Synovus Announces Earnings for the First Quarter 2021

Rhea-AI Summary

Synovus Financial Corp. (NYSE: SNV) reported strong financial results for Q1 2021, with net income of $178.8 million, or $1.19 per diluted share, reflecting a sequential increase of $0.23. Adjusted EPS rose to $1.21, up $0.13 from the previous quarter. Total loans grew by $552.1 million sequentially, while core transaction deposits surged by $2.05 billion, a 6% increase. The company's CET1 ratio improved to 9.74%, and non-interest expenses fell by $35.4 million. However, net interest income declined by $12.1 million due to asset repricing and lower day counts.

Positive

• Net income rose to $178.8 million, up 26% sequentially.
• Adjusted EPS increased to $1.21, up 12% from the previous quarter.
• Core transaction deposits grew by $2.05 billion, a 6% increase.
• CET1 ratio improved to 9.74%, reflecting strong core earnings.
• Non-interest expenses declined by $35.4 million sequentially.

Negative

• Net interest income decreased by $12.1 million sequentially.
• Net interest margin fell to 3.04%, down 8 bps sequentially.
• Non-interest revenue dropped by $3.8 million sequentially.

Synovus Financial Corp. (NYSE: SNV) today reported financial results for the quarter ended March 31, 2021.

First Quarter 2021 Highlights

• Net income available to common shareholders of $178.8 million or $1.19 per diluted share, up $0.23 sequentially and $0.99 compared to prior year.
  • Adjusted diluted EPS of $1.21, up $0.13 sequentially and $1.00 compared to prior year.
• Period-end loans increased $552.1 million or 1% sequentially.
  • Paycheck Protection Program (PPP) loans increased $170.1 million and third-party consumer loan balances, including a prime auto purchase of $476 million, increased $503.2 million sequentially.
• Core transaction deposits (non-interest bearing, NOW/savings, and money market deposits excluding public and brokered funds) increased $2.05 billion or 6% sequentially.
• Total deposit costs of 0.22% down 6 bps sequentially due to ongoing repricing and product remixing.
• Net interest income of $373.9 million declined $12.1 million sequentially as lower deposit costs and deployment of excess liquidity partially offset a lower day count, continued fixed-rate asset repricing, and accelerated prepayment activity.
  • Net interest margin of 3.04% vs 3.12% sequentially.
• Non-interest revenue declined $3.8 million sequentially and increased $7.1 million compared to prior year.
  • Adjusted non-interest revenue increased $0.6 million sequentially as broad-based growth helped offset normalization of net mortgage revenue.
• Non-interest expense declined $35.4 million sequentially and $9.1 million compared to prior year.
  • Adjusted non-interest expense declined $8.5 million sequentially led by reduction in professional fees, partially offset by seasonal increases in payroll taxes and benefits.
• Reversal of provision for credit losses of $18.6 million, primarily from a more favorable economic outlook.
  • Allowance for credit losses coverage ratio (to loans) of 1.58%, or 1.69% excluding PPP loans.
• Credit quality metrics remain relatively stable with a net charge-off ratio of 0.21%; non-performing assets, non-performing loans, and past dues remained near prior cycle lows.
• Preliminary CET1 ratio increased 8 bps sequentially to 9.74%, with strong core earnings helping offset a $1.20 billion increase in risk-weighted assets.
• In April, executed share repurchases of approximately $10 million as part of the $200 million authorization for 2021.

First Quarter Summary

	Reported												Adjusted
(dollars in thousands)	1Q21				4Q20				1Q20				1Q21				4Q20				1Q20
Net income available to common shareholders	$	178,802			$	142,118			$	30,230			$	180,685			$	160,618			$	30,708
Diluted earnings per share	1.19				0.96				0.20				1.21				1.08				0.21
Total loans	38,805,101				38,252,984				38,258,024				N/A				N/A				N/A
Total deposits	47,368,951				46,691,571				39,826,585				N/A				N/A				N/A
Total FTE revenue	485,587				501,514				477,903				487,577				499,114				473,424
Return on avg assets	1.40		%		1.11		%		0.32		%		1.41		%		1.25		%		0.32		%
Return on avg common equity	15.77				12.31				2.75				15.93				13.91				2.79
Return on avg tangible common equity	17.85				14.00				3.34				18.04				15.79				3.39
Net interest margin	3.04				3.12				3.37				N/A				N/A				N/A
Efficiency ratio	55.01				60.32				57.81				54.19				54.60				56.72
NCO ratio	0.21				0.23				0.21				N/A				N/A				N/A
NPA ratio	0.50				0.50				0.50				N/A				N/A				N/A

“Our results in the first quarter of 2021 reflect strong financial performance as we continue to position the company for long-term growth,” said Kessel Stelling, Synovus Chairman and CEO. “Solid earnings drove capital growth, core transaction deposits grew $2 billion from the previous quarter, credit quality remained strong, and our efficiency initiatives enabled additional investments in improving the customer experience. We continued to support our customers and communities through the Paycheck Protection Program in the first quarter, including approximately $1 billion in phase two fundings. As the economic recovery accelerates and Kevin Blair steps in as CEO, the energy and optimism among our team are high, and I have never been more confident in our future.”

Kevin Blair, Synovus President and COO, said, “I’m honored for the opportunity to lead this exceptional team, and to build upon our strong foundation in driving growth as we deliver differentiated, value-adding solutions and advice to attract and build relationships with our clients.”

Balance Sheet

Loans*
(dollars in millions)	1Q21				4Q20				Linked Quarter Change				Linked Quarter % Change			1Q20				Year/Year Change				Year/Year % Change
Commercial & industrial	$	19,693.8			$	19,520.2			$	173.7			1	%		$	17,810.3			$	1,883.5			11	%
Commercial real estate	10,533.9				10,325.7				208.2				2			10,475.4				58.6				1
Consumer	8,577.3				8,407.1				170.2				2			9,972.3				(1,395.0		)		(14	)
Total loans	$	38,805.1			$	38,253.0			$	552.1			1	%		$	38,258.0			$	547.1			1	%
*Amounts may not total due to rounding

• Total loans ended the quarter at $38.81 billion, up $552.1 million or 1% sequentially.
• Commercial and industrial (C&I) loan growth of $173.7 million sequentially.
  • Total PPP loans increased by $170.1 million.
    • Phase 1 forgiveness of $711 million, or $687 million net of unearned, and Phase 2 fundings of $894 million, or $857 million net of unearned.
  • C&I line utilization remains near historic lows ~40%.
• CRE loans increased $208.2 million as the recovery in commercial real estate continues.
• Consumer loans increased $170.2 million sequentially, with a prime auto portfolio purchase of $476 million partially offset by declines in consumer mortgages and HELOCs of $214.3 million and $105.4 million, respectively.

Deposits*
(dollars in millions)	1Q21				4Q20				Linked Quarter Change				Linked Quarter % Change			1Q20				Year/Year Change				Year/Year % Change
Non-interest-bearing DDA	$	13,742.1			$	12,382.7			$	1,359.4			11	%		$	8,968.8			$	4,773.3			53	%
Interest-bearing DDA	5,841.7				5,674.4				167.3				3			4,617.4				1,224.4				27
Money market	13,943.7				13,541.2				402.5				3			10,255.0				3,688.7				36
Savings	1,277.0				1,156.2				120.8				10			949.5				327.6				35
Public funds	6,154.9				6,760.6				(605.7		)		(9	)		5,261.4				893.6				17
Time deposits	3,214.8				3,605.9				(391.2		)		(11	)		5,786.6				(2,571.9		)		(44	)
Brokered deposits	3,194.7				3,570.4				(375.7		)		(11	)		3,987.9				(793.3		)		(20	)
Total deposits	$	47,369.0			$	46,691.6			$	677.4			1	%		$	39,826.6			$	7,542.4			19	%
*Amounts may not total due to rounding

• Total deposits ended the quarter at $47.37 billion, up $677.4 million or 1% sequentially.
• Core transaction deposits increased $2.05 billion or 6% sequentially.
  • Broad-based growth in all categories including MMA, DDA, NOW, and savings supported declines in higher cost deposits.
• Total deposit costs declined 6 bps to 0.22% sequentially.

Income Statement Summary**
(in thousands, except per share data)	1Q21				4Q20				Linked Quarter Change				Linked Quarter % Change			1Q20				Year/Year Change				Year/Year % Change
Net interest income	$	373,857			$	385,932			$	(12,075	)		(3	)%		$	373,260			$	597			—	%
Non-interest revenue	110,956				114,761				(3,805		)		(3	)		103,857				7,099				7
Non-interest expense	267,134				302,498				(35,364		)		(12	)		276,279				(9,145		)		(3	)
(Reversal of) provision for credit losses	(18,575		)		11,066				(29,641		)		nm			158,722				(177,297		)		nm
Income before taxes	$	236,254			$	187,129			$	49,125			26	%		$	42,116			$	194,138			461	%
Income tax expense	49,161				36,720				12,441				34			3,595				45,566				nm
Preferred stock dividends	8,291				8,291				—				—			8,291				—				—
Net income available to common shareholders	$	178,802			$	142,118			$	36,684			26	%		$	30,230			$	148,572			491	%
Weighted average common shares outstanding, diluted	149,780				148,725				1,055				1	%		148,401				1,379				1	%
Diluted earnings per share	$	1.19			$	0.96			$	0.23			25			$	0.20			$	0.99			486
Adjusted diluted earnings per share	1.21				1.08				0.13				12			0.21				1.00				483
** Amounts may not total due to rounding

Core Performance

• Net interest income of $373.9 million in the first quarter, down $12.1 million sequentially as lower deposit costs and deployment of excess liquidity helped offset declines from continued fixed-rate repricing and accelerated prepayment activity.
  • Net PPP fee accretion of $24.9 million, up $0.1 million sequentially.
  • Net interest margin was 3.04%, down 8 bps sequentially.
• Non-interest revenue decreased $3.8 million, or 3% sequentially, and increased $7.1 million, or 7% compared to prior year. Adjusted non-interest revenue increased $0.6 million, or 1% sequentially, and $13.6 million, or 14% compared to prior year.
  • Broad-based growth including $3.2 million in capital markets income helped offset normalization of net mortgage revenue, which declined $2.1 million sequentially.
• Non-interest expense decreased $35.4 million, or 12% sequentially. Adjusted non-interest expense decreased $8.5 million, or 3% sequentially.
  • Seasonal increases in employment-related expenses such as payroll taxes and benefits more than offset by lower headcount and day count as well as lower professional fees associated with Synovus Forward and COVID/PPP.
• Reversal of provision for credit losses of $18.6 million; allowance for credit losses coverage ratio (to loans) of 1.58%, or 1.69% excluding PPP loans.
• Tax expense was $49.2 million, an increase of $12.4 million driven by higher taxable income.
  • Effective tax rate of 20.81%.

Capital Ratios
	1Q21			4Q20			1Q20
Common equity Tier 1 capital (CET1) ratio	9.74	%	*	9.66	%		8.70	%
Tier 1 capital ratio	10.99		*	10.95			9.95
Total risk-based capital ratio	13.34		*	13.42			12.29
Tier 1 leverage ratio	8.80		*	8.50			8.92
Tangible common equity ratio	7.55			7.66			7.94
* Ratios are preliminary.

Capital

• CET1 ratio improved 8 bps during the quarter to 9.74% as strong core performance helped offset a $1.20 billion increase in risk-weighted assets.
• Total risk-based capital ratio of 13.34% declined 8 bps from the prior quarter following a reduction in the ACL.

First Quarter Earnings Conference Call

Synovus will host an earnings highlights conference call at 8:30 a.m. EDT on April 20, 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 $55 billion in assets. Synovus provides commercial and retail banking, investment, and mortgage services through 288 branches in Alabama, Florida, Georgia, South Carolina, 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; our expectations regarding net interest income and net interest margin; expectations on our growth strategy, expense and revenue initiatives, capital management, balance sheet 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, 2020, 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; total adjusted revenue; adjusted tangible efficiency ratio; adjusted net income available to common shareholders; adjusted diluted earnings per 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 FTE revenue; efficiency ratio-FTE; net income available to common shareholders; diluted earnings per 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. Total adjusted revenue and adjusted non-interest revenue are measures used by management to evaluate total FTE revenue and non-interest revenue exclusive of net investment securities gains (losses) and changes in the fair value of private equity investments, net. 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 diluted earnings per 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)	1Q21				4Q20				1Q20
Adjusted non-interest revenue
Total non-interest revenue	$	110,956			$	114,761			$	103,857
Add/subtract: Investment securities losses (gains), net	1,990				(2,337		)		(8,734		)
Subtract/add: Fair value (increase) decrease of private equity investments	—				(63		)		4,255
Adjusted non-interest revenue	$	112,946			$	112,361			$	99,378
Adjusted non-interest expense
Total non-interest expense	$	267,134			$	302,498			$	276,279
Subtract: Restructuring charges	(531		)		(18,068		)		(3,220		)
Subtract: Valuation adjustment to Visa derivative	—				(890		)		—
Subtract: Loss on early extinguishment of debt	—				(8,409		)		(1,904		)
Adjusted non-interest expense	$	266,603			$	275,131			$	271,155
Reconciliation of Non-GAAP Financial Measures, continued
(dollars in thousands)	1Q21				4Q20				1Q20
Total adjusted revenue and adjusted tangible efficiency ratio
Adjusted non-interest expense	$	266,603			$	275,131			$	271,155
Subtract: Amortization of intangibles	(2,379		)		(2,640		)		(2,640		)
Adjusted tangible non-interest expense	$	264,224			$	272,491			$	268,515
Net interest income	$	373,857			$	385,932			$	373,260
Add: Tax equivalent adjustment	774				821				786
Add: Total non-interest revenue	110,956				114,761				103,857
Total FTE revenue	485,587				501,514				477,903
Add/subtract: Investment securities losses (gains), net	1,990				(2,337		)		(8,734		)
Subtract/add: Fair value (increase) decrease of private equity investments	—				(63		)		4,255
Total adjusted revenue	$	487,577			$	499,114			$	473,424
Efficiency ratio-FTE	55.01		%		60.32		%		57.81		%
Adjusted tangible efficiency ratio	54.19				54.60				56.72

Adjusted return on average assets
Net income	$	187,093			$	150,409			$	38,521
Add: Restructuring charges	531				18,068				3,220
Add: Valuation adjustment to Visa derivative	—				890				—
Add: Loss on early extinguishment of debt	—				8,409				1,904
Add/subtract: Investment securities losses (gains), net	1,990				(2,337		)		(8,734		)
Subtract/add: Fair value (increase) decrease of private equity investments	—				(63		)		4,255
Subtract: Tax effect of adjustments (1)	(638		)		(6,467		)		(167		)
Adjusted net income	$	188,976			$	168,909			$	38,999
Net income annualized	$	758,766			$	598,366			$	154,931
Adjusted net income annualized	$	766,403			$	671,964			$	156,853
Total average assets	$	54,188,504			$	53,833,909			$	48,696,595
Return on average assets	1.40		%		1.11		%		0.32		%
Adjusted return on average assets	1.41				1.25				0.32
Adjusted net income available to common shareholders and adjusted diluted earnings per share
Net income available to common shareholders	$	178,802			$	142,118			$	30,230
Add: Restructuring charges	531				18,068				3,220
Add: Valuation adjustment to Visa derivative	—				890				—
Add: Loss on early extinguishment of debt	—				8,409				1,904
Add/subtract: Investment securities losses (gains), net	1,990				(2,337		)		(8,734		)
Subtract/add: Fair value (increase) decrease of private equity investments	—				(63		)		4,255
Subtract: Tax effect of adjustments (1)	(638		)		(6,467		)		(167		)
Adjusted net income available to common shareholders	$	180,685			$	160,618			$	30,708
Weighted average common shares outstanding, diluted	149,780				148,725				148,401
Diluted earnings per share	$	1.19			$	0.96			$	0.20
Adjusted diluted earnings per share	1.21				1.08				0.21

Reconciliation of Non-GAAP Financial Measures, continued
(dollars in thousands)	1Q21				4Q20				1Q20
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	$	178,802			$	142,118			$	30,230
Add: Restructuring charges	531				18,068				3,220
Add: Valuation adjustment to Visa derivative	—				890				—
Add: Loss on early extinguishment of debt	—				8,409				1,904
Add/subtract: Investment securities losses (gains), net	1,990				(2,337		)		(8,734		)
Subtract/add: Fair value (increase) decrease of private equity investments	—				(63		)		4,255
Subtract: Tax effect of adjustments (1)	(638		)		(6,467		)		(167		)
Adjusted net income available to common shareholders	$	180,685			$	160,618			$	30,708
Adjusted net income available to common shareholders annualized	$	732,778			$	638,980			$	123,507
Add: Amortization of intangibles, annualized net of tax	7,207				7,782				7,868
Adjusted net income available to common shareholders excluding amortization of intangibles annualized	$	739,985			$	646,762			$	131,375
Net income available to common shareholders annualized	$	725,141			$	565,382			$	121,584
Add: Amortization of intangibles, annualized net of tax	7,207				7,782				7,868
Net income available to common shareholders excluding amortization of intangibles annualized	$	732,348			$	573,164			$	129,452
Total average shareholders' equity less preferred stock	$	4,599,076			$	4,594,199			$	4,424,278
Subtract: Goodwill	(452,390		)		(452,390		)		(497,267		)
Subtract: Other intangible assets, net	(44,005		)		(46,511		)		(54,514		)
Total average tangible shareholders' equity less preferred stock	$	4,102,681			$	4,095,298			$	3,872,497
Return on average common equity	15.77		%		12.31		%		2.75		%
Adjusted return on average common equity	15.93				13.91				2.79
Return on average tangible common equity	17.85				14.00				3.34
Adjusted return on average tangible common equity	18.04				15.79				3.39

Reconciliation of Non-GAAP Financial Measures, continued
(dollars in thousands)	March 31, 2021				December 31, 2020				March 31, 2020
Tangible common equity ratio
Total assets	$	55,159,011			$	54,394,159			$	50,619,585
Subtract: Goodwill	(452,390		)		(452,390		)		(497,267		)
Subtract: Other intangible assets, net	(42,733		)		(45,112		)		(53,032		)
Tangible assets	$	54,663,888			$	53,896,657			$	50,069,286
Total shareholders’ equity	$	5,161,717			$	5,161,334			$	5,065,205
Subtract: Goodwill	(452,390		)		(452,390		)		(497,267		)
Subtract: Other intangible assets, net	(42,733		)		(45,112		)		(53,032		)
Subtract: Preferred Stock, no par value	(537,145		)		(537,145		)		(537,145		)
Tangible common equity	$	4,129,449			$	4,126,687			$	3,977,761
Total shareholders’ equity to total assets ratio	9.36		%		9.49		%		10.01		%
Tangible common equity ratio	7.55				7.66				7.94
(1) An assumed marginal tax rate of 25.3% for 2021 and 25.9% for 2020 was applied.

Synovus
	INCOME STATEMENT DATA
	(Unaudited)
	(Dollars in thousands, except per share data)	2021				2020										First Quarter
		First Quarter				Fourth Quarter		Third Quarter			Second Quarter		First Quarter			'21 vs '20
																% Change
	Interest income	$	409,817			433,479		435,550			451,569		483,897			(15	)%
	Interest expense	35,960				47,547		58,560			75,003		110,637			(67	)
	Net interest income	373,857				385,932		376,990			376,566		373,260			—
	(Reversal of) provision for credit losses	(18,575		)		11,066		43,383			141,851		158,722			nm
	Net interest income after provision for credit losses	392,432				374,866		333,607			234,715		214,538			83
	Non-interest revenue:
	Service charges on deposit accounts	20,033				19,063		17,813			15,567		20,689			(3	)
	Fiduciary and asset management fees	17,954				17,242		15,885			14,950		15,174			18
	Card fees	11,996				11,743		10,823			9,186		10,950			10
	Brokerage revenue	12,974				11,794		10,604			9,984		12,398			5
	Mortgage banking income	22,315				24,426		31,229			23,530		12,227			83
	Capital markets income	7,505				4,352		5,690			6,050		11,243			(33	)
	Income from bank-owned life insurance	8,843				9,725		7,778			7,756		6,038			46
	Investment securities (losses)/gains, net	(1,990		)		2,337		(1,550	)		69,409		8,734			nm
	Gain on sale and fair value increase/(decrease) on private equity investments	—				63		260			8,707		(4,255	)		nm
	Other non-interest revenue	11,326				14,016		15,879			8,345		10,659			6
	Total non-interest revenue	110,956				114,761		114,411			173,484		103,857			7
	Non-interest expense:
	Salaries and other personnel expense	161,477				153,946		154,994			159,597		149,678			8
	Net occupancy, equipment, and software expense	41,134				44,183		41,554			41,727		42,194			(3	)
	Third-party processing and other services	20,032				20,799		21,827			22,666		22,700			(12	)
	Professional fees	9,084				17,541		13,377			15,305		10,675			(15	)
	FDIC insurance and other regulatory fees	5,579				6,288		6,793			6,851		5,278			6
	Amortization of intangibles	2,379				2,640		2,640			2,640		2,640			(10	)
	Goodwill impairment	—				—		44,877			—		—			nm
	Restructuring charges	531				18,068		2,882			2,822		3,220			nm
	Loss on early extinguishment of debt	—				8,409		154			—		1,904			nm
	Earnout liability adjustments	—				—		—			4,908		—			nm
	Other operating expenses	26,918				30,624		27,557			27,625		37,990			(29	)
	Total non-interest expense	267,134				302,498		316,655			284,141		276,279			(3	)
	Income before income taxes	236,254				187,129		131,363			124,058		42,116			461
	Income tax expense	49,161				36,720		39,789			30,866		3,595			nm
	Net income	187,093				150,409		91,574			93,192		38,521			386
	Less: Preferred stock dividends	8,291				8,291		8,291			8,291		8,291			—
	Net income available to common shareholders	$	178,802			142,118		83,283			84,901		30,230			491	%
	Net income per common share, basic	$	1.20			0.96		0.57			0.58		0.21			487	%
	Net income per common share, diluted	1.19				0.96		0.56			0.57		0.20			486
	Cash dividends declared per common share	0.33				0.33		0.33			0.33		0.33			—
	Return on average assets *	1.40		%		1.11		0.69			0.71		0.32			108	bps
	Return on average common equity *	15.77				12.31		7.28			7.48		2.75			1,302
	Weighted average common shares outstanding, basic	148,467				147,744		147,314			147,288		147,311			1	%
	Weighted average common shares outstanding, diluted	149,780				148,725		147,976			147,733		148,401			1
	nm - not meaningful
	bps - basis points
	* - ratios are annualized

Synovus
	BALANCE SHEET DATA		March 31, 2021				December 31, 2020				March 31, 2020
	(Unaudited)
	(In thousands, except share data)
	ASSETS
	Cash and due from banks		$	493,645			$	531,625			$	652,451
	Interest-bearing funds with Federal Reserve Bank		2,722,100				3,586,565				1,020,775
	Interest earning deposits with banks		23,969				20,944				20,717
	Federal funds sold and securities purchased under resale agreements		88,552				113,783				129,891
	Cash and cash equivalents		3,328,266				4,252,917				1,823,834
	Investment securities available for sale, at fair value		8,825,757				7,962,438				6,937,240
	Loans held for sale ($242,010, $216,647, and $119,841 measured at fair value, respectively)		993,887				760,123				119,841
	Loans, net of deferred fees and costs		38,805,101				38,252,984				38,258,024
	Allowance for loan losses		(563,214		)		(605,736		)		(493,452		)
	Loans, net		38,241,887				37,647,248				37,764,572
	Cash surrender value of bank-owned life insurance		1,054,475				1,049,373				1,031,544
	Premises, equipment and software, net		454,911				463,959				482,462
	Goodwill		452,390				452,390				497,267
	Other intangible assets, net		42,733				45,112				53,032
	Other assets		1,764,705				1,760,599				1,909,793
	Total assets		$	55,159,011			$	54,394,159			$	50,619,585
	LIABILITIES AND SHAREHOLDERS' EQUITY
	Liabilities:
	Deposits:
	Non-interest-bearing deposits		$	14,660,287			$	13,477,854			$	9,659,451
	Interest-bearing deposits		32,708,664				33,213,717				30,167,134
	Total deposits		47,368,951				46,691,571				39,826,585
	Federal funds purchased and securities sold under repurchase agreements		293,659				227,922				312,776
	Other short-term borrowings		—				7,717				1,175,000
	Long-term debt		1,202,825				1,202,494				3,152,339
	Other liabilities		1,131,859				1,103,121				1,087,680
	Total liabilities		49,997,294				49,232,825				45,554,380
	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 168,978,380, 168,132,522, and 167,359,689; outstanding 148,888,513, 148,039,495, and 147,266,662		168,978				168,133				167,360
	Additional paid-in capital		3,864,281				3,851,208				3,821,357
	Treasury stock, at cost – 20,089,867, 20,093,027, and 20,093,027 shares		(731,690		)		(731,806		)		(731,806		)
	Accumulated other comprehensive income, net		15,278				158,635				256,911
	Retained earnings		1,307,725				1,178,019				1,014,238
	Total shareholders’ equity		5,161,717				5,161,334				5,065,205
	Total liabilities and shareholders' equity		$	55,159,011			$	54,394,159			$	50,619,585

Synovus
	AVERAGE BALANCES AND YIELDS/RATES (1)
	(Unaudited)		2021				2020
	(Dollars in thousands)
			First				Fourth		Third		Second		First
			Quarter				Quarter		Quarter		Quarter		Quarter
	Interest Earning Assets
	Investment securities (2) (4)		$	8,437,563			7,493,822		7,227,400		6,618,533		6,680,047
	Yield			1.40	%		2.07		2.39		2.72		3.09
	Trading account assets (5)		$	3,063			8,496		5,391		6,173		6,306
	Yield			2.81	%		1.03		1.69		2.19		2.70
	Commercial loans (3) (4)		$	29,844,491			30,363,102		30,730,135		30,236,919		27,607,343
	Yield			3.95	%		3.96		3.80		3.95		4.57
	Consumer loans (3)		$	8,367,776			8,521,449		9,032,437		9,899,172		9,985,702
	Yield			3.98	%		4.00		4.08		4.34		4.60
	Allowance for loan losses		$	(599,872	)		(595,547	)	(591,098	)	(498,545	)	(368,033	)
	Loans, net (3)		$	37,612,395			38,289,004		39,171,474		39,637,546		37,225,012
	Yield			4.02	%		4.03		3.92		4.08		4.62
	Mortgage loans held for sale		$	246,962			309,278		244,952		221,157		86,415
	Yield			2.68	%		2.74		2.92		3.09		3.67
	Other loans held for sale		$	660,753			544,301		493,940		19,246		—
	Yield			2.91	%		2.81		3.61		4.19		—
	Federal funds sold, due from Federal Reserve Bank, and other short-term investments		$	2,838,021			2,716,645		1,265,880		1,709,086		652,130
	Yield			0.10	%		0.10		0.11		0.11		1.02
	Federal Home Loan Bank and Federal Reserve Bank Stock (5)		$	157,657			162,537		200,923		247,801		284,082
	Yield			1.69	%		2.64		2.73		3.60		3.38
	Total interest earning assets		$	49,956,414			49,524,083		48,609,960		48,459,542		44,933,992
	Yield			3.32	%		3.49		3.58		3.75		4.33
	Interest-Bearing Liabilities
	Interest-bearing demand deposits		$	8,570,753			8,531,415		7,789,095		7,260,940		6,445,986
	Rate			0.14	%		0.16		0.19		0.21		0.51
	Money Market accounts		$	15,348,916			14,411,860		13,272,972		12,238,479		11,548,014
	Rate			0.23	%		0.26		0.36		0.46		1.00
	Savings deposits		$	1,219,288			1,147,667		1,114,956		1,036,024		926,822
	Rate			0.02	%		0.01		0.02		0.02		0.05
	Time deposits under $100,000		$	1,161,306			1,239,592		1,379,923		1,621,943		1,761,741
	Rate			0.56	%		0.74		1.03		1.43		1.64
	Time deposits over $100,000		$	2,993,996			3,302,959		3,863,821		4,772,555		5,051,705
	Rate			0.74	%		1.03		1.44		1.80		2.04
	Other brokered deposits		$	1,950,582			1,978,393		1,912,114		1,998,571		1,376,669
	Rate			0.20	%		0.23		0.23		0.25		1.42
	Brokered time deposits		$	1,418,751			1,795,982		2,232,940		2,244,429		2,166,496
	Rate			1.50	%		1.60		1.59		1.86		2.11
	Total interest-bearing deposits		$	32,663,592			32,407,868		31,565,821		31,172,941		29,277,433
	Rate			0.31	%		0.39		0.54		0.73		1.18
	Federal funds purchased and securities sold under repurchase agreements		$	209,448			174,316		180,342		250,232		167,324
	Rate			0.07	%		0.07		0.09		0.12		0.30
	Other short-term borrowings		$	—			—		46,739		550,000		1,384,362
	Rate			—	%		—		1.12		1.23		1.66
	Long-term debt		$	1,202,613			1,552,791		2,234,665		2,834,188		2,678,651
	Rate			3.63	%		3.96		2.71		2.36		2.78
	Total interest-bearing liabilities		$	34,075,653			34,134,975		34,027,567		34,807,361		33,507,770
	Rate			0.42	%		0.55		0.68		0.86		1.30
	Non-interest-bearing demand deposits		$	13,791,286			13,566,112		12,773,676		11,923,534		9,409,774
	Cost of funds			0.30	%		0.40		0.50		0.65		1.04
	Effective cost of funds(6)			0.28	%		0.37		0.48		0.62		0.96
	Net interest margin			3.04	%		3.12		3.10		3.13		3.37
	Taxable equivalent adjustment (4)		$	774			821		956		861		786
	(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.
	(6) Includes the impact of non-interest-bearing capital funding sources.

Synovus
LOANS OUTSTANDING BY TYPE
(Unaudited)		Total Loans				Total Loans				Linked Quarter			Total Loans				Year/Year
(Dollars in thousands)
Loan Type		March 31, 2021				December 31, 2020				% Change			March 31, 2020				% Change
Commercial, Financial, and Agricultural		$	12,662,329			$	12,410,152			2	%		$	10,902,455			16	%
Owner-Occupied		7,031,505				7,110,016				(1	)		6,907,893				2
Total Commercial & Industrial		19,693,834				19,520,168				1			17,810,348				11
Multi-Family		2,220,939				2,190,534				1			2,103,566				6
Hotels		1,462,370				1,442,242				1			1,311,614				11
Office Buildings		2,280,053				2,207,744				3			2,211,525				3
Shopping Centers		1,662,158				1,644,519				1			1,778,627				(7	)
Warehouses		692,267				700,050				(1	)		759,858				(9	)
Other Investment Property		1,017,938				918,290				11			859,726				18
Total Investment Properties		9,335,725				9,103,379				3			9,024,916				3
1-4 Family Construction		189,626				182,981				4			254,495				(25	)
1-4 Family Investment Mortgage		449,328				445,714				1			482,442				(7	)
Total 1-4 Family Properties		638,954				628,695				2			736,937				(13	)
Commercial Development		142,380				130,678				9			107,219				33
Residential Development		196,653				245,170				(20	)		302,516				(35	)
Land Acquisition		220,216				217,785				1			303,770				(28	)
Land and Development		559,249				593,633				(6	)		713,505				(22	)
Total Commercial Real Estate		10,533,928				10,325,707				2			10,475,358				1
Consumer Mortgages		5,299,175				5,513,491				(4	)		5,613,997				(6	)
Home Equity Lines		1,432,367				1,537,726				(7	)		1,793,486				(20	)
Credit Cards		267,371				281,018				(5	)		261,581				2
Other Consumer Loans		1,578,426				1,074,874				47			2,303,254				(31	)
Total Consumer		8,577,339				8,407,109				2			9,972,318				(14	)
Total		$	38,805,101			$	38,252,984			1	%		$	38,258,024			1	%
NON-PERFORMING LOANS COMPOSITION
(Unaudited)		Total Non-performing Loans				Total Non-performing Loans				Linked Quarter			Total Non-performing Loans				Year/Year
(Dollars in thousands)
Loan Type		March 31, 2021				December 31, 2020				% Change			March 31, 2020				% Change
Commercial, Financial, and Agricultural		$	76,460			$	77,386			(1	)%		$	99,287			(23	)%
Owner-Occupied		17,192				20,019				(14	)		17,357				(1	)
Total Commercial & Industrial		93,652				97,405				(4	)		116,644				(20	)
Multi-Family		2,698				168				nm			356				658
Office Buildings		1,645				1,134				45			836				97
Shopping Centers		20,138				21,082				(4	)		712				nm
Warehouses		221				217				2			—				nm
Other Investment Property		887				2,030				(56	)		308				188
Total Investment Properties		25,589				24,631				4			2,212				nm
1-4 Family Construction		1,291				1,236				4			278				364
1-4 Family Investment Mortgage		2,760				2,383				16			2,047				35
Total 1-4 Family Properties		4,051				3,619				12			2,325				74
Commercial Development		567				582				(3	)		596				(5	)
Residential Development		452				533				(15	)		561				(19	)
Land Acquisition		782				1,048				(25	)		1,043				(25	)
Land and Development		1,801				2,163				(17	)		2,200				(18	)
Total Commercial Real Estate		31,441				30,413				3			6,737				367
Consumer Mortgages		11,201				8,740				28			13,571				(17	)
Home Equity Lines		12,191				12,145				—			12,475				(2	)
Other Consumer Loans		6,684				2,376				181			6,860				(3	)
Total Consumer		30,076				23,261				29			32,906				(9	)
Total		$	155,169			$	151,079			3	%		$	156,287			(1	)%

Synovus
	CREDIT QUALITY DATA
	(Unaudited)
	(Dollars in thousands)		2021				2020												First Quarter
			First				Fourth			Third			Second			First			'21 vs '20
			Quarter				Quarter			Quarter			Quarter			Quarter			% Change
	Non-performing Loans (NPLs)		$	155,169			151,079			168,837			147,437			156,287			(1	)%
	Impaired Loans Held for Sale		23,590				23,590			—			—			—			nm
	Other Real Estate and Other Assets		16,849				17,394			23,280			30,242			33,679			(50	)
	Non-performing Assets (NPAs)		195,608				192,063			192,117			177,679			189,966			3
	Allowance for Loan Losses (ALL)		563,214				605,736			603,800			588,648			493,452			14
	Reserve for Unfunded Commitments		51,528				47,785			60,794			61,029			38,420			34
	Allowance for Credit Losses (ACL)		614,742				653,521			664,594			649,677			531,872			16
	Net Charge-Offs - Quarter		20,204				22,139			28,466			24,046			20,061
	Net Charge-Offs / Average Loans - Quarter (1)		0.21		%		0.23			0.29			0.24			0.21
	NPLs / Loans		0.40				0.39			0.43			0.37			0.41
	NPAs / Loans, ORE and specific other assets		0.50				0.50			0.49			0.44			0.50
	ACL/Loans		1.58				1.71			1.68			1.63			1.39
	ALL/Loans		1.45				1.58			1.53			1.47			1.29
	ACL/NPLs		396.18				432.57			393.63			440.65			340.32
	ALL/NPLs		362.97				400.94			357.62			399.25			315.74
	Past Due Loans over 90 days and Still Accruing		$	3,804			4,117			7,512			8,391			6,398			(41	)
	As a Percentage of Loans Outstanding		0.01		%		0.01			0.02			0.02			0.02
	Total Past Due Loans and Still Accruing		$	45,693			47,349			57,316			46,390			83,235			(45	)
	As a Percentage of Loans Outstanding		0.12		%		0.12			0.14			0.12			0.22
	Accruing Troubled Debt Restructurings (TDRs)		$	129,776			134,972			163,511			166,461			160,128			(19	)
	(1) Ratio is annualized.
	SELECTED CAPITAL INFORMATION (1)
	(Unaudited)
	(Dollars in thousands)
			March 31, 2021				December 31, 2020			March 31, 2020
	Tier 1 Capital		$	4,721,859			4,572,010			4,281,560
	Total Risk-Based Capital		5,733,955				5,604,230			5,289,039
	Common Equity Tier 1 Capital Ratio		9.74		%		9.66			8.70
	Tier 1 Capital Ratio		10.99				10.95			9.95
	Total Risk-Based Capital Ratio		13.34				13.42			12.29
	Tier 1 Leverage Ratio		8.80				8.50			8.92
	Common Equity as a Percentage of Total Assets (2)		8.38				8.51			8.95
	Tangible Common Equity Ratio (3) (5)		7.55				7.66			7.94
	Book Value Per Common Share (4)		$	31.06			31.24			30.75
	Tangible Book Value Per Common Share (3)		27.74				27.88			27.01
	(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.

 

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FAQ

What were Synovus Financial's earnings for Q1 2021?

Synovus Financial reported net income of $178.8 million for Q1 2021, or $1.19 per diluted share.

How did Synovus's adjusted EPS change in Q1 2021?

Adjusted EPS rose to $1.21 in Q1 2021, an increase of $0.13 from the previous quarter.

What is the current CET1 ratio for Synovus?

The CET1 ratio for Synovus improved to 9.74% in Q1 2021.

What was the total loan growth for Synovus in Q1 2021?

Total loans increased by $552.1 million sequentially in Q1 2021.

How did non-interest expenses change in Synovus's latest quarter?

Non-interest expenses decreased by $35.4 million sequentially in Q1 2021.