Press Release

Synovus Announces Earnings for the Second Quarter 2020

Company Release - 7/21/2020 6:30 AM ET

Diluted Earnings per Share of $0.57 vs. $0.96 in 2Q19

Adjusted Diluted Earnings per Share of $0.23 vs. $1.00 in2Q19

COLUMBUS, Ga.--(BUSINESS WIRE)-- Synovus Financial Corp. (NYSE: SNV) today reported financial results for the quarter ended June 30, 2020.

Second Quarter 2020 Highlights

  • Diluted EPS of $0.57; adjusted diluted EPS of $0.23.
  • Period-end loan growth of $1.66 billion or 4.3% sequentially; funded approximately $2.9 billion in Paycheck Protection Program (PPP) loans, supporting more than 19,000 customers.
  • Core transaction deposits (non-interest bearing, NOW/savings, and money market deposits excluding public and brokered funds) increased $4.63 billion or 18.7% sequentially.
  • Interest-bearing deposit (NOW/savings, money market, and time deposit) costs down 45 bps from the first quarter.
  • Net interest income growth of $3.3 million sequentially; net interest margin of 3.13% vs. 3.37% in 1Q20.
  • Non-interest revenue increased $69.6 million sequentially and $83.7 million compared to prior year, largely due to investment gains of $78.1 million.
  • Provision for credit losses of $141.9 million reflected significant economic stress due to the COVID-19 healthcare crisis; allowance for credit losses coverage ratio (to loans) of 1.63%, or 1.74% excluding PPP loans.
  • Credit quality metrics remain stable, with the non-performing loan ratio and net charge-off ratio of 0.37% and 0.24%, respectively.
  • CET1 ratio improved 20 bps to 8.90% and Total Risk Based Capital ratio increased 41 bps to 12.70%.

Second Quarter Summary

 

 

Reported

 

Adjusted

(dollars in thousands)

 

2Q20

 

1Q20

 

2Q19

 

2Q20

 

1Q20

 

2Q19

Net income available to common shareholders

 

$

84,901

 

 

$

30,230

 

 

$

153,034

 

 

$34,015

 

 

$

30,708

 

 

$

158,892

 

Diluted earnings per share

 

0.57

 

 

0.20

 

 

0.96

 

 

0.23

 

 

0.21

 

 

1.00

 

Total loans

 

39,914,297

 

 

38,258,024

 

 

36,138,561

 

 

N/A

 

 

N/A

 

 

N/A

 

Total deposits

 

44,194,580

 

 

39,826,585

 

 

37,966,722

 

 

N/A

 

 

N/A

 

 

N/A

 

Total revenues

 

550,911

 

 

477,903

 

 

487,880

 

 

472,795

 

 

473,424

 

 

488,270

 

Return on avg assets

 

0.71

%

 

0.32

%

 

1.34

%

 

0.32

%

 

0.32

%

 

1.39

%

Return on avg common equity

 

7.48

 

 

2.75

 

 

13.90

 

 

3.00

 

 

2.79

 

 

14.43

 

Return on avg tangible common equity

 

8.69

 

 

3.34

 

 

16.09

 

 

3.60

 

 

3.39

 

 

16.70

 

Net interest margin

 

3.13

 

 

3.37

 

 

3.69

 

 

3.11

 

 

3.35

 

 

3.48

 

Efficiency ratio

 

51.58

 

 

57.81

 

 

54.14

 

 

57.91

 

 

56.72

 

 

52.08

 

NCO ratio

 

0.24

 

 

0.21

 

 

0.13

 

 

N/A

 

 

N/A

 

 

N/A

 

NPA ratio

 

0.44

 

 

0.50

 

 

0.39

 

 

N/A

 

 

N/A

 

 

N/A

 

 

“Our performance in the second quarter demonstrates the key role we play as a financial resource and community partner in the markets we serve,” said Kessel D. Stelling, Synovus Chairman and CEO. “We delivered approximately $3 billion in Paycheck Protection Program loans to more than 19,000 customers and originated a record $1.4 billion in consumer mortgages. Through strong operating performance and effective balance sheet management, we further improved both our capital and liquidity levels during the quarter. As we navigate an uncertain economic environment, we continue to invest in the future while accelerating many Synovus Forward initiatives focused on efficiencies, digital enhancements, and customer experience. And as our communities manage through the challenges of the pandemic and longstanding racial inequalities, we are fully committed to do our part to bring strength and positive change.”

Balance Sheet

Loans*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(dollars in millions)

 

2Q20

 

 

1Q20

 

 

Linked
Quarter
Change

 

Linked
Quarter %
Change

 

2Q19

 

 

Year/Year
Change

 

Year/Year
% Change

Commercial & industrial

 

$

19,938.3

 

 

 

$

17,661.4

 

 

 

$

2,276.8

 

 

 

12.9

%

 

$

16,228.7

 

 

 

$

3,709.5

 

 

 

22.9

%

Commercial real estate

 

10,827.5

 

 

 

10,671.2

 

 

 

156.3

 

 

 

1.5

 

 

10,367.2

 

 

 

460.3

 

 

 

4.4

 

Consumer

 

9,246.7

 

 

 

9,950.9

 

 

 

(704.2

)

 

 

(7.1

)

 

9,566.1

 

 

 

(319.5

)

 

 

(3.3

)

Unearned income

 

(98.2

)

 

 

(25.5

)

 

 

(72.7

)

 

 

nm

 

 

(23.6

)

 

 

(74.6

)

 

 

316.8

 

Total loans

 

$

39,914.3

 

 

 

$

38,258.0

 

 

 

$

1,656.3

 

 

 

4.3

%

 

$

36,138.6

 

 

 

$

3,775.7

 

 

 

10.4

%

*Amounts may not total due to rounding
nm = not meaningful

 
  • Total loans ended the quarter at $39.91 billion, up $1.66 billion or 4.3% sequentially.
  • Commercial and industrial (C&I) loans sequential growth of $2.28 billion led by net growth of $2.71 billion in PPP loans, offsetting C&I line utilization of 41% compared to 50% in the prior quarter.
  • Consumer loans decreased by $704.2 million sequentially, primarily as a result of transitioning lending partnership assets to held-for-sale, partially offset by record portfolio mortgage production of $800.5 million, up $510.5 million sequentially.
 

Deposits*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(dollars in millions)

 

2Q20

 

1Q20

 

Linked
Quarter
Change

 

Linked
Quarter %
Change

 

2Q19

 

Year/Year
Change

 

Year/Year
% Change

Non-interest-bearing DDA

 

$

11,830.7

 

 

$

8,968.8

 

 

$

2,861.9

 

 

 

31.9

%

 

$

8,577.6

 

 

$

3,253.1

 

 

 

37.9

%

Interest-bearing DDA

 

5,057.2

 

 

4,617.4

 

 

439.9

 

 

 

9.5

 

 

4,847.2

 

 

210.0

 

 

 

4.3

 

Money market

 

11,457.2

 

 

10,255.0

 

 

1,202.2

 

 

 

11.7

 

 

8,952.9

 

 

2,504.3

 

 

 

28.0

 

Savings

 

1,080.1

 

 

949.5

 

 

130.6

 

 

 

13.8

 

 

891.2

 

 

188.9

 

 

 

21.2

 

Public funds

 

5,347.4

 

 

5,261.4

 

 

86.0

 

 

 

1.6

 

 

4,351.3

 

 

996.0

 

 

 

22.9

 

Time deposits

 

5,131.7

 

 

5,786.6

 

 

(655.0

)

 

 

(11.3

)

 

7,343.0

 

 

(2,211.3

)

 

 

(30.1

)

Brokered deposits

 

4,290.3

 

 

3,987.9

 

 

302.4

 

 

 

7.6

 

 

3,003.5

 

 

1,286.8

 

 

 

42.8

 

Total deposits

 

$

44,194.6

 

 

$

39,826.6

 

 

$

4,368.0

 

 

 

11.0

%

 

$

37,966.7

 

 

$

6,227.9

 

 

 

16.4

%

*Amounts may not total due to rounding

 
  • Total deposits ended the quarter at $44.19 billion, up $4.37 billion or 11.0% sequentially.
  • Core transaction deposits increased $4.63 billion or 18.7% sequentially, led by non-interest-bearing DDA growth of $2.86 billion.
  • Broad-based growth in NOW, MMA, and savings deposits more than offset a $655.0 million decline in time deposits.
  • 2Q20 interest-bearing deposit costs declined 45 bps from 1Q20.

Income Statement Summary**

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in thousands, except per share data)

 

2Q20

 

1Q20

 

Linked
Quarter
Change

 

Linked
Quarter %
Change

 

2Q19

 

Year/Year
Change

 

Year/Year
% Change

Net interest income

 

$

376,566

 

 

$

373,260

 

 

$

3,306

 

 

 

0.9

%

 

$

397,262

 

 

$

(20,696

)

 

 

(5.2

)%

Non-interest revenue

 

173,484

 

 

103,857

 

 

69,627

 

 

 

67.0

 

 

89,807

 

 

83,677

 

 

 

93.2

 

Non-interest expense

 

284,141

 

 

276,279

 

 

7,862

 

 

 

2.8

 

 

264,126

 

 

20,015

 

 

 

7.6

 

Provision for credit losses

 

141,851

 

 

158,722

 

 

(16,871

)

 

 

(10.6

)

 

12,119

 

 

129,732

 

 

 

nm

 

Income before taxes

 

$

124,058

 

 

$

42,116

 

 

$

81,942

 

 

 

194.6

%

 

$

210,824

 

 

$

(86,766

)

 

 

(41.2

)%

Income tax expense

 

30,866

 

 

3,595

 

 

27,271

 

 

 

nm

 

 

54,640

 

 

(23,774

)

 

 

(43.5

)

Preferred stock dividends

 

8,291

 

 

8,291

 

 

 

 

 

 

 

3,150

 

 

5,141

 

 

 

163.2

 

Net income available to common shareholders

 

$

84,901

 

 

$

30,230

 

 

$

54,671

 

 

 

180.9

%