Diluted earnings per share of $1.13 vs.
$1.16 in 2Q22
Adjusted diluted earnings per share of $1.16
vs. $1.17 in 2Q22
Synovus Financial Corp. (NYSE: SNV) today reported financial
results for the quarter ended June 30, 2023. “Our second quarter
financial performance reflects the strength and resiliency of our
team, with pre-provision net revenue growing 8% year over year and
adjusted return on tangible common equity at 18%,” said Synovus
Chairman, CEO and President Kevin Blair. “Strong deposit
production, increased capital levels and stability in credit
metrics, as we saw during the second quarter, all serve as
mitigants to the risks of an environment with heightened levels of
volatility and uncertainty. And as we position the company for
sustainable, long-term growth, we’re proactively optimizing the
balance sheet, we’ve adjusted revenue expectations in response to
slower economic growth trends and deposit remixing, and we’ve
significantly reduced expense growth. Even as we execute amid
lingering challenging market conditions, we remain fully dedicated
to providing reliable and innovative financial solutions to our
clients. Their trust and confidence in our institution have been
paramount to our growth and sustained performance.”
Second Quarter 2023 Highlights
- Total revenue of $567.8 million increased $45.2 million, or 9%,
compared to the second quarter 2022, driven by net interest income
growth of 7%, in addition to growth in core client fee income,
excluding mortgage, of 7% year-over-year.
- Pre-provision net revenue of $260.6 million increased $20.0
million, or 8%, compared to the second quarter 2022.
- Period-end loans increased $308.6 million sequentially,
primarily driven by fundings of existing CRE commitments and growth
in consumer loans, somewhat offset by lower utilization from
C&I commitments.
- Total deposits increased $126.5 million sequentially and
included remixing due to the rate environment.
- Credit quality metrics at solid levels with a net charge-off
ratio of 0.24%, a modest increase in the ACL ratio to 1.19%, and
broader stable performance across the loan portfolio, asset types,
and industries.
- Preliminary CET1 ratio of 9.85% increased 8 bps sequentially as
capital generation continued to support client loan growth while
also buffering capital levels given economic uncertainty.
Second Quarter Summary
Reported
Adjusted
(dollars in thousands)
2Q23
1Q23
2Q22
2Q23
1Q23
2Q22
Net income available to common
shareholders
$
165,819
$
193,868
$
169,761
$
169,526
$
195,276
$
171,018
Diluted earnings per share
1.13
1.32
1.16
1.16
1.33
1.17
Total revenue
567,807
613,877
522,654
567,347
599,469
526,854
Total loans
44,353,537
44,044,939
41,204,780
N/A
N/A
N/A
Total deposits
50,080,392
49,953,936
49,034,700
N/A
N/A
N/A
Return on avg assets
1.15
%
1.36
%
1.26
%
1.18
%
1.37
%
1.27
%
Return on avg common equity
15.5
19.2
16.5
15.8
19.4
16.6
Return on avg tangible common equity
17.7
21.9
18.8
18.1
22.1
19.0
Net interest margin
3.20
3.43
3.22
N/A
N/A
N/A
Efficiency ratio-TE(1)(2)
53.99
52.33
53.87
52.57
50.48
53.43
NCO ratio-QTD
0.24
0.17
0.16
N/A
N/A
N/A
NPA ratio
0.59
0.41
0.33
N/A
N/A
N/A
(1)
Taxable equivalent
(2)
Adjusted tangible efficiency ratio
Balance Sheet
Loans*
(dollars in millions)
2Q23
1Q23
Linked
Quarter
Change
Linked
Quarter %
Change
2Q22
Year/Year
Change
Year/Year
% Change
Commercial & industrial
$
22,531.2
$
22,600.2
$
(68.9
)
—
%
$
20,778.3
$
1,752.9
8
%
Commercial real estate
13,293.9
12,996.8
297.1
2
11,503.4
1,790.5
16
Consumer
8,528.4
8,448.0
80.4
1
8,923.0
(394.6
)
(4
)
Total loans
$
44,353.5
$
44,044.9
$
308.6
1
%
$
41,204.8
$
3,148.8
8
%
*Amounts may not total due to rounding
- Total loans ended the quarter at $44.35 billion, up $308.6
million sequentially.
- Commercial and industrial (C&I) loans decreased $68.9
million sequentially, primarily driven by lower utilization from
existing commitments and a strategic decline in syndicated
loans.
- CRE loans increased $297.1 million sequentially, mostly due to
draws on existing multi-family commitments and continued low levels
of pay-offs.
- Consumer loans increased $80.4 million sequentially, largely a
result of growth in portfolio mortgages somewhat offset by
continued third-party decline from runoff.
Deposits*
(dollars in millions)
2Q23
1Q23
Linked
Quarter
Change
Linked
Quarter %
Change
2Q22
Year/Year
Change
Year/Year
% Change
Non-interest-bearing DDA
$
12,945.5
$
13,827.6
$
(882.0
)
(6
)%
$
15,781.1
$
(2,835.6
)
(18
)%
Interest-bearing DDA
6,255.3
5,841.0
414.3
7
6,327.1
(71.7
)
(1
)
Money market
10,803.7
11,776.0
(972.3
)
(8
)
13,793.0
(2,989.3
)
(22
)
Savings
1,222.9
1,312.7
(89.8
)
(7
)
1,498.7
(275.9
)
(18
)
Public funds
7,031.4
6,888.2
143.2
2
5,863.9
1,167.5
20
Time deposits
5,291.8
4,060.3
1,231.5
30
2,147.8
3,144.1
146
Brokered deposits
6,529.8
6,248.3
281.5
5
3,623.1
2,906.7
80
Total deposits
$
50,080.4
$
49,953.9
$
126.5
—
%
$
49,034.7
$
1,045.7
2
%
*Amounts may not total due to rounding
- Total deposits ended the quarter at $50.08 billion, up $126.5
million sequentially
- Money market deposits were primarily impacted by the continued
shifting to time deposits.
- Non-interest-bearing DDAs were impacted by pressures from
seasonal cash deployment of excess funds and continued pressures
from the higher rate environment.
- Total deposit costs increased 51 bps sequentially to 1.95% and
were impacted by the anticipated pricing lags on core
interest-bearing deposits (excludes brokered deposits) as well as
the decline in non-interest-bearing DDAs.
Income Statement Summary**
(in thousands, except per share data)
2Q23
1Q23
Linked
Quarter
Change
Linked
Quarter %
Change
2Q22
Year/Year
Change
Year/Year
% Change
Net interest income
$
455,531
$
480,751
$
(25,220
)
(5
)%
$
425,388
$
30,143
7
%
Non-interest revenue
112,276
133,126
(20,850
)
(16
)
97,266
15,010
15
Non-interest expense
307,181
321,852
(14,671
)
(5
)
282,051
25,130
9
Provision for (reversal of) credit
losses
38,881
32,154
6,727
21
12,688
26,193
206
Income before taxes
$
221,745
$
259,871
$
(38,126
)
(15
)%
$
227,915
$
(6,170
)
(3
)%
Income tax expense
47,801
57,712
(9,911
)
(17
)
49,863
(2,062
)
(4
)
Net income
173,944
202,159
(28,215
)
(14
)
178,052
(4,108
)
(2
)
Less: Net income (loss) attributable to
noncontrolling interest
(166
)
—
(166
)
NM
—
(166
)
NM
Net income attributable to Synovus
Financial Corp.
174,110
202,159
(28,049
)
(14
)
178,052
(3,942
)
(2
)
Less: Preferred stock dividends
8,291
8,291
—
—
8,291
—
—
Net income available to common
shareholders
$
165,819
$
193,868
$
(28,049
)
(14
)%
$
169,761
$
(3,942
)
(2
)%
Weighted average common shares
outstanding, diluted
146,550
146,727
(177
)
—
%
146,315
235
—
%
Diluted earnings per share
$
1.13
$
1.32
$
(0.19
)
(14
)
$
1.16
$
(0.03
)
(3
)
Adjusted diluted earnings per share
1.16
1.33
(0.17
)
(13
)
1.17
(0.01
)
(1
)
Effective tax rate
21.56
%
22.21
%
21.88
%
** Amounts may not total due to
rounding
Core Performance
- Net interest income of $455.5 million was down $25.2 million
sequentially, or 5%, and increased $30.1 million, or 7%, compared
to the second quarter 2022.
- The quarter-over-quarter decline was largely driven by
increases in deposit costs and negative re- mixing in
non-interest-bearing DDA deposits partially offset by higher asset
yields and earning asset growth.
- Net interest margin was 3.20%, down 23 bps sequentially,
impacted by the same factors mentioned above.
- The year-over-year increase resulted primarily from loan growth
and interest rate increases somewhat offset by higher deposit costs
and negative remixing from non-interest DDA deposits.
- Non-interest revenue decreased $20.9 million, or 16%,
sequentially and increased $15.0 million, or 15%, compared to the
second quarter 2022. Adjusted non-interest revenue decreased $6.9
million, or 6%, sequentially and increased $10.2 million, or 10%,
compared to the second quarter 2022.
- The quarter-over-quarter decrease was impacted by the prior
quarter's $13.1 million one-time benefit from the recovery of a
non-performing asset related to the regulatory approval of our
Qualpay investment and strong growth in capital markets income in
the first quarter 2023, which normalized this quarter.
- The year-over-year increase primarily related to higher wealth
revenue from diverse sources including fees from short-term
liquidity management products and a $7 million write-down in the
second quarter 2022 on a minority tech investment.
- Non-interest expense decreased $14.7 million, or 5%,
sequentially and increased $25.1 million, or 9%, compared to the
second quarter 2022. Adjusted non-interest expense decreased $3.8
million, or 1%, sequentially and increased $17.0 million, or 6%,
compared to the second quarter 2022.
- The quarter-over-quarter decrease was largely due to the
previous quarter's $16.8 million loss associated with the move of
third-party consumer loans to held for sale in addition to
seasonally elevated personnel expense in the first quarter
2023.
- The year-over-year increase primarily resulted from new
business initiatives and infrastructure investments as well as
investments in our workforce and higher FDIC insurance and
healthcare costs.
- Overall credit performance and the credit quality of our recent
originations was solid. The non-performing loan and asset ratios
both moved to 0.59%; the net charge-off ratio for the quarter was
0.24%, and total past dues were 0.19% of total loans
outstanding.
- Provision for credit losses of $38.9 million increased $6.7
million sequentially and increased $26.2 million compared to the
second quarter 2022.
- Drivers of the quarter-over-quarter increase included higher
net charge-offs and a modest increase of 2 bps in the allowance for
credit losses coverage ratio (to loans).
- Drivers of the year-over-year increase largely included an 8
bps increase in the allowance for credit losses coverage ratio (to
loans), which resulted from deterioration in forecasted economic
scenarios mostly offset by continued solid loan portfolio
performance, and higher net charge-offs.
Capital Ratios
2Q23
1Q23
2Q22
Common equity Tier 1 capital (CET1)
ratio
9.85
%
*
9.77
%
9.46
%
Tier 1 capital ratio
10.88
*
10.81
10.56
Total risk-based capital ratio
12.79
*
12.72
12.43
Tier 1 leverage ratio
9.23
*
9.14
9.03
Tangible common equity ratio
6.17
6.12
6.26
* Ratios are preliminary.
Capital
- Preliminary CET1 ratio improved 8 bps during the quarter to
9.85%, and the preliminary total risk-based capital ratio of 12.79%
increased 7 bps from the previous quarter as core earnings
continued to support capital generation.
Second Quarter Earnings Conference Call
Synovus will host an earnings highlights conference call at 8:30
a.m. ET on July 20, 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 $61 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 revenue exclusive of net
investment securities gains (losses), 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)
2Q23
1Q23
2Q22
Adjusted non-interest revenue
Total non-interest revenue
$
112,276
$
133,126
$
97,266
Investment securities (gains) losses,
net
—
(1,030
)
—
Recovery of NPA
—
(13,126
)
—
Fair value adjustment on non-qualified
deferred compensation
(1,598
)
(1,371
)
3,240
Adjusted non-interest revenue
$
110,678
$
117,599
$
100,506
Adjusted non-interest expense
Total non-interest expense
$
307,181
$
321,852
$
282,051
(Loss) gain on other loans held for
sale
(2,360
)
(16,750
)
—
Gain (loss) on early extinguishment of
debt
377
—
—
Restructuring (charges) reversals
110
733
1,850
Valuation adjustment to Visa
derivative
(3,027
)
—
(3,500
)
Fair value adjustment on non-qualified
deferred compensation
(1,598
)
(1,371
)
3,240
Adjusted non-interest expense
$
300,683
$
304,464
$
283,641
Reconciliation of Non-GAAP Financial
Measures, continued
(dollars in thousands)
2Q23
1Q23
2Q22
Adjusted revenue and tangible
efficiency ratio
Adjusted non-interest expense
$
300,683
$
304,464
$
283,641
Amortization of intangibles
(2,420
)
(1,857
)
(2,118
)
Adjusted tangible non-interest expense
$
298,263
$
302,607
$
281,523
Net interest income
$
455,531
$
480,751
$
425,388
Total non-interest revenue
112,276
133,126
97,266
Total revenue
$
567,807
$
613,877
$
522,654
Tax equivalent adjustment
1,138
1,119
960
Total TE revenue
568,945
614,996
523,614
Recovery of NPA
—
(13,126
)
—
Investment securities losses (gains),
net
—
(1,030
)
—
Fair value adjustment on non-qualified
deferred compensation
(1,598
)
(1,371
)
3,240
Adjusted revenue
$
567,347
$
599,469
$
526,854
Efficiency ratio-TE
53.99
%
52.33
%
53.87
%
Adjusted tangible efficiency ratio
52.57
50.48
53.43
Adjusted return on average
assets
Net income
$
173,944
$
202,159
$
178,052
Recovery of NPA
—
(13,126
)
—
Loss (gain) on other loans held for
sale
2,360
16,750
—
(Gain) loss on early extinguishment of
debt
(377
)
—
—
Restructuring charges (reversals)
(110
)
(733
)
(1,850
)
Valuation adjustment to Visa
derivative
3,027
—
3,500
Investment securities losses (gains),
net
—
(1,030
)
—
Tax effect of adjustments(1)
(1,193
)
(453
)
(393
)
Adjusted net income
$
177,651
$
203,567
$
179,309
Net income annualized
$
697,687
$
819,867
$
714,165
Adjusted net income annualized
$
712,556
$
825,577
$
719,206
Total average assets
$
60,515,077
$
60,133,561
$
56,536,940
Return on average assets
1.15
%
1.36
%
1.26
%
Adjusted return on average assets
1.18
1.37
1.27
Adjusted net income available to common
shareholders and adjusted diluted earnings per share
Net income available to common
shareholders
$
165,819
$
193,868
$
169,761
Recovery of NPA
—
(13,126
)
—
Loss (gain) on other loans held for
sale
2,360
16,750
—
(Gain) loss on early extinguishment of
debt
(377
)
—
—
Restructuring charges (reversals)
(110
)
(733
)
(1,850
)
Valuation adjustment to Visa
derivative
3,027
—
3,500
Investment securities losses (gains),
net
—
(1,030
)
—
Tax effect of adjustments(1)
(1,193
)
(453
)
(393
)
Adjusted net income available to common
shareholders
$
169,526
$
195,276
$
171,018
Weighted average common shares
outstanding, diluted
146,550
146,727
146,315
Diluted earnings per share
$
1.13
$
1.32
$
1.16
Adjusted diluted earnings per share
1.16
1.33
1.17
Reconciliation of Non-GAAP Financial
Measures, continued
(dollars in thousands)
2Q23
1Q23
2Q22
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
$
165,819
$
193,868
$
169,761
Recovery of NPA
—
(13,126
)
—
Loss (gain) on other loans held for
sale
2,360
16,750
—
(Gain) loss on early extinguishment of
debt
(377
)
—
—
Restructuring charges (reversals)
(110
)
(733
)
(1,850
)
Valuation adjustment to Visa
derivative
3,027
—
3,500
Investment securities losses (gains),
net
—
(1,030
)
—
Tax effect of adjustments(1)
(1,193
)
(453
)
(393
)
Adjusted net income available to common
shareholders
$
169,526
$
195,276
$
171,018
Adjusted net income available to common
shareholders annualized
$
679,967
$
791,953
$
685,951
Amortization of intangibles, tax effected,
annualized
7,344
5,699
6,471
Adjusted net income available to common
shareholders excluding amortization of intangibles annualized
$
687,311
$
797,652
$
692,422
Net income available to common
shareholders annualized
$
665,098
$
786,242
$
680,910
Amortization of intangibles, tax effected,
annualized
7,344
5,699
6,471
Net income available to common
shareholders excluding amortization of intangibles annualized
$
672,442
$
791,941
$
687,381
Total average Synovus Financial Corp.
shareholders' equity less preferred stock
$
4,303,722
$
4,088,777
$
4,132,536
Average goodwill
(460,118
)
(452,390
)
(452,390
)
Average other intangible assets, net
(36,738
)
(26,245
)
(32,387
)
Total average Synovus Financial Corp.
tangible shareholders' equity less preferred stock
$
3,806,866
$
3,610,142
$
3,647,759
Return on average common equity
15.5
%
19.2
%
16.5
%
Adjusted return on average common
equity
15.8
19.4
16.6
Return on average tangible common
equity
17.7
21.9
18.8
Adjusted return on average tangible common
equity
18.1
22.1
19.0
(dollars in thousands)
June 30, 2023
December 31, 2022
June 30, 2022
Tangible common equity ratio
Total assets
$
60,655,591
$
59,731,378
$
57,382,745
Goodwill
(475,573
)
(452,390
)
(452,390
)
Other intangible assets, net
(61,538
)
(27,124
)
(31,360
)
Tangible assets
$
60,118,480
$
59,251,864
$
56,898,995
Total Synovus Financial Corp.
shareholders’ equity
$
4,782,528
$
4,475,801
$
4,584,438
Goodwill
(475,573
)
(452,390
)
(452,390
)
Other intangible assets, net
(61,538
)
(27,124
)
(31,360
)
Preferred Stock, no par value
(537,145
)
(537,145
)
(537,145
)
Tangible common equity
$
3,708,272
$
3,459,142
$
3,563,543
Total Synovus Financial Corp.
shareholders’ equity to total assets ratio
7.88
%
7.49
%
7.99
%
Tangible common equity ratio
6.17
5.84
6.26
(1) An assumed marginal tax rate of 24.3%
for 2Q23 and 1Q23 and 23.8% for 2Q22 was applied.
Amounts may not total due to
rounding
Synovus
INCOME STATEMENT DATA
(Unaudited)
(Dollars in thousands, except per share
data)
Six Months Ended June
30,
2023
2022
23 vs '22
% Change
Interest income
$
1,476,022
$
869,834
70
%
Interest expense
539,739
52,199
934
Net interest income
936,283
817,635
15
Provision for (reversal of) credit
losses
71,035
24,088
195
Net interest income after provision for
credit losses
865,248
793,547
9
Non-interest revenue:
Service charges on deposit accounts
46,451
46,030
1
Fiduciary and asset management fees
39,723
40,377
(2
)
Card fees
32,884
30,846
7
Brokerage revenue
43,466
29,898
45
Mortgage banking income
8,467
9,857
(14
)
Capital markets income
20,700
12,864
61
Income from bank-owned life insurance
14,140
15,722
(10
)
Investment securities gains (losses),
net
1,030
—
nm
Recovery of NPA
13,126
—
nm
Other non-interest revenue
25,415
17,006
49
Total non-interest revenue
245,402
202,600
21
Non-interest expense:
Salaries and other personnel expense
371,926
325,747
14
Net occupancy, equipment, and software
expense
85,645
86,076
(1
)
Third-party processing and other
services
43,493
42,947
1
Professional fees
18,560
19,338
(4
)
FDIC insurance and other regulatory
fees
21,429
13,144
63
Restructuring charges (reversals)
(843
)
(8,274
)
nm
Loss on other loans held for sale
19,110
—
nm
Other operating expenses
69,714
75,523
(8
)
Total non-interest expense
629,034
554,501
13
Income before income taxes
481,616
441,646
9
Income tax expense
105,513
92,558
14
Net income
376,103
349,088
8
Less: Net income attributable to
noncontrolling interest
(166
)
—
nm
Net income attributable to Synovus
Financial Corp.
376,269
349,088
8
Less: Preferred stock dividends
16,581
16,581
—
Net income available to common
shareholders
$
359,688
$
332,507
8
%
Net income per common share, basic
$
2.46
$
2.29
8
%
Net income per common share, diluted
2.45
2.27
8
Cash dividends declared per common
share
0.76
0.68
12
Return on average assets *
1.26
%
1.24
%
2 bps
Return on average common equity *
17.28
15.28
200
Weighted average common shares
outstanding, basic
145,957
145,301
—
%
Weighted average common shares
outstanding, diluted
146,644
146,489
—
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
Second Quarter
Second
Quarter
First
Quarter
Fourth
Quarter
Third
Quarter
Second
Quarter
'23 vs '22
% Change
Interest income
$
759,143
716,879
654,654
551,299
453,772
67
%
Interest expense
303,612
236,128
153,308
73,380
28,384
970
Net interest income
455,531
480,751
501,346
477,919
425,388
7
Provision for (reversal of) credit
losses
38,881
32,154
34,884
25,581
12,688
206
Net interest income after provision for
credit losses
416,650
448,597
466,462
452,338
412,700
1
Non-interest revenue:
Service charges on deposit accounts
23,477
22,974
23,639
23,398
23,491
—
Fiduciary and asset management fees
20,027
19,696
18,836
19,201
20,100
—
Card fees
17,059
15,824
15,887
15,101
16,089
6
Brokerage revenue
20,908
22,558
19,996
17,140
15,243
37
Mortgage banking income
4,609
3,858
2,554
5,065
3,904
18
Capital markets income
6,975
13,725
6,998
6,839
7,393
(6
)
Income from bank-owned life insurance
6,878
7,262
7,206
6,792
9,165
(25
)
Investment securities gains (losses),
net
—
1,030
—
—
—
nm
Recovery of NPA
—
13,126
—
—
—
nm
Other non-interest revenue
12,343
13,073
7,323
10,762
1,881
556
Total non-interest revenue
112,276
133,126
102,439
104,298
97,266
15
Non-interest expense:
Salaries and other personnel expense
183,001
188,924
182,629
173,334
161,063
14
Net occupancy, equipment, and software
expense
42,785
42,860
45,192
43,462
43,199
(1
)
Third-party processing and other
services
21,659
21,833
23,130
22,539
21,952
(1
)
Professional fees
9,597
8,963
11,096
6,755
10,865
(12
)
FDIC insurance and other regulatory
fees
11,162
10,268
8,232
7,707
6,894
62
Restructuring charges (reversals)
(110
)
(733
)
(2,372
)
956
(1,850
)
(94
)
Loss on other loans held for sale
2,360
16,750
—
—
—
nm
Other operating expenses
36,727
32,987
41,089
39,257
39,928
(8
)
Total non-interest expense
307,181
321,852
308,996
294,010
282,051
9
Income before income taxes
221,745
259,871
259,905
262,626
227,915
(3
)
Income tax expense
47,801
57,712
54,135
59,582
49,863
(4
)
Net income
173,944
202,159
205,770
203,044
178,052
(2
)
Less: Net income attributable to
noncontrolling interest
(166
)
—
—
—
—
nm
Net income attributable to Synovus
Financial Corp.
174,110
202,159
205,770
203,044
178,052
(2
)
Less: Preferred stock dividends
8,291
8,291
8,291
8,291
8,291
—
Net income available to common
shareholders
$
165,819
193,868
197,479
194,753
169,761
(2
)%
Net income per common share, basic
$
1.13
1.33
1.36
1.34
1.17
(3
)%
Net income per common share, diluted
1.13
1.32
1.35
1.33
1.16
(3
)
Cash dividends declared per common
share
0.38
0.38
0.34
0.34
0.34
12
Return on average assets *
1.15
%
1.36
1.38
1.39
1.26
(11) bps
Return on average common equity *
15.45
19.23
20.93
18.66
16.48
(103
)
Weighted average common shares
outstanding, basic
146,113
145,799
145,467
145,386
145,328
1
%
Weighted average common shares
outstanding, diluted
146,550
146,727
146,528
146,418
146,315
—
nm - not meaningful
bps - basis points
* - ratios are annualized
Amounts may not total due to rounding
Synovus
BALANCE SHEET DATA
June 30, 2023
December 31, 2022
June 30, 2022
(Unaudited)
(In thousands, except share data)
ASSETS
Cash and due from banks
$
576,148
$
624,097
$
583,323
Interest-bearing funds with Federal
Reserve Bank
1,391,961
1,280,684
1,023,030
Interest earning deposits with banks
50,254
34,632
29,139
Federal funds sold and securities
purchased under resale agreements
35,788
38,367
29,568
Cash, cash equivalents, and restricted
cash
2,054,151
1,977,780
1,665,060
Investment securities available for sale,
at fair value
9,621,175
9,678,103
9,889,850
Loans held for sale (includes $62,616,
$51,136 and $76,864 measured at fair value, respectively)
514,450
391,502
917,679
Loans, net of deferred fees and costs
44,353,537
43,716,353
41,204,780
Allowance for loan losses
(471,238
)
(443,424
)
(407,837
)
Loans, net
43,882,299
43,272,929
40,796,943
Cash surrender value of bank-owned life
insurance
1,100,114
1,089,280
1,078,703
Premises, equipment, and software, net
365,443
370,632
383,060
Goodwill
475,573
452,390
452,390
Other intangible assets, net
61,538
27,124
31,360
Other assets
2,580,848
2,471,638
2,167,700
Total assets
$
60,655,591
$
59,731,378
$
57,382,745
LIABILITIES AND EQUITY
Liabilities:
Deposits:
Non-interest-bearing deposits
$
13,565,602
$
15,639,899
$
16,876,710
Interest-bearing deposits
36,514,790
33,231,660
32,157,990
Total deposits
50,080,392
48,871,559
49,034,700
Federal funds purchased and securities
sold under repurchase agreements
83,384
146,588
345,242
Other short-term borrowings
1,461
603,384
255,018
Long-term debt
4,021,411
4,109,597
1,804,104
Other liabilities
1,661,175
1,524,449
1,359,243
Total liabilities
55,847,823
55,255,577
52,798,307
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 170,808,134, 170,141,492 and 170,012,527
respectively; outstanding 146,153,276, 145,486,634 and 145,357,669
respectively
170,808
170,141
170,013
Additional paid-in capital
3,933,548
3,920,346
3,908,118
Treasury stock, at cost; 24,654,858
shares
(944,484
)
(944,484
)
(944,484
)
Accumulated other comprehensive income
(loss), net
(1,395,175
)
(1,442,117
)
(1,026,705
)
Retained earnings
2,480,686
2,234,770
1,940,351
Total Synovus Financial Corp.
shareholders’ equity
4,782,528
4,475,801
4,584,438
Noncontrolling interest in subsidiary
25,240
—
—
Total equity
4,807,768
4,475,801
4,584,438
Total liabilities and equity
$
60,655,591
$
59,731,378
$
57,382,745
Synovus
AVERAGE BALANCES, INTEREST, AND
YIELDS/RATES
(Unaudited)
Second Quarter 2023
First Quarter 2023
Second 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)
$
35,628,637
$
566,823
6.38
%
$
35,030,809
$
526,529
6.10
%
$
31,870,387
$
308,442
3.88
%
Consumer loans (1) (2)
8,470,478
104,545
4.94
8,762,631
104,147
4.78
8,720,488
83,826
3.86
Less: Allowance for loan losses
(466,700
)
—
—
(445,192
)
—
—
(415,372
)
—
—
Loans, net
43,632,415
671,368
6.17
43,348,248
630,676
5.89
40,175,503
392,268
3.92
Investment securities available for
sale
11,200,717
60,421
2.16
11,293,958
61,054
2.16
11,153,091
50,312
1.81
Trading account assets
21,328
309
5.80
11,338
124
4.39
11,987
73
2.44
Other earning assets(4)
1,446,425
18,081
4.95
1,513,800
17,212
4.55
813,028
1,660
0.81
FHLB and Federal Reserve Bank stock
280,248
4,301
6.14
306,935
3,355
4.37
179,837
1,820
4.05
Mortgage loans held for sale
54,603
852
6.24
36,497
566
6.20
85,299
921
4.32
Other loans held for sale
546,224
4,949
3.58
443,690
5,011
4.52
725,762
7,678
4.19
Total interest earning assets
57,181,960
$
760,281
5.33
%
56,954,466
$
717,998
5.11
%
53,144,507
$
454,732
3.43
%
Cash and due from banks
646,066
643,502
538,647
Premises and equipment
369,039
370,275
385,457
Other real estate
—
—
11,439
Cash surrender value of bank-owned life
insurance
1,095,866
1,091,080
1,077,231
Other assets(5)
1,222,146
1,074,238
1,379,659
Total assets
$
60,515,077
$
60,133,561
$
56,536,940
Liabilities and Equity
Interest-bearing liabilities:
Interest-bearing demand deposits
$
9,891,375
$
41,803
1.70
%
$
9,091,166
$
23,221
1.04
%
$
9,513,334
$
3,598
0.15
%
Money market accounts
13,468,210
85,397
2.54
14,395,050
72,615
2.05
15,328,395
6,850
0.18
Savings deposits
1,276,040
281
0.09
1,370,173
211
0.06
1,506,195
72
0.02
Time deposits
4,866,221
39,551
3.26
3,601,288
21,496
2.42
2,829,684
1,688
0.24
Brokered deposits
6,342,751
74,748
4.73
5,553,970
56,392
4.12
2,878,536
6,293
0.88
Federal funds purchased and securities
sold under repurchase agreements
88,591
351
1.57
133,360
670
2.01
246,737
219
0.35
Other short-term borrowings
455,050
5,566
4.84
1,677,519
18,994
4.53
480,999
896
0.74
Long-term debt
3,821,126
55,915
5.82
3,148,062
42,529
5.41
878,413
8,768
3.99
Total interest-bearing liabilities
40,209,364
$
303,612
3.03
%
38,970,588
$
236,128
2.46
%
33,662,293
$
28,384
0.33
%
Non-interest-bearing demand deposits
13,874,482
15,014,224
16,959,850
Other liabilities
1,556,863
1,522,827
1,245,116
Total equity
4,874,368
4,625,922
4,669,681
Total liabilities and equity
$
60,515,077
$
60,133,561
$
56,536,940
Net interest income and net interest
margin, taxable equivalent (6)
$
456,669
3.20
%
$
481,870
3.43
%
$
426,348
3.22
%
Less: taxable-equivalent adjustment
1,138
1,119
960
Net interest income
$
455,531
$
480,751
$
425,388
(1)
Average loans are shown net of deferred
fees and costs. NPLs are included.
(2)
Interest income includes net loan fees as
follows: Second Quarter 2023 — $11.3 million, First Quarter 2023 —
$11.5 million, and Second Quarter 2022 — $13.0 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
$(1.46) billion, $(1.52) billion, and $(923.1) million for the
Second Quarter 2023, First Quarter 2023, and Second 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)
Six Months Ended June
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)
$
35,331,375
$
1,093,352
6.24
%
$
31,316,646
$
589,029
3.79
%
Consumer loans (1) (2)
8,615,748
208,693
4.87
8,657,598
165,194
3.83
Less: Allowance for loan losses
(456,005
)
(419,639
)
Loans, net
43,491,118
1,302,045
6.03
39,554,605
754,223
3.84
Investment securities available for
sale
11,247,080
121,475
2.16
11,206,150
97,562
1.74
Trading account assets
16,360
434
5.30
10,540
112
2.13
Other earning assets(4)
1,479,926
35,292
4.74
1,363,223
2,475
0.36
FHLB and Federal Reserve Bank stock
293,518
7,656
5.22
170,006
2,505
2.95
Mortgage loans held for sale
45,600
1,418
6.22
94,542
1,803
3.81
Other loans held for sale
495,240
9,960
4.00
661,768
12,978
3.90
Total interest earning assets
57,068,842
$
1,478,280
5.22
%
53,060,834
$
871,658
3.31
%
Cash and due from banks
644,791
543,638
Premises and equipment
369,654
392,079
Other real estate
—
11,598
Cash surrender value of bank-owned life
insurance
1,093,486
1,074,076
Other assets(5)
1,148,600
1,613,313
Total assets
$
60,325,373
$
56,695,538
Liabilities and Equity
Interest-bearing liabilities:
Interest-bearing demand deposits
$
9,493,481
$
65,024
1.38
%
$
9,531,330
$
5,970
0.13
%
Money market accounts
13,929,069
158,012
2.29
15,685,030
12,199
0.16
Savings deposits
1,322,846
491
0.07
1,483,547
139
0.02
Time deposits
4,237,249
61,047
2.91
2,919,242
3,826
0.26
Brokered deposits
5,950,539
131,141
4.44
2,833,580
10,026
0.71
Federal funds purchased and securities
sold under repurchase agreements
110,852
1,021
1.83
220,689
230
0.21
Other short-term borrowings
1,062,908
24,559
4.60
244,202
896
0.73
Long-term debt
3,486,453
98,444
5.63
930,131
18,913
4.07
Total interest-bearing liabilities
39,593,397
$
539,739
2.75
%
33,847,751
$
52,199
0.31
%
Non-interest-bearing demand deposits
14,441,205
16,727,040
Other liabilities
1,539,939
1,195,043
Total equity
4,750,832
4,925,704
Total liabilities and equity
$
60,325,373
$
56,695,538
Net interest income, taxable equivalent
net interest margin (6)
$
938,541
3.32
%
$
819,459
3.11
%
Less: taxable-equivalent adjustment
2,258
1,824
Net interest income
$
936,283
$
817,635
(1)
Average loans are shown net of deferred
fees and costs. NPLs are included.
(2)
Interest income includes net loan fees as
follows: 2023 — $22.8 million and 2022 — $33.7 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
$(1.49) billion and $(587.1) million for the six months ended June
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
June 30, 2023
March 31, 2023
% Change
June 30, 2022
% Change
Commercial, Financial, and
Agricultural
$
14,166,890
$
14,201,398
—
%
$
13,018,089
9
%
Owner-Occupied
8,364,342
8,398,778
—
7,760,236
8
Total Commercial &
Industrial
22,531,232
22,600,176
—
20,778,325
8
Multi-Family
3,597,497
3,374,129
7
2,547,706
41
Hotels
1,771,381
1,737,163
2
1,597,930
11
Office Buildings
3,031,806
3,071,236
(1
)
2,680,399
13
Shopping Centers
1,329,492
1,332,078
—
1,458,902
(9
)
Warehouses
1,068,734
1,020,921
5
811,738
32
Other Investment Property
1,471,356
1,441,303
2
1,311,373
12
Total Investment Properties
12,270,266
11,976,830
2
10,408,048
18
1-4 Family Construction
205,459
201,896
2
234,379
(12
)
1-4 Family Investment Mortgage
410,267
394,754
4
407,476
1
Total 1-4 Family Properties
615,726
596,650
3
641,855
(4
)
Commercial Development
60,910
63,004
(3
)
109,764
(45
)
Residential Development
98,229
106,872
(8
)
156,816
(37
)
Land Acquisition
248,767
253,399
(2
)
186,934
33
Land and Development
407,906
423,275
(4
)
453,514
(10
)
Total Commercial Real Estate
13,293,898
12,996,755
2
11,503,417
16
Consumer Mortgages
5,379,284
5,246,640
3
5,124,523
5
Home Equity
1,773,987
1,757,250
1
1,579,218
12
Credit Cards
187,677
184,595
2
194,290
(3
)
Other Consumer Loans
1,187,459
1,259,523
(6
)
2,025,007
(41
)
Total Consumer
8,528,407
8,448,008
1
8,923,038
(4
)
Total
$
44,353,537
$
44,044,939
1
%
$
41,204,780
8
%
NON-PERFORMING LOANS
COMPOSITION
(Unaudited)
Total
Non-performing Loans
Total
Non-performing Loans
Linked Quarter
Total
Non-performing Loans
Year/Year
(Dollars in thousands)
Loan Type
June 30, 2023
March 31, 2023
% Change
June 30, 2022
% Change
Commercial, Financial, and
Agricultural
$
144,415
$
94,196
53
%
$
48,601
197
%
Owner-Occupied
22,197
25,591
(13
)
11,398
95
Total Commercial &
Industrial
166,612
119,787
39
59,999
178
Multi-Family
1,748
1,806
(3
)
2,598
(33
)
Office Buildings
28,024
190
nm
1,796
nm
Shopping Centers
699
727
(4
)
750
(7
)
Warehouses
218
222
(2
)
924
(76
)
Other Investment Property
664
668
(1
)
1,302
(49
)
Total Investment Properties
31,353
3,613
768
7,370
325
1-4 Family Construction
632
—
nm
55
nm
1-4 Family Investment Mortgage
3,525
3,515
—
3,063
15
Total 1-4 Family Properties
4,157
3,515
18
3,118
33
Commercial Development
—
—
nm
432
(100
)
Residential Development
267
267
—
399
(33
)
Land Acquisition
871
886
(2
)
1,093
(20
)
Land and Development
1,138
1,153
(1
)
1,924
(41
)
Total Commercial Real Estate
36,648
8,281
343
12,412
195
Consumer Mortgages
41,877
39,536
6
22,857
83
Home Equity
9,936
7,967
25
8,100
23
Other Consumer Loans
6,433
6,889
(7
)
5,656
14
Total Consumer
58,246
54,392
7
36,613
59
Total
$
261,506
$
182,460
43
%
$
109,024
140
%
Synovus
CREDIT QUALITY DATA
(Unaudited)
(Dollars in thousands)
2023
2022
Second
Quarter
Second
First
Fourth
Third
Second
'23 vs '22
Quarter
Quarter
Quarter
Quarter
Quarter
% Change
Non-performing Loans (NPLs)
$
261,506
182,460
128,061
122,094
109,024
140
%
Impaired Loans Held for Sale
—
—
—
447
—
nm
Other Real Estate and Other Assets
—
—
15,320
15,320
26,759
(100
)
Non-performing Assets (NPAs)
261,506
182,460
143,381
137,861
135,783
93
Allowance for Loan Losses (ALL)
471,238
457,010
443,424
421,359
407,837
16
Reserve for Unfunded Commitments
55,729
57,473
57,455
57,936
50,559
10
Allowance for Credit Losses (ACL)
526,967
514,483
500,879
479,295
458,396
15
Net Charge-Offs - Quarter
26,396
18,550
13,300
4,682
16,565
Net Charge-Offs - YTD
44,947
18,550
53,156
39,856
35,174
Net Charge-Offs / Average Loans - Quarter
(1)
0.24
%
0.17
0.12
0.04
0.16
Net Charge-Offs / Average Loans - YTD
(1)
0.20
0.17
0.13
0.13
0.18
NPLs / Loans
0.59
0.41
0.29
0.29
0.26
NPAs / Loans, ORE and specific other
assets
0.59
0.41
0.33
0.32
0.33
ACL/Loans
1.19
1.17
1.15
1.13
1.11
ALL/Loans
1.06
1.04
1.01
0.99
0.99
ACL/NPLs
201.51
281.97
391.13
392.56
420.45
ALL/NPLs
180.20
250.47
346.26
345.11
374.08
Past Due Loans over 90 days and Still
Accruing
$
3,643
3,529
3,373
3,443
2,251
62
As a Percentage of Loans Outstanding
0.01
%
0.01
0.01
0.01
0.01
Total Past Due Loans and Still
Accruing
$
84,946
55,053
65,568
63,545
56,160
51
As a Percentage of Loans Outstanding
0.19
%
0.12
0.15
0.15
0.14
(1) Ratio is annualized.
SELECTED CAPITAL INFORMATION
(1)
(Unaudited)
(Dollars in thousands)
June 30,
2023
December 31,
2022
June 30,
2022
Common Equity Tier 1 Capital Ratio
9.85
%
9.63
9.46
Tier 1 Capital Ratio
10.88
10.68
10.56
Total Risk-Based Capital Ratio
12.79
12.54
12.43
Tier 1 Leverage Ratio
9.23
9.07
9.03
Total Synovus Financial Corp.
shareholders' equity as a Percentage of Total Assets
7.88
7.49
7.99
Tangible Common Equity Ratio (2) (4)
6.17
5.84
6.26
Book Value Per Common Share (3)
$
29.05
27.07
27.84
Tangible Book Value Per Common Share
(2)
25.37
23.78
24.52
(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/20230719590036/en/
Media Contact Audria Belton Media Relations
media@synovus.com
Investor Contact Jennifer Demba Investor Relations
investorrelations@synovus.com
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