Synovus announces earnings for the second quarter 2023

Rhea-AI Summary

Synovus Financial Corp. reports Q2 2023 financial results with diluted earnings per share of $1.13, total revenue of $567.8 million, and total deposits of $50.08 billion.

Positive

• Diluted earnings per share of $1.13, an increase of 8% in pre-provision net revenue, and a 2% increase in total deposits

Negative

• 5% decrease in net interest income, 16% decrease in non-interest revenue, and 5% decrease in non-interest expense

Diluted earnings per share of $1.13 vs. $1.16 in 2Q22

Adjusted diluted earnings per share of $1.16 vs. $1.17 in 2Q22

COLUMBUS, Ga.--(BUSINESS WIRE)-- Synovus Financial Corp. (NYSE: SNV) today reported financial results for the quarter ended June 30, 2023. “Our second quarter financial performance reflects the strength and resiliency of our team, with pre-provision net revenue growing 8% year over year and adjusted return on tangible common equity at 18%,” said Synovus Chairman, CEO and President Kevin Blair. “Strong deposit production, increased capital levels and stability in credit metrics, as we saw during the second quarter, all serve as mitigants to the risks of an environment with heightened levels of volatility and uncertainty. And as we position the company for sustainable, long-term growth, we’re proactively optimizing the balance sheet, we’ve adjusted revenue expectations in response to slower economic growth trends and deposit remixing, and we’ve significantly reduced expense growth. Even as we execute amid lingering challenging market conditions, we remain fully dedicated to providing reliable and innovative financial solutions to our clients. Their trust and confidence in our institution have been paramount to our growth and sustained performance.”

Second Quarter 2023 Highlights

• Total revenue of $567.8 million increased $45.2 million, or 9%, compared to the second quarter 2022, driven by net interest income growth of 7%, in addition to growth in core client fee income, excluding mortgage, of 7% year-over-year.
• Pre-provision net revenue of $260.6 million increased $20.0 million, or 8%, compared to the second quarter 2022.
• Period-end loans increased $308.6 million sequentially, primarily driven by fundings of existing CRE commitments and growth in consumer loans, somewhat offset by lower utilization from C&I commitments.
• Total deposits increased $126.5 million sequentially and included remixing due to the rate environment.
• Credit quality metrics at solid levels with a net charge-off ratio of 0.24%, a modest increase in the ACL ratio to 1.19%, and broader stable performance across the loan portfolio, asset types, and industries.
• Preliminary CET1 ratio of 9.85% increased 8 bps sequentially as capital generation continued to support client loan growth while also buffering capital levels given economic uncertainty.

   

Second Quarter Summary

	Reported												Adjusted
(dollars in thousands)		2Q23				1Q23				2Q22				2Q23				1Q23				2Q22
Net income available to common shareholders	$	165,819			$	193,868			$	169,761			$	169,526			$	195,276			$	171,018
Diluted earnings per share		1.13				1.32				1.16				1.16				1.33				1.17
Total revenue		567,807				613,877				522,654				567,347				599,469				526,854
Total loans		44,353,537				44,044,939				41,204,780				N/A				N/A				N/A
Total deposits		50,080,392				49,953,936				49,034,700				N/A				N/A				N/A
Return on avg assets		1.15	%			1.36	%			1.26	%			1.18	%			1.37	%			1.27	%
Return on avg common equity		15.5				19.2				16.5				15.8				19.4				16.6
Return on avg tangible common equity		17.7				21.9				18.8				18.1				22.1				19.0
Net interest margin		3.20				3.43				3.22				N/A				N/A				N/A
Efficiency ratio-TE(1)(2)		53.99				52.33				53.87				52.57				50.48				53.43
NCO ratio-QTD		0.24				0.17				0.16				N/A				N/A				N/A
NPA ratio		0.59				0.41				0.33				N/A				N/A				N/A

(1)	Taxable equivalent
(2)	Adjusted tangible efficiency ratio

Balance Sheet

Loans*
(dollars in millions)		2Q23			1Q23		Linked Quarter Change				Linked Quarter % Change				2Q22		Year/Year Change				Year/Year % Change
Commercial & industrial	$	22,531.2		$	22,600.2		$	(68.9	)		—	%		$	20,778.3		$	1,752.9			8	%
Commercial real estate		13,293.9			12,996.8			297.1			2				11,503.4			1,790.5			16
Consumer		8,528.4			8,448.0			80.4			1				8,923.0			(394.6	)		(4	)
Total loans	$	44,353.5		$	44,044.9		$	308.6			1	%		$	41,204.8		$	3,148.8			8	%
*Amounts may not total due to rounding

• Total loans ended the quarter at $44.35 billion, up $308.6 million sequentially.
• Commercial and industrial (C&I) loans decreased $68.9 million sequentially, primarily driven by lower utilization from existing commitments and a strategic decline in syndicated loans.
• CRE loans increased $297.1 million sequentially, mostly due to draws on existing multi-family commitments and continued low levels of pay-offs.
• Consumer loans increased $80.4 million sequentially, largely a result of growth in portfolio mortgages somewhat offset by continued third-party decline from runoff.

Deposits*
(dollars in millions)		2Q23			1Q23		Linked Quarter Change				Linked Quarter % Change				2Q22		Year/Year Change				Year/Year % Change
Non-interest-bearing DDA	$	12,945.5		$	13,827.6		$	(882.0	)		(6	)%		$	15,781.1		$	(2,835.6	)		(18	)%
Interest-bearing DDA		6,255.3			5,841.0			414.3			7				6,327.1			(71.7	)		(1	)
Money market		10,803.7			11,776.0			(972.3	)		(8	)			13,793.0			(2,989.3	)		(22	)
Savings		1,222.9			1,312.7			(89.8	)		(7	)			1,498.7			(275.9	)		(18	)
Public funds		7,031.4			6,888.2			143.2			2				5,863.9			1,167.5			20
Time deposits		5,291.8			4,060.3			1,231.5			30				2,147.8			3,144.1			146
Brokered deposits		6,529.8			6,248.3			281.5			5				3,623.1			2,906.7			80
Total deposits	$	50,080.4		$	49,953.9		$	126.5			—	%		$	49,034.7		$	1,045.7			2	%
*Amounts may not total due to rounding

• Total deposits ended the quarter at $50.08 billion, up $126.5 million sequentially
  • Money market deposits were primarily impacted by the continued shifting to time deposits.
  • Non-interest-bearing DDAs were impacted by pressures from seasonal cash deployment of excess funds and continued pressures from the higher rate environment.
• Total deposit costs increased 51 bps sequentially to 1.95% and were impacted by the anticipated pricing lags on core interest-bearing deposits (excludes brokered deposits) as well as the decline in non-interest-bearing DDAs.

Income Statement Summary**
(in thousands, except per share data)		2Q23				1Q23			Linked Quarter Change				Linked Quarter % Change				2Q22			Year/Year Change				Year/Year % Change
Net interest income	$	455,531			$	480,751			$	(25,220	)		(5	)%		$	425,388			$	30,143			7	%
Non-interest revenue		112,276				133,126				(20,850	)		(16	)			97,266				15,010			15
Non-interest expense		307,181				321,852				(14,671	)		(5	)			282,051				25,130			9
Provision for (reversal of) credit losses		38,881				32,154				6,727			21				12,688				26,193			206
Income before taxes	$	221,745			$	259,871			$	(38,126	)		(15	)%		$	227,915			$	(6,170	)		(3	)%
Income tax expense		47,801				57,712				(9,911	)		(17	)			49,863				(2,062	)		(4	)
Net income		173,944				202,159				(28,215	)		(14	)			178,052				(4,108	)		(2	)
Less: Net income (loss) attributable to noncontrolling interest		(166	)			—				(166	)		NM				—				(166	)		NM
Net income attributable to Synovus Financial Corp.		174,110				202,159				(28,049	)		(14	)			178,052				(3,942	)		(2	)
Less: Preferred stock dividends		8,291				8,291				—			—				8,291				—			—
Net income available to common shareholders	$	165,819			$	193,868			$	(28,049	)		(14	)%		$	169,761			$	(3,942	)		(2	)%
Weighted average common shares outstanding, diluted		146,550				146,727				(177	)		—	%			146,315				235			—	%
Diluted earnings per share	$	1.13			$	1.32			$	(0.19	)		(14	)		$	1.16			$	(0.03	)		(3	)
Adjusted diluted earnings per share		1.16				1.33				(0.17	)		(13	)			1.17				(0.01	)		(1	)
Effective tax rate		21.56	%			22.21	%										21.88	%
** Amounts may not total due to rounding

Core Performance

• Net interest income of $455.5 million was down $25.2 million sequentially, or 5%, and increased $30.1 million, or 7%, compared to the second quarter 2022.
  • The quarter-over-quarter decline was largely driven by increases in deposit costs and negative re- mixing in non-interest-bearing DDA deposits partially offset by higher asset yields and earning asset growth.
    • Net interest margin was 3.20%, down 23 bps sequentially, impacted by the same factors mentioned above.
  • 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 decreased $20.9 million, or 16%, sequentially and increased $15.0 million, or 15%, compared to the second quarter 2022. Adjusted non-interest revenue decreased $6.9 million, or 6%, sequentially and increased $10.2 million, or 10%, compared to the second quarter 2022.
  • The quarter-over-quarter decrease was impacted by the prior quarter's $13.1 million one-time benefit from the recovery of a non-performing asset related to the regulatory approval of our Qualpay investment and strong growth in capital markets income in the first quarter 2023, which normalized this quarter.
  • The year-over-year increase primarily related to higher wealth revenue from diverse sources including fees from short-term liquidity management products and a $7 million write-down in the second quarter 2022 on a minority tech investment.
• Non-interest expense decreased $14.7 million, or 5%, sequentially and increased $25.1 million, or 9%, compared to the second quarter 2022. Adjusted non-interest expense decreased $3.8 million, or 1%, sequentially and increased $17.0 million, or 6%, compared to the second quarter 2022.
  • The quarter-over-quarter decrease was largely due to the previous quarter's $16.8 million loss associated with the move of third-party consumer loans to held for sale in addition to seasonally elevated personnel expense in the first quarter 2023.
  • The year-over-year increase primarily resulted from new business initiatives and infrastructure investments as well as investments in our workforce and higher FDIC insurance and healthcare costs.
• Overall credit performance and the credit quality of our recent originations was solid. The non-performing loan and asset ratios both moved to 0.59%; the net charge-off ratio for the quarter was 0.24%, and total past dues were 0.19% of total loans outstanding.
• Provision for credit losses of $38.9 million increased $6.7 million sequentially and increased $26.2 million compared to the second quarter 2022.
  • Drivers of the quarter-over-quarter increase included higher net charge-offs and a modest increase of 2 bps in the allowance for credit losses coverage ratio (to loans).
  • Drivers of the year-over-year increase largely included an 8 bps increase in the allowance for credit losses coverage ratio (to loans), which resulted from deterioration in forecasted economic scenarios mostly offset by continued solid loan portfolio performance, and higher net charge-offs.

Capital Ratios
	2Q23			1Q23			2Q22
Common equity Tier 1 capital (CET1) ratio	9.85	%	*	9.77	%		9.46	%
Tier 1 capital ratio	10.88		*	10.81			10.56
Total risk-based capital ratio	12.79		*	12.72			12.43
Tier 1 leverage ratio	9.23		*	9.14			9.03
Tangible common equity ratio	6.17			6.12			6.26
* Ratios are preliminary.

Capital

• Preliminary CET1 ratio improved 8 bps during the quarter to 9.85%, and the preliminary total risk-based capital ratio of 12.79% increased 7 bps from the previous quarter as core earnings continued to support capital generation.

Second Quarter Earnings Conference Call

Synovus will host an earnings highlights conference call at 8:30 a.m. ET on July 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 $61 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 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 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 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)		2Q23				1Q23				2Q22
Adjusted non-interest revenue
Total non-interest revenue	$	112,276			$	133,126			$	97,266
Investment securities (gains) losses, net		—				(1,030	)			—
Recovery of NPA		—				(13,126	)			—
Fair value adjustment on non-qualified deferred compensation		(1,598	)			(1,371	)			3,240
Adjusted non-interest revenue	$	110,678			$	117,599			$	100,506
Adjusted non-interest expense
Total non-interest expense	$	307,181			$	321,852			$	282,051
(Loss) gain on other loans held for sale		(2,360	)			(16,750	)			—
Gain (loss) on early extinguishment of debt		377				—				—
Restructuring (charges) reversals		110				733				1,850
Valuation adjustment to Visa derivative		(3,027	)			—				(3,500	)
Fair value adjustment on non-qualified deferred compensation		(1,598	)			(1,371	)			3,240
Adjusted non-interest expense	$	300,683			$	304,464			$	283,641
Reconciliation of Non-GAAP Financial Measures, continued
(dollars in thousands)		2Q23				1Q23				2Q22
Adjusted revenue and tangible efficiency ratio
Adjusted non-interest expense	$	300,683			$	304,464			$	283,641
Amortization of intangibles		(2,420	)			(1,857	)			(2,118	)
Adjusted tangible non-interest expense	$	298,263			$	302,607			$	281,523
Net interest income	$	455,531			$	480,751			$	425,388
Total non-interest revenue		112,276				133,126				97,266
Total revenue	$	567,807			$	613,877			$	522,654
Tax equivalent adjustment		1,138				1,119				960
Total TE revenue		568,945				614,996				523,614
Recovery of NPA		—				(13,126	)			—
Investment securities losses (gains), net		—				(1,030	)			—
Fair value adjustment on non-qualified deferred compensation		(1,598	)			(1,371	)			3,240
Adjusted revenue	$	567,347			$	599,469			$	526,854
Efficiency ratio-TE		53.99	%			52.33	%			53.87	%
Adjusted tangible efficiency ratio		52.57				50.48				53.43

Adjusted return on average assets
Net income	$	173,944			$	202,159			$	178,052
Recovery of NPA		—				(13,126	)			—
Loss (gain) on other loans held for sale		2,360				16,750				—
(Gain) loss on early extinguishment of debt		(377	)			—				—
Restructuring charges (reversals)		(110	)			(733	)			(1,850	)
Valuation adjustment to Visa derivative		3,027				—				3,500
Investment securities losses (gains), net		—				(1,030	)			—
Tax effect of adjustments(1)		(1,193	)			(453	)			(393	)
Adjusted net income	$	177,651			$	203,567			$	179,309
Net income annualized	$	697,687			$	819,867			$	714,165
Adjusted net income annualized	$	712,556			$	825,577			$	719,206
Total average assets	$	60,515,077			$	60,133,561			$	56,536,940
Return on average assets		1.15	%			1.36	%			1.26	%
Adjusted return on average assets		1.18				1.37				1.27
Adjusted net income available to common shareholders and adjusted diluted earnings per share
Net income available to common shareholders	$	165,819			$	193,868			$	169,761
Recovery of NPA		—				(13,126	)			—
Loss (gain) on other loans held for sale		2,360				16,750				—
(Gain) loss on early extinguishment of debt		(377	)			—				—
Restructuring charges (reversals)		(110	)			(733	)			(1,850	)
Valuation adjustment to Visa derivative		3,027				—				3,500
Investment securities losses (gains), net		—				(1,030	)			—
Tax effect of adjustments(1)		(1,193	)			(453	)			(393	)
Adjusted net income available to common shareholders	$	169,526			$	195,276			$	171,018
Weighted average common shares outstanding, diluted		146,550				146,727				146,315
Diluted earnings per share	$	1.13			$	1.32			$	1.16
Adjusted diluted earnings per share		1.16				1.33				1.17

Reconciliation of Non-GAAP Financial Measures, continued
(dollars in thousands)		2Q23				1Q23				2Q22
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	$	165,819			$	193,868			$	169,761
Recovery of NPA		—				(13,126	)			—
Loss (gain) on other loans held for sale		2,360				16,750				—
(Gain) loss on early extinguishment of debt		(377	)			—				—
Restructuring charges (reversals)		(110	)			(733	)			(1,850	)
Valuation adjustment to Visa derivative		3,027				—				3,500
Investment securities losses (gains), net		—				(1,030	)			—
Tax effect of adjustments(1)		(1,193	)			(453	)			(393	)
Adjusted net income available to common shareholders	$	169,526			$	195,276			$	171,018
Adjusted net income available to common shareholders annualized	$	679,967			$	791,953			$	685,951
Amortization of intangibles, tax effected, annualized		7,344				5,699				6,471
Adjusted net income available to common shareholders excluding amortization of intangibles annualized	$	687,311			$	797,652			$	692,422
Net income available to common shareholders annualized	$	665,098			$	786,242			$	680,910
Amortization of intangibles, tax effected, annualized		7,344				5,699				6,471
Net income available to common shareholders excluding amortization of intangibles annualized	$	672,442			$	791,941			$	687,381
Total average Synovus Financial Corp. shareholders' equity less preferred stock	$	4,303,722			$	4,088,777			$	4,132,536
Average goodwill		(460,118	)			(452,390	)			(452,390	)
Average other intangible assets, net		(36,738	)			(26,245	)			(32,387	)
Total average Synovus Financial Corp. tangible shareholders' equity less preferred stock	$	3,806,866			$	3,610,142			$	3,647,759
Return on average common equity		15.5	%			19.2	%			16.5	%
Adjusted return on average common equity		15.8				19.4				16.6
Return on average tangible common equity		17.7				21.9				18.8
Adjusted return on average tangible common equity		18.1				22.1				19.0

(dollars in thousands)	June 30, 2023				December 31, 2022				June 30, 2022
Tangible common equity ratio
Total assets	$	60,655,591			$	59,731,378			$	57,382,745
Goodwill		(475,573	)			(452,390	)			(452,390	)
Other intangible assets, net		(61,538	)			(27,124	)			(31,360	)
Tangible assets	$	60,118,480			$	59,251,864			$	56,898,995
Total Synovus Financial Corp. shareholders’ equity	$	4,782,528			$	4,475,801			$	4,584,438
Goodwill		(475,573	)			(452,390	)			(452,390	)
Other intangible assets, net		(61,538	)			(27,124	)			(31,360	)
Preferred Stock, no par value		(537,145	)			(537,145	)			(537,145	)
Tangible common equity	$	3,708,272			$	3,459,142			$	3,563,543
Total Synovus Financial Corp. shareholders’ equity to total assets ratio		7.88	%			7.49	%			7.99	%
Tangible common equity ratio		6.17				5.84				6.26
(1) An assumed marginal tax rate of 24.3% for 2Q23 and 1Q23 and 23.8% for 2Q22 was applied.
Amounts may not total due to rounding

Synovus
INCOME STATEMENT DATA
(Unaudited)
(Dollars in thousands, except per share data)	Six Months Ended June 30,
		2023				2022			23 vs '22
									% Change
Interest income	$	1,476,022			$	869,834			70	%
Interest expense		539,739				52,199			934
Net interest income		936,283				817,635			15
Provision for (reversal of) credit losses		71,035				24,088			195
Net interest income after provision for credit losses		865,248				793,547			9
Non-interest revenue:
Service charges on deposit accounts		46,451				46,030			1
Fiduciary and asset management fees		39,723				40,377			(2	)
Card fees		32,884				30,846			7
Brokerage revenue		43,466				29,898			45
Mortgage banking income		8,467				9,857			(14	)
Capital markets income		20,700				12,864			61
Income from bank-owned life insurance		14,140				15,722			(10	)
Investment securities gains (losses), net		1,030				—			nm
Recovery of NPA		13,126				—			nm
Other non-interest revenue		25,415				17,006			49
Total non-interest revenue		245,402				202,600			21
Non-interest expense:
Salaries and other personnel expense		371,926				325,747			14
Net occupancy, equipment, and software expense		85,645				86,076			(1	)
Third-party processing and other services		43,493				42,947			1
Professional fees		18,560				19,338			(4	)
FDIC insurance and other regulatory fees		21,429				13,144			63
Restructuring charges (reversals)		(843	)			(8,274	)		nm
Loss on other loans held for sale		19,110				—			nm
Other operating expenses		69,714				75,523			(8	)
Total non-interest expense		629,034				554,501			13
Income before income taxes		481,616				441,646			9
Income tax expense		105,513				92,558			14
Net income		376,103				349,088			8
Less: Net income attributable to noncontrolling interest		(166	)			—			nm
Net income attributable to Synovus Financial Corp.		376,269				349,088			8
Less: Preferred stock dividends		16,581				16,581			—
Net income available to common shareholders	$	359,688			$	332,507			8	%
Net income per common share, basic	$	2.46			$	2.29			8	%
Net income per common share, diluted		2.45				2.27			8
Cash dividends declared per common share		0.76				0.68			12
Return on average assets *		1.26	%			1.24	%		2 bps
Return on average common equity *		17.28				15.28			200
Weighted average common shares outstanding, basic		145,957				145,301			—	%
Weighted average common shares outstanding, diluted		146,644				146,489			—
nm - not meaningful
bps - basis points
* - ratios are annualized
Amounts may not total due to rounding

Synovus
INCOME STATEMENT DATA
(Unaudited)
(Dollars in thousands, except per share data)	2023							2022								Second Quarter
	Second Quarter				First Quarter			Fourth Quarter			Third Quarter		Second Quarter			'23 vs '22
																% Change
Interest income	$	759,143			716,879			654,654			551,299		453,772			67	%
Interest expense		303,612			236,128			153,308			73,380		28,384			970
Net interest income		455,531			480,751			501,346			477,919		425,388			7
Provision for (reversal of) credit losses		38,881			32,154			34,884			25,581		12,688			206
Net interest income after provision for credit losses		416,650			448,597			466,462			452,338		412,700			1
Non-interest revenue:
Service charges on deposit accounts		23,477			22,974			23,639			23,398		23,491			—
Fiduciary and asset management fees		20,027			19,696			18,836			19,201		20,100			—
Card fees		17,059			15,824			15,887			15,101		16,089			6
Brokerage revenue		20,908			22,558			19,996			17,140		15,243			37
Mortgage banking income		4,609			3,858			2,554			5,065		3,904			18
Capital markets income		6,975			13,725			6,998			6,839		7,393			(6	)
Income from bank-owned life insurance		6,878			7,262			7,206			6,792		9,165			(25	)
Investment securities gains (losses), net		—			1,030			—			—		—			nm
Recovery of NPA		—			13,126			—			—		—			nm
Other non-interest revenue		12,343			13,073			7,323			10,762		1,881			556
Total non-interest revenue		112,276			133,126			102,439			104,298		97,266			15
Non-interest expense:
Salaries and other personnel expense		183,001			188,924			182,629			173,334		161,063			14
Net occupancy, equipment, and software expense		42,785			42,860			45,192			43,462		43,199			(1	)
Third-party processing and other services		21,659			21,833			23,130			22,539		21,952			(1	)
Professional fees		9,597			8,963			11,096			6,755		10,865			(12	)
FDIC insurance and other regulatory fees		11,162			10,268			8,232			7,707		6,894			62
Restructuring charges (reversals)		(110	)		(733	)		(2,372	)		956		(1,850	)		(94	)
Loss on other loans held for sale		2,360			16,750			—			—		—			nm
Other operating expenses		36,727			32,987			41,089			39,257		39,928			(8	)
Total non-interest expense		307,181			321,852			308,996			294,010		282,051			9
Income before income taxes		221,745			259,871			259,905			262,626		227,915			(3	)
Income tax expense		47,801			57,712			54,135			59,582		49,863			(4	)
Net income		173,944			202,159			205,770			203,044		178,052			(2	)
Less: Net income attributable to noncontrolling interest		(166	)		—			—			—		—			nm
Net income attributable to Synovus Financial Corp.		174,110			202,159			205,770			203,044		178,052			(2	)
Less: Preferred stock dividends		8,291			8,291			8,291			8,291		8,291			—
Net income available to common shareholders	$	165,819			193,868			197,479			194,753		169,761			(2	)%
Net income per common share, basic	$	1.13			1.33			1.36			1.34		1.17			(3	)%
Net income per common share, diluted		1.13			1.32			1.35			1.33		1.16			(3	)
Cash dividends declared per common share		0.38			0.38			0.34			0.34		0.34			12
Return on average assets *		1.15	%		1.36			1.38			1.39		1.26			(11) bps
Return on average common equity *		15.45			19.23			20.93			18.66		16.48			(103	)
Weighted average common shares outstanding, basic		146,113			145,799			145,467			145,386		145,328			1	%
Weighted average common shares outstanding, diluted		146,550			146,727			146,528			146,418		146,315			—
nm - not meaningful
bps - basis points
* - ratios are annualized
Amounts may not total due to rounding

Synovus
BALANCE SHEET DATA		June 30, 2023				December 31, 2022				June 30, 2022
(Unaudited)
(In thousands, except share data)
ASSETS
Cash and due from banks		$	576,148			$	624,097			$	583,323
Interest-bearing funds with Federal Reserve Bank			1,391,961				1,280,684				1,023,030
Interest earning deposits with banks			50,254				34,632				29,139
Federal funds sold and securities purchased under resale agreements			35,788				38,367				29,568
Cash, cash equivalents, and restricted cash			2,054,151				1,977,780				1,665,060
Investment securities available for sale, at fair value			9,621,175				9,678,103				9,889,850
Loans held for sale (includes $62,616, $51,136 and $76,864 measured at fair value, respectively)			514,450				391,502				917,679
Loans, net of deferred fees and costs			44,353,537				43,716,353				41,204,780
Allowance for loan losses			(471,238	)			(443,424	)			(407,837	)
Loans, net			43,882,299				43,272,929				40,796,943
Cash surrender value of bank-owned life insurance			1,100,114				1,089,280				1,078,703
Premises, equipment, and software, net			365,443				370,632				383,060
Goodwill			475,573				452,390				452,390
Other intangible assets, net			61,538				27,124				31,360
Other assets			2,580,848				2,471,638				2,167,700
Total assets		$	60,655,591			$	59,731,378			$	57,382,745
LIABILITIES AND EQUITY
Liabilities:
Deposits:
Non-interest-bearing deposits		$	13,565,602			$	15,639,899			$	16,876,710
Interest-bearing deposits			36,514,790				33,231,660				32,157,990
Total deposits			50,080,392				48,871,559				49,034,700
Federal funds purchased and securities sold under repurchase agreements			83,384				146,588				345,242
Other short-term borrowings			1,461				603,384				255,018
Long-term debt			4,021,411				4,109,597				1,804,104
Other liabilities			1,661,175				1,524,449				1,359,243
Total liabilities			55,847,823				55,255,577				52,798,307
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 170,808,134, 170,141,492 and 170,012,527 respectively; outstanding 146,153,276, 145,486,634 and 145,357,669 respectively			170,808				170,141				170,013
Additional paid-in capital			3,933,548				3,920,346				3,908,118
Treasury stock, at cost; 24,654,858 shares			(944,484	)			(944,484	)			(944,484	)
Accumulated other comprehensive income (loss), net			(1,395,175	)			(1,442,117	)			(1,026,705	)
Retained earnings			2,480,686				2,234,770				1,940,351
Total Synovus Financial Corp. shareholders’ equity			4,782,528				4,475,801				4,584,438
Noncontrolling interest in subsidiary			25,240				—				—
Total equity			4,807,768				4,475,801				4,584,438
Total liabilities and equity		$	60,655,591			$	59,731,378			$	57,382,745

Synovus
AVERAGE BALANCES, INTEREST, AND YIELDS/RATES
(Unaudited)
	Second Quarter 2023										First Quarter 2023										Second 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)	$	35,628,637			$	566,823		6.38	%		$	35,030,809			$	526,529		6.10	%		$	31,870,387			$	308,442		3.88	%
Consumer loans (1) (2)		8,470,478				104,545		4.94				8,762,631				104,147		4.78				8,720,488				83,826		3.86
Less: Allowance for loan losses		(466,700	)			—		—				(445,192	)			—		—				(415,372	)			—		—
Loans, net		43,632,415				671,368		6.17				43,348,248				630,676		5.89				40,175,503				392,268		3.92
Investment securities available for sale		11,200,717				60,421		2.16				11,293,958				61,054		2.16				11,153,091				50,312		1.81
Trading account assets		21,328				309		5.80				11,338				124		4.39				11,987				73		2.44
Other earning assets(4)		1,446,425				18,081		4.95				1,513,800				17,212		4.55				813,028				1,660		0.81
FHLB and Federal Reserve Bank stock		280,248				4,301		6.14				306,935				3,355		4.37				179,837				1,820		4.05
Mortgage loans held for sale		54,603				852		6.24				36,497				566		6.20				85,299				921		4.32
Other loans held for sale		546,224				4,949		3.58				443,690				5,011		4.52				725,762				7,678		4.19
Total interest earning assets		57,181,960			$	760,281		5.33	%			56,954,466			$	717,998		5.11	%			53,144,507			$	454,732		3.43	%
Cash and due from banks		646,066										643,502										538,647
Premises and equipment		369,039										370,275										385,457
Other real estate		—										—										11,439
Cash surrender value of bank-owned life insurance		1,095,866										1,091,080										1,077,231
Other assets(5)		1,222,146										1,074,238										1,379,659
Total assets	$	60,515,077									$	60,133,561									$	56,536,940
Liabilities and Equity
Interest-bearing liabilities:
Interest-bearing demand deposits	$	9,891,375			$	41,803		1.70	%		$	9,091,166			$	23,221		1.04	%		$	9,513,334			$	3,598		0.15	%
Money market accounts		13,468,210				85,397		2.54				14,395,050				72,615		2.05				15,328,395				6,850		0.18
Savings deposits		1,276,040				281		0.09				1,370,173				211		0.06				1,506,195				72		0.02
Time deposits		4,866,221				39,551		3.26				3,601,288				21,496		2.42				2,829,684				1,688		0.24
Brokered deposits		6,342,751				74,748		4.73				5,553,970				56,392		4.12				2,878,536				6,293		0.88
Federal funds purchased and securities sold under repurchase agreements		88,591				351		1.57				133,360				670		2.01				246,737				219		0.35
Other short-term borrowings		455,050				5,566		4.84				1,677,519				18,994		4.53				480,999				896		0.74
Long-term debt		3,821,126				55,915		5.82				3,148,062				42,529		5.41				878,413				8,768		3.99
Total interest-bearing liabilities		40,209,364			$	303,612		3.03	%			38,970,588			$	236,128		2.46	%			33,662,293			$	28,384		0.33	%
Non-interest-bearing demand deposits		13,874,482										15,014,224										16,959,850
Other liabilities		1,556,863										1,522,827										1,245,116
Total equity		4,874,368										4,625,922										4,669,681
Total liabilities and equity	$	60,515,077									$	60,133,561									$	56,536,940
Net interest income and net interest margin, taxable equivalent (6)					$	456,669		3.20	%						$	481,870		3.43	%						$	426,348		3.22	%
Less: taxable-equivalent adjustment						1,138										1,119										960
Net interest income					$	455,531									$	480,751									$	425,388

(1)	Average loans are shown net of deferred fees and costs. NPLs are included.
(2)	Interest income includes net loan fees as follows: Second Quarter 2023 — $11.3 million, First Quarter 2023 — $11.5 million, and Second Quarter 2022 — $13.0 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 $(1.46) billion, $(1.52) billion, and $(923.1) million for the Second Quarter 2023, First Quarter 2023, and Second Quarter 2022, respectively.
(6)	The net interest margin is calculated by dividing annualized net interest income-taxable equivalent by average total interest earning assets.

Synovus
AVERAGE BALANCES, INTEREST, AND YIELDS/RATES
(Unaudited)
	Six Months Ended June 30,
	2023										2022
(dollars in thousands)	Average Balance				Interest			Yield/ Rate			Average Balance				Interest			Yield/ Rate
Assets
Interest earning assets:
Commercial loans (1) (2) (3)	$	35,331,375			$	1,093,352		6.24	%		$	31,316,646			$	589,029		3.79	%
Consumer loans (1) (2)		8,615,748				208,693		4.87				8,657,598				165,194		3.83
Less: Allowance for loan losses		(456,005	)									(419,639	)
Loans, net		43,491,118				1,302,045		6.03				39,554,605				754,223		3.84
Investment securities available for sale		11,247,080				121,475		2.16				11,206,150				97,562		1.74
Trading account assets		16,360				434		5.30				10,540				112		2.13
Other earning assets(4)		1,479,926				35,292		4.74				1,363,223				2,475		0.36
FHLB and Federal Reserve Bank stock		293,518				7,656		5.22				170,006				2,505		2.95
Mortgage loans held for sale		45,600				1,418		6.22				94,542				1,803		3.81
Other loans held for sale		495,240				9,960		4.00				661,768				12,978		3.90
Total interest earning assets		57,068,842			$	1,478,280		5.22	%			53,060,834			$	871,658		3.31	%
Cash and due from banks		644,791										543,638
Premises and equipment		369,654										392,079
Other real estate		—										11,598
Cash surrender value of bank-owned life insurance		1,093,486										1,074,076
Other assets(5)		1,148,600										1,613,313
Total assets	$	60,325,373									$	56,695,538
Liabilities and Equity
Interest-bearing liabilities:
Interest-bearing demand deposits	$	9,493,481			$	65,024		1.38	%		$	9,531,330			$	5,970		0.13	%
Money market accounts		13,929,069				158,012		2.29				15,685,030				12,199		0.16
Savings deposits		1,322,846				491		0.07				1,483,547				139		0.02
Time deposits		4,237,249				61,047		2.91				2,919,242				3,826		0.26
Brokered deposits		5,950,539				131,141		4.44				2,833,580				10,026		0.71
Federal funds purchased and securities sold under repurchase agreements		110,852				1,021		1.83				220,689				230		0.21
Other short-term borrowings		1,062,908				24,559		4.60				244,202				896		0.73
Long-term debt		3,486,453				98,444		5.63				930,131				18,913		4.07
Total interest-bearing liabilities		39,593,397			$	539,739		2.75	%			33,847,751			$	52,199		0.31	%
Non-interest-bearing demand deposits		14,441,205										16,727,040
Other liabilities		1,539,939										1,195,043
Total equity		4,750,832										4,925,704
Total liabilities and equity	$	60,325,373									$	56,695,538
Net interest income, taxable equivalent net interest margin (6)					$	938,541		3.32	%						$	819,459		3.11	%
Less: taxable-equivalent adjustment						2,258										1,824
Net interest income					$	936,283									$	817,635

(1)	Average loans are shown net of deferred fees and costs. NPLs are included.
(2)	Interest income includes net loan fees as follows: 2023 — $22.8 million and 2022 — $33.7 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 $(1.49) billion and $(587.1) million for the six months ended June 30, 2023 and 2022, 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		June 30, 2023			March 31, 2023			% Change			June 30, 2022			% Change
Commercial, Financial, and Agricultural		$	14,166,890		$	14,201,398		—	%		$	13,018,089		9	%
Owner-Occupied			8,364,342			8,398,778		—				7,760,236		8
Total Commercial & Industrial			22,531,232			22,600,176		—				20,778,325		8
Multi-Family			3,597,497			3,374,129		7				2,547,706		41
Hotels			1,771,381			1,737,163		2				1,597,930		11
Office Buildings			3,031,806			3,071,236		(1	)			2,680,399		13
Shopping Centers			1,329,492			1,332,078		—				1,458,902		(9	)
Warehouses			1,068,734			1,020,921		5				811,738		32
Other Investment Property			1,471,356			1,441,303		2				1,311,373		12
Total Investment Properties			12,270,266			11,976,830		2				10,408,048		18
1-4 Family Construction			205,459			201,896		2				234,379		(12	)
1-4 Family Investment Mortgage			410,267			394,754		4				407,476		1
Total 1-4 Family Properties			615,726			596,650		3				641,855		(4	)
Commercial Development			60,910			63,004		(3	)			109,764		(45	)
Residential Development			98,229			106,872		(8	)			156,816		(37	)
Land Acquisition			248,767			253,399		(2	)			186,934		33
Land and Development			407,906			423,275		(4	)			453,514		(10	)
Total Commercial Real Estate			13,293,898			12,996,755		2				11,503,417		16
Consumer Mortgages			5,379,284			5,246,640		3				5,124,523		5
Home Equity			1,773,987			1,757,250		1				1,579,218		12
Credit Cards			187,677			184,595		2				194,290		(3	)
Other Consumer Loans			1,187,459			1,259,523		(6	)			2,025,007		(41	)
Total Consumer			8,528,407			8,448,008		1				8,923,038		(4	)
Total		$	44,353,537		$	44,044,939		1	%		$	41,204,780		8	%
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		June 30, 2023			March 31, 2023			% Change			June 30, 2022			% Change
Commercial, Financial, and Agricultural		$	144,415		$	94,196		53	%		$	48,601		197	%
Owner-Occupied			22,197			25,591		(13	)			11,398		95
Total Commercial & Industrial			166,612			119,787		39				59,999		178
Multi-Family			1,748			1,806		(3	)			2,598		(33	)
Office Buildings			28,024			190		nm				1,796		nm
Shopping Centers			699			727		(4	)			750		(7	)
Warehouses			218			222		(2	)			924		(76	)
Other Investment Property			664			668		(1	)			1,302		(49	)
Total Investment Properties			31,353			3,613		768				7,370		325
1-4 Family Construction			632			—		nm				55		nm
1-4 Family Investment Mortgage			3,525			3,515		—				3,063		15
Total 1-4 Family Properties			4,157			3,515		18				3,118		33
Commercial Development			—			—		nm				432		(100	)
Residential Development			267			267		—				399		(33	)
Land Acquisition			871			886		(2	)			1,093		(20	)
Land and Development			1,138			1,153		(1	)			1,924		(41	)
Total Commercial Real Estate			36,648			8,281		343				12,412		195
Consumer Mortgages			41,877			39,536		6				22,857		83
Home Equity			9,936			7,967		25				8,100		23
Other Consumer Loans			6,433			6,889		(7	)			5,656		14
Total Consumer			58,246			54,392		7				36,613		59
Total		$	261,506		$	182,460		43	%		$	109,024		140	%

Synovus
CREDIT QUALITY DATA
(Unaudited)
(Dollars in thousands)						2023		2022						Second Quarter
		Second				First		Fourth		Third		Second		'23 vs '22
		Quarter				Quarter		Quarter		Quarter		Quarter		% Change
Non-performing Loans (NPLs)		$	261,506			182,460		128,061		122,094		109,024		140	%
Impaired Loans Held for Sale			—			—		—		447		—		nm
Other Real Estate and Other Assets			—			—		15,320		15,320		26,759		(100	)
Non-performing Assets (NPAs)			261,506			182,460		143,381		137,861		135,783		93
Allowance for Loan Losses (ALL)			471,238			457,010		443,424		421,359		407,837		16
Reserve for Unfunded Commitments			55,729			57,473		57,455		57,936		50,559		10
Allowance for Credit Losses (ACL)			526,967			514,483		500,879		479,295		458,396		15
Net Charge-Offs - Quarter			26,396			18,550		13,300		4,682		16,565
Net Charge-Offs - YTD			44,947			18,550		53,156		39,856		35,174
Net Charge-Offs / Average Loans - Quarter (1)			0.24	%		0.17		0.12		0.04		0.16
Net Charge-Offs / Average Loans - YTD (1)			0.20			0.17		0.13		0.13		0.18
NPLs / Loans			0.59			0.41		0.29		0.29		0.26
NPAs / Loans, ORE and specific other assets			0.59			0.41		0.33		0.32		0.33
ACL/Loans			1.19			1.17		1.15		1.13		1.11
ALL/Loans			1.06			1.04		1.01		0.99		0.99
ACL/NPLs			201.51			281.97		391.13		392.56		420.45
ALL/NPLs			180.20			250.47		346.26		345.11		374.08
Past Due Loans over 90 days and Still Accruing		$	3,643			3,529		3,373		3,443		2,251		62
As a Percentage of Loans Outstanding			0.01	%		0.01		0.01		0.01		0.01
Total Past Due Loans and Still Accruing		$	84,946			55,053		65,568		63,545		56,160		51
As a Percentage of Loans Outstanding			0.19	%		0.12		0.15		0.15		0.14
(1) Ratio is annualized.
SELECTED CAPITAL INFORMATION (1)
(Unaudited)
(Dollars in thousands)
		June 30, 2023				December 31, 2022		June 30, 2022
Common Equity Tier 1 Capital Ratio			9.85	%		9.63		9.46
Tier 1 Capital Ratio			10.88			10.68		10.56
Total Risk-Based Capital Ratio			12.79			12.54		12.43
Tier 1 Leverage Ratio			9.23			9.07		9.03
Total Synovus Financial Corp. shareholders' equity as a Percentage of Total Assets			7.88			7.49		7.99
Tangible Common Equity Ratio (2) (4)			6.17			5.84		6.26
Book Value Per Common Share (3)		$	29.05			27.07		27.84
Tangible Book Value Per Common Share (2)			25.37			23.78		24.52
(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.

 

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Media Contact

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Media Relations

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Investor Relations

investorrelations@synovus.com

Source: Synovus Financial Corp.

FAQ

What were the diluted earnings per share for Q2 2023?

The diluted earnings per share for Q2 2023 were $1.13.

What was the change in pre-provision net revenue compared to Q2 2022?

Pre-provision net revenue increased by 8% compared to Q2 2022.

How much did total deposits increase by in Q2 2023?

Total deposits increased by $126.5 million in Q2 2023.

What was the change in net interest income compared to the previous quarter?

Net interest income decreased by 5% compared to the previous quarter.

What was the change in non-interest revenue compared to Q2 2022?

Non-interest revenue increased by 15% compared to Q2 2022.

What was the change in non-interest expense compared to the previous quarter?

Non-interest expense decreased by 5% compared to the previous quarter.