12.4 million
sequentially, or 3%, and fell $34.8 million, or 7%, compared to the
third quarter 2022.
- The quarter-over-quarter decline was largely driven by modest
increases in deposit costs and a continued decline in
non-interest-bearing DDA deposits, but at a slower pace, partially
offset by modestly better asset yields.
- Net interest margin was 3.11%, down 9 bps sequentially,
impacted by the same factors mentioned above.
- The year-over-year decline resulted primarily from higher
deposit costs and negative remixing from non-interest DDA deposits
somewhat offset by higher asset yields.
- Non-interest revenue fell $5.1 million, or 5%, sequentially and
increased $2.8 million, or 3%, compared to the third quarter 2022.
Adjusted non-interest revenue declined $4.4 million, or 4%,
sequentially and increased $0.9 million, or 1%, compared to the
third quarter 2022.
- The quarter-over-quarter decrease was impacted by recent
changes to the NSF/overdraft program, a soft mortgage lending
market and more muted capital markets activity.
- The year-over-year increase primarily related to higher wealth
revenue and increased card fees.
- Non-interest expense increased $46.4 million, or 15%,
sequentially and increased $59.5 million, or 20%, compared to the
third quarter 2022. Adjusted non-interest expense increased $5.2
million, or 2%, sequentially and increased $11.8 million, or 4%,
compared to the third quarter 2022.
- The quarter-over-quarter and year-over-year increases were
largely impacted by a $31.0 million loss from loan sales and $18.4
million in voluntary early retirement charges. The year-over-year
increase was also affected by new business initiatives and
infrastructure investments as well as higher FDIC insurance and
healthcare costs.
- As expected, credit quality metrics continued to increase from
historically low levels. The non-performing loan and asset ratios
both moved to 0.64%; the net charge-off ratio for the quarter was
0.61%, largely driven by the medical office building loan sale and
a shared national C&I credit, while total past dues were 0.13%
of total loans outstanding.
- Provision for credit losses of $72.6 million increased $33.7
million sequentially and rose $47.0 million compared to the third
quarter 2022.
- Drivers of the quarter-over-quarter and year-over-year
increases included higher net charge-offs and increases of 3 bps
and 9 bps, respectively, in the allowance for credit losses
coverage ratio (to loans), reflecting migration trends and the
uncertain economic environment.
Capital Ratios
3Q23
2Q23
3Q22
Common equity Tier 1 capital (CET1)
ratio
10.13
%
*
9.86
%
9.52
%
Tier 1 capital ratio
11.18
*
10.89
10.59
Total risk-based capital ratio
13.12
*
12.80
12.45
Tier 1 leverage ratio
9.38
*
9.23
9.04
Tangible common equity ratio
5.90
6.17
5.52
* Ratios are preliminary.
Capital
- The preliminary CET1 ratio improved 27 bps during the quarter
to 10.13%, and the preliminary total risk-based capital ratio of
13.12% increased 32 bps from the previous quarter as capital
preservation remains the near-term priority given persistent
economic uncertainty.
Third Quarter Earnings Conference Call
Synovus will host an earnings highlights conference call at 8:30
a.m. ET on October 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 $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 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 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, 2022, under the captions
“Cautionary Notice Regarding Forward-Looking Statements” and “Risk
Factors” and in Synovus’ quarterly reports on Form 10-Q and current
reports on Form 8-K. We believe these forward-looking statements
are reasonable; however, undue reliance should not be placed on any
forward-looking statements, which are based on current expectations
and speak only as of the date that they are made. We do not assume
any obligation to update any forward-looking statements as a result
of new information, future developments or otherwise, except as
otherwise may be required by law.
Non-GAAP Financial Measures
The measures entitled adjusted non-interest revenue,
non-interest expense; adjusted revenue; 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 revenue; total non-interest
expense; total revenue; 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 Synovus Financial Corp. 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 revenue
and adjusted revenue are measures used by management to evaluate
non-interest revenue and total revenue exclusive of fair value
adjustment on non-qualified deferred compensation and other items
not indicative of ongoing operations that could impact
period-to-period comparisons. 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)
3Q23
2Q23
3Q22
Adjusted non-interest revenue
Total non-interest revenue
$
107,139
$
112,276
$
104,298
Gain on sale of GLOBALT
(1,929
)
—
—
Fair value adjustment on non-qualified
deferred compensation
1,035
(1,598
)
1,076
Adjusted non-interest revenue
$
106,245
$
110,678
$
105,374
Adjusted non-interest expense
Total non-interest expense
$
353,532
$
307,181
$
294,010
(Loss) gain on other loans held for
sale
(30,954
)
(2,360
)
—
Gain (loss) on early extinguishment of
debt
526
377
—
Restructuring (charges) reversals
(17,319
)
110
(956
)
Valuation adjustment to Visa
derivative
(900
)
(3,027
)
—
Fair value adjustment on non-qualified
deferred compensation
1,035
(1,598
)
1,076
Adjusted non-interest expense
$
305,920
$
300,683
$
294,130
Reconciliation of Non-GAAP Financial
Measures, continued
(dollars in thousands)
3Q23
2Q23
3Q22
Adjusted revenue and tangible
efficiency ratio
Adjusted non-interest expense
$
305,920
$
300,683
$
294,130
Amortization of intangibles
(3,042
)
(2,420
)
(2,118
)
Adjusted tangible non-interest expense
$
302,878
$
298,263
$
292,012
Net interest income
$
443,159
$
455,531
$
477,919
Total non-interest revenue
107,139
112,276
104,298
Total revenue
$
550,298
$
567,807
$
582,217
Tax equivalent adjustment
1,148
1,138
972
Total TE revenue
551,446
568,945
583,189
Gain on sale of GLOBALT
(1,929
)
—
—
Fair value adjustment on non-qualified
deferred compensation
1,035
(1,598
)
1,076
Adjusted revenue
$
550,552
$
567,347
$
584,265
Efficiency ratio-TE
64.11
%
53.99
%
50.41
%
Adjusted tangible efficiency ratio
55.01
52.57
49.98
Adjusted return on average
assets
Net income
$
96,465
$
173,944
$
203,044
Loss (gain) on other loans held for
sale
30,954
2,360
—
(Gain) loss on early extinguishment of
debt
(526
)
(377
)
—
Gain on sale of GLOBALT
(1,929
)
—
—
Restructuring charges (reversals)
17,319
(110
)
956
Valuation adjustment to Visa
derivative
900
3,027
—
Tax effect of adjustments(1)
(11,371
)
(1,193
)
(228
)
Adjusted net income
$
131,812
$
177,651
$
203,772
Net income annualized
$
382,714
$
697,687
$
805,555
Adjusted net income annualized
$
522,950
$
712,556
$
808,443
Total average assets
$
59,916,679
$
60,515,077
$
58,055,978
Return on average assets
0.64
%
1.15
%
1.39
%
Adjusted return on average assets
0.87
1.18
1.39
Adjusted net income available to common
shareholders and adjusted diluted earnings per share
Net income available to common
shareholders
$
87,423
$
165,819
$
194,753
Gain on sale of GLOBALT
(1,929
)
—
—
Loss (gain) on other loans held for
sale
30,954
2,360
—
(Gain) loss on early extinguishment of
debt
(526
)
(377
)
—
Restructuring charges (reversals)
17,319
(110
)
956
Valuation adjustment to Visa
derivative
900
3,027
—
Tax effect of adjustments(1)
(11,371
)
(1,193
)
(228
)
Adjusted net income available to common
shareholders
$
122,770
$
169,526
$
195,481
Weighted average common shares
outstanding, diluted
146,740
146,550
146,418
Diluted earnings per share
$
0.60
$
1.13
$
1.33
Adjusted diluted earnings per share
0.84
1.16
1.34
Reconciliation of Non-GAAP Financial
Measures, continued
(dollars in thousands)
3Q23
2Q23
3Q22
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
$
87,423
$
165,819
$
194,753
Loss (gain) on other loans held for
sale
30,954
2,360
—
(Gain) loss on early extinguishment of
debt
(526
)
(377
)
—
Gain on sale of GLOBALT
(1,929
)
—
—
Restructuring charges (reversals)
17,319
(110
)
956
Valuation adjustment to Visa
derivative
900
3,027
—
Tax effect of adjustments(1)
(11,371
)
(1,193
)
(228
)
Adjusted net income available to common
shareholders
$
122,770
$
169,526
$
195,481
Adjusted net income available to common
shareholders annualized
$
487,077
$
679,967
$
775,550
Amortization of intangibles, tax effected,
annualized
9,131
7,344
6,401
Adjusted net income available to common
shareholders excluding amortization of intangibles annualized
$
496,208
$
687,311
$
781,951
Net income available to common
shareholders annualized
$
346,841
$
665,098
$
772,661
Amortization of intangibles, tax effected,
annualized
9,131
7,344
6,401
Net income available to common
shareholders excluding amortization of intangibles annualized
$
355,972
$
672,442
$
779,062
Total average Synovus Financial Corp.
shareholders' equity less preferred stock
$
4,223,422
$
4,303,722
$
4,141,516
Average goodwill
(476,408
)
(460,118
)
(452,390
)
Average other intangible assets, net
(59,016
)
(36,738
)
(30,214
)
Total average Synovus Financial Corp.
tangible shareholders' equity less preferred stock
$
3,687,998
$
3,806,866
$
3,658,912
Return on average common equity
8.2
%
15.5
%
18.7
%
Adjusted return on average common
equity
11.5
15.8
18.7
Return on average tangible common
equity
9.7
17.7
21.3
Adjusted return on average tangible common
equity
13.5
18.1
21.4
(dollars in thousands)
September 30, 2023
December 31, 2022
September 30, 2022
Tangible common equity ratio
Total assets
$
59,342,930
$
59,731,378
$
58,639,522
Goodwill
(479,851
)
(452,390
)
(452,390
)
Other intangible assets, net
(49,096
)
(27,124
)
(29,242
)
Tangible assets
$
58,813,983
$
59,251,864
$
58,157,890
Total Synovus Financial Corp.
shareholders’ equity
$
4,536,958
$
4,475,801
$
4,229,715
Goodwill
(479,851
)
(452,390
)
(452,390
)
Other intangible assets, net
(49,096
)
(27,124
)
(29,242
)
Preferred Stock, no par value
(537,145
)
(537,145
)
(537,145
)
Tangible common equity
$
3,470,866
$
3,459,142
$
3,210,938
Total Synovus Financial Corp.
shareholders’ equity to total assets ratio
7.65
%
7.49
%
7.21
%
Tangible common equity ratio
5.90
5.84
5.52
(1) An assumed marginal tax rate of 24.3%
for 3Q23 and 2Q23 and 23.8% for 3Q22 was applied.
Amounts may not total due to rounding
Synovus
INCOME STATEMENT DATA
(Unaudited)
(Dollars in thousands, except per share
data)
Nine Months Ended September
30,
2023
2022
'23 vs '22
% Change
Interest income
$
2,262,061
$
1,421,133
59
%
Interest expense
882,619
125,578
603
Net interest income
1,379,442
1,295,555
6
Provision for (reversal of) credit
losses
143,607
49,669
189
Net interest income after provision for
credit losses
1,235,835
1,245,886
(1
)
Non-interest revenue:
Service charges on deposit accounts
67,836
69,428
(2
)
Fiduciary and asset management fees
59,928
59,577
1
Card fees
51,485
45,946
12
Brokerage revenue
63,703
47,038
35
Mortgage banking income
12,138
14,922
(19
)
Capital markets income
27,077
19,704
37
Income from bank-owned life insurance
21,106
22,514
(6
)
Investment securities gains (losses),
net
1,030
—
nm
Recovery of NPA
13,126
—
nm
Other non-interest revenue
35,112
27,768
26
Total non-interest revenue
352,541
306,897
15
Non-interest expense:
Salaries and other personnel expense
551,667
499,081
11
Net occupancy, equipment, and software
expense
131,435
129,538
1
Third-party processing and other
services
64,932
65,486
(1
)
Professional fees
28,707
26,094
10
FDIC insurance and other regulatory
fees
33,266
20,851
60
Restructuring charges (reversals)
16,476
(7,318
)
nm
Loss on other loans held for sale
50,064
—
nm
Other operating expenses
106,019
114,779
(8
)
Total non-interest expense
982,566
848,511
16
Income before income taxes
605,810
704,272
(14
)
Income tax expense
133,242
152,140
(12
)
Net income
472,568
552,132
(14
)
Less: Net income attributable to
noncontrolling interest
(796
)
—
nm
Net income attributable to Synovus
Financial Corp.
473,364
552,132
(14
)
Less: Preferred stock dividends
26,254
24,872
6
Net income available to common
shareholders
$
447,110
$
527,260
(15
)%
Net income per common share, basic
$
3.06
$
3.63
(16
)%
Net income per common share, diluted
3.05
3.60
(15
)
Cash dividends declared per common
share
1.14
1.02
12
Return on average assets *
1.05
%
1.29
%
(24) bps
Return on average common equity *
14.23
16.37
(214
)
Weighted average common shares
outstanding, basic
146,028
145,329
—
%
Weighted average common shares
outstanding, diluted
146,683
146,465
—
nm - not meaningful
bps - basis points
* - ratios are annualized
Amounts may not total due to rounding
Synovus
INCOME STATEMENT DATA
(Unaudited)
(Dollars in thousands, except per share
data)
2023
2022
Third Quarter
Third Quarter
Second Quarter
First Quarter
Fourth Quarter
Third Quarter
'23 vs '22
% Change
Interest income
$
786,039
759,143
716,879
654,654
551,299
43
%
Interest expense
342,880
303,612
236,128
153,308
73,380
367
Net interest income
443,159
455,531
480,751
501,346
477,919
(7
)
Provision for (reversal of) credit
losses
72,572
38,881
32,154
34,884
25,581
184
Net interest income after provision for
credit losses
370,587
416,650
448,597
466,462
452,338
(18
)
Non-interest revenue:
Service charges on deposit accounts
21,385
23,477
22,974
23,639
23,398
(9
)
Fiduciary and asset management fees
20,205
20,027
19,696
18,836
19,201
5
Card fees
18,602
17,059
15,824
15,887
15,101
23
Brokerage revenue
20,237
20,908
22,558
19,996
17,140
18
Mortgage banking income
3,671
4,609
3,858
2,554
5,065
(28
)
Capital markets income
6,377
6,975
13,725
6,998
6,839
(7
)
Income from bank-owned life insurance
6,965
6,878
7,262
7,206
6,792
3
Investment securities gains (losses),
net
—
—
1,030
—
—
nm
Recovery of NPA
—
—
13,126
—
—
nm
Other non-interest revenue
9,697
12,343
13,073
7,323
10,762
(10
)
Total non-interest revenue
107,139
112,276
133,126
102,439
104,298
3
Non-interest expense:
Salaries and other personnel expense
179,741
183,001
188,924
182,629
173,334
4
Net occupancy, equipment, and software
expense
45,790
42,785
42,860
45,192
43,462
5
Third-party processing and other
services
21,439
21,659
21,833
23,130
22,539
(5
)
Professional fees
10,147
9,597
8,963
11,096
6,755
50
FDIC insurance and other regulatory
fees
11,837
11,162
10,268
8,232
7,707
54
Restructuring charges (reversals)
17,319
(110
)
(733
)
(2,372
)
956
nm
Loss on other loans held for sale
30,954
2,360
16,750
—
—
nm
Other operating expenses
36,305
36,727
32,987
41,089
39,257
(8
)
Total non-interest expense
353,532
307,181
321,852
308,996
294,010
20
Income before income taxes
124,194
221,745
259,871
259,905
262,626
(53
)
Income tax expense
27,729
47,801
57,712
54,135
59,582
(53
)
Net income
96,465
173,944
202,159
205,770
203,044
(52
)
Less: Net income attributable to
noncontrolling interest
(630
)
(166
)
—
—
—
nm
Net income attributable to Synovus
Financial Corp.
97,095
174,110
202,159
205,770
203,044
(52
)
Less: Preferred stock dividends
9,672
8,291
8,291
8,291
8,291
17
Net income available to common
shareholders
$
87,423
165,819
193,868
197,479
194,753
(55
)%
Net income per common share, basic
$
0.60
1.13
1.33
1.36
1.34
(55
)%
Net income per common share, diluted
0.60
1.13
1.32
1.35
1.33
(55
)
Cash dividends declared per common
share
0.38
0.38
0.38
0.34
0.34
12
Return on average assets *
0.64
%
1.15
1.36
1.38
1.39
(75) bps
Return on average common equity *
8.2
15.5
19.2
20.9
18.7
(1,050
)
Weighted average common shares
outstanding, basic
146,170
146,113
145,799
145,467
145,386
1
%
Weighted average common shares
outstanding, diluted
146,740
146,550
146,727
146,528
146,418
—
nm - not meaningful
bps - basis points
* - ratios are annualized
Amounts may not total due to rounding
Synovus
BALANCE SHEET DATA
September 30, 2023
December 31, 2022
September 30, 2022
(Unaudited)
(In thousands, except share data)
ASSETS
Cash and due from banks
$
604,631
$
624,097
$
516,163
Interest-bearing funds with Federal
Reserve Bank
1,431,356
1,280,684
1,260,748
Interest earning deposits with banks
65,468
34,632
32,445
Federal funds sold and securities
purchased under resale agreements
36,176
38,367
58,448
Cash, cash equivalents, and restricted
cash
2,137,631
1,977,780
1,867,804
Investment securities available for sale,
at fair value
9,237,191
9,678,103
9,587,508
Loans held for sale (includes $48,994,
$51,136 and $56,517 measured at fair value, respectively)
66,558
391,502
696,450
Loans, net of deferred fees and costs
43,679,910
43,716,353
42,571,458
Allowance for loan losses
(477,532
)
(443,424
)
(421,359
)
Loans, net
43,202,378
43,272,929
42,150,099
Cash surrender value of bank-owned life
insurance
1,107,092
1,089,280
1,084,060
Premises, equipment, and software, net
364,054
370,632
376,823
Goodwill
479,851
452,390
452,390
Other intangible assets, net
49,096
27,124
29,242
Other assets
2,699,079
2,471,638
2,395,146
Total assets
$
59,342,930
$
59,731,378
$
58,639,522
LIABILITIES AND EQUITY
Liabilities:
Deposits:
Non-interest-bearing deposits
$
12,976,574
$
15,639,899
$
16,359,551
Interest-bearing deposits
37,227,316
33,231,660
31,338,013
Total deposits
50,203,890
48,871,559
47,697,564
Federal funds purchased and securities
sold under repurchase agreements
98,270
146,588
240,210
Other short-term borrowings
2,362
603,384
614,232
Long-term debt
2,704,701
4,109,597
4,434,327
Other liabilities
1,772,139
1,524,449
1,423,474
Total liabilities
54,781,362
55,255,577
54,409,807
Equity:
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 170,859,506, 170,141,492 and 170,097,791
respectively; outstanding 146,204,648, 145,486,634 and 145,442,933
respectively
170,860
170,141
170,098
Additional paid-in capital
3,940,507
3,920,346
3,916,729
Treasury stock, at cost; 24,654,858
shares
(944,484
)
(944,484
)
(944,484
)
Accumulated other comprehensive income
(loss), net
(1,679,404
)
(1,442,117
)
(1,534,314
)
Retained earnings
2,512,334
2,234,770
2,084,541
Total Synovus Financial Corp.
shareholders’ equity
4,536,958
4,475,801
4,229,715
Noncontrolling interest in subsidiary
24,610
—
—
Total equity
4,561,568
4,475,801
4,229,715
Total liabilities and equity
$
59,342,930
$
59,731,378
$
58,639,522
Synovus
AVERAGE BALANCES, INTEREST, AND
YIELDS/RATES
(Unaudited)
Third Quarter 2023
Second Quarter 2023
Third Quarter 2022
(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)
$
34,990,459
$
579,177
6.57
%
$
35,628,637
$
566,823
6.38
%
$
32,836,799
$
384,995
4.65
%
Consumer loans (1) (2)
8,509,757
108,065
5.06
8,470,478
104,545
4.94
8,931,573
94,425
4.21
Less: Allowance for loan losses
(461,385
)
—
—
(466,700
)
—
—
(419,160
)
—
—
Loans, net
43,038,831
687,242
6.34
43,632,415
671,368
6.17
41,349,212
479,420
4.60
Investment securities available for
sale
11,194,291
61,642
2.20
11,200,717
60,421
2.16
11,126,705
53,550
1.92
Trading account assets
16,186
237
5.86
21,328
309
5.80
16,771
81
1.93
Other earning assets(4)
1,237,445
16,369
5.17
1,446,425
18,081
4.95
1,012,717
5,791
2.24
FHLB and Federal Reserve Bank stock
244,906
3,783
6.18
280,248
4,301
6.14
244,879
1,412
2.31
Mortgage loans held for sale
53,904
879
6.52
54,603
852
6.24
66,601
862
5.18
Other loans held for sale
881,067
17,035
7.57
546,224
4,949
3.58
892,805
11,155
4.89
Total interest earning assets
56,666,630
$
787,187
5.51
%
57,181,960
$
760,281
5.33
%
54,709,690
$
552,271
4.00
%
Cash and due from banks
509,511
646,066
557,537
Premises and equipment
365,568
369,039
383,189
Other real estate
—
—
2,398
Cash surrender value of bank-owned life
insurance
1,102,626
1,095,866
1,080,914
Other assets(5)
1,272,344
1,222,146
1,322,251
Total assets
$
59,916,679
$
60,515,077
$
58,055,979
Liabilities and Equity
Interest-bearing liabilities:
Interest-bearing demand deposits
$
10,114,171
$
52,983
2.08
%
$
9,891,375
$
41,803
1.70
%
$
8,437,408
$
5,782
0.27
%
Money market accounts
13,147,465
95,339
2.88
13,468,210
85,397
2.54
15,410,964
20,696
0.53
Savings deposits
1,178,322
280
0.09
1,276,040
281
0.09
1,508,312
84
0.02
Time deposits
6,180,584
59,972
3.85
4,866,221
39,551
3.26
2,270,163
2,428
0.42
Brokered deposits
6,442,690
83,486
5.14
6,342,751
74,748
4.73
3,899,669
17,927
1.82
Federal funds purchased and securities
sold under repurchase agreements
73,344
296
1.58
88,591
351
1.57
240,412
641
1.04
Other short-term borrowings
1,722
—
—
455,050
5,566
4.84
709,078
3,666
2.02
Long-term debt
3,230,374
50,524
6.18
3,821,126
55,915
5.82
2,656,939
22,156
3.29
Total interest-bearing liabilities
40,368,672
$
342,880
3.37
%
40,209,364
$
303,612
3.03
%
35,132,945
$
73,380
0.83
%
Non-interest-bearing demand deposits
13,049,343
13,874,482
16,904,353
Other liabilities
1,713,131
1,556,863
1,340,020
Total equity
4,785,533
4,874,368
4,678,661
Total liabilities and equity
$
59,916,679
$
60,515,077
$
58,055,979
Net interest income and net interest
margin, taxable equivalent (6)
$
444,307
3.11
%
$
456,669
3.20
%
$
478,891
3.47
%
Less: taxable-equivalent adjustment
1,148
1,138
972
Net interest income
$
443,159
$
455,531
$
477,919
(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 2023 — $11.8 million, Second Quarter
2023 — $11.3 million, and Third Quarter 2022 — $11.9 million.
(3)
Reflects taxable-equivalent
adjustments, using the statutory federal tax rate of 21%, in
adjusting interest on tax-exempt loans 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
$(1.60) billion, $(1.46) billion, and $(1.06) billion for the Third
Quarter 2023, Second Quarter 2023, and Third Quarter 2022,
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,
2023
2022
(dollars in thousands)
Average Balance
Interest
Yield/
Rate
Average Balance
Interest
Yield/
Rate
Assets
Interest earning assets:
Commercial loans (1) (2) (3)
$
35,216,487
$
1,672,529
6.35
%
$
31,828,932
$
974,024
4.09
%
Consumer loans (1) (2)
8,580,029
316,757
4.92
8,749,927
259,619
3.95
Less: Allowance for loan losses
(457,818
)
(419,478
)
Loans, net
43,338,698
1,989,286
6.14
40,159,381
1,233,643
4.11
Investment securities available for
sale
11,229,290
183,118
2.17
11,179,378
151,111
1.80
Trading account assets
16,302
671
5.49
12,640
193
2.04
Other earning assets(4)
1,398,211
51,660
4.87
1,245,102
8,267
0.88
FHLB and Federal Reserve Bank stock
277,136
11,439
5.50
195,238
3,917
2.67
Mortgage loans held for sale
48,398
2,297
6.33
85,126
2,665
4.17
Other loans held for sale
625,262
26,995
5.69
739,627
24,133
4.30
Total interest earning assets
56,933,297
$
2,265,466
5.32
%
53,616,492
$
1,423,929
3.55
%
Cash and due from banks
593,023
548,322
Premises and equipment
367,332
389,083
Other real estate
—
8,498
Cash surrender value of bank-owned life
insurance
1,096,567
1,076,381
Other assets(5)
1,187,026
1,515,226
Total assets
$
60,177,245
$
57,154,002
Liabilities and Equity
Interest-bearing liabilities:
Interest-bearing demand deposits
$
9,702,651
$
118,007
1.63
%
$
9,162,684
$
11,752
0.17
%
Money market accounts
13,665,672
253,351
2.48
15,592,671
32,896
0.28
Savings deposits
1,274,142
771
0.08
1,491,893
223
0.02
Time deposits
4,892,146
121,019
3.31
2,700,505
6,254
0.31
Brokered deposits
6,116,392
214,627
4.69
3,192,848
27,952
1.17
Federal funds purchased and securities
sold under repurchase agreements
98,212
1,317
1.77
227,335
871
0.51
Other short-term borrowings
705,292
24,559
4.59
400,862
4,561
1.50
Long-term debt
3,400,156
148,968
5.80
1,512,059
41,069
3.61
Total interest-bearing liabilities
39,854,663
$
882,619
2.96
%
34,280,857
$
125,578
0.49
%
Non-interest-bearing demand deposits
13,972,152
16,786,794
Other liabilities
1,592,230
1,243,900
Total equity
4,758,200
4,842,451
Total liabilities and equity
$
60,177,245
$
57,154,002
Net interest income, taxable equivalent
net interest margin (6)
$
1,382,847
3.25
%
$
1,298,351
3.24
%
Less: taxable-equivalent adjustment
3,405
2,796
Net interest income
$
1,379,442
$
1,295,555
(1)
Average loans are shown net of
deferred fees and costs. NPLs are included.
(2)
Interest income includes net loan
fees as follows: 2023 — $34.6 million and 2022 — $45.6 million.
(3)
Reflects taxable-equivalent
adjustments, using the statutory federal tax rate of 21%, in
adjusting interest on tax-exempt loans 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
$(1.53) billion and $(747.7) million for the nine months ended
September 30, 2023 and 2022, 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)
Total Loans
Total Loans
Linked Quarter
Total Loans
Year/Year
(Dollars in thousands)
Loan Type
September 30, 2023
June 30, 2023
% Change
September 30, 2022
% Change
Commercial, Financial, and
Agricultural
$
14,498,966
$
14,166,890
2
%
$
13,254,966
9
%
Owner-Occupied
8,281,988
8,364,342
(1
)
7,957,550
4
Total Commercial &
Industrial
22,780,954
22,531,232
1
21,212,516
7
Multi-Family
3,930,617
3,597,497
9
2,949,172
33
Hotels
1,790,094
1,771,381
1
1,712,016
5
Office Buildings
1,911,095
3,031,806
(37
)
2,945,771
(35
)
Shopping Centers
1,327,770
1,329,492
—
1,441,385
(8
)
Warehouses
985,723
1,068,734
(8
)
943,961
4
Other Investment Property
1,432,456
1,471,356
(3
)
1,246,099
15
Total Investment Properties
11,377,755
12,270,266
(7
)
11,238,404
1
1-4 Family Construction
224,091
205,459
9
249,840
(10
)
1-4 Family Investment Mortgage
396,813
410,267
(3
)
389,787
2
Total 1-4 Family Properties
620,904
615,726
1
639,627
(3
)
Commercial Development
64,212
60,910
5
92,159
(30
)
Residential Development
92,209
98,229
(6
)
119,019
(23
)
Land Acquisition
239,773
248,767
(4
)
198,756
21
Land and Development
396,194
407,906
(3
)
409,934
(3
)
Total Commercial Real Estate
12,394,853
13,293,898
(7
)
12,287,965
1
Consumer Mortgages
5,391,282
5,379,284
—
5,166,928
4
Home Equity
1,784,356
1,773,987
1
1,708,246
4
Credit Cards
191,046
187,677
2
197,978
(4
)
Other Consumer Loans
1,137,419
1,187,459
(4
)
1,997,825
(43
)
Total Consumer
8,504,103
8,528,407
—
9,070,977
(6
)
Total
$
43,679,910
$
44,353,537
(2
)%
$
42,571,458
3
%
NON-PERFORMING LOANS
COMPOSITION
(Unaudited)
Total
Non-performing Loans
Total
Non-performing Loans
Linked Quarter
Total
Non-performing Loans
Year/Year
(Dollars in thousands)
Loan Type
September 30, 2023
June 30, 2023
% Change
September 30, 2022
% Change
Commercial, Financial, and
Agricultural
$
97,468
$
144,415
(33
)%
$
59,275
64
%
Owner-Occupied
84,505
22,197
281
8,433
902
Total Commercial &
Industrial
181,973
166,612
9
67,708
169
Multi-Family
1,702
1,748
(3
)
2,550
(33
)
Office Buildings
27,810
28,024
(1
)
884
nm
Shopping Centers
653
699
(7
)
742
(12
)
Warehouses
207
218
(5
)
223
(7
)
Other Investment Property
572
664
(14
)
641
(11
)
Total Investment Properties
30,944
31,353
(1
)
5,040
514
1-4 Family Construction
—
632
nm
55
nm
1-4 Family Investment Mortgage
3,386
3,525
(4
)
3,036
12
Total 1-4 Family Properties
3,386
4,157
(19
)
3,091
10
Commercial Development
—
—
nm
422
(100
)
Residential Development
267
267
—
267
—
Land Acquisition
538
871
(38
)
980
(45
)
Land and Development
805
1,138
(29
)
1,669
(52
)
Total Commercial Real Estate
35,135
36,648
(4
)
9,800
259
Consumer Mortgages
43,863
41,877
5
32,527
35
Home Equity
11,620
9,936
17
7,121
63
Other Consumer Loans
7,941
6,433
23
4,938
61
Total Consumer
63,424
58,246
9
44,586
42
Total
$
280,532
$
261,506
7
%
$
122,094
130
%
Synovus
CREDIT QUALITY DATA
(Unaudited)
(Dollars in thousands)
2023
2022
Third Quarter
Third
Second
First
Fourth
Third
'23 vs '22
Quarter
Quarter
Quarter
Quarter
Quarter
% Change
Non-performing Loans (NPLs)
$
280,532
261,506
182,460
128,061
122,094
130
%
Impaired Loans Held for Sale
—
—
—
—
447
(100
)
Other Real Estate and Other Assets
—
—
—
15,320
15,320
(100
)
Non-performing Assets (NPAs)
280,532
261,506
182,460
143,381
137,861
103
Allowance for Loan Losses (ALL)
477,532
471,238
457,010
443,424
421,359
13
Reserve for Unfunded Commitments
55,185
55,729
57,473
57,455
57,936
(5
)
Allowance for Credit Losses (ACL)
532,717
526,967
514,483
500,879
479,295
11
Net Charge-Offs - Quarter
66,822
26,396
18,550
13,300
4,682
Net Charge-Offs - YTD
111,768
44,946
18,550
53,156
39,856
Net Charge-Offs / Average Loans - Quarter
(1)
0.61
%
0.24
0.17
0.12
0.04
Net Charge-Offs / Average Loans - YTD
(1)
0.34
0.20
0.17
0.13
0.13
NPLs / Loans
0.64
0.59
0.41
0.29
0.29
NPAs / Loans, ORE and specific other
assets
0.64
0.59
0.41
0.33
0.32
ACL/Loans
1.22
1.19
1.17
1.15
1.13
ALL/Loans
1.09
1.06
1.04
1.01
0.99
ACL/NPLs
189.90
201.51
281.97
391.13
392.56
ALL/NPLs
170.22
180.20
250.47
346.26
345.11
Past Due Loans over 90 days and Still
Accruing
$
3,792
3,643
3,529
3,373
3,443
10
As a Percentage of Loans Outstanding
0.01
%
0.01
0.01
0.01
0.01
Total Past Due Loans and Still
Accruing
$
54,974
84,946
55,053
65,568
63,545
(13
)
As a Percentage of Loans Outstanding
0.13
%
0.19
0.12
0.15
0.15
(1) Ratio is annualized.
SELECTED CAPITAL INFORMATION
(1)
(Unaudited)
(Dollars in thousands)
September 30, 2023
December 31, 2022
September 30, 2022
Common Equity Tier 1 Capital Ratio
10.13
%
9.63
9.52
Tier 1 Capital Ratio
11.18
10.68
10.59
Total Risk-Based Capital Ratio
13.12
12.54
12.45
Tier 1 Leverage Ratio
9.38
9.07
9.04
Total Synovus Financial Corp.
shareholders' equity as a Percentage of Total Assets
7.65
7.49
7.21
Tangible Common Equity Ratio (2) (4)
5.90
5.84
5.52
Book Value Per Common Share (3)
$
27.36
27.07
25.39
Tangible Book Value Per Common Share
(2)
23.74
23.78
22.08
(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 Synovus Financial Corp. 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/20231018816984/en/
Media Contact Audria Belton Media Relations
media@synovus.com
Investor Contact Jennifer Demba Investor Relations
investorrelations@synovus.com
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