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Analyst Upgrades Synovus Financial To 'Buy'

The Associated Press

NEW YORK (AP) — A SunTrust Robinson Humphrey analyst upgraded Synovus Financial Corp. to "Buy" from "Neutral" Monday, citing the regional bank's efforts to control expenses and improve earnings.

In a note to clients, Jennifer H. Demba wrote that a rising net interest margin, a wave of mortgage refinancing and improved loan and deposit pricing could boost pre-tax provision earnings at the Columbus, Ga.-based company.

The bank's credit outlook also appears to have improved from just a few weeks ago, Demba added, since the bank is "being more aggressive" with its problem loan portfolio. The largest percentage of the company's non-performing assets sit in the Atlanta area, and the housing market there appears to be improving, Demba wrote.

Synovus management is putting its loan portfolio through a stress test to determine if the company needs to raise additional capital to weather the economic downturn. The bank accepted $968 million in funds from the federal government's Troubled Asset Relief Program and will likely "take its time" in repaying the money, Demba wrote.

Synovus spokesman Greg Hudgison declined to comment.

Shares of the company rose a penny to $3.61 in afternoon trading.