Synovus Reports Earnings for Third Quarter of 2013

Net Income Available to Common Shareholders Increases by 21%

Business Wire

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

Synovus Financial Corp. (SNV) today reported financial results for the quarter ended September 30, 2013.

Third Quarter Results

  • Net income available to common shareholders increased to $37.2 million for the third quarter of 2013, a 21% increase compared to $30.7 million for the second quarter of 2013, and $16.0 million for the third quarter of 2012. Diluted net income per common share for the third quarter of 2013 was $0.04 compared to $0.03 for the second quarter of 2013 and $0.02 for the third quarter of 2012.
    • The third quarter of 2013 results included income tax expense of $27.8 million compared to $27.4 million in the second quarter of 2013 and a tax benefit of $211 thousand in the third quarter of 2012.
  • Credit costs declined to $22.4 million for the third quarter of 2013, compared to $24.0 million for the second quarter of 2013 and $85.6 million for the third quarter of 2012.
  • Total loans grew $103.3 million sequentially or 2.1% annualized.

“We were pleased with the continued growth in profitability during the third quarter, with a 21% increase in net income available to common shareholders compared to last quarter. This upward trend signals one of the many and immediate benefits of our company’s July 26th exit from the Troubled Asset Relief Program (TARP),” said Kessel D. Stelling, Chairman and CEO of Synovus. “Third quarter results also included other encouraging signs, including growth in loans and deposits, stability in the net interest margin, and continued positive credit trends.”

Core Performance

Pre-tax, pre-credit costs income was $95.4 million for the third quarter of 2013, down $2.6 million from $98.0 million for the second quarter of 2013.

  • Net interest income was $204.0 million for the third quarter of 2013, up $1.9 million from $202.1 million in the previous quarter.
  • The net interest margin increased to 3.40%, up one basis point from the second quarter of 2013, with the yield on earning assets up one basis point and the effective cost of funds unchanged.
  • Total non-interest income was $63.6 million for the third quarter of 2013, down $1.5 million, compared to $65.1 million for the second quarter of 2013, due primarily to a decline in mortgage banking income of $2.0 million.
  • Adjusted non-interest expense (excludes Visa indemnification charges, restructuring charges and other credit costs) was $171.0 million, up $3.3 million from $167.8 million for the second quarter of 2013, due primarily to a $3.3 million increase in employment expenses (merit increases and one additional pay day) and elevated professional fees.

Balance Sheet Fundamentals

  • Total reported loans ended the quarter at $19.71 billion, a $103.3 million increase from the second quarter of 2013.
    • Commercial and industrial loans grew by $18.1 million from the second quarter of 2013, or 0.7% annualized.
    • Retail loans grew by $83.3 million from the second quarter of 2013, or 9.5% annualized.
    • Commercial real estate loans grew by $3.2 million from the second quarter of 2013.
  • Total deposits ended the quarter at $20.97 billion, up $263.2 million from the previous quarter due primarily to increases in non-interest bearing demand deposits and time deposits.
  • Core deposits ended the quarter at $19.70 billion, up $326.0 million compared to the second quarter of 2013. Core deposits, excluding time deposits, increased $133.5 million compared to the previous quarter.

Credit Quality

All key credit quality metrics continued to improve.

  • Total credit costs were $22.4 million in the third quarter of 2013, down from $24.0 million in the second quarter of 2013 and $85.6 million in the third quarter of 2012.
  • Net charge-offs were $23.0 million in the third quarter of 2013, down from $30.0 million in the second quarter of 2013 and $96.5 million in the third quarter of 2012. The annualized net charge-off ratio was 0.47% in the third quarter, down from 0.61% in the previous quarter and 1.97% in the third quarter of 2012.
  • Non-performing loan inflows were $47.4 million in the third quarter of 2013, down from $66.9 million in the second quarter of 2013 and $114.8 million in the third quarter of 2012.
  • Non-performing loans, excluding loans held for sale, were $450.9 million at September 30, 2013, down $32.6 million from the previous quarter, and down $249.3 million or 35.6% from the third quarter of 2012. The non-performing loan ratio was 2.29% at September 30, 2013, down from 2.47% at the end of the previous quarter and 3.55% at September 30, 2012.
  • Total non-performing assets were $586.9 million at September 30, 2013, down $48.3 million from the previous quarter, and down $312.5 million or 34.7% from the third quarter of 2012. The non-performing asset ratio was 2.96% at September 30, 2013, compared to 3.21% at the end of the previous quarter and 4.51% at September 30, 2012.
  • Total delinquencies (consisting of loans 30 or more days past due and still accruing) declined to 0.40% of total loans at September 30, 2013, compared to 0.41% at June 30, 2013, and 0.55% at September 30, 2012. Total loans past due 90 days or more and still accruing remained low at 0.02% at September 30, 2013, compared to 0.02% at June 30, 2013, and 0.05% at September 30, 2012.
  • Distressed asset sales were approximately $56 million during the third quarter, compared to approximately $67 million in the second quarter of 2013, and approximately $110 million in the third quarter of 2012.

Capital Ratios

The September 30, 2013 capital ratios reflect the common and preferred stock offerings ($300 million in net proceeds) completed during the third quarter in connection with the July 2013 $968 million TARP redemption.

  • Tier 1 Common Equity ratio was 9.93% at September 30, 2013, compared to 8.97% at June 30, 2013.
  • Tier 1 Capital ratio was 10.55% at September 30, 2013, compared to 13.49% at June 30, 2013.
  • Total Risk Based Capital ratio was 13.04% at September 30, 2013, compared to 15.99% at June 30, 2013.
  • Tier 1 Leverage ratio was 8.96% at September 30, 2013, compared to 11.33% at June 30, 2013.
  • Tangible Common Equity ratio was 10.61% at September 30, 2013, compared to 9.71% at June 30, 2013.

“We will recognize later this month our 125th anniversary as a banking organization, and I want to thank our team members and our customers for their dedication and loyalty to our company. While we celebrate our rich past, we are also looking ahead to a bright future.

“Our post-TARP redemption capital position is strong, and our company is well-positioned in growing markets throughout the southeast. According to recently released FDIC data, we again retained top five market share in markets that represent approximately 80% of our core deposit franchise. We continue to invest in high-opportunity markets and business lines where we can leverage our proven, relationship-based delivery model to build long-term customer relationships,” Stelling concluded.

Synovus will host an earnings highlights conference call at 8:30 a.m. EDT on October 22, 2013. 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 with approximately $26 billion in assets based in Columbus, Georgia. 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 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 pre-tax, pre-credit costs income, adjusted non-interest expense, core deposits, core deposits excluding time deposits, Tier 1 common equity ratio, and tangible common equity to tangible assets 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 income (loss) before income taxes, total non-interest expense, total deposits, Tier 1 capital to risk-weighted assets ratio, and total shareholders’ equity to total assets ratio, 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 income (loss) before income taxes, or total non-interest expense, total deposits, Tier 1 capital to risk-weighted assets ratio, and total shareholders’ equity to total assets ratio determined in accordance with GAAP and may not be comparable to other similarly titled measures at other companies. The computations of pre-tax, pre-credit costs income, adjusted non-interest expense, core deposits, core deposits excluding time deposits, Tier 1 common equity ratio, and tangible common equity to tangible assets ratio, the reconciliation of these measures to income (loss) before income taxes, total non-interest expense, total deposits, Tier 1 capital to risk-weighted assets ratio, and total shareholders’ equity to total assets ratio are set forth in the tables below.

Reconciliation of Non-GAAP Financial Measures
(dollars in thousands)   3Q13 2Q13 1Q13 4Q12 3Q12
Pre-tax, Pre-credit Costs Income
Income (loss) before income taxes $ 73,459 72,906 46,553 (72,299 ) 30,514
Add: Provision for losses on loans 6,761 13,077 35,696 146,526 63,572
Add: Other credit costs(1) 15,603 10,887 13,595 39,236 22,046
Add: Restructuring charges 687 1,758 4,850 1,969 1,192
Subtract: Investment securities gains, net. (1,124 ) (1,403 ) (45 ) (8,233 ) (6,656 )
Add: Visa indemnification charges   -   764   37   757   833  
Pre-tax, pre-credit costs income $ 95,386   97,989   100,686   107,956   111,501  
 
Adjusted Non-interest Expense
Total non-interest expense $ 187,328 181,186 182,286 213,346 191,492
Subtract: Other credit costs(1) (15,603 ) (10,887 ) (13,595 ) (39,236 ) (22,046 )
Subtract: Restructuring charges (687 ) (1,758 ) (4,850 ) (1,969 ) (1,192 )
Subtract: Visa indemnification charges   -   (764 ) (37 ) (757 ) (833 )
Adjusted non-interest expense $ 171,038   167,777   163,804   171,384   167,421  
 
Core deposits
Core deposits excluding time deposits
Total deposits $ 20,973,856 20,710,703 20,561,193 21,057,044 20,846,830
Subtract: Brokered deposits   (1,275,200 ) (1,338,064 ) (1,332,632 ) (1,092,749 ) (919,959 )
Core deposits 19,698,656 19,372,639 19,228,561 19,964,295 19,926,871
Subtract: Time deposits   (3,569,752 ) (3,377,215 ) (3,482,196 ) (3,583,304 ) (3,771,117 )
Core deposits excluding time deposits $ 16,128,904   15,995,424   15,746,365   16,380,991   16,155,754  
 
Tier 1 Common Equity Ratio
Total shareholders' equity $ 2,931,860 3,568,204 3,578,106 3,569,431 2,875,700
Add/subtract: Accumulated other comprehensive
loss (income)
29,514 33,060 (2,787 ) (4,101 ) (16,156 )
Subtract: Goodwill (24,431 ) (24,431 ) (24,431 ) (24,431 ) (24,431 )
Subtract: Other intangible assets, net (3,783 ) (4,156 ) (4,583 ) (5,149 ) (5,895 )
Subtract: Disallowed deferred tax asset (647,828 ) (674,996 ) (687,007 ) (710,488 ) -
Other items   7,425   7,304   7,191   6,982   6,732  
Tier 1 capital   2,292,757   2,904,985   2,866,489   2,832,244   2,835,950  
Subtract: Qualifying trust preferred securities (10,000 ) (10,000 ) (10,000 ) (10,000 ) (10,000 )
Subtract: Series C Preferred Stock, no par value (125,400 ) - - - -
Subtract: Series A Preferred Stock, no par value   -   (962,725 ) (960,005 ) (957,327 ) (954,690 )
Tier 1 common equity   2,157,357   1,932,260   1,896,484   1,864,917   1,871,260  
Risk-weighted assets 21,736,116((2 )) 21,542,287 21,235,129 21,387,935 21,443,178
Tier 1 common equity ratio   9.93 %(2) 8.97   8.93   8.72   8.73  
 
Tangible common equity to tangible assets ratio
Total assets $ 26,218,360 26,563,174 26,212,879 26,760,012 25,764,644
Subtract: Goodwill (24,431 ) (24,431 ) (24,431 ) (24,431 ) (24,431 )
Subtract: Other intangible assets, net   (3,783 ) (4,156 ) (4,583 ) (5,149 ) (5,895 )
Tangible assets $ 26,190,146   26,534,587   26,183,865   26,730,432   25,734,318  
 
Total shareholders’ equity $ 2,931,860 3,568,204 3,578,106 3,569,431 2,875,700
Subtract: Goodwill (24,431 ) (24,431 ) (24,431 ) (24,431 ) (24,431 )
Subtract: Other intangible assets, net (3,783 ) (4,156 ) (4,583 ) (5,149 ) (5,895 )
Subtract: Series C Preferred Stock, no par value (125,400 ) - - - -
Subtract: Series A Preferred Stock, no par value   -   (962,725 ) (960,005 ) (957,327 ) (954,690 )
Tangible common equity $ 2,778,246   2,576,892   2,589,087   2,582,524   1,890,684  
Total shareholders’ equity to total assets ratio 11.18 % 13.43 13.65 13.34 11.16
Tangible common equity to tangible assets ratio     10.61 % 9.71   9.89   9.66   7.35  

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

(2) Preliminary

Synovus
 
INCOME STATEMENT DATA Nine Months Ended
(Unaudited)
(Dollars in thousands, except per share data) September 30,
           
 
2013 2012 Change
           
 
Interest income $ 695,755 764,140 (8.9) %
Interest expense 89,894 117,479 (23.5)
     
 
Net interest income 605,861 646,661 (6.3)
Provision for loan losses 55,534 173,843 (68.1)
     
 
Net interest income after provision for loan losses 550,327 472,818 16.4
     
 
Non-interest income:
Service charges on deposit accounts 58,142 57,319 1.4
Fiduciary and asset management fees 32,471 31,966 1.6
Brokerage revenue 21,231 19,786 7.3
Mortgage banking income 19,569 23,247 (15.8)
Bankcard fees 22,662 23,938 (5.3)
Investment securities gains, net 2,571 30,909 (91.7)
Other fee income 16,461 14,927 10.3
(Decrease) increase in fair value of private equity investments, net (856) 6,428 nm
Other non-interest income 21,139 25,329 (16.5)
     
 
Total non-interest income 193,390 233,849 (17.3)
     
 
Non-interest expense:
Salaries and other personnel expense 276,190 280,972 (1.7)
Net occupancy and equipment expense 77,025 79,512 (3.1)
FDIC insurance and other regulatory fees 24,059 37,171 (35.3)
Foreclosed real estate expense, net 28,800 55,677 (48.3)
Losses on other loans held for sale, net 487 4,005 (87.8)
Professional fees 28,922 29,270 (1.2)
Third-party services 30,446 28,466 7.0
Visa indemnification charges 801 5,546 (85.6)
Restructuring charges 7,295 3,444 111.8
Other operating expenses 76,774 78,827 (2.6)
     
 
 
Total non-interest expense 550,799 602,890 (8.6)
     
 
Income before income taxes 192,918 103,777 85.9
Income tax expense (benefit) 72,114 (2,393) nm
     
 
Net income 120,804 106,170 13.8
 
Dividends and accretion of discount on Series A Preferred Stock 38,100 43,968 (13.3)
 
 
Net income available to common shareholders $ 82,704 62,202 33.0
 
 
Net income per common share, basic 0.10 0.08 20.8
 
Net income per common share, diluted 0.09 0.07 30.4
 
Cash dividends declared per common share 0.03 0.03 -
 
Return on average assets 0.61 % 0.53 15.1
Return on average common equity 4.16 4.33 (3.9)
 
 
Weighted average common shares outstanding, basic 865,565 786,429 10.1 %
Weighted average common shares outstanding, diluted 927,329 909,717 1.9
 
nm - not meaningful
Synovus  
 
INCOME STATEMENT DATA
(Unaudited)
(Dollars in thousands, except per share data) 2013 2012 3rd Quarter
                     
Third Second First Fourth Third '13 vs. '12
Quarter   Quarter   Quarter   Quarter   Quarter   Change
 
Interest income $ 233,852 231,513 230,391 240,000 247,676 (5.6) %
Interest expense 29,882 29,436 30,577 32,544 35,331 (15.4)
 
 
Net interest income 203,970 202,077 199,814 207,456 212,345 (3.9)
Provision for loan losses 6,761 13,077 35,696 146,526 63,572 (89.4)
 
 
Net interest income after provision for loan losses 197,209 189,000 164,118 60,930 148,773 32.6
 
 
Non-interest income:
Service charges on deposit accounts 19,426 19,195 19,521 20,883 20,404 (4.8)
Fiduciary and asset management fees 10,389 11,111 10,971 10,537 10,340 0.5
Brokerage revenue 6,636 7,002 7,594 7,127 6,844 (3.0)
Mortgage banking income 5,314 7,338 6,917 9,025 9,261 (42.6)
Bankcard fees 7,760 7,838 7,064 10,137 7,866 (1.3)
Investment securities gains, net 1,124 1,403 45 8,233 6,656 (83.1)
Other fee income 5,199 5,775 5,487 6,211 5,276 (1.5)
Increase (decrease) in fair value of private equity investments, net 284 (883) (257) 1,805 (944) nm
Other non-interest income 7,446 6,313 7,379 6,159 7,530 (1.1)
 
 
Total non-interest income 63,578 65,092 64,721 80,117 73,233 (13.2)
 
 
 
Non-interest expense:
Salaries and other personnel expense 92,794 89,479 93,917 94,901 93,177 (0.4)
Net occupancy and equipment expense 26,475 26,383 24,167 26,063 26,647 (0.6)
FDIC insurance and other regulatory fees 7,639 7,941 8,480 8,237 9,205 (17.0)
Foreclosed real estate expense, net 10,359 7,502 10,940 34,978 11,997 (13.7)
Losses (gains) on other loans held for sale, net 408 (86) 165 675 4,104 (90.1)
Professional fees 11,410 10,416 7,095 12,037 10,074 13.3
Third-party services 10,151 10,366 9,929 9,540 9,429 7.7
Visa indemnification charges - 764 37 757 833 (100.0)
Restructuring charges 687 1,758 4,850 1,969 1,192 (42.4)
Other operating expenses 27,405 26,663 22,706 24,189 24,834 10.4
 
 
Total non-interest expense 187,328 181,186 182,286 213,346 191,492 (2.2)
 
 
 
Income before income taxes 73,459 72,906 46,553 (72,299) 30,514 140.7
Income tax expense (benefit) 27,765 27,371 16,979 (796,339) (211) nm
 
 
Net income 45,694 45,535 29,574 724,040 30,725 48.7
 
Dividends and accretion of discount on Series A Preferred Stock 8,506 14,818 14,776 14,736 14,695 (42.1)
 
 
 
Net income available to common shareholders $ 37,188 30,717 14,798 709,304 16,030 132.0
 
 
Net income per common share, basic 0.04 0.04 0.02 0.90 0.02 90.7
 
Net income per common share, diluted 0.04 0.03 0.02 0.78 0.02 120.1
 
Cash dividends declared per common share 0.01 0.01 0.01 0.01 0.01 -
 
Return on average assets * 0.69 % 0.69 % 0.46 % 11.13 % 0.47 46.8
Return on average common equity * 5.40 4.70 2.30 149.46 3.30 63.6
 
 
Weighted average common shares outstanding, basic 956,694 851,093 787,043 786,576 786,576 21.6 %
Weighted average common shares outstanding, diluted 959,680 910,937 910,835 911,251 910,396 5.4
 
nm - not meaningful
* - ratios are annualized
Synovus
         
BALANCE SHEET DATA September 30, 2013 December 31, 2012 September 30, 2012
(Unaudited)
 
(In thousands, except share data)
 
ASSETS
Cash and cash equivalents $ 514,694 614,630 454,028
Interest bearing funds with Federal Reserve Bank 966,435 1,498,390 815,156
Interest earning deposits with banks 14,060 23,442 27,215
Federal funds sold and securities purchased
under resale agreements 80,177 113,517 116,318
Trading account assets, at fair value 17,363 11,102 5,953
Mortgage loans held for sale, at fair value 61,232 212,663 246,224
Other loans held for sale 9,351 10,690 11,254
Investment securities available for sale, at fair value 3,151,344 2,981,112 3,229,440
 
Loans, net of deferred fees and costs 19,711,610 19,541,690 19,731,865
Allowance for loan losses (318,612) (373,405) (420,404)
Loans, net 19,392,998 19,168,285 19,311,461
 
Premises and equipment, net 476,088 479,546 475,222
Goodwill 24,431 24,431 24,431
Other intangible assets, net 3,783 5,149 5,895
Other real estate 126,640 150,271 189,182
Deferred tax asset, net 763,050 806,406 1,985
Other assets 616,714 660,378 850,880
 
Total assets $ 26,218,360 26,760,012 25,764,644
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest bearing deposits $ 5,358,659 5,665,527 5,503,288
Interest bearing deposits, excluding brokered deposits 14,339,997 14,298,768 14,423,583
Brokered deposits 1,275,200 1,092,749 919,959
 
 
Total deposits 20,973,856 21,057,044 20,846,830
 
Federal funds purchased, securities sold under repurchase agreements, and other short-term liabilities 194,613 201,243 165,865
Long-term debt 1,885,057 1,726,455 1,654,183
Other liabilities 232,974 205,839 222,066
 
Total liabilities 23,286,500 23,190,581 22,888,944
 
 
 
Shareholders' equity:
Series A Preferred Stock - no par value, 967,870 outstanding at December 31, 2012 and September 30, 2012 - 957,327 954,690
Series C Preferred Stock - no par value, 5,200,000 outstanding at September 30, 2013 125,400 - -
Common stock - $1.00 par value. 972,230,238 outstanding at September 30, 2013, 786,579,240 outstanding at December 31, 2012, and 786,575,516 outstanding at September 30, 2012 977,924 792,273 792,269
Additional paid-in capital 2,138,593 2,189,874 2,202,903
Treasury stock, at cost - 5,693,452 shares (114,176) (114,176) (114,176)
Accumulated other comprehensive (loss) income (29,514) 4,101 16,156
Accumulated deficit (166,367) (259,968) (976,142)
Total shareholders' equity 2,931,860 3,569,431 2,875,700
 
Total liabilities and shareholders' equity $ 26,218,360 26,760,012 25,764,644
Synovus
         
AVERAGE BALANCES AND YIELDS/RATES (1)
(Unaudited)
(Dollars in thousands)
2013 2012
                     
Third Second First Fourth Third
Quarter Quarter Quarter Quarter Quarter
                     
Interest Earning Assets
 
Taxable investment securities (2) $ 3,062,976 3,034,152 2,984,129 3,069,000 3,495,838
Yield 1.79 % 1.70 1.42 1.62 1.67
 
Tax-exempt investment securities (2) (4) $ 9,835 11,435 14,362 17,377 19,503
Yield (taxable equivalent) 6.26 % 6.47 6.34 6.59 6.47
 
Trading account assets $ 13,806 7,847 8,629 9,600 12,343
Yield 4.50 % 6.34 7.12 8.04 8.27
 
Commercial loans (3) (4) $ 16,067,424 16,075,832 16,000,000 16,171,318 16,102,353
Yield 4.37 % 4.39 4.48 4.50 4.65
 
Consumer loans (3) $ 3,528,057 3,454,874 3,461,622 3,514,256 3,529,528
Yield 4.61 % 4.62 4.68 4.70 4.72
 
Allowance for loan losses $ (328,084 )     (351,075 )   (372,239 )   (405,237 )   (446,495 )
 
Loans, net (3) $ 19,267,397 19,179,631 19,089,383 19,280,337 19,185,386
Yield 4.50 % 4.52 4.54 4.65 4.79
 
Mortgage loans held for sale $ 85,493 129,742 179,507 208,839 175,199
Yield 4.07 % 4.35 3.80 3.72 4.03
 

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

$ 1,375,921 1,550,113 1,343,652 1,366,422 1,215,743
Yield 0.24 % 0.24 0.24 0.24 0.24
 
Federal Home Loan Bank and Federal Reserve Bank stock (5) $ 70,741 65,014 65,330 66,630 53,239
Yield 2.30 % 2.35 2.36 2.03 1.87
                         
Total interest earning assets $ 23,886,169 23,977,934 23,684,992 24,018,205 24,157,251
Yield 3.89 % 3.88 3.95 3.99 4.09
                         
 
Interest Bearing Liabilities
 
 
Interest bearing demand deposits $ 3,933,902 3,895,675 3,839,707 3,872,025 3,344,561
Rate 0.23 % 0.18 0.18 0.18 0.19
 
Money market accounts $ 6,148,289 6,072,155 6,135,649 6,251,374 6,751,607
Rate 0.33 % 0.33 0.33 0.33 0.33
 
Savings deposits $ 607,144 609,832 581,792 558,726 557,086
Rate 0.11 % 0.11 0.11 0.10 0.10
 
Time deposits under $100,000 $ 1,526,974 1,537,639 1,581,092 1,648,554 1,763,864
Rate 0.62 % 0.64 0.69 0.74 0.85
 
Time deposits over $100,000 $ 2,022,719 1,891,624 1,958,870 2,015,582 2,176,488
Rate 0.84 % 0.88 0.93 0.99 1.11
 
Brokered money market accounts $ 202,802 202,532 202,734 180,216 186,336
Rate 0.27 % 0.31 0.32 0.34 0.33
 
Brokered time deposits $ 1,130,491 1,131,444 1,013,461 800,434 820,908
Rate 0.70   %   0.77     0.99     1.42     1.83  
 
Total interest bearing deposits $ 15,572,321 15,340,901 15,313,305 15,326,911 15,600,850
Rate 0.42 % 0.42 0.44 0.47 0.54
 

Federal funds purchased and other short-term liabilities

$ 195,717 206,046 214,661 266,431 350,183
Rate 0.14 % 0.15 0.17 0.17 0.17
 
Long-term debt $ 1,885,385 1,762,173 1,688,580 1,740,588 1,372,741
Rate 2.85 % 3.06 3.26 3.31 4.09
                         
 
Total interest bearing liabilities $ 17,653,423 17,309,120 17,216,546 17,333,930 17,323,774
Rate 0.67 % 0.68 0.72 0.75 0.81
                         
 
Non-interest bearing demand deposits $ 5,306,447 5,327,795 5,232,587 5,466,312 5,560,827
 
Effective cost of funds 0.49 % 0.49 0.52 0.54 0.58
                         
 
Net interest margin     3.40   %   3.39     3.43     3.45     3.51  
 
Taxable equivalent adjustment $ 529 557 618 766 761
 
(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)
 
 
September 30, 2013
                   
 
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 $ 953,632 4.8 % $ 2,991 0.7 %
Hotels 611,756 3.1 452 0.1
Office Buildings 799,613 4.1 5,623 1.2
Shopping Centers 866,460 4.4 11,389 2.5
Commercial Development 167,435 0.8 47,150 10.5
Warehouses 552,378 2.8 2,184 0.5
Other Investment Property 489,839 2.5 9,795 2.2
       
 
Total Investment Properties 4,441,113 22.5 79,584 17.8
       
 
1-4 Family Construction 125,134 0.6 3,199 0.7
1-4 Family Investment Mortgage 853,060 4.3 25,820 5.7
Residential Development 196,051 1.0 17,781 3.9
       
 
Total 1-4 Family Properties 1,174,245 6.0 46,800 10.4
       
 
Land Acquisition 730,135 3.7 152,911 33.9
       
 
Total Commercial Real Estate 6,345,493 32.2 279,295 61.9
       
 
Commercial, Financial, and Agricultural 5,415,424 27.5 64,907 14.4
Owner-Occupied Real Estate 3,811,649 19.3 41,559 9.2
Small Business 591,377 2.9 5,475 1.2
       
 
Total Commercial & Industrial 9,818,450 49.8 111,941 24.8
 
Home Equity Lines 1,549,582 7.9 18,996 4.2
Consumer Mortgages 1,482,861 7.5 38,902 8.6
Credit Cards 253,805 1.3 - -
Other Retail Loans 286,421 1.5 1,745 0.4
       
 
Total Retail 3,572,669 18.0 59,643 13.2
 
 
Unearned Income (25,002) nm - nm
       
 
Total $ 19,711,610 100.0 % $ 450,879 100.0 %
 
LOANS OUTSTANDING BY TYPE COMPARISON
(Unaudited)
(Dollars in thousands)
                   
Total Loans 3Q13 vs. 2Q13 3Q13 vs. 3Q12
Loan Type September 30, 2013 June 30, 2013 % change (1) September 30, 2012 % change
           
 
 
Multi-Family $ 953,632 898,472 24.4 759,500 25.6 %
Hotels 611,756 656,471 (27.0) 689,196 (11.2)
Office Buildings 799,613 782,196 8.8 772,961 3.4
Shopping Centers 866,460 844,309 10.4 918,224 (5.6)
Commercial Development 167,435 177,511 (22.5) 279,585 (40.1)
Warehouses 552,378 538,274 10.4 508,770 8.6
Other Investment Property 489,839 495,290 (4.4) 474,228 3.3
         
 
Total Investment Properties 4,441,113 4,392,523 4.4 4,402,464 0.9
         
 
1-4 Family Construction 125,134 120,417 15.5 152,598 (18.0)
1-4 Family Investment Mortgage 853,060 857,063 (1.9) 906,744 (5.9)
Residential Development 196,051 220,007 (43.2) 367,908 (46.7)
         
 
Total 1-4 Family Properties 1,174,245 1,197,487 (7.7) 1,427,250 (17.7)
 
Land Acquisition 730,135 752,319 (11.7) 909,420 (19.7)
         
 
Total Commercial Real Estate 6,345,493 6,342,329 0.2 6,739,134 (5.8)
         
 
Commercial, Financial, and Agricultural 5,415,424 5,397,786 1.3 5,163,546 4.9
Owner-Occupied Real Estate 3,811,649 3,833,713 (2.3) 3,877,578 (1.7)
Small Business 591,377 568,881 15.7 444,784 33.0
         
 
Total Commercial & Industrial 9,818,450 9,800,380 0.7 9,485,908 3.5
 
 
Home Equity Lines 1,549,582 1,507,738 11.0 1,572,986 (1.5)
Consumer Mortgages 1,482,861 1,451,212 8.7 1,416,820 4.7
Credit Cards 253,805 251,788 3.2 257,922 (1.6)
Other Retail Loans 286,421 278,603 11.1 276,148 3.7
         
Total Retail 3,572,669 3,489,341 9.5 3,523,876 1.4
 
 
Unearned Income (25,002) (23,767) nm (17,053) nm
         
 
Total $ 19,711,610 19,608,283 2.1 % 19,731,865 (0.1) %
 
(1) Percentage change is annualized.
Synovus
       
CREDIT QUALITY DATA
(Unaudited)
(Dollars in thousands) 2013 2012 3rd Quarter
                     
Third Second First Fourth Third '13 vs. '12
Quarter   Quarter   Quarter   Quarter   Quarter Change
 
Non-performing Loans $ 450,879 483,464 513,227 543,333 700,204 (35.6) %
Other Loans Held for Sale (1) 9,351 12,083 9,129 9,455 10,019 (6.7)
Other Real Estate 126,640 139,653 155,237 150,271 189,182 (33.1)  
Non-performing Assets 586,870 635,200 677,592 703,059 899,405 (34.7)
 
Allowance for Loan Losses 318,612 334,880 351,772 373,405 420,404 (24.2)
 
Net Charge-Offs - Quarter 23,030 29,969 57,328 193,525 96,493 (76.1)
Net Charge-Offs / Average Loans - Quarter (2) 0.47 % 0.61 1.18 3.94 1.97
 
Non-performing Loans / Loans 2.29 2.47 2.65 2.78 3.55
Non-performing Assets / Loans, Other Loans Held for Sale & ORE 2.96 3.21 3.47 3.57 4.51
Allowance / Loans 1.62 1.71 1.82 1.91 2.13
 
Allowance / Non-performing Loans 70.66 69.27 68.54 68.72 60.04
Allowance / Non-performing Loans (3) 91.84 91.76 97.75 93.49 131.56
 
Past Due Loans over 90 days and Still Accruing $ 4,738 4,596 5,799 6,811 8,972 (47.2) %
As a Percentage of Loans Outstanding 0.02 % 0.02 0.03 0.03 0.05
 
Total Past Dues Loans and Still Accruing $ 78,906 80,678 88,330 104,825 108,633 (27.4)
As a Percentage of Loans Outstanding 0.40 % 0.41 0.46 0.54 0.55
 
Accruing troubled debt restructurings (TDRs) $ 574,236 635,125 623,900 673,383 698,847 (17.8)
 
(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)      
September 30, 2013 December 31, 2012 September 30, 2012
 
Tier 1 Capital $ 2,292,757 2,832,244 2,835,950
Total Risk-Based Capital 2,835,116 3,460,998 3,465,950
Tier 1 Capital Ratio 10.55 % 13.24 13.23
Tier 1 Common Equity Ratio 9.93 8.72 8.73
Total Risk-Based Capital Ratio 13.04 16.18 16.16
Tier 1 Leverage Ratio 8.96 11.00 10.97
Common Equity as a Percentage of Total Assets (2) 10.70 9.76 7.46
Tangible Common Equity as a Percentage of Tangible Assets (3) 10.61 9.66 7.35
Tangible Common Equity as a Percentage of Risk Weighted Assets (3) 12.78 12.07 8.82
Book Value Per Common Share (4) (5) 2.89 2.99 2.11
Tangible Book Value Per Common Share (3) (5) 2.86 2.95 2.07
 
 
(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) September 30, 2013 includes addition to common shares from the final settlement of tangible equity units (tMEDS) of 122.8 million shares. Equity and common shares for prior periods exclude impact of unexercised tangible equity units (tMEDs).

 

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

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