Ga.-based Synovus Bank, the major banking subsidiary of Synovus Financial Corp. (SNV), acquired approximately $54 million in deposits – including all uninsured deposits – of Valdosta, GA-based failed Sunrise Bank from the Federal Deposit Insurance Corporation (:FDIC). Sunrise Bank, which operated through branches at Valdosta, Atlanta, and Jeffersonville in GA, was a subsidiary of Capitol Bancorp, Ltd. (CBCRQ).
From May 13, depositors of Sunrise Bank will become depositors of Synovus Bank. Deposits will continue to be insured by the FDIC and the existing branches of Sunrise Bank will function as temporary branches of Synovus Bank.
Bank of North Georgia, CB&T of Middle Georgia and First State Bank and Trust are the divisions of Synovus Bank that will operate in Atlanta, Jeffersonville and Valdosta respectively. These branches will continue to serve the requirements of the current customers of Sunrise Bank till the transition process to Synovus is fully complete.
Management at Synovus believes that the clients of Sunrise Bank will benefit from its long-standing expertise in Ga. market, as well as its diverse range of products and solutions.
We believe the above-mentioned strategic acquisition is an effort to mitigate the falling top line. Synovus is currently in a recovery phase, driven by lower non-performing assets and improving operating efficiencies. Further, repayment of Troubled Asset Relief Program (:TARP) dues, which is slated to take place in the third quarter of 2013, is a positive. However, regulatory issues, low interest environment and significant exposure to residential real estate markets remain matters of concern.
Synovus currently carries a Zacks Rank #3 (Hold). Better performing banking stocks include Popular, Inc. (BPOP) and Heritage Financial Group, Inc. (HBOS), both of which carry a Zacks Rank #1 (Strong Buy).
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