Financial News

Synovus Announces Earnings for the Fourth Quarter 2020

Synovus Financial Corp. (NYSE: SNV) today reported financial results for the quarter and year ended December 31, 2020.

2020 Highlights

  • Net income available to common shareholders for 2020 was $340.5 million or $2.30 per diluted share as compared to $540.9 million or $3.47 per diluted share for 2019.
    • Adjusted earnings per diluted share for 2020 were $2.41 as compared to $3.90 for 2019, a decrease of 38%.
  • CET1 ratio increased 72 basis points to 9.67%; total risk-based capital ratio of 13.43% the highest since 2014.
  • Allowance for Credit Losses (ACL) increased $370.7 million or 105 basis points (to loans) to 1.81% year-over-year, excluding Paycheck Protection Program (PPP) loans.
    • Includes increase of $110.4 million or 30 basis points from the adoption of Current Expected Credit Losses on January 1, 2020.
  • Processed and approved nearly $2.9 billion in PPP loans, supporting approximately 19,000 customers.
  • Announced Synovus Forward in January, a plan expected to add $100 million pre-tax benefit with a combination of revenue and expense initiatives.
  • In December, a CEO transition plan was announced, and Kevin Blair was named to the Board. In April 2021, Chairman and CEO Kessel Stelling will move into the role of Executive Chairman and Kevin Blair will become CEO.

Fourth Quarter 2020 Highlights

  • Net income available to common shareholders was $142.1 million or $0.96 per diluted share as compared to $83.3 million or $0.56 in the prior quarter.
    • Adjusted earnings per diluted share of $1.08, up 22% sequentially and 15% year-over-year.
  • Period-end loan decline of $1.30 billion or 3% sequentially.
    • Loans declined by $700 million or 2% from the third quarter, excluding PPP forgiveness of $540 million or $516 million, net of unearned fees, and lending partnership balance reductions of $81 million.
  • Period-end deposit growth of $2.03 billion or 5% from the third quarter.
    • Core transaction deposits (non-interest bearing, NOW/savings, and money market deposits excluding public and brokered funds) increased $1.77 billion or 6% sequentially.
    • Total deposit costs of 28 basis points declined 11 basis points from the third quarter.
  • Net interest income of $385.9 million increased $8.9 million or 2% sequentially.
  • Non-interest revenue of $114.8 million stable with the prior quarter and increased $16.8 million year-over-year.
  • Non-interest expense of $302.5 million, a decrease of $14.2 million from the third quarter and an increase of $36.4 million from the prior-year quarter.
    • Adjusted non-interest expense of $275.1 million increased $6.4 million sequentially, primarily due to a $4.5 million increase in expenses related to Synovus Forward, PPP, and COVID.
  • Credit quality metrics remained relatively stable, with a non-performing loan ratio of 0.39% and non-performing asset ratio of 0.50%; net charge-off ratio of 0.23%.

Fourth Quarter Summary

Reported

Adjusted*

(dollars in thousands)

4Q20

3Q20

4Q19

4Q20

3Q20

4Q19

Net income available to common shareholders

$

142,118

$

83,283

$

143,393

$

160,618

$

131,364

$

140,069

Diluted earnings per share

0.96

0.56

0.97

1.08

0.89

0.94

Total loans

38,252,984

39,549,847

37,162,450

N/A

N/A

N/A

Total deposits

46,691,571

44,665,904

38,405,504

N/A

N/A

N/A

Total FTE revenues

501,514

492,357

497,992

499,114

493,647

492,049

Return on avg assets

1.11

%

0.69

%

1.27

%

1.25

%

1.05

%

1.24

%

Return on avg common equity

12.31

7.28

13.08

13.91

11.48

12.78

Return on avg tangible common equity

14.00

8.46

15.18

15.79

13.24

14.84

Net interest margin**

3.12

3.10

3.65

3.10

3.08

3.40

Efficiency ratio

60.32

64.31

53.44

54.60

53.91

53.20

Net charge-off ratio

0.23

0.29

0.10

N/A

N/A

N/A

NPA ratio

0.50

0.49

0.37

N/A

N/A

N/A

 

* Non-GAAP measures; see applicable reconciliation

** Adjusted net interest margin excludes purchase accounting adjustments primarily comprised of loan accretion and deposit premium amortization

“In a year marked by extraordinary volatility, we drew on the strength of our relationship-centered model to support our team members, customers, and communities,” said Kessel Stelling, Synovus chairman and CEO. “During 2020, we delivered approximately 19,000 PPP loans totaling $2.9 billion to small business customers throughout the Southeast and grew core transaction deposits $8.6 billion. We also accelerated investments in several technology initiatives that provided more convenience and a better digital experience as customers adapted to this highly virtual environment. And at year end, our higher capital levels, improved liquidity, and strong credit quality further demonstrated the strength and resiliency of our balance sheet in a challenging environment. In the year ahead, we expect our Synovus Forward initiatives to produce additional revenue opportunities, expense savings, and efficiencies that will further strengthen our bank. We continue to move forward with purpose, meeting the very real needs of individuals and businesses, and remain committed to being a source of stability, unity, and value creation for all we serve.”

Balance Sheet

Loans*

(dollars in millions)

4Q20

3Q20

Linked
Quarter
Change

Linked
Quarter %
Change

4Q19

Year/Year
Change

Year/Year
% Change

Commercial & industrial

$

19,373.7

$

20,014.2

$

(640.5)

(3)

%

$

16,769.4

$

2,604.3

16

%

Commercial real estate

10,570.4

10,965.9

(395.4)

(4)

10,493.8

76.7

1

Consumer

8,386.5

8,668.8

(282.3)

(3)

9,924.7

(1,538.1)

(15)

Unearned income

(77.7)

(99.0)

21.3

(22)

(25.4)

(52.3)

206

Total loans

$

38,253.0

$

39,549.8

$

(1,296.9)

(3)

%

$

37,162.5

$

1,090.5

3

%

 

* Amounts may not total due to rounding

  • Total loans ended the quarter at $38.25 billion, down $1.30 billion or 3% sequentially.
  • Commercial and industrial (C&I) loans decreased $640.5 million or 3% from the prior quarter.
    • PPP forgiveness of $540 million, or $516 million, net of unearned fees, in the fourth quarter.
    • C&I line utilization remains near historic lows at 40%, down 6% year-over-year.
  • Consumer loans decreased by $282.3 million or 3% sequentially.
    • Strategic declines in lending partnership balances of $81 million.
  • Commercial real estate loans declined by $395.4 million or 4% from the prior quarter as pay-off and pay-down activity increased during the quarter.

Deposits*

(dollars in millions)

4Q20

3Q20

Linked
Quarter
Change

Linked
Quarter %
Change

4Q19

Year/Year
Change

Year/Year %
Change

Non-interest-bearing DDA

$

12,382.7

$

12,129.8

$

252.9

2

%

$

8,661.2

$

3,721.5

43

%

Interest-bearing DDA

5,674.4

5,291.1

383.3

7

4,769.5

904.9

19

Money market

13,541.2

12,441.3

1,099.9

9

9,827.4

3,713.9

38

Savings

1,156.2

1,126.0

30.3

3

909.5

246.7

27

Public funds

6,760.6

5,791.9

968.7

17

4,622.3

2,138.3

46

Time deposits

3,605.9

3,976.5

(370.5)

(9)

6,185.6

(2,579.7)

(42)

Brokered deposits

3,570.4

3,909.3

(338.9)

(9)

3,430.0

140.4

4

Total deposits

$

46,691.6

$

44,665.9

$

2,025.7

5

%

$

38,405.5

$

8,286.1

22

%

 

* Amounts may not total due to rounding

  • Total deposits ended the quarter at $46.69 billion up $2.03 billion or 5% sequentially.
    • Core transaction deposits increased $1.77 billion or 6% from the prior quarter.
    • Strong seasonal inflows supported a $968.7 million increase in public funds compared to the third quarter.
  • Total deposit costs declined 11 basis points from the third quarter to 28 basis points.

Income Statement Summary*

(in thousands, except per share data)

4Q20

3Q20

Linked
Quarter
Change

Linked
Quarter %
Change

4Q19

Year/Year
Change

Year/Year %
Change

Net interest income

$

385,932

$

376,990

$

8,942

2

%

$

399,268

$

(13,336)

(3)

%

Non-interest revenue

114,761

114,411

350

97,955

16,806

17

Non-interest expense

302,498

316,655

(14,157)

(4)

266,121

36,377

14

Provision for credit losses

11,066

43,383

(32,317)

(74)

24,470

(13,404)

(55)

Income before taxes

$

187,129

$

131,363

$

55,766

42

$

206,632

$

(19,503)

(9)

Income tax expense

36,720

39,789

(3,069)

(8)

54,948

(18,228)

(33)

Preferred stock dividends

8,291

8,291

8,291

Net income available to common shareholders

$

142,118

$

83,283

$

58,835

71

%

$

143,393

$

(1,275)

(1)

%

Weighted average common shares outstanding, diluted

148,725

147,976

749

1

148,529

196

Diluted earnings per share

$

0.96

$

0.56

$

0.39

70

$

0.97

$

(0.01)

(1)

Adjusted diluted earnings per share**

$

1.08

$

0.89

$

0.19

22

$

0.94

$

0.14

15

 

* Amounts may not total due to rounding

** Non-GAAP measure; see applicable reconciliation

Core Performance

  • Total FTE revenues were $501.5 million in the fourth quarter up $9.2 million sequentially.
  • Net interest income increased $8.9 million or 2% compared to the prior quarter, primarily due to PPP fee accretion of $24.8 million up $12.9 million from the third quarter.
  • Net interest margin was 3.12% up 2 basis points from the previous quarter.
  • Non-interest revenue of $114.8 million was stable with the third quarter and increased $16.8 million or 17% compared to fourth quarter 2019.
    • The fourth quarter included broad-based growth with increases in service charges, fiduciary and asset management, card fees, and brokerage offset by declines in capital markets and mortgage revenues.
  • Non-interest expense decreased $14.2 million or 4% sequentially. Adjusted non-interest expense increased $6.4 million or 2% from the prior quarter.
    • Adjusted non-interest expense includes a $4.5 million increase in fees related to Synovus Forward, PPP, and COVID.
  • Provision for credit losses was $11.1 million a $32.3 million decrease from the previous quarter.
    • The decrease includes net charge-offs of $22.1 million. Provision for credit losses other than net charge-offs reflects lower loan balances and a more favorable economic outlook.
  • The effective tax rate was 19.6% for the quarter.

Capital Ratios

4Q20

3Q20

4Q19

Common equity Tier 1 capital (CET1) ratio

9.67

%

(1)

9.30

%

8.95

%

Tier 1 capital ratio

10.95

(1)

10.57

10.23

Total risk-based capital ratio

13.43

(1)

13.16

12.25

Tier 1 leverage ratio

8.50

(1)

8.48

9.16

Tangible common equity ratio(2)

7.66

7.67

8.08

 

(1) Ratios are preliminary

(2) Non-GAAP measure; see applicable reconciliation

Capital

  • CET1 ratio increased 37 basis points sequentially to 9.67%, above the higher end of the 9.0-9.5% operating range.
  • Total risk-based capital ratio of 13.43% increased 27 basis points from the prior quarter and includes subordinated debt optimization efforts completed in the fourth quarter.
  • The Board of Directors has authorized share repurchases of up to $200 million in 2021.

Fourth Quarter Earnings Conference Call

Synovus will host an earnings highlights conference call at 8:30 a.m. ET on January 26, 2021. 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 $54 billion in assets. Synovus provides commercial and retail banking, investment, and mortgage services through 289 branches in Georgia, Alabama, South Carolina, Florida, and Tennessee. Synovus Bank, a wholly owned subsidiary of Synovus, has been recognized as one of the country's "Most Reputable Banks" by American Banker and The Reputation Institute. Synovus is on the web at synovus.com, and on Twitter, Facebook, LinkedIn, and Instagram.

Forward-Looking Statements

This press release and certain of our other filings with the Securities and Exchange Commission contain statements that constitute “forward-looking statements” within the meaning of, and subject to the protections of, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are forward-looking statements. You can identify these forward-looking statements through Synovus’ use of words such as “believes,” “anticipates,” “expects,” “may,” “will,” “assumes,” “should,” “predicts,” “could,” “would,” “intends,” “targets,” “estimates,” “projects,” “plans,” “potential” and other similar words and expressions of the future or otherwise regarding the outlook for Synovus’ future business and financial performance and/or the performance of the banking industry and economy in general. These forward-looking statements include, among others, our expectations regarding our future operating and financial performance, including our outlook and long-term goals for future growth; our expectations regarding net interest margin; expectations on our growth strategy, expense management, capital 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, 2019, 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; adjusted non-interest expense; adjusted total revenues; adjusted tangible efficiency ratio; adjusted net income available to common shareholders; adjusted earnings per diluted 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 revenues; efficiency ratio-FTE; net income available to common shareholders; earnings per diluted common share; return on average assets; return on average common equity; and the ratio of total 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 total revenues and adjusted non-interest revenue are measures used by management to evaluate total revenues exclusive of investment securities gains (losses), net and gain on sale and fair value increase, net of private equity investments. 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 earnings per diluted share, adjusted return on average assets, and adjusted return on average common equity are measures used by management to evaluate operating results exclusive of items that are not indicative of ongoing operations and impact period-to-period comparisons. 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)

4Q20

3Q20

4Q19

2020

2019

Adjusted non-interest revenue

Total non-interest revenue

$

114,761

$

114,411

$

97,955

$

506,513

$

355,900

Subtract/add: Investment securities (gains) losses, net

(2,337)

1,550

2,157

(78,931)

7,659

Subtract: Gain on sale and fair value increase, net of private equity investments

(63)

(260)

(8,100)

(4,775)

(11,607)

Adjusted non-interest revenue

$

112,361

$

115,701

$

92,012

$

422,807

$

351,952

Adjusted non-interest expense

Total non-interest expense

$

302,498

$

316,655

$

266,121

$

1,179,574

$

1,098,968

Subtract: Earnout liability adjustments

(4,908)

(10,457)

Subtract: Goodwill impairment

(44,877)

(44,877)

Add/subtract: Merger-related expense

913

(56,580)

Subtract: Restructuring charges

(18,068)

(2,882)

(1,259)

(26,991)

(1,230)

Subtract: Valuation adjustment to Visa derivative

(890)

(1,111)

(890)

(3,611)

Subtract: Loss on early extinguishment of debt

(8,409)

(154)

(10,466)

(4,592)

Adjusted non-interest expense

$

275,131

$

268,742

$

264,664

$

1,091,442

$

1,022,498

Adjusted total revenues and adjusted tangible efficiency ratio

Adjusted non-interest expense

$

275,131

$

268,742

$

264,664

$

1,091,442

$

1,022,498

Subtract: Amortization of intangibles

(2,640)

(2,640)

(2,901)

(10,560)

(11,603)

Adjusted tangible non-interest expense

$

272,491

$

266,102

$

261,763

$

1,080,882

$

1,010,895

Net interest income

$

385,932

$

376,990

$

399,268

$

1,512,748

$

1,595,803

Add: Tax equivalent adjustment

821

956

769

3,424

3,025

Add: Total non-interest revenue

114,761

114,411

97,955

506,513

355,900

Total FTE revenues

501,514

492,357

497,992

2,022,685

1,954,728

Subtract/add: Investment securities (gains) losses, net

(2,337)

1,550

2,157

(78,931)

7,659

Subtract: Gain on sale and fair value increase, net of private equity investments

(63)

(260)

(8,100)

(4,775)

(11,607)

Adjusted total revenues

$

499,114

$

493,647

$

492,049

$

1,938,979

$

1,950,780

Efficiency ratio-FTE

60.32

%

64.31

%

53.44

%

58.32

%

56.22

%

Adjusted tangible efficiency ratio

54.60

53.91

53.20

55.74

51.82

Reconciliation of Non-GAAP Financial Measures, continued

(in thousands, except per share data)

4Q20

3Q20

4Q19

2020

2019

Adjusted return on average assets

Net income

$

150,409

$

91,574

$

151,684

$

373,695

$

563,780

Add: Income tax expense, net related to State Tax Reform

4,402

Add: Earnout liability adjustments

4,908

10,457

Add: Goodwill impairment

44,877

44,877

Subtract/add: Merger-related expense

(913)

56,580

Add: Restructuring charges

18,068

2,882

1,259

26,991

1,230

Add: Valuation adjustment to Visa derivative

890

1,111

890

3,611

Add: Loss on early extinguishment of debt

8,409

154

10,466

4,592

Subtract/add: Investment securities (gains) losses, net

(2,337)

1,550

2,157

(78,931)

7,659

Subtract: Gain on sale and fair value increase, net of private equity investments

(63)

(260)

(8,100)

(4,775)

(11,607)

Subtract/add: Tax effect of adjustments

(6,467)

(1,122)

1,162

11,748

(9,343)

Adjusted net income

$

168,909

$

139,655

$

148,360

$

389,869

$

631,361

Net income annualized

$

598,366

$

364,305

$

601,790

$

373,695

$

563,780

Adjusted net income annualized

$

671,964

$

555,584

$

588,602

$

389,869

$

631,361

Total average assets

$

53,833,909

$

53,138,334

$

47,459,405

$

52,138,038

$

46,791,930

Return on average assets

1.11

%

0.69

%

1.27

%

0.72

%

1.20

%

Adjusted return on average assets

1.25

1.05

1.24

0.75

1.35

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

Net income available to common shareholders

$

142,118

$

83,283

$

143,393

$

340,532

$

540,899

Add: Income tax expense, net related to State Tax Reform

4,402

Add: Earnout liability adjustments

4,908

10,457

Add: Goodwill impairment

44,877

44,877

Subtract/add: Merger-related expense

(913)

56,580

Add: Restructuring charges

18,068

2,882

1,259

26,991

1,230

Add: Valuation adjustment to Visa derivative

890

1,111

890

3,611

Add: Loss on early extinguishment of debt

8,409

154

10,466

4,592

Subtract/add: Investment securities (gains) losses, net

(2,337)

1,550

2,157

(78,931)

7,659

Subtract: Gain on sale and fair value increase, net of private equity investments

(63)

(260)

(8,100)

(4,775)

(11,607)

Subtract/add: Tax effect of adjustments

(6,467)

(1,122)

1,162

11,748

(9,343)

Adjusted net income available to common shareholders

$

160,618

$

131,364

$

140,069

$

356,706

$

608,480

Weighted average common shares outstanding, diluted

148,725

147,976

148,529

148,210

156,058

Net income per common share, diluted

$

0.96

$

0.56

$

0.97

$

2.30

$

3.47

Adjusted net income per common share, diluted

1.08

0.89

0.94

2.41

3.90

Reconciliation of Non-GAAP Financial Measures, continued

(dollars in thousands)

4Q20

3Q20

4Q19

2020

2019

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

$

142,118

$

83,283

$

143,393

$

340,532

$

540,899

Add: Income tax expense, net related to State Tax Reform

4,402

Add: Earnout liability adjustments

4,908

10,457

Add: Goodwill impairment

44,877

44,877

Subtract/add: Merger-related expense

(913)

56,580

Add: Restructuring charges

18,068

2,882

1,259

26,991

1,230

Add: Valuation adjustment to Visa derivative

890

1,111

890

3,611

Add: Loss on early extinguishment of debt

8,409

154

10,466

4,592

Subtract/add: Investment securities (gains) losses, net

(2,337)

1,550

2,157

(78,931)

7,659

Subtract: Gain on sale and fair value increase, net of private equity investments

(63)

(260)

(8,100)

(4,775)

(11,607)

Subtract/add: Tax effect of adjustments

(6,467)

(1,122)

1,162

11,748

(9,343)

Adjusted net income available to common shareholders

$

160,618

$

131,364

$

140,069

$

356,706

$

608,480

Adjusted net income available to common shareholders annualized

$

638,980

$

522,600

$

555,709

$

356,706

$

608,480

Add: Amortization of intangibles

7,782

7,782

8,528

7,825

8,598

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

$

646,762

$

530,382

$

564,237

$

364,531

$

617,078

Net income available to common shareholders annualized

$

565,382

$

331,322

$

568,896

$

340,532

$

540,899

Add: Amortization of intangibles

7,782

7,782

8,528

7,825

8,598

Net income available to common shareholders excluding amortization of intangibles annualized

$

573,164

$

339,104

$

577,424

$

348,357

$

549,497

Total average shareholders' equity less preferred stock

$

4,594,199

$

4,553,159

$

4,348,250

$

4,534,935

$

4,384,458

Subtract: Goodwill

(452,390)

(497,267)

(488,223)

(485,987)

(487,126)

Subtract: Other intangible assets, net

(46,511)

(49,075)

(57,149)

(50,427)

(65,553)

Total average tangible shareholders' equity less preferred stock

$

4,095,298

$

4,006,817

$

3,802,878

$

3,998,521

$

3,831,779

Return on average common equity

12.31

%

7.28

%

13.08

%

7.51

%

12.34

%

Adjusted return on average common equity

13.91

11.48

12.78

7.87

13.88

Return on average tangible common equity

14.00

8.46

15.18

8.71

14.34

Adjusted return on average tangible common equity

15.79

13.24

14.84

9.12

16.10

Reconciliation of Non-GAAP Financial Measures, continued

December 31,

September 30,

December 31,

(dollars in thousands)

2020

2020

2019

Tangible common equity ratio

Total assets

$

54,366,086

$

53,040,538

$

48,203,282

Subtract: Goodwill

(452,390)

(452,390)

(497,267)

Subtract: Other intangible assets, net

(45,112)

(47,752)

(55,671)

Tangible assets

$

53,868,584

$

52,540,396

$

47,650,344

Total shareholders’ equity

$

5,161,334

$

5,064,542

$

4,941,690

Subtract: Goodwill

(452,390)

(452,390)

(497,267)

Subtract: Other intangible assets, net

(45,112)

(47,752)

(55,671)

Subtract: Preferred stock, no par value

(537,145)

(537,145)

(537,145)

Tangible common equity

$

4,126,687

$

4,027,255

$

3,851,607

Total shareholders’ equity to total assets ratio

9.49

%

9.55

%

10.25

%

Tangible common equity ratio

7.66

7.67

8.08

Synovus

INCOME STATEMENT DATA

(Unaudited)

Years Ended

(Dollars in thousands, except per share data)

December 31,

2020

2019

% Change

Interest income

$

1,804,495

$

2,050,638

(12)

%

Interest expense

291,747

454,835

(36)

Net interest income

1,512,748

1,595,803

(5)

Provision for credit losses

355,022

87,720

305

Net interest income after provision for credit losses

1,157,726

1,508,083

(23)

Non-interest revenue:

Service charges on deposit accounts

73,132

88,190

(17)

Fiduciary and asset management fees

63,251

58,388

8

Card fees

42,702

45,659

(6)

Brokerage revenue

44,781

41,608

8

Mortgage banking income

91,413

32,599

180

Capital markets income

27,336

30,529

(10)

Income from bank-owned life insurance

31,297

21,226

47

Investment securities gains (losses), net

78,931

(7,659)

nm

Gain on sale and fair value increase, net of private equity investments

4,775

11,607

nm

Other non-interest revenue

48,895

33,753

45

Total non-interest revenue

506,513

355,900

42

Non-interest expense:

Salaries and other personnel expense

618,214

570,036

8

Net occupancy, equipment, and software expense

169,658

161,906

5

Third-party processing and other services

83,034

75,696

10

Professional fees

56,899

35,300

61

FDIC insurance and other regulatory fees

25,210

31,696

(20)

Amortization of intangibles

10,560

11,603

(9)

Goodwill impairment

44,877

nm

Restructuring charges

26,991

1,230

nm

Loss on early extinguishment of debt

10,466

4,592

nm

Earnout liability adjustments

4,908

10,457

nm

Merger-related expense

56,580

nm

Other operating expenses

128,757

139,872

(8)

Total non-interest expense

1,179,574

1,098,968

7

Income before income taxes

484,665

765,015

(37)

Income tax expense

110,970

201,235

(45)

Net income

373,695

563,780

(34)

Less: Preferred stock dividends

33,163

22,881

45

Net income available to common shareholders

$

340,532

$

540,899

(37)

%

Net income per common share, basic

2.31

3.50

(34)

%

Net income per common share, diluted

2.30

3.47

(34)

Cash dividends declared per common share

1.32

1.20

10

Return on average assets*

0.72

%

1.20

%

(48)

bps

Return on average common equity*

7.51

12.34

(483)

Weighted average common shares outstanding, basic

147,415

154,331

(4)

%

Weighted average common shares outstanding, diluted

148,210

156,058

(5)

nm - not meaningful

bps - basis points

* - ratios are annualized

Synovus

INCOME STATEMENT DATA

(Unaudited)

(Dollars in thousands, except per share data)

2020

2019

Fourth Quarter

Fourth
Quarter

Third Quarter

Second
Quarter

First Quarter

Fourth
Quarter

20 vs '19

% Change

Interest income

$

433,479

435,550

451,569

483,897

506,253

(14)

%

Interest expense

47,547

58,560

75,003

110,637

106,985

(56)

Net interest income

385,932

376,990

376,566

373,260

399,268

(3)

Provision for credit losses

11,066

43,383

141,851

158,722

24,470

(55)

Net interest income after provision for credit losses

374,866

333,607

234,715

214,538

374,798

Non-interest revenue:

Service charges on deposit accounts

19,063

17,813

15,567

20,689

22,385

(15)

Fiduciary and asset management fees

17,242

15,885

14,950

15,174

15,645

10

Card fees

11,743

10,823

9,186

10,950

11,325

4

Brokerage revenue

11,794

10,604

9,984

12,398

11,106

6

Mortgage banking income

24,426

31,229

23,530

12,227

9,287

163

Capital markets income

4,352

5,690

6,050

11,243

8,972

(51)

Income from bank-owned life insurance

9,725

7,778

7,756

6,038

5,620

73

Investment securities gains (losses), net

2,337

(1,550)

69,409

8,734

(2,157)

nm

Gain on sale and fair value increase/(decrease) of private equity investments

63

260

8,707

(4,255)

8,100

nm

Other non-interest revenue

14,016

15,879

8,345

10,659

7,672

83

Total non-interest revenue

114,761

114,411

173,484

103,857

97,955

17

Non-interest expense:

Salaries and other personnel expense

153,946

154,994

159,597

149,678

145,084

6

Net occupancy, equipment, and software expense

44,183

41,554

41,727

42,194

42,644

4

Third-party processing and other services

19,569

20,620

21,366

21,480

20,293

(4)

Professional Fees

17,541

13,377

15,305

10,675

9,921

77

FDIC insurance and other regulatory fees

6,288

6,793

6,851

5,278

9,825

(36)

Amortization of intangibles

2,640

2,640

2,640

2,640

2,901

(9)

Goodwill impairment

44,877

nm

Restructuring charges

18,068

2,882

2,822

3,220

1,259

nm

Loss on early extinguishment of debt

8,409

154

1,904

nm

Earnout liability adjustments

4,908

nm

Other operating expenses

31,854

28,764

28,925

39,210

34,194

(7)

Total non-interest expense

302,498

316,655

284,141

276,279

266,121

14

Income before income taxes

187,129

131,363

124,058

42,116

206,632

(9)

Income tax expense

36,720

39,789

30,866

3,595

54,948

(33)

Net income

150,409

91,574

93,192

38,521

151,684

(1)

Less: Preferred stock dividends

8,291

8,291

8,291

8,291

8,291

Net income available to common shareholders

$

142,118

83,283

84,901

30,230

143,393

(1)

Net income per common share, basic

$

0.96

0.57

0.58

0.21

0.98

(1)

%

Net income per common share, diluted

0.96

0.56

0.57

0.20

0.97

(1)

Cash dividends declared per common share

0.33

0.33

0.33

0.33

0.30

10

Return on average assets *

1.11

%

0.69

0.71

0.32

1.27

(16)

bps

Return on average common equity *

12.31

7.28

7.48

2.75

13.08

(77)

Weighted average common shares outstanding, basic

147,744

147,314

147,288

147,311

146,948

1

%

Weighted average common shares outstanding, diluted

148,725

147,976

147,733

148,401

148,529

nm - not meaningful

bps - basis points

* - ratios are annualized

Synovus

BALANCE SHEET DATA

December 31, 2020

September 30, 2020

December 31, 2019

(Unaudited)

(In thousands, except share data)

ASSETS

Cash and due from banks

$

531,625

$

578,026

$

535,846

Interest-bearing funds with Federal Reserve Bank

3,586,565

1,266,313

553,390

Interest earning deposits with banks

20,944

20,929

20,635

Federal funds sold and securities purchased under resale agreements

113,783

120,095

77,047

Cash and cash equivalents

4,252,917

1,985,363

1,186,918

Investment securities available for sale, at fair value

7,962,438

7,566,525

6,778,670

Loans held for sale ($216,647, $285,899, and $115,173 measured at fair value, respectively)

760,123

745,160

115,173

Loans, net of deferred fees and costs

38,252,984

39,549,847

37,162,450

Allowance for loan losses

(605,736)

(603,800)

(281,402)

Loans, net

37,647,248

38,946,047

36,881,048

Cash surrender value of bank-owned life insurance

1,049,373

1,044,046

775,665

Premises and equipment, net

463,959

471,208

493,940

Goodwill

452,390

452,390

497,267

Other intangible assets, net

45,112

47,752

55,671

Other assets

1,732,526

1,782,047

1,418,930

Total assets

$

54,366,086

$

53,040,538

$

48,203,282

LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:

Deposits:

Non-interest-bearing deposits

$

13,477,854

$

13,075,081

$

9,439,485

Interest-bearing deposits

33,213,717

31,590,823

28,966,019

Total deposits

46,691,571

44,665,904

38,405,504

Federal funds purchased and securities sold under repurchase agreements

227,922

202,344

165,690

Other short-term borrowings

7,717

400,000

1,753,560

Long-term debt

1,202,494

1,628,385

2,153,897

Other liabilities

1,075,048

1,079,363

782,941

Total liabilities

49,204,752

47,975,996

43,261,592

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 168,132,522, 167,410,950, and 166,800,623; outstanding 148,039,495, 147,317,923, and 147,157,596

168,133

167,411

166,801

Additional paid-in capital

3,851,208

3,832,142

3,819,336

Treasury stock, at cost – 20,093,027, 20,093,027, and 19,643,027 shares

(731,806)

(731,806)

(715,560)

Accumulated other comprehensive income, net

158,635

174,914

65,641

Retained earnings

1,178,019

1,084,736

1,068,327

Total shareholders’ equity

5,161,334

5,064,542

4,941,690

Total liabilities and shareholders' equity

$

54,366,086

$

53,040,538

$

48,203,282

Synovus

AVERAGE BALANCES AND YIELDS/RATES (1)

(Unaudited)

(Dollars in thousands)

2020

2019

Fourth

Third

Second

First

Fourth

Quarter

Quarter

Quarter

Quarter

Quarter

Interest Earning Assets

Investment securities (2) (4)

$

7,493,822

7,227,400

6,618,533

6,680,047

6,696,768

Yield

2.07

%

2.39

2.72

3.09

3.12

Trading account assets (5)

$

8,496

5,391

6,173

6,306

7,986

Yield

1.03

%

1.69

2.19

2.70

2.69

Commercial loans (3) (4)

$

30,363,102

30,730,135

30,236,919

27,607,343

26,698,202

Yield

3.96

%

3.80

3.95

4.57

4.82

Consumer loans (3)

$

8,521,449

9,032,437

9,899,172

9,985,702

9,809,832

Yield

4.00

%

4.08

4.34

4.60

5.07

Allowance for loan losses

$

(595,547)

(591,098)

(498,545)

(368,033)

(269,052)

Loans, net (3)

$

38,289,004

39,171,474

39,637,546

37,225,012

36,238,982

Yield

4.03

%

3.92

4.08

4.62

4.93

Mortgage loans held for sale

$

309,278

244,952

221,157

86,415

117,909

Yield

2.74

%

2.92

3.09

3.67

3.77

Other loans held for sale

$

544,301

493,940

19,246

Yield

2.81

%

3.61

4.19

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

$

2,716,645

1,265,880

1,709,086

652,130

514,635

Yield

0.10

%

0.11

0.11

1.02

1.71

Federal Home Loan Bank and Federal Reserve Bank Stock (5)

$

162,537

200,923

247,801

284,082

278,586

Yield

2.64

%

2.73

3.60

3.38

2.85

Total interest earning assets

$

49,524,083

48,609,960

48,459,542

44,933,992

43,854,866

Yield

3.49

%

3.58

3.75

4.33

4.60

Interest-Bearing Liabilities

Interest-bearing demand deposits

$

8,531,415

7,789,095

7,260,940

6,445,986

6,381,282

Rate

0.16

%

0.19

0.21

0.51

0.60

Money Market accounts

$

14,411,860

13,272,972

12,238,479

11,548,014

10,526,296

Rate

0.26

%

0.36

0.46

1.00

1.13

Savings deposits

$

1,147,667

1,114,956

1,036,024

926,822

915,640

Rate

0.01

%

0.02

0.02

0.05

0.05

Time deposits under $100,000

$

1,239,592

1,379,923

1,621,943

1,761,741

1,873,350

Rate

0.74

%

1.03

1.43

1.64

1.27

Time deposits over $100,000

$

3,302,959

3,863,821

4,772,555

5,051,705

5,198,266

Rate

1.03

%

1.44

1.80

2.04

1.51

Other brokered deposits

$

1,978,393

1,912,114

1,998,571

1,376,669

1,156,131

Rate

0.23

%

0.23

0.25

1.42

1.84

Brokered time deposits

$

1,795,982

2,232,940

2,244,429

2,166,496

2,121,069

Rate

1.60

%

1.59

1.86

2.11

2.16

Total interest-bearing deposits

$

32,407,868

31,565,821

31,172,941

29,277,433

28,172,034

Rate

0.39

%

0.54

0.73

1.18

1.16

Federal funds purchased and securities sold under repurchase agreements

$

174,316

180,342

250,232

167,324

192,731

Rate

0.07

%

0.09

0.12

0.30

0.24

Other short-term borrowings

$

46,739

550,000

1,384,362

1,565,507

Rate

%

1.12

1.23

1.66

1.87

Long-term debt

$

1,552,791

2,234,665

2,834,188

2,678,651

2,153,983

Rate

3.96

%

2.71

2.36

2.78

3.07

Total interest-bearing liabilities

$

34,134,975

34,027,567

34,807,361

33,507,770

32,084,255

Rate

0.55

%

0.68

0.86

1.30

1.30

Non-interest-bearing demand deposits

$

13,566,112

12,773,676

11,923,534

9,409,774

9,706,784

Cost of funds

0.40

%

0.50

0.65

1.04

1.02

Net interest margin

3.12

%

3.10

3.13

3.37

3.65

Taxable equivalent adjustment

$

821

956

861

786

769

(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 21%, in adjusting interest on tax-exempt loans and investment securities to a taxable equivalent basis.

(5) Included as a component of other assets on the consolidated balance sheet.

Synovus

LOANS OUTSTANDING BY TYPE

(Unaudited)

(Dollars in thousands)

Total Loans

Total Loans

Linked
Quarter

Total Loans

Year/Year

Loan Type

December 31,
2020

September 30,
2020

% Change

December 31,
2019

% Change

Commercial, Financial, and Agricultural

$

12,574,899

$

13,120,038

(4)

%

$

10,239,559

23

%

Owner-Occupied

6,798,780

6,894,113

(1)

6,529,811

4

Total Commercial & Industrial

19,373,679

20,014,151

(3)

16,769,370

16

Multi-Family

2,197,942

2,365,118

(7)

1,989,096

10

Hotels

1,444,264

1,409,424

2

1,284,291

12

Office Buildings

2,261,253

2,313,346

(2)

2,255,308

Shopping Centers

1,607,223

1,698,993

(5)

1,785,616

(10)

Warehouses

702,020

730,253

(4)

703,705

Other Investment Property

1,133,828

1,145,313

(1)

986,311

15

Total Investment Properties

9,346,530

9,662,447

(3)

9,004,327

4

1-4 Family Construction

183,373

180,406

2

284,594

(36)

1-4 Family Investment Mortgage

445,795

474,632

(6)

495,421

(10)

Total 1-4 Family Properties

629,168

655,038

(4)

780,015

(19)

Commercial Development

130,802

111,493

17

103,643

26

Residential Development

245,776

260,313

(6)

282,677

(13)

Land Acquisition

218,158

276,584

(21)

323,122

(32)

Land and Development

594,736

648,390

(8)

709,442

(16)

Total Commercial Real Estate

10,570,434

10,965,875

(4)

10,493,784

1

Consumer Mortgages

5,507,700

5,658,525

(3)

5,546,368

(1)

Home Equity Lines

1,523,836

1,615,207

(6)

1,713,157

(11)

Credit Cards

281,018

264,829

6

268,841

5

Other Consumer Loans

1,073,989

1,130,237

(5)

2,396,294

(55)

Total Consumer

8,386,543

8,668,798

(3)

9,924,660

(15)

Unearned Income

(77,672)

(98,977)

(22)

(25,364)

206

Total

$

38,252,984

$

39,549,847

(3)

%

$

37,162,450

3

%

NON-PERFORMING LOANS COMPOSITION (1)

(Unaudited)

(Dollars in thousands)

Total
Non-performing Loans

Total
Non-performing Loans

Linked
Quarter

Total
Non-performing Loans

Year/Year

Loan Type

December 31,
2020

September 30,
2020

% Change

December 31,
2019

% Change

Commercial, Financial, and Agricultural

$

77,386

$

95,365

(19)

%

$

56,186

38

%

Owner-Occupied

20,019

20,261

(1)

9,780

105

Total Commercial & Industrial

97,405

115,626

(16)

65,966

48

Multi-Family

168

157

7

385

(56)

Office Buildings

1,134

27,608

(96)

600

89

Shopping Centers

21,082

257

nm

718

nm

Warehouses

217

nm

nm

Other Investment Property

2,030

238

753

321

532

Total Investment Properties

24,631

28,260

(13)

2,024

nm

1-4 Family Construction

1,236

1,556

(21)

698

77

1-4 Family Investment Mortgage

2,383

1,815

31

1,555

53

Total 1-4 Family Properties

3,619

3,371

7

2,253

61

Commercial Development

582

833

(30)

87

569

Residential Development

533

648

(18)

395

35

Land Acquisition

1,048

910

15

628

67

Land and Development

2,163

2,391

(10)

1,110

95

Total Commercial Real Estate

30,413

34,022

(11)

5,387

465

Consumer Mortgages

8,740

7,433

18

12,545

(30)

Home Equity Lines

12,145

10,297

18

12,034

1

Other Consumer Loans

2,376

1,459

63

5,704

(58)

Total Consumer

23,261

19,189

21

30,283

(23)

Total

$

151,079

$

168,837

(11)

%

$

101,636

49

%

Synovus

CREDIT QUALITY DATA

(Unaudited)

(Dollars in thousands)

2020

2019

Fourth
Quarter

Fourth

Third

Second

First

Fourth

20 vs '19

Quarter

Quarter

Quarter

Quarter

Quarter

% Change

Non-performing Loans (NPL)

$

151,079

168,837

147,437

156,287

101,636

49

Impaired Loans Held for Sale

23,590

nm

Other Real Estate and Other Assets

17,394

23,280

30,242

33,679

35,810

(51)

Non-performing Assets (NPAs)

192,063

192,117

177,679

189,966

137,446

40

Allowance for Loan Losses (ALL)

605,736

603,800

588,648

493,452

281,402

115

Reserve for Unfunded Commitments

47,785

60,794

61,029

38,420

1,375

nm

Allowance for Credit Losses (ACL)

653,521

664,594

649,677

531,872

282,777

131

Net Charge-Offs - Quarter

22,139

28,466

24,046

20,061

8,821

Net Charge-Offs - YTD

94,712

72,573

44,107

20,061

57,612

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

0.23

%

0.29

0.24

0.21

0.10

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

0.24

0.25

0.23

0.21

0.16

NPLs / Loans

0.39

0.43

0.37

0.41

0.27

 

NPAs / Loans, ORE and specific other assets

0.50

0.49

0.44

0.50

0.37

ACL/Loans

1.71

1.68

1.63

1.39

0.76

ALL/Loans

1.58

1.53

1.47

1.29

0.76

ACL/NPLs

432.57

393.63

440.65

340.32

278.23

ALL/NPLs

400.94

357.62

399.25

315.74

276.87

Past Due Loans over 90 days and Still Accruing

$

4,117

7,512

8,391

6,398

15,943

(74)

As a Percentage of Loans Outstanding

0.01

%

0.02

0.02

0.02

0.04

Total Past Due Loans and Still Accruing

$

47,349

57,316

46,390

83,235

123,793

(62)

As a Percentage of Loans Outstanding

0.12

%

0.14

0.12

0.22

0.33

Accruing Troubled Debt Restructurings (TDRs)

$

134,972

163,511

166,461

160,128

133,145

1

(1) Ratio is annualized.

SELECTED CAPITAL INFORMATION (1)

(Unaudited)

(Dollars in thousands)

December 31,
2020

September 30,
2020

December 31,
2019

Tier 1 Capital

$

4,572,173

4,450,547

4,280,604

Total Risk-Based Capital

5,604,043

5,536,918

5,123,381

Common Equity Tier 1 Capital Ratio

9.67

%

9.30

8.95

Tier 1 Capital Ratio

10.95

10.57

10.23

Total Risk-Based Capital Ratio

13.43

13.16

12.25

Tier 1 Leverage Ratio

8.50

8.48

9.16

Common Equity as a Percentage of Total Assets (2)

8.51

8.54

9.14

Tangible Common Equity Ratio (3) (5)

7.66

7.67

8.08

Book Value Per Common Share (4)

$

31.24

30.73

29.93

Tangible Book Value Per Common Share (3)

27.88

27.34

26.17

(1) Current quarter regulatory capital information is preliminary.

(2) Common equity consists of Total Shareholders' Equity less Preferred Stock.

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

(4) Book Value Per Common Share consists of Total Shareholders' Equity less Preferred Stock divided by total common shares outstanding.

(5) See "Non-GAAP Financial Measures" of this report for applicable reconciliation.

Contacts:

Media Contact
Lee Underwood
Media Relations
(706) 644-0528

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