Press Release

Synovus Announces Earnings for the Third Quarter 2019

Company Release - 10/22/2019 6:30 AM ET

Diluted Earnings per Share of $0.83, down 1.6% vs. $0.84 in 3Q18

Adjusted Diluted Earnings per Share of $0.97, up 2.9% vs. $0.94 in 3Q18

COLUMBUS, Ga.--(BUSINESS WIRE)-- Synovus Financial Corp. (NYSE: SNV) today reported financial results for the quarter ended September 30, 2019.

Third Quarter 2019 Highlights

  • Diluted EPS of $0.83; adjusted diluted EPS of $0.97, down 2.7% sequentially and up 2.9% year-over-year.
  • Period-end loan growth of $279.3 million, or 3.1% annualized, from prior quarter.
  • Non-interest-bearing deposits excluding public funds increased $392.6 million sequentially or 18.2% annualized.
  • Net interest margin of 3.69%, unchanged from the previous quarter. Excluding the impact of purchase accounting adjustments (PAA), net interest margin was 3.42%, down 6 basis points from the prior quarter.
  • Non-interest income declined by $1.0 million from the second quarter but grew $1.1 million or 1.2% sequentially on an adjusted basis.
  • Credit quality metrics remained solid, with non-performing loan (NPL) ratio declining 2 basis points and the non-performing asset (NPA) ratio increasing 3 basis points.
  • Repurchased $343.5 million in common stock during the quarter; year-to-date repurchases total $688.5 million of the $725 million repurchase authorization.
  • Completed $350 million Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series E offering on July 1.

Third Quarter Summary

 

Reported

 

Adjusted

(dollars in thousands)

3Q19

 

2Q19

 

3Q18

 

3Q19

 

2Q19

 

3Q18

Net income available to common shareholders

$

127,435

 

 

$

153,034

 

 

$

99,330

 

 

$

149,732

 

 

$

158,892

 

 

$

111,504

 

Diluted earnings per share

0.83

 

 

0.96

 

 

0.84

 

 

0.97

 

 

1.00

 

 

0.94

 

Total loans

36,417,826

 

 

36,138,561

 

 

25,577,116

 

 

N/A

 

N/A

 

N/A

Total deposits

37,433,070

 

 

37,966,722

 

 

26,433,658

 

 

N/A

 

N/A

 

N/A

Total revenues

491,676

 

 

487,880

 

 

363,423

 

 

494,213

 

 

488,270

 

 

362,989

 

Return on avg assets

1.14

%

 

1.34

%

 

1.36

%

 

1.33

%

 

1.39

%

 

1.47

%

Return on avg common equity

11.36

 

 

13.90

 

 

13.95

 

 

13.35

 

 

14.43

 

 

15.66

 

Return on avg tangible common equity

13.19

 

 

16.09

 

 

14.33

 

 

15.46

 

 

16.70

 

 

16.08

 

Net interest margin

3.69

 

 

3.69

 

 

3.89

 

 

3.42

 

 

3.48

 

 

N/A

Efficiency ratio

56.20

 

 

54.14

 

 

60.62

 

 

51.71

 

 

52.08

 

 

55.55

 

Net charge-off ratio

0.22

 

 

0.13

 

 

0.24

 

 

N/A

 

N/A

 

N/A

NPA ratio

0.42

 

 

0.39

 

 

0.46

 

 

N/A

 

N/A

 

N/A

“Our team continues to execute on our strategic priorities, with core transaction deposit growth of $525.5 million, strong funded loan production of $2.6 billion, and solid fee income growth led by our mortgage, wealth, and capital markets teams,” said Kessel D. Stelling, Synovus chairman and CEO. “Credit quality remains strong, and we continue to focus on efficiency and expense management, the crisp execution of our FCB acquisition, talent and technology, and growth in our core business and specialty lines.”

Balance Sheet

Loans**

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(dollars in millions)

3Q19

 

2Q19

 

Linked
Quarter
Change

 

Linked
Quarter %
Change*

 

3Q18

 

Year/Year
Change

 

Year/Year
% Change

Commercial & industrial

$

16,445.3

 

 

$

16,247.5

 

 

$

197.7

 

 

4.8

%

 

$

12,503.3

 

 

$

3,942.0

 

 

31.5

%

Commercial real estate

10,286.0

 

 

10,348.4

 

 

(62.4

)

 

(2.4

)

 

6,712.4

 

 

3,573.6

 

 

53.2

 

Consumer

9,709.2

 

 

9,566.1

 

 

143.1

 

 

5.9

 

 

6,385.2

 

 

3,324.0

 

 

52.1

 

Unearned income

(22.7

)

 

(23.6

)

 

0.9

 

 

(15.1

)

 

(23.8

)

 

1.1

 

 

(4.7

)

Total loans

$

36,417.8

 

 

$

36,138.6

 

 

$

279.3

 

 

3.1

%

 

$

25,577.1

 

 

$

10,840.7

 

 

42.4

%

* Annualized

** Amounts may not total due to rounding

  • Total loans ended the quarter at $36.42 billion, up $279.3 million or 3.1% annualized from the previous quarter.
  • Total funded loan production in the quarter was approximately $2.6 billion.
  • Commercial and industrial loans increased $197.7 million from the second quarter, with contributions from middle market, senior housing, health care, premium finance, and ABL teams.
  • Commercial real estate loans declined by $62.4 million from the prior quarter, as payoff activity accelerated.
  • Consumer loan growth was broad-based, with meaningful contributions from mortgage, lending partnerships, and HELOC growth.

Deposits**

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(dollars in millions)

3Q19

 

2Q19

 

Linked
Quarter
Change

 

Linked
Quarter %
Change*

 

3Q18

 

Year/Year
Change

 

Year/Year
% Change

Non-interest-bearing DDA

$

8,970.2

 

 

$

8,577.6

 

 

$

392.6

 

 

18.2

%

 

$

6,936.7

 

 

$

2,033.5

 

 

29.3

%

Interest-bearing DDA

4,714.8

 

 

4,847.2

 

 

(132.4

)

 

(10.8

)

 

3,943.2

 

 

771.6

 

 

19.6

 

Money market

9,212.1

 

 

8,952.9

 

 

259.3

 

 

11.5

 

 

7,536.2

 

 

1,675.9

 

 

22.2

 

Savings

897.3

 

 

891.2

 

 

6.1

 

 

2.7

 

 

816.5

 

 

80.8

 

 

9.9

 

Public funds

3,795.3

 

 

4,351.3

 

 

(556.0

)

 

(50.7

)

 

2,024.7

 

 

1,770.6

 

 

87.5

 

Time deposits

6,647.8

 

 

7,343.0

 

 

(695.2

)

 

(37.6

)

 

3,492.5

 

 

3,155.3

 

 

90.3

 

Brokered deposits

3,195.5

 

 

3,003.5

 

 

192.0

 

 

25.4

 

 

1,683.8

 

 

1,511.7

 

 

89.8

 

Total deposits

$

37,433.1

 

 

$

37,966.7

 

 

$

(533.7

)

 

(5.6

)%

 

$

26,433.7

 

 

$

10,999.4

 

 

41.6

%

* Annualized

** Amounts may not total due to rounding

  • Total deposits ended the quarter at $37.43 billion, down $533.7 million or 5.6% annualized from second quarter 2019.
  • Deposit costs and mix improved in the quarter, with core transaction deposits increasing $525.5 million, while public funds and CDs declined by $556.0 million and $695.2 million, respectively. Core transaction deposits consist of non-interest bearing, NOW/savings, and money market deposits excluding public and brokered funds.
  • Deposit costs peaked in July; core deposit costs, excluding brokered deposits and PAA, declined 1 basis point from the prior quarter to 0.99%.
  • On a period-end basis, non-interest bearing demand deposit accounts grew $392.6 million, or 18.2% annualized from the second quarter, while money market accounts increased $259.3 million, or 11.5% sequentially. Brokered deposits increased $192.0 million from the prior quarter.
  • The loan to deposit ratio for the quarter was 97.3%, up from 95.2% in the prior quarter, and within our targeted range.

Income Statement Summary**

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in thousands, except per share data)

3Q19

 

2Q19

 

Linked
Quarter
Change

 

Linked
Quarter %
Change

 

3Q18

 

Year/Year
Change

 

Year/Year
% Change

Net interest income

$

402,097

 

 

$

397,262

 

 

$

4,835

 

 

1.2

%

 

$

291,619

 

 

$

110,478

 

 

37.9

%

Non-interest income

88,760

 

 

89,807

 

 

(1,047

)

 

(1.2

)%

 

71,668

 

 

17,092

 

 

23.8

 

Non-interest expense

276,310

 

 

264,126

 

 

12,184

 

 

4.6

 

 

220,297

 

 

56,013

 

 

25.4

 

Provision expense

27,562

 

 

12,119

 

 

15,443

 

 

127.4

 

 

14,982

 

 

12,580

 

 

84.0

 

Income before taxes

$

186,985

 

 

$

210,824

 

 

$

(23,839

)

 

(11.3

)%

 

$

128,008

 

 

$

58,977

 

 

46.1

%

Income tax expense

51,259

 

 

54,640

 

 

(3,381

)

 

(6.2

)

 

18,949

 

 

32,310

 

 

170.5

 

Preferred stock dividends

8,291

 

 

3,150

 

 

5,141

 

 

163.2

 

 

9,729

 

 

(1,438

)

 

(14.8

)

Net income available to common shareholders

$

127,435

 

 

$

153,034

 

 

$

(25,599

)

 

(16.7

)%

 

$

99,330

 

 

$

28,105

 

 

28.3

%

Weighted average common shares outstanding, diluted

154,043