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Synovus announces earnings for the second quarter 2023

Diluted earnings per share of $1.13 vs. $1.16 in 2Q22

Adjusted diluted earnings per share of $1.16 vs. $1.17 in 2Q22

Synovus Financial Corp. (NYSE: SNV) today reported financial results for the quarter ended June 30, 2023. “Our second quarter financial performance reflects the strength and resiliency of our team, with pre-provision net revenue growing 8% year over year and adjusted return on tangible common equity at 18%,” said Synovus Chairman, CEO and President Kevin Blair. “Strong deposit production, increased capital levels and stability in credit metrics, as we saw during the second quarter, all serve as mitigants to the risks of an environment with heightened levels of volatility and uncertainty. And as we position the company for sustainable, long-term growth, we’re proactively optimizing the balance sheet, we’ve adjusted revenue expectations in response to slower economic growth trends and deposit remixing, and we’ve significantly reduced expense growth. Even as we execute amid lingering challenging market conditions, we remain fully dedicated to providing reliable and innovative financial solutions to our clients. Their trust and confidence in our institution have been paramount to our growth and sustained performance.”

Second Quarter 2023 Highlights

  • Total revenue of $567.8 million increased $45.2 million, or 9%, compared to the second quarter 2022, driven by net interest income growth of 7%, in addition to growth in core client fee income, excluding mortgage, of 7% year-over-year.
  • Pre-provision net revenue of $260.6 million increased $20.0 million, or 8%, compared to the second quarter 2022.
  • Period-end loans increased $308.6 million sequentially, primarily driven by fundings of existing CRE commitments and growth in consumer loans, somewhat offset by lower utilization from C&I commitments.
  • Total deposits increased $126.5 million sequentially and included remixing due to the rate environment.
  • Credit quality metrics at solid levels with a net charge-off ratio of 0.24%, a modest increase in the ACL ratio to 1.19%, and broader stable performance across the loan portfolio, asset types, and industries.
  • Preliminary CET1 ratio of 9.85% increased 8 bps sequentially as capital generation continued to support client loan growth while also buffering capital levels given economic uncertainty.

     

Second Quarter Summary

 

Reported

 

Adjusted

(dollars in thousands)

 

2Q23

 

 

 

1Q23

 

 

 

2Q22

 

 

 

2Q23

 

 

 

1Q23

 

 

 

2Q22

 

Net income available to common shareholders

$

165,819

 

 

$

193,868

 

 

$

169,761

 

 

$

169,526

 

 

$

195,276

 

 

$

171,018

 

Diluted earnings per share

 

1.13

 

 

 

1.32

 

 

 

1.16

 

 

 

1.16

 

 

 

1.33

 

 

 

1.17

 

Total revenue

 

567,807

 

 

 

613,877

 

 

 

522,654

 

 

 

567,347

 

 

 

599,469

 

 

 

526,854

 

Total loans

 

44,353,537

 

 

 

44,044,939

 

 

 

41,204,780

 

 

 

N/A

 

 

 

N/A

 

 

 

N/A

 

Total deposits

 

50,080,392

 

 

 

49,953,936

 

 

 

49,034,700

 

 

 

N/A

 

 

 

N/A

 

 

 

N/A

 

Return on avg assets

 

1.15

%

 

 

1.36

%

 

 

1.26

%

 

 

1.18

%

 

 

1.37

%

 

 

1.27

%

Return on avg common equity

 

15.5

 

 

 

19.2

 

 

 

16.5

 

 

 

15.8

 

 

 

19.4

 

 

 

16.6

 

Return on avg tangible common equity

 

17.7

 

 

 

21.9

 

 

 

18.8

 

 

 

18.1

 

 

 

22.1

 

 

 

19.0

 

Net interest margin

 

3.20

 

 

 

3.43

 

 

 

3.22

 

 

 

N/A

 

 

 

N/A

 

 

 

N/A

 

Efficiency ratio-TE(1)(2)

 

53.99

 

 

 

52.33

 

 

 

53.87

 

 

 

52.57

 

 

 

50.48

 

 

 

53.43

 

NCO ratio-QTD

 

0.24

 

 

 

0.17

 

 

 

0.16

 

 

 

N/A

 

 

 

N/A

 

 

 

N/A

 

NPA ratio

 

0.59

 

 

 

0.41

 

 

 

0.33

 

 

 

N/A

 

 

 

N/A

 

 

 

N/A

 

(1)

Taxable equivalent

(2)

Adjusted tangible efficiency ratio

 
 

Balance Sheet

Loans*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(dollars in millions)

 

2Q23

 

 

1Q23

 

Linked

Quarter

Change

 

Linked

Quarter %

Change

 

 

2Q22

 

Year/Year

Change

 

Year/Year

% Change

Commercial & industrial

$

22,531.2

 

$

22,600.2

 

$

(68.9

)

 

%

 

$

20,778.3

 

$

1,752.9

 

 

8

%

Commercial real estate

 

13,293.9

 

 

12,996.8

 

 

297.1

 

 

2

 

 

 

11,503.4

 

 

1,790.5

 

 

16

 

Consumer

 

8,528.4

 

 

8,448.0

 

 

80.4

 

 

1

 

 

 

8,923.0

 

 

(394.6

)

 

(4

)

Total loans

$

44,353.5

 

$

44,044.9

 

$

308.6

 

 

1

%

 

$

41,204.8

 

$

3,148.8

 

 

8

%

*Amounts may not total due to rounding

  • Total loans ended the quarter at $44.35 billion, up $308.6 million sequentially.
  • Commercial and industrial (C&I) loans decreased $68.9 million sequentially, primarily driven by lower utilization from existing commitments and a strategic decline in syndicated loans.
  • CRE loans increased $297.1 million sequentially, mostly due to draws on existing multi-family commitments and continued low levels of pay-offs.
  • Consumer loans increased $80.4 million sequentially, largely a result of growth in portfolio mortgages somewhat offset by continued third-party decline from runoff.

 

 

Deposits*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(dollars in millions)

 

2Q23

 

 

1Q23

 

Linked

Quarter

Change

 

Linked

Quarter %

Change

 

 

2Q22

 

Year/Year

Change

 

Year/Year

% Change

Non-interest-bearing DDA

$

12,945.5

 

$

13,827.6

 

$

(882.0

)

 

(6

)%

 

$

15,781.1

 

$

(2,835.6

)

 

(18

)%

Interest-bearing DDA

 

6,255.3

 

 

5,841.0

 

 

414.3

 

 

7

 

 

 

6,327.1

 

 

(71.7

)

 

(1

)

Money market

 

10,803.7

 

 

11,776.0

 

 

(972.3

)

 

(8

)

 

 

13,793.0

 

 

(2,989.3

)

 

(22

)

Savings

 

1,222.9

 

 

1,312.7

 

 

(89.8

)

 

(7

)

 

 

1,498.7

 

 

(275.9

)

 

(18

)

Public funds

 

7,031.4

 

 

6,888.2

 

 

143.2

 

 

2

 

 

 

5,863.9

 

 

1,167.5

 

 

20

 

Time deposits

 

5,291.8

 

 

4,060.3

 

 

1,231.5

 

 

30

 

 

 

2,147.8

 

 

3,144.1

 

 

146

 

Brokered deposits

 

6,529.8

 

 

6,248.3

 

 

281.5

 

 

5

 

 

 

3,623.1

 

 

2,906.7

 

 

80

 

Total deposits

$

50,080.4

 

$

49,953.9

 

$

126.5

 

 

%

 

$

49,034.7

 

$

1,045.7

 

 

2

%

*Amounts may not total due to rounding

  • Total deposits ended the quarter at $50.08 billion, up $126.5 million sequentially
    • Money market deposits were primarily impacted by the continued shifting to time deposits.
    • Non-interest-bearing DDAs were impacted by pressures from seasonal cash deployment of excess funds and continued pressures from the higher rate environment.
  • Total deposit costs increased 51 bps sequentially to 1.95% and were impacted by the anticipated pricing lags on core interest-bearing deposits (excludes brokered deposits) as well as the decline in non-interest-bearing DDAs.
 

Income Statement Summary**

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in thousands, except per share data)

 

2Q23

 

 

 

1Q23

 

 

Linked

Quarter

Change

 

Linked

Quarter %

Change

 

 

2Q22

 

 

Year/Year

Change

 

Year/Year

% Change

Net interest income

$

455,531

 

 

$

480,751

 

 

$

(25,220

)

 

(5

)%

 

$

425,388

 

 

$

30,143

 

 

7

%

Non-interest revenue

 

112,276

 

 

 

133,126

 

 

 

(20,850

)

 

(16

)

 

 

97,266

 

 

 

15,010

 

 

15

 

Non-interest expense

 

307,181

 

 

 

321,852

 

 

 

(14,671

)

 

(5

)

 

 

282,051

 

 

 

25,130

 

 

9

 

Provision for (reversal of) credit losses

 

38,881

 

 

 

32,154

 

 

 

6,727

 

 

21

 

 

 

12,688

 

 

 

26,193

 

 

206

 

Income before taxes

$

221,745

 

 

$

259,871

 

 

$

(38,126

)

 

(15

)%

 

$

227,915

 

 

$

(6,170

)

 

(3

)%

Income tax expense

 

47,801

 

 

 

57,712

 

 

 

(9,911

)

 

(17

)

 

 

49,863

 

 

 

(2,062

)

 

(4

)

Net income

 

173,944

 

 

 

202,159

 

 

 

(28,215

)

 

(14

)

 

 

178,052

 

 

 

(4,108

)

 

(2

)

Less: Net income (loss) attributable to noncontrolling interest

 

(166

)

 

 

 

 

 

(166

)

 

NM

 

 

 

 

 

 

(166

)

 

NM

 

Net income attributable to Synovus Financial Corp.

 

174,110

 

 

 

202,159

 

 

 

(28,049

)

 

(14

)

 

 

178,052

 

 

 

(3,942

)

 

(2

)

Less: Preferred stock dividends

 

8,291

 

 

 

8,291

 

 

 

 

 

 

 

 

8,291

 

 

 

 

 

 

Net income available to common shareholders

$

165,819

 

 

$

193,868

 

 

$

(28,049

)

 

(14

)%

 

$

169,761

 

 

$

(3,942

)

 

(2

)%

Weighted average common shares outstanding, diluted

 

146,550

 

 

 

146,727

 

 

 

(177

)

 

%

 

 

146,315

 

 

 

235

 

 

%

Diluted earnings per share

$

1.13

 

 

$

1.32

 

 

$

(0.19

)

 

(14

)

 

$

1.16

 

 

$

(0.03

)

 

(3

)

Adjusted diluted earnings per share

 

1.16

 

 

 

1.33

 

 

 

(0.17

)

 

(13

)

 

 

1.17

 

 

 

(0.01

)

 

(1

)

Effective tax rate

 

21.56

%

 

 

22.21

%

 

 

 

 

 

 

21.88

%

 

 

 

 

** Amounts may not total due to rounding

Core Performance

  • Net interest income of $455.5 million was down $25.2 million sequentially, or 5%, and increased $30.1 million, or 7%, compared to the second quarter 2022.
    • The quarter-over-quarter decline was largely driven by increases in deposit costs and negative re- mixing in non-interest-bearing DDA deposits partially offset by higher asset yields and earning asset growth.
      • Net interest margin was 3.20%, down 23 bps sequentially, impacted by the same factors mentioned above.
    • The year-over-year increase resulted primarily from loan growth and interest rate increases somewhat offset by higher deposit costs and negative remixing from non-interest DDA deposits.
  • Non-interest revenue decreased $20.9 million, or 16%, sequentially and increased $15.0 million, or 15%, compared to the second quarter 2022. Adjusted non-interest revenue decreased $6.9 million, or 6%, sequentially and increased $10.2 million, or 10%, compared to the second quarter 2022.
    • The quarter-over-quarter decrease was impacted by the prior quarter's $13.1 million one-time benefit from the recovery of a non-performing asset related to the regulatory approval of our Qualpay investment and strong growth in capital markets income in the first quarter 2023, which normalized this quarter.
    • The year-over-year increase primarily related to higher wealth revenue from diverse sources including fees from short-term liquidity management products and a $7 million write-down in the second quarter 2022 on a minority tech investment.
  • Non-interest expense decreased $14.7 million, or 5%, sequentially and increased $25.1 million, or 9%, compared to the second quarter 2022. Adjusted non-interest expense decreased $3.8 million, or 1%, sequentially and increased $17.0 million, or 6%, compared to the second quarter 2022.
    • The quarter-over-quarter decrease was largely due to the previous quarter's $16.8 million loss associated with the move of third-party consumer loans to held for sale in addition to seasonally elevated personnel expense in the first quarter 2023.
    • The year-over-year increase primarily resulted from new business initiatives and infrastructure investments as well as investments in our workforce and higher FDIC insurance and healthcare costs.
  • Overall credit performance and the credit quality of our recent originations was solid. The non-performing loan and asset ratios both moved to 0.59%; the net charge-off ratio for the quarter was 0.24%, and total past dues were 0.19% of total loans outstanding.
  • Provision for credit losses of $38.9 million increased $6.7 million sequentially and increased $26.2 million compared to the second quarter 2022.
    • Drivers of the quarter-over-quarter increase included higher net charge-offs and a modest increase of 2 bps in the allowance for credit losses coverage ratio (to loans).
    • Drivers of the year-over-year increase largely included an 8 bps increase in the allowance for credit losses coverage ratio (to loans), which resulted from deterioration in forecasted economic scenarios mostly offset by continued solid loan portfolio performance, and higher net charge-offs.
 

Capital Ratios

 

 

 

 

 

 

 

2Q23

 

1Q23

 

2Q22

Common equity Tier 1 capital (CET1) ratio

9.85

%

*

9.77

%

 

9.46

%

Tier 1 capital ratio

10.88

 

*

10.81

 

 

10.56

 

Total risk-based capital ratio

12.79

 

*

12.72

 

 

12.43

 

Tier 1 leverage ratio

9.23

 

*

9.14

 

 

9.03

 

Tangible common equity ratio

6.17

 

 

6.12

 

 

6.26

 

* Ratios are preliminary.

 

Capital

  • Preliminary CET1 ratio improved 8 bps during the quarter to 9.85%, and the preliminary total risk-based capital ratio of 12.79% increased 7 bps from the previous quarter as core earnings continued to support capital generation.

Second Quarter Earnings Conference Call

Synovus will host an earnings highlights conference call at 8:30 a.m. ET on July 20, 2023. 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.

Synovus Financial Corp. is a financial services company based in Columbus, Georgia, with approximately $61 billion in assets. Synovus provides commercial and consumer banking and a full suite of specialized products and services, including private banking, treasury management, wealth management, mortgage services, premium finance, asset-based lending, structured lending, capital markets and international banking. Synovus has 246 branches in Georgia, Alabama, South Carolina, Florida and Tennessee. Synovus is a Great Place to Work-Certified Company and 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 our future operating and financial performance; expectations on our growth strategy, expense and revenue initiatives, capital management, balance sheet management, and future profitability; expectations on credit quality and performance; 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, 2022, 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 revenue, non-interest expense; adjusted revenue; adjusted tangible efficiency ratio; adjusted net income available to common shareholders; adjusted diluted earnings per share; adjusted return on average assets; adjusted return on average common equity; return on average tangible common equity; adjusted return on average tangible common equity; and tangible common equity ratio 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 revenue; total non-interest expense; total revenue; efficiency ratio- TE; net income available to common shareholders; diluted earnings per share; return on average assets; return on average common equity; and the ratio of total Synovus Financial Corp. shareholders' equity to total assets, 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 non-interest revenue and adjusted revenue are measures used by management to evaluate non-interest revenue and total revenue revenue exclusive of net investment securities gains (losses), fair value adjustment on non-qualified deferred compensation, and other items not indicative of ongoing operations that could impact period-to-period comparisons. Adjusted non-interest expense and the adjusted tangible efficiency ratio are measures utilized by management to measure the success of expense management initiatives focused on reducing recurring controllable operating costs. Adjusted net income available to common shareholders, adjusted diluted earnings per 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. Return on average tangible common equity and adjusted return on average tangible common equity are measures used by management to compare Synovus’ performance with other financial institutions because it calculates the return available to common shareholders without the impact of intangible assets and their related amortization, thereby allowing management to evaluate the performance of the business consistently. The tangible common equity ratio is used by management 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)

 

2Q23

 

 

 

1Q23

 

 

 

2Q22

 

 

 

 

 

 

 

Adjusted non-interest revenue

 

 

 

 

 

Total non-interest revenue

$

112,276

 

 

$

133,126

 

 

$

97,266

 

Investment securities (gains) losses, net

 

 

 

 

(1,030

)

 

 

 

Recovery of NPA

 

 

 

 

(13,126

)

 

 

 

Fair value adjustment on non-qualified deferred compensation

 

(1,598

)

 

 

(1,371

)

 

 

3,240

 

Adjusted non-interest revenue

$

110,678

 

 

$

117,599

 

 

$

100,506

 

 

 

 

 

 

 

Adjusted non-interest expense

 

 

 

 

 

Total non-interest expense

$

307,181

 

 

$

321,852

 

 

$

282,051

 

(Loss) gain on other loans held for sale

 

(2,360

)

 

 

(16,750

)

 

 

 

Gain (loss) on early extinguishment of debt

 

377

 

 

 

 

 

 

 

Restructuring (charges) reversals

 

110

 

 

 

733

 

 

 

1,850

 

Valuation adjustment to Visa derivative

 

(3,027

)

 

 

 

 

 

(3,500

)

Fair value adjustment on non-qualified deferred compensation

 

(1,598

)

 

 

(1,371

)

 

 

3,240

 

Adjusted non-interest expense

$

300,683

 

 

$

304,464

 

 

$

283,641

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Non-GAAP Financial Measures, continued

 

 

 

 

 

 

(dollars in thousands)

 

2Q23

 

 

 

1Q23

 

 

 

2Q22

 

Adjusted revenue and tangible efficiency ratio

 

 

 

 

 

Adjusted non-interest expense

$

300,683

 

 

$

304,464

 

 

$

283,641

 

Amortization of intangibles

 

(2,420

)

 

 

(1,857

)

 

 

(2,118

)

Adjusted tangible non-interest expense

$

298,263

 

 

$

302,607

 

 

$

281,523

 

 

 

 

 

 

 

Net interest income

$

455,531

 

 

$

480,751

 

 

$

425,388

 

Total non-interest revenue

 

112,276

 

 

 

133,126

 

 

 

97,266

 

Total revenue

$

567,807

 

 

$

613,877

 

 

$

522,654

 

Tax equivalent adjustment

 

1,138

 

 

 

1,119

 

 

 

960

 

Total TE revenue

 

568,945

 

 

 

614,996

 

 

 

523,614

 

Recovery of NPA

 

 

 

 

(13,126

)

 

 

 

Investment securities losses (gains), net

 

 

 

 

(1,030

)

 

 

 

Fair value adjustment on non-qualified deferred compensation

 

(1,598

)

 

 

(1,371

)

 

 

3,240

 

Adjusted revenue

$

567,347

 

 

$

599,469

 

 

$

526,854

 

Efficiency ratio-TE

 

53.99

%

 

 

52.33

%

 

 

53.87

%

Adjusted tangible efficiency ratio

 

52.57

 

 

 

50.48

 

 

 

53.43

 

 

 

 

 

 

 

Adjusted return on average assets

Net income

$

173,944

 

 

$

202,159

 

 

$

178,052

 

Recovery of NPA

 

 

 

 

(13,126

)

 

 

 

Loss (gain) on other loans held for sale

 

2,360

 

 

 

16,750

 

 

 

 

(Gain) loss on early extinguishment of debt

 

(377

)

 

 

 

 

 

 

Restructuring charges (reversals)

 

(110

)

 

 

(733

)

 

 

(1,850

)

Valuation adjustment to Visa derivative

 

3,027

 

 

 

 

 

 

3,500

 

Investment securities losses (gains), net

 

 

 

 

(1,030

)

 

 

 

Tax effect of adjustments(1)

 

(1,193

)

 

 

(453

)

 

 

(393

)

Adjusted net income

$

177,651

 

 

$

203,567

 

 

$

179,309

 

Net income annualized

$

697,687

 

 

$

819,867

 

 

$

714,165

 

Adjusted net income annualized

$

712,556

 

 

$

825,577

 

 

$

719,206

 

Total average assets

$

60,515,077

 

 

$

60,133,561

 

 

$

56,536,940

 

Return on average assets

 

1.15

%

 

 

1.36

%

 

 

1.26

%

Adjusted return on average assets

 

1.18

 

 

 

1.37

 

 

 

1.27

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income available to common shareholders and adjusted diluted earnings per share

Net income available to common shareholders

$

165,819

 

 

$

193,868

 

 

$

169,761

 

Recovery of NPA

 

 

 

 

(13,126

)

 

 

 

Loss (gain) on other loans held for sale

 

2,360

 

 

 

16,750

 

 

 

 

(Gain) loss on early extinguishment of debt

 

(377

)

 

 

 

 

 

 

Restructuring charges (reversals)

 

(110

)

 

 

(733

)

 

 

(1,850

)

Valuation adjustment to Visa derivative

 

3,027

 

 

 

 

 

 

3,500

 

Investment securities losses (gains), net

 

 

 

 

(1,030

)

 

 

 

Tax effect of adjustments(1)

 

(1,193

)

 

 

(453

)

 

 

(393

)

Adjusted net income available to common shareholders

$

169,526

 

 

$

195,276

 

 

$

171,018

 

Weighted average common shares outstanding, diluted

 

146,550

 

 

 

146,727

 

 

 

146,315

 

Diluted earnings per share

$

1.13

 

 

$

1.32

 

 

$

1.16

 

Adjusted diluted earnings per share

 

1.16

 

 

 

1.33

 

 

 

1.17

 

 
 

Reconciliation of Non-GAAP Financial Measures, continued

 

 

 

 

 

 

(dollars in thousands)

 

2Q23

 

 

 

1Q23

 

 

 

2Q22

 

Adjusted return on average common equity, return on average tangible common equity, and adjusted return on average tangible common equity

 

 

 

 

 

Net income available to common shareholders

$

165,819

 

 

$

193,868

 

 

$

169,761

 

Recovery of NPA

 

 

 

 

(13,126

)

 

 

 

Loss (gain) on other loans held for sale

 

2,360

 

 

 

16,750

 

 

 

 

(Gain) loss on early extinguishment of debt

 

(377

)

 

 

 

 

 

 

Restructuring charges (reversals)

 

(110

)

 

 

(733

)

 

 

(1,850

)

Valuation adjustment to Visa derivative

 

3,027

 

 

 

 

 

 

3,500

 

Investment securities losses (gains), net

 

 

 

 

(1,030

)

 

 

 

Tax effect of adjustments(1)

 

(1,193

)

 

 

(453

)

 

 

(393

)

Adjusted net income available to common shareholders

$

169,526

 

 

$

195,276

 

 

$

171,018

 

 

 

 

 

 

 

Adjusted net income available to common shareholders annualized

$

679,967

 

 

$

791,953

 

 

$

685,951

 

Amortization of intangibles, tax effected, annualized

 

7,344

 

 

 

5,699

 

 

 

6,471

 

Adjusted net income available to common shareholders excluding amortization of intangibles annualized

$

687,311

 

 

$

797,652

 

 

$

692,422

 

 

 

 

 

 

 

Net income available to common shareholders annualized

$

665,098

 

 

$

786,242

 

 

$

680,910

 

Amortization of intangibles, tax effected, annualized

 

7,344

 

 

 

5,699

 

 

 

6,471

 

Net income available to common shareholders excluding amortization of intangibles annualized

$

672,442

 

 

$

791,941

 

 

$

687,381

 

 

 

 

 

 

 

Total average Synovus Financial Corp. shareholders' equity less preferred stock

$

4,303,722

 

 

$

4,088,777

 

 

$

4,132,536

 

Average goodwill

 

(460,118

)

 

 

(452,390

)

 

 

(452,390

)

Average other intangible assets, net

 

(36,738

)

 

 

(26,245

)

 

 

(32,387

)

Total average Synovus Financial Corp. tangible shareholders' equity less preferred stock

$

3,806,866

 

 

$

3,610,142

 

 

$

3,647,759

 

Return on average common equity

 

15.5

%

 

 

19.2

%

 

 

16.5

%

Adjusted return on average common equity

 

15.8

 

 

 

19.4

 

 

 

16.6

 

Return on average tangible common equity

 

17.7

 

 

 

21.9

 

 

 

18.8

 

Adjusted return on average tangible common equity

 

18.1

 

 

 

22.1

 

 

 

19.0

 

 

 

 

 

 

 

 

 

 

 

 

 

(dollars in thousands)

June 30, 2023

 

December 31, 2022

 

June 30, 2022

 

 

 

 

 

 

Tangible common equity ratio

 

 

 

 

 

Total assets

$

60,655,591

 

 

$

59,731,378

 

 

$

57,382,745

 

Goodwill

 

(475,573

)

 

 

(452,390

)

 

 

(452,390

)

Other intangible assets, net

 

(61,538

)

 

 

(27,124

)

 

 

(31,360

)

Tangible assets

$

60,118,480

 

 

$

59,251,864

 

 

$

56,898,995

 

 

 

 

 

 

 

Total Synovus Financial Corp. shareholders’ equity

$

4,782,528

 

 

$

4,475,801

 

 

$

4,584,438

 

Goodwill

 

(475,573

)

 

 

(452,390

)

 

 

(452,390

)

Other intangible assets, net

 

(61,538

)

 

 

(27,124

)

 

 

(31,360

)

Preferred Stock, no par value

 

(537,145

)

 

 

(537,145

)

 

 

(537,145

)

Tangible common equity

$

3,708,272

 

 

$

3,459,142

 

 

$

3,563,543

 

Total Synovus Financial Corp. shareholders’ equity to total assets ratio

 

7.88

%

 

 

7.49

%

 

 

7.99

%

Tangible common equity ratio

 

6.17

 

 

 

5.84

 

 

 

6.26

 

 

 

 

 

 

 

(1) An assumed marginal tax rate of 24.3% for 2Q23 and 1Q23 and 23.8% for 2Q22 was applied.

 

Amounts may not total due to rounding 

 
 
 
 

Synovus

INCOME STATEMENT DATA

(Unaudited)

 

 

 

 

 

 

(Dollars in thousands, except per share data)

Six Months Ended June 30,

 

 

 

 

 

 

 

 

 

2023

 

 

 

2022

 

 

23 vs '22

 

 

 

% Change

 

 

 

 

 

 

Interest income

$

1,476,022

 

 

$

869,834

 

 

70

%

Interest expense

 

539,739

 

 

 

52,199

 

 

934

 

 

 

 

 

 

 

Net interest income

 

936,283

 

 

 

817,635

 

 

15

 

Provision for (reversal of) credit losses

 

71,035

 

 

 

24,088

 

 

195

 

 

 

 

 

 

 

Net interest income after provision for credit losses

 

865,248

 

 

 

793,547

 

 

9

 

 

 

 

 

 

 

Non-interest revenue:

 

 

 

 

 

Service charges on deposit accounts

 

46,451

 

 

 

46,030

 

 

1

 

Fiduciary and asset management fees

 

39,723

 

 

 

40,377

 

 

(2

)

Card fees

 

32,884

 

 

 

30,846

 

 

7

 

Brokerage revenue

 

43,466

 

 

 

29,898

 

 

45

 

Mortgage banking income

 

8,467

 

 

 

9,857

 

 

(14

)

Capital markets income

 

20,700

 

 

 

12,864

 

 

61

 

Income from bank-owned life insurance

 

14,140

 

 

 

15,722

 

 

(10

)

Investment securities gains (losses), net

 

1,030

 

 

 

 

 

nm

Recovery of NPA

 

13,126

 

 

 

 

 

nm

Other non-interest revenue

 

25,415

 

 

 

17,006

 

 

49

 

 

 

 

 

 

 

Total non-interest revenue

 

245,402

 

 

 

202,600

 

 

21

 

 

 

 

 

 

 

Non-interest expense:

 

 

 

 

 

Salaries and other personnel expense

 

371,926

 

 

 

325,747

 

 

14

 

Net occupancy, equipment, and software expense

 

85,645

 

 

 

86,076

 

 

(1

)

Third-party processing and other services

 

43,493

 

 

 

42,947

 

 

1

 

Professional fees

 

18,560

 

 

 

19,338

 

 

(4

)

FDIC insurance and other regulatory fees

 

21,429

 

 

 

13,144

 

 

63

 

Restructuring charges (reversals)

 

(843

)

 

 

(8,274

)

 

nm

Loss on other loans held for sale

 

19,110

 

 

 

 

 

nm

Other operating expenses

 

69,714

 

 

 

75,523

 

 

(8

)

 

 

 

 

 

 

Total non-interest expense

 

629,034

 

 

 

554,501

 

 

13

 

 

 

 

 

 

 

Income before income taxes

 

481,616

 

 

 

441,646

 

 

9

 

Income tax expense

 

105,513

 

 

 

92,558

 

 

14

 

 

 

 

 

 

 

Net income

 

376,103

 

 

 

349,088

 

 

8

 

 

 

 

 

 

 

Less: Net income attributable to noncontrolling interest

 

(166

)

 

 

 

 

nm

 

 

 

 

 

 

Net income attributable to Synovus Financial Corp.

 

376,269

 

 

 

349,088

 

 

8

 

 

 

 

 

 

 

Less: Preferred stock dividends

 

16,581

 

 

 

16,581

 

 

 

 

 

 

 

 

 

Net income available to common shareholders

$

359,688

 

 

$

332,507

 

 

8

%

 

 

 

 

 

 

Net income per common share, basic

$

2.46

 

 

$

2.29

 

 

8

%

 

 

 

 

 

 

Net income per common share, diluted

 

2.45

 

 

 

2.27

 

 

8

 

 

 

 

 

 

 

Cash dividends declared per common share

 

0.76

 

 

 

0.68

 

 

12

 

 

 

 

 

 

 

Return on average assets *

 

1.26

%

 

 

1.24

%

 

2 bps

Return on average common equity *

 

17.28

 

 

 

15.28

 

 

200

 

 

 

 

 

 

 

Weighted average common shares outstanding, basic

 

145,957

 

 

 

145,301

 

 

%

Weighted average common shares outstanding, diluted

 

146,644

 

 

 

146,489

 

 

 

 

 

 

 

 

 

nm - not meaningful

bps - basis points

* - ratios are annualized

Amounts may not total due to rounding  
 
 

Synovus

INCOME STATEMENT DATA

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

(Dollars in thousands, except per share data)

2023

 

2022

 

Second Quarter

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Second

Quarter

 

First

Quarter

 

Fourth

Quarter

 

Third

Quarter

 

Second

Quarter

 

'23 vs '22

 

 

 

 

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

$

759,143

 

 

716,879

 

 

654,654

 

 

551,299

 

453,772

 

 

67

%

Interest expense

 

303,612

 

 

236,128

 

 

153,308

 

 

73,380

 

28,384

 

 

970

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

455,531

 

 

480,751

 

 

501,346

 

 

477,919

 

425,388

 

 

7

 

Provision for (reversal of) credit losses

 

38,881

 

 

32,154

 

 

34,884

 

 

25,581

 

12,688

 

 

206

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income after provision for credit losses

 

416,650

 

 

448,597

 

 

466,462

 

 

452,338

 

412,700

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest revenue:

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

23,477

 

 

22,974

 

 

23,639

 

 

23,398

 

23,491

 

 

 

Fiduciary and asset management fees

 

20,027

 

 

19,696

 

 

18,836

 

 

19,201

 

20,100

 

 

 

Card fees

 

17,059

 

 

15,824

 

 

15,887

 

 

15,101

 

16,089

 

 

6

 

Brokerage revenue

 

20,908

 

 

22,558

 

 

19,996

 

 

17,140

 

15,243

 

 

37

 

Mortgage banking income

 

4,609

 

 

3,858

 

 

2,554

 

 

5,065

 

3,904

 

 

18

 

Capital markets income

 

6,975

 

 

13,725

 

 

6,998

 

 

6,839

 

7,393

 

 

(6

)

Income from bank-owned life insurance

 

6,878

 

 

7,262

 

 

7,206

 

 

6,792

 

9,165

 

 

(25

)

Investment securities gains (losses), net

 

 

 

1,030

 

 

 

 

 

 

 

nm

Recovery of NPA

 

 

 

13,126

 

 

 

 

 

 

 

nm

Other non-interest revenue

 

12,343

 

 

13,073

 

 

7,323

 

 

10,762

 

1,881

 

 

556

 

 

 

 

 

 

 

 

 

 

 

 

 

Total non-interest revenue

 

112,276

 

 

133,126

 

 

102,439

 

 

104,298

 

97,266

 

 

15

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest expense:

 

 

 

 

 

 

 

 

 

 

 

Salaries and other personnel expense

 

183,001

 

 

188,924

 

 

182,629

 

 

173,334

 

161,063

 

 

14

 

Net occupancy, equipment, and software expense

 

42,785

 

 

42,860

 

 

45,192

 

 

43,462

 

43,199

 

 

(1

)

Third-party processing and other services

 

21,659

 

 

21,833

 

 

23,130

 

 

22,539

 

21,952

 

 

(1

)

Professional fees

 

9,597

 

 

8,963

 

 

11,096

 

 

6,755

 

10,865

 

 

(12

)

FDIC insurance and other regulatory fees

 

11,162

 

 

10,268

 

 

8,232

 

 

7,707

 

6,894

 

 

62

 

Restructuring charges (reversals)

 

(110

)

 

(733

)

 

(2,372

)

 

956

 

(1,850

)

 

(94

)

Loss on other loans held for sale

 

2,360

 

 

16,750

 

 

 

 

 

 

 

nm

Other operating expenses

 

36,727

 

 

32,987

 

 

41,089

 

 

39,257

 

39,928

 

 

(8

)

 

 

 

 

 

 

 

 

 

 

 

 

Total non-interest expense

 

307,181

 

 

321,852

 

 

308,996

 

 

294,010

 

282,051

 

 

9

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

221,745

 

 

259,871

 

 

259,905

 

 

262,626

 

227,915

 

 

(3

)

Income tax expense

 

47,801

 

 

57,712

 

 

54,135

 

 

59,582

 

49,863

 

 

(4

)

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

173,944

 

 

202,159

 

 

205,770

 

 

203,044

 

178,052

 

 

(2

)

 

 

 

 

 

 

 

 

 

 

 

 

Less: Net income attributable to noncontrolling interest

 

(166

)

 

 

 

 

 

 

 

 

nm

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Synovus Financial Corp.

 

174,110

 

 

202,159

 

 

205,770

 

 

203,044

 

178,052

 

 

(2

)

 

 

 

 

 

 

 

 

 

 

 

 

Less: Preferred stock dividends

 

8,291

 

 

8,291

 

 

8,291

 

 

8,291

 

8,291

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income available to common shareholders

$

165,819

 

 

193,868

 

 

197,479

 

 

194,753

 

169,761

 

 

(2

)%

 

 

 

 

 

 

 

 

 

 

 

 

Net income per common share, basic

$

1.13

 

 

1.33

 

 

1.36

 

 

1.34

 

1.17

 

 

(3

)%

 

 

 

 

 

 

 

 

 

 

 

 

Net income per common share, diluted

 

1.13

 

 

1.32

 

 

1.35

 

 

1.33

 

1.16

 

 

(3

)

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per common share

 

0.38

 

 

0.38

 

 

0.34

 

 

0.34

 

0.34

 

 

12

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets *

 

1.15

%

 

1.36

 

 

1.38

 

 

1.39

 

1.26

 

 

(11) bps

Return on average common equity *

 

15.45

 

 

19.23

 

 

20.93

 

 

18.66

 

16.48

 

 

(103

)

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding, basic

 

146,113

 

 

145,799

 

 

145,467

 

 

145,386

 

145,328

 

 

1

%

Weighted average common shares outstanding, diluted

 

146,550

 

 

146,727

 

 

146,528

 

 

146,418

 

146,315

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

nm - not meaningful

bps - basis points

* - ratios are annualized

Amounts may not total due to rounding 
 
 
 

 

 

 

 

 

 

 

Synovus

 

 

 

 

 

 

BALANCE SHEET DATA

 

June 30, 2023

 

December 31, 2022

 

June 30, 2022

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands, except share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

Cash and due from banks

 

$

576,148

 

 

$

624,097

 

 

$

583,323

 

Interest-bearing funds with Federal Reserve Bank

 

 

1,391,961

 

 

 

1,280,684

 

 

 

1,023,030

 

Interest earning deposits with banks

 

 

50,254

 

 

 

34,632

 

 

 

29,139

 

Federal funds sold and securities purchased under resale agreements

 

 

35,788

 

 

 

38,367

 

 

 

29,568

 

Cash, cash equivalents, and restricted cash

 

 

2,054,151

 

 

 

1,977,780

 

 

 

1,665,060

 

 

 

 

 

 

 

 

Investment securities available for sale, at fair value

 

 

9,621,175

 

 

 

9,678,103

 

 

 

9,889,850

 

Loans held for sale (includes $62,616, $51,136 and $76,864 measured at fair value, respectively)

 

 

514,450

 

 

 

391,502

 

 

 

917,679

 

 

 

 

 

 

 

 

Loans, net of deferred fees and costs

 

 

44,353,537

 

 

 

43,716,353

 

 

 

41,204,780

 

Allowance for loan losses

 

 

(471,238

)

 

 

(443,424

)

 

 

(407,837

)

Loans, net

 

 

43,882,299

 

 

 

43,272,929

 

 

 

40,796,943

 

 

 

 

 

 

 

 

Cash surrender value of bank-owned life insurance

 

 

1,100,114

 

 

 

1,089,280

 

 

 

1,078,703

 

Premises, equipment, and software, net

 

 

365,443

 

 

 

370,632

 

 

 

383,060

 

Goodwill

 

 

475,573

 

 

 

452,390

 

 

 

452,390

 

Other intangible assets, net

 

 

61,538

 

 

 

27,124

 

 

 

31,360

 

Other assets

 

 

2,580,848

 

 

 

2,471,638

 

 

 

2,167,700

 

Total assets

 

$

60,655,591

 

 

$

59,731,378

 

 

$

57,382,745

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

Non-interest-bearing deposits

 

$

13,565,602

 

 

$

15,639,899

 

 

$

16,876,710

 

Interest-bearing deposits

 

 

36,514,790

 

 

 

33,231,660

 

 

 

32,157,990

 

 

 

 

 

 

 

 

Total deposits

 

 

50,080,392

 

 

 

48,871,559

 

 

 

49,034,700

 

 

 

 

 

 

 

 

Federal funds purchased and securities sold under repurchase agreements

 

 

83,384

 

 

 

146,588

 

 

 

345,242

 

Other short-term borrowings

 

 

1,461

 

 

 

603,384

 

 

 

255,018

 

Long-term debt

 

 

4,021,411

 

 

 

4,109,597

 

 

 

1,804,104

 

Other liabilities

 

 

1,661,175

 

 

 

1,524,449

 

 

 

1,359,243

 

Total liabilities

 

 

55,847,823

 

 

 

55,255,577

 

 

 

52,798,307

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

 

 

Preferred stock - no par value. Authorized 100,000,000 shares; issued 22,000,000

 

 

537,145

 

 

 

537,145

 

 

 

537,145

 

Common stock - $1.00 par value. Authorized 342,857,143 shares; issued 170,808,134, 170,141,492 and 170,012,527 respectively; outstanding 146,153,276, 145,486,634 and 145,357,669 respectively

 

 

170,808

 

 

 

170,141

 

 

 

170,013

 

Additional paid-in capital

 

 

3,933,548

 

 

 

3,920,346

 

 

 

3,908,118

 

Treasury stock, at cost; 24,654,858 shares

 

 

(944,484

)

 

 

(944,484

)

 

 

(944,484

)

Accumulated other comprehensive income (loss), net

 

 

(1,395,175

)

 

 

(1,442,117

)

 

 

(1,026,705

)

Retained earnings

 

 

2,480,686

 

 

 

2,234,770

 

 

 

1,940,351

 

Total Synovus Financial Corp. shareholders’ equity

 

 

4,782,528

 

 

 

4,475,801

 

 

 

4,584,438

 

Noncontrolling interest in subsidiary

 

 

25,240

 

 

 

 

 

 

 

Total equity

 

 

4,807,768

 

 

 

4,475,801

 

 

 

4,584,438

 

Total liabilities and equity

 

$

60,655,591

 

 

$

59,731,378

 

 

$

57,382,745

 

 
 

Synovus

AVERAGE BALANCES, INTEREST, AND YIELDS/RATES

(Unaudited)

 

Second Quarter 2023

 

First Quarter 2023

 

Second Quarter 2022

(dollars in thousands)

Average

Balance

 

Interest

 

Yield/

Rate

 

Average

Balance

 

Interest

 

Yield/

Rate

 

Average

Balance

 

Interest

 

Yield/

Rate

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial loans (1) (2) (3)

$

35,628,637

 

 

$

566,823

 

6.38

%

 

$

35,030,809

 

 

$

526,529

 

6.10

%

 

$

31,870,387

 

 

$

308,442

 

3.88

%

Consumer loans (1) (2)

 

8,470,478

 

 

 

104,545

 

4.94

 

 

 

8,762,631

 

 

 

104,147

 

4.78

 

 

 

8,720,488

 

 

 

83,826

 

3.86

 

Less: Allowance for loan losses

 

(466,700

)

 

 

 

 

 

 

(445,192

)

 

 

 

 

 

 

(415,372

)

 

 

 

 

Loans, net

 

43,632,415

 

 

 

671,368

 

6.17

 

 

 

43,348,248

 

 

 

630,676

 

5.89

 

 

 

40,175,503

 

 

 

392,268

 

3.92

 

Investment securities available for sale

 

11,200,717

 

 

 

60,421

 

2.16

 

 

 

11,293,958

 

 

 

61,054

 

2.16

 

 

 

11,153,091

 

 

 

50,312

 

1.81

 

Trading account assets

 

21,328

 

 

 

309

 

5.80

 

 

 

11,338

 

 

 

124

 

4.39

 

 

 

11,987

 

 

 

73

 

2.44

 

Other earning assets(4)

 

1,446,425

 

 

 

18,081

 

4.95

 

 

 

1,513,800

 

 

 

17,212

 

4.55

 

 

 

813,028

 

 

 

1,660

 

0.81

 

FHLB and Federal Reserve Bank stock

 

280,248

 

 

 

4,301

 

6.14

 

 

 

306,935

 

 

 

3,355

 

4.37

 

 

 

179,837

 

 

 

1,820

 

4.05

 

Mortgage loans held for sale

 

54,603

 

 

 

852

 

6.24

 

 

 

36,497

 

 

 

566

 

6.20

 

 

 

85,299

 

 

 

921

 

4.32

 

Other loans held for sale

 

546,224

 

 

 

4,949

 

3.58

 

 

 

443,690

 

 

 

5,011

 

4.52

 

 

 

725,762

 

 

 

7,678

 

4.19

 

Total interest earning assets

 

57,181,960

 

 

$

760,281

 

5.33

%

 

 

56,954,466

 

 

$

717,998

 

5.11

%

 

 

53,144,507

 

 

$

454,732

 

3.43

%

Cash and due from banks

 

646,066

 

 

 

 

 

 

 

643,502

 

 

 

 

 

 

 

538,647

 

 

 

 

 

Premises and equipment

 

369,039

 

 

 

 

 

 

 

370,275

 

 

 

 

 

 

 

385,457

 

 

 

 

 

Other real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11,439

 

 

 

 

 

Cash surrender value of bank-owned life insurance

 

1,095,866

 

 

 

 

 

 

 

1,091,080

 

 

 

 

 

 

 

1,077,231

 

 

 

 

 

Other assets(5)

 

1,222,146

 

 

 

 

 

 

 

1,074,238

 

 

 

 

 

 

 

1,379,659

 

 

 

 

 

Total assets

$

60,515,077

 

 

 

 

 

 

$

60,133,561

 

 

 

 

 

 

$

56,536,940

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing demand deposits

$

9,891,375

 

 

$

41,803

 

1.70

%

 

$

9,091,166

 

 

$

23,221

 

1.04

%

 

$

9,513,334

 

 

$

3,598

 

0.15

%

Money market accounts

 

13,468,210

 

 

 

85,397

 

2.54

 

 

 

14,395,050

 

 

 

72,615

 

2.05

 

 

 

15,328,395

 

 

 

6,850

 

0.18

 

Savings deposits

 

1,276,040

 

 

 

281

 

0.09

 

 

 

1,370,173

 

 

 

211

 

0.06

 

 

 

1,506,195

 

 

 

72

 

0.02

 

Time deposits

 

4,866,221

 

 

 

39,551

 

3.26

 

 

 

3,601,288

 

 

 

21,496

 

2.42

 

 

 

2,829,684

 

 

 

1,688

 

0.24

 

Brokered deposits

 

6,342,751

 

 

 

74,748

 

4.73

 

 

 

5,553,970

 

 

 

56,392

 

4.12

 

 

 

2,878,536

 

 

 

6,293

 

0.88

 

Federal funds purchased and securities sold under repurchase agreements

 

88,591

 

 

 

351

 

1.57

 

 

 

133,360

 

 

 

670

 

2.01

 

 

 

246,737

 

 

 

219

 

0.35

 

Other short-term borrowings

 

455,050

 

 

 

5,566

 

4.84

 

 

 

1,677,519

 

 

 

18,994

 

4.53

 

 

 

480,999

 

 

 

896

 

0.74

 

Long-term debt

 

3,821,126

 

 

 

55,915

 

5.82

 

 

 

3,148,062

 

 

 

42,529

 

5.41

 

 

 

878,413

 

 

 

8,768

 

3.99

 

Total interest-bearing liabilities

 

40,209,364

 

 

$

303,612

 

3.03

%

 

 

38,970,588

 

 

$

236,128

 

2.46

%

 

 

33,662,293

 

 

$

28,384

 

0.33

%

Non-interest-bearing demand deposits

 

13,874,482

 

 

 

 

 

 

 

15,014,224

 

 

 

 

 

 

 

16,959,850

 

 

 

 

 

Other liabilities

 

1,556,863

 

 

 

 

 

 

 

1,522,827

 

 

 

 

 

 

 

1,245,116

 

 

 

 

 

Total equity

 

4,874,368

 

 

 

 

 

 

 

4,625,922

 

 

 

 

 

 

 

4,669,681

 

 

 

 

 

Total liabilities and equity

$

60,515,077

 

 

 

 

 

 

$

60,133,561

 

 

 

 

 

 

$

56,536,940

 

 

 

 

 

Net interest income and net interest margin, taxable equivalent (6)

 

 

$

456,669

 

3.20

%

 

 

 

$

481,870

 

3.43

%

 

 

 

$

426,348

 

3.22

%

Less: taxable-equivalent adjustment

 

 

 

1,138

 

 

 

 

 

 

1,119

 

 

 

 

 

 

960

 

 

Net interest income

 

 

$

455,531

 

 

 

 

 

$

480,751

 

 

 

 

 

$

425,388

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Average loans are shown net of deferred fees and costs. NPLs are included.

(2)

Interest income includes net loan fees as follows: Second Quarter 2023 — $11.3 million, First Quarter 2023 — $11.5 million, and Second Quarter 2022 — $13.0 million.

(3)

Reflects taxable-equivalent adjustments, using the statutory federal tax rate of 21%, in adjusting interest on tax-exempt loans to a taxable-equivalent basis.

(4)

Includes interest-bearing funds with Federal Reserve Bank, interest earning deposits with banks, and federal funds sold and securities purchased under resale agreements.

(5)

Includes average net unrealized gains/(losses) on investment securities available for sale of $(1.46) billion, $(1.52) billion, and $(923.1) million for the Second Quarter 2023, First Quarter 2023, and Second Quarter 2022, respectively.

(6)

The net interest margin is calculated by dividing annualized net interest income-taxable equivalent by average total interest earning assets.

 
 

Synovus

AVERAGE BALANCES, INTEREST, AND YIELDS/RATES

(Unaudited)

 

Six Months Ended June 30,

 

2023

 

2022

(dollars in thousands)

Average Balance

 

Interest

 

Yield/

Rate

 

Average Balance

 

Interest

 

Yield/

Rate

Assets

 

 

 

 

 

 

 

 

 

 

 

Interest earning assets:

 

 

 

 

 

 

 

 

 

 

 

Commercial loans (1) (2) (3)

$

35,331,375

 

 

$

1,093,352

 

6.24

%

 

$

31,316,646

 

 

$

589,029

 

3.79

%

Consumer loans (1) (2)

 

8,615,748

 

 

 

208,693

 

4.87

 

 

 

8,657,598

 

 

 

165,194

 

3.83

 

Less: Allowance for loan losses

 

(456,005

)

 

 

 

 

 

 

(419,639

)

 

 

 

 

Loans, net

 

43,491,118

 

 

 

1,302,045

 

6.03

 

 

 

39,554,605

 

 

 

754,223

 

3.84

 

Investment securities available for sale

 

11,247,080

 

 

 

121,475

 

2.16

 

 

 

11,206,150

 

 

 

97,562

 

1.74

 

Trading account assets

 

16,360

 

 

 

434

 

5.30

 

 

 

10,540

 

 

 

112

 

2.13

 

Other earning assets(4)

 

1,479,926

 

 

 

35,292

 

4.74

 

 

 

1,363,223

 

 

 

2,475

 

0.36

 

FHLB and Federal Reserve Bank stock

 

293,518

 

 

 

7,656

 

5.22

 

 

 

170,006

 

 

 

2,505

 

2.95

 

Mortgage loans held for sale

 

45,600

 

 

 

1,418

 

6.22

 

 

 

94,542

 

 

 

1,803

 

3.81

 

Other loans held for sale

 

495,240

 

 

 

9,960

 

4.00

 

 

 

661,768

 

 

 

12,978

 

3.90

 

Total interest earning assets

 

57,068,842

 

 

$

1,478,280

 

5.22

%

 

 

53,060,834

 

 

$

871,658

 

3.31

%

Cash and due from banks

 

644,791

 

 

 

 

 

 

 

543,638

 

 

 

 

 

Premises and equipment

 

369,654

 

 

 

 

 

 

 

392,079

 

 

 

 

 

Other real estate

 

 

 

 

 

 

 

 

11,598

 

 

 

 

 

Cash surrender value of bank-owned life insurance

 

1,093,486

 

 

 

 

 

 

 

1,074,076

 

 

 

 

 

Other assets(5)

 

1,148,600

 

 

 

 

 

 

 

1,613,313

 

 

 

 

 

Total assets

$

60,325,373

 

 

 

 

 

 

$

56,695,538

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing demand deposits

$

9,493,481

 

 

$

65,024

 

1.38

%

 

$

9,531,330

 

 

$

5,970

 

0.13

%

Money market accounts

 

13,929,069

 

 

 

158,012

 

2.29

 

 

 

15,685,030

 

 

 

12,199

 

0.16

 

Savings deposits

 

1,322,846

 

 

 

491

 

0.07

 

 

 

1,483,547

 

 

 

139

 

0.02

 

Time deposits

 

4,237,249

 

 

 

61,047

 

2.91

 

 

 

2,919,242

 

 

 

3,826

 

0.26

 

Brokered deposits

 

5,950,539

 

 

 

131,141

 

4.44

 

 

 

2,833,580

 

 

 

10,026

 

0.71

 

Federal funds purchased and securities sold under repurchase agreements

 

110,852

 

 

 

1,021

 

1.83

 

 

 

220,689

 

 

 

230

 

0.21

 

Other short-term borrowings

 

1,062,908

 

 

 

24,559

 

4.60

 

 

 

244,202

 

 

 

896

 

0.73

 

Long-term debt

 

3,486,453

 

 

 

98,444

 

5.63

 

 

 

930,131

 

 

 

18,913

 

4.07

 

Total interest-bearing liabilities

 

39,593,397

 

 

$

539,739

 

2.75

%

 

 

33,847,751

 

 

$

52,199

 

0.31

%

Non-interest-bearing demand deposits

 

14,441,205

 

 

 

 

 

 

 

16,727,040

 

 

 

 

 

Other liabilities

 

1,539,939

 

 

 

 

 

 

 

1,195,043

 

 

 

 

 

Total equity

 

4,750,832

 

 

 

 

 

 

 

4,925,704

 

 

 

 

 

Total liabilities and equity

$

60,325,373

 

 

 

 

 

 

$

56,695,538

 

 

 

 

 

Net interest income, taxable equivalent net interest margin (6)

 

 

$

938,541

 

3.32

%

 

 

 

$

819,459

 

3.11

%

Less: taxable-equivalent adjustment

 

 

 

2,258

 

 

 

 

 

 

1,824

 

 

Net interest income

 

 

$

936,283

 

 

 

 

 

$

817,635

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Average loans are shown net of deferred fees and costs. NPLs are included.

(2)

Interest income includes net loan fees as follows: 2023 — $22.8 million and 2022 — $33.7 million.

(3)

Reflects taxable-equivalent adjustments, using the statutory federal tax rate of 21%, in adjusting interest on tax-exempt loans to a taxable-equivalent basis.

(4)

Includes interest-bearing funds with Federal Reserve Bank, interest earning deposits with banks, and federal funds sold and securities purchased under resale agreements.

(5)

Includes average net unrealized gains/(losses) on investment securities available for sale of $(1.49) billion and $(587.1) million for the six months ended June 30, 2023 and 2022, respectively.

(6)

The net interest margin is calculated by dividing annualized net interest income-taxable equivalent by average total interest earning assets.

 
 
 
 

Synovus

LOANS OUTSTANDING BY TYPE

(Unaudited)

 

Total Loans

 

Total Loans

 

Linked Quarter

 

Total Loans

 

Year/Year

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

Loan Type

 

June 30, 2023

 

March 31, 2023

 

% Change

 

June 30, 2022

 

% Change

Commercial, Financial, and Agricultural

 

$

14,166,890

 

$

14,201,398

 

%

 

$

13,018,089

 

9

%

Owner-Occupied

 

 

8,364,342

 

 

8,398,778

 

 

 

 

7,760,236

 

8

 

Total Commercial & Industrial

 

 

22,531,232

 

 

22,600,176

 

 

 

 

20,778,325

 

8

 

Multi-Family

 

 

3,597,497

 

 

3,374,129

 

7

 

 

 

2,547,706

 

41

 

Hotels

 

 

1,771,381

 

 

1,737,163

 

2

 

 

 

1,597,930

 

11

 

Office Buildings

 

 

3,031,806

 

 

3,071,236

 

(1

)

 

 

2,680,399

 

13

 

Shopping Centers

 

 

1,329,492

 

 

1,332,078

 

 

 

 

1,458,902

 

(9

)

Warehouses

 

 

1,068,734

 

 

1,020,921

 

5

 

 

 

811,738

 

32

 

Other Investment Property

 

 

1,471,356

 

 

1,441,303

 

2

 

 

 

1,311,373

 

12

 

Total Investment Properties

 

 

12,270,266

 

 

11,976,830

 

2

 

 

 

10,408,048

 

18

 

1-4 Family Construction

 

 

205,459

 

 

201,896

 

2

 

 

 

234,379

 

(12

)

1-4 Family Investment Mortgage

 

 

410,267

 

 

394,754

 

4

 

 

 

407,476

 

1

 

Total 1-4 Family Properties

 

 

615,726

 

 

596,650

 

3

 

 

 

641,855

 

(4

)

Commercial Development

 

 

60,910

 

 

63,004

 

(3

)

 

 

109,764

 

(45

)

Residential Development

 

 

98,229

 

 

106,872

 

(8

)

 

 

156,816

 

(37

)

Land Acquisition

 

 

248,767

 

 

253,399

 

(2

)

 

 

186,934

 

33

 

Land and Development

 

 

407,906

 

 

423,275

 

(4

)

 

 

453,514

 

(10

)

Total Commercial Real Estate

 

 

13,293,898

 

 

12,996,755

 

2

 

 

 

11,503,417

 

16

 

Consumer Mortgages

 

 

5,379,284

 

 

5,246,640

 

3

 

 

 

5,124,523

 

5

 

Home Equity

 

 

1,773,987

 

 

1,757,250

 

1

 

 

 

1,579,218

 

12

 

Credit Cards

 

 

187,677

 

 

184,595

 

2

 

 

 

194,290

 

(3

)

Other Consumer Loans

 

 

1,187,459

 

 

1,259,523

 

(6

)

 

 

2,025,007

 

(41

)

Total Consumer

 

 

8,528,407

 

 

8,448,008

 

1

 

 

 

8,923,038

 

(4

)

Total

 

$

44,353,537

 

$

44,044,939

 

1

%

 

$

41,204,780

 

8

%

 

 

 

 

 

 

 

 

 

 

 

NON-PERFORMING LOANS COMPOSITION

(Unaudited)

 

Total

Non-performing Loans

 

Total

Non-performing Loans

 

Linked Quarter

 

Total

Non-performing Loans

 

Year/Year

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

Loan Type

 

June 30, 2023

 

March 31, 2023

 

% Change

 

June 30, 2022

 

% Change

Commercial, Financial, and Agricultural

 

$

144,415

 

$

94,196

 

53

%

 

$

48,601

 

197

%

Owner-Occupied

 

 

22,197

 

 

25,591

 

(13

)

 

 

11,398

 

95

 

Total Commercial & Industrial

 

 

166,612

 

 

119,787

 

39

 

 

 

59,999

 

178

 

Multi-Family

 

 

1,748

 

 

1,806

 

(3

)

 

 

2,598

 

(33

)

Office Buildings

 

 

28,024

 

 

190

 

nm

 

 

1,796

 

nm

Shopping Centers

 

 

699

 

 

727

 

(4

)

 

 

750

 

(7

)

Warehouses

 

 

218

 

 

222

 

(2

)

 

 

924

 

(76

)

Other Investment Property

 

 

664

 

 

668

 

(1

)

 

 

1,302

 

(49

)

Total Investment Properties

 

 

31,353

 

 

3,613

 

768

 

 

 

7,370

 

325

 

1-4 Family Construction

 

 

632

 

 

 

nm

 

 

55

 

nm

1-4 Family Investment Mortgage

 

 

3,525

 

 

3,515

 

 

 

 

3,063

 

15

 

Total 1-4 Family Properties

 

 

4,157

 

 

3,515

 

18

 

 

 

3,118

 

33

 

Commercial Development

 

 

 

 

 

nm

 

 

432

 

(100

)

Residential Development

 

 

267

 

 

267

 

 

 

 

399

 

(33

)

Land Acquisition

 

 

871

 

 

886

 

(2

)

 

 

1,093

 

(20

)

Land and Development

 

 

1,138

 

 

1,153

 

(1

)

 

 

1,924

 

(41

)

Total Commercial Real Estate

 

 

36,648

 

 

8,281

 

343

 

 

 

12,412

 

195

 

Consumer Mortgages

 

 

41,877

 

 

39,536

 

6

 

 

 

22,857

 

83

 

Home Equity

 

 

9,936

 

 

7,967

 

25

 

 

 

8,100

 

23

 

Other Consumer Loans

 

 

6,433

 

 

6,889

 

(7

)

 

 

5,656

 

14

 

Total Consumer

 

 

58,246

 

 

54,392

 

7

 

 

 

36,613

 

59

 

Total

 

$

261,506

 

$

182,460

 

43

%

 

$

109,024

 

140

%

 
 
 
 

Synovus

CREDIT QUALITY DATA

(Unaudited)

(Dollars in thousands)

 

2023

 

2022

 

Second

Quarter

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Second

 

First

 

Fourth

 

Third

 

Second

 

'23 vs '22

 

 

Quarter

 

Quarter

 

Quarter

 

Quarter

 

Quarter

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-performing Loans (NPLs)

 

$

261,506

 

 

182,460

 

128,061

 

122,094

 

109,024

 

140

%

Impaired Loans Held for Sale

 

 

 

 

 

 

447

 

 

nm

Other Real Estate and Other Assets

 

 

 

 

 

15,320

 

15,320

 

26,759

 

(100

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-performing Assets (NPAs)

 

 

261,506

 

 

182,460

 

143,381

 

137,861

 

135,783

 

93

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for Loan Losses (ALL)

 

 

471,238

 

 

457,010

 

443,424

 

421,359

 

407,837

 

16

 

Reserve for Unfunded Commitments

 

 

55,729

 

 

57,473

 

57,455

 

57,936

 

50,559

 

10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for Credit Losses (ACL)

 

 

526,967

 

 

514,483

 

500,879

 

479,295

 

458,396

 

15

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Charge-Offs - Quarter

 

 

26,396

 

 

18,550

 

13,300

 

4,682

 

16,565

 

 

Net Charge-Offs - YTD

 

 

44,947

 

 

18,550

 

53,156

 

39,856

 

35,174

 

 

Net Charge-Offs / Average Loans - Quarter (1)

 

 

0.24

%

 

0.17

 

0.12

 

0.04

 

0.16

 

 

Net Charge-Offs / Average Loans - YTD (1)

 

 

0.20

 

 

0.17

 

0.13

 

0.13

 

0.18

 

 

NPLs / Loans

 

 

0.59

 

 

0.41

 

0.29

 

0.29

 

0.26

 

 

NPAs / Loans, ORE and specific other assets

 

 

0.59

��

 

0.41

 

0.33

 

0.32

 

0.33

 

 

ACL/Loans

 

 

1.19

 

 

1.17

 

1.15

 

1.13

 

1.11

 

 

ALL/Loans

 

 

1.06

 

 

1.04

 

1.01

 

0.99

 

0.99

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ACL/NPLs

 

 

201.51

 

 

281.97

 

391.13

 

392.56

 

420.45

 

 

ALL/NPLs

 

 

180.20

 

 

250.47

 

346.26

 

345.11

 

374.08

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Past Due Loans over 90 days and Still Accruing

 

$

3,643

 

 

3,529

 

3,373

 

3,443

 

2,251

 

62

 

As a Percentage of Loans Outstanding

 

 

0.01

%

 

0.01

 

0.01

 

0.01

 

0.01

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Past Due Loans and Still Accruing

 

$

84,946

 

 

55,053

 

65,568

 

63,545

 

56,160

 

51

 

As a Percentage of Loans Outstanding

 

 

0.19

%

 

0.12

 

0.15

 

0.15

 

0.14

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Ratio is annualized.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SELECTED CAPITAL INFORMATION (1)

 

 

 

 

 

 

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

2023

 

December 31,

2022

 

June 30,

2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Equity Tier 1 Capital Ratio

 

 

9.85

%

 

9.63

 

9.46

 

 

 

 

 

 

Tier 1 Capital Ratio

 

 

10.88

 

 

10.68

 

10.56

 

 

 

 

 

 

Total Risk-Based Capital Ratio

 

 

12.79

 

 

12.54

 

12.43

 

 

 

 

 

 

Tier 1 Leverage Ratio

 

 

9.23

 

 

9.07

 

9.03

 

 

 

 

 

 

Total Synovus Financial Corp. shareholders' equity as a Percentage of Total Assets

 

 

7.88

 

 

7.49

 

7.99

 

 

 

 

 

 

Tangible Common Equity Ratio (2) (4)

 

 

6.17

 

 

5.84

 

6.26

 

 

 

 

 

 

Book Value Per Common Share (3)

 

$

29.05

 

 

27.07

 

27.84

 

 

 

 

 

 

Tangible Book Value Per Common Share (2)

 

 

25.37

 

 

23.78

 

24.52

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Current quarter regulatory capital information is preliminary.

(2) Excludes the carrying value of goodwill and other intangible assets from common equity and total assets.

(3) Book Value Per Common Share consists of Total Synovus Financial Corp. shareholders’ equity less Preferred stock divided by total common shares outstanding.

(4) See "Non-GAAP Financial Measures" for applicable reconciliation.

 

 

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