Synovus Announces Earnings for the First Quarter 2022

Rhea-AI Summary

Synovus Financial Corp. (NYSE: SNV) reported Q1 2022 results, showing diluted earnings per share of $1.11, down from $1.19 in Q1 2021. Net income fell to $162.7 million primarily due to increased provisions for credit losses. Total loans increased by 11% annualized, reaching $40.17 billion, while core transaction deposits rose by 4% annualized. Adjusted pre-provision net revenue was $213 million, up 9% year-over-year, supported by a 10% growth in net interest income excluding PPP fees. The company increased its 2022 financial expectations amidst a challenging landscape.

Positive

• 11% annualized loan growth totaling $40.17 billion.
• Adjusted pre-provision net revenue up 9% year-over-year to $213 million.
• Core transaction deposits grew 4% annualized, indicating strong customer retention.

Negative

• Net income of $162.7 million down $16 million year-over-year.
• Diluted EPS decreased by $0.08 compared to prior year.
• Increased provision for credit losses impacting net income.

Diluted Earnings per Share of $1.11 vs. $1.19 in 1Q21

Adjusted Diluted Earnings per Share of $1.08 vs. $1.21 in 1Q21

COLUMBUS, Ga.--(BUSINESS WIRE)-- Synovus Financial Corp. (NYSE: SNV) today reported financial results for the quarter ended March 31, 2022. “Performance during the first quarter reflects strong execution against our profitable growth objectives, evidenced by 11 percent annualized loan growth and adjusted pre-provision net revenue of $213 million, up 9% year-over-year,” said Synovus President and CEO Kevin Blair. “In a rapidly changing landscape that presented new challenges, our team excelled, enabling an increase in our financial expectations for 2022. Leveraging the strength of our core franchise while leaning into our solid, transformational growth plan, we will enhance performance throughout the year while proactively pursuing new and expanded sources of revenue. I remain confident in the strength and capabilities of our team and our ability to achieve sustainable top quartile performance.”

First Quarter 2022 Highlights

• Net income available to common shareholders of $162.7 million, or $1.11 per diluted share, down $0.20 sequentially and down $0.08 compared to prior year.
  • Adjusted diluted EPS of $1.08, down $0.27 sequentially and down $0.13 compared to prior year. Year-over-year decline was primarily due to increased provision for credit losses.
• Period-end loans increased $857.2 million sequentially, and $1.05 billion, or 11.0% annualized, excluding Paycheck Protection program (PPP) loans.
• Core transaction deposits (non-interest bearing, NOW/savings, and money market deposits excluding public and brokered funds) increased $405.0 million sequentially, or 4% annualized, largely due to growth in non-interest bearing and savings deposits.
  • Total deposit costs of 0.11% down 1 bp sequentially primarily due to mix optimization.
• Pre-provision net revenue of $225.1 million increased $7.5 million, or 3%, compared to prior year.
  • Adjusted pre-provision net revenue of $213.4 million increased $17.3 million, or 9%, compared to prior year driven primarily by growth in net interest income excluding PPP fees of over $36 million, or 10%.

First Quarter Summary

		Reported												Adjusted
(dollars in thousands)		1Q22				4Q21				1Q21				1Q22				4Q21				1Q21
Net income available to common shareholders		$	162,746			$	192,110			$	178,802			$	158,368			$	198,373			$	180,685
Diluted earnings per share			1.11				1.31				1.19				1.08				1.35				1.21
Total loans			40,169,150				39,311,958				38,805,101				N/A				N/A				N/A
Total deposits			48,656,244				49,427,276				47,368,951				N/A				N/A				N/A
Total TE(1) revenue			498,447				510,265				485,587				499,742				509,040				486,785
Return on avg assets			1.22	%			1.40	%			1.40	%			1.19	%			1.44	%			1.41	%
Return on avg common equity			14.20				16.11				15.77				13.82				16.64				15.93
Return on avg tangible common equity			16.02				18.14				17.85				15.59				18.72				18.04
Net interest margin			3.00				2.96				3.04				N/A				N/A				N/A
Efficiency ratio-TE(1)			54.66				57.85				55.01				55.50				55.64				54.12
NCO ratio-QTD			0.19				0.11				0.21				N/A				N/A				N/A
NPA ratio			0.40				0.40				0.50				N/A				N/A				N/A
(1) Taxable equivalent

Balance Sheet

Loans*
(dollars in millions)		1Q22			4Q21			Linked Quarter Change				Linked Quarter % Change			1Q21			Year/Year Change			Year/Year % Change
Commercial & industrial		$	20,352.3		$	19,622.9		$	729.4			4	%		$	19,779.6		$	572.7		3	%
Commercial real estate			11,145.3			11,015.1			130.2			1				10,533.9			611.4		6
Consumer			8,671.5			8,673.9			(2.4	)		—				8,491.6			179.9		2
Total loans		$	40,169.2		$	39,312.0		$	857.2			2	%		$	38,805.1		$	1,364.0		4	%
*Amounts may not total due to rounding

• Total loans ended the quarter at $40.17 billion, up $857.2 million sequentially, and $1.05 billion, or 11.0% annualized, excluding PPP loans.
• Commercial and industrial (C&I) loans increased $729.4 million sequentially, led by broad based growth within our Wholesale Banking segment, partially offset by declines in PPP loan balances of $196.7 million.
• CRE loans increased $130.2 million, with payoff activity down from elevated levels seen in the second half of 2021.
• Consumer loans decreased $2.4 million sequentially.

Deposits*
(dollars in millions)		1Q22			4Q21			Linked Quarter Change				Linked Quarter % Change			1Q21			Year/Year Change				Year/Year % Change
Non-interest-bearing DDA		$	15,526.7		$	15,242.8		$	283.8			2	%		$	13,742.1		$	1,784.6			13	%
Interest-bearing DDA			6,685.4			6,347.0			338.4			5				5,841.7			843.6			14
Money market			14,596.9			14,886.4			(289.5	)		(2	)			13,943.7			653.2			5
Savings			1,476.7			1,404.4			72.3			5				1,277.0			199.7			16
Public funds			6,048.7			6,284.6			(235.8	)		(4	)			6,154.9			(106.2	)		(2	)
Time deposits			2,284.2			2,427.1			(142.9	)		(6	)			3,214.8			(930.6	)		(29	)
Brokered deposits			2,037.7			2,835.0			(797.3	)		(28	)			3,194.7			(1,157.0	)		(36	)
Total deposits		$	48,656.2		$	49,427.3		$	(771.0	)		(2	)%		$	47,369.0		$	1,287.3			3	%
*Amounts may not total due to rounding

• Total deposits ended the quarter at $48.66 billion, down $771.0 million sequentially.
• Core transaction deposits increased $405.0 million sequentially, or 4% annualized.
  • Growth of $283.8 million in non-interest bearing deposits and $72.3 million in savings deposits.
• Total deposit costs declined 1 bp sequentially to 0.11% due to mix optimization.

Income Statement Summary**
(in thousands, except per share data)		1Q22			4Q21				Linked Quarter Change				Linked Quarter % Change			1Q21				Year/Year Change				Year/Year % Change
Net interest income		$	392,248		$	392,313			$	(65	)		—	%		$	373,857			$	18,391			5	%
Non-interest revenue			105,334			117,068				(11,734	)		(10	)			110,956				(5,622	)		(5	)
Non-interest expense			272,450			295,207				(22,757	)		(8	)			267,134				5,316			2
Provision for (reversal of) credit losses			11,400			(55,210	)			66,610			nm				(18,575	)			29,975			nm
Income before taxes		$	213,732		$	269,384			$	(55,652	)		(21	)%		$	236,254			$	(22,522	)		(10	)%
Income tax expense			42,695			68,983				(26,288	)		(38	)			49,161				(6,466	)		(13	)
Preferred stock dividends			8,291			8,291				—			—				8,291				—			—
Net income available to common shareholders		$	162,746		$	192,110			$	(29,364	)		(15	)%		$	178,802			$	(16,056	)		(9	)%
Weighted average common shares outstanding, diluted			146,665			146,793				(128	)		—	%			149,780				(3,115	)		(2	)%
Diluted earnings per share		$	1.11		$	1.31			$	(0.20	)		(15	)		$	1.19			$	(0.08	)		(7	)
Adjusted diluted earnings per share			1.08			1.35				(0.27	)		(20	)			1.21				(0.13	)		(11	)
** Amounts may not total due to rounding

Core Performance

• Net interest income of $392.2 million was flat sequentially, despite lower day count and PPP fees, and increased $18.4 million, or 5%, compared to prior year.
  • Net PPP fee accretion of $6.9 million, down $5.8 million sequentially and down $18.0 million year-over-year.
  • Net interest margin was 3.00%, up 4 bps sequentially, aided by efficient balance sheet management.
• Non-interest revenue decreased $11.7 million, or 10%, sequentially and decreased $5.6 million, or 5%, compared to prior year. Adjusted non-interest revenue decreased $9.2 million, or 8%, sequentially and decreased $5.5 million, or 5%, compared to prior year.
  • Quarter-over-quarter decline was primarily related to an $8 million BOLI benefit in the previous quarter.
  • Year-over-year decline was primarily due to lower mortgage banking income resulting from increasing mortgage rates and lower refinancing volumes.
• Non-interest expense decreased $22.8 million, or 8%, sequentially and increased $5.3 million, or 2%, compared to prior year. Adjusted non-interest expense decreased $6.1 million, or 2%, sequentially and increased $13.7 million, or 5%, compared to prior year.
  • Quarter-over-quarter decline was a result of prudent expense management and the normalization of expense from an unusually high fourth quarter of 2021.
  • Year-over-year increase was primarily due to incentives and costs associated with elevated performance.
• Credit quality ratios remain strong and near historical lows. The net charge-off ratio for the quarter was 0.19%; both the non-performing loan and asset ratios remained flat at 0.33% and 0.40%, respectively; and total past dues were 0.11% of total loans outstanding.
• Provision for credit losses of $11.4 million compared to a reversal of provision for credit losses of $55.2 million for the fourth quarter of 2021; allowance for credit losses coverage ratio (to loans) of 1.15%, a decline of 4 bps sequentially. Drivers of the decline included positive trends in our credit performance and loan mix mostly offset by economic uncertainty which slowed the pace of the allowance decline this quarter.
• The effective tax rate was 19.98% for the quarter.

Capital Ratios
		1Q22				4Q21			1Q21
Common equity Tier 1 capital (CET1) ratio		9.47	%	*		9.50	%		9.74	%
Tier 1 capital ratio		10.60		*		10.66			10.99
Total risk-based capital ratio		12.53		*		12.61			13.34
Tier 1 leverage ratio		8.87		*		8.72			8.80
Tangible common equity ratio		6.80				7.52			7.55
* Ratios are preliminary.

Capital

• Preliminary CET1 ratio declined 3 bps during the quarter to 9.47%, and the preliminary total risk-based capital ratio of 12.53% declined 8 bps from the previous quarter as capital generated through earnings helped offset the impact of loan growth and a $0.34 dividend for common shareholders.

First Quarter Earnings Conference Call

Synovus will host an earnings highlights conference call at 8:30 a.m. EDT on April 21, 2022. 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 $56 billion in assets. Synovus provides commercial and retail 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, and international banking through 272 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, 2021, 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 pre-provision net revenue; 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; pre-provision net revenue; 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 TE revenue and non-interest revenue exclusive of net investment securities gains (losses) and fair value adjustment on non-qualified deferred compensation. 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 pre-provision net revenue is used by management to evaluate pre-tax earnings exclusive of provision for credit losses, which can vary significantly, and other items that management believes are not indicative of ongoing operations and affect period-to-period comparisons. 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)		1Q22				4Q21				1Q21
Adjusted non-interest revenue
Total non-interest revenue		$	105,334			$	117,068			$	110,956
Subtract/add: Investment securities (gains) losses, net			—				(230	)			1,990
Subtract/add: Fair value adjustment on non-qualified deferred compensation			1,295				(995	)			(792	)
Adjusted non-interest revenue		$	106,629			$	115,843			$	112,154
Adjusted non-interest expense
Total non-interest expense		$	272,450			$	295,207			$	267,134
Subtract/add: Restructuring charges			6,424				(5,958	)			(531	)
Subtract: Valuation adjustment to Visa derivative			—				(2,656	)			—
Subtract: Loss on early extinguishment of debt, net			(677	)			—				—
Subtract/add: Fair value adjustment on non-qualified deferred compensation			1,295				(995	)			(792	)
Adjusted non-interest expense		$	279,492			$	285,598			$	265,811
Reconciliation of Non-GAAP Financial Measures, continued
(dollars in thousands)		1Q22				4Q21				1Q21
Total adjusted revenue and adjusted tangible efficiency ratio
Adjusted non-interest expense		$	279,492			$	285,598			$	265,811
Subtract: Amortization of intangibles			(2,118	)			(2,379	)			(2,379	)
Adjusted tangible non-interest expense		$	277,374			$	283,219			$	263,432
Net interest income		$	392,248			$	392,313			$	373,857
Add: Tax equivalent adjustment			865				884				774
Add: Total non-interest revenue			105,334				117,068				110,956
Total TE revenue			498,447				510,265				485,587
Subtract/add: Investment securities (gains) losses, net			—				(230	)			1,990
Subtract/add: Fair value adjustment on non-qualified deferred compensation			1,295				(995	)			(792	)
Total adjusted revenue		$	499,742			$	509,040			$	486,785
Efficiency ratio-TE			54.66	%			57.85	%			55.01	%
Adjusted tangible efficiency ratio			55.50				55.64				54.12
Adjusted pre-provision net revenue
Net interest income		$	392,248			$	392,313			$	373,857
Add: Total non-interest revenue			105,334				117,068				110,956
Subtract: Non-interest expense			272,450				295,207				267,134
Pre-provision net revenue		$	225,132			$	214,174			$	217,679
Total adjusted revenue		$	499,742			$	509,040			$	486,785
Subtract: Adjusted non-interest expense			279,492				285,598				265,811
Subtract: PPP fees			6,885				12,684				24,890
Adjusted pre-provision net revenue		$	213,365			$	210,758			$	196,084

Adjusted return on average assets
Net income		$	171,037			$	200,401			$	187,093
Add/subtract: Restructuring charges			(6,424	)			5,958				531
Add: Valuation adjustment to Visa derivative			—				2,656				—
Add: Loss on early extinguishment of debt, net			677				—				—
Subtract/add: Investment securities (gains) losses, net			—				(230	)			1,990
Add/subtract: Tax effect of adjustments (1)			1,369				(2,121	)			(638	)
Adjusted net income		$	166,659			$	206,664			$	188,976
Net income annualized		$	693,650			$	795,069			$	758,766
Adjusted net income annualized		$	675,895			$	819,917			$	766,403
Total average assets		$	56,855,898			$	56,911,929			$	54,188,504
Return on average assets			1.22	%			1.40	%			1.40	%
Adjusted return on average assets			1.19				1.44				1.41
Reconciliation of Non-GAAP Financial Measures, continued
(dollars in thousands)		1Q22				4Q21				1Q21
Adjusted net income available to common shareholders and adjusted diluted earnings per share
Net income available to common shareholders		$	162,746			$	192,110			$	178,802
Add/subtract: Restructuring charges			(6,424	)			5,958				531
Add: Valuation adjustment to Visa derivative			—				2,656				—
Add: Loss on early extinguishment of debt, net			677				—				—
Subtract/add: Investment securities (gains) losses, net			—				(230	)			1,990
Add/subtract: Tax effect of adjustments (1)			1,369				(2,121	)			(638	)
Adjusted net income available to common shareholders		$	158,368			$	198,373			$	180,685
Weighted average common shares outstanding, diluted			146,665				146,793				149,780
Diluted earnings per share		$	1.11			$	1.31			$	1.19
Adjusted diluted earnings per share			1.08				1.35				1.21

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		$	162,746			$	192,110			$	178,802
Add/subtract: Restructuring charges			(6,424	)			5,958				531
Add: Valuation adjustment to Visa derivative			—				2,656				—
Add: Loss on early extinguishment of debt, net			677				—				—
Subtract/add: Investment securities (gains) losses, net			—				(230	)			1,990
Add/subtract: Tax effect of adjustments (1)			1,369				(2,121	)			(638	)
Adjusted net income available to common shareholders		$	158,368			$	198,373			$	180,685
Adjusted net income available to common shareholders annualized		$	642,270			$	787,023			$	732,778
Add: Amortization of intangibles, annualized net of tax			6,543				7,050				7,207
Adjusted net income available to common shareholders excluding amortization of intangibles annualized		$	648,813			$	794,073			$	739,985
Net income available to common shareholders annualized		$	660,025			$	762,176			$	725,141
Add: Amortization of intangibles, annualized net of tax			6,543				7,050				7,207
Net income available to common shareholders excluding amortization of intangibles annualized		$	666,568			$	769,226			$	732,348
Total average shareholders' equity less preferred stock		$	4,647,426			$	4,730,828			$	4,599,076
Subtract: Goodwill			(452,390	)			(452,390	)			(452,390	)
Subtract: Other intangible assets, net			(34,576	)			(36,805	)			(44,005	)
Total average tangible shareholders' equity less preferred stock		$	4,160,460			$	4,241,633			$	4,102,681
Return on average common equity			14.20	%			16.11	%			15.77	%
Adjusted return on average common equity			13.82				16.64				15.93
Return on average tangible common equity			16.02				18.14				17.85
Adjusted return on average tangible common equity			15.59				18.72				18.04

Reconciliation of Non-GAAP Financial Measures, continued
(dollars in thousands)		March 31, 2022				December 31, 2021				March 31, 2021
Tangible common equity ratio
Total assets		$	56,419,549			$	57,317,226			$	55,159,011
Subtract: Goodwill			(452,390	)			(452,390	)			(452,390	)
Subtract: Other intangible assets, net			(33,478	)			(35,596	)			(42,733	)
Tangible assets		$	55,933,681			$	56,829,240			$	54,663,888
Total shareholders’ equity		$	4,824,635			$	5,296,800			$	5,161,717
Subtract: Goodwill			(452,390	)			(452,390	)			(452,390	)
Subtract: Other intangible assets, net			(33,478	)			(35,596	)			(42,733	)
Subtract: Preferred Stock, no par value			(537,145	)			(537,145	)			(537,145	)
Tangible common equity		$	3,801,622			$	4,271,669			$	4,129,449
Total shareholders’ equity to total assets ratio			8.55	%			9.24	%			9.36	%
Tangible common equity ratio			6.80				7.52				7.55
(1) An assumed marginal tax rate of 23.8% for 2022 and 25.3% for 2021 was applied.

Synovus
INCOME STATEMENT DATA
(Unaudited)
(Dollars in thousands, except per share data)	2022				2021												First Quarter
	First				Fourth			Third			Second			First			'22 vs '21
	Quarter				Quarter			Quarter			Quarter			Quarter			% Change
Interest income	$	416,062			418,279			412,504			412,743			409,817			2	%
Interest expense		23,814			25,966			27,587			30,883			35,960			(34	)
Net interest income		392,248			392,313			384,917			381,860			373,857			5
Provision for (reversal of) credit losses		11,400			(55,210	)		(7,868	)		(24,598	)		(18,575	)		nm
Net interest income after provision for credit losses		380,848			447,523			392,785			406,458			392,432			(3	)
Non-interest revenue:
Service charges on deposit accounts		22,539			22,221			22,641			21,414			20,033			13
Fiduciary and asset management fees		20,277			20,602			19,786			18,805			17,954			13
Card fees		14,756			12,861			13,238			13,304			11,996			23
Brokerage revenue		14,655			14,795			14,745			13,926			12,974			13
Mortgage banking income		5,953			7,059			11,155			13,842			22,315			(73	)
Capital markets income		5,472			7,188			8,089			3,335			7,505			(27	)
Income from bank-owned life insurance		6,556			15,168			6,820			7,188			8,843			(26	)
Investment securities gains (losses), net		—			230			962			—			(1,990	)		nm
Other non-interest revenue		15,126			16,944			17,519			15,273			11,326			34
Total non-interest revenue		105,334			117,068			114,955			107,087			110,956			(5	)
Non-interest expense:
Salaries and other personnel expense		164,684			167,018			160,364			160,567			161,477			2
Net occupancy, equipment, and software expense		42,877			42,780			43,483			41,825			41,134			4
Third-party processing and other services		20,996			22,791			19,446			24,419			20,032			5
Professional fees		8,474			9,014			6,739			7,947			9,084			(7	)
FDIC insurance and other regulatory fees		6,250			6,016			5,212			5,547			5,579			12
Restructuring charges		(6,424	)		5,958			319			415			531			nm
Other operating expenses		35,593			41,630			31,469			29,811			29,297			21
Total non-interest expense		272,450			295,207			267,032			270,531			267,134			2
Income before income taxes		213,732			269,384			240,708			243,014			236,254			(10	)
Income tax expense		42,695			68,983			53,935			56,814			49,161			(13	)
Net income		171,037			200,401			186,773			186,200			187,093			(9	)
Less: Preferred stock dividends		8,291			8,291			8,291			8,291			8,291			—
Net income available to common shareholders	$	162,746			192,110			178,482			177,909			178,802			(9	)%
Net income per common share, basic	$	1.12			1.32			1.22			1.20			1.20			(7	)%
Net income per common share, diluted		1.11			1.31			1.21			1.19			1.19			(7	)
Cash dividends declared per common share		0.34			0.33			0.33			0.33			0.33			3
Return on average assets *		1.22	%		1.40			1.34			1.36			1.40			(18) bps
Return on average common equity *		14.20			16.11			14.96			15.40			15.77			(157	)
Weighted average common shares outstanding, basic		145,273			145,316			146,308			148,113			148,467			(2	)%
Weighted average common shares outstanding, diluted		146,665			146,793			147,701			149,747			149,780			(2	)
nm - not meaningful
bps - basis points
* - ratios are annualized

Synovus
BALANCE SHEET DATA		March 31, 2022				December 31, 2021				March 31, 2021
(Unaudited)
(In thousands, except share data)
ASSETS
Cash and due from banks		$	557,178			$	432,925			$	493,645
Interest-bearing funds with Federal Reserve Bank			941,272				2,479,006				2,722,100
Interest earning deposits with banks			27,411				25,535				23,969
Federal funds sold and securities purchased under resale agreements			27,642				72,387				88,552
Cash, cash equivalents, and restricted cash			1,553,503				3,009,853				3,328,266
Investment securities available for sale, at fair value			10,463,101				10,918,329				8,825,757
Loans held for sale ($111,992, $108,198, and $242,010 measured at fair value, respectively)			723,921				750,642				993,887
Loans, net of deferred fees and costs			40,169,150				39,311,958				38,805,101
Allowance for loan losses			(414,956	)			(427,597	)			(563,214	)
Loans, net			39,754,194				38,884,361				38,241,887
Cash surrender value of bank-owned life insurance			1,075,175				1,068,616				1,054,475
Premises, equipment, and software, net			386,631				407,241				454,911
Goodwill			452,390				452,390				452,390
Other intangible assets, net			33,478				35,596				42,733
Other assets			1,977,156				1,790,198				1,764,705
Total assets		$	56,419,549			$	57,317,226			$	55,159,011
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest-bearing deposits		$	16,611,344			$	16,392,653			$	14,660,287
Interest-bearing deposits			32,044,900				33,034,623				32,708,664
Total deposits			48,656,244				49,427,276				47,368,951
Federal funds purchased and securities sold under repurchase agreements			501,124				264,133				293,659
Long-term debt			805,259				1,204,229				1,202,825
Other liabilities			1,632,287				1,124,788				1,131,859
Total liabilities			51,594,914				52,020,426				49,997,294
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 169,912,021, 169,383,758, and 168,978,380; outstanding 145,334,763, 145,010,086, and 148,888,513			169,912				169,384				168,978
Additional paid-in capital			3,899,269				3,894,109				3,864,281
Treasury stock, at cost – 24,577,258, 24,373,672, and 20,089,867 shares			(941,168	)			(931,497	)			(731,690	)
Accumulated other comprehensive income (loss), net			(662,065	)			(82,321	)			15,278
Retained earnings			1,821,542				1,709,980				1,307,725
Total shareholders’ equity			4,824,635				5,296,800				5,161,717
Total liabilities and shareholders' equity		$	56,419,549			$	57,317,226			$	55,159,011

Synovus
AVERAGE BALANCES, INTEREST, AND YIELDS/RATES
(Unaudited)
	First Quarter 2022										Fourth Quarter 2021										First Quarter 2021
(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)	$	30,756,752			$	280,588		3.70	%		$	29,685,876			$	286,513		3.83	%		$	29,924,651			$	291,200		3.95	%
Consumer loans (1) (2)		8,594,009				81,368		3.81				8,679,721				83,836		3.89				8,287,616				82,065		3.83
Less: Allowance for loan losses		(423,953	)			—		—				(474,972	)			—		—				(599,872	)			—		—
Loans, net		38,926,808				361,956		3.76				37,890,625				370,349		3.88				37,612,395				373,265		4.02
Investment securities available for sale		11,259,800				47,250		1.68				10,884,571				41,447		1.52				8,437,563				29,458		1.40
Trading account assets		9,078				39		1.73				11,280				42		1.50				3,063				22		2.81
Other earning assets(4)		1,919,531				815		0.17				3,186,271				1,208		0.15				2,838,063				716		0.10
FHLB and Federal Reserve Bank stock		160,065				685		1.71				159,933				919		2.30				157,657				668		1.69
Mortgage loans held for sale		103,887				882		3.40				130,786				1,009		3.09				246,962				1,657		2.68
Other loans held for sale		597,062				5,300		3.55				518,992				4,189		3.16				660,753				4,805		2.91
Total interest earning assets		52,976,231			$	416,927		3.18	%			52,782,458			$	419,163		3.16	%			49,956,456			$	410,591		3.32	%
Cash and due from banks		548,684										541,788										518,738
Premises and equipment		398,774										421,577										460,466
Other real estate		11,759										1,351										1,823
Cash surrender value of bank-owned life insurance		1,070,886										1,067,004										1,051,520
Other assets(5)		1,849,564										2,097,751										2,199,501
Total assets	$	56,855,898									$	56,911,929									$	54,188,504
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing demand deposits	$	9,549,527			$	2,372		0.10	%		$	9,165,054			$	2,238		0.10	%		$	8,570,753			$	2,973		0.14	%
Money market accounts		16,045,627				5,349		0.14				15,998,203				5,562		0.14				15,348,916				8,730		0.23
Savings deposits		1,460,648				67		0.02				1,408,858				65		0.02				1,219,288				49		0.02
Time deposits		3,009,795				2,138		0.29				3,163,062				2,599		0.33				4,155,302				7,042		0.69
Brokered deposits		2,788,124				3,733		0.54				2,836,841				3,980		0.56				3,369,333				6,224		0.75
Federal funds purchased and securities sold under repurchase agreements		194,352				11		0.02				227,664				24		0.04				209,448				34		0.07
Other short-term borrowings		4,653				—		—				—				—		—				—				—		—
Long-term debt		982,423				10,144		4.13				1,203,959				11,498		3.82				1,202,613				10,908		3.63
Total interest-bearing liabilities		34,035,149			$	23,814		0.28	%			34,003,641			$	25,966		0.30	%			34,075,653			$	35,960		0.42	%
Non-interest-bearing demand deposits		16,491,643										16,545,203										13,791,286
Other liabilities		1,144,535										1,095,112										1,185,344
Shareholders' equity		5,184,571										5,267,973										5,136,221
Total liabilities and shareholders' equity	$	56,855,898									$	56,911,929									$	54,188,504
Net interest income and net interest margin, taxable equivalent (6)					$	393,113		3.00	%						$	393,197		2.96	%						$	374,631		3.04	%
Less: taxable-equivalent adjustment						865										884										774
Net interest income					$	392,248									$	392,313									$	373,857

(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 2022 — $20.7 million, Fourth Quarter 2021 — $24.7 million, and First Quarter 2021 — $31.9 million.
(3)		Reflects taxable-equivalent adjustments, using the statutory federal tax rate of 21%, in adjusting interest on tax-exempt loans and investment securities 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 $(247.4) million, $(34.2) million, and $116.1 million for the First Quarter 2022, Fourth Quarter 2021, and First Quarter 2021, respectively.
(6)		The net interest margin is calculated by dividing annualized net interest income-taxable equivalent by average total interest earning assets.

Synovus
LOANS OUTSTANDING BY TYPE
(Unaudited)		Total Loans			Total Loans			Linked Quarter			Total Loans			Year/Year
(Dollars in thousands)
Loan Type		March 31, 2022			December 31, 2021			% Change			March 31, 2021			% Change
Commercial, Financial, and Agricultural		$	12,659,611		$	12,147,858		4	%		$	12,748,106		(1	)%
Owner-Occupied			7,692,714			7,475,066		3				7,031,505		9
Total Commercial & Industrial			20,352,325			19,622,924		4				19,779,611		3
Multi-Family			2,288,497			2,129,424		7				2,220,939		3
Hotels			1,593,983			1,537,060		4				1,462,370		9
Office Buildings			2,521,381			2,511,058		—				2,280,053		11
Shopping Centers			1,500,768			1,655,465		(9	)			1,627,933		(8	)
Warehouses			814,756			801,639		2				692,267		18
Other Investment Property			1,327,760			1,268,130		5				1,052,163		26
Total Investment Properties			10,047,145			9,902,776		1				9,335,725		8
1-4 Family Construction			229,038			206,881		11				189,626		21
1-4 Family Investment Mortgage			391,636			438,588		(11	)			449,328		(13	)
Total 1-4 Family Properties			620,674			645,469		(4	)			638,954		(3	)
Commercial Development			102,757			102,790		—				142,380		(28	)
Residential Development			193,580			171,820		13				196,653		(2	)
Land Acquisition			181,162			192,256		(6	)			220,216		(18	)
Land and Development			477,499			466,866		2				559,249		(15	)
Total Commercial Real Estate			11,145,318			11,015,111		1				10,533,928		6
Consumer Mortgages			5,052,003			5,068,998		—				5,299,130		(5	)
Home Equity			1,416,341			1,361,419		4				1,460,866		(3	)
Credit Cards			188,247			204,172		(8	)			181,594		4
Other Consumer Loans			2,014,916			2,039,334		(1	)			1,549,972		30
Total Consumer			8,671,507			8,673,923		—				8,491,562		2
Total		$	40,169,150		$	39,311,958		2	%		$	38,805,101		4	%
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, 2022			December 31, 2021			% Change			March 31, 2021			% Change
Commercial, Financial, and Agricultural		$	64,888		$	61,787		5	%		$	76,460		(15	)%
Owner-Occupied			10,854			11,196		(3	)			17,192		(37	)
Total Commercial & Industrial			75,742			72,983		4				93,652		(19	)
Multi-Family			2,639			2,380		11				2,698		(2	)
Office Buildings			2,205			1,615		37				1,645		34
Shopping Centers			915			915		—				20,138		(95	)
Warehouses			482			223		116				221		118
Other Investment Property			1,047			717		46				887		18
Total Investment Properties			7,288			5,850		25				25,589		(72	)
1-4 Family Construction			55			55		—				1,291		(96	)
1-4 Family Investment Mortgage			2,187			4,508		(51	)			2,760		(21	)
Total 1-4 Family Properties			2,242			4,563		(51	)			4,051		(45	)
Commercial Development			625			449		39				567		10
Residential Development			407			446		(9	)			452		(10	)
Land Acquisition			1,021			1,023		—				782		31
Land and Development			2,053			1,918		7				1,801		14
Total Commercial Real Estate			11,583			12,331		(6	)			31,441		(63	)
Consumer Mortgages			29,997			29,078		3				11,201		168
Home Equity			8,854			9,773		(9	)			12,207		(27	)
Other Consumer Loans			5,955			6,877		(13	)			6,668		(11	)
Total Consumer			44,806			45,728		(2	)			30,076		49
Total		$	132,131		$	131,042		1	%		$	155,169		(15	)%

Synovus
CREDIT QUALITY DATA
(Unaudited)
(Dollars in thousands)		2022				2021								First Quarter
		First				Fourth		Third		Second		First		'22 vs '21
		Quarter				Quarter		Quarter		Quarter		Quarter		% Change
Non-performing Loans (NPLs)		$	132,131			131,042		155,465		161,028		155,169		(15	)%
Impaired Loans Held for Sale			—			—		—		—		23,590		nm
Other Real Estate and Other Assets			26,759			27,137		16,883		16,806		16,849		59
Non-performing Assets (NPAs)			158,890			158,179		172,348		177,834		195,608		(19	)
Allowance for Loan Losses (ALL)			414,956			427,597		492,243		516,708		563,214		(26	)
Reserve for Unfunded Commitments			47,317			41,885		42,971		46,890		51,528		(8	)
Allowance for Credit Losses (ACL)			462,273			469,482		535,214		563,598		614,742		(25	)
Net Charge-Offs - Quarter			18,609			10,522		20,516		26,547		20,204
Net Charge-Offs - YTD			18,609			77,788		67,266		46,750		20,204
Net Charge-Offs / Average Loans - Quarter (1)			0.19	%		0.11		0.22		0.28		0.21
Net Charge-Offs / Average Loans - YTD (1)			0.19			0.20		0.24		0.24		0.21
NPLs / Loans			0.33			0.33		0.41		0.42		0.40
NPAs / Loans, ORE and specific other assets			0.40			0.40		0.45		0.46		0.50
ACL/Loans			1.15			1.19		1.40		1.47		1.58
ALL/Loans			1.03			1.09		1.28		1.35		1.45
ACL/NPLs			349.86			358.27		344.27		350.00		396.18
ALL/NPLs			314.05			326.31		316.63		320.88		362.97
Past Due Loans over 90 days and Still Accruing		$	3,067			6,770		5,960		4,415		3,804		(19	)
As a Percentage of Loans Outstanding			0.01	%		0.02		0.02		0.01		0.01
Total Past Due Loans and Still Accruing		$	45,385			57,565		60,817		49,321		45,693		(1	)
As a Percentage of Loans Outstanding			0.11	%		0.15		0.16		0.13		0.12
Accruing Troubled Debt Restructurings (TDRs)		$	145,957			119,804		126,055		124,528		129,776		12
(1) Ratio is annualized.
SELECTED CAPITAL INFORMATION (1)
(Unaudited)
(Dollars in thousands)
		March 31,				December 31,		March 31,
		2022				2021		2021
Common Equity Tier 1 Capital Ratio			9.47	%		9.50		9.74
Tier 1 Capital Ratio			10.60			10.66		10.99
Total Risk-Based Capital Ratio			12.53			12.61		13.34
Tier 1 Leverage Ratio			8.87			8.72		8.80
Common Equity as a Percentage of Total Assets (2)			7.60			8.30		8.38
Tangible Common Equity Ratio (3) (5)			6.80			7.52		7.55
Book Value Per Common Share (4)		$	29.50			32.82		31.06
Tangible Book Value Per Common Share (3)			26.16			29.46		27.74
(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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Source: Synovus Financial Corp.

FAQ

What were Synovus Financial's earnings for Q1 2022?

Synovus Financial reported diluted earnings per share of $1.11 in Q1 2022.

How did total loans perform in Q1 2022 for SNV?

Total loans increased by 11% annualized in Q1 2022, reaching $40.17 billion.

What were the main reasons for the decline in net income for SNV in Q1 2022?

The decline in net income was primarily due to increased provision for credit losses.

What is the adjusted pre-provision net revenue for Synovus in Q1 2022?

Synovus reported adjusted pre-provision net revenue of $213 million, a 9% increase year-over-year.

How did Synovus's diluted earnings per share in Q1 2022 compare to the previous year?

Diluted EPS in Q1 2022 was $1.11, down from $1.19 in Q1 2021.