Synovus Reports Earnings for Fourth Quarter of 2013

Total Loans Grow $346 Million or 7.0% Annualized

Business Wire

COLUMBUS, Ga.--(BUSINESS WIRE)--

Synovus Financial Corp. (SNV) today reported financial results for the quarter ended December 31, 2013.

Fourth Quarter Results

  • Net income available to common shareholders was $35.8 million for the fourth quarter of 2013, compared to $37.2 million for the third quarter of 2013, and $709.3 million for the fourth quarter of 2012. Diluted net income per common share for the fourth quarter of 2013 was $0.04 compared to $0.04 for the third quarter of 2013 and $0.78 for the fourth quarter of 2012. Excluding litigation loss contingency expense and restructuring charges (net of tax), the fourth quarter of 2013 net income available to common shareholders was $44.3 million or $0.05 per diluted common share.
    • The fourth quarter of 2013 results included litigation loss contingency expense of $10 million or $0.01 per share.
    • The fourth quarter of 2012 results included an $800 million tax benefit related to the deferred tax asset recapture.
  • Total loans grew $346.2 million sequentially or 7.0% annualized.
  • Credit costs totaled $22.3 million for the fourth quarter of 2013, compared to $22.4 million for the third quarter of 2013 and $185.8 million for the fourth quarter of 2012.

"We were pleased to report 7% annualized sequential quarter loan growth, driven primarily by C&I and retail lending,” said Kessel D. Stelling, Chairman and CEO of Synovus. “Partnerships between our local bank divisions and large corporate banking teams across our five-state footprint produced meaningful results, and we saw growth in key markets such as Atlanta, Tampa, Charleston, Nashville, Savannah, and Columbus. HELOC and private client mortgages drove the growth in retail loans during the quarter. Credit quality continued to improve, and our net interest margin remained stable. Additionally, our focus on cost savings continued as we completed implementation of initiatives necessary to achieve the $30 million in expense reductions announced at the beginning of the year.”

Core Performance

Pre-tax, pre-credit costs income was $96.3 million for the fourth quarter of 2013, an increase of $868 thousand from $95.4 million for the third quarter of 2013.

  • Net interest income was $204.3 million for the fourth quarter of 2013, up $360 thousand from $204.0 million in the previous quarter.
  • The net interest margin was 3.38%, compared to 3.40% in the third quarter of 2013, with the yield on earning assets down four basis points and the effective cost of funds down two basis points.
  • Total non-interest income was $60.2 million for the fourth quarter of 2013, down $3.4 million, compared to $63.6 million for the third quarter of 2013, due primarily to a decline in mortgage banking income of $2.4 million and private equity investment losses of $2.1 million.
    • Financial Management Services revenues were $19.5 million, up $1.6 million compared to the third quarter, dTARriven by increases in fees from customer interest rate swaps and trust services.
  • Non-interest expense for the fourth quarter of 2013 was $190.7 million, up $3.4 million from the third quarter of 2013.
    • The fourth quarter of 2013 non-interest expense includes $10.0 million in litigation loss contingency expense and $3.8 million in restructuring charges.
    • Adjusted non-interest expense (excludes Visa indemnification charges, restructuring charges, litigation loss contingency expense and other credit costs) was $167.9 million, down $3.2 million from $171.0 million for the third quarter of 2013, driven by declines in almost every category.
    • The $30 million expense reduction initiative announced in January 2013 was fully implemented during the year.

Balance Sheet Fundamentals

  • Total reported loans ended the quarter at $20.06 billion, a $346.2 million increase from the third quarter of 2013.
    • Commercial and industrial loans grew by $272.5 million from the third quarter of 2013, or 11.1% annualized.
    • Retail loans grew by $75.6 million from the third quarter of 2013, or 8.4% annualized.
    • Commercial real estate loans grew by $2.0 million from the third quarter of 2013.
  • Total deposits ended the quarter at $20.88 billion, down $97.1 million from the previous quarter due primarily to a decline in brokered time deposits.
  • Core deposits ended the quarter at $19.78 billion, up $84.1 million compared to the third quarter of 2013. Core deposits, excluding time deposits, increased $155.7 million compared to the previous quarter.

Credit Quality

Broad based improvement in credit quality continued.

  • Total credit costs were $22.3 million in the fourth quarter of 2013, down from $22.4 million in the third quarter of 2013 and $185.8 million in the fourth quarter of 2012.
  • Net charge-offs were $25.1 million in the fourth quarter of 2013, up from $23.0 million in the third quarter of 2013 and down from $193.5 million in the fourth quarter of 2012. The annualized net charge-off ratio was 0.51% in the fourth quarter, up from 0.47% in the previous quarter and down from 3.94% in the fourth quarter of 2012.
  • Non-performing loan inflows were $41.2 million in the fourth quarter of 2013, down from $47.4 million in the third quarter of 2013 and $262.7 million in the fourth quarter of 2012.
  • Non-performing loans, excluding loans held for sale, were $416.3 million at December 31, 2013, down $34.6 million from the previous quarter, and down $127.0 million or 23.4% from the fourth quarter of 2012. The non-performing loan ratio was 2.08% at December 31, 2013, down from 2.29% at the end of the previous quarter and 2.78% at December 31, 2012.
  • Total non-performing assets were $539.6 million at December 31, 2013, down $47.3 million from the previous quarter, and down $163.4 million or 23.2% from the fourth quarter of 2012. The non-performing asset ratio was 2.67% at December 31, 2013, compared to 2.96% at the end of the previous quarter and 3.57% at December 31, 2012.
  • Total delinquencies (consisting of loans 30 or more days past due and still accruing) declined to 0.36% of total loans at December 31, 2013, compared to 0.40% at September 30, 2013, and 0.54% at December 31, 2012. Total loans past due 90 days or more and still accruing remained low at 0.02% at December 31, 2013, compared to 0.02% at September 30, 2013, and 0.03% at December 31, 2012.
  • Distressed asset sales were approximately $68 million during the fourth quarter, compared to approximately $56 million in the third quarter of 2013, and approximately $545 million in the fourth quarter of 2012, which included the completion of a bulk asset sale in December of 2012.

Capital Ratios

  • Tier 1 Common Equity ratio was 9.93% at December 31, 2013, unchanged from September 30, 2013.
  • Tier 1 Capital ratio was 10.54% at December 31, 2013, compared to 10.55% at September 30, 2013.
  • Total Risk Based Capital ratio was 13.00% at December 31, 2013, compared to 13.04% at September 30, 2013.
  • Tier 1 Leverage ratio was 9.13% at December 31, 2013, compared to 8.96% at September 30, 2013.
  • Tangible Common Equity ratio was 10.68% at December 31, 2013, compared to 10.61% at September 30, 2013.

Stelling concluded, "Our team’s 125th anniversary celebration during the fourth quarter was an appropriate way to close out a successful year defined by several important achievements, including upgrades from three rating agencies, two successful capital raises, and the redemption of our TARP obligation. Entering 2014, our capital position is strong, our customers remain our central focus, and our lending engine is gaining good traction. While expense management continues to be a major focus for our company, with additional reductions of approximately $30 million planned for 2014, we are also making strategic investments in talent, technology, and marketing that will improve our customers’ experience and support future growth. ”

Synovus will host an earnings highlights conference call at 8:30 a.m. EDT on January 21, 2014. The earnings call will be accompanied by a slide presentation. Shareholders and other interested parties can access the slide presentation and listen to the conference call via simultaneous Internet broadcast at www.synovus.com by clicking on the “Live Webcast” icon. RealPlayer or Windows Media Player can be downloaded prior to accessing the actual call or the replay. The replay will be archived for 12 months and will be available 30-45 minutes after the call.

About Synovus

Synovus Financial Corp. is a financial services company based in Columbus, Georgia, with approximately $26 billion in assets. Synovus Financial Corp. provides commercial and retail banking, investment and mortgage services to customers in Georgia, Alabama, South Carolina, Florida and Tennessee. See Synovus Financial Corp. on the web at www.synovus.com.

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 commercial banking industry and economy in general. These forward-looking statements include, among others, our expectations on credit trends and key credit metrics; expectations regarding deposits, loan growth and the net interest margin; expectations on our growth strategy, strategic investments, expense initiatives, and future profitability; 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 report. 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, 2012 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 core deposits, core deposits excluding time deposits, tangible common equity to tangible assets ratio, Tier 1 common equity ratio, net income available to common shareholders excluding litigation loss contingency expense and restructuring charges, pre-tax, pre-credit costs income, and adjusted non-interest expense 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 deposits, total shareholders’ equity to total assets ratio, Tier 1 capital to risk-weighted assets ratio, net income available to common shareholders, income (loss) before income taxes, and total non-interest expense, respectively.

Synovus believes that these non-GAAP financial measures provide meaningful additional information about Synovus to assist management and investors in evaluating Synovus’ capital strength and the performance of its core business. These non-GAAP financial measures should not be considered as substitutes for total deposits, total shareholders’ equity to total assets ratio, Tier 1 capital to risk-weighted assets ratio, net income available to common shareholders, income (loss) before income taxes, or total non-interest expense determined in accordance with GAAP and may not be comparable to other similarly titled measures at other companies.

The computations of core deposits, core deposits excluding time deposits, tangible common equity to tangible assets ratio, Tier 1 common equity ratio, net income available to common shareholders excluding litigation loss contingency expense and restructuring charges, pre-tax, pre-credit costs income, and adjusted non-interest expense, and the reconciliation of these measures to total deposits, total shareholders’ equity to total assets ratio, Tier 1 capital to risk-weighted assets ratio, income (loss) before income taxes, and total non-interest expense are set forth in the tables below.

                     
Reconciliation of Non-GAAP Financial Measures
(dollars in thousands) 4Q13     3Q13     2Q13     1Q13     4Q12

Net income available to common shareholders excluding litigation loss contingency expense and restructuring charges

Net income available to common shareholders $ 35,849
Add: Litigation loss contingency expense (after-tax) 6,110
Add: Restructuring charges (after-tax)   2,303

Net income available to common shareholders excluding litigation loss contingency expense and restructuring charges

$

44,262

Weighted average common shares outstanding - diluted 975,933

Net income per common share, diluted, excluding litigation loss contingency expense and restructuring charges

$ 0.05
 

Pre-tax, Pre-credit Costs Income

Income (loss) before income taxes $ 59,709 73,459 72,906 46,553 (72,299 )
Add: Provision for losses on loans 14,064 6,761 13,077 35,696 146,526
Add: Other credit costs(1) 8,285 15,603 10,887 13,595 39,236
Add: Restructuring charges 3,770 687 1,758 4,850 1,969
Add: Litigation loss contingency expense(2) 10,000 - - - -
Subtract: Investment securities gains, net (373 ) (1,124 ) (1,403 ) (45 ) (8,233 )
Add: Visa indemnification charges   799   -   764   37   757  
Pre-tax, pre-credit costs income $ 96,254   95,386   97,989   100,686   107,956  
 
Adjusted Non-interest Expense
Total non-interest expense $ 190,738 187,328 181,186 182,286 213,346
Subtract: Other credit costs(1) (8,285 ) (15,603 ) (10,887 ) (13,595 ) (39,236 )
Subtract: Restructuring charges (3,770 ) (687 ) (1,758 ) (4,850 ) (1,969 )
 
Subtract: Visa indemnification charges (799 ) - (764 ) (37 ) (757 )
 
Subtract: Litigation loss contingency expense(2)   (10,000 ) -   -   -   -  
Adjusted non-interest expense $ 167,884   171,038   167,777   163,804   171,384  
 
Core deposits

Core deposits excluding time deposits

Total deposits $ 20,876,790 20,973,856 20,710,703 20,561,193 21,057,044
 
Subtract: Brokered deposits   (1,094,002 ) (1,275,200 ) (1,338,064 ) (1,332,632 ) (1,092,749 )
Core deposits 19,782,788 19,698,656 19,372,639 19,228,561 19,964,295
 
Subtract: Time deposits   (3,498,200 ) (3,569,752 ) (3,377,215 ) (3,482,196 ) (3,583,304 )
Core deposits excluding time deposits $ 16,284,588   16,128,904   15,995,424   15,746,365   16,380,991  
 
Tier 1 Common Equity Ratio
Total shareholders' equity $ 2,948,985 2,931,860 3,568,204 3,578,106 3,569,431

Add/subtract: Accumulated other comprehensive loss (income)

41,258 29,514 33,060 (2,787 ) (4,101 )
 
Subtract: Goodwill (24,431 ) (24,431 ) (24,431 ) (24,431 ) (24,431 )
 
Subtract: Other intangible assets, net (3,415 ) (3,783 ) (4,156 ) (4,583 ) (5,149 )
 
Subtract: Disallowed deferred tax asset (618,516 ) (647,828 ) (674,996 ) (687,007 ) (710,488 )
Other items   7,612   7,426   7,304   7,191   6,982  
Tier 1 capital   2,351,493   2,292,758   2,904,985   2,866,489   2,832,244  
 
Subtract: Qualifying trust preferred securities (10,000 ) (10,000 ) (10,000 ) (10,000 ) (10,000 )
 
Subtract: Series C Preferred Stock, no par value (125,862 ) (125,400 ) - - -
 
Subtract: Series A Preferred Stock, no par value   -   -   (962,725 ) (960,005 ) (957,327 )
Tier 1 common equity   2,215,631   2,157,358   1,932,260   1,896,484   1,864,917  
 
Risk-weighted assets

22,312,655

(3)

21,735,363 21,542,287 21,235,129 21,387,935
Tier 1 common equity ratio   9.93 %(3) 9.93   8.97   8.93   8.72  
 
Tangible common equity to tangible assets ratio
Total assets $ 26,201,604 26,218,360 26,563,174 26,212,879 26,760,012
Subtract: Goodwill (24,431 ) (24,431 ) (24,431 ) (24,431 ) (24,431 )
 
Subtract: Other intangible assets, net   (3,415 ) (3,783 ) (4,156 ) (4,583 ) (5,149 )
Tangible assets $ 26,173,758   26,190,146   26,534,587   26,183,865   26,730,432  
 
Total shareholders’ equity $ 2,948,985 2,931,860 3,568,204 3,578,106 3,569,431
Subtract: Goodwill (24,431 ) (24,431 ) (24,431 ) (24,431 ) (24,431 )
Subtract: Other intangible assets, net (3,415 ) (3,783 ) (4,156 ) (4,583 ) (5,149 )
 
Subtract: Series C Preferred Stock, no par value (125,862 ) (125,400 ) - - -
 
Subtract: Series A Preferred Stock, no par value   -   -   (962,725 ) (960,005 ) (957,327 )
Tangible common equity $ 2,795,277   2,778,246   2,576,892   2,589,087   2,582,524  
Total shareholders’ equity to total assets ratio 11.25 % 11.18 13.43 13.65 13.34
Tangible common equity to tangible assets ratio         10.68 %     10.61       9.71       9.89       9.66  

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

 

(2) Consists of loss contingency accruals with respect to outstanding legal matters. Amounts for periods prior to the three months ended December 31, 2013 are not disclosed separately as amounts are not material.

 

(3) Preliminary

 
         
Synovus
 
INCOME STATEMENT DATA Twelve Months Ended
(Unaudited)
(Dollars in thousands, except per share data) December 31,
2013       2012       Change
 
Interest income $ 929,014 1,004,140 (7.5 ) %
Interest expense 118,822   150,023   (20.8 )
 
Net interest income 810,192 854,117 (5.1 )
Provision for loan losses 69,598   320,369   (78.3 )
 
Net interest income after provision for loan losses 740,594   533,748   38.8  
 
Non-interest income:
Service charges on deposit accounts 77,789 78,203 (0.5 )
Fiduciary and asset management fees 43,450 42,503 2.2
Brokerage revenue 27,538 26,913 2.3
Mortgage banking income 22,482 32,272 (30.3 )
Bankcard fees 30,641 34,075 (10.1 )
Investment securities gains, net 2,945 39,142 (92.5 )
Other fee income 22,567 21,138 6.8
(Decrease) increase in fair value of private equity investments, net (2,963 ) 8,233 nm
Other non-interest income 29,122   31,487   (7.5 )
 
Total non-interest income 253,571   313,966   (19.2 )
 
Non-interest expense:
Salaries and other personnel expense 368,152 375,872 (2.1 )
Net occupancy and equipment expense 103,339 105,575 (2.1 )
FDIC insurance and other regulatory fees 32,758 45,408 (27.9 )
Foreclosed real estate expense, net 33,864 90,655 (62.6 )
Losses on other loans held for sale, net 329 4,681 (93.0 )
Professional fees 38,776 41,307 (6.1 )
Third-party services 40,135 38,006 5.6
Visa indemnification charges 1,600 6,304 (74.6 )
Litigation loss contingency expense (1) 10,000 - nm
Restructuring charges 11,064 5,412 104.4
Other operating expenses 101,520   103,017   (1.5 )
 
 
Total non-interest expense 741,537   816,237   (9.2 )
 
Income before income taxes 252,628 31,477 nm
Income tax expense (benefit) 93,245   (798,732 ) nm
 
Net income 159,383 830,209 (80.8 )
 
Dividends and accretion of discount on preferred stock 40,830   58,703   (30.4 )
 
 
Net income available to common shareholders $ 118,553   771,506   (84.6 )
 
 
Net income per common share, basic 0.13 0.98 (86.5 )
 
Net income per common share, diluted 0.13 0.85 (85.1 )
 
Cash dividends declared per common share 0.04 0.04 -
 
Return on average assets 0.61 % 3.15 (80.6 )
Return on average common equity 4.39 40.65 (89.2 )
 
 
Weighted average common shares outstanding, basic 892,462 786,466 13.5 %
Weighted average common shares outstanding, diluted 939,580 910,102 3.2
 
nm - not meaningful
 
(1 )

Consists of loss contingency accruals with respect to outstanding legal matters. Amounts for periods prior to the three months ended December 31, 2013 are not disclosed separately as amounts are not material.

 
                 
Synovus
  INCOME STATEMENT DATA
(Unaudited)
(Dollars in thousands, except per share data) 2013       2012      

4th Quarter

 

Fourth
Quarter

   

Third
Quarter

   

Second
Quarter

   

First
Quarter

   

Fourth
Quarter

   

'13 vs. '12
Change

 
Interest income $ 233,259 233,852 231,513 230,391 240,000 (2.8 ) %
Interest expense 28,928   29,882 29,436   30,577   32,544   (11.1 )
 
Net interest income 204,331 203,970 202,077 199,814 207,456 (1.5 )
Provision for loan losses 14,064   6,761 13,077   35,696   146,526   (90.4 )
 
Net interest income after provision for loan losses 190,267   197,209 189,000   164,118   60,930   212.3  
 
Non-interest income:
Service charges on deposit accounts 19,647 19,426 19,195 19,521 20,883 (5.9 )
Fiduciary and asset management fees 10,978 10,389 11,111 10,971 10,537 4.2
Brokerage revenue 6,307 6,636 7,002 7,594 7,127 (11.5 )
Mortgage banking income 2,913 5,314 7,338 6,917 9,025 (67.7 )
Bankcard fees 7,979 7,760 7,838 7,064 10,137 (21.3 )
Investment securities gains, net 373 1,124 1,403 45 8,233 (95.5 )
Other fee income 6,106 5,199 5,775 5,487 6,211 (1.7 )
(Decrease) increase in fair value of private equity investments, net (2,108 ) 284 (883 ) (257 ) 1,805 nm
Other non-interest income 7,986   7,446 6,313   7,379   6,159   29.7  
 
Total non-interest income 60,181   63,578 65,092   64,721   80,117   (24.9 )
 
 
Non-interest expense:
Salaries and other personnel expense 91,962 92,794 89,479 93,917 94,901 (3.1 )
Net occupancy and equipment expense 26,314 26,475 26,383 24,167 26,063 1.0
FDIC insurance and other regulatory fees 8,699 7,639 7,941 8,480 8,237 5.6
Foreclosed real estate expense, net 5,064 10,359 7,502 10,940 34,978 (85.5 )
Losses (gains) on other loans held for sale, net (159 ) 408 (86 ) 165 675 (123.6 )
Professional fees 9,855 11,410 10,416 7,095 12,037 (18.1 )
Third-party services 9,689 10,151 10,366 9,929 9,540 1.6
Visa indemnification charges 799 - 764 37 757 5.5
Litigation loss contingency expense (1) 10,000 - - - - nm
Restructuring charges 3,770 687 1,758 4,850 1,969 91.5
Other operating expenses 24,745   27,405 26,663   22,706   24,189   2.3  
 
 
Total non-interest expense 190,738   187,328 181,186   182,286   213,346   (10.6 )
 
 
Income before income taxes 59,710 73,459 72,906 46,553 (72,299 ) 182.6
Income tax expense (benefit) 21,131   27,765 27,371   16,979   (796,339 ) nm
 
Net income 38,579 45,694 45,535 29,574 724,040 (94.7 )
Dividends and accretion of discount on preferred stock 2,730   8,506 14,818   14,776   14,736   (81.5 )
 
Net income available to common shareholders $ 35,849   37,188 30,717   14,798   709,304   (94.9 )
 
 
Net income per common share, basic 0.04 0.04 0.04 0.02 0.90 (95.9 )
 
Net income per common share, diluted 0.04 0.04 0.03 0.02 0.78 (95.3 )
 
Cash dividends declared per common share 0.01 0.01 0.01 0.01 0.01 -
 
Return on average assets * 0.58 % 0.69 % 0.69 % 0.46 % 11.13 (94.8 )
Return on average common equity * 5.04 5.40 4.70 2.30 149.46 (96.6 )
 
 
Weighted average common shares outstanding, basic 972,279 956,694 851,093 787,043 786,576 23.6 %
Weighted average common shares outstanding, diluted 975,933 959,680 910,937 910,835 911,251 7.1
 
nm - not meaningful
* - ratios are annualized
 

(1) Consists of loss contingency accruals with respect to outstanding legal matters. Amounts for periods prior to the three months ended December 31, 2013 are not disclosed separately as amounts are not material.

 
...
           
Synovus
       

BALANCE SHEET DATA

December 31, 2013

September 30, 2013

December 31, 2012

(Unaudited)
 
(In thousands, except share data)
 
ASSETS
Cash and cash equivalents $ 469,630 514,694 614,630
Interest bearing funds with Federal Reserve Bank 644,528 966,435 1,498,390
Interest earning deposits with banks 24,325 14,060 23,442

Federal funds sold and securities purchased under resale agreements

80,975 80,177 113,517
Trading account assets, at fair value 6,113 17,363 11,102
Mortgage loans held for sale, at fair value 45,384 61,232 212,663
Other loans held for sale 10,685 9,351 10,690
Investment securities available for sale, at fair value 3,199,358 3,151,344 2,981,112
 
Loans, net of deferred fees and costs 20,057,798 19,711,610 19,541,690
Allowance for loan losses (307,560 ) (318,612 ) (373,405 )
Loans, net 19,750,238   19,392,998   19,168,285  
 
Premises and equipment, net 468,871 476,088 479,546
Goodwill 24,431 24,431 24,431
Other intangible assets, net 3,415 3,783 5,149
Other real estate 112,629 126,640 150,271
Deferred tax asset, net 744,646 763,050 806,406
Other assets 616,376   616,714   660,378  
 
Total assets $ 26,201,604   26,218,360   26,760,012  
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest bearing deposits $ 5,642,751 5,358,659 5,665,527
Interest bearing deposits, excluding brokered deposits 14,140,037 14,339,997 14,298,768
Brokered deposits 1,094,002   1,275,200   1,092,749  
 
Total deposits 20,876,790 20,973,856 21,057,044
 

Federal funds purchased, securities sold under repurchase agreements, and other short-term liabilities

148,132 194,613 201,243
Long-term debt 2,033,141 1,885,057 1,726,455
Other liabilities 194,556   232,974   205,839  
 
Total liabilities 23,252,619   23,286,500   23,190,581  
 
 
Shareholders' equity:
Series A Preferred Stock - no par value, 967,870 shares outstanding at December 31, 2012 - - 957,327
Series C Preferred Stock - no par value, 5,200,000 shares outstanding at December 31, 2013 and September 30, 2013 125,862 125,400 -
Common stock - $1.00 par value. 972,351,457 shares outstanding at December 31, 2013, 972,230,238 shares outstanding at September 30, 2013, and 786,579,240 shares outstanding at December 31, 2012 978,045 977,924 792,273
Additional paid-in capital 2,138,024 2,138,593 2,189,874
Treasury stock, at cost - 5,693,452 shares (114,176 ) (114,176 ) (114,176 )
Accumulated other comprehensive (loss) income (41,258 ) (29,514 ) 4,101
Accumulated deficit (137,512 ) (166,367 ) (259,968 )
Total shareholders' equity 2,948,985 2,931,860 3,569,431
 
Total liabilities and shareholders' equity $ 26,201,604   26,218,360   26,760,012  
 
                   
Synovus
 
AVERAGE BALANCES AND YIELDS/RATES (1)
(Unaudited)
(Dollars in thousands)
  2013           2012
 

Fourth
Quarter

   

Third
Quarter

   

Second
Quarter

   

First
Quarter

   

Fourth
Quarter

 
Interest Earning Assets
Taxable investment securities (2) $ 3,196,561 3,062,976 3,034,152 2,984,129 3,069,000

 

Yield

1.94 % 1.79 1.70 1.42 1.62
 

Tax-exempt investment securities (2) (4)

$ 7,758 9,835 11,435 14,362 17,377
Yield (taxable equivalent) 6.14 % 6.26 6.47 6.34 6.59
 
Trading account assets $ 10,021 13,806 7,847 8,629 9,600
Yield 4.60 % 4.50 6.34 7.12 8.04
 
Commercial loans (3) (4) $ 16,217,373 16,067,424 16,075,832 16,000,000 16,171,318
Yield 4.28 % 4.37 4.39 4.48 4.50
 
Consumer loans (3) $ 3,615,836 3,528,057 3,454,874 3,461,622 3,514,256
Yield 4.50 % 4.61 4.62 4.68 4.70
 
Allowance for loan losses $ (316,001 )     (328,084 )     (351,075 )     (372,239 )     (405,237 )
 
Loans, net (3) $ 19,517,208 19,267,397 19,179,631 19,089,383 19,280,337
Yield 4.40 % 4.50 4.52 4.54 4.65
 
Mortgage loans held for sale $ 46,036 85,493 129,742 179,507 208,839
Yield 3.94 % 4.07 4.35 3.80 3.72
 

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

$ 1,235,144 1,375,921 1,550,113 1,343,652 1,366,422
Yield 0.24 % 0.24 0.24 0.24 0.24
 
Federal Home Loan Bank and Federal Reserve Bank stock (5) $ 70,815 70,741 65,014 65,330 66,630
Yield 2.85 % 2.30 2.35 2.36 2.03
                                   
Total interest earning assets $ 24,083,543 23,886,169 23,977,934 23,684,992 24,018,205
  Yield       3.85     % 3.89       3.88       3.95       3.99  
 
Interest Bearing Liabilities
 
Interest bearing demand deposits $ 4,102,398 3,933,902 3,895,675 3,839,707 3,872,025
Rate 0.19 % 0.23 0.18 0.18 0.18
 
Money market accounts $ 6,161,893 6,148,289 6,072,155 6,135,649 6,251,374
Rate 0.33 % 0.33 0.33 0.33 0.33
 
Savings deposits $ 605,054 607,144 609,832 581,792 558,726
Rate 0.10 % 0.11 0.11 0.11 0.10
 
Time deposits under $100,000 $ 1,491,673 1,526,974 1,537,639 1,581,092 1,648,554
Rate 0.61 % 0.62 0.64 0.69 0.74
 
Time deposits over $100,000 $ 2,049,094 2,022,719 1,891,624 1,958,870 2,015,582
Rate 0.80 % 0.84 0.88 0.93 0.99
 
Brokered money market accounts $ 210,380 202,802 202,532 202,734 180,216
Rate 0.27 % 0.27 0.31 0.32 0.34
 
Brokered time deposits $ 984,047 1,130,491 1,131,444 1,013,461 800,434
Rate 0.65     % 0.70       0.77       0.99       1.42  
 
Total interest bearing deposits $ 15,604,539 15,572,321 15,340,901 15,313,305 15,326,911
Rate 0.39 % 0.42 0.42 0.44 0.47
 

Federal funds purchased and other short-term liabilities

$ 216,757 195,717 206,046 214,661 266,431
Rate 0.15 % 0.14 0.15 0.17 0.17
 
Long-term debt $ 1,886,223 1,885,385 1,762,173 1,688,580 1,740,588
  Rate       2.85     % 2.85       3.06       3.26       3.31  
Total interest bearing liabilities $ 17,707,519 17,653,423 17,309,120 17,216,546 17,333,930
  Rate       0.65     % 0.67       0.68       0.72       0.75  
 
Non-interest bearing demand deposits $ 5,545,529 5,306,447 5,327,795 5,232,587 5,466,312
 
Effective cost of funds 0.47 % 0.49 0.49 0.52 0.54
                                   
Net interest margin       3.38     % 3.40       3.39       3.43       3.45  
 
Taxable equivalent adjustment $ 481 529 557 618 766
 
(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 balance sheet
 
Synovus      
     
 
LOANS OUTSTANDING AND NON-PERFORMING LOANS COMPOSITION
(Unaudited)
(Dollars in thousands)
 
 
December 31, 2013
 
Loan Type Total Loans    

Loans as a %
of Total Loans
Outstanding

   

Total
Non-performin
Loans

 

Non-performing Loans
as a % of Total
Nonperforming Loans

 
 
Multi-Family $ 945,014 4.7 % $ 788 0.2 %
Hotels 686,292 3.4 1,230 0.3
Office Buildings 859,954 4.3 4,211 1.0
Shopping Centers 846,965 4.2 11,176 2.7
Commercial Development 155,377 0.8 35,473 8.5
Warehouses 560,824 2.8 2,093 0.5
Other Investment Property 512,253   2.6   11,483   2.8  
 
Total Investment Properties 4,566,679   22.8   66,454   16.1  
 
1-4 Family Construction 141,840 0.7 2,547 0.6
1-4 Family Investment Mortgage 836,265 4.2 16,752 4.0
Residential Development 185,148   0.9   14,519   3.5  
 
Total 1-4 Family Properties 1,163,253   5.8   33,818   8.1  
 
Land Acquisition 707,820   3.5   154,096   37.0  
 
Total Commercial Real Estate 6,437,752 32.1 254,368 61.1
       
 
Commercial, Financial, and Agricultural (2) 6,185,955 30.8 65,236 15.7
Owner-Occupied Real Estate 3,814,720   19.0   36,980   8.9  
 
Total Commercial & Industrial 10,000,675 49.9 102,216 24.6
 
Home Equity Lines 1,587,541 7.9 17,908 4.3
Consumer Mortgages 1,519,068 7.6 39,770 9.6
Credit Cards 256,846 1.3 - -
Other Retail Loans 284,778   1.4   2,038   0.5  
 
Total Retail 3,648,233 18.1 59,716 14.3
 
 
Unearned Income (28,862 ) nm -   nm
 
Total $ 20,057,798   100.0   % $ 416,300   100.0   %
 
 
LOANS OUTSTANDING BY TYPE COMPARISON
(Unaudited)
(Dollars in thousands)
         
Loan Type  

Total Loans
December 31, 2013

September 30, 2013

4Q13 vs. 3Q13
% change (1)

December 31, 2012

4Q13 vs. 4Q12
% change

 
 
Multi-Family $ 945,014 953,631 (3.6 ) 796,110 18.7 %
Hotels 686,292 655,593 18.6 686,067 0.0
Office Buildings 859,954 799,613 29.9 773,881 11.1
Shopping Centers 846,965 866,460 (8.9 ) 896,869 (5.6 )
Commercial Development 155,377 167,435 (28.6 ) 226,513 (31.4 )
Warehouses 560,824 552,378 6.1 538,157 4.2
Other Investment Property 512,253   521,576   (7.1 ) 498,884   2.7  
 
Total Investment Properties 4,566,679   4,516,686   4.4   4,416,481   3.4  
 
1-4 Family Construction 141,840 138,719 8.9 137,778 2.9
1-4 Family Investment Mortgage 836,265 853,060 (7.8 ) 865,801 (3.4 )
Residential Development 185,148   196,051   (22.1 ) 282,463   (34.5 )
 
Total 1-4 Family Properties 1,163,253   1,187,830   (8.2 ) 1,286,042   (9.5 )
 
Land Acquisition 707,820   731,278   (12.7 ) 795,341   (11.0 )
 
Total Commercial Real Estate 6,437,752   6,435,794   0.1   6,497,864   (0.9 )
 
Commercial, Financial, and Agricultural (2) 6,185,955 5,971,069 14.3 5,291,078 16.9
Owner-Occupied Real Estate 3,814,720   3,757,080   6.1   4,278,373   (10.8 )
 
Total Commercial & Industrial 10,000,675 9,728,149 11.1 9,569,451 4.5
 
 
Home Equity Lines 1,587,541 1,549,582 9.7 1,542,397 2.9
Consumer Mortgages 1,519,068 1,482,860 9.7 1,411,561 7.6
Credit Cards 256,846 253,805 4.8 263,561 (2.5 )
Other Retail Loans 284,778   286,422   (2.3 ) 277,229   2.7  
Total Retail 3,648,233 3,572,669 8.4 3,494,748 4.4
 
 
Unearned Income (28,862 ) (25,002 ) 61.3   (20,373 ) 41.7  
 
Total $ 20,057,798   19,711,610   7.0   % 19,541,690   2.6   %
 
(1) Percentage change is annualized.
(2) Small Business loans are reported within Commercial, Financial and Agricultural loans.
Synovus
                       
CREDIT QUALITY DATA
(Unaudited)
(Dollars in thousands) 2013           2012     4th Quarter

Fourth
Quarter

   

Third
Quarter

   

Second
Quarter

   

First
Quarter

   

Fourth
Quarter

   

'13 vs. '12
Change

 
Non-performing Loans $ 416,300 450,879 483,464 513,227 543,333 (23.4 ) %
Other Loans Held for Sale (1) 10,685 9,351 12,083 9,129 9,455 13.0
Other Real Estate 112,629 126,640 139,653 155,237 150,271 (25.0 )  
Non-performing Assets 539,614 586,870 635,200 677,592 703,059 (23.2 )
 
Allowance for Loan Losses 307,560 318,612 334,880 351,772 373,405 (17.6 )
 
Net Charge-Offs - Quarter 25,116 23,030 29,969 57,328 193,525 (87.0 )
Net Charge-Offs / Average Loans - Quarter (2) 0.51 % 0.47 0.61 1.18 3.94
 
Non-performing Loans / Loans 2.08 2.29 2.47 2.65 2.78
Non-performing Assets / Loans, Other Loans Held for Sale & ORE 2.67 2.96 3.21 3.47 3.57
Allowance / Loans 1.53 1.62 1.71 1.82 1.91
 
Allowance / Non-performing Loans 73.88 70.66 69.27 68.54 68.72
Allowance / Non-performing Loans (3) 95.43 91.84 91.76 97.75 93.49
 
Past Due Loans over 90 days and Still Accruing $ 4,489 4,738 4,596 5,799 6,811 (34.1 ) %
As a Percentage of Loans Outstanding 0.02 % 0.02 0.02 0.03 0.03
 
Total Past Dues Loans and Still Accruing $ 72,600 78,906 80,678 88,330 104,825 (30.7 )
As a Percentage of Loans Outstanding 0.36 % 0.40 0.41 0.46 0.54
 
Accruing troubled debt restructurings (TDRs) $ 556,410 574,236 635,125 623,900 673,383 (17.4 )
 
(1) Represent impaired loans that are intended to be sold. Held for sale loans are carried at the lower of cost or fair value, less costs to sell.
(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, 2013

December 31, 2012

 
Tier 1 Capital $ 2,351,493 2,832,244
Total Risk-Based Capital 2,900,823 3,460,998
Tier 1 Capital Ratio 10.54 % 13.24
Tier 1 Common Equity Ratio 9.93 8.72
Total Risk-Based Capital Ratio 13.00 16.18
Tier 1 Leverage Ratio 9.13 11.00
Common Equity as a Percentage of Total Assets (2) 10.77 9.76
Tangible Common Equity as a Percentage of Tangible Assets (3) 10.68 9.66
Tangible Common Equity as a Percentage of Risk Weighted Assets (3) 12.53 12.07
Book Value Per Common Share (4) 2.90 2.99
Tangible Book Value Per Common Share (3) 2.87 2.95
 
 
(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.

Contact:
Synovus Financial Corp.
Patrick A. Reynolds, 706-649-4973
Director of Investor Relations

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