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Synovus Announces Earnings for the Second Quarter 2016

July 19, 2016 6:30 AM

Diluted Earnings per Share of $0.46, up 15.6% vs. 2Q15

Adjusted Diluted Earnings per Share of $0.49, up 16.9% vs. 2Q15

COLUMBUS, Ga.--(BUSINESS WIRE)-- Synovus Financial Corp. (NYSE: SNV) today reported financial results for the quarter ended June 30, 2016.

Second Quarter Highlights

“Our second quarter results demonstrate continued solid performance, including strong revenue growth and further diversification of our loan portfolio with increases in both C&I and consumer lending,” said Kessel D. Stelling, Synovus Chairman and CEO. “We were also pleased during the second quarter to be named by American Banker and the Reputation Institute as one of the nation’s most reputable banks. This recognition further demonstrates our team’s commitment to exceptional service, and further validates that our relationship-centered model is a highly-valued competitive differentiator. We were especially pleased with the number one ranking by non-customers, which we believe signals a strong opportunity to gain market share.”

Balance Sheet

Core Performance

Credit Quality

Improvement in credit quality continued.

Capital Ratios

Capital ratios remained strong and include the impact of common stock repurchases completed through June 30, 2016 and phase-out of sub-debt maturing in the second quarter 2017.

Second Quarter Earnings Conference Call

Synovus will host an earnings highlights conference call at 8:30 a.m. EDT on July 19, 2016. 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/events. The replay will be archived for 12 months and will be available 30-45 minutes after the call.

Synovus Financial Corp.

Synovus Financial Corp. is a financial services company based in Columbus, Georgia, with approximately $29 billion in assets. Synovus provides commercial and retail banking, investment, and mortgage services to customers through 28 locally-branded divisions, 253 branches, and 335 ATMs in Georgia, Alabama, South Carolina, Florida, and Tennessee. Synovus Bank, a wholly owned subsidiary of Synovus, was recognized as one of America's Most Reputable Banks by American Banker and the Reputation Institute in 2016 and 2015. Synovus is on the web at synovus.com, on Twitter @synovus, and on LinkedIn at http://linkedin.com/company/synovus.

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, 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, 2015 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.

Use of Non-GAAP Financial Measures

The measures entitled average core deposits; average core deposits excluding average state, county, and municipal deposits; tangible common equity ratio; common equity Tier 1 (CET1) ratio (fully phased-in); adjusted diluted earnings per share; adjusted non-interest income; adjusted non-interest expense; and adjusted efficiency ratio are not measures recognized under U.S. generally accepted accounting principles (GAAP) and therefore are considered non-GAAP financial measures. The most comparable GAAP measures are total average deposits; total shareholders’ equity to total assets ratio; net income per diluted common share; total non-interest income; total non-interest expense, and efficiency ratio, respectively.

Synovus believes that these non-GAAP financial measures provide meaningful additional information about Synovus to assist management, investors, and bank regulators in evaluating Synovus’ capital strength and the performance of its core business. Average core deposits and average core deposits excluding state, county, and municipal deposits are measures used by management to evaluate organic growth of deposits and the quality of deposits as a funding source. The Tangible Common Equity 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. Adjusted diluted earnings per share is a measure used by management to evaluate operating results exclusive of items that are not indicative of ongoing operations and impact period-to- period comparisons. Adjusted non-interest income is a measure used by management to evaluate non-interest income exclusive of net investment securities gains. 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. These non-GAAP financial measures should not be considered as substitutes for total average deposits; total shareholders’ equity to total assets ratio; net income per diluted common share; total non-interest income; total non-interest expense; and efficiency ratio determined in accordance with GAAP and may not be comparable to other similarly titled measures at other companies.

The computations of average core deposits; average core deposits excluding average state, county, and municipal deposits; tangible common equity ratio; common equity Tier 1 (CET1) ratio (fully phased-in); adjusted diluted earnings per share; adjusted non-interest income; and adjusted non-interest expense; and the reconciliation of these measures to total average deposits; total shareholders’ equity to total assets ratio; net income per diluted common share; total non-interest income; total non-interest expense; and efficiency ratio are set forth in the tables below.

1 Consists of net interest income and non-interest income excluding investment securities gains, net

2 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.

Reconciliation of Non-GAAP Financial Measures
(dollars in thousands) 2Q16 1Q16 2Q15
Average core deposits
Average core deposits excluding state, county, and municipal deposits
Total average deposits $ 23,608,027 23,210,263 22,466,102
Subtract: Average brokered deposits (1,337,001 ) (1,095,239 ) (1,555,931 )
Average core deposits 22,271,026 22,115,024 20,910,171
Subtract: Average state, county, and municipal deposits (2,280,038 ) (2,440,749 ) (2,277,783 )
Average core deposits excluding state, county, and

municipal deposits

$ 19,990,988 19,674,275 18,632,388
Tangible common equity ratio
Total assets $ 29,459,691 29,171,257 28,205,870
Subtract: Goodwill (24,431 ) (24,431 ) (24,431 )
Subtract: Other intangible assets, net (228 ) (277 ) (863 )
Tangible assets $ 29,435,032 29,146,549 28,180,576
Total shareholders’ equity $ 2,951,659 2,953,268 3,006,157

Subtract: Goodwill

(24,431 ) (24,431 ) (24,431 )

Subtract: Other intangible assets, net

(228 ) (277 ) (863 )

Subtract: Series C Preferred Stock, no par value

(125,980 ) (125,980 ) (125,980 )
Tangible common equity $ 2,801,020 2,802,580 2,854,883
Total shareholders’ equity to total assets ratio 10.02 % 10.12 % 10.66
Tangible common equity ratio 9.52 % 9.62 % 10.13
Common Equity Tier 1 (CET1) ratio (fully phased-in)
Common Equity Tier 1 (CET1) $ 2,615,939 2,609,191 2,615,827
Adjustment related to capital components (114,751 ) (125,980 ) (125,729 )
CET1 (fully phased-in) $ 2,501,188 2,483,211 2,490,098
Total risk-weighted assets (fully phased-in) $ 26,368,883 26,231,764 24,673,795
Common Equity Tier 1 (CET1) ratio (fully phased-in) 9.49 % 9.47 % 10.09 %

Reconciliation of Non-GAAP Financial Measures, continued

(dollars in thousands) 2Q16 1Q16 2Q15

Adjusted Non-interest Income

Total non-interest income $ 67,886 63,147 68,832
Subtract: Investment securities gains, net - (67 ) (1,985 )
Adjusted non-interest income $ 67,886 63,080 66,847
Adjusted Diluted Earnings per Share
Net income available to common shareholders $ 57,898 49,972 53,234
Add: Litigation contingency expense(1) - 2,700 4,400
Add: Restructuring charges 5,841 1,140 5
Add: Loss on early extinguishment of debt - 4,735 -
Tax effect of adjustments (2,138 ) (3,138 ) (1,612 )
Adjusted net income available to common shareholders $ 61,601 55,409 56,027
Weighted average common shares outstanding - diluted 125,699 127,857 133,625
Adjusted diluted earnings per share $ 0.49 0.43 0.42
Adjusted Non-interest Expense
Total non-interest expense $ 188,611 188,233 177,806
Subtract: Restructuring charges (5,841 ) (1,140 ) (5 )
Subtract: Visa indemnification charges (360 ) (360 ) (354 )
Subtract: Loss on early extinguishment of debt - (4,735 ) -
Subtract: Litigation contingency expense(1) - (2,700 ) (4,400 )
Adjusted non-interest expense $ 182,410 179,298 173,047
Adjusted Efficiency Ratio
Adjusted non-interest expense $ 182,410 179,298 173,047
Subtract: Other credit costs(2) (4,143 ) (4,950 ) (6,175 )
Adjusted non-interest expense excluding other credit costs $ 178,267 174,348 166,872
Net interest income 221,449 218,193 203,644
Add: Tax equivalent adjustment 329 305 330
Add: Total non-interest income 67,886 63,147 68,832
Subtract: Investment securities gains, net - (67 ) (1,985 )
Total revenues $ 289,664 281,578 270,821
Adjusted efficiency ratio 61.54 % 61.92 61.62

(1) Amounts for other periods presented herein are not reported separately as amounts are not material.

(2) Other credit costs consist primarily of foreclosed real estate expense, net.

Synovus

INCOME STATEMENT DATA Six Months Ended
(Unaudited)
(Dollars in thousands, except per share data) June 30,
2016 2015 Change
Interest income $ 501,716 465,055 7.9 %
Interest expense 62,073 58,148 6.8
Net interest income 439,643 406,907 8.0
Provision for loan losses 16,070 11,034 45.6
Net interest income after provision for loan losses 423,573 395,873 7.0
Non-interest income:
Service charges on deposit accounts 39,950 38,928 2.6
Fiduciary and asset management fees 22,854 23,414 (2.4 )
Brokerage revenue 13,821 14,032 (1.5 )
Mortgage banking income 11,425 13,995 (18.4 )
Bankcard fees 16,718 16,576 0.9
Investment securities gains, net 67 2,710 (97.5 )
Other fee income 10,084 9,851 2.4
Other non-interest income 16,114 15,181 6.1
Total non-interest income 131,033 134,687 (2.7 )
Non-interest expense:
Salaries and other personnel expense 198,419 191,054 3.9
Net occupancy and equipment expense 53,360 52,713 1.2
Third-party processing expense 22,814 21,015 8.6
FDIC insurance and other regulatory fees 13,344 13,725 (2.8 )
Professional fees 13,307 12,011 10.8
Advertising expense 9,761 6,309 54.7
Foreclosed real estate expense, net 7,272 13,847 (47.5 )
Visa indemnification charges 720 729 (1.2 )
Loss on early extinguishment of debt 4,735 - nm
Litigation contingency expense 2,700 4,400 (38.6 )
Restructuring charges, net 6,981 (102 ) nm
Other operating expenses 43,431 41,012 5.9
Total non-interest expense 376,844 356,713 5.6
Income before income taxes 177,762 173,847 2.3
Income tax expense 64,773 64,091 1.1
Net income 112,989 109,756 2.9
Dividends on preferred stock 5,119 5,119 -
Net income available to common shareholders $ 107,870 104,637 3.1 %
Net income per common share, basic $ 0.85 0.78 8.8 %
Net income per common share, diluted 0.85 0.78 9.5
Cash dividends declared per common share 0.24 0.20 20.0
Return on average assets

0.78%

0.80

(2) bps

Return on average common equity 7.66 7.27 39
Weighted average common shares outstanding, basic 126,164 133,935 (5.8 )%
Weighted average common shares outstanding, diluted 126,778 134,678 (5.9 )
nm - not meaningful
bps - basis points
Synovus

INCOME STATEMENT DATA
(Unaudited)
(In thousands, except per share data) 2016

2015

2nd Quarter
Second First Fourth Third Second '16 vs. '15
Quarter Quarter Quarter Quarter Quarter Change
Interest income $ 252,393 249,323 242,814 238,093 233,654 8.0 %
Interest expense 30,944 31,130 30,194 30,303 30,010 3.1
Net interest income 221,449 218,193 212,620 207,790 203,644 8.7
Provision for loan losses 6,693 9,377 5,021 2,956 6,636 0.9
Net interest income after provision for loan losses 214,756 208,816 207,599 204,834 197,008 9.0
Non-interest income:
Service charges on deposit accounts 20,240 19,710 20,522 20,692 19,795 2.2
Fiduciary and asset management fees 11,580 11,274 11,206 11,308 11,843 (2.2 )
Brokerage revenue 7,338 6,483 6,877 6,946 6,782 8.2
Mortgage banking income 5,941 5,484 4,136 5,965 7,511 (20.9 )
Bankcard fees 8,346 8,372 8,262 8,334 8,499 (1.8 )
Investment securities gains, net - 67 58 - 1,985 nm
Other fee income 5,280 4,804 5,798 5,521 4,605 14.7
Other non-interest income 9,161 6,953 9,316 8,293 7,812 17.3
Total non-interest income 67,886 63,147 66,175 67,059 68,832 (1.4 )
Non-interest expense:
Salaries and other personnel expense 97,061 101,358 95,524 94,341 94,565 2.6
Net occupancy and equipment expense 26,783 26,577 27,816 26,937 26,541 0.9
Third-party processing expense 11,698 11,116 10,993 10,844 10,672 9.6
FDIC insurance and other regulatory fees 6,625 6,719 6,776 6,591 6,767 (2.1 )
Professional fees 6,938 6,369 8,265 6,371 6,417 8.1
Advertising expense 7,351 2,410 3,680 5,488 2,865 156.6
Foreclosed real estate expense, net 4,588 2,684 4,454 4,503 4,351 5.4
Visa indemnification charges 360 360 371 363 354 1.7
Loss on early extinguishment of debt - 4,735 1,533 - - nm
Litigation contingency/settlement expenses - 2,700 710 - 4,400 nm
Restructuring charges, net 5,841 1,140 69 69 5 nm
Other operating expenses 21,366 22,065 22,842 22,400 20,869 2.4
Total non-interest expense 188,611 188,233 183,033 177,907 177,806 6.1
Income before income taxes 94,031 83,730 90,741 93,986 88,034 6.8
Income tax expense 33,574 31,199 32,343 36,058 32,242 4.1
Net income 60,457 52,531 58,398 57,928 55,792 8.4
Dividends on preferred stock 2,559 2,559 2,559 2,559 2,559 -
Net income available to common shareholders $ 57,898 49,972 55,839 55,369 53,233 8.8 %
Net income per common share, basic $ 0.46 0.39 0.43 0.42 0.40 15.6 %
Net income per common share, diluted 0.46 0.39 0.43 0.42 0.40 15.6
Cash dividends declared per common share 0.12 0.12 0.12 0.10 0.10 20.0
Return on average assets * 0.83 % 0.73 0.81 0.81 0.80

3 bps

Return on average common equity * 8.26 7.06 7.67 7.64 7.39 87
Weighted average common shares outstanding, basic 125,100 127,227 130,354 131,516 132,947 (5.9 )%
Weighted average common shares outstanding, diluted 125,699 127,857 131,197 132,297 133,625 (5.9 )
nm - not meaningful
bps - basis points
* - ratios are annualized
Synovus
BALANCE SHEET DATA June 30, 2016 December 31, 2015 June 30, 2015
(Unaudited)
(In thousands, except share data)
ASSETS
Cash and cash equivalents $ 377,334 367,092 360,832
Interest bearing funds with Federal Reserve Bank 904,406 829,887 1,289,205
Interest earning deposits with banks 24,541 17,387 18,694

Federal funds sold and securities purchased under resale agreements

77,685 69,819 72,487
Trading account assets, at fair value 1,001 5,097 11,973
Mortgage loans held for sale, at fair value 87,824 59,275 98,202
Investment securities available for sale, at fair value 3,580,359 3,587,818 3,354,673
Loans, net of deferred fees and costs 23,060,908 22,429,565 21,494,869
Allowance for loan losses (255,076 ) (252,496 ) (254,702 )
Loans, net 22,805,832 22,177,069 21,240,167
Premises and equipment, net 424,967 445,155 445,579
Goodwill 24,431 24,431 24,431
Other real estate 33,289 47,030 66,449
Deferred tax asset, net 425,160 511,948 571,402
Other assets 692,862 650,645 650,984
Total assets $ 29,459,691 28,792,653 28,205,078
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest bearing deposits $ 6,934,443 6,732,970 6,421,815
Interest bearing deposits, excluding brokered deposits 15,495,318 15,434,171 14,775,216
Brokered deposits 1,496,161 1,075,520 1,452,150
Total deposits 23,925,922 23,242,661 22,649,181
Federal funds purchased and securities sold under repurchase agreements 247,179 177,025 188,285
Long-term debt 2,135,892 2,186,893 2,138,427
Other liabilities 199,039 185,878 223,028
Total liabilities 26,508,032 25,792,457 25,198,920
Shareholders' equity:
Series C Preferred Stock - no par value, 5,200,000 shares outstanding at June 30, 2016, December 31, 2015, and June 30, 2015 125,980 125,980 125,980
Common stock - $1.00 par value. 124,047,659 shares outstanding at June 30, 2016, 129,547,032 shares outstanding at December 31, 2015 and 132,257,577 shares outstanding at June 30, 2015 141,008 140,592 140,425
Additional paid-in capital 2,993,985 2,989,981 2,981,434
Treasury stock, at cost - 16,959,977 shares at June 30, 2016, 11,045,377 shares at December 31, 2015, and 8,167,677 shares at June 30, 2015 (573,058 ) (401,511 ) (311,859 )
Accumulated other comprehensive gain (loss) 11,005 (29,819 ) (22,323 )
Retained earnings 252,739 174,973 92,500
Total shareholders' equity 2,951,659 3,000,196 3,006,157
Total liabilities and shareholders' equity $ 29,459,691 28,792,653 28,205,078
Synovus

AVERAGE BALANCES AND YIELDS/RATES (1)
(Unaudited)
(Dollars in thousands)
2016 2015
Second First Fourth Third Second
Quarter Quarter Quarter Quarter Quarter
Interest Earning Assets
Taxable investment securities (2) $ 3,529,030 3,537,131 3,481,184 3,380,543 3,165,513
Yield 1.89 % 1.91 1.85 1.76 1.79
Tax-exempt investment securities (2) (4) $ 3,491 4,091 4,352 4,509 4,595
Yield (taxable equivalent) 6.08 % 6.37 6.16 6.21 6.15
Trading account assets $ 3,803 5,216 8,067 7,278 12,564
Yield 1.27 % 1.65 2.24 1.84 3.72
Commercial loans (3) (4) $ 18,433,638 18,253,169 17,884,661 17,522,735 17,297,130
Yield 4.04 % 4.03 3.97 3.99 4.01
Consumer loans (3) $ 4,497,147 4,334,817 4,233,061 4,105,639 3,986,151
Yield 4.32 % 4.37 4.27 4.31 4.37
Allowance for loan losses $ (251,101 ) (258,097 ) (252,049 ) (256,102 ) (254,177 )
Loans, net (3) $ 22,679,684 22,329,889 21,865,673 21,372,272 21,029,104
Yield 4.15 % 4.15 4.08 4.10 4.14
Mortgage loans held for sale $ 72,477 63,339 50,668 69,438 90,419
Yield 3.59 % 3.72 3.84 3.82 3.39

Federal funds sold, due from Federal Reserve Bank, and other short-term investments

$ 907,615 885,939 1,081,604 1,380,686 1,590,114
Yield 0.47 % 0.47 0.27 0.24 0.24
Federal Home Loan Bank and Federal Reserve Bank stock (5) $ 77,571 80,679 66,790 71,852 76,091
Yield 5.15 % 3.82 5.08 4.71 4.57
Total interest earning assets $ 27,273,670 26,906,284 26,558,338 26,286,578 25,968,400
Yield 3.73 % 3.73 3.63 3.60 3.61
Interest Bearing Liabilities
Interest bearing demand deposits $ 4,233,310 4,198,738 4,117,116 3,955,803 3,919,401
Rate 0.18 % 0.17 0.17 0.18 0.18
Money market accounts $ 7,082,759 7,095,778 7,062,517 6,893,563 6,466,610
Rate 0.31 % 0.32 0.35 0.36 0.35
Savings deposits $ 746,225 722,172 692,536 685,813 675,260
Rate 0.06 % 0.07 0.06 0.06 0.06
Time deposits under $100,000 $ 1,262,280 1,279,811 1,307,601 1,338,994 1,351,299
Rate 0.64 % 0.65 0.65 0.66 0.68
Time deposits over $100,000 $ 2,016,116 2,006,302 2,033,193 2,086,851 2,061,434
Rate 0.89 % 0.89 0.88 0.88 0.88
Non maturing brokered deposits $ 451,398 315,006 297,925 221,817 185,909
Rate 0.39 % 0.48 0.31 0.31 0.31
Brokered time deposits $ 885,603 780,232 887,168 1,135,346 1,370,022
Rate 0.85 % 0.83 0.76 0.71 0.67
Total interest bearing deposits $ 16,677,691 16,398,039 16,398,056 16,318,187 16,029,935
Rate 0.39 % 0.39 0.40 0.42 0.42

Federal funds purchased and securities sold under repurchase agreements

$ 221,276 177,921 158,810 207,894 232,531
Rate 0.09 % 0.10 0.08 0.09 0.08
Long-term debt $ 2,279,043 2,361,973 2,007,924 2,072,455 2,172,765
Rate 2.55 % 2.55 2.63 2.46 2.39
Total interest bearing liabilities $ 19,178,010 18,937,933 18,564,790 18,598,536 18,435,231
Rate 0.65 % 0.66 0.65 0.65 0.65
Non-interest bearing demand deposits $ 6,930,336 6,812,223 6,846,200 6,541,832 6,436,167
Effective cost of funds 0.46 % 0.46 0.45 0.46 0.46
Net interest margin 3.27 % 3.27 3.18 3.14 3.15
Taxable equivalent adjustment $ 329 305 311 315 330

(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
LOANS OUTSTANDING AND NON-PERFORMING LOANS COMPOSITION
(Unaudited)
(Dollars in thousands)
June 30, 2016
Loans as a % Total Non-performing Loans
of Total Loans Non-performing as a % of Total
Loan Type Total Loans Outstanding Loans Nonperforming Loans
Multi-Family $ 1,528,192 6.6 % $ 4,070 2.6 %
Hotels 746,397 3.2 5,052 3.3
Office Buildings 1,559,631 6.8 2,563 1.7
Shopping Centers 926,147 4.0 358 0.2
Warehouses 535,889 2.3 1,128 0.7
Other Investment Property 624,405 2.7 978 0.7
Total Investment Properties 5,920,661 25.6 14,149 9.2
1-4 Family Construction 208,871 0.9 304 0.2
1-4 Family Investment Mortgage 758,463 3.3 7,994 5.2
Residential Development 160,446 0.7 9,571 6.2
Total 1-4 Family Properties 1,127,780 4.9 17,869 11.6
Land Acquisition 459,254 2.0 7,610 4.9
Total Commercial Real Estate 7,507,695 32.5 39,628 25.7
Commercial, Financial, and Agricultural 6,596,835 28.5 55,821 36.2
Owner-Occupied 4,358,595 18.9 17,118 11.1
Total Commercial & Industrial 10,955,430 47.4 72,939 47.3
Home Equity Lines 1,657,109 7.2 16,912 11.0
Consumer Mortgages 2,132,114 9.2 21,895 14.2
Credit Cards 236,034 1.1 - -
Other Retail Loans 600,153 2.6 2,698 1.8
Total Retail 4,625,410 20.1 41,505 27.0
Unearned Income (27,627 ) - - -
Total $ 23,060,908 100.0 % $ 154,072 100.0 %
LOANS OUTSTANDING BY TYPE COMPARISON
(Unaudited)
(Dollars in thousands)
Total Loans 2Q16 vs. 1Q16 2Q16 vs. 2Q15
Loan Type June 30, 2016 March 31, 2016 % change (1) June 30, 2015 % change
Multi-Family $ 1,528,192 1,524,850 0.9 % $ 1,286,747 18.8 %
Hotels 746,397 718,640 15.5 663,286 12.5
Office Buildings 1,559,631 1,557,608 0.5 1,348,234 15.7
Shopping Centers 926,147 963,520 (15.6 ) 917,678 0.9
Warehouses 535,889 568,662 (23.2 ) 524,525 2.2
Other Investment Property 624,405 649,865 (15.8 ) 662,924 (5.8 )
Total Investment Properties 5,920,661 5,983,145 (4.2 ) 5,403,394 9.6
1-4 Family Construction 208,871 211,312 (4.6 ) 163,866 27.5
1-4 Family Investment Mortgage 758,463 787,354 (14.8 ) 788,704 (3.8 )
Residential Development 160,446 161,942 (3.7 ) 161,130 (0.4 )
Total 1-4 Family Properties 1,127,780 1,160,608 (11.4 ) 1,113,700 1.3
Land Acquisition 459,254 469,882 (9.1 ) 554,501 (17.2 )
Total Commercial Real Estate 7,507,695 7,613,635 (5.6 ) 7,071,595 6.2
Commercial, Financial, and Agricultural 6,596,835 6,537,253 3.7 6,243,259 5.7
Owner-Occupied 4,358,595 4,272,219 8.1 4,161,268 4.7
Total Commercial & Industrial 10,955,430 10,809,472 5.4 10,404,527 5.3
Home Equity Lines 1,657,109 1,669,406 (3.0 ) 1,683,651 (1.6 )
Consumer Mortgages 2,132,114 1,970,193 33.1 1,793,752 18.9
Credit Cards 236,034 232,554 6.0 246,724 (4.3 )
Other Retail Loans 600,153 492,274 88.1 323,741 85.4
Total Retail 4,625,410 4,364,427 24.1 4,047,868 14.3
Unearned Income (27,627 ) (29,331 ) (23.4 ) (29,121 ) (5.1 )
Total $ 23,060,908 22,758,203 5.3 % $ 21,494,869 7.3 %
(1) Percentage change is annualized.
Synovus

CREDIT QUALITY DATA
(Unaudited)
(Dollars in thousands) 2016 2015 2nd Quarter
Second First Fourth Third Second '16 vs. '15
Quarter Quarter Quarter Quarter Quarter Change
Non-performing Loans $ 154,072 178,167 168,370 157,640 173,638 (11.3 )%
Other Real Estate 33,289 38,462 47,030 64,346 66,449 (49.9 )
Non-performing Assets 187,361 216,629 215,400 221,986 240,087 (22.0 )
Allowance for loan losses 255,076 254,516 252,496 250,900 254,702 0.1
Net Charge-Offs - Quarter 6,133 7,357 3,425 6,758 5,306 15.6
Net Charge-Offs / Average Loans - Quarter (1) 0.11 % 0.13 0.06 0.12 0.10
Non-performing Loans / Loans 0.67 0.78 0.75 0.72 0.81
Non-performing Assets / Loans, Other Loans Held for Sale & ORE 0.81 0.95 0.96 1.01 1.11
Allowance / Loans 1.11 1.12 1.13 1.15 1.18
Allowance / Non-performing Loans 165.56 142.85 149.96 159.16 146.69
Allowance / Non-performing Loans (2) 195.25 173.64 189.47 205.90 202.08
Past Due Loans over 90 days and Still Accruing $ 5,964 3,214 2,621 2,998 4,832 23.4
As a Percentage of Loans Outstanding 0.03 % 0.01 0.01 0.01 0.02
Total Past Due Loans and Still Accruing $ 55,716 63,852 47,912 39,350 50,860 9.5
As a Percentage of Loans Outstanding 0.24 % 0.28 0.21 0.18 0.24
Accruing Troubled Debt Restructurings (TDRs) $ 205,165 209,159 223,873 240,370 268,542 (23.6 )
(1) Ratio is annualized.
(2) Excludes non-performing loans for which the expected loss has been charged off.
SELECTED CAPITAL INFORMATION (1)
(Unaudited)
(Dollars in thousands)
June 30, 2016 March 31, 2016 June 30, 2015
Tier 1 Capital $ 2,627,574 2,609,191 2,615,827
Total Risk-Based Capital 3,146,898 3,183,901 2,971,518
Common Equity Tier 1 Ratio (transitional) 10.02 % 10.04 10.73
Common Equity Tier 1 Ratio (fully phased-in) 9.49 9.47 10.09
Tier 1 Capital Ratio 10.06 10.04 10.73
Total Risk-Based Capital Ratio 12.05 12.25 12.18
Tier 1 Leverage Ratio 9.10 9.15 9.48
Common Equity as a Percentage of Total Assets (2) 9.59 9.69 10.21
Tangible Common Equity as a Percentage of Tangible Assets (3) 9.52 9.62 10.13
Tangible Common Equity as a Percentage of Risk Weighted Assets (3) 10.72 10.78 11.71
Book Value Per Common Share (4) 22.78 22.47 21.78
Tangible Book Value Per Common Share (3) 22.58 22.27 21.59

(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.

Synovus Financial Corp.

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Source: Synovus Financial Corp.

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