Synovus Announces Earnings for the Second Quarter 2022

Rhea-AI Summary

Synovus Financial Corp. (NYSE: SNV) reported a diluted EPS of $1.16 for Q2 2022, a slight decrease from $1.19 in Q2 2021. Revenue rose to $523 million, a 7% year-over-year increase, driven by robust loan growth and improved margins. Loans increased by $1.04 billion sequentially, with non-performing loans at historically low levels. Despite an uncertain economic outlook, the company remains focused on growth and client relationships. Total deposits reached $49.03 billion, reflecting seasonal trends and rate-driven outflows.

Positive

• Total revenue increased by 7% year-over-year to $523 million.
• Period-end loans rose by $1.04 billion sequentially, showing strong growth.
• Credit quality metrics are historically low, indicating healthy loan performance.
• Non-interest-bearing deposits grew by $254 million during the quarter.

Negative

• Diluted EPS declined to $1.16, down $0.03 compared to the previous year.
• Non-interest revenue decreased by $8.1 million sequentially and by $9.8 million year-over-year.

Diluted Earnings per Share of $1.16 vs. $1.19 in 2Q21

Adjusted Diluted Earnings per Share of $1.17 vs. $1.20 in 2Q21

COLUMBUS, Ga.--(BUSINESS WIRE)-- Synovus Financial Corp. (NYSE: SNV) today reported financial results for the quarter ended June 30, 2022. "We are pleased with our second quarter results and financial metrics, which reflect the efforts of our team to expand client relationships and attract new business," said Synovus President and CEO Kevin Blair. "Revenues of $523 million, up 7 percent year-over-year, were driven by our fourth consecutive quarter of annualized double-digit loan growth, excluding PPP, and 22 basis points of margin expansion during the quarter. Our ongoing focus on growing core operating deposit relationships led to another quarter of account growth, as well as non-interest bearing deposit growth of $254 million. We also acknowledge the strength of our client base, with credit metrics at historically low levels and average operating liquidity up more than 40 percent on average compared to pre-pandemic levels. Despite the increasing uncertainty presented by economic risks, we have continued to prudently invest in our core businesses as well as new business initiatives, which will serve as ongoing sources of growth. I am confident in our ability to guide both our company and clients through the present environment while building an even stronger bank for the future."

Second Quarter 2022 Highlights

• Net income available to common shareholders of $169.8 million, or $1.16 per diluted share, up $0.05 sequentially and down $0.03 compared to prior year.
  • Adjusted diluted EPS of $1.17, up $0.09 sequentially and down $0.03 compared to prior year. Year-over-year decline was primarily due to prior year benefit from reversal of provision for credit losses.
• Total revenue of $522.7 million increased $33.7 million, or 7%, compared to prior year.
  • Total revenue, excluding Paycheck Protection program (PPP) fees, of $519.0 million increased $50.4 million, or 11%, compared to prior year.
• Period-end loans increased $1.04 billion sequentially, and $1.15 billion, or 12% annualized, excluding PPP loans.
• Credit quality metrics remain at historically low levels with sequential improvement in the NPA, NPL, and criticized/classified loans ratios.

Second Quarter Summary

	Reported												Adjusted
(dollars in thousands)	2Q22				1Q22				2Q21				2Q22				1Q22				2Q21
Net income available to common shareholders	$	169,761			$	162,746			$	177,909			$	171,018			$	158,368			$	178,969
Diluted earnings per share		1.16				1.11				1.19				1.17				1.08				1.20
Total revenue		522,654				497,582				488,947				N/A				N/A				N/A
Total loans		41,204,780				40,169,150				38,236,018				N/A				N/A				N/A
Total deposits		49,034,700				48,656,244				47,171,962				N/A				N/A				N/A
Return on avg assets		1.26	%			1.22	%			1.36	%			1.27	%			1.19	%			1.37	%
Return on avg common equity		16.48				14.20				15.40				16.60				13.82				15.50
Return on avg tangible common equity		18.84				16.02				17.41				18.98				15.59				17.52
Net interest margin		3.22				3.00				3.02				N/A				N/A				N/A
Efficiency ratio-TE(1)		53.87				54.66				55.24				53.43				55.50				54.41
NCO ratio-QTD		0.16				0.19				0.28				N/A				N/A				N/A
NPA ratio		0.33				0.40				0.46				N/A				N/A				N/A
(1) Taxable equivalent

Balance Sheet

Loans*
(dollars in millions)	2Q22			1Q22			Linked Quarter Change			Linked Quarter % Change			2Q21			Year/Year Change			Year/Year % Change
Commercial & industrial	$	20,778.3		$	20,352.3		$	426.0		2	%		$	19,239.4		$	1,538.9		8	%
Commercial real estate		11,503.4			11,145.3			358.1		3				10,361.1			1,142.4		11
Consumer		8,923.0			8,671.5			251.5		3				8,635.5			287.5		3
Total loans	$	41,204.8		$	40,169.2		$	1,035.6		3	%		$	38,236.0		$	2,968.8		8	%
*Amounts may not total due to rounding

• Total loans ended the quarter at $41.20 billion, up $1.04 billion sequentially, and $1.15 billion, or 12% annualized, excluding PPP loans.
• Commercial and industrial (C&I) loans increased $426.0 million sequentially, led by broad based growth within our Wholesale Banking segment, partially offset by declines in PPP loan balances of $116.2 million.
• CRE loans increased $358.1 million sequentially, led by multi-family loans in addition to our Specialty Healthcare group.
• Consumer loans increased $251.5 million sequentially across multiple products including home equity and mortgage.

Deposits*
(dollars in millions)	2Q22			1Q22			Linked Quarter Change				Linked Quarter % Change			2Q21			Year/Year Change				Year/Year % Change
Non-interest-bearing DDA	$	15,781.1		$	15,526.7		$	254.4			2	%		$	14,342.6		$	1,438.5			10	%
Interest-bearing DDA		6,327.1			6,685.4			(358.3	)		(5	)			5,839.8			487.2			8
Money market		13,793.0			14,596.9			(803.9	)		(6	)			13,983.1			(190.1	)		(1	)
Savings		1,498.7			1,476.7			22.0			1				1,341.5			157.3			12
Public funds		5,863.9			6,048.7			(184.8	)		(3	)			5,804.9			59.0			1
Time deposits		2,147.8			2,284.2			(136.4	)		(6	)			2,891.1			(743.3	)		(26	)
Brokered deposits		3,623.1			2,037.7			1,585.4			78				2,969.0			654.2			22
Total deposits	$	49,034.7		$	48,656.2		$	378.5			1	%		$	47,172.0		$	1,862.7			4	%
*Amounts may not total due to rounding

• Total deposits ended the quarter at $49.03 billion, up $378.5 million sequentially, impacted by seasonal effects and rate-driven outflows of $803.9 million and $358.3 million, respectively, in money-market and interest-bearing demand deposit accounts and offset by the use of brokered deposits as a cost-effective balance sheet and liquidity management tool.
  • Total non-interest-bearing deposits are now 35% of core deposits (total deposits excluding brokered deposits).
• Total deposit costs increased 4 bps sequentially to 0.15% and were impacted by the rising rate environment.

Income Statement Summary**
(in thousands, except per share data)	2Q22			1Q22			Linked Quarter Change				Linked Quarter % Change			2Q21				Year/Year Change				Year/Year % Change
Net interest income	$	425,388		$	392,248		$	33,140			8	%		$	381,860			$	43,528			11	%
Non-interest revenue		97,266			105,334			(8,068	)		(8	)			107,087				(9,821	)		(9	)
Non-interest expense		282,051			272,450			9,601			4				270,531				11,520			4
Provision for (reversal of) credit losses		12,688			11,400			1,288			11				(24,598	)			37,286			nm
Income before taxes	$	227,915		$	213,732		$	14,183			7	%		$	243,014			$	(15,099	)		(6	)%
Income tax expense		49,863			42,695			7,168			17				56,814				(6,951	)		(12	)
Preferred stock dividends		8,291			8,291			—			—				8,291				—			—
Net income available to common shareholders	$	169,761		$	162,746		$	7,015			4	%		$	177,909			$	(8,148	)		(5	)%
Weighted average common shares outstanding, diluted		146,315			146,665			(350	)		—	%			149,747				(3,432	)		(2	)%
Diluted earnings per share	$	1.16		$	1.11		$	0.05			5			$	1.19			$	(0.03	)		(3	)
Adjusted diluted earnings per share		1.17			1.08			0.09			8				1.20				(0.03	)		(3	)
** Amounts may not total due to rounding

Core Performance

• Net interest income of $425.4 million was up $33.1 million sequentially and increased $43.5 million, or 11%, compared to prior year, driven by strong loan growth and higher rates.
  • PPP fees of $3.7 million, down $3.2 million sequentially and down $16.7 million year-over-year.
  • Net interest margin was 3.22%, up 22 bps sequentially, aided by higher interest rates, lower cash balances, and slower deposit repricing.
• Non-interest revenue decreased $8.1 million, or 8%, sequentially and decreased $9.8 million, or 9%, compared to prior year.
  • Quarter-over-quarter and year-over-year declines were primarily related to a $7 million write-down on a minority fintech investment and a challenging mortgage banking environment, partially offset by increases in wealth revenue, capital markets, and card fee income categories.
• Non-interest expense increased $9.6 million, or 4%, sequentially and increased $11.5 million, or 4%, compared to prior year. Adjusted non-interest expense increased $4.1 million, or 1%, sequentially and increased $15.4 million, or 6%, compared to prior year.
  • Year-over-year increase was primarily due to incentives and costs associated with elevated performance, merit increases, new business initiatives, and infrastructure investments.
• Credit quality ratios remain near historical lows. Both the non-performing loan and asset ratios improved to 0.26% and 0.33%, respectively; the net charge-off ratio for the quarter was 0.16%, and total past dues were 0.14% of total loans outstanding.
• Provision for credit losses of $12.7 million increased $1.3 million sequentially; allowance for credit losses coverage ratio (to loans) of 1.11% declined 4 bps sequentially. Drivers of the decline included our strong credit performance, including reduction of NPLs, and quality and mix of new originations, offset by an uncertain and generally negative economic outlook.
• The effective tax rate was 21.88% for the quarter.

Capital Ratios
	2Q22			1Q22			2Q21
Common equity Tier 1 capital (CET1) ratio	9.46	%	*	9.49	%		9.75	%
Tier 1 capital ratio	10.56		*	10.63			11.00
Total risk-based capital ratio	12.43		*	12.56			13.25
Tier 1 leverage ratio	9.03		*	8.87			8.72
Tangible common equity ratio	6.26			6.80			7.73
* Ratios are preliminary.

Capital

• Preliminary CET1 ratio declined 3 bps during the quarter to 9.46%, and the preliminary total risk-based capital ratio of 12.43% declined 13 bps from the previous quarter as capital generated through earnings helped offset the impact of loan growth.

Second Quarter Earnings Conference Call

Synovus will host an earnings highlights conference call at 8:30 a.m. EDT on July 21, 2022. The earnings call will be accompanied by a slide presentation. Shareholders and other interested parties may listen to this conference call via simultaneous Internet broadcast. For a link to the webcast, go to investor.synovus.com/event. The replay will be archived for 12 months and will be available 30-45 minutes after the call.

Synovus Financial Corp. is a financial services company based in Columbus, Georgia, with approximately $57 billion in assets. Synovus provides commercial and retail banking and a full suite of specialized products and services, including private banking, treasury management, wealth management, mortgage services, premium finance, asset-based lending, structured lending, and international banking through 261 branches in Georgia, Alabama, South Carolina, Florida, and Tennessee. Synovus is a Great Place to Work-Certified Company and is on the web at synovus.com and on Twitter, Facebook, LinkedIn, and Instagram.

Forward-Looking Statements

This press release and certain of our other filings with the Securities and Exchange Commission contain statements that constitute “forward-looking statements” within the meaning of, and subject to the protections of, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are forward-looking statements. You can identify these forward-looking statements through Synovus’ use of words such as “believes,” “anticipates,” “expects,” “may,” “will,” “assumes,” “should,” “predicts,” “could,” “would,” “intends,” “targets,” “estimates,” “projects,” “plans,” “potential” and other similar words and expressions of the future or otherwise regarding the outlook for Synovus’ future business and financial performance and/or the performance of the banking industry and economy in general. These forward-looking statements include, among others, our expectations regarding our future operating and financial performance; expectations on our growth strategy, expense and revenue initiatives, capital management, balance sheet management, and future profitability; expectations on credit quality and performance; and the assumptions underlying our expectations. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve known and unknown risks and uncertainties which may cause the actual results, performance or achievements of Synovus to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are based on the information known to, and current beliefs and expectations of, Synovus’ management and are subject to significant risks and uncertainties. Actual results may differ materially from those contemplated by such forward-looking statements. A number of factors could cause actual results to differ materially from those contemplated by the forward-looking statements in this press release. Many of these factors are beyond Synovus’ ability to control or predict.

These forward-looking statements are based upon information presently known to Synovus’ management and are inherently subjective, uncertain and subject to change due to any number of risks and uncertainties, including, without limitation, the risks and other factors set forth in Synovus’ filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2021, under the captions “Cautionary Notice Regarding Forward-Looking Statements” and “Risk Factors” and in Synovus’ quarterly reports on Form 10-Q and current reports on Form 8-K. We believe these forward-looking statements are reasonable; however, undue reliance should not be placed on any forward-looking statements, which are based on current expectations and speak only as of the date that they are made. We do not assume any obligation to update any forward-looking statements as a result of new information, future developments or otherwise, except as otherwise may be required by law.

Non-GAAP Financial Measures

The measures entitled adjusted non-interest expense; 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 expense; efficiency ratio-TE; net income available to common shareholders; diluted earnings per share; return on average assets; return on average common equity; and the ratio of total shareholders' equity to total assets, respectively.

Management believes that these non-GAAP financial measures provide meaningful additional information about Synovus to assist management and investors in evaluating Synovus’ operating results, financial strength, the performance of its business, and the strength of its capital position. However, these non-GAAP financial measures have inherent limitations as analytical tools and should not be considered in isolation or as a substitute for analyses of operating results or capital position as reported under GAAP. The non-GAAP financial measures should be considered as additional views of the way our financial measures are affected by significant items and other factors, and since they are not required to be uniformly applied, they may not be comparable to other similarly titled measures at other companies. Adjusted non-interest 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)	2Q22				1Q22				2Q21
Adjusted non-interest expense
Total non-interest expense	$	282,051			$	272,450			$	270,531
Subtract: Earnout liability adjustments		—				—				(750	)
Subtract/add: Restructuring charges		1,850				6,424				(415	)
Subtract: Valuation adjustment to Visa derivative		(3,500	)			—				—
Subtract: Loss on early extinguishment of debt, net		—				(677	)			—
Subtract/add: Fair value adjustment on non-qualified deferred compensation		3,240				1,295				(1,126	)
Adjusted non-interest expense	$	283,641			$	279,492			$	268,240
Reconciliation of Non-GAAP Financial Measures, continued
(dollars in thousands)	2Q22				1Q22				2Q21
Adjusted tangible efficiency ratio
Adjusted non-interest expense	$	283,641			$	279,492			$	268,240
Subtract: Amortization of intangibles		(2,118	)			(2,118	)			(2,379	)
Adjusted tangible non-interest expense	$	281,523			$	277,374			$	265,861
Net interest income	$	425,388			$	392,248			$	381,860
Add: Tax equivalent adjustment		960				865				791
Add: Total non-interest revenue		97,266				105,334				107,087
Total TE revenue		523,614				498,447				489,738
Subtract/add: Fair value adjustment on non-qualified deferred compensation		3,240				1,295				(1,126	)
Total adjusted revenue	$	526,854			$	499,742			$	488,612
Efficiency ratio-TE		53.87	%			54.66	%			55.24	%
Adjusted tangible efficiency ratio		53.43				55.50				54.41

Adjusted return on average assets
Net income	$	178,052			$	171,037			$	186,200
Add: Earnout liability adjustments		—				—				750
Add/subtract: Restructuring charges		(1,850	)			(6,424	)			415
Add: Valuation adjustment to Visa derivative		3,500				—				—
Add: Loss on early extinguishment of debt, net		—				677				—
Add/subtract: Tax effect of adjustments (1)		(393	)			1,369				(105	)
Adjusted net income	$	179,309			$	166,659			$	187,260
Net income annualized	$	714,165			$	693,650			$	746,846
Adjusted net income annualized	$	719,206			$	675,895			$	751,098
Total average assets	$	56,536,940			$	56,855,898			$	55,017,771
Return on average assets		1.26	%			1.22	%			1.36	%
Adjusted return on average assets		1.27				1.19				1.37
Adjusted net income available to common shareholders and adjusted diluted earnings per share
Net income available to common shareholders	$	169,761			$	162,746			$	177,909
Add: Earnout liability adjustments		—				—				750
Add/subtract: Restructuring charges		(1,850	)			(6,424	)			415
Add: Valuation adjustment to Visa derivative		3,500				—				—
Add: Loss on early extinguishment of debt, net		—				677				—
Add/subtract: Tax effect of adjustments (1)		(393	)			1,369				(105	)
Adjusted net income available to common shareholders	$	171,018			$	158,368			$	178,969
Weighted average common shares outstanding, diluted		146,315				146,665				149,747
Diluted earnings per share	$	1.16			$	1.11			$	1.19
Adjusted diluted earnings per share		1.17				1.08				1.20

Reconciliation of Non-GAAP Financial Measures, continued
(dollars in thousands)	2Q22				1Q22				2Q21
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	$	169,761			$	162,746			$	177,909
Add: Earnout liability adjustments		—				—				750
Add/subtract: Restructuring charges		(1,850	)			(6,424	)			415
Add: Valuation adjustment to Visa derivative		3,500				—				—
Add: Loss on early extinguishment of debt, net		—				677				—
Add/subtract: Tax effect of adjustments (1)		(393	)			1,369				(105	)
Adjusted net income available to common shareholders	$	171,018			$	158,368			$	178,969
Adjusted net income available to common shareholders annualized	$	685,951			$	642,270			$	717,843
Add: Amortization of intangibles, annualized net of tax		6,471				6,543				7,128
Adjusted net income available to common shareholders excluding amortization of intangibles annualized	$	692,422			$	648,813			$	724,971
Net income available to common shareholders annualized	$	680,910			$	660,025			$	713,591
Add: Amortization of intangibles, annualized net of tax		6,471				6,543				7,128
Net income available to common shareholders excluding amortization of intangibles annualized	$	687,381			$	666,568			$	720,719
Total average shareholders' equity less preferred stock	$	4,132,536			$	4,647,426			$	4,632,568
Subtract: Goodwill		(452,390	)			(452,390	)			(452,390	)
Subtract: Other intangible assets, net		(32,387	)			(34,576	)			(41,399	)
Total average tangible shareholders' equity less preferred stock	$	3,647,759			$	4,160,460			$	4,138,779
Return on average common equity		16.48	%			14.20	%			15.40	%
Adjusted return on average common equity		16.60				13.82				15.50
Return on average tangible common equity		18.84				16.02				17.41
Adjusted return on average tangible common equity		18.98				15.59				17.52

(dollars in thousands)	June 30, 2022				March 31, 2022				December 31, 2021				June 30, 2021
Tangible common equity ratio
Total assets	$	57,382,745			$	56,419,549			$	57,317,226			$	54,938,659
Subtract: Goodwill		(452,390	)			(452,390	)			(452,390	)			(452,390	)
Subtract: Other intangible assets, net		(31,360	)			(33,478	)			(35,596	)			(40,354	)
Tangible assets	$	56,898,995			$	55,933,681			$	56,829,240			$	54,445,915
Total shareholders’ equity	$	4,584,438			$	4,824,635			$	5,296,800			$	5,237,714
Subtract: Goodwill		(452,390	)			(452,390	)			(452,390	)			(452,390	)
Subtract: Other intangible assets, net		(31,360	)			(33,478	)			(35,596	)			(40,354	)
Subtract: Preferred Stock, no par value		(537,145	)			(537,145	)			(537,145	)			(537,145	)
Tangible common equity	$	3,563,543			$	3,801,622			$	4,271,669			$	4,207,825
Total shareholders’ equity to total assets ratio		7.99	%			8.55	%			9.24	%			9.53	%
Tangible common equity ratio		6.26				6.80				7.52				7.73
(1) An assumed marginal tax rate of 23.8% for 2022 and 25.3% for 2021 was applied.

Synovus
INCOME STATEMENT DATA
(Unaudited)
(Dollars in thousands, except per share data)	Six Months Ended June 30,
	2022				2021				22 vs '21
									% Change
Interest income	$	869,834			$	822,560			6	%
Interest expense		52,199				66,844			(22	)
Net interest income		817,635				755,716			8
Provision for (reversal of) credit losses		24,088				(43,173	)		nm
Net interest income after provision for credit losses		793,547				798,889			(1	)
Non-interest revenue:
Service charges on deposit accounts		46,030				41,448			11
Fiduciary and asset management fees		40,377				36,759			10
Card fees		30,846				25,300			22
Brokerage revenue		29,898				26,899			11
Mortgage banking income		9,857				36,157			(73	)
Capital markets income		12,864				10,840			19
Income from bank-owned life insurance		15,722				16,031			(2	)
Investment securities gains (losses), net		—				(1,990	)		nm
Other non-interest revenue		17,006				26,599			(36	)
Total non-interest revenue		202,600				218,043			(7	)
Non-interest expense:
Salaries and other personnel expense		325,747				322,044			1
Net occupancy, equipment, and software expense		86,076				82,959			4
Third-party processing and other services		42,947				44,451			(3	)
Professional fees		19,338				17,031			14
FDIC insurance and other regulatory fees		13,144				11,127			18
Restructuring charges		(8,274	)			946			nm
Other operating expenses		75,523				59,107			28
Total non-interest expense		554,501				537,665			3
Income before income taxes		441,646				479,267			(8	)
Income tax expense		92,558				105,975			(13	)
Net income		349,088				373,292			(6	)
Less: Preferred stock dividends		16,581				16,581			—
Net income available to common shareholders	$	332,507			$	356,711			(7	)%
Net income per common share, basic	$	2.29			$	2.41			(5	)%
Net income per common share, diluted		2.27				2.38			(5	)
Cash dividends declared per common share		0.68				0.66			3
Return on average assets *		1.24	%			1.38	%		(14	) bps
Return on average common equity *		15.28				15.58			(30	)
Weighted average common shares outstanding, basic		145,301				148,289			(2	)%
Weighted average common shares outstanding, diluted		146,489				149,764			(2	)
nm - not meaningful
bps - basis points
* - ratios are annualized

Synovus
INCOME STATEMENT DATA
(Unaudited)
(Dollars in thousands, except per share data)	2022							2021									Second Quarter
	Second Quarter				First Quarter			Fourth Quarter			Third Quarter			Second Quarter			'22 vs '21
																	% Change
Interest income	$	453,772			416,062			418,279			412,504			412,743			10	%
Interest expense		28,384			23,814			25,966			27,587			30,883			(8	)
Net interest income		425,388			392,248			392,313			384,917			381,860			11
Provision for (reversal of) credit losses		12,688			11,400			(55,210	)		(7,868	)		(24,598	)		nm
Net interest income after provision for credit losses		412,700			380,848			447,523			392,785			406,458			2
Non-interest revenue:
Service charges on deposit accounts		23,491			22,539			22,221			22,641			21,414			10
Fiduciary and asset management fees		20,100			20,277			20,602			19,786			18,805			7
Card fees		16,089			14,756			12,861			13,238			13,304			21
Brokerage revenue		15,243			14,655			14,795			14,745			13,926			9
Mortgage banking income		3,904			5,953			7,059			11,155			13,842			(72	)
Capital markets income		7,393			5,472			7,188			8,089			3,335			122
Income from bank-owned life insurance		9,165			6,556			15,168			6,820			7,188			28
Investment securities gains (losses), net		—			—			230			962			—			nm
Other non-interest revenue		1,881			15,126			16,944			17,519			15,273			(88	)
Total non-interest revenue		97,266			105,334			117,068			114,955			107,087			(9	)
Non-interest expense:
Salaries and other personnel expense		161,063			164,684			167,018			160,364			160,567			—
Net occupancy, equipment, and software expense		43,199			42,877			42,780			43,483			41,825			3
Third-party processing and other services		21,952			20,996			22,791			19,446			24,419			(10	)
Professional fees		10,865			8,474			9,014			6,739			7,947			37
FDIC insurance and other regulatory fees		6,894			6,250			6,016			5,212			5,547			24
Restructuring charges		(1,850	)		(6,424	)		5,958			319			415			nm
Other operating expenses		39,928			35,593			41,630			31,469			29,811			34
Total non-interest expense		282,051			272,450			295,207			267,032			270,531			4
Income before income taxes		227,915			213,732			269,384			240,708			243,014			(6	)
Income tax expense		49,863			42,695			68,983			53,935			56,814			(12	)
Net income		178,052			171,037			200,401			186,773			186,200			(4	)
Less: Preferred stock dividends		8,291			8,291			8,291			8,291			8,291			—
Net income available to common shareholders	$	169,761			162,746			192,110			178,482			177,909			(5	)%
Net income per common share, basic	$	1.17			1.12			1.32			1.22			1.20			(3	)%
Net income per common share, diluted		1.16			1.11			1.31			1.21			1.19			(3	)
Cash dividends declared per common share		0.34			0.34			0.33			0.33			0.33			3
Return on average assets *		1.26	%		1.22			1.40			1.34			1.36			(10	) bps
Return on average common equity *		16.48			14.20			16.11			14.96			15.40			108
Weighted average common shares outstanding, basic		145,328			145,273			145,316			146,308			148,113			(2	)%
Weighted average common shares outstanding, diluted		146,315			146,665			146,793			147,701			149,747			(2	)
nm - not meaningful
bps - basis points
* - ratios are annualized

Synovus
BALANCE SHEET DATA		June 30, 2022				December 31, 2021				June 30, 2021
(Unaudited)
(In thousands, except share data)
ASSETS
Cash and due from banks		$	583,323			$	432,925			$	560,396
Interest-bearing funds with Federal Reserve Bank			1,023,030				2,479,006				2,598,213
Interest earning deposits with banks			29,139				25,535				21,513
Federal funds sold and securities purchased under resale agreements			29,568				72,387				82,554
Cash, cash equivalents, and restricted cash			1,665,060				3,009,853				3,262,676
Investment securities available for sale, at fair value			9,889,850				10,918,329				9,442,170
Loans held for sale ($76,864, $108,198, and $202,216 measured at fair value, respectively)			917,679				750,642				750,916
Loans, net of deferred fees and costs			41,204,780				39,311,958				38,236,018
Allowance for loan losses			(407,837	)			(427,597	)			(516,708	)
Loans, net			40,796,943				38,884,361				37,719,310
Cash surrender value of bank-owned life insurance			1,078,703				1,068,616				1,059,235
Premises, equipment, and software, net			383,060				407,241				446,447
Goodwill			452,390				452,390				452,390
Other intangible assets, net			31,360				35,596				40,354
Other assets			2,167,700				1,790,198				1,765,161
Total assets		$	57,382,745			$	57,317,226			$	54,938,659
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest-bearing deposits		$	16,876,710			$	16,392,653			$	15,345,629
Interest-bearing deposits			32,157,990				33,034,623				31,826,333
Total deposits			49,034,700				49,427,276				47,171,962
Federal funds purchased and securities sold under repurchase agreements			345,242				264,133				194,786
Long-term debt			1,804,104				1,204,229				1,203,293
Other liabilities			1,614,261				1,124,788				1,130,904
Total liabilities			52,798,307				52,020,426				49,700,945
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 170,012,527, 169,383,758, and 169,107,609; outstanding 145,357,669, 145,010,086, and 147,071,532			170,013				169,384				169,108
Additional paid-in capital			3,908,118				3,894,109				3,872,949
Treasury stock, at cost – 24,654,858, 24,373,672, and 22,036,077 shares			(944,484	)			(931,497	)			(824,197	)
Accumulated other comprehensive income (loss), net			(1,026,705	)			(82,321	)			45,726
Retained earnings			1,940,351				1,709,980				1,436,983
Total shareholders’ equity			4,584,438				5,296,800				5,237,714
Total liabilities and shareholders' equity		$	57,382,745			$	57,317,226			$	54,938,659

Synovus
AVERAGE BALANCES, INTEREST, AND YIELDS/RATES
(Unaudited)
	Second Quarter 2022										First Quarter 2022										Second Quarter 2021
(dollars in thousands)	Average Balance				Interest			Yield/ Rate			Average Balance				Interest			Yield/ Rate			Average Balance				Interest			Yield/ Rate
Assets
Interest earning assets:
Commercial loans (1) (2) (3)	$	31,870,387			$	308,442		3.88	%		$	30,756,752			$	280,588		3.70	%		$	29,936,751			$	287,677		3.85	%
Consumer loans (1) (2)		8,720,488				83,826		3.86				8,594,009				81,368		3.81				8,559,726				84,402		3.94
Less: Allowance for loan losses		(415,372	)			—		—				(423,953	)			—		—				(561,242	)			—		—
Loans, net		40,175,503				392,268		3.92				38,926,808				361,956		3.76				37,935,235				372,079		3.93
Investment securities available for sale		11,153,091				50,312		1.81				11,259,800				47,250		1.68				9,184,691				33,298		1.45
Trading account assets		11,987				73		2.44				9,078				39		1.73				2,831				8		1.15
Other earning assets(4)		813,028				1,660		0.81				1,919,531				815		0.17				2,705,819				740		0.11
FHLB and Federal Reserve Bank stock		179,837				1,820		4.05				160,065				685		1.71				159,340				800		2.01
Mortgage loans held for sale		85,299				921		4.32				103,887				882		3.40				242,940				1,859		3.06
Other loans held for sale		725,762				7,678		4.19				597,062				5,300		3.55				615,301				4,750		3.05
Total interest earning assets		53,144,507			$	454,732		3.43	%			52,976,231			$	416,927		3.18	%			50,846,157			$	413,534		3.26	%
Cash and due from banks		538,647										548,684										571,561
Premises and equipment		385,457										398,774										452,652
Other real estate		11,439										11,759										1,406
Cash surrender value of bank-owned life insurance		1,077,231										1,070,886										1,055,663
Other assets(5)		1,379,659										1,849,564										2,090,332
Total assets	$	56,536,940									$	56,855,898									$	55,017,771
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing demand deposits	$	9,513,334			$	3,598		0.15	%		$	9,549,527			$	2,372		0.10	%		$	8,601,262			$	2,441		0.11	%
Money market accounts		15,328,395				6,850		0.18				16,045,627				5,349		0.14				15,476,262				7,181		0.19
Savings deposits		1,506,195				72		0.02				1,460,648				67		0.02				1,333,297				55		0.02
Time deposits		2,829,684				1,688		0.24				3,009,795				2,138		0.29				3,792,382				4,894		0.52
Brokered deposits		2,878,536				6,293		0.88				2,788,124				3,733		0.54				3,057,607				4,799		0.63
Federal funds purchased and securities sold under repurchase agreements		246,737				219		0.35				194,352				11		0.02				204,053				35		0.07
Other short-term borrowings		478,469				896		0.74				4,653				—		—				—				—		—
Long-term debt		878,413				8,768		3.99				982,423				10,144		4.13				1,203,038				11,478		3.82
Total interest-bearing liabilities		33,659,763			$	28,384		0.33	%			34,035,149			$	23,814		0.28	%			33,667,901			$	30,883		0.36	%
Non-interest-bearing demand deposits		16,959,850										16,491,643										15,088,836
Other liabilities		1,247,646										1,144,535										1,091,321
Shareholders' equity		4,669,681										5,184,571										5,169,713
Total liabilities and shareholders' equity	$	56,536,940									$	56,855,898									$	55,017,771
Net interest income and net interest margin, taxable equivalent (6)					$	426,348		3.22	%						$	393,113		3.00	%						$	382,651		3.02	%
Less: taxable-equivalent adjustment						960										865										791
Net interest income					$	425,388									$	392,248									$	381,860

(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 2022 — $13.0 million, First Quarter 2022 — $20.7 million, and Second Quarter 2021 — $28.5 million.
(3)	Reflects taxable-equivalent adjustments, using the statutory federal tax rate of 21%, in adjusting interest on tax-exempt loans and investment securities to a taxable-equivalent basis.
(4)	Includes interest-bearing funds with Federal Reserve Bank, interest earning deposits with banks, and federal funds sold and securities purchased under resale agreements.
(5)	Includes average net unrealized gains/(losses) on investment securities available for sale of $(923.1) million, $(247.4) million, and $37.0 million for the Second Quarter 2022, First Quarter 2022, and Second Quarter 2021, respectively.
(6)	The net interest margin is calculated by dividing annualized net interest income-taxable equivalent by average total interest earning assets.

Synovus
AVERAGE BALANCES, INTEREST, AND YIELDS/RATES
(Unaudited)
	Six Months Ended June 30,
	2022										2021
(dollars in thousands)	Average Balance				Interest			Yield/ Rate			Average Balance				Interest			Yield/ Rate
Assets
Interest earning assets:
Commercial loans (1) (2) (3)	$	31,316,646			$	589,029		3.79	%		$	29,930,734			$	578,877		3.90	%
Consumer loans (1) (2)		8,657,598				165,194		3.83				8,424,423				166,466		3.97
Less: Allowance for loan losses		(419,639	)									(580,450	)
Loans, net		39,554,605				754,223		3.84				37,774,707				745,343		3.97
Investment securities available for sale		11,206,150				97,562		1.74				8,813,191				62,755		1.42
Trading account assets		10,540				112		2.13				2,947				30		2.01
Other earning assets(4)		1,363,223				2,475		0.36				2,771,576				1,458		0.10
FHLB and Federal Reserve Bank stock		170,006				2,505		2.95				158,503				1,468		1.85
Mortgage loans held for sale		94,542				1,803		3.81				244,940				3,516		2.87
Other loans held for sale		661,768				12,978		3.90				637,901				9,555		2.98
Total interest earning assets		53,060,834			$	871,658		3.31	%			50,403,765			$	824,125		3.29	%
Cash and due from banks		543,638										545,295
Premises and equipment		392,079										456,537
Other real estate		11,598										1,613
Cash surrender value of bank-owned life insurance		1,074,076										1,053,603
Other assets(5)		1,613,313										2,144,615
Total assets	$	56,695,538									$	54,605,428
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing demand deposits	$	9,531,330			$	5,970		0.13	%		$	8,586,092			$	5,414		0.13	%
Money market accounts		15,685,030				12,199		0.16				15,412,941				15,911		0.21
Savings deposits		1,483,547				139		0.02				1,276,608				105		0.02
Time deposits		2,919,242				3,826		0.26				3,972,840				11,936		0.61
Brokered deposits		2,833,580				10,026		0.71				3,212,608				11,023		0.69
Federal funds purchased and securities sold under repurchase agreements		220,689				230		0.21				206,735				69		0.07
Other short-term borrowings		242,870				896		0.73				—				—		—
Long-term debt		930,131				18,913		4.07				1,202,827				22,386		3.73
Total interest-bearing liabilities		33,846,419			$	52,199		0.31	%			33,870,651			$	66,844		0.39	%
Non-interest-bearing demand deposits		16,727,040										14,443,645
Other liabilities		1,196,375										1,138,073
Shareholders' equity		4,925,704										5,153,059
Total liabilities and shareholders' equity	$	56,695,538									$	54,605,428
Net interest income, taxable equivalent net interest margin (6)					$	819,459		3.11	%						$	757,281		3.03	%
Less: taxable-equivalent adjustment						1,824										1,565
Net interest income					$	817,635									$	755,716

(1)	Average loans are shown net of deferred fees and costs. NPLs are included.
(2)	Interest income includes net loan fees as follows: 2022 — $33.7 million and 2021 — $60.4 million.
(3)	Reflects taxable-equivalent adjustments, using the statutory federal tax rate of 21%, in adjusting interest on tax-exempt loans and investment securities to a taxable-equivalent basis.
(4)	Includes interest-bearing funds with Federal Reserve Bank, interest earning deposits with banks, and federal funds sold and securities purchased under resale agreements.
(5)	Includes average net unrealized gains/(losses) on investment securities available for sale of $(587.1) million and $76.3 million for the six months ended June 30, 2022 and 2021, respectively.
(6)	The net interest margin is calculated by dividing net interest income-TE 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, 2022			March 31, 2022			% Change			June 30, 2021			% Change
Commercial, Financial, and Agricultural		$	13,018,089		$	12,659,611		3	%		$	12,174,835		7	%
Owner-Occupied			7,760,236			7,692,714		1				7,064,599		10
Total Commercial & Industrial			20,778,325			20,352,325		2				19,239,434		8
Multi-Family			2,547,706			2,288,497		11				2,086,641		22
Hotels			1,597,930			1,593,983		—				1,411,443		13
Office Buildings			2,680,399			2,521,381		6				2,340,378		15
Shopping Centers			1,458,902			1,500,768		(3	)			1,611,249		(9	)
Warehouses			811,738			814,756		—				657,699		23
Other Investment Property			1,311,373			1,327,760		(1	)			1,110,603		18
Total Investment Properties			10,408,048			10,047,145		4				9,218,013		13
1-4 Family Construction			234,379			229,038		2				174,009		35
1-4 Family Investment Mortgage			407,476			391,636		4				462,335		(12	)
Total 1-4 Family Properties			641,855			620,674		3				636,344		1
Commercial Development			109,764			102,757		7				120,683		(9	)
Residential Development			156,816			193,580		(19	)			164,950		(5	)
Land Acquisition			186,934			181,162		3				221,061		(15	)
Land and Development			453,514			477,499		(5	)			506,694		(10	)
Total Commercial Real Estate			11,503,417			11,145,318		3				10,361,051		11
Consumer Mortgages			5,124,523			5,052,003		1				5,200,718		(1	)
Home Equity			1,579,218			1,416,341		11				1,395,717		13
Credit Cards			194,290			188,247		3				196,207		(1	)
Other Consumer Loans			2,025,007			2,014,916		1				1,842,891		10
Total Consumer			8,923,038			8,671,507		3				8,635,533		3
Total		$	41,204,780		$	40,169,150		3	%		$	38,236,018		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, 2022			March 31, 2022			% Change			June 30, 2021			% Change
Commercial, Financial, and Agricultural		$	48,601		$	64,888		(25	)%		$	70,943		(31	)%
Owner-Occupied			11,398			10,854		5				13,155		(13	)
Total Commercial & Industrial			59,999			75,742		(21	)			84,098		(29	)
Multi-Family			2,598			2,639		(2	)			2,406		8
Office Buildings			1,796			2,205		(19	)			1,618		11
Shopping Centers			750			915		(18	)			124		505
Warehouses			924			482		92				218		324
Other Investment Property			1,302			1,047		24				408		219
Total Investment Properties			7,370			7,288		1				4,774		54
1-4 Family Construction			55			55		—				548		(90	)
1-4 Family Investment Mortgage			3,063			2,187		40				1,927		59
Total 1-4 Family Properties			3,118			2,242		39				2,475		26
Commercial Development			432			625		(31	)			560		(23	)
Residential Development			399			407		(2	)			451		(12	)
Land Acquisition			1,093			1,021		7				1,029		6
Land and Development			1,924			2,053		(6	)			2,040		(6	)
Total Commercial Real Estate			12,412			11,583		7				9,289		34
Consumer Mortgages			22,857			29,997		(24	)			51,376		(56	)
Home Equity			8,100			8,854		(9	)			8,952		(10	)
Other Consumer Loans			5,656			5,955		(5	)			7,313		(23	)
Total Consumer			36,613			44,806		(18	)			67,641		(46	)
Total		$	109,024		$	132,131		(17	)%		$	161,028		(32	)%

Synovus
	CREDIT QUALITY DATA
	(Unaudited)
	(Dollars in thousands)		2022						2021						Second Quarter
			Second				First		Fourth		Third		Second		'22 vs '21
			Quarter				Quarter		Quarter		Quarter		Quarter		% Change
	Non-performing Loans (NPLs)		$	109,024			132,131		131,042		155,465		161,028		(32	)%
	Impaired Loans Held for Sale			—			—		—		—		—		nm
	Other Real Estate and Other Assets			26,759			26,759		27,137		16,883		16,806		59
	Non-performing Assets (NPAs)			135,783			158,890		158,179		172,348		177,834		(24	)
	Allowance for Loan Losses (ALL)			407,837			414,956		427,597		492,243		516,708		(21	)
	Reserve for Unfunded Commitments			50,559			47,317		41,885		42,971		46,890		8
	Allowance for Credit Losses (ACL)			458,396			462,273		469,482		535,214		563,598		(19	)
	Net Charge-Offs - Quarter			16,566			18,609		10,522		20,516		26,546
	Net Charge-Offs - YTD			35,175			18,609		77,788		67,266		46,750
	Net Charge-Offs / Average Loans - Quarter (1)			0.16	%		0.19		0.11		0.22		0.28
	Net Charge-Offs / Average Loans - YTD (1)			0.18			0.19		0.20		0.24		0.24
	NPLs / Loans			0.26			0.33		0.33		0.41		0.42
	NPAs / Loans, ORE and specific other assets			0.33			0.40		0.40		0.45		0.46
	ACL/Loans			1.11			1.15		1.19		1.40		1.47
	ALL/Loans			0.99			1.03		1.09		1.28		1.35
	ACL/NPLs			420.45			349.86		358.27		344.27		350.00
	ALL/NPLs			374.08			314.05		326.31		316.63		320.88
	Past Due Loans over 90 days and Still Accruing		$	2,251			3,067		6,770		5,960		4,415		(49	)
	As a Percentage of Loans Outstanding			0.01	%		0.01		0.02		0.02		0.01
	Total Past Due Loans and Still Accruing		$	56,160			45,385		57,565		60,817		49,321		14
	As a Percentage of Loans Outstanding			0.14	%		0.11		0.15		0.16		0.13
	Accruing Troubled Debt Restructurings (TDRs)		$	164,101			145,957		119,804		126,055		124,528		32
	(1) Ratio is annualized.
	SELECTED CAPITAL INFORMATION (1)
	(Unaudited)
	(Dollars in thousands)
			June 30, 2022				December 31, 2021		June 30, 2021
	Common Equity Tier 1 Capital Ratio			9.46	%		9.50		9.75
	Tier 1 Capital Ratio			10.56			10.66		11.00
	Total Risk-Based Capital Ratio			12.43			12.61		13.25
	Tier 1 Leverage Ratio			9.03			8.72		8.72
	Total Shareholders' Equity as a Percentage of Total Assets			7.99			9.24		9.53
	Tangible Common Equity Ratio (2) (4)			6.26			7.52		7.73
	Book Value Per Common Share (3)		$	27.84			32.82		31.96
	Tangible Book Value Per Common Share (2)			24.52			29.46		28.61
	(1) Current quarter regulatory capital information is preliminary.
	(2) Excludes the carrying value of goodwill and other intangible assets from common equity and total assets.
	(3) Book Value Per Common Share consists of Total Shareholders' Equity less Preferred Stock divided by total common shares outstanding.
	(4) See "Non-GAAP Financial Measures" of this report for applicable reconciliation.

 

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Source: Synovus Financial Corp.

FAQ

What was Synovus Financial's diluted earnings per share in Q2 2022?

Synovus Financial reported diluted earnings per share of $1.16 for Q2 2022.

How much did Synovus Financial's total revenue increase in Q2 2022?

Total revenue for Synovus Financial increased by 7% year-over-year to $523 million.

What are the key highlights from Synovus Financial's Q2 2022 earnings report?

Key highlights include an increase in loans by $1.04 billion, historically low credit quality metrics, and a decline in diluted EPS.

What was the total deposit amount for Synovus Financial in Q2 2022?

Total deposits for Synovus Financial reached $49.03 billion in Q2 2022.

What challenges did Synovus Financial face in its Q2 2022 report?

Synovus Financial faced a decline in diluted EPS and a decrease in non-interest revenue compared to both the previous quarter and year.