Synovus announces earnings for the first quarter 2024

Rhea-AI Summary

Synovus Financial Corp. (NYSE: SNV) reported first quarter 2024 earnings with diluted earnings per share of $0.78 vs. $1.32 in 1Q23. Adjusted diluted earnings per share were $0.79 vs. $1.33 in 1Q23. The $12.8 million FDIC Special Assessment reduced 1Q24 reported and adjusted EPS by $0.07. Net income available to common shareholders was $114.8 million, showing progress in key areas like commercial loan growth, core deposit growth, and expense control.

Positive

• Net income available to common shareholders increased to $114.8 million, or $0.78 per diluted share, compared to $60.6 million or $0.41 in the previous quarter and $193.9 million or $1.32 in the first quarter of 2023.
• Pre-provision net revenue increased by $79.2 million, or 58%, sequentially, but was down $77.0 million, or 26%, compared to the first quarter of 2023.
• Net interest income declined by $18.4 million, or 4%, compared to the prior quarter and was down $61.9 million, or 13%, compared to the first quarter of 2023.
• Non-interest revenue increased by $67.4 million, or 131%, sequentially, and declined $14.2 million, or 11%, compared to the first quarter of 2023.
• Non-interest expense declined by 9% sequentially, while adjusted non-interest expense declined by 10%.
• Provision for credit losses increased by 19% sequentially.
• The allowance for credit losses ratio (to loans) was up 2 basis points from the previous quarter.
• The preliminary CET1 ratio rose sequentially to 10.38%.
• Commercial and industrial loans increased by $132.8 million or 1% from the prior quarter and $131.1 million or 1% from the first quarter of 2023.
• Period-end core deposits increased to $44.9 billion, primarily due to time deposit growth.
• Total deposit costs increased by 17 basis points from the previous quarter to 2.67%.
• Headcount declined by 1% sequentially and 7% year over year.
• Approximately 0.17% of net charge-offs were attributable to a commercial and industrial loan relationship.
• The company experienced year-over-year growth in core banking fees and commercial sponsorship income.
• Synovus Financial Corp. will host an earnings highlights conference call on April 18, 2024.

Negative

• Net interest income declined compared to the previous quarter and the first quarter of 2023.
• Non-interest revenue declined compared to the first quarter of 2023.
• Provision for credit losses increased sequentially.
• Headcount declined year over year.
• The company experienced a decline in adjusted non-interest revenue compared to the first quarter of 2023.

Insights

Financial Analyst

The reported decline in diluted earnings per share (EPS) from $1.32 in Q1 2023 to $0.78 in Q1 2024 immediately raises a flag regarding Synovus' profitability within the period. This 41% drop is significant, even when considering the FDIC Special Assessment's $0.07 per share impact. A decline in net interest income of 13% year-over-year, coupled with a 4% dip from the previous quarter, suggests Synovus is grappling with a tightening interest margin environment. The net interest margin compression from 3.43% in Q1 2023 to 3.04% in Q1 2024 underscores this challenge. Investors should be mindful of the effect that rising deposit costs and the decline in average earning assets may have on the company's interest income going forward.

Risk Analyst

From a risk perspective, the uptick in the provision for credit losses – 68% higher than in Q1 2023 – alongside an increased non-performing loan and asset ratios, indicates a potentially rising risk environment for Synovus’ loan portfolio. These factors may reflect broader economic pressures that could affect loan repayment capabilities. While the overall allowance for credit losses ratio has only slightly increased, it will be important to monitor further changes that might affect credit quality. The preliminary Common Equity Tier 1 (CET1) ratio stands at 10.38%, which represents a stronger capital position and may provide some cushion against potential future losses.

Market Analyst

The mixed signals in deposit and loan dynamics, with period-end loans slightly decreasing while period-end core deposits modestly increased, paint a picture of cautious optimism in Synovus' ability to attract deposits amidst challenging loan demand conditions. However, a noticeable 17% year-over-year dive in non-interest bearing deposits might suggest a shift in consumer behavior or a preference for yield-bearing accounts in a rising rate environment. This shift could influence the cost of capital and potentially squeeze margins if not managed effectively.

Diluted earnings per share of $0.78 vs. $1.32 in 1Q23

Adjusted diluted earnings per share of $0.79 vs. $1.33 in 1Q23

$12.8 million FDIC Special Assessment reduced 1Q24 reported and adjusted EPS by $0.07

COLUMBUS, Ga.--(BUSINESS WIRE)-- Synovus Financial Corp. (NYSE: SNV) today reported financial results for the quarter ended March 31, 2024.

“Our first quarter results demonstrate tangible progress on our strategic priorities, including key commercial category loan and core deposit growth, client non-interest revenue growth and excellent operating expense control. We remain focused on raising the bar on service and deepening client relationships, all while building a more risk-resilient bank, which was evidenced by our highest common equity tier 1 capital ratios in several years and an over 30% decline in wholesale funding versus last year," said Synovus Chairman, CEO and President Kevin Blair.

First Quarter 2024 Highlights

• Net income available to common shareholders was $114.8 million, or $0.78 per diluted share, compared to $60.6 million or $0.41 in the fourth quarter 2023 and $193.9 million or $1.32 in first quarter 2023.
• An incremental $12.8 million FDIC Special Assessment reduced first quarter 2024 reported and adjusted EPS by $0.07. A $51.0 million FDIC Special Assessment impacted fourth quarter 2023 reported and adjusted EPS by $0.26.
• Pre-provision net revenue of $215.0 million increased $79.2 million, or 58%, sequentially and was down $77.0 million, or 26%, compared to first quarter 2023.
• Net interest income declined $18.4 million, or 4%, compared to the prior quarter and was down $61.9 million, or 13%, compared to first quarter 2023, primarily attributable to a decline in average earnings assets and higher funding costs. Net interest margin was 3.04% which compressed from the fourth quarter 2023 as higher deposit costs more than offset an increase in earning asset yields.
• Period-end loans declined $94.6 million from the fourth quarter 2023 as core commercial lending growth was more than offset by soft loan demand, higher loan paydowns and strategic declines in certain loan categories such as non-relationship syndicated lending and third-party consumer lending. Commercial and industrial loans increased $132.8 million or 1% from the prior quarter and $131.1 million or 1% from first quarter 2023.
• Period-end core deposits ended the quarter at $44.9 billion, an increase of $165.1 million sequentially primarily as a result of time deposit growth, partially offset by a decline in non-interest bearing deposits. Total deposit costs increased 17 basis points from the fourth quarter 2023 to 2.67%.
• Non-interest revenue of $118.9 million increased $67.4 million, or 131%, sequentially and declined $14.2 million, or 11%, compared to first quarter 2023. Adjusted non-interest revenue of $116.6 million fell $9.6 million, or 8%, sequentially and declined $1.0 million, or 1%, compared to the first quarter 2023. Year-over-year pressure was the result of the consumer checking program changes and GLOBALT divestiture in 2023. The company experienced year-over-year growth in core banking fees and commercial sponsorship income.
• On a sequential basis, non-interest expense of $322.7 million declined 9% while adjusted non-interest expense declined 10% to $318.9 million. Compared to the prior year, non-interest expense and adjusted non-interest expense was flat and increased 5%, respectively. All comparisons were significantly impacted by the FDIC Special Assessments in fourth quarter 2023 and first quarter 2024. Headcount declined 1% sequentially and 7% year over year. Excluding the first quarter 2024 FDIC Special Assessment, adjusted non-interest expense was relatively stable compared to first quarter 2023.
• Provision for credit losses of $54.0 million increased 19% sequentially and compares to $32.2 million in first quarter 2023. The allowance for credit losses ratio (to loans) of 1.26% was up 2 basis points from the fourth quarter 2023.
• The non-performing loan and asset ratios were slightly higher at 0.81% and 0.86%, respectively; the net charge-off ratio for the quarter was 0.41%, and total past dues were 0.13% of total loans outstanding. Approximately 0.17% of first quarter 2024 net charge-offs were attributable to an $18 million loss from a commercial and industrial loan relationship that is expected to be resolved later this month.
• The preliminary CET1 ratio rose sequentially to 10.38% as core earnings accretion more than offset the impact of $29.9 million in common stock repurchases during the first quarter 2024.

First Quarter Summary

	Reported												Adjusted
(dollars in thousands)	1Q24				4Q23				1Q23				1Q24				4Q23				1Q23
Net income available to common shareholders	$	114,822			$	60,645			$	193,868			$	115,973			$	116,901			$	195,276
Diluted earnings per share		0.78				0.41				1.32				0.79				0.80				1.33
Total revenue		537,734				488,682				613,877				536,745				564,593				599,469
Total loans		43,309,877				43,404,490				44,044,939				N/A				N/A				N/A
Total deposits		50,580,242				50,739,185				49,953,936				N/A				N/A				N/A
Return on avg assets		0.85	%			0.47	%			1.36	%			0.85	%			0.84	%			1.37	%
Return on avg common equity		10.2				5.9				19.2				10.3				11.3				19.4
Return on avg tangible common equity		11.7				7.0				21.9				11.8				13.3				22.1
Net interest margin		3.04	%			3.11	%			3.43	%			N/A				N/A				N/A
Efficiency ratio-TE(1)(2)		59.87				72.03				52.33				58.88				61.97				50.48
NCO ratio-QTD		0.41				0.38				0.17				N/A				N/A				N/A
NPA ratio		0.86				0.66				0.41				N/A				N/A				N/A

(1) Taxable equivalent

(2) Adjusted tangible efficiency ratio

N/A - not applicable

Balance Sheet

Loans*
(dollars in millions)	1Q24			4Q23			Linked Quarter Change				Linked Quarter % Change			1Q23			Year/Year Change				Year/Year % Change
Commercial & industrial	$	22,731.3		$	22,598.5		$	132.8			1	%		$	22,600.2		$	131.1			1	%
Commercial real estate		12,194.0			12,316.8			(122.7	)		(1	)			12,996.8			(802.7	)		(6	)
Consumer		8,384.6			8,489.2			(104.7	)		(1	)			8,448.0			(63.4	)		(1	)
Total loans	$	43,309.9		$	43,404.5		$	(94.6	)		—	%		$	44,044.9		$	(735.0	)		(2	)%

*Amounts may not total due to rounding

Deposits*
(dollars in millions)	1Q24			4Q23			Linked Quarter Change				Linked Quarter % Change			1Q23			Year/Year Change				Year/Year % Change
Non-interest-bearing DDA	$	11,515.4		$	11,801.2		$	(285.8	)		(2	)%		$	13,827.6		$	(2,312.2	)		(17	)%
Interest-bearing DDA		6,478.8			6,541.0			(62.1	)		(1	)			5,837.0			641.8			11
Money market		10,712.7			10,819.7			(107.0	)		(1	)			11,780.0			(1,067.2	)		(9	)
Savings		1,045.1			1,062.6			(17.5	)		(2	)			1,312.7			(267.6	)		(20	)
Public funds		7,270.4			7,349.5			(79.1	)		(1	)			6,888.2			382.2			6
Time deposits		7,838.9			7,122.2			716.7			10				4,060.3			3,778.6			93
Brokered deposits		5,718.9			6,043.0			(324.1	)		(5	)			6,248.3			(529.3	)		(8	)
Total deposits	$	50,580.2		$	50,739.2		$	(158.9	)		—	%		$	49,953.9		$	626.3			1	%

*Amounts may not total due to rounding

Income Statement Summary**
(in thousands, except per share data)	1Q24				4Q23				Linked Quarter Change				Linked Quarter % Change			1Q23				Year/Year Change				Year/Year % Change
Net interest income	$	418,846			$	437,214			$	(18,368	)		(4	)%		$	480,751			$	(61,905	)		(13	)%
Non-interest revenue		118,888				51,468				67,420			131				133,126				(14,238	)		(11	)
Non-interest expense		322,741				352,858				(30,117	)		(9	)			321,852				889			—
Provision for (reversal of) credit losses		53,980				45,472				8,508			19				32,154				21,826			68
Income before taxes	$	161,013			$	90,352			$	70,661			78	%		$	259,871			$	(98,858	)		(38	)%
Income tax expense		36,943				20,779				16,164			78				57,712				(20,769	)		(36	)
Net income		124,070				69,573				54,497			78				202,159				(78,089	)		(39	)
Less: Net income (loss) attributable to noncontrolling interest		(437	)			(768	)			331			(43	)			—				(437	)		NM
Net income attributable to Synovus Financial Corp.		124,507				70,341				54,166			77				202,159				(77,652	)		(38	)
Less: Preferred stock dividends		9,685				9,696				(11	)		—				8,291				1,394			17
Net income available to common shareholders	$	114,822			$	60,645			$	54,177			89	%		$	193,868			$	(79,046	)		(41	)%
Weighted average common shares outstanding, diluted		147,122				146,877				245			—	%			146,727				395			—	%
Diluted earnings per share	$	0.78			$	0.41			$	0.37			90			$	1.32			$	(0.54	)		(41	)
Adjusted diluted earnings per share		0.79				0.80				(0.01	)		(1	)			1.33				(0.54	)		(41	)
Effective tax rate		22.94	%			23.00	%										22.21	%

** Amounts may not total due to rounding

NM - not meaningful

Capital Ratios
	1Q24			4Q23			1Q23
Common equity Tier 1 capital (CET1) ratio	10.38	%	*	10.22	%		9.77	%
Tier 1 capital ratio	11.44		*	11.28			10.81
Total risk-based capital ratio	13.31		*	13.07			12.72
Tier 1 leverage ratio	9.62		*	9.49			9.14
Tangible common equity ratio	6.67			6.84			6.12

* Ratios are preliminary.

First Quarter Earnings Conference Call

Synovus will host an earnings highlights conference call at 8:30 a.m. ET on April 18, 2024. 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 $60 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 246 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 X, formerly known as 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, 2023, 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 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 Synovus Financial Corp. 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 total revenue exclusive of 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)	1Q24				4Q23				1Q23
Adjusted non-interest revenue
Total non-interest revenue	$	118,888			$	51,468			$	133,126
Investment securities (gains) losses, net		—				77,748				(1,030	)
Recovery of NPA		—				—				(13,126	)
Fair value adjustment on non-qualified deferred compensation		(2,299	)			(3,053	)			(1,371	)
Adjusted non-interest revenue	$	116,589			$	126,163			$	117,599
Adjusted non-interest expense
Total non-interest expense	$	322,741			$	352,858			$	321,852
(Loss) gain on other loans held for sale		—				—				(16,750	)
Gain (loss) on early extinguishment of debt		—				4,497				—
Restructuring (charges) reversals		(1,524	)			(1,231	)			733
Fair value adjustment on non-qualified deferred compensation		(2,299	)			(3,053	)			(1,371	)
Adjusted non-interest expense	$	318,918			$	353,071			$	304,464
Reconciliation of Non-GAAP Financial Measures, continued
(dollars in thousands)	1Q24				4Q23				1Q23
Adjusted revenue and tangible efficiency ratio
Adjusted non-interest expense	$	318,918			$	353,071			$	304,464
Amortization of intangibles		(2,907	)			(3,168	)			(1,857	)
Adjusted tangible non-interest expense	$	316,011			$	349,903			$	302,607
Net interest income	$	418,846			$	437,214			$	480,751
Total non-interest revenue		118,888				51,468				133,126
Total revenue	$	537,734			$	488,682			$	613,877
Tax equivalent adjustment		1,310				1,216				1,119
Total TE revenue		539,044				489,898				614,996
Recovery of NPA		—				—				(13,126	)
Investment securities losses (gains), net		—				77,748				(1,030	)
Fair value adjustment on non-qualified deferred compensation		(2,299	)			(3,053	)			(1,371	)
Adjusted revenue	$	536,745			$	564,593			$	599,469
Efficiency ratio-TE		59.87	%			72.03	%			52.33	%
Adjusted tangible efficiency ratio		58.88				61.97				50.48

Adjusted return on average assets
Net income	$	124,070			$	69,573			$	202,159
Recovery of NPA		—				—				(13,126	)
Loss (gain) on other loans held for sale		—				—				16,750
(Gain) loss on early extinguishment of debt		—				(4,497	)			—
Restructuring charges (reversals)		1,524				1,231				(733	)
Investment securities losses (gains), net		—				77,748				(1,030	)
Tax effect of adjustments(1)		(373	)			(18,226	)			(453	)
Adjusted net income	$	125,221			$	125,829			$	203,567
Net income annualized	$	499,007			$	276,023			$	819,867
Adjusted net income annualized	$	503,636			$	499,213			$	825,577
Total average assets	$	59,022,231			$	59,164,065			$	60,133,561
Return on average assets		0.85	%			0.47	%			1.36	%
Adjusted return on average assets		0.85				0.84				1.37
Adjusted net income available to common shareholders and adjusted diluted earnings per share
Net income available to common shareholders	$	114,822			$	60,645			$	193,868
Recovery of NPA		—				—				(13,126	)
Loss (gain) on other loans held for sale		—				—				16,750
(Gain) loss on early extinguishment of debt		—				(4,497	)			—
Restructuring charges (reversals)		1,524				1,231				(733	)
Investment securities losses (gains), net		—				77,748				(1,030	)
Tax effect of adjustments(1)		(373	)			(18,226	)			(453	)
Adjusted net income available to common shareholders	$	115,973			$	116,901			$	195,276
Weighted average common shares outstanding, diluted		147,122				146,877				146,727
Diluted earnings per share	$	0.78			$	0.41			$	1.32
Adjusted diluted earnings per share		0.79				0.80				1.33
(1) An assumed marginal tax rate of 24.5% for 1Q24 and 4Q23 and 24.3% for 1Q23 was applied.

Reconciliation of Non-GAAP Financial Measures, continued
(dollars in thousands)	1Q24				4Q23				1Q23
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	$	114,822			$	60,645			$	193,868
Recovery of NPA		—				—				(13,126	)
Loss (gain) on other loans held for sale		—				—				16,750
(Gain) loss on early extinguishment of debt		—				(4,497	)			—
Restructuring charges (reversals)		1,524				1,231				(733	)
Investment securities losses (gains), net		—				77,748				(1,030	)
Tax effect of adjustments(1)		(373	)			(18,226	)			(453	)
Adjusted net income available to common shareholders	$	115,973			$	116,901			$	195,276
Adjusted net income available to common shareholders annualized	$	466,441			$	463,792			$	791,953
Amortization of intangibles, tax effected, annualized		8,831				9,493				5,699
Adjusted net income available to common shareholders excluding amortization of intangibles annualized	$	475,272			$	473,285			$	797,652
Net income available to common shareholders annualized	$	461,812			$	240,602			$	786,242
Amortization of intangibles, tax effected, annualized		8,831				9,493				5,699
Net income available to common shareholders excluding amortization of intangibles annualized	$	470,643			$	250,095			$	791,941
Total average Synovus Financial Corp. shareholders' equity less preferred stock	$	4,542,616			$	4,090,163			$	4,088,777
Average goodwill		(480,440	)			(479,858	)			(452,390	)
Average other intangible assets, net		(44,497	)			(47,502	)			(26,245	)
Total average Synovus Financial Corp. tangible shareholders' equity less preferred stock	$	4,017,679			$	3,562,803			$	3,610,142
Return on average common equity		10.2	%			5.9	%			19.2	%
Adjusted return on average common equity		10.3				11.3				19.4
Return on average tangible common equity		11.7				7.0				21.9
Adjusted return on average tangible common equity		11.8				13.3				22.1
(1) An assumed marginal tax rate of 24.5% for 1Q24 and 4Q23 and 24.3% for 1Q23 was applied.

(dollars in thousands)	March 31, 2024				December 31, 2023				March 31, 2023
Tangible common equity ratio
Total assets	$	59,835,120			$	59,809,534			$	61,840,025
Goodwill		(480,440	)			(480,440	)			(452,390	)
Other intangible assets, net		(43,021	)			(45,928	)			(25,267	)
Tangible assets	$	59,311,659			$	59,283,166			$	61,362,368
Total Synovus Financial Corp. shareholders’ equity	$	5,017,918			$	5,119,993			$	4,770,130
Goodwill		(480,440	)			(480,440	)			(452,390	)
Other intangible assets, net		(43,021	)			(45,928	)			(25,267	)
Preferred Stock, no par value		(537,145	)			(537,145	)			(537,145	)
Tangible common equity	$	3,957,312			$	4,056,480			$	3,755,328
Total Synovus Financial Corp. shareholders’ equity to total assets ratio		8.39	%			8.56	%			7.71	%
Tangible common equity ratio		6.67				6.84				6.12
Amounts may not total due to rounding

Synovus
INCOME STATEMENT DATA
(Unaudited)
(Dollars in thousands, except per share data)	2024				2023												First Quarter
	First Quarter				Fourth Quarter			Third Quarter			Second Quarter			First Quarter			'24 vs '23
																	% Change
Interest income	$	782,710			788,297			786,039			759,143			716,879			9	%
Interest expense		363,864			351,083			342,880			303,612			236,128			54
Net interest income		418,846			437,214			443,159			455,531			480,751			(13	)
Provision for (reversal of) credit losses		53,980			45,472			72,572			38,881			32,154			68
Net interest income after provision for credit losses		364,866			391,742			370,587			416,650			448,597			(19	)
Non-interest revenue:
Service charges on deposit accounts		21,813			22,260			21,385			23,477			22,974			(5	)
Fiduciary and asset management fees		19,013			18,149			20,205			20,027			19,696			(3	)
Card fees		19,486			20,872			18,602			17,059			15,824			23
Brokerage revenue		22,707			21,961			21,387			22,451			24,204			(6	)
Mortgage banking income		3,418			3,019			3,671			4,609			3,858			(11	)
Capital markets income		6,627			6,456			7,980			9,482			15,127			(56	)
Income from bank-owned life insurance		7,347			10,324			6,965			6,878			7,262			1
Investment securities gains (losses), net		—			(77,748	)		—			—			1,030			nm
Recovery of NPA		—			—			—			—			13,126			nm
Other non-interest revenue		18,477			26,175			6,944			8,293			10,025			84
Total non-interest revenue		118,888			51,468			107,139			112,276			133,126			(11	)
Non-interest expense:
Salaries and other personnel expense		188,521			176,712			179,741			183,001			188,924			—
Net occupancy, equipment, and software expense		46,808			48,146			45,790			42,785			42,860			9
Third-party processing and other services		20,258			21,717			21,439			21,659			21,833			(7	)
Professional fees		7,631			11,147			10,147			9,597			8,963			(15	)
FDIC insurance and other regulatory fees		23,819			61,470			11,837			11,162			10,268			132
Restructuring charges (reversals)		1,524			1,231			17,319			(110	)		(733	)		nm
Loss on other loans held for sale		—			—			30,954			2,360			16,750			nm
Other operating expenses		34,180			32,435			36,305			36,727			32,987			4
Total non-interest expense		322,741			352,858			353,532			307,181			321,852			—
Income before income taxes		161,013			90,352			124,194			221,745			259,871			(38	)
Income tax expense		36,943			20,779			27,729			47,801			57,712			(36	)
Net income		124,070			69,573			96,465			173,944			202,159			(39	)
Less: Net income (loss) attributable to noncontrolling interest		(437	)		(768	)		(630	)		(166	)		—			nm
Net income attributable to Synovus Financial Corp.		124,507			70,341			97,095			174,110			202,159			(38	)
Less: Preferred stock dividends		9,685			9,696			9,672			8,291			8,291			17
Net income available to common shareholders	$	114,822			60,645			87,423			165,819			193,868			(41	)%
Net income per common share, basic	$	0.78			0.41			0.60			1.13			1.33			(41	)%
Net income per common share, diluted		0.78			0.41			0.60			1.13			1.32			(41	)
Cash dividends declared per common share		0.38			0.38			0.38			0.38			0.38			—
Return on average assets *		0.85	%		0.47			0.64			1.15			1.36			(51) bps
Return on average common equity *		10.2			5.9			8.2			15.5			19.2			(900	)
Weighted average common shares outstanding, basic		146,430			146,372			146,170			146,113			145,799			—	%
Weighted average common shares outstanding, diluted		147,122			146,877			146,740			146,550			146,727			—
nm - not meaningful
bps - basis points
* - ratios are annualized
Amounts may not total due to rounding

Synovus
BALANCE SHEET DATA		March 31, 2024				December 31, 2023				March 31, 2023
(Unaudited)
(In thousands, except share data)
ASSETS
Interest-earning deposits with banks and other cash and cash equivalents		$	2,379,778			$	2,414,103			$	3,329,882
Federal funds sold and securities purchased under resale agreements			43,722				37,323				35,518
Cash, cash equivalents, and restricted cash			2,423,500				2,451,426				3,365,400
Investment securities available for sale, at fair value			9,694,515				9,788,662				9,732,618
Loans held for sale (includes $36,698, $47,338 and $44,400 measured at fair value, respectively)			130,586				52,768				669,447
Loans, net of deferred fees and costs			43,309,877				43,404,490				44,044,939
Allowance for loan losses			(492,661	)			(479,385	)			(457,010	)
Loans, net			42,817,216				42,925,105				43,587,929
Cash surrender value of bank-owned life insurance			1,119,379				1,112,030				1,094,072
Premises, equipment, and software, net			375,315				365,851				367,089
Goodwill			480,440				480,440				452,390
Other intangible assets, net			43,021				45,928				25,267
Other assets			2,751,148				2,587,324				2,545,813
Total assets		$	59,835,120			$	59,809,534			$	61,840,025
LIABILITIES AND EQUITY
Liabilities:
Deposits:
Non-interest-bearing deposits		$	12,042,353			$	12,507,616			$	14,642,677
Interest-bearing deposits			38,537,889				38,231,569				35,311,259
Total deposits			50,580,242				50,739,185				49,953,936
Federal funds purchased and securities sold under repurchase agreements			128,244				189,074				195,695
Other short-term borrowings			252,469				3,496				253,152
Long-term debt			2,031,735				1,932,534				5,146,252
Other liabilities			1,800,794				1,801,097				1,520,860
Total liabilities			54,793,484				54,665,386				57,069,895
Equity:
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 171,873,265, 171,360,188 and 170,713,864 respectively; outstanding 146,418,407, 146,705,330 and 146,059,006 respectively			171,873				171,360				170,714
Additional paid-in capital			3,957,576				3,955,819				3,925,449
Treasury stock, at cost; 25,454,858, 24,654,858 and 24,654,858 shares, respectively			(974,499	)			(944,484	)			(944,484	)
Accumulated other comprehensive income (loss), net			(1,248,194	)			(1,117,073	)			(1,289,327	)
Retained earnings			2,574,017				2,517,226				2,370,633
Total Synovus Financial Corp. shareholders’ equity			5,017,918				5,119,993				4,770,130
Noncontrolling interest in subsidiary			23,718				24,155				—
Total equity			5,041,636				5,144,148				4,770,130
Total liabilities and equity		$	59,835,120			$	59,809,534			$	61,840,025

Synovus
AVERAGE BALANCES, INTEREST, AND YIELDS/RATES
(Unaudited)
	First Quarter 2024										Fourth Quarter 2023										First Quarter 2023
(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)	$	34,943,797			$	583,459		6.72	%		$	35,106,156			$	590,588		6.67	%		$	35,030,809			$	526,529		6.10	%
Consumer loans (1) (2)		8,434,105				109,566		5.21				8,491,244				109,509		5.14				8,762,631				104,147		4.78
Less: Allowance for loan losses		(481,146	)			—		—				(480,332	)			—		—				(445,192	)			—		—
Loans, net		42,896,756				693,025		6.49				43,117,068				700,097		6.45				43,348,248				630,676		5.89
Investment securities available for sale		11,148,242				71,906		2.58				11,164,487				65,176		2.33				11,293,958				61,054		2.16
Trading account assets		11,567				65		2.25				13,067				215		6.59				11,338				124		4.39
Other earning assets(4)		1,218,090				16,173		5.25				1,463,176				19,689		5.26				1,513,800				17,212		4.55
FHLB and Federal Reserve Bank stock		187,825				2,273		4.84				187,015				3,536		7.56				306,935				3,355		4.37
Mortgage loans held for sale		29,773				495		6.65				39,024				696		7.14				36,497				566		6.20
Other loans held for sale		18,465				83		1.77				8,044				104		5.06				443,690				5,011		4.52
Total interest earning assets		55,510,718				784,020		5.68	%			55,991,881				789,513		5.59	%			56,954,466				717,998		5.11	%
Cash and due from banks		532,624										522,986										643,502
Premises and equipment		370,376										366,647										370,275
Other real estate		61										—										—
Cash surrender value of bank-owned life insurance		1,114,703										1,108,766										1,091,080
Other assets(5)		1,493,749										1,173,785										1,074,238
Total assets	$	59,022,231									$	59,164,065									$	60,133,561
Liabilities and Equity
Interest-bearing liabilities:
Interest-bearing demand deposits	$	10,590,340				65,415		2.48	%		$	10,422,286				58,588		2.23	%		$	9,088,533				23,218		1.04	%
Money market accounts		12,826,385				103,129		3.23				13,053,781				103,211		3.14				14,397,683				72,618		2.05
Savings deposits		1,057,087				287		0.11				1,098,914				275		0.10				1,370,173				211		0.06
Time deposits		7,902,850				86,493		4.40				7,198,229				75,462		4.16				3,601,288				21,496		2.42
Brokered deposits		5,737,445				77,342		5.42				6,069,055				81,444		5.32				5,553,970				56,392		4.12
Federal funds purchased and securities sold under repurchase agreements		113,558				648		2.26				93,854				350		1.46				133,360				670		2.01
Other short-term borrowings		71,775				955		5.26				2,672				51		7.50				1,677,519				18,994		4.53
Long-term debt		1,764,740				29,595		6.69				1,922,661				31,702		6.55				3,148,062				42,529		5.41
Total interest-bearing liabilities		40,064,180				363,864		3.65	%			39,861,452				351,083		3.49	%			38,970,588				236,128		2.46	%
Non-interest-bearing demand deposits		12,071,670										12,744,275										15,014,224
Other liabilities		1,782,659										1,906,686										1,522,827
Total equity		5,103,722										4,651,652										4,625,922
Total liabilities and equity	$	59,022,231									$	59,164,065									$	60,133,561
Net interest income and net interest margin, taxable equivalent (6)					$	420,156		3.04	%						$	438,430		3.11	%						$	481,870		3.43	%
Less: taxable-equivalent adjustment						1,310										1,216										1,119
Net interest income					$	418,846									$	437,214									$	480,751

(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 2024 — $10.6 million, Fourth Quarter 2023 — $13.1 million, and First Quarter 2023 — $11.5 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 $(1.36) billion, $(1.89) billion, and $(1.52) billion for the First Quarter 2024, Fourth Quarter 2023, and First Quarter 2023, 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)
(Dollars in thousands)
		Total Loans			Total Loans			Linked Quarter			Total Loans			Year/Year
Loan Type		March 31, 2024			December 31, 2023			% Change			March 31, 2023			% Change
Commercial, Financial, and Agricultural		$	14,616,902		$	14,459,345		1	%		$	14,201,398		3	%
Owner-Occupied			8,114,394			8,139,148		—				8,398,778		(3	)
Total Commercial & Industrial			22,731,296			22,598,493		1				22,600,176		1
Multi-Family			4,199,435			4,098,188		2				3,374,129		24
Hotels			1,790,505			1,803,102		(1	)			1,737,163		3
Office Buildings			1,852,208			1,891,587		(2	)			3,071,236		(40	)
Shopping Centers			1,302,754			1,319,049		(1	)			1,332,078		(2	)
Warehouses			871,662			854,475		2				1,020,921		(15	)
Other Investment Property			1,294,317			1,396,903		(7	)			1,441,303		(10	)
Total Investment Properties			11,310,881			11,363,304		—				11,976,830		(6	)
1-4 Family Construction			194,146			194,481		—				201,896		(4	)
1-4 Family Investment Mortgage			385,992			404,021		(4	)			394,754		(2	)
Total 1-4 Family Properties			580,138			598,502		(3	)			596,650		(3	)
Commercial Development			66,000			73,022		(10	)			63,004		5
Residential Development			72,024			79,961		(10	)			106,872		(33	)
Land Acquisition			164,976			201,969		(18	)			253,399		(35	)
Land and Development			303,000			354,952		(15	)			423,275		(28	)
Total Commercial Real Estate			12,194,019			12,316,758		(1	)			12,996,755		(6	)
Consumer Mortgages			5,384,602			5,411,723		(1	)			5,246,640		3
Home Equity			1,804,348			1,807,399		—				1,757,250		3
Credit Cards			180,663			194,141		(7	)			184,595		(2	)
Other Consumer Loans			1,014,949			1,075,976		(6	)			1,259,523		(19	)
Total Consumer			8,384,562			8,489,239		(1	)			8,448,008		(1	)
Total		$	43,309,877		$	43,404,490		—	%		$	44,044,939		(2	)%
NON-PERFORMING LOANS COMPOSITION
(Unaudited)
(Dollars in thousands)
		Total			Total						Total
		Non-performing Loans			Non-performing Loans			Linked Quarter			Non-performing Loans			Year/Year
Loan Type		March 31, 2024			December 31, 2023			% Change			March 31, 2023			% Change
Commercial, Financial, and Agricultural		$	192,693		$	89,870		114	%		$	94,196		105	%
Owner-Occupied			80,218			91,370		(12	)			25,591		213
Total Commercial & Industrial			272,911			181,240		51				119,787		128
Multi-Family			2,077			1,681		24				1,806		15
Office Buildings			7,630			35,338		(78	)			190		nm
Shopping Centers			547			641		(15	)			727		(25	)
Warehouses			188			196		(4	)			222		(15	)
Other Investment Property			1,784			1,914		(7	)			668		167
Total Investment Properties			12,226			39,770		(69	)			3,613		238
1-4 Family Investment Mortgage			2,300			3,056		(25	)			3,515		(35	)
Total 1-4 Family Properties			2,300			3,056		(25	)			3,515		(35	)
Residential Development			478			267		79				267		79
Land Acquisition			540			537		1				886		(39	)
Land and Development			1,018			804		27				1,153		(12	)
Total Commercial Real Estate			15,544			43,630		(64	)			8,281		88
Consumer Mortgages			42,563			46,108		(8	)			39,536		8
Home Equity			12,451			10,473		19				7,967		56
Other Consumer Loans			6,981			6,726		4				6,889		1
Total Consumer			61,995			63,307		(2	)			54,392		14
Total		$	350,450		$	288,177		22	%		$	182,460		92	%

Synovus
CREDIT QUALITY DATA
(Unaudited)
(Dollars in thousands)		2024				2023								First Quarter
		First				Fourth		Third		Second		First		'24 vs '23
		Quarter				Quarter		Quarter		Quarter		Quarter		% Change
Non-performing Loans (NPLs)		$	350,450			288,177		280,532		261,506		182,460		92	%
Other Real Estate and Other Assets			21,210			—		—		—		—		nm
Non-performing Assets (NPAs)			371,660			288,177		280,532		261,506		182,460		104
Allowance for Loan Losses (ALL)			492,661			479,385		477,532		471,238		457,010		8
Reserve for Unfunded Commitments			53,579			57,231		55,185		55,729		57,473		(7	)
Allowance for Credit Losses (ACL)			546,240			536,616		532,717		526,967		514,483		6
Net Charge-Offs - Quarter			44,356			41,574		66,822		26,396		18,550
Net Charge-Offs - YTD			44,356			153,342		111,768		44,946		18,550
Net Charge-Offs / Average Loans - Quarter (1)			0.41	%		0.38		0.61		0.24		0.17
Net Charge-Offs / Average Loans - YTD (1)			0.41			0.35		0.34		0.20		0.17
NPLs / Loans			0.81			0.66		0.64		0.59		0.41
NPAs / Loans, ORE and specific other assets			0.86			0.66		0.64		0.59		0.41
ACL/Loans			1.26			1.24		1.22		1.19		1.17
ALL/Loans			1.14			1.10		1.09		1.06		1.04
ACL/NPLs			155.87			186.21		189.90		201.51		281.97
ALL/NPLs			140.58			166.35		170.22		180.20		250.47
Past Due Loans over 90 days and Still Accruing		$	3,748			5,053		3,792		3,643		3,529		6
As a Percentage of Loans Outstanding			0.01	%		0.01		0.01		0.01		0.01
Total Past Due Loans and Still Accruing		$	54,814			59,099		54,974		84,946		55,053		—
As a Percentage of Loans Outstanding			0.13	%		0.14		0.13		0.19		0.12
(1) Ratio is annualized.
SELECTED CAPITAL INFORMATION (1)
(Unaudited)
(Dollars in thousands)
		March 31, 2024				December 31, 2023		March 31, 2023
Common Equity Tier 1 Capital Ratio			10.38	%		10.22		9.77
Tier 1 Capital Ratio			11.44			11.28		10.81
Total Risk-Based Capital Ratio			13.31			13.07		12.72
Tier 1 Leverage Ratio			9.62			9.49		9.14
Total Synovus Financial Corp. shareholders' equity as a Percentage of Total Assets			8.39			8.56		7.71
Tangible Common Equity Ratio (2) (4)			6.67			6.84		6.12
Book Value Per Common Share (3)		$	30.60			31.24		28.98
Tangible Book Value Per Common Share (2)			27.03			27.65		25.71
(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 Synovus Financial Corp. shareholders’ equity less Preferred stock divided by total common shares outstanding.
(4) See "Non-GAAP Financial Measures" for applicable reconciliation.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240416411238/en/

Media Contact

Audria Belton

Media Relations

media@synovus.com

Investor Contact

Jennifer H. Demba, CFA

Investor Relations

investorrelations@synovus.com

Source: Synovus Financial Corp.

FAQ

What were Synovus Financial Corp.'s diluted earnings per share in the first quarter of 2024?

Synovus Financial Corp. reported diluted earnings per share of $0.78 in the first quarter of 2024.

How did the $12.8 million FDIC Special Assessment impact Synovus Financial Corp.'s first quarter 2024 earnings?

The $12.8 million FDIC Special Assessment reduced first quarter 2024 reported and adjusted EPS by $0.07.

What was the change in net interest income for Synovus Financial Corp. compared to the first quarter of 2023?

Net interest income declined by $61.9 million, or 13%, compared to the first quarter of 2023.

What was the change in provision for credit losses for Synovus Financial Corp. compared to the first quarter of 2023?

Provision for credit losses increased by 19% sequentially.

How did headcount change for Synovus Financial Corp. year over year?

Headcount declined 7% year over year.

What is the preliminary CET1 ratio for Synovus Financial Corp. in the first quarter of 2024?

The preliminary CET1 ratio rose sequentially to 10.38%.

When will Synovus Financial Corp. host an earnings highlights conference call?

Synovus Financial Corp. will host an earnings highlights conference call on April 18, 2024.