Synovus announces earnings for the first quarter 2023

Rhea-AI Summary

Synovus Financial Corp. (NYSE: SNV) reported strong first-quarter 2023 results, achieving a net income of $193.9 million, or $1.32 per diluted share, a 19% increase from the prior year. Adjusted diluted EPS rose to $1.33, marking a 23% rise year-over-year. Total revenue hit $613.9 million, up 23%, largely due to robust loan growth and higher interest rates. Pre-provision net revenue also grew by 30% year-over-year to $292 million. The company saw a sequential increase in total loans by $328.6 million, reaching $44.04 billion, and total deposits rose by $1.08 billion to $49.95 billion. The CET1 capital ratio improved to 9.76%, reflecting ongoing healthy capital generation. However, net interest income fell 4% from the previous quarter to $480.8 million due to rising deposit costs.

Positive

• Net income rose 19% YoY to $193.9 million.
• Total revenue increased 23% YoY to $613.9 million.
• Pre-provision net revenue surged 30% YoY to $292 million.
• Total loans increased $328.6 million sequentially to $44.04 billion.
• Total deposits grew $1.08 billion sequentially to $49.95 billion.
• CET1 capital ratio improved to 9.76%, indicating strong capital generation.

Negative

• Net interest income declined 4% sequentially to $480.8 million.
• Total deposit costs increased by 56 bps sequentially to 1.44%.

Diluted earnings per share of $1.32 vs. $1.11 in 1Q22

Adjusted diluted earnings per share of $1.33 vs. $1.08 in 1Q22

COLUMBUS, Ga.--(BUSINESS WIRE)-- Synovus Financial Corp. (NYSE: SNV) today reported financial results for the quarter ended March 31, 2023. “Our first quarter results reflect a disciplined approach to execution, with pre-provision net revenue of $292 million, a 30% increase year over year,” said Synovus Chairman, CEO and President Kevin Blair. “Our stable deposit base and record deposit production are testaments to the quality of our clients and ability to expand existing and attract new relationships even in this environment. The recent J.D. Power recognition as the Southeast’s number one bank in retail client satisfaction and trust affirms the value of our commitment to tailored solutions, local market presence and personal relationships. Our team continues to exercise prudence and perseverance as we focus on profitable growth and meet the future needs of clients and communities we serve.”

First Quarter 2023 Highlights

• Net income available to common shareholders of $193.9 million, or $1.32 per diluted share, up $0.21 compared to the first quarter 2022.
• Total revenue of $613.9 million increased $116.3 million, or 23%, compared to the first quarter 2022, driven by loan growth and higher interest rates, in addition to growth in core client fee income, excluding mortgage, of 19% year over year.
• Pre-provision net revenue of $292.0 million increased $66.9 million, or 30%, compared to the first quarter 2022.
• Period-end loans increased $328.6 million sequentially, primarily driven by new commercial production offset by a decline in third-party consumer loans from both runoff and a move to held-for-sale of $424 million.
• Total deposits increased $1.08 billion sequentially, or 2%, a result of growth in both core as well as brokered deposits.
• Fortified our liquidity position and currently maintain over $25 billion⁽¹⁾ of contingent liquidity across a diverse set of sources.
• Credit quality metrics continue to remain at strong levels with a net charge-off ratio of 0.17% and a modest increase in the ACL ratio to 1.17%. The NPL and NPA ratios both moved to 0.41%.
• Preliminary CET1 ratio of 9.76% increased 13 bps sequentially as capital generation continued to support client loan growth while also buffering capital levels given economic and regulatory uncertainty.

⁽¹⁾ As of April 17, 2023

First Quarter Summary
	Reported												Adjusted
(dollars in thousands)		1Q23				4Q22				1Q22				1Q23				4Q22				1Q22
Net income available to common shareholders	$	193,868			$	197,479			$	162,746			$	195,276			$	197,576			$	158,368
Diluted earnings per share		1.32				1.35				1.11				1.33				1.35				1.08
Total revenue		613,877				603,785				497,582				599,469				603,359				499,742
Total loans		44,044,939				43,716,353				40,169,150				N/A				N/A				N/A
Total deposits		49,953,936				48,871,559				48,656,244				N/A				N/A				N/A
Return on avg assets		1.36	%			1.38	%			1.22	%			1.37	%			1.39	%			1.19	%
Return on avg common equity		19.23				20.93				14.20				19.37				20.94				13.82
Return on avg tangible common equity		21.94				24.21				16.02				22.09				24.22				15.59
Net interest margin(1)		3.43				3.56				3.01				N/A				N/A				N/A
Efficiency ratio-TE(2)(3)		52.33				51.08				54.66				50.48				50.58				55.50
NCO ratio-QTD		0.17				0.12				0.19				N/A				N/A				N/A
NPA ratio		0.41				0.33				0.40				N/A				N/A				N/A
(1) NIM reflects Actual/Actual day count and includes other immaterial adjustments versus NIM previously reported.
(2) Taxable equivalent
(3) Adjusted tangible efficiency ratio

Balance Sheet
Loans*
(dollars in millions)		1Q23			4Q22		Linked Quarter Change				Linked Quarter % Change				1Q22		Year/Year Change				Year/Year % Change
Commercial & industrial	$	22,600.2		$	22,066.7		$	533.5			2	%		$	20,352.3		$	2,247.9			11	%
Commercial real estate		12,996.8			12,650.3			346.4			3				11,145.3			1,851.4			17
Consumer		8,448.0			8,999.4			(551.4	)		(6	)			8,671.5			(223.5	)		(3	)
Total loans	$	44,044.9		$	43,716.4		$	328.6			1	%		$	40,169.2		$	3,875.8			10	%
*Amounts may not total due to rounding

• Total loans ended the quarter at $44.04 billion, up $328.6 million sequentially.
• Commercial and industrial (C&I) loans increased $533.5 million sequentially, led by broad-based growth within our Wholesale Banking segment across multiple industries and business lines.
• CRE loans increased $346.4 million sequentially as low levels of production were more than offset by slower payoffs and draws related to existing commitments.
• Consumer loans decreased $551.4 million sequentially, largely a result of third-party decline from both runoff and a $424 million move to held-for-sale.

Deposits*
(dollars in millions)		1Q23			4Q22		Linked Quarter Change				Linked Quarter % Change				1Q22		Year/Year Change				Year/Year % Change
Non-interest-bearing DDA	$	13,827.6		$	14,574.5		$	(746.9	)		(5	)%		$	15,526.7		$	(1,699.1	)		(11	)%
Interest-bearing DDA		5,837.0			5,761.4			75.7			1				6,685.4			(848.3	)		(13	)
Money market		11,780.0			12,480.7			(700.8	)		(6	)			14,596.9			(2,816.9	)		(19	)
Savings		1,312.7			1,396.4			(83.8	)		(6	)			1,476.7			(164.0	)		(11	)
Public funds		6,888.2			6,635.6			252.6			4				6,048.7			839.5			14
Time deposits		4,060.3			2,724.1			1,336.2			49				2,284.2			1,776.1			78
Brokered deposits		6,248.3			5,299.0			949.2			18				2,037.7			4,210.6			207
Total deposits	$	49,953.9		$	48,871.6		$	1,082.4			2	%		$	48,656.2		$	1,297.7			3	%
*Amounts may not total due to rounding

• Total deposits ended the quarter at $49.95 billion, up $1.08 billion sequentially and resulted from relationship-based production in addition to increased brokered deposits as a result of proactive management of our liquidity position, partially offset by the impact of non-interest bearing DDAs decline due to commercial seasonality, normal cash deployment, and to a lesser extent, continued rate pressures.
• Total deposit costs increased 56 bps sequentially to 1.44% and were primarily impacted by the continued rising rate environment and aforementioned mix shift.

Income Statement Summary**
(in thousands, except per share data)		1Q23				4Q22			Linked Quarter Change				Linked Quarter % Change				1Q22			Year/Year Change			Year/Year % Change
Net interest income	$	480,751			$	501,346			$	(20,595	)		(4	)%		$	392,248			$	88,503		23	%
Non-interest revenue		133,126				102,439				30,687			30				105,334				27,792		26
Non-interest expense		321,852				308,996				12,856			4				272,450				49,402		18
Provision for (reversal of) credit losses		32,154				34,884				(2,730	)		(8	)			11,400				20,754		182
Income before taxes	$	259,871			$	259,905			$	(34	)		—	%		$	213,732			$	46,139		22	%
Income tax expense		57,712				54,135				3,577			7				42,695				15,017		35
Preferred stock dividends		8,291				8,291				—			—				8,291				—		—
Net income available to common shareholders	$	193,868			$	197,479			$	(3,611	)		(2	)%		$	162,746			$	31,122		19	%
Weighted average common shares outstanding, diluted		146,727				146,528				199			—	%			146,665				62		—	%
Diluted earnings per share	$	1.32			$	1.35			$	(0.03	)		(2	)		$	1.11			$	0.21		19
Adjusted diluted earnings per share		1.33				1.35				(0.02	)		(1	)			1.08				0.25		23
Effective tax rate		22.21	%			20.83	%										19.98	%
** Amounts may not total due to rounding

Core Performance

• Net interest income of $480.8 million was down $20.6 million sequentially, or 4%, and increased $88.5 million, or 23%, compared to the first quarter 2022.
  • The quarter-over-quarter decline was largely driven by lower day count, increases in deposit costs, and negative remixing from non-interest DDA deposits partially offset by higher asset yields and earning asset growth.
    • Net interest margin was 3.43%, down 13 bps sequentially, impacted by the same factors mentioned above as well as higher cash balances due to precautionary March liquidity actions.
  • The year-over-year increase resulted primarily from loan growth and interest rate increases somewhat offset by higher deposit costs and negative remixing from non-interest DDA deposits.
• Non-interest revenue increased $30.7 million, or 30%, sequentially and increased $27.8 million, or 26%, compared to the first quarter 2022 and was impacted by a $13.1 million one-time benefit from the recovery of a non-performing asset related to the regulatory approval of our Qualpay investment. Adjusted non-interest revenue increased $16.7 million, or 17%, sequentially and increased $11.0 million, or 10%, compared to the first quarter 2022.
  • Increases primarily related to strong capital markets income from syndication fees and interest rate management products and higher wealth revenue from diverse sources including fees from short-term liquidity management products.
• Non-interest expense increased $12.9 million, or 4%, sequentially and increased $49.4 million, or 18%, compared to the first quarter 2022 and was impacted by a $16.8 million loss associated with the move of third-party consumer loans to held-for-sale. Adjusted non-interest expense decreased $2.8 million, or 1%, sequentially and increased $25.0 million, or 9%, compared to the first quarter 2022.
  • The quarter-over-quarter increase was largely due to normal, seasonal personnel expense and planned increases in FDIC insurance expense and healthcare costs offset by lower performance-related expense and well-managed operating costs.
  • The year-over-year increase primarily resulted from new business initiatives, core operating costs including investments in and expansion of our workforce, and costs associated with the industrywide increase in FDIC insurance and healthcare costs.
• Overall credit performance and the credit quality of our recent originations remain strong. The non-performing loan and asset ratios both moved to 0.41%; the net charge-off ratio for the quarter was 0.17%, and total past dues were 0.12% of total loans outstanding.
• Provision for credit losses of $32.2 million decreased $2.7 million sequentially and increased $20.8 million compared to the first quarter 2022. Drivers of the year-over-year increase included loan growth and a modest increase in the allowance for credit losses coverage ratio (to loans) of 2 bps, a result of deterioration in forecasted economic scenarios mostly offset by continued strong loan portfolio performance.

Capital Ratios
	1Q23			4Q22			1Q22
Common equity Tier 1 capital (CET1) ratio	9.76	%	*	9.63	%		9.49	%
Tier 1 capital ratio	10.79		*	10.68			10.63
Total risk-based capital ratio	12.69		*	12.54			12.56
Tier 1 leverage ratio	9.14		*	9.07			8.87
Tangible common equity ratio	6.12			5.84			6.80
* Ratios are preliminary.

Capital

• Preliminary CET1 ratio improved 13 bps during the quarter to 9.76%, and the preliminary total risk-based capital ratio of 12.69% increased 15 bps from the previous quarter as core earnings continued to support robust capital generation.

First Quarter Earnings Conference Call

Synovus will host an earnings highlights conference call at 8:30 a.m. ET on April 20, 2023. 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 $62 billion in assets. Synovus provides commercial and consumer banking and a full suite of specialized products and services, including private banking, treasury management, wealth management, mortgage services, premium finance, asset-based lending, structured lending, capital markets and international banking. Synovus has 245 branches in Georgia, Alabama, South Carolina, Florida and Tennessee. Synovus is a Great Place to Work-Certified Company and 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; 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, 2022, 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, non-interest expense; 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 TE revenue; efficiency ratio-TE; 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. Adjusted non-interest revenue and adjusted revenue are measures used by management to evaluate non-interest revenue and TE revenue exclusive of net investment securities gains (losses), fair value adjustment on non-qualified deferred compensation, and other items not indicative of ongoing operations that could impact period-to-period comparisons. 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)	1Q23				4Q22				1Q22
Adjusted non-interest revenue
Total non-interest revenue	$	133,126			$	102,439			$	105,334
Investment securities (gains) losses, net		(1,030	)			—				—
Recovery of NPA		(13,126	)			—				—
Fair value adjustment on non-qualified deferred compensation		(1,371	)			(1,557	)			1,295
Adjusted non-interest revenue	$	117,599			$	100,882			$	106,629
Adjusted non-interest expense
Total non-interest expense	$	321,852			$	308,996			$	272,450
Loss on other loans held for sale		(16,750	)			—				—
Loss on early extinguishment of debt		—				—				(677	)
Restructuring (charges) reversals		733				2,372				6,424
Valuation adjustment to Visa derivative		—				(2,500	)			—
Fair value adjustment on non-qualified deferred compensation		(1,371	)			(1,557	)			1,295
Adjusted non-interest expense	$	304,464			$	307,311			$	279,492
Reconciliation of Non-GAAP Financial Measures, continued
(dollars in thousands)	1Q23				4Q22				1Q22
Adjusted revenue and tangible efficiency ratio
Adjusted non-interest expense	$	304,464			$	307,311			$	279,492
Amortization of intangibles		(1,857	)			(2,118	)			(2,118	)
Adjusted tangible non-interest expense	$	302,607			$	305,193			$	277,374
Net interest income	$	480,751			$	501,346			$	392,248
Tax equivalent adjustment		1,119				1,131				865
Total non-interest revenue		133,126				102,439				105,334
Total TE revenue	$	614,996			$	604,916			$	498,447
Recovery of NPA		(13,126	)			—				—
Investment securities losses (gains), net		(1,030	)			—				—
Fair value adjustment on non-qualified deferred compensation		(1,371	)			(1,557	)			1,295
Adjusted revenue	$	599,469			$	603,359			$	499,742
Efficiency ratio-TE		52.33	%			51.08	%			54.66	%
Adjusted tangible efficiency ratio		50.48				50.58				55.50
Adjusted return on average assets
Net income	$	202,159			$	205,770			$	171,037
Recovery of NPA		(13,126	)			—				—
Loss on other loans held for sale		16,750				—				—
Loss on early extinguishment of debt		—				—				677
Restructuring charges (reversals)		(733	)			(2,372	)			(6,424	)
Valuation adjustment to Visa derivative		—				2,500				—
Investment securities losses (gains), net		(1,030	)			—				—
Tax effect of adjustments(1)		(453	)			(31	)			1,369
Adjusted net income	$	203,567			$	205,867			$	166,659
Net income annualized	$	819,867			$	816,370			$	693,650
Adjusted net income annualized	$	825,577			$	816,755			$	675,895
Total average assets	$	60,133,561			$	58,963,417			$	56,855,898
Return on average assets		1.36	%			1.38	%			1.22	%
Adjusted return on average assets		1.37				1.39				1.19
Adjusted net income available to common shareholders and adjusted diluted earnings per share
Net income available to common shareholders	$	193,868			$	197,479			$	162,746
Recovery of NPA		(13,126	)			—				—
Loss on other loans held for sale		16,750				—				—
Loss on early extinguishment of debt		—				—				677
Restructuring charges (reversals)		(733	)			(2,372	)			(6,424	)
Valuation adjustment to Visa derivative		—				2,500				—
Investment securities losses (gains), net		(1,030	)			—				—
Tax effect of adjustments(1)		(453	)			(31	)			1,369
Adjusted net income available to common shareholders	$	195,276			$	197,576			$	158,368
Weighted average common shares outstanding, diluted		146,727				146,528				146,665
Diluted earnings per share	$	1.32			$	1.35			$	1.11
Adjusted diluted earnings per share		1.33				1.35				1.08

Reconciliation of Non-GAAP Financial Measures, continued
(dollars in thousands)	1Q23				4Q22				1Q22
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	$	193,868			$	197,479			$	162,746
Recovery of NPA		(13,126	)			—				—
Loss on other loans held for sale		16,750				—				—
Loss on early extinguishment of debt		—				—				677
Restructuring charges (reversals)		(733	)			(2,372	)			(6,424	)
Valuation adjustment to Visa derivative		—				2,500				—
Investment securities losses (gains), net		(1,030	)			—				—
Tax effect of adjustments(1)		(453	)			(31	)			1,369
Adjusted net income available to common shareholders	$	195,276			$	197,576			$	158,368
Adjusted net income available to common shareholders annualized	$	791,953			$	783,861			$	642,270
Amortization of intangibles, tax effected, annualized		5,699				6,358				6,543
Adjusted net income available to common shareholders excluding amortization of intangibles annualized	$	797,652			$	790,219			$	648,813
Net income available to common shareholders annualized	$	786,242			$	783,476			$	660,025
Amortization of intangibles, tax effected, annualized		5,699				6,358				6,543
Net income available to common shareholders excluding amortization of intangibles annualized	$	791,941			$	789,834			$	666,568
Total average shareholders' equity less preferred stock	$	4,088,777			$	3,742,927			$	4,647,426
Average goodwill		(452,390	)			(452,390	)			(452,390	)
Average other intangible assets, net		(26,245	)			(28,174	)			(34,576	)
Total average tangible shareholders' equity less preferred stock	$	3,610,142			$	3,262,363			$	4,160,460
Return on average common equity		19.23	%			20.93	%			14.20	%
Adjusted return on average common equity		19.37				20.94				13.82
Return on average tangible common equity		21.94				24.21				16.02
Adjusted return on average tangible common equity		22.09				24.22				15.59

(dollars in thousands)	March 31, 2023				December 31, 2022				March 31, 2022
Tangible common equity ratio
Total assets	$	61,840,025			$	59,731,378			$	56,419,549
Goodwill		(452,390	)			(452,390	)			(452,390	)
Other intangible assets, net		(25,267	)			(27,124	)			(33,478	)
Tangible assets	$	61,362,368			$	59,251,864			$	55,933,681
Total shareholders’ equity	$	4,770,130			$	4,475,801			$	4,824,635
Goodwill		(452,390	)			(452,390	)			(452,390	)
Other intangible assets, net		(25,267	)			(27,124	)			(33,478	)
Preferred Stock, no par value		(537,145	)			(537,145	)			(537,145	)
Tangible common equity	$	3,755,328			$	3,459,142			$	3,801,622
Total shareholders’ equity to total assets ratio		7.71	%			7.49	%			8.55	%
Tangible common equity ratio		6.12				5.84				6.80
(1) An assumed marginal tax rate of 24.3% for 1Q23 and 4Q22 and 23.8% for 1Q22 was applied.

Synovus
INCOME STATEMENT DATA
(Unaudited)
(Dollars in thousands, except per share data)		2023				2022												First Quarter
		First Quarter				Fourth Quarter			Third Quarter			Second Quarter			First Quarter			'23 vs '22
																		% Change
Interest income		$	716,879			654,654			551,299			453,772			416,062			72	%
Interest expense			236,128			153,308			73,380			28,384			23,814			892
Net interest income			480,751			501,346			477,919			425,388			392,248			23
Provision for (reversal of) credit losses			32,154			34,884			25,581			12,688			11,400			182
Net interest income after provision for credit losses			448,597			466,462			452,338			412,700			380,848			18
Non-interest revenue:
Service charges on deposit accounts			22,974			23,639			23,398			23,491			22,539			2
Fiduciary and asset management fees			19,696			18,836			19,201			20,100			20,277			(3	)
Card fees			15,824			15,887			15,101			16,089			14,756			7
Brokerage revenue			22,558			19,996			17,140			15,243			14,655			54
Mortgage banking income			3,858			2,554			5,065			3,904			5,953			(35	)
Capital markets income			13,725			6,998			6,839			7,393			5,472			151
Income from bank-owned life insurance			7,262			7,206			6,792			9,165			6,556			11
Investment securities gains (losses), net			1,030			—			—			—			—			nm
Recovery of NPA			13,126			—			—			—			—			nm
Other non-interest revenue			13,073			7,323			10,762			1,881			15,126			(14	)
Total non-interest revenue			133,126			102,439			104,298			97,266			105,334			26
Non-interest expense:
Salaries and other personnel expense			188,924			182,629			173,334			161,063			164,684			15
Net occupancy, equipment, and software expense			42,860			45,192			43,462			43,199			42,877			—
Third-party processing and other services			21,833			23,130			22,539			21,952			20,996			4
Professional fees			8,963			11,096			6,755			10,865			8,474			6
FDIC insurance and other regulatory fees			10,268			8,232			7,707			6,894			6,250			64
Restructuring charges (reversals)			(733	)		(2,372	)		956			(1,850	)		(6,424	)		nm
Loss on other loans held for sale			16,750			—			—			—			—			nm
Other operating expenses			32,987			41,089			39,257			39,928			35,593			(7	)
Total non-interest expense			321,852			308,996			294,010			282,051			272,450			18
Income before income taxes			259,871			259,905			262,626			227,915			213,732			22
Income tax expense			57,712			54,135			59,582			49,863			42,695			35
Net income			202,159			205,770			203,044			178,052			171,037			18
Less: Preferred stock dividends			8,291			8,291			8,291			8,291			8,291			—
Net income available to common shareholders		$	193,868			197,479			194,753			169,761			162,746			19	%
Net income per common share, basic		$	1.33			1.36			1.34			1.17			1.12			19	%
Net income per common share, diluted			1.32			1.35			1.33			1.16			1.11			19
Cash dividends declared per common share			0.38			0.34			0.34			0.34			0.34			12
Return on average assets *			1.36	%		1.38			1.39			1.26			1.22			14	bps
Return on average common equity *			19.23			20.93			18.66			16.48			14.20			503
Weighted average common shares outstanding, basic			145,799			145,467			145,386			145,328			145,273			—	%
Weighted average common shares outstanding, diluted			146,727			146,528			146,418			146,315			146,665			—
nm - not meaningful
bps - basis points
* - ratios are annualized

Synovus
BALANCE SHEET DATA		March 31, 2023				December 31, 2022				March 31, 2022
(Unaudited)
(In thousands, except share data)
ASSETS
Cash and due from banks		$	638,150			$	624,097			$	557,178
Interest-bearing funds with Federal Reserve Bank			2,656,953				1,280,684				941,272
Interest earning deposits with banks			34,779				34,632				27,411
Federal funds sold and securities purchased under resale agreements			35,518				38,367				27,642
Cash, cash equivalents, and restricted cash			3,365,400				1,977,780				1,553,503
Investment securities available for sale, at fair value			9,732,618				9,678,103				10,463,101
Loans held for sale (includes $44,400, $51,136 and $111,992 measured at fair value, respectively)			669,447				391,502				723,921
Loans, net of deferred fees and costs			44,044,939				43,716,353				40,169,150
Allowance for loan losses			(457,010	)			(443,424	)			(414,956	)
Loans, net			43,587,929				43,272,929				39,754,194
Cash surrender value of bank-owned life insurance			1,094,072				1,089,280				1,075,175
Premises, equipment, and software, net			367,089				370,632				386,631
Goodwill			452,390				452,390				452,390
Other intangible assets, net			25,267				27,124				33,478
Other assets			2,545,813				2,471,638				1,977,156
Total assets		$	61,840,025			$	59,731,378			$	56,419,549
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest-bearing deposits		$	14,642,677			$	15,639,899			$	16,611,344
Interest-bearing deposits			35,311,259				33,231,660				32,044,900
Total deposits			49,953,936				48,871,559				48,656,244
Federal funds purchased and securities sold under repurchase agreements			195,695				146,588				501,124
Other short-term borrowings			253,152				603,384				400,389
Long-term debt			5,146,252				4,109,597				805,259
Other liabilities			1,520,860				1,524,449				1,231,898
Total liabilities			57,069,895				55,255,577				51,594,914
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 170,713,864, 170,141,492 and 169,912,021 respectively; outstanding 146,059,006, 145,486,634 and 145,334,763 respectively			170,714				170,141				169,912
Additional paid-in capital			3,925,449				3,920,346				3,899,269
Treasury stock, at cost; 24,654,858, 24,654,858, and 24,577,258 shares, respectively			(944,484	)			(944,484	)			(941,168	)
Accumulated other comprehensive income (loss), net			(1,289,327	)			(1,442,117	)			(662,065	)
Retained earnings			2,370,633				2,234,770				1,821,542
Total shareholders’ equity			4,770,130				4,475,801				4,824,635
Total liabilities and shareholders' equity		$	61,840,025			$	59,731,378			$	56,419,549

Synovus
AVERAGE BALANCES, INTEREST, AND YIELDS/RATES
(Unaudited)
		First Quarter 2023											Fourth Quarter 2022											First Quarter 2022
(dollars in thousands)		Average Balance				Interest				Yield/ Rate			Average Balance				Interest				Yield/ Rate			Average Balance				Interest				Yield/ Rate
Assets
Interest earning assets:
Commercial loans (1) (2) (3)		$	35,030,809			$	526,529			6.10	%		$	34,103,384			$	474,439			5.52	%		$	30,756,752			$	280,588			3.70	%
Consumer loans (1) (2)			8,762,631				104,147			4.78				9,041,520				101,905			4.50				8,594,009				81,368			3.81
Less: Allowance for loan losses			(445,192	)			—			—				(427,525	)			—			—				(423,953	)			—			—
Loans, net			43,348,248				630,676			5.89				42,717,379				576,344			5.36				38,926,808				361,956			3.76
Investment securities available for sale			11,293,958				61,054			2.16				11,296,449				58,840			2.08				11,259,800				47,250			1.68
Trading account assets			11,338				124			4.39				15,552				68			1.75				9,078				39			1.73
Other earning assets(4)			1,513,800				17,212			4.55				1,148,099				10,490			3.58				1,919,531				815			0.17
FHLB and Federal Reserve Bank stock			306,935				3,355			4.37				270,822				2,805			4.14				160,065				685			1.71
Mortgage loans held for sale			36,497				566			6.20				46,240				688			5.95				103,887				882			3.40
Other loans held for sale			443,690				5,011			4.52				514,811				6,550			4.98				597,062				5,300			3.55
Total interest earning assets			56,954,466			$	717,998			5.11	%			56,009,352			$	655,785			4.65	%			52,976,231			$	416,927			3.19	%
Cash and due from banks			643,502											651,189											548,684
Premises and equipment			370,275											375,352											398,774
Other real estate			—											—											11,759
Cash surrender value of bank-owned life insurance			1,091,080											1,085,394											1,070,886
Other assets(5)			1,074,238											842,130											1,849,564
Total assets		$	60,133,561										$	58,963,417										$	56,855,898
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing demand deposits		$	9,088,533			$	23,218			1.04	%		$	8,627,386			$	14,160			0.65	%		$	9,549,527			$	2,372			0.10	%
Money market accounts			14,397,683				72,618			2.05				14,771,308				46,671			1.25				16,045,627				5,349			0.14
Savings deposits			1,370,173				211			0.06				1,450,153				176			0.05				1,460,648				67			0.02
Time deposits			3,601,288				21,496			2.42				2,567,979				7,648			1.18				3,009,795				2,138			0.29
Brokered deposits			5,553,970				56,392			4.12				4,986,542				39,500			3.14				2,788,124				3,733			0.54
Federal funds purchased and securities sold under repurchase agreements			133,360				670			2.01				141,707				437			1.21				194,352				11			0.02
Other short-term borrowings			1,677,519				18,994			4.53				660,295				6,383			3.78				4,773				—			—
Long-term debt			3,148,062				42,529			5.41				3,446,306				38,333			4.39				982,423				10,144			4.13
Total interest-bearing liabilities			38,970,588			$	236,128			2.46	%			36,651,676			$	153,308			1.66	%			34,035,269			$	23,814			0.28	%
Non-interest-bearing demand deposits			15,014,224											16,569,275											16,491,643
Other liabilities			1,522,827											1,462,394											1,144,415
Shareholders' equity			4,625,922											4,280,072											5,184,571
Total liabilities and shareholders' equity		$	60,133,561										$	58,963,417										$	56,855,898
Net interest income and net interest margin, taxable equivalent (6) (7)						$	481,870			3.43	%						$	502,477			3.56	%						$	393,113			3.01	%
Less: taxable-equivalent adjustment							1,119											1,131											865
Net interest income						$	480,751										$	501,346										$	392,248

(1)		Average loans are shown net of deferred fees and costs. NPLs are included.
(2)		Interest income includes net loan fees as follows: First Quarter 2023 — $11.5 million, Fourth Quarter 2022 — $11.7 million, and First Quarter 2022 — $20.7 million.
(3)		Reflects taxable-equivalent adjustments, using the statutory federal tax rate of 21%, in adjusting interest on tax-exempt loans to a taxable-equivalent basis.
(4)		Includes interest-bearing funds with Federal Reserve Bank, interest earning deposits with banks, and federal funds sold and securities purchased under resale agreements.
(5)		Includes average net unrealized gains/(losses) on investment securities available for sale of $(1.52) billion, $(1.69) billion, and $(247.4) million for the First Quarter 2023, Fourth Quarter 2022, and First Quarter 2022, respectively.
(6)		The net interest margin is calculated by dividing annualized net interest income-taxable equivalent by average total interest earning assets.
(7)		Net interest margin reflects Actual/Actual day count and includes other immaterial adjustments versus NIM previously reported.

Synovus
LOANS OUTSTANDING BY TYPE
(Unaudited)		Total Loans				Total Loans				Linked Quarter			Total Loans				Year/Year
(Dollars in thousands)
Loan Type		March 31, 2023				December 31, 2022				% Change			March 31, 2022				% Change
Commercial, Financial, and Agricultural		$	14,201,398			$	13,874,416			2	%		$	12,659,611			12	%
Owner-Occupied			8,398,778				8,192,240			3				7,692,714			9
Total Commercial & Industrial			22,600,176				22,066,656			2				20,352,325			11
Multi-Family			3,374,129				3,134,571			8				2,288,497			47
Hotels			1,737,163				1,708,194			2				1,593,983			9
Office Buildings			3,071,236				3,011,911			2				2,521,381			22
Shopping Centers			1,332,078				1,403,928			(5	)			1,500,768			(11	)
Warehouses			1,020,921				1,035,152			(1	)			814,756			25
Other Investment Property			1,441,303				1,350,291			7				1,327,760			9
Total Investment Properties			11,976,830				11,644,047			3				10,047,145			19
1-4 Family Construction			201,896				229,263			(12	)			229,038			(12	)
1-4 Family Investment Mortgage			394,754				387,670			2				391,636			1
Total 1-4 Family Properties			596,650				616,933			(3	)			620,674			(4	)
Commercial Development			63,004				79,889			(21	)			102,757			(39	)
Residential Development			106,872				108,661			(2	)			193,580			(45	)
Land Acquisition			253,399				200,783			26				181,162			40
Land and Development			423,275				389,333			9				477,499			(11	)
Total Commercial Real Estate			12,996,755				12,650,313			3				11,145,318			17
Consumer Mortgages			5,246,640				5,214,443			1				5,052,003			4
Home Equity			1,757,250				1,757,038			—				1,416,341			24
Credit Cards			184,595				203,612			(9	)			188,247			(2	)
Other Consumer Loans			1,259,523				1,824,291			(31	)			2,014,916			(37	)
Total Consumer			8,448,008				8,999,384			(6	)			8,671,507			(3	)
Total		$	44,044,939			$	43,716,353			1	%		$	40,169,150			10	%
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, 2023				December 31, 2022				% Change			March 31, 2022				% Change
Commercial, Financial, and Agricultural		$	94,196			$	59,307			59	%		$	64,888			45	%
Owner-Occupied			25,591				10,104			153				10,854			136
Total Commercial & Industrial			119,787				69,411			73				75,742			58
Multi-Family			1,806				1,857			(3	)			2,639			(32	)
Office Buildings			190				309			(39	)			2,205			(91	)
Shopping Centers			727				735			(1	)			915			(21	)
Warehouses			222				223			—				482			(54	)
Other Investment Property			668				349			91				1,047			(36	)
Total Investment Properties			3,613				3,473			4				7,288			(50	)
1-4 Family Construction			—				55			(100	)			55			(100	)
1-4 Family Investment Mortgage			3,515				3,067			15				2,187			61
Total 1-4 Family Properties			3,515				3,122			13				2,242			57
Commercial Development			—				—			nm				625			(100	)
Residential Development			267				267			—				407			(34	)
Land Acquisition			886				891			(1	)			1,021			(13	)
Land and Development			1,153				1,158			—				2,053			(44	)
Total Commercial Real Estate			8,281				7,753			7				11,583			(29	)
Consumer Mortgages			39,536				36,847			7				29,997			32
Home Equity			7,967				6,830			17				8,854			(10	)
Other Consumer Loans			6,889				7,220			(5	)			5,955			16
Total Consumer			54,392				50,897			7				44,806			21
Total		$	182,460			$	128,061			42	%		$	132,131			38	%

Synovus
CREDIT QUALITY DATA
(Unaudited)
(Dollars in thousands)		2023				2022												First Quarter
		First				Fourth			Third			Second			First			'23 vs '22
		Quarter				Quarter			Quarter			Quarter			Quarter			% Change
Non-performing Loans (NPLs)		$	182,460			128,061			122,094			109,024			132,131			38	%
Impaired Loans Held for Sale			—			—			447			—			—			nm
Other Real Estate and Other Assets			—			15,320			15,320			26,759			26,759			(100	)
Non-performing Assets (NPAs)			182,460			143,381			137,861			135,783			158,890			15
Allowance for Loan Losses (ALL)			457,010			443,424			421,359			407,837			414,956			10
Reserve for Unfunded Commitments			57,473			57,455			57,936			50,559			47,317			21
Allowance for Credit Losses (ACL)			514,483			500,879			479,295			458,396			462,273			11
Net Charge-Offs - Quarter			18,550			13,300			4,682			16,565			18,609
Net Charge-Offs - YTD			18,550			53,156			39,856			35,174			18,609
Net Charge-Offs / Average Loans - Quarter (1)			0.17	%		0.12			0.04			0.16			0.19
Net Charge-Offs / Average Loans - YTD (1)			0.17			0.13			0.13			0.18			0.19
NPLs / Loans			0.41			0.29			0.29			0.26			0.33
NPAs / Loans, ORE and specific other assets			0.41			0.33			0.32			0.33			0.40
ACL/Loans			1.17			1.15			1.13			1.11			1.15
ALL/Loans			1.04			1.01			0.99			0.99			1.03
ACL/NPLs			281.97			391.13			392.56			420.45			349.86
ALL/NPLs			250.47			346.26			345.11			374.08			314.05
Past Due Loans over 90 days and Still Accruing		$	3,529			3,373			3,443			2,251			3,067			15
As a Percentage of Loans Outstanding			0.01	%		0.01			0.01			0.01			0.01
Total Past Due Loans and Still Accruing		$	55,053			65,568			63,545			56,160			45,385			21
As a Percentage of Loans Outstanding			0.12	%		0.15			0.15			0.14			0.11
(1) Ratio is annualized.
SELECTED CAPITAL INFORMATION (1)
(Unaudited)
(Dollars in thousands)
		March 31, 2023				December 31, 2022			March 31, 2022
Common Equity Tier 1 Capital Ratio			9.76	%		9.63			9.49
Tier 1 Capital Ratio			10.79			10.68			10.63
Total Risk-Based Capital Ratio			12.69			12.54			12.56
Tier 1 Leverage Ratio			9.14			9.07			8.87
Total Shareholders' Equity as a Percentage of Total Assets			7.71			7.49			8.55
Tangible Common Equity Ratio (2) (4)			6.12			5.84			6.80
Book Value Per Common Share (3)		$	28.98			27.07			29.50
Tangible Book Value Per Common Share (2)			25.71			23.78			26.16
(1) Current quarter regulatory capital information is preliminary.
(2) Excludes the carrying value of goodwill and other intangible assets from common equity and total assets.
(3) Book Value Per Common Share consists of Total Shareholders' Equity less Preferred Stock divided by total common shares outstanding.
(4) See "Non-GAAP Financial Measures" for applicable reconciliation.

 

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Investor Relations

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Source: Synovus Financial Corp.

FAQ

What were Synovus Financial's earnings results for Q1 2023?

Synovus reported a net income of $193.9 million, or $1.32 per diluted share, for Q1 2023.

How did total revenue perform for Synovus in Q1 2023?

Total revenue for Synovus in Q1 2023 was $613.9 million, representing a 23% increase year-over-year.

What is the current loan growth for Synovus in Q1 2023?

Synovus saw total loans increase by $328.6 million sequentially, reaching $44.04 billion.

What is the CET1 capital ratio for Synovus as of Q1 2023?

As of Q1 2023, Synovus's CET1 capital ratio improved to 9.76%.

What challenges did Synovus face regarding net interest income in Q1 2023?

Net interest income for Synovus declined 4% sequentially to $480.8 million due to rising deposit costs.