FBR Capital Maintains a 'Market Perform' on Synovus Financial (SNV); EPS Better than Expected; Credit Costs Expected to Remain Elevated Longer

FBR Capital maintains a 'Market Perform' on Synovus Financial (NYSE: SNV), PT $2.50.

FBR analyst says, "We maintain our rating on SNV as 1Q11 results were generally in line with our expectations - noninterest expense declined more than expected, offset by a slower pace of projected credit improvement. While fundamentals are slowly improving, most core trends continue to lag the improvement exhibited by peers and as a result we expect SNV will not achieve profitability until 2012 (management's guidance remains unchanged regarding achieving profitability sometime in 2011). Following the quarter, we are reducing our EPS estimates for FY11 to ($0.27) from ($0.22) and FY12 to $0.02 from $0.06, reflecting lower reserve release and lower noninterest revenue. While we expect asset quality to continue improving, credit costs will remain elevated and continued loan portfolio runoff will negatively impact earnings power, despite improving NIM."

For more ratings news on Synovus Financial click here and for the rating history of Synovus Financial click here.

Shares of Synovus Financial closed at $2.47 yesterday.

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