This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Synovus Reports Earnings For Second Quarter Of 2013

Stock quotes in this article: SNV

Synovus Financial Corp. (NYSE: SNV) today reported financial results for the quarter ended June 30, 2013.

Second Quarter Results

  • Pre-tax income increased to $72.9 million for the second quarter of 2013, up 56.6% from $46.6 million in the first quarter of 2013, and up 95.2% from $37.3 million in the second quarter of 2012.
  • Net income available to common shareholders increased to $30.7 million for the second quarter of 2013, compared to $14.8 million for the first quarter of 2013 and $24.8 million for the second quarter of 2012. Diluted net income per common share for the second quarter of 2013 was $0.03 compared to $0.02 for the first quarter of 2013 and $0.03 for the second quarter of 2012.
    • The second quarter of 2013 results included income tax expense of $27.4 million compared to $17.0 million in the first quarter of 2013 and a tax benefit of $2.1 million in the second quarter of 2012.
  • Credit costs declined substantially to $24.0 million for the second quarter of 2013, compared to $49.3 million for the first quarter of 2013 and $70.3 million for the second quarter of 2012.
  • Total loans grew $240.4 million sequentially or 5.0% annualized.

“Our second quarter results reflect continued, steady progress,” said Kessel D. Stelling, Chairman and CEO of Synovus. “During the quarter, net income available to common shareholders increased to $31 million, credit costs again declined significantly to $24 million – down 51% from the previous quarter – and net charge-offs declined by 48% compared to last quarter. While continuing to operate in a challenging environment, we grew loans $240 million sequentially, or 5% annualized.”

Core Performance

Pre-tax, pre-credit costs income was $98.0 million for the second quarter of 2013, down $2.7 million from $100.7 million for the first quarter of 2013.

  • Net interest income was $202.1 million for the second quarter of 2013, up $2.3 million from $199.8 million in the previous quarter.
  • The net interest margin was 3.39%, down four basis points from the first quarter of 2013, due to a decline in the yield on earning assets of seven basis points which was partially offset by a decline in the effective cost of funds of three basis points.
  • Total non-interest income was $65.1 million for the second quarter of 2013, up $0.4 million, compared to $64.7 million for the first quarter of 2013.
    • Bankcard fees increased $0.8 million.
    • Mortgage banking income increased $0.4 million.
    • Fiduciary and asset management fees increased $0.1 million.
    • Service charges on deposit accounts declined $0.3 million.
    • Brokerage revenue declined $0.6 million.
    • Securities gains were $1.4 million in the quarter.
  • Adjusted non-interest expense (excludes Visa indemnification charges, restructuring charges and other credit costs) was $167.8 million, up $4.0 million from $163.8 million for the first quarter of 2013, due primarily to higher professional fees.

Balance Sheet Fundamentals

  • Total reported loans ended the quarter at $19.61 billion, a $240.4 million increase from the first quarter of 2013.
    • Commercial and industrial loans grew by $184.6 million from the first quarter of 2013, or 8.2% annualized.
    • Retail loans grew by $78.5 million from the first quarter of 2013, or 7.9% annualized.
    • Commercial real estate loans declined by $20.4 million from the first quarter of 2013.
  • Total deposits ended the quarter at $20.71 billion, up $149.5 million from the previous quarter due primarily to increases in non-interest bearing demand deposits and NOW account balances.
  • Core deposits ended the quarter at $19.37 billion, up $144.1 million compared to the first quarter of 2013. Core deposits, excluding time deposits, increased $249.1 million compared to the previous quarter.

Credit Trends

  • Total credit costs were $24.0 million in the second quarter of 2013, down from $49.3 million in the first quarter of 2013 and $70.3 million in the second quarter of 2012.
  • Net charge-offs were $30.0 million in the second quarter of 2013, down from $57.3 million in the first quarter of 2013 and $98.7 million in the second quarter of 2012. The annualized net charge-off ratio was 0.61% in the second quarter, down from 1.18% in the previous quarter and 1.99% in the second quarter of 2012.
  • Non-performing loan inflows were $66.9 million in the second quarter of 2013, down from $83.9 million in the first quarter of 2013 and $124.3 million in the second quarter of 2012.
  • Non-performing loans, excluding loans held for sale, were $483.5 million at June 30, 2013, down $29.8 million from the previous quarter, and down $271.7 million or 36.0% from the second quarter of 2012. The non-performing loan ratio was 2.47% at June 30, 2013, down from 2.65% at the end of the previous quarter and 3.84% at June 30, 2012.
  • Total non-performing assets were $635.2 million at June 30, 2013, down $42.4 million from the previous quarter, and down $326.2 million or 33.9% from the second quarter of 2012. The non-performing asset ratio was 3.21% at June 30, 2013, compared to 3.47% at the end of the previous quarter and 4.83% at June 30, 2012.
  • Total delinquencies (consisting of loans 30 or more days past due and still accruing) declined to 0.41% of total loans at June 30, 2013, compared to 0.46% at March 31, 2013, and 0.47% at June 30, 2012. Total loans past due 90 days or more and still accruing declined to 0.02% at June 30, 2013, compared to 0.03% at March 31, 2013, and 0.03% at June 30, 2012.
  • Distressed asset sales were approximately $67 million during the second quarter, compared to approximately $61 million in the first quarter of 2013, and approximately $128 million in the second quarter of 2012.

Capital Ratios

  • Tier 1 Capital ratio was 13.49% at June 30, 2013, compared to 13.50% at March 31, 2013.
  • Tier 1 Common Equity ratio was 8.97% at June 30, 2013, compared to 8.93% at March 31, 2013.
  • Total Risk Based Capital ratio was 16.00% at June 30, 2013, compared to 16.45% at March 31, 2013.
  • Tier 1 Leverage ratio was 11.33% at June 30, 2013, compared to 11.27% at March 31, 2013.
  • Tangible Common Equity ratio was 9.71% at June 30, 2013, compared to 9.89% at March 31, 2013.

Stelling concluded, “We are pleased with the growth in loans and deposits, the strong improvement in credit trends, and the growth in profitability– all accomplishments that continue to signal our increasing strength. We have entered the second half of 2013 with even greater  confidence in our company's future. Our enhanced financial performance, attractive Southeastern footprint, and passion for service to customers and communities provide the right formula for long-term success in this competitive banking environment.”

Synovus will host an earnings highlights conference call at 5:00 p.m. EDT on July 18, 2013. The earnings call will be accompanied by a slide presentation. Shareholders and other interested parties can access the slide presentation and listen to the conference call via simultaneous Internet broadcast at www.synovus.com by clicking on the “Live Webcast” icon. RealPlayer or Windows Media Player can be downloaded prior to accessing the actual call or the replay. The replay will be archived for 12 months and will be available 30-45 minutes after the call.

About Synovus

Synovus Financial Corp. is a financial services company with approximately $27 billion in assets based in Columbus, Georgia. Synovus Financial Corp. provides commercial and retail banking, investment and mortgage services to customers in Georgia, Alabama, South Carolina, Florida and Tennessee. See Synovus Financial Corp. on the web at www.synovus.com.

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 commercial banking industry and economy in general. These forward-looking statements include, among others, our expectations on credit trends and key credit metrics; expectations regarding deposits, loan growth and our loan portfolio; expectations on growth, and future profitability; expectations regarding the impact of our ongoing efficiency initiatives and future cost savings; 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 report. Many of these factors are beyond Synovus’ ability to control or predict.

1 of 4

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,804.71 -238.19 -1.40%
S&P 500 1,946.16 -26.13 -1.32%
NASDAQ 4,422.0850 -71.3050 -1.59%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs