Upgrade to SI Premium - Free Trial

Synovus Announces Earnings for the Fourth Quarter 2018 and a 20% Increase in Common Stock Dividend

January 15, 2019 6:30 AM

2018 Diluted Earnings per Share up 59.5% from 2017

COLUMBUS, Ga.--(BUSINESS WIRE)-- Synovus Financial Corp. (NYSE: SNV) today reported financial results for the quarter and year ended December 31, 2018.

Net income available to common shareholders for the fourth quarter 2018 was $101.9 million or $0.87 per diluted share as compared to $99.3 million or $0.84 per diluted share for the third quarter 2018 and $27.0 million or $0.23 per diluted share for the fourth quarter 2017. Adjusted earnings per diluted share for the fourth quarter 2018 was $0.92, down 3.1% from the third quarter 2018 and up 28.1% from the fourth quarter 2017.

Additionally, the Company announced plans to return approximately $500 million to common shareholders this year through a 20% dividend increase and additional share repurchases.

Fourth quarter and full year results do not include financial results of FCB Financial Holdings, Inc. (FCB), which Synovus acquired on January 1, 2019.

2018 Highlights

“Synovus became a stronger company in every respect in 2018,” said Kessel Stelling, Synovus chairman and CEO. “From completion of the single-brand transition, to the announcement and successful closing of the FCB acquisition, to surpassing all of our profitability and efficiency targets, we delivered outstanding operating and financial performance last year. These results will provide the opportunity to accelerate capital returns to shareholders in 2019 through a 20 percent increase in the common stock dividend and more than $300 million in additional share repurchases.

“As we begin the new year, we are excited to welcome the FCB team members and loyal customers to the Synovus family,” Stelling continued. “We are pleased with the integration results to date, and confident in the ability of our combined company to create value for customers, communities, and shareholders.”

Fourth Quarter Financial Results

Balance Sheet

Core Performance

Credit Quality

Capital Ratios1

Capital Management

FCB Fourth Quarter Information

Fourth Quarter Earnings Conference Call

Synovus will host an earnings highlights conference call at 8:30 a.m. EDT on January 15, 2019. 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.

1 December 31, 2018, capital ratios are preliminary.

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.

3 Capital actions expected in 2019 are subject to customary regulatory approval pursuant to Regulation Q: 12 CFR Part 217.20.

Synovus Financial Corp. is a financial services company based in Columbus, Georgia, with approximately $45 billion in assets. Synovus provides commercial and retail banking, investment, and mortgage services through 300 branches in Georgia, Alabama, South Carolina, Florida, and Tennessee. Synovus Bank, a wholly owned subsidiary of Synovus, was named one of American Banker’s “Best Banks to Work For” in 2018 and has been recognized as one of the country’s 10 “Most Reputable Banks” by American Banker and the Reputation Institute for four consecutive years. Synovus 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 deposit growth, loan growth and the net interest margin; expectations on our growth strategy, strategic transactions, expense initiatives, capital management and future profitability; expectations on credit trends and key credit metrics; and the assumptions underlying our expectations. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve known and unknown risks and uncertainties which may cause the actual results, performance or achievements of Synovus to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are based on the information known to, and current beliefs and expectations of, Synovus’ management and are subject to significant risks and uncertainties. Actual results may differ materially from those contemplated by such forward-looking statements. A number of factors could cause actual results to differ materially from those contemplated by the forward-looking statements in this press release. Many of these factors are beyond Synovus’ ability to control or predict.

These forward-looking statements are based upon information presently known to Synovus’ management and are inherently subjective, uncertain and subject to change due to any number of risks and uncertainties, including, without limitation, the risks and other factors set forth in Synovus’ filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2017, under the captions “Cautionary Notice Regarding Forward-Looking Statements” and “Risk Factors” and in Synovus’ quarterly reports on Form 10-Q and current reports on Form 8-K. We believe these forward-looking statements are reasonable; however, undue reliance should not be placed on any forward-looking statements, which are based on current expectations and speak only as of the date that they are made. We do not assume any obligation to update any forward-looking statements as a result of new information, future developments or otherwise, except as otherwise may be required by law.

Non-GAAP�Financial Measures

The measures entitled adjusted non-interest income; adjusted non-interest expense; adjusted total revenues; adjusted efficiency ratio; adjusted earnings per diluted share; adjusted return on average assets; adjusted return on average common equity; tangible common equity to tangible assets ratio; and common equity Tier 1 (CET1) ratio (fully phased-in) are not measures recognized under GAAP and therefore are considered non-GAAP financial measures. The most comparable GAAP measures to these measures are total non-interest income; total non-interest expense; total revenues; efficiency ratio; earnings per diluted common share; return on average assets; return on average common equity; the ratio of total shareholders' equity to total assets; and the CET1 ratio, respectively.

Management believes that these non-GAAP financial measures provide meaningful additional information about Synovus to assist management and investors in evaluating Synovus’ operating results, financial strength, the performance of its business, and the strength of its capital position. However, these non-GAAP financial measures have inherent limitations as analytical tools and should not be considered in isolation or as a substitute for analyses of operating results or capital position as reported under GAAP. The non-GAAP financial measures should be considered as additional views of the way our financial measures are affected by significant items and other factors, and since they are not required to be uniformly applied, they may not be comparable to other similarly titled measures at other companies. Adjusted total revenues and adjusted non-interest income are measures used by management to evaluate total revenues and non-interest income exclusive of net investment securities gains (losses), changes in the fair value of private equity investments, net, and the Cabela’s transaction fee. Adjusted non-interest expense and the adjusted efficiency ratio are measures utilized by management to measure the success of expense management initiatives focused on reducing recurring controllable operating costs. Adjusted earnings per diluted 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. The tangible common equity to tangible assets ratio and common equity Tier 1 (CET1) ratio (fully phased-in) are used by management and bank regulators to assess the strength of our capital position. The computations of these measures are set forth in the tables below.

�
Reconciliation of Non-GAAP Financial Measures
� � � � � � � � � � � � � � � �
(dollars in thousands) 4Q18 3Q18 4Q17 2018 2017
Adjusted non-interest income
Total non-interest income $ 67,991 $ 71,668 $ 69,353 $ 280,093 $ 345,327
Subtract: Cabela's Transaction Fee — — — — (75,000 )
Add: Investment securities losses, net — — — 1,296 289
Add/subtract: Decrease (increase) in fair value of private equity investments, net 2,084 � (434 ) (100 ) 4,743 � 3,093 �
Adjusted non-interest income $ 70,075 � $ 71,234 � $ 69,253 � $ 286,132 � $ 273,709 �
�
Adjusted non-interest expense
Total non-interest expense $ 209,922 $ 220,297 $ 226,533 $ 829,455 $ 821,313
Subtract: Discounts to fair value for ORE accelerated dispositions — — — — (7,082 )
Subtract: Asset impairment charges related to accelerated disposition of corporate real estate and other properties — — — — (1,168 )
Subtract: Earnout liability adjustments — (11,652 ) (1,700 ) (11,652 ) (3,759 )
Subtract: Merger-related expense (3,381 ) (6,684 ) — (10,065 ) (110 )
Subtract/add: Litigation settlement/contingency expense — — (300 ) 4,026 (701 )
Subtract/add: Restructuring charges, net (140 ) (21 ) 29 51 (7,014 )
Subtract: Amortization of intangibles (292 ) (292 ) (292 ) (1,167 ) (1,059 )
Subtract: Fair value adjustment to Visa derivative — — — (2,328 ) —
Subtract: Loss on early extinguishment of debt — � — � (23,160 ) — � (23,160 )
Adjusted non-interest expense $ 206,109 � $ 201,648 � $ 201,110 � $ 808,320 � $ 777,260 �
�
Adjusted total revenues and adjusted efficiency ratio
Adjusted non-interest expense $ 206,109 $ 201,648 $ 201,110 $ 808,320 $ 777,260
Net interest income 297,933 291,619 269,712 1,148,413 1,023,309
Add: Tax equivalent adjustment 181 136 234 553 1,124
Add: Total non-interest income 67,991 71,668 69,353 280,093 345,327
Add: Investment securities losses, net — � — � — � 1,296 � 289 �
Total FTE revenues 366,105 363,423 339,299 1,430,355 1,370,049
Subtract: Cabela's Transaction Fee — — — — (75,000 )
Add/subtract: Decrease (increase) in fair value of private equity investments, net 2,084 � (434 ) (100 ) 4,743 � 3,093 �
Adjusted total revenues $ 368,189 � $ 362,989 � $ 339,199 � $ 1,435,098 � $ 1,298,142 �
Efficiency ratio 57.34 % 60.62 % 66.77 % 57.99 % 59.95 %
Adjusted efficiency ratio 55.98 � 55.55 � 59.29 � 56.33 � 59.87 �
�
Reconciliation of Non-GAAP Financial Measures, continued
� � � � � � � � � � � � � � � �
(in thousands, except per share data) 4Q18 3Q18 4Q17 2018 2017
Adjusted Return on Average Assets
Net income $ 105,070 $ 109,059 $ 29,606 $ 428,476 $ 275,474
Subtract: Cabela's Transaction Fee — — — — (75,000 )
Add: Provision expense on loans transferred to held-for-sale — — — — 27,710
Add: Discounts to fair value for ORE accelerated dispositions — — — — 7,082
Add: Asset impairment charges related to accelerated disposition of corporate real estate and other properties — — — — 1,168
Subtract/add: Income tax (benefit) expense, net related to Federal Tax Reform, SAB 118, State Tax Reform, and adjusted portion of other discrete items — (9,865 ) 42,334 (9,148 ) 42,334
Add: Earnout liability adjustments — 11,652 1,700 11,652 3,759
Add: Merger-related expense 3,381 6,684 — 10,065 110
Add/subtract: Litigation settlement/contingency expense — — 300 (4,026 ) 701
Add/subtract: Restructuring charges, net 140 21 (29 ) (51 ) 7,014
Add: Amortization of intangibles 292 292 292 1,167 1,059
Add: Fair value adjustment to Visa derivative — — — 2,328 —
Add: Loss on early extinguishment of debt — — 23,160 — 23,160
Add: Investment securities losses, net — — — 1,296 289
Add/subtract: Decrease (increase) in fair value of private equity investments, net 2,084 (434 ) (100 ) 4,743 3,093
Subtract/add: Tax effect of adjustments (591 ) 27 � (8,740 ) (1,283 ) 1,337 �
Adjusted net income $ 110,376 $ 117,436 $ 88,523 $ 445,219 $ 319,290
Net income annualized $ 416,854 $ 432,680 $ 117,459 $ — $ —
Adjusted net income annualized $ 437,905 $ 465,915 $ 351,205 $ — $ —
Total average assets $ 32,190,303 $ 31,725,604 $ 31,388,724 $ 31,668,847 $ 30,787,288
Return on average assets 1.29 % 1.36 % 0.37 % 1.35 % 0.89 %
Adjusted return on average assets 1.36 � 1.47 � 1.12 � 1.41 � 1.04 �
�
Reconciliation of Non-GAAP Financial Measures, continued
� � � � � � � � � � � � � � � �
(in thousands, except per share data) 4Q18 3Q18 4Q17 2018 2017
Adjusted net income per common share, diluted and adjusted return on average common equity
Net income available to common shareholders $ 101,919 $ 99,330 $ 27,046 $ 410,478 $ 265,236
Subtract: Cabela's Transaction Fee — — — — (75,000 )
Add: Provision expense on loans transferred to held-for-sale — — — — 27,710
Add: Discounts to fair value for ORE accelerated dispositions — — — — 7,082
Add: Asset impairment charges related to accelerated disposition of corporate real estate and other properties — — — — 1,168
Subtract/add: Income tax (benefit) expense, net related to Federal Tax Reform, SAB 118, State Tax Reform, and adjusted portion of other discrete items — (9,865 ) 42,334 (9,148 ) 42,334
Add: Preferred stock redemption charge — 4,020 — 4,020 —
Add: Earnout liability adjustments — 11,652 1,700 11,652 3,759
Add: Merger-related expense 3,381 6,684 — 10,065 110
Add/subtract: Litigation settlement/contingency expense — — 300 (4,026 ) 701
Add/subtract: Restructuring charges, net 140 21 (29 ) (51 ) 7,014
Add: Amortization of intangibles 292 292 292 1,167 1,059
Add: Fair value adjustment to Visa derivative — — — 2,328 —
Add: Loss on early extinguishment of debt — — 23,160 — 23,160
Add: Investment securities losses, net — — — 1,296 289
Add/subtract: Decrease (increase) in fair value of private equity investments, net 2,084 (434 ) (100 ) 4,743 3,093
Subtract/add: Tax effect of adjustments (591 ) 27 � (8,740 ) (1,283 ) 1,337 �
Adjusted net income available to common shareholders $ 107,225 $ 111,727 $ 85,963 $ 431,241 $ 309,052
Weighted average common shares outstanding, diluted 116,986 118,095 120,182 118,378 122,012
Net income per common share, diluted $ 0.87 $ 0.84 $ 0.23 $ 3.47 $ 2.17
Adjusted net income per common share, diluted 0.92 � 0.95 � 0.72 � 3.64 � 2.53 �
�
Net income available to common shareholders' annualized $ 404,353 $ 394,081 $ 107,302 $ — $ —
Adjusted net income available to common shareholders' annualized $ 425,404 $ 443,265 $ 341,049 $ — $ —
Total average shareholders' equity less preferred stock $ 2,837,740 $ 2,824,707 $ 2,851,523 $ 2,821,311 $ 2,844,570
Return on average common equity 14.25 % 13.95 % 3.76 % 14.55 % 9.32 %
Adjusted return on average common equity 14.99 � 15.69 � 11.96 � 15.29 � 10.86 �
�
Reconciliation of Non-GAAP Financial Measures, continued � � � � � � � � � �
December 31, September 30, December 31,
(dollars in thousands) 2018 2018 2017
Tangible Common Equity to Tangible Assets Ratio
�
Total assets $ 32,669,192 $ 32,075,120 $ 31,221,837
Subtract: Goodwill (57,315 ) (57,315 ) (57,315 )
Subtract: Other intangible assets, net (9,875 ) (10,166 ) (11,254 )
Tangible assets $ 32,602,002 � $ 32,007,639 � $ 31,153,268 �
�
Total shareholders’ equity $ 3,133,602 $ 3,040,073 $ 2,961,566
Subtract: Goodwill (57,315 ) (57,315 ) (57,315 )
Subtract: Other intangible assets, net (9,875 ) (10,166 ) (11,254 )
Subtract: Preferred Stock, no par value (195,140 ) (195,138 ) (125,980 )
Tangible common equity $ 2,871,272 � $ 2,777,454 � $ 2,767,017 �
Total shareholders’ equity to total assets ratio 9.59 % 9.48 % 9.49 %
Tangible common equity to tangible assets ratio 8.81 � 8.68 � 8.88 �
�
� � � � � � � � � �
December 31, September 30, December 31,
(dollars in thousands) 2018 2018 2017
Common equity Tier 1 (CET1) ratio (fully phased-in)
Common equity Tier 1 (CET1) $ 2,897,998 $ 2,846,416 $ 2,763,168
Subtract: Adjustment related to capital components (2,720 ) (2,784 ) (17,147 )
CET1 (fully phased-in) $ 2,895,278 $ 2,843,632 $ 2,746,021
Total risk-weighted assets $ 28,871,478 $ 28,738,381 $ 27,667,906
Total risk-weighted assets (fully phased-in) $ 28,948,308 $ 28,844,942 $ 27,791,929
Common equity Tier 1 (CET1) ratio 10.04 % 9.90 % 9.99 %
Common equity Tier 1 (CET1) ratio (fully phased-in) 10.00 � 9.86 � 9.88 �
�
�
Synovus
�
INCOME STATEMENT DATA
(Unaudited) � � � Twelve Months Ended
(Dollars in thousands, except per share data) December 31,
2018 � � 2017 � � % Change
�
Interest income $ 1,344,305 1,162,497 15.6 %
Interest expense 195,892 � 139,188 � 40.7 �
�
�
Net interest income 1,148,413 1,023,309 12.2
Provision for loan losses 51,697 � 67,185 � (23.1 )
�
Net interest income after provision for loan losses 1,096,716 � 956,124 � 14.7 �
�
Non-interest income:
Service charges on deposit accounts 80,840 81,419 (0.7 )
Fiduciary and asset management fees 54,685 50,485 8.3
Card fees 42,503 39,376 7.9
Brokerage revenue 36,567 29,705 23.1
Mortgage banking income 18,958 22,798 (16.8 )
Income from bank-owned life insurance 15,403 13,460 14.4
Cabela's Transaction Fee — 75,000 nm
Decrease in fair value of private equity investments, net (4,743 ) (3,093 ) nm
Investment securities losses, net (1,296 ) (289 ) nm
Other fee income 19,974 20,168 (1.0 )
Other non-interest income 17,202 � 16,298 � 5.5 �
�
Total non-interest income 280,093 � 345,327 � (18.9 )
�
Non-interest expense:
Salaries and other personnel expense 453,420 433,321 4.6
Net occupancy and equipment expense 130,482 119,964 8.8
Third-party processing expense 58,625 54,708 7.2
FDIC insurance and other regulatory fees 24,494 27,011 (9.3 )
Professional fees 26,737 26,232 1.9
Advertising expense 20,881 22,948 (9.0 )
Foreclosed real estate expense, net 2,204 12,540 (82.4 )
Loss on early extinguishment of debt — 23,160 nm
Earnout liability adjustments 11,652 5,466 113.2
Merger-related expense 10,065 110 nm
Amortization of intangibles 1,167 1,059 10.2
Fair value adjustment to Visa derivative 2,328 — nm
Litigation settlement/contingency expense (4,026 ) 701 nm
Restructuring charges, net (51 ) 7,014 nm
Other operating expenses 91,477 � 87,079 � 5.1 �
�
Total non-interest expense 829,455 � 821,313 � 1.0 �
�
�
Income before income taxes 547,354 480,138 14.0
Income tax expense 118,878 � 204,664 � (41.9 )
�
Net income 428,476 275,474 55.5
�
Less: Preferred stock dividends and redemption charge 17,998 � 10,238 � 75.8 �
�
�
Net income available to common shareholders $ 410,478 � 265,236 � 54.8 �
�
�
Net income per common share, basic $ 3.49 2.19 59.4 %
�
Net income per common share, diluted 3.47 2.17 59.5
�
Cash dividends declared per common share 1.00 0.60 66.7
�
Return on average assets* 1.35 % 0.89 46bps
Return on average common equity* 14.55 9.32 523
�
�
Weighted average common shares outstanding, basic 117,644 121,162 (2.9 )%
Weighted average common shares outstanding, diluted 118,378 122,012 (3.0 )
�
nm - not meaningful
bps - basis points
* - ratios are annualized
�
�
Synovus
�
INCOME STATEMENT DATA
(Unaudited)
(In thousands, except per share data) � � � 2018 � � 2017
� � � � � � � � � � � � � �
Fourth � � Third � � Second � � First Fourth � � Year/Year
Quarter � � Quarter � � Quarter � � Quarter Quarter � � % Change
�
Interest income $ 357,394 343,942 329,834 313,134 306,934 16.4 %
Interest expense 59,461 � 52,323 45,257 � 38,850 � 37,222 � 59.7 �
�
�
Net interest income 297,933 291,619 284,577 274,284 269,712 10.5
Provision for loan losses 12,148 � 14,982 11,790 � 12,776 � 8,565 � 41.8 �
�
Net interest income after provision for loan losses 285,785 � 276,637 272,787 � 261,508 � 261,147 � 9.4 �
�
�
Non-interest income:
Service charges on deposit accounts 20,320 20,582 19,999 19,940 20,371 (0.3 )
Fiduciary and asset management fees 13,805 13,462 13,983 13,435 13,195 4.6
Card fees 10,862 10,608 10,833 10,199 9,762 11.3
Brokerage revenue 9,643 9,329 8,900 8,695 7,758 24.3
Mortgage banking income 3,781 5,290 4,839 5,047 5,647 (33.0 )
Income from bank-owned life insurance 3,682 3,771 3,733 4,217 3,900 (5.6 )
(Decrease)/increase in fair value of private equity investments, net (2,084 ) 434 (37 ) (3,056 ) 100 nm
Investment securities losses, net — — (1,296 ) — — —
Other fee income 5,587 4,510 5,259 4,618 4,041 38.3
Other non-interest income 2,395 � 3,682 7,174 � 3,951 � 4,579 � (47.7 )
�
Total non-interest income 67,991 � 71,668 73,387 � 67,046 � 69,353 � (2.0 )
�
�
�
Non-interest expense:
Salaries and other personnel expense 113,496 114,341 111,863 113,720 111,242 2.0
Net occupancy and equipment expense 34,260 32,088 32,654 31,480 30,127 13.7
Third-party processing expense 14,803 14,810 15,067 13,945 14,826 (0.2 )
FDIC insurance and other regulatory fees 4,728 6,430 6,543 6,793 6,288 (24.8 )
Professional fees 8,650 6,298 6,284 5,505 6,184 39.9
Advertising expense 6,834 3,735 5,220 5,092 8,080 (15.4 )
Foreclosed real estate expense, net 1,095 360 (107 ) 856 1,693 (35.3 )
Loss on early extinguishment of debt — — — — 23,160 nm
Earnout liability adjustments — 11,652 — — 1,700 nm
Merger-related expense 3,381 6,684 — — — nm
Amortization of intangibles 292 292 292 292 292 —
Fair value adjustment to Visa derivative — — 2,328 — — —
Litigation settlement/contingency expense — — (1,400 ) (2,626 ) 300 nm
Restructuring charges, net 140 21 103 (315 ) (29 ) nm
Other operating expenses 22,243 � 23,586 25,210 � 20,437 � 22,670 � (1.9 )
�
Total non-interest expense 209,922 � 220,297 204,057 � 195,179 � 226,533 � (7.3 )
�
�
�
Income before income taxes 143,854 128,008 142,117 133,375 103,967 38.4
Income tax expense 38,784 � 18,949 30,936 � 30,209 � 74,361 � (47.8 )
�
Net income 105,070 109,059 111,181 103,166 29,606 254.9
�
Less: Preferred stock dividends and redemption charge 3,151 � 9,729 2,559 � 2,559 � 2,560 � 23.1 �
�
Net income available to common shareholders $ 101,919 � 99,330 108,622 � 100,607 � 27,046 � 276.8 �
�
Net income per common share, basic $ 0.88 0.85 0.92 0.85 0.23 286.5 %
�
Net income per common share, diluted 0.87 0.84 0.91 0.84 0.23 287.2
�
Cash dividends declared per common share 0.25 0.25 0.25 0.25 0.15 66.7
�
Return on average assets * 1.29 % 1.36 1.42 1.34 0.37 92bps
Return on average common equity * 14.25 13.95 15.39 14.62 3.76 1,049
�
Weighted average common shares outstanding, basic 116,303 117,241 118,397 118,666 119,282 (2.5 )%
Weighted average common shares outstanding, diluted 116,986 118,095 119,139 119,321 120,182 (2.7 )
�
nm - not meaningful
bps - basis points
* - ratios are annualized
�
�
Synovus
� � � � � � � � � �
�
BALANCE SHEET DATA December 31, 2018 September 30, 2018 December 31, 2017
(Unaudited)
�
(In thousands, except share data)
�
ASSETS
Cash and due from banks $ 468,426 436,540 397,848
Interest-bearing funds with Federal Reserve Bank 641,476 515,493 460,928
Interest earning deposits with banks 19,841 34,470 26,311
Federal funds sold and securities purchased under resale agreements 13,821 � 25,430 � 47,846 �
Cash and cash equivalents 1,143,564 1,011,933 932,933
�
Mortgage loans held for sale, at fair value 37,129 37,276 48,024
Investment securities available for sale, at fair value 3,991,632 3,883,574 3,987,069
�
Loans, net of deferred fees and costs 25,946,573 25,577,116 24,787,464
Allowance for loan losses (250,555 ) (251,450 ) (249,268 )
Loans, net 25,696,018 � 25,325,666 � 24,538,196 �
�
Cash surrender value of bank-owned life insurance 554,134 551,061 540,958
Premises and equipment, net 434,307 431,012 426,813
Goodwill 57,315 57,315 57,315
Other intangible assets 9,875 10,166 11,254
Deferred tax assets, net 141,134 185,116 165,788
Other assets 604,084 � 582,001 � 513,487 �
�
Total assets $ 32,669,192 � 32,075,120 � 31,221,837 �
�
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest-bearing deposits $ 7,650,967 7,628,736 7,686,339
Interest-bearing deposits 19,069,355 � 18,804,922 � 18,461,561 �
�
Total deposits 26,720,322 26,433,658 26,147,900
�
Federal funds purchased and securities sold under repurchase agreements 237,692 191,145 161,190
Other short-term borrowings 650,000 478,540 100,000
Long-term debt 1,657,157 1,656,909 1,606,138
Other liabilities 270,419 � 274,795 � 245,043 �
�
Total liabilities 29,535,590 � 29,035,047 � 28,260,271 �
�
�
Shareholders' equity:
Series D Preferred Stock - no par value. Authorized 100,000,000 shares; 8,000,000 shares issued and outstanding at December 31,2018 and September 30, 2018 195,140 195,138 —
�
Series C Preferred Stock - no par value. 5,200,000 outstanding at December 31, 2017 — — 125,980
�
Common stock - $1.00 par value. Authorized 342,857,143 shares; 143,300,449 issued at December 31, 2018, 143,093,317 issued at September 30, 2018, and 142,677,449 issued at December 31, 2017; 115,865,510 outstanding at December 31, 2018, 116,714,463 outstanding at September 30, 2018 and 118,897,295 outstanding at December 31, 2017 143,300 143,093 142,678
�
Additional paid-in capital 3,060,561 3,049,233 3,043,129
�
Treasury stock, at cost – 27,434,939 shares at December 31, 2018, 26,378,854 shares at September 30, 2018, and 23,780,154 shares at December 31. 2017 (1,014,746 ) (974,478 ) (839,674 )
�
Accumulated other comprehensive loss, net (94,420 ) (143,720 ) (54,754 )
�
Retained Earnings 843,767 � 770,807 � 544,207 �
�
Total shareholders’ equity 3,133,602 � 3,040,073 � 2,961,566 �
�
Total liabilities and shareholders' equity $ 32,669,192 � 32,075,120 � 31,221,837 �
�
�
Synovus
�
AVERAGE BALANCES AND YIELDS/RATES (1)
(Unaudited)
(Dollars in thousands)
� � � 2018 � � 2017
Fourth � � Third � � Second � � First Fourth
Quarter Quarter Quarter Quarter Quarter
Interest Earning Assets
Taxable investment securities (2) $ 4,073,685 4,061,239 4,077,564 4,097,162 3,937,278
Yield 2.45 % 2.38 2.34 2.34 2.29
Tax-exempt investment securities(2)(4) $ — 89 115 140 180
Yield (taxable equivalent) — % 5.91 6.87 6.57 7.97
Trading account assets(5) $ 7,493 16,646 23,772 8,167 7,360
Yield 1.90 % 2.52 2.79 2.66 2.78
Commercial loans(3)(4) $ 19,150,252 19,025,830 18,857,271 18,963,515 18,935,774
Yield 5.13 % 4.98 4.85 4.64 4.49
Consumer loans(3) $ 6,476,026 6,298,643 6,092,899 5,899,015 5,704,629
Yield 4.85 % 4.80 4.76 4.71 4.54
Allowance for loan losses $ (251,098 ) (251,684 ) (257,966 ) (251,635 ) (252,319 )
Loans, net(3) $ 25,375,180 25,072,789 24,692,204 24,610,895 24,388,084
Yield 5.11 % 4.99 4.88 4.70 4.55
Mortgage loans held for sale $ 36,477 49,030 50,366 38,360 45,353
Yield 4.79 % 4.71 4.42 3.95 3.96
Federal funds sold, due from Federal Reserve Bank, and other short-term investments $ 641,832 544,704 724,537 516,575 922,296
Yield 2.20 % 1.90 1.77 1.48 1.31
Federal Home Loan Bank and Federal Reserve Bank Stock(5) $ 162,369 163,568 165,845 177,381 159,455
Yield 4.31 % 4.41 � 4.63 � 3.39 � 4.03 �
Total interest earning assets $ 30,297,036 29,908,065 29,734,403 29,448,680 29,460,006
Yield 4.69 % 4.58 � 4.47 � 4.31 � 4.15 �
Interest Bearing Liabilities
Interest bearing demand deposits $ 4,692,804 4,701,204 5,001,826 5,032,000 4,976,239
Rate 0.41 % 0.38 0.35 0.31 0.28
Money Market accounts $ 8,050,732 7,936,621 7,791,107 7,561,554 7,514,992
Rate 0.89 % 0.72 0.55 0.43 0.36
Savings deposits $ 815,588 824,935 829,800 811,587 804,853
Rate 0.04 % 0.03 0.03 0.03 0.03
Time deposits under $100,000 $ 1,242,811 1,205,987 1,161,890 1,143,780 1,166,413
Rate 1.16 % 0.99 0.82 0.71 0.70
Time deposits over $100,000 $ 2,478,649 2,273,582 2,021,084 1,895,545 2,004,031
Rate 1.67 % 1.46 1.22 1.02 0.99
Non-maturing brokered deposits $ 349,480 358,277 262,976 424,118 546,413
Rate 2.46 % 2.10 1.94 1.14 0.81
Brokered time deposits $ 1,275,276 1,414,700 1,659,941 1,527,793 1,651,920
Rate 2.03 % 1.94 � 1.85 � 1.75 � 1.63 �
Total interest-bearing deposits $ 18,905,340 18,715,306 18,728,624 18,396,377 18,664,861
Rate 0.96 % 0.83 0.70 0.58 0.54
Federal funds purchased and securities sold under repurchase agreements $ 194,370 230,504 207,655 202,226 184,369
Rate 0.18 % 0.25 0.35 0.21 0.15
Other short-term borrowings $ 112,228 146,794 3,024 394,056 3,261
Rate 2.51 % 2.12 2.84 1.52 1.42
Long-term debt $ 1,657,022 1,656,743 1,852,094 1,733,938 1,710,721
Rate 3.06 % 2.87 � 2.66 � 2.51 � 2.67 �
Total interest-bearing liabilities $ 20,868,960 20,749,347 20,791,397 20,726,597 20,563,212
Rate 1.12 % 0.99 � 0.87 � 0.76 � 0.72 �
Non-interest bearing demand deposits $ 8,014,761 7,672,006 7,539,451 7,391,695 7,621,147
Cost of funds 0.81 % 0.73 � 0.64 � 0.56 � 0.52 �
Net interest margin 3.92 % 3.89 � 3.86 � 3.78 � 3.65 �
�
Taxable equivalent adjustment $ 181 136 120 116 234
�
(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 BY TYPE
(Unaudited)
(Dollars in thousands) � � � � �
Total Loans Total Loans Linked Quarter Total Loans Year/Year
Loan Type December 31, 2018 September 30, 2018 % Change (1) December 31, 2017 % Change
�
Commercial, Financial, and Agricultural $ 7,449,698 7,281,466 9.2 % $ 7,179,487 3.8 %
Owner-Occupied 5,331,508 � 5,221,828 � 8.3 � 4,844,163 � 10.1 �
�
Total Commercial & Industrial 12,781,206 12,503,294 8.8 12,023,650 6.3
�
Multi-Family 1,208,033 1,330,006 (36.4 ) 1,492,159 (19.0 )
Hotels 704,319 760,885 (29.5 ) 741,703 (5.0 )
Office Buildings 1,451,048 1,368,608 23.9 1,499,834 (3.3 )
Shopping Centers 808,540 815,696 (3.5 ) 791,311 2.2
Warehouses 627,353 679,184 (30.3 ) 581,410 7.9
Other Investment Property 761,658 � 711,311 � 28.1 � 563,648 � 35.1 �
�
Total Investment Properties 5,560,951 5,665,690 (7.3 ) 5,670,065 (1.9 )
�
1-4 Family Construction 174,259 183,044 (19.0 ) 198,200 (12.1 )
1-4 Family Investment Mortgage 505,611 � 524,152 � (14.0 ) 583,419 � (13.3 )
�
Total 1-4 Family Properties 679,870 707,196 (15.3 ) 781,619 (13.0 )
�
Commercial Development 60,675 61,608 (6.0 ) 70,062 (13.4 )
Residential Development 93,166 91,578 6.9 114,079 (18.3 )
Land Acquisition 169,829 � 186,334 � (35.1 ) 299,463 � (43.3 )
�
Land and Development 323,670 � 339,520 � (18.5 ) 483,604 � (33.1 )
�
Total Commercial Real Estate 6,564,491 � 6,712,406 � (8.7 ) 6,935,288 � (5.3 )
�
Consumer Mortgages 2,934,235 2,843,244 12.7 2,633,503 11.4
Home Equity Lines 1,515,796 1,465,419 13.6 1,514,227 0.1
Credit Cards 258,245 245,149 21.2 232,676 11.0
Other Consumer Loans 1,916,743 � 1,831,385 � 18.5 � 1,473,451 � 30.1 �
�
Total Consumer 6,625,019 � 6,385,197 � 14.9 � 5,853,857 � 13.2 �
�
Unearned Income (24,143 ) (23,781 ) 6.0 � (25,331 ) (4.7 )
�
Total $ 25,946,573 � 25,577,116 � 5.7 � $ 24,787,464 � 4.7 %
�
(1) Percentage change is annualized.
�
NON-PERFORMING LOANS COMPOSITION
(Unaudited)
(Dollars in thousands)
� � � � �
Total Total Total
Non-performing Non-performing Linked Quarter Non-performing Year/Year
Loan Type Loans Loans % Change Loans % Change
� December 31, 2018 September 30, 2018 � December 31, 2017 �
�
Commercial, Financial, and Agricultural $ 69,295 69,010 0.4 % $ 70,130 (1.2 )%
Owner-Occupied 8,971 � 5,708 � 57.2 � 6,654 � 34.8 �
�
Total Commercial & Industrial 78,266 74,718 4.7 76,784 1.9
�
Multi-Family 237 234 1.3 1,241 (80.9 )
Hotels — — — — —
Office Buildings 165 166 (0.6 ) 1,532 (89.2 )
Shopping Centers 89 89 — 165 (46.1 )
Warehouses — — — 226 (100.0 )
Other Investment Property 1,890 � 1,666 � 13.4 � 640 � 195.3 �
�
Total Investment Properties 2,381 2,155 10.5 3,804 (37.4 )
�
1-4 Family Investment Mortgage 2,381 � 3,139 � (24.1 ) 2,849 � (16.4 )
�
Total 1-4 Family Properties 2,381 3,139 (24.1 ) 2,849 (16.4 )
�
Commercial Development 93 42 121.4 45 106.7
Residential Development 1,444 3,184 (54.6 ) 3,257 (55.7 )
Land Acquisition 1,416 � 1,603 � (11.7 ) 2,495 � (43.2 )
�
Land and Development 2,953 � 4,829 � (38.8 ) 5,797 � (49.1 )
�
Total Commercial Real Estate 7,715 � 10,123 � (23.8 ) 12,450 � (38.0 )
�
Consumer Mortgages 4,949 5,313 (6.9 ) 7,203 (31.3 )
Home Equity Lines 12,114 14,498 (16.4 ) 17,455 (30.6 )
Other Consumer Loans 3,689 � 3,773 � (2.2 ) 1,669 � 121.0 �
�
Total Consumer 20,752 � 23,584 � (12.0 ) 26,327 � (21.2 )
�
Total $ 106,733 � 108,425 � (1.6 )% $ 115,561 � (7.6 )%
�
� � � � � � � � � � � � �
Synovus
�
CREDIT QUALITY DATA
(Unaudited)
(Dollars in thousands) 2018 2017
� � � � � � � � � � � � � �
Fourth Third Second First Fourth

Year/Year %
change

Quarter � � Quarter � � Quarter � � Quarter Quarter � �
�
Non-performing Loans $ 106,733 108,425 117,328 120,081 115,561 (7.6 )%
Impaired Loans Held for Sale (1) 1,506 12 2,733 6,591 11,278 nm
Other Real Estate 6,220 � 8,542 6,288 4,496 3,758 65.5 �
�
Non-performing Assets 114,459 116,979 126,349 131,168 130,597 (12.4 )
�
Allowance for loan losses 250,555 251,450 251,725 257,764 249,268 0.5
�
Net Charge-Offs - Quarter 13,044 15,257 17,829 4,280 8,979
Net Charge-Offs - YTD 50,410 37,366 22,109 4,280 69,675
Net Charge-Offs / Average Loans - Quarter (2) 0.20 % 0.24 0.29 0.07 0.15
Net Charge-Offs / Average Loans - YTD (2) 0.20 0.20 0.18 0.07 0.29
�
Non-performing Loans / Loans 0.41 0.42 0.47 0.48 0.47
Non-performing Assets / Loans, Impaired Loans Held for Sale, & ORE 0.44 0.46 0.50 0.53 0.53
Allowance / Loans 0.97 0.98 1.00 1.04 1.01
�
Allowance / Non-performing Loans 234.75 231.91 214.55 214.66 215.70
Allowance / Non-performing Loans (3) 297.68 288.21 262.99 241.49 238.44
�
Past Due Loans over 90 days and Still Accruing $ 3,798 4,856 3,222 5,416 4,414 (14.0 )
As a Percentage of Loans Outstanding 0.01 % 0.02 0.01 0.02 0.02
�
Total Past Due Loans and Still Accruing $ 56,927 78,323 55,614 54,150 52,032 9.4
As a Percentage of Loans Outstanding 0.22 % 0.31 0.22 0.22 0.21
�
Accruing Troubled Debt Restructurings (TDRs) $ 115,588 114,740 125,310 129,394 151,271 (23.6 )
�
�
(1) Represent impaired loans that have been specifically identified to be sold. Impaired loans held for sale are carried at the lower of cost or fair value, less costs to sell, based primarily on estimated sales proceeds net of selling costs.
(2) Ratio is annualized.
(3) Excludes non-performing loans for which the expected loss has been charged off.
�
�
�
SELECTED CAPITAL INFORMATION (1)
(Unaudited)
(Dollars in thousands) � � �

December 31,
2018

September 30,
2018

December 31,
2017

�
�
Tier 1 Capital $ 3,090,418 3,038,768 2,872,001
Total Risk-Based Capital 3,601,377 3,550,686 3,383,081
Common Equity Tier 1 Ratio (transitional) 10.04 % 9.90 9.99
Common Equity Tier 1 Ratio (fully phased-in) (5) 10.00 9.86 9.88
Tier 1 Capital Ratio 10.70 10.57 10.38
Total Risk-Based Capital Ratio 12.47 12.36 12.23
Tier 1 Leverage Ratio 9.60 9.58 9.19
Common Equity as a Percentage of Total Assets (2) 8.99 8.87 9.08
Tangible Common Equity as a Percentage of Tangible Assets (3) (5) 8.81 8.68 8.88
Book Value Per Common Share (4) $ 25.36 24.38 23.85
Tangible Book Value Per Common Share (3) 24.78 23.80 23.27
�
�
(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.
(5) See "Non-GAAP Financial Measures" of this report for applicable reconciliation of GAAP measures.
�

Media Contact

Lee Underwood

Media Relations

(706) 644-0528

Investor Contact

Steve Adams

Investor Relations

(706) 641-6462

Source: Synovus Financial Corp.

Categories

Press Releases

Next Articles