Synovus Announces Earnings for the Third Quarter 2022

Rhea-AI Summary

Synovus Financial Corp. (NYSE: SNV) reported its third-quarter financial results for 2022, showing a diluted earnings per share of $1.33, up from $1.21 in 3Q21. Net income rose to $194.8 million, with total revenue increasing by 16% year-over-year to $582.2 million. Pre-provision net revenue also saw a significant surge of 24% year-over-year to $288 million. Despite a 3% sequential decline in total deposits, overall credit quality remained robust. The preliminary CET1 ratio improved slightly to 9.51%.

Positive

• Earnings per share increased to $1.33, up 15% sequentially.
• Total revenue rose 16% year-over-year to $582.2 million.
• Pre-provision net revenue up 24% year-over-year to $288 million.
• Loan growth of $1.37 billion sequentially, or 13% annualized.
• Credit quality metrics remain strong with low net charge-off and historically low NPA ratio.

Negative

• Total deposits declined by $1.34 billion sequentially, or 3%, due to clients seeking higher-rate alternatives.

Diluted Earnings per Share of $1.33 vs. $1.21 in 3Q21

Adjusted Diluted Earnings per Share of $1.34 vs. $1.20 in 3Q21

COLUMBUS, Ga.--(BUSINESS WIRE)-- Synovus Financial Corp. (NYSE: SNV) today reported financial results for the quarter ended Sept. 30, 2022. “We demonstrated ongoing progress this quarter as we continue to execute our strategic growth plan,” said Synovus President and CEO Kevin Blair. “Our strong third quarter performance is a result of increased productivity, deepened, more profitable client relationships as well as prudent expense management. Pre-provision net revenue of $288 million, up 24% year over year, was driven by broad-based loan growth and robust margin expansion. Credit quality was solid in the third quarter, and capital remained at targeted levels as we continued to utilize our strong earnings to support client loan growth. We are confident in and committed to our path forward by investing in our core and new business initiatives while prioritizing credit, capital and liquidity management as we face economic uncertainty ahead.”

Third Quarter 2022 Highlights

• Net income available to common shareholders of $194.8 million, or $1.33 per diluted share, up $0.17 sequentially and up $0.12 compared to prior year.

• Total revenue of $582.2 million increased $59.6 million sequentially, or 11%, and increased $82.3 million, or 16%, compared to prior year, driven by strong loan growth and higher interest rates.

• Pre-provision net revenue of $288.2 million increased $47.6 million sequentially, or 20%, and increased $55.4 million, or 24%, compared to prior year.

• Period-end loans increased $1.37 billion sequentially, or 13% annualized, with growth diversified across asset classes and commercial business lines.

• Total deposits declined $1.34 billion sequentially, or 3%, primarily resulting from higher-rate, non-bank liquidity alternatives for clients, seasonality, and excess liquidity deployment.

• Credit quality metrics continue to remain at strong levels with sequential improvement in the NPA ratio, stable NPL and criticized/classified loan ratios, and a historically low net charge-off ratio.

• Maintained preliminary CET1 ratio of 9.51% as robust capital generation continued to support client loan growth.

Third Quarter Summary

	Reported												Adjusted
(dollars in thousands)		3Q22				2Q22				3Q21				3Q22				2Q22				3Q21
Net income available to common shareholders	$	194,753			$	169,761			$	178,482			$	195,481			$	171,018			$	177,760
Diluted earnings per share		1.33				1.16				1.21				1.34				1.17				1.20
Total revenue		582,217				522,654				499,872				N/A				N/A				N/A
Total loans		42,571,458				41,204,780				38,341,030				N/A				N/A				N/A
Total deposits		47,697,564				49,034,700				47,688,419				N/A				N/A				N/A
Return on avg assets		1.39	%			1.26	%			1.34	%			1.39	%			1.27	%			1.33	%
Return on avg common equity		18.66				16.48				14.96				18.73				16.60				14.90
Return on avg tangible common equity		21.29				18.84				16.85				21.37				18.98				16.79
Net interest margin		3.49				3.22				3.01				N/A				N/A				N/A
Efficiency ratio-TE(1)(2)		50.41				53.87				53.34				49.98				53.43				52.96
NCO ratio-QTD		0.04				0.16				0.22				N/A				N/A				N/A
NPA ratio		0.32				0.33				0.45				N/A				N/A				N/A
(1) Taxable equivalent
(2) Adjusted tangible efficiency ratio

Balance Sheet

Loans*
(dollars in millions)	3Q22			2Q22			Linked Quarter Change			Linked Quarter % Change			3Q21			Year/Year Change			Year/Year % Change
Commercial & industrial**	$	21,212.5		$	20,778.3		$	434.2		2	%		$	18,994.3		$	2,218.2		12	%
Commercial real estate		12,288.0			11,503.4			784.5		7				10,574.1			1,713.9		16
Consumer		9,071.0			8,923.0			147.9		2				8,772.7			298.3		3
Total loans	$	42,571.5		$	41,204.8		$	1,366.7		3	%		$	38,341.0		$	4,230.4		11	%
*Amounts may not total due to rounding
**Includes PPP balances of $42.8 million, $86.7 million, and $782.2 million at 3Q22, 2Q22, and 3Q21, respectively.

• Total loans ended the quarter at $42.57 billion, up $1.37 billion sequentially, or 13% annualized.

• Commercial and industrial (C&I) loans increased $434.2 million sequentially, led by broad based growth within our Wholesale Banking segment and higher utilization from commitments.

• CRE loans increased $784.5 million sequentially, led by growth in multi-family loans and our Specialty Healthcare group in addition to the impact of a slowdown in payoffs.

• Consumer loans increased $147.9 million sequentially led by home equity and mortgage.

Deposits*
(dollars in millions)	3Q22			2Q22			Linked Quarter Change				Linked Quarter % Change			3Q21			Year/Year Change				Year/Year % Change
Non-interest-bearing DDA	$	15,373.7		$	15,781.1		$	(407.4	)		(3	)%		$	14,832.9		$	540.8			4	%
Interest-bearing DDA		5,776.8			6,327.1			(550.3	)		(9	)			6,056.0			(279.2	)		(5	)
Money market		12,918.6			13,793.0			(874.5	)		(6	)			14,267.4			(1,348.9	)		(9	)
Savings		1,470.1			1,498.7			(28.6	)		(2	)			1,380.4			89.7			6
Public funds		5,549.7			5,863.9			(314.2	)		(5	)			5,791.6			(241.9	)		(4	)
Time deposits		2,110.9			2,147.8			(36.8	)		(2	)			2,579.3			(468.4	)		(18	)
Brokered deposits		4,497.8			3,623.1			874.7			24				2,780.7			1,717.1			62
Total deposits	$	47,697.6		$	49,034.7		$	(1,337.1	)		(3	)%		$	47,688.4		$	9.1			—	%
*Amounts may not total due to rounding

• Total deposits ended the quarter at $47.70 billion, down $1.34 billion sequentially, impacted by higher-rate, non-bank liquidity alternatives for clients, seasonality, and excess liquidity deployment.

• Total deposit costs increased 23 bps sequentially to 0.38% and were primarily impacted by the rising rate environment.

Income Statement Summary**
(in thousands, except per share data)		3Q22				2Q22			Linked Quarter Change			Linked Quarter % Change				3Q21			Year/Year Change				Year/Year % Change
Net interest income	$	477,919			$	425,388			$	52,531		12	%		$	384,917			$	93,002			24	%
Non-interest revenue		104,298				97,266				7,032		7				114,955				(10,657	)		(9	)
Non-interest expense		294,010				282,051				11,959		4				267,032				26,978			10
Provision for (reversal of) credit losses		25,581				12,688				12,893		102				(7,868	)			33,449			nm
Income before taxes	$	262,626			$	227,915			$	34,711		15	%		$	240,708			$	21,918			9	%
Income tax expense		59,582				49,863				9,719		19				53,935				5,647			10
Preferred stock dividends		8,291				8,291				—		—				8,291				—			—
Net income available to common shareholders	$	194,753			$	169,761			$	24,992		15	%		$	178,482			$	16,271			9	%
Weighted average common shares outstanding, diluted		146,418				146,315				103		—	%			147,701				(1,283	)		(1	) %
Diluted earnings per share	$	1.33			$	1.16			$	0.17		15			$	1.21			$	0.12			10
Adjusted diluted earnings per share		1.34				1.17				0.17		15				1.20				0.14			12
Effective tax rate		22.69	%			21.88	%									22.41	%
** Amounts may not total due to rounding

Core Performance

• Net interest income of $477.9 million was up $52.5 million sequentially, or 12%, and increased $93.0 million, or 24%, compared to prior year, driven by strong loan growth and higher rates.
  • Net interest margin was 3.49%, up 27 bps sequentially, aided by higher interest rates and deposit pricing discipline.

• Non-interest revenue increased $7.0 million, or 7%, sequentially and decreased $10.7 million, or 9%, compared to prior year.
  • The quarter-over-quarter increase was largely due to a prior quarter $7 million write-down on a minority fintech investment.
  • Year-over-year decline was primarily related to the continued challenging residential mortgage banking environment and prior year gains on equity investments, partially offset by increases in wealth revenue, brokerage revenue, and card fee income categories.

• Non-interest expense increased $12.0 million, or 4%, sequentially and increased $27.0 million, or 10%, compared to prior year. Adjusted non-interest expense increased $10.5 million, or 4%, sequentially and increased $27.1 million, or 10%, compared to prior year.
  • Increases were primarily due to higher performance-based incentives, merit-related salary increases, and operating costs related to realized revenue growth and investments in new growth initiatives.

• Credit quality ratios remain historically strong. The non-performing loan and asset ratios were 0.29% and 0.32%, respectively; the net charge-off ratio for the quarter was 0.04%, and total past dues were 0.15% of total loans outstanding.

• Provision for credit losses of $25.6 million increased $12.9 million sequentially and increased $33.4 million compared to prior year. Drivers of the increase included loan growth and a modest increase in the allowance for credit losses coverage ratio (to loans) of 2 bps sequentially, a result of deteriorating economic conditions mostly offset by continued strong credit quality.

Capital Ratios
	3Q22			2Q22			3Q21
Common equity Tier 1 capital (CET1) ratio	9.51	%	*	9.46	%		9.58	%
Tier 1 capital ratio	10.58		*	10.56			10.79
Total risk-based capital ratio	12.44		*	12.43			12.92
Tier 1 leverage ratio	9.04		*	9.03			8.78
Tangible common equity ratio	5.52			6.26			7.68
* Ratios are preliminary.

Capital

• Preliminary CET1 ratio improved 5 bps during the quarter to 9.51%, and the preliminary total risk-based capital ratio of 12.44% improved 1 bps from the previous quarter as capital generated through earnings helped offset the impact of loan growth.

Third Quarter Earnings Conference Call

Synovus will host an earnings highlights conference call at 8:30 a.m. EDT on October 20, 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 $59 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 254 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)		3Q22				2Q22				3Q21
Adjusted non-interest expense
Total non-interest expense	$	294,010			$	282,051			$	267,032
Subtract: Earnout liability adjustments		—				—				243
Subtract/add: Restructuring charges		(956	)			1,850				(319	)
Subtract: Valuation adjustment to Visa derivative		—				(3,500	)			—
Subtract/add: Fair value adjustment on non-qualified deferred compensation		1,076				3,240				97
Adjusted non-interest expense	$	294,130			$	283,641			$	267,053
Reconciliation of Non-GAAP Financial Measures, continued
(dollars in thousands)		3Q22				2Q22				3Q21
Adjusted tangible efficiency ratio
Adjusted non-interest expense	$	294,130			$	283,641			$	267,053
Subtract: Amortization of intangibles		(2,118	)			(2,118	)			(2,379	)
Adjusted tangible non-interest expense	$	292,012			$	281,523			$	264,674
Net interest income	$	477,919			$	425,388			$	384,917
Add: Tax equivalent adjustment		972				960				736
Add: Total non-interest revenue		104,298				97,266				114,955
Total TE revenue		583,189				523,614				500,608
Add/subtract: Investment securities losses (gains), net		—				—				(962	)
Subtract/add: Fair value adjustment on non-qualified deferred compensation		1,076				3,240				97
Total adjusted revenue	$	584,265			$	526,854			$	499,743
Efficiency ratio-TE		50.41	%			53.87	%			53.34	%
Adjusted tangible efficiency ratio		49.98				53.43				52.96

Adjusted return on average assets
Net income	$	203,044			$	178,052			$	186,773
Add: Earnout liability adjustments		—				—				(243	)
Add/subtract: Restructuring charges		956				(1,850	)			319
Add: Valuation adjustment to Visa derivative		—				3,500				—
Add/subtract: Investment securities losses (gains), net		—				—				(962	)
Add/subtract: Tax effect of adjustments (1)		(228	)			(393	)			164
Adjusted net income	$	203,772			$	179,309			$	186,051
Net income annualized	$	805,555			$	714,165			$	741,002
Adjusted net income annualized	$	808,443			$	719,206			$	738,137
Total average assets	$	58,055,979			$	56,536,940			$	55,326,260
Return on average assets		1.39	%			1.26	%			1.34	%
Adjusted return on average assets		1.39				1.27				1.33
Adjusted net income available to common shareholders and adjusted diluted earnings per share
Net income available to common shareholders	$	194,753			$	169,761			$	178,482
Add: Earnout liability adjustments		—				—				(243	)
Add/subtract: Restructuring charges		956				(1,850	)			319
Add: Valuation adjustment to Visa derivative		—				3,500				—
Add/subtract: Investment securities losses (gains), net		—				—				(962	)
Add/subtract: Tax effect of adjustments (1)		(228	)			(393	)			164
Adjusted net income available to common shareholders	$	195,481			$	171,018			$	177,760
Weighted average common shares outstanding, diluted		146,418				146,315				147,701
Diluted earnings per share	$	1.33			$	1.16			$	1.21
Adjusted diluted earnings per share		1.34				1.17				1.20

Reconciliation of Non-GAAP Financial Measures, continued
(dollars in thousands)		3Q22				2Q22				3Q21
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	$	194,753			$	169,761			$	178,482
Subtract/add: Earnout liability adjustments		—				—				(243	)
Add/subtract: Restructuring charges		956				(1,850	)			319
Add: Valuation adjustment to Visa derivative		—				3,500				—
Add/subtract: Investment securities losses (gains), net		—				—				(962	)
Add/subtract: Tax effect of adjustments (1)		(228	)			(393	)			164
Adjusted net income available to common shareholders	$	195,481			$	171,018			$	177,760
Adjusted net income available to common shareholders annualized	$	775,550			$	685,951			$	705,243
Add: Amortization of intangibles, annualized net of tax		6,401				6,471				7,050
Adjusted net income available to common shareholders excluding amortization of intangibles annualized	$	781,951			$	692,422			$	712,293
Net income available to common shareholders annualized	$	772,661			$	680,910			$	708,108
Add: Amortization of intangibles, annualized net of tax		6,401				6,471				7,050
Net income available to common shareholders excluding amortization of intangibles annualized	$	779,062			$	687,381			$	715,158
Total average shareholders' equity less preferred stock	$	4,141,516			$	4,132,536			$	4,734,754
Subtract: Goodwill		(452,390	)			(452,390	)			(452,390	)
Subtract: Other intangible assets, net		(30,214	)			(32,387	)			(39,109	)
Total average tangible shareholders' equity less preferred stock	$	3,658,912			$	3,647,759			$	4,243,255
Return on average common equity		18.66	%			16.48	%			14.96	%
Adjusted return on average common equity		18.73				16.60				14.90
Return on average tangible common equity		21.29				18.84				16.85
Adjusted return on average tangible common equity		21.37				18.98				16.79

(dollars in thousands)	September 30, 2022				June 30, 2022				December 31, 2021				September 30, 2021
Tangible common equity ratio
Total assets	$	58,639,522			$	57,382,745			$	57,317,226			$	55,509,129
Subtract: Goodwill		(452,390	)			(452,390	)			(452,390	)			(452,390	)
Subtract: Other intangible assets, net		(29,242	)			(31,360	)			(35,596	)			(37,975	)
Tangible assets	$	58,157,890			$	56,898,995			$	56,829,240			$	55,018,764
Total shareholders’ equity	$	4,229,715			$	4,584,438			$	5,296,800			$	5,252,802
Subtract: Goodwill		(452,390	)			(452,390	)			(452,390	)			(452,390	)
Subtract: Other intangible assets, net		(29,242	)			(31,360	)			(35,596	)			(37,975	)
Subtract: Preferred Stock, no par value		(537,145	)			(537,145	)			(537,145	)			(537,145	)
Tangible common equity	$	3,210,938			$	3,563,543			$	4,271,669			$	4,225,292
Total shareholders’ equity to total assets ratio		7.21	%			7.99	%			9.24	%			9.46	%
Tangible common equity ratio		5.52				6.26				7.52				7.68
(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)	Nine Months Ended September 30,
			2022				2021			22 vs '21
										% Change
	Interest income	$	1,421,133			$	1,235,064			15	%
	Interest expense		125,578				94,430			33
	Net interest income		1,295,555				1,140,634			14
	Provision for (reversal of) credit losses		49,669				(51,041	)		nm
	Net interest income after provision for credit losses		1,245,886				1,191,675			5
	Non-interest revenue:
	Service charges on deposit accounts		69,428				64,089			8
	Fiduciary and asset management fees		59,577				56,545			5
	Card fees		45,946				38,538			19
	Brokerage revenue		47,038				41,644			13
	Mortgage banking income		14,922				47,312			(68	)
	Capital markets income		19,704				18,929			4
	Income from bank-owned life insurance		22,514				22,851			(1	)
	Investment securities gains (losses), net		—				(1,028	)		nm
	Other non-interest revenue		27,768				44,117			(37	)
	Total non-interest revenue		306,897				332,997			(8	)
	Non-interest expense:
	Salaries and other personnel expense		499,081				482,408			3
	Net occupancy, equipment, and software expense		129,538				126,442			2
	Third-party processing and other services		65,486				63,897			2
	Professional fees		26,094				23,771			10
	FDIC insurance and other regulatory fees		20,851				16,338			28
	Restructuring charges		(7,318	)			1,265			nm
	Other operating expenses		114,779				90,576			27
	Total non-interest expense		848,511				804,697			5
	Income before income taxes		704,272				719,975			(2	)
	Income tax expense		152,140				159,910			(5	)
	Net income		552,132				560,065			(1	)
	Less: Preferred stock dividends		24,872				24,872			—
	Net income available to common shareholders	$	527,260			$	535,193			(1	)%
	Net income per common share, basic	$	3.63			$	3.63			0	%
	Net income per common share, diluted		3.60				3.59			0
	Cash dividends declared per common share		1.02				0.99			3
	Return on average assets *		1.29	%			1.37	%		(8) bps
	Return on average common equity *		16.37				15.37			100
	Weighted average common shares outstanding, basic		145,329				147,622			(2	)%
	Weighted average common shares outstanding, diluted		146,465				149,069			(2	)
	nm - not meaningful
	bps - basis points
	* - ratios are annualized

Synovus
	INCOME STATEMENT DATA
	(Unaudited)
	(Dollars in thousands, except per share data)	2022										2021						Third Quarter
		Third Quarter				Second Quarter			First Quarter			Fourth Quarter			Third Quarter			'22 vs '21
																		% Change
	Interest income	$	551,299			453,772			416,062			418,279			412,504			34	%
	Interest expense		73,380			28,384			23,814			25,966			27,587			166
	Net interest income		477,919			425,388			392,248			392,313			384,917			24
	Provision for (reversal of) credit losses		25,581			12,688			11,400			(55,210	)		(7,868	)		nm
	Net interest income after provision for credit losses		452,338			412,700			380,848			447,523			392,785			15
	Non-interest revenue:
	Service charges on deposit accounts		23,398			23,491			22,539			22,221			22,641			3
	Fiduciary and asset management fees		19,201			20,100			20,277			20,602			19,786			(3	)
	Card fees		15,101			16,089			14,756			12,861			13,238			14
	Brokerage revenue		17,140			15,243			14,655			14,795			14,745			16
	Mortgage banking income		5,065			3,904			5,953			7,059			11,155			(55	)
	Capital markets income		6,839			7,393			5,472			7,188			8,089			(15	)
	Income from bank-owned life insurance		6,792			9,165			6,556			15,168			6,820			—
	Investment securities gains (losses), net		—			—			—			230			962			nm
	Other non-interest revenue		10,762			1,881			15,126			16,944			17,519			(39	)
	Total non-interest revenue		104,298			97,266			105,334			117,068			114,955			(9	)
	Non-interest expense:
	Salaries and other personnel expense		173,334			161,063			164,684			167,018			160,364			8
	Net occupancy, equipment, and software expense		43,462			43,199			42,877			42,780			43,483			—
	Third-party processing and other services		22,539			21,952			20,996			22,791			19,446			16
	Professional fees		6,755			10,865			8,474			9,014			6,739			—
	FDIC insurance and other regulatory fees		7,707			6,894			6,250			6,016			5,212			48
	Restructuring charges		956			(1,850	)		(6,424	)		5,958			319			nm
	Other operating expenses		39,257			39,928			35,593			41,630			31,469			25
	Total non-interest expense		294,010			282,051			272,450			295,207			267,032			10
	Income before income taxes		262,626			227,915			213,732			269,384			240,708			9
	Income tax expense		59,582			49,863			42,695			68,983			53,935			10
	Net income		203,044			178,052			171,037			200,401			186,773			9
	Less: Preferred stock dividends		8,291			8,291			8,291			8,291			8,291			—
	Net income available to common shareholders	$	194,753			169,761			162,746			192,110			178,482			9	%
	Net income per common share, basic	$	1.34			1.17			1.12			1.32			1.22			10	%
	Net income per common share, diluted		1.33			1.16			1.11			1.31			1.21			10
	Cash dividends declared per common share		0.34			0.34			0.34			0.33			0.33			3
	Return on average assets *		1.39	%		1.26			1.22			1.40			1.34			5 bps
	Return on average common equity *		18.66			16.48			14.20			16.11			14.96			370
	Weighted average common shares outstanding, basic		145,386			145,328			145,273			145,316			146,308			(1	)%
	Weighted average common shares outstanding, diluted		146,418			146,315			146,665			146,793			147,701			(1	)
	nm - not meaningful
	bps - basis points
	* - ratios are annualized

Synovus
	BALANCE SHEET DATA		September 30, 2022				December 31, 2021				September 30, 2021
	(Unaudited)
	(In thousands, except share data)
	ASSETS
	Cash and due from banks		$	516,163			$	432,925			$	483,035
	Interest-bearing funds with Federal Reserve Bank			1,260,748				2,479,006				2,103,497
	Interest earning deposits with banks			32,445				25,535				23,261
	Federal funds sold and securities purchased under resale agreements			58,448				72,387				77,627
	Cash, cash equivalents, and restricted cash			1,867,804				3,009,853				2,687,420
	Investment securities available for sale, at fair value			9,587,508				10,918,329				10,481,071
	Loans held for sale ($56,517, $108,198, and $152,258 measured at fair value, respectively)			696,450				750,642				550,948
	Loans, net of deferred fees and costs			42,571,458				39,311,958				38,341,030
	Allowance for loan losses			(421,359	)			(427,597	)			(492,243	)
	Loans, net			42,150,099				38,884,361				37,848,787
	Cash surrender value of bank-owned life insurance			1,084,060				1,068,616				1,065,256
	Premises, equipment, and software, net			376,823				407,241				423,933
	Goodwill			452,390				452,390				452,390
	Other intangible assets, net			29,242				35,596				37,975
	Other assets			2,395,146				1,790,198				1,961,349
	Total assets		$	58,639,522			$	57,317,226			$	55,509,129
	LIABILITIES AND SHAREHOLDERS' EQUITY
	Liabilities:
	Deposits:
	Non-interest-bearing deposits		$	16,359,551			$	16,392,653			$	15,787,882
	Interest-bearing deposits			31,338,013				33,034,623				31,900,537
	Total deposits			47,697,564				49,427,276				47,688,419
	Federal funds purchased and securities sold under repurchase agreements			240,210				264,133				262,548
	Long-term debt			4,434,327				1,204,229				1,203,761
	Other liabilities			2,037,706				1,124,788				1,101,599
	Total liabilities			54,409,807				52,020,426				50,256,327
	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 170,097,791, 169,383,758, and 169,170,589; outstanding 145,442,933, 145,010,086, and 145,483,994			170,098				169,384				169,171
	Additional paid-in capital			3,916,729				3,894,109				3,883,289
	Treasury stock, at cost – 24,654,858, 24,373,672, and 23,686,595 shares			(944,484	)			(931,497	)			(898,707	)
	Accumulated other comprehensive income (loss), net			(1,534,314	)			(82,321	)			(5,462	)
	Retained earnings			2,084,541				1,709,980				1,567,366
	Total shareholders’ equity			4,229,715				5,296,800				5,252,802
	Total liabilities and shareholders' equity		$	58,639,522			$	57,317,226			$	55,509,129

Synovus
AVERAGE BALANCES, INTEREST, AND YIELDS/RATES
(Unaudited)
	Third Quarter 2022										Second Quarter 2022										Third 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)	$	32,836,799			$	384,995		4.65	%		$	31,870,387			$	308,442		3.88	%		$	28,984,837			$	285,445		3.91	%
Consumer loans (1) (2)		8,931,573				94,425		4.21				8,720,488				83,826		3.86				8,549,296				84,615		3.94
Less: Allowance for loan losses		(419,160	)			—		—				(415,372	)			—		—				(514,828	)			—		—
Loans, net		41,349,212				479,420		4.60				40,175,503				392,268		3.92				37,019,305				370,060		3.97
Investment securities available for sale		11,126,705				53,550		1.93				11,153,091				50,312		1.81				9,876,651				35,876		1.45
Trading account assets		16,771				81		1.93				11,987				73		2.44				5,192				15		1.15
Other earning assets(4)		1,012,717				5,791		2.24				813,028				1,660		0.81				3,271,501				1248		0.15
FHLB and Federal Reserve Bank stock		244,879				1,412		2.31				179,837				1,820		4.05				159,741				501		1.26
Mortgage loans held for sale		66,601				862		5.18				85,299				921		4.32				196,032				1,410		2.88
Other loans held for sale		892,805				11,155		4.89				725,762				7,678		4.19				527,736				4,130		3.06
Total interest earning assets		54,709,690			$	552,271		4.01	%			53,144,507			$	454,732		3.43	%			51,056,158			$	413,240		3.22	%
Cash and due from banks		557,537										538,647										611,783
Premises and equipment		383,189										385,457										447,046
Other real estate		2,398										11,439										1,513
Cash surrender value of bank-owned life insurance		1,080,914										1,077,231										1,061,478
Other assets(5)		1,322,251										1,379,659										2,148,282
Total assets	$	58,055,979									$	56,536,940									$	55,326,260
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing demand deposits	$	8,436,922			$	5,782		0.27	%		$	9,513,334			$	3,598		0.15	%		$	8,463,325			$	2,192		0.10	%
Money market accounts		15,411,450				20,696		0.53				15,328,395				6,850		0.18				15,597,723				6,081		0.15
Savings deposits		1,508,312				84		0.02				1,506,195				72		0.02				1,377,089				60		0.02
Time deposits		2,270,163				2,428		0.42				2,829,684				1,688		0.24				3,424,028				3,572		0.41
Brokered deposits		3,899,669				17,927		1.82				2,878,536				6,293		0.88				2,859,123				4,181		0.58
Federal funds purchased and securities sold under repurchase agreements		240,412				641		1.04				246,737				219		0.35				202,525				36		0.07
Other short-term borrowings		702,443				3,666		2.04				478,469				896		0.74				—				—		—
Long-term debt		2,656,939				22,156		3.29				878,413				8,768		3.99				1,203,500				11,465		3.81
Total interest-bearing liabilities		35,126,310			$	73,380		0.81	%			33,659,763			$	28,384		0.33	%			33,127,313			$	27,587		0.33	%
Non-interest-bearing demand deposits		16,904,353										16,959,850										15,755,929
Other liabilities		1,346,655										1,247,646										1,171,119
Shareholders' equity		4,678,661										4,669,681										5,271,899
Total liabilities and shareholders' equity	$	58,055,979									$	56,536,940									$	55,326,260
Net interest income and net interest margin, taxable equivalent (6)					$	478,891		3.49	%						$	426,348		3.22	%						$	385,653		3.01	%
Less: taxable-equivalent adjustment						972										960										736
Net interest income					$	477,919									$	425,388									$	384,917

(1)	Average loans are shown net of deferred fees and costs. NPLs are included.
(2)	Interest income includes net loan fees as follows: Third Quarter 2022 — $11.9 million, Second Quarter 2022 — $13.0 million, and Third Quarter 2021 — $30.4 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 $(1.06) billion, $(923.1) million, and $66.6 million for the Third Quarter 2022, Second Quarter 2022, and Third 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)
	Nine Months Ended September 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)	$	31,828,932			$	974,024		4.09	%		$	29,611,970			$	864,322		3.90	%
Consumer loans (1) (2)		8,749,927				259,619		3.95				8,466,505				251,081		3.95
Less: Allowance for loan losses		(419,478	)									(558,336	)
Loans, net		40,159,381				1,233,643		4.11				37,520,139				1,115,403		3.97
Investment securities available for sale		11,179,378				151,111		1.80				9,171,573				98,631		1.43
Trading account assets		12,640				193		2.04				3,703				44		1.60
Other earning assets(4)		1,245,102				8,267		0.88				2,940,049				2,705		0.12
FHLB and Federal Reserve Bank stock		195,238				3,917		2.67				158,921				1,971		1.65
Mortgage loans held for sale		85,126				2,665		4.17				228,458				4,926		2.87
Other loans held for sale		739,627				24,133		4.30				600,776				13,685		3.00
Total interest earning assets		53,616,492			$	1,423,929		3.55	%			50,623,619			$	1,237,365		3.27	%
Cash and due from banks		548,322										567,702
Premises and equipment		389,083										453,339
Other real estate		8,498										1,579
Cash surrender value of bank-owned life insurance		1,076,381										1,056,257
Other assets(5)		1,515,226										2,145,850
Total assets	$	57,154,002									$	54,848,346
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing demand deposits	$	9,162,519			$	11,752		0.17	%		$	8,544,720			$	7,606		0.12	%
Money market accounts		15,592,834				32,896		0.28				15,475,212				21,994		0.19
Savings deposits		1,491,893				223		0.02				1,310,470				164		0.02
Time deposits		2,700,505				6,254		0.31				3,787,892				15,507		0.55
Brokered deposits		3,192,848				27,952		1.17				3,093,485				15,204		0.66
Federal funds purchased and securities sold under repurchase agreements		227,335				871		0.51				205,316				104		0.07
Other short-term borrowings		397,744				4,561		1.51				—				—		—
Long-term debt		1,512,059				41,069		3.61				1,203,054				33,851		3.75
Total interest-bearing liabilities		34,277,737			$	125,578		0.48	%			33,620,149			$	94,430		0.37	%
Non-interest-bearing demand deposits		16,786,794										14,885,880
Other liabilities		1,247,020										1,149,209
Shareholders' equity		4,842,451										5,193,108
Total liabilities and shareholders' equity	$	57,154,002									$	54,848,346
Net interest income, taxable equivalent net interest margin (6)					$	1,298,351		3.24	%						$	1,142,935		3.02	%
Less: taxable-equivalent adjustment						2,796										2,301
Net interest income					$	1,295,555									$	1,140,634

(1)	Average loans are shown net of deferred fees and costs. NPLs are included.
(2)	Interest income includes net loan fees as follows: 2022 — $45.6 million and 2021 — $90.8 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 $(747.7) million and $73.1 million for the nine months ended September 30, 2022 and 2021, respectively.
(6)	The net interest margin is calculated by dividing 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		September 30, 2022			June 30, 2022			% Change			September 30, 2021			% Change
Commercial, Financial, and Agricultural		$	13,254,966		$	13,018,089		2	%		$	11,864,362		12	%
Owner-Occupied			7,957,550			7,760,236		3				7,129,926		12
Total Commercial & Industrial			21,212,516			20,778,325		2				18,994,288		12
Multi-Family			2,949,172			2,547,706		16				2,197,139		34
Hotels			1,712,016			1,597,930		7				1,441,414		19
Office Buildings			2,945,771			2,680,399		10				2,341,316		26
Shopping Centers			1,441,385			1,458,902		(1	)			1,570,020		(8	)
Warehouses			943,961			811,738		16				687,496		37
Other Investment Property			1,246,099			1,311,373		(5	)			1,244,904		—
Total Investment Properties			11,238,404			10,408,048		8				9,482,289		19
1-4 Family Construction			249,840			234,379		7				191,906		30
1-4 Family Investment Mortgage			389,787			407,476		(4	)			421,968		(8	)
Total 1-4 Family Properties			639,627			641,855		—				613,874		4
Commercial Development			92,159			109,764		(16	)			103,512		(11	)
Residential Development			119,019			156,816		(24	)			186,033		(36	)
Land Acquisition			198,756			186,934		6				188,378		6
Land and Development			409,934			453,514		(10	)			477,923		(14	)
Total Commercial Real Estate			12,287,965			11,503,417		7				10,574,086		16
Consumer Mortgages			5,166,928			5,124,523		1				5,108,457		1
Home Equity			1,708,246			1,579,218		8				1,359,688		26
Credit Cards			197,978			194,290		2				199,700		(1	)
Other Consumer Loans			1,997,825			2,025,007		(1	)			2,104,811		(5	)
Total Consumer			9,070,977			8,923,038		2				8,772,656		3
Total		$	42,571,458		$	41,204,780		3	%		$	38,341,030		11	%
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		September 30, 2022			June 30, 2022			% Change			September 30, 2021			% Change
Commercial, Financial, and Agricultural		$	59,275		$	48,601		22	%		$	77,349		(23	) %
Owner-Occupied			8,433			11,398		(26	)			13,134		(36	)
Total Commercial & Industrial			67,708			59,999		13				90,483		(25	)
Multi-Family			2,550			2,598		(2	)			2,396		6
Office Buildings			884			1,796		(51	)			2,488		(64	)
Shopping Centers			742			750		(1	)			932		(20	)
Warehouses			223			924		(76	)			302		(26	)
Other Investment Property			641			1,302		(51	)			624		3
Total Investment Properties			5,040			7,370		(32	)			6,742		(25	)
1-4 Family Construction			55			55		—				522		(89	)
1-4 Family Investment Mortgage			3,036			3,063		(1	)			2,364		28
Total 1-4 Family Properties			3,091			3,118		(1	)			2,886		7
Commercial Development			422			432		(2	)			463		(9	)
Residential Development			267			399		(33	)			449		(41	)
Land Acquisition			980			1,093		(10	)			1,024		(4	)
Land and Development			1,669			1,924		(13	)			1,936		(14	)
Total Commercial Real Estate			9,800			12,412		(21	)			11,564		(15	)
Consumer Mortgages			32,527			22,857		42				37,541		(13	)
Home Equity			7,121			8,100		(12	)			8,702		(18	)
Other Consumer Loans			4,938			5,656		(13	)			7,175		(31	)
Total Consumer			44,586			36,613		22				53,418		(17	)
Total		$	122,094		$	109,024		12	%		$	155,465		(21	) %

Synovus
	CREDIT QUALITY DATA
	(Unaudited)
	(Dollars in thousands)		2022								2021				Third Quarter
			Third				Second		First		Fourth		Third		'22 vs '21
			Quarter				Quarter		Quarter		Quarter		Quarter		% Change
	Non-performing Loans (NPLs)		$	122,094			109,024		132,131		131,042		155,465		(21	) %
	Impaired Loans Held for Sale			447			—		—		—		—		nm
	Other Real Estate and Other Assets			15,320			26,759		26,759		27,137		16,883		(9	)
	Non-performing Assets (NPAs)			137,861			135,783		158,890		158,179		172,348		(20	)
	Allowance for Loan Losses (ALL)			421,359			407,837		414,956		427,597		492,243		(14	)
	Reserve for Unfunded Commitments			57,936			50,559		47,317		41,885		42,971		35
	Allowance for Credit Losses (ACL)			479,295			458,396		462,273		469,482		535,214		(10	)
	Net Charge-Offs - Quarter			4,682			16,565		18,609		10,522		20,516
	Net Charge-Offs - YTD			39,856			35,174		18,609		77,788		67,266
	Net Charge-Offs / Average Loans - Quarter (1)			0.04	%		0.16		0.19		0.11		0.22
	Net Charge-Offs / Average Loans - YTD (1)			0.13			0.18		0.19		0.20		0.24
	NPLs / Loans			0.29			0.26		0.33		0.33		0.41
	NPAs / Loans, ORE and specific other assets			0.32			0.33		0.40		0.40		0.45
	ACL/Loans			1.13			1.11		1.15		1.19		1.40
	ALL/Loans			0.99			0.99		1.03		1.09		1.28
	ACL/NPLs			392.56			420.45		349.86		358.27		344.27
	ALL/NPLs			345.11			374.08		314.05		326.31		316.63
	Past Due Loans over 90 days and Still Accruing		$	3,443			2,251		3,067		6,770		5,960		(42	)
	As a Percentage of Loans Outstanding			0.01	%		0.01		0.01		0.02		0.02
	Total Past Due Loans and Still Accruing		$	63,545			56,160		45,385		57,565		60,817		4
	As a Percentage of Loans Outstanding			0.15	%		0.14		0.11		0.15		0.16
	Accruing Troubled Debt Restructurings (TDRs)		$	118,755			164,101		145,957		119,804		126,055		(6	)
	(1) Ratio is annualized.
	SELECTED CAPITAL INFORMATION (1)
	(Unaudited)
	(Dollars in thousands)
			September 30, 2022				December 31, 2021		September 30, 2021
	Common Equity Tier 1 Capital Ratio			9.51	%		9.50		9.58
	Tier 1 Capital Ratio			10.58			10.66		10.79
	Total Risk-Based Capital Ratio			12.44			12.61		12.92
	Tier 1 Leverage Ratio			9.04			8.72		8.78
	Total Shareholders' Equity as a Percentage of Total Assets			7.21			9.24		9.46
	Tangible Common Equity Ratio (2) (4)			5.52			7.52		7.68
	Book Value Per Common Share (3)		$	25.39			32.82		32.41
	Tangible Book Value Per Common Share (2)			22.08			29.46		29.04
	(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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Investor Relations

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Source: Synovus Financial Corp.

FAQ

What were Synovus Financial's earnings for Q3 2022?

Synovus reported diluted earnings per share of $1.33 for Q3 2022, up from $1.21 in Q3 2021.

How did total revenue change for Synovus in Q3 2022?

Total revenue increased by 16% year-over-year to $582.2 million in Q3 2022.

What is the status of Synovus' loan growth in Q3 2022?

Synovus experienced loan growth of $1.37 billion sequentially, translating to 13% annualized growth.

What is the CET1 ratio of Synovus as of Q3 2022?

The preliminary CET1 ratio for Synovus improved to 9.51% in Q3 2022.

How did credit quality perform in Q3 2022 for Synovus?

Credit quality metrics remained strong, with a low net charge-off ratio of 0.04%.