Synovus Announces Earnings for the Third Quarter 2021

Rhea-AI Summary

Synovus Financial Corp. (NYSE: SNV) reported a strong third quarter of 2021 with net income of $178.5 million, translating to $1.21 per diluted share, marking a 116% year-over-year increase. Adjusted diluted EPS remained stable at $1.20. Total loans grew by $105 million, while core transaction deposits increased by $1.03 billion. Net interest income reached $384.9 million, driven by lower deposit costs. Positive credit quality metrics were noted, with a 0.22% net charge-off ratio. Synovus aims to achieve a $175 million pre-tax run rate benefit by the end of 2022 through efficiency initiatives.

Positive

• Net income available to common shareholders increased to $178.5 million, up 116% year-over-year.
• Diluted EPS of $1.21 represents a sequential increase of $0.02 and an annual increase of $0.65.
• Core transaction deposits grew by $1.03 billion, a 3% increase sequentially.
• Pre-provision net revenue increased by $14.4 million sequentially to $232.8 million.
• Achieved a pre-tax run rate benefit of approximately $100 million from efficiency initiatives.

Negative

• CET1 ratio declined by 12 basis points to 9.63%, impacted by balance sheet growth and capital return.
• Total loans decreased by $1.2 billion compared to the prior year, down 3%.

Diluted Earnings per Share of $1.21 vs. $0.56 in 3Q20

Adjusted Diluted Earnings per Share of $1.20 vs. $0.89 in 3Q20

COLUMBUS, Ga.--(BUSINESS WIRE)-- Synovus Financial Corp. (NYSE: SNV) today reported financial results for the quarter ended September 30, 2021.

Third Quarter 2021 Highlights

• Net income available to common shareholders of $178.5 million or $1.21 per diluted share, up $0.02 sequentially and up $0.65 compared to prior year.
  • Adjusted diluted EPS of $1.20, unchanged sequentially and up $0.31 compared to prior year.
• Period-end loans increased $105.0 million sequentially, or $922.7 million excluding Paycheck Protection program (PPP) loans.
  • PPP loans declined $817.7 million sequentially.
• Core transaction deposits (non-interest bearing, NOW/savings, and money market deposits excluding public and brokered funds) increased $1.03 billion or 3% sequentially.
• Total deposit costs of 0.13% down 3 bps sequentially due to ongoing repricing and product remixing.
• Net interest income of $384.9 million increased $3.1 million sequentially as asset growth, reduced deposit costs, and a higher day count more than offset continued fixed-rate repricing and the slight reduction in LIBOR.
  • Net interest margin of 3.01%, down 1 bp sequentially.
• Non-interest revenue increased $7.9 million as broad-based growth helped to offset continued normalization of net mortgage revenue.
  • Adjusted non-interest revenue increased $8.1 million.
• Non-interest expense decreased $3.5 million sequentially as reductions in third-party processing and other services offset increases in other areas such as net occupancy, equipment, and software expense.
  • Adjusted non-interest expense decreased $1.2 million sequentially.
• Pre-provision net revenue of $232.8 million increased $14.4 million sequentially as total revenue increased $10.9 million and non-interest expense decreased $3.5 million.
• Reversal of provision for credit losses of $7.9 million, primarily from a more favorable economic outlook.
  • Allowance for credit losses coverage ratio (to loans) of 1.40%, or 1.42% excluding PPP loans.
• Credit quality metrics remain relatively stable, near historical lows. The net charge-off ratio declined 6 bps from prior quarter to 0.22%; the non-performing loan and asset ratios each fell 1 bp to 0.41% and 0.45%, respectively; and criticized and classified loans declined 22%.
• Preliminary CET1 ratio declined 12 bps sequentially to 9.63%, with strong core earnings helping offset the decline from deploying capital for balance sheet growth and returning capital to shareholders.
  • Includes $74.6 million in share repurchases at an average price of $42.00.
• Achieved pre-tax run rate benefit of approximately $100 million at the end of the quarter from a combination of revenue and expense initiatives under Synovus Forward, which is designed to make Synovus a more efficient, profitable, and nimble organization.
  • On track to achieve an aggregate $175 million pre-tax run rate benefit by the end of 2022.

Third Quarter Summary

		Reported												Adjusted
(dollars in thousands)		3Q21				2Q21				3Q20				3Q21				2Q21				3Q20
Net income available to common shareholders		$	178,482			$	177,909			$	83,283			$	177,760			$	178,969			$	131,364
Diluted earnings per share		1.21				1.19				0.56				1.20				1.20				0.89
Total loans		38,341,030				38,236,018				39,549,847					N/A				N/A				N/A
Total deposits		47,688,419				47,171,962				44,665,904					N/A				N/A				N/A
Total TE(1) revenue		500,608				489,738				492,357				499,743				488,612				492,851
Return on avg assets		1.34		%		1.36		%		0.69		%		1.33		%		1.37		%		1.05		%
Return on avg common equity		14.96				15.40				7.28				14.90				15.50				11.48
Return on avg tangible common equity		16.85				17.41				8.46				16.79				17.52				13.24
Net interest margin		3.01				3.02				3.10					N/A				N/A				N/A
Efficiency ratio-TE(1)		53.34				55.24				64.31				52.96				54.41				53.83
NCO ratio		0.22				0.28				0.29					N/A				N/A				N/A
NPA ratio		0.45				0.46				0.49					N/A				N/A				N/A
(1) Taxable equivalent

“Our third quarter story was shaped by an intense focus on growth, and we are pleased with the results,” said Kevin Blair, Synovus president and CEO. “Loans, excluding PPP, grew $923 million, core transaction deposits were up $1.0 billion, and pre-provision net revenue increased 7 percent versus the second quarter. Our ongoing Synovus Forward initiatives reached a pre-tax run rate benefit of $100 million by quarter end and we are executing on an additional $75 million of benefits to be delivered by the end of 2022. Synovus Forward represents our ongoing innovation and profitable growth mindset, guiding our efforts to deliver sustainable, top quartile financial performance and enabling us to invest in areas with long-term benefit. With these strategic investments, combined with the momentum we are experiencing in our core businesses, our team is confident in our ability to continue to deliver as we build the bank of the future.”

Balance Sheet

Loans*
(dollars in millions)		3Q21				2Q21				Linked Quarter Change				Linked Quarter % Change			3Q20				Year/Year Change				Year/Year % Change
Commercial & industrial		$	18,934.8			$	19,150.1			$	(215.3	)		(1	)%		$	20,123.6			$	(1,188.9	)		(6	)%
Commercial real estate		10,540.3				10,361.1				179.2				2			10,736.1				(195.8		)		(2	)
Consumer		8,866.0				8,724.8				141.1				2			8,690.1				175.8				2
Total loans		$	38,341.0			$	38,236.0			$	105.0			—	%		$	39,549.8			$	(1,208.9	)		(3	)%
*Amounts may not total due to rounding

• Total loans ended the quarter at $38.34 billion, up $105.0 million sequentially, or $922.7 million excluding PPP loans.
• Commercial and industrial (C&I) loans declined $215.3 million sequentially, led by a decline in PPP loan balances of $817.7 million.
  • C&I loan growth of $602.3 million excluding PPP balance changes despite line utilization remaining near historic lows at 39%.
• CRE loans increased $179.2 million, primarily in the income-producing real estate portfolio.
• Consumer loans increased $141.1 million sequentially, with growth of $266.5 million in third-party consumer lending offsetting declines in consumer mortgages and HELOCs of $92.3 million and $50.0 million, respectively.

Deposits*
(dollars in millions)		3Q21				2Q21				Linked Quarter Change				Linked Quarter % Change			3Q20				Year/Year Change				Year/Year % Change
Non-interest-bearing DDA		$	14,832.9			$	14,342.6			$	490.3			3	%		$	12,129.8			$	2,703.2			22	%
Interest-bearing DDA		6,056.0				5,839.8				216.2				4			5,291.1				764.8				14
Money market		14,267.4				13,983.1				284.3				2			12,441.3				1,826.1				15
Savings		1,380.4				1,341.5				39.0				3			1,126.0				254.4				23
Public funds		5,791.6				5,804.9				(13.3		)		—			5,791.9				(0.4		)		—
Time deposits		2,579.3				2,891.1				(311.8		)		(11	)		3,976.5				(1,397.1		)		(35	)
Brokered deposits		2,780.7				2,969.0				(188.3		)		(6	)		3,909.3				(1,128.6		)		(29	)
Total deposits		$	47,688.4			$	47,172.0			$	516.5			1	%		$	44,665.9			$	3,022.5			7	%
*Amounts may not total due to rounding

• Total deposits ended the quarter at $47.69 billion, up $516.5 million sequentially.
• Core transaction deposits increased $1.03 billion or 3% sequentially.
  • Broad-based growth in DDA, NOW, MMA, and savings accounts supported strategic declines in higher cost deposits.
• Total deposit costs declined 3 bps sequentially to 0.13%.

Income Statement Summary**
(in thousands, except per share data)		3Q21				2Q21				Linked Quarter Change				Linked Quarter % Change			3Q20				Year/Year Change				Year/Year % Change
Net interest income		$	384,917			$	381,860			$	3,057			1	%		$	376,990			$	7,927			2	%
Non-interest revenue		114,955				107,087				7,868				7			114,411				544				—
Non-interest expense		267,032				270,531				(3,499		)		(1	)		316,655				(49,623		)		(16	)
(Reversal of) provision for credit losses		(7,868		)		(24,598		)		16,730				68			43,383				(51,251		)		nm
Income before taxes		$	240,708			$	243,014			$	(2,306	)		(1	)%		$	131,363			$	109,345			83	%
Income tax expense		53,935				56,814				(2,879		)		(5	)		39,789				14,146				36
Preferred stock dividends		8,291				8,291				—				—			8,291				—				—
Net income available to common shareholders		$	178,482			$	177,909			$	573			—	%		$	83,283			$	95,199			114	%
Weighted average common shares outstanding, diluted		147,701				149,747				(2,046		)		(1	)%		147,976				(275		)		—	%
Diluted earnings per share		$	1.21			$	1.19			$	0.02			2			$	0.56			$	0.65			116
Adjusted diluted earnings per share		1.20				1.20				—				—			0.89				0.31				35
** Amounts may not total due to rounding

Core Performance

• Net interest income of $384.9 million increased $3.1 million sequentially as asset growth and reduced deposit costs more than offset continued fixed-rate repricing and the slight reduction in LIBOR.
  • Net PPP fee accretion of $21.3 million, up $0.9 million sequentially.
  • Net interest margin was 3.01%, down 1 bp sequentially.
• Non-interest revenue increased $7.9 million, or 7% sequentially. Adjusted non-interest revenue increased $8.1 million, or 8% sequentially, and decreased $0.8 million, or 1% compared to prior year.
  • Broad-based growth including $4.8 million in capital markets income helped offset normalization of net mortgage revenue, which declined $2.7 million sequentially.
• Non-interest expense decreased $3.5 million, or 1% sequentially. Adjusted non-interest expense decreased $1.2 million sequentially.
  • Declines in third-party processing and other services of $5.0 million offset an increase in additional project spend that contributed to the $1.7 million increase in net occupancy, equipment, and software expense.
• Pre-provision net revenue of $232.8 million increased $14.4 million sequentially as total revenue increased $10.9 million and non-interest expense decreased $3.5 million.
• Reversal of provision for credit losses of $7.9 million from the provision expense associated with strong loan growth being more than offset by a reduction in life of loan loss estimates; allowance for credit losses coverage ratio (to loans) of 1.40%, or 1.42% excluding PPP loans.
• Tax expense was $53.9 million, a decrease of $2.9 million sequentially due to lower taxable income and favorable changes in discrete items.
  • Year-to-date effective tax rate of 22.21%.

Capital Ratios
		3Q21				2Q21			3Q20
Common equity Tier 1 capital (CET1) ratio		9.63	%	*		9.75	%		9.30	%
Tier 1 capital ratio		10.83		*		11.00			10.57
Total risk-based capital ratio		12.96		*		13.25			13.16
Tier 1 leverage ratio		8.82		*		8.72			8.48
Tangible common equity ratio		7.68				7.73			7.67
* Ratios are preliminary.

Capital

• Preliminary CET1 ratio declined 12 bps during the quarter to 9.63% as strong core performance helped offset the impact of asset growth and $74.6 million in share repurchases at an average price of $42.00.
• Total risk-based capital ratio of 12.96% declined 29 bps from the prior quarter following a reduction in the Allowance for Credit Losses.

Third Quarter Earnings Conference Call

Synovus will host an earnings highlights conference call at 8:30 a.m. EDT on October 19, 2021. The earnings call will be accompanied by a slide presentation. Shareholders and other interested parties may listen to this conference call via simultaneous Internet broadcast. For a link to the webcast, go to investor.synovus.com/event. The replay will be archived for 12 months and will be available 30-45 minutes after the call.

Synovus Financial Corp. is a financial services company based in Columbus, Georgia, with approximately $56 billion in assets. Synovus provides commercial and retail banking, investment, and mortgage services through 283 branches in Alabama, Florida, Georgia, South Carolina, and Tennessee. Synovus Bank, a wholly owned subsidiary of Synovus, has been recognized as one of the country's “Most Reputable Banks” by American Banker and the Reputation Institute. Synovus 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, 2020, under the captions “Cautionary Notice Regarding Forward-Looking Statements” and “Risk Factors” and in Synovus’ quarterly reports on Form 10-Q and current reports on Form 8-K. We believe these forward-looking statements are reasonable; however, undue reliance should not be placed on any forward-looking statements, which are based on current expectations and speak only as of the date that they are made. We do not assume any obligation to update any forward-looking statements as a result of new information, future developments or otherwise, except as otherwise may be required by law.

Non-GAAP Financial Measures

The measures entitled adjusted non-interest revenue; adjusted non-interest expense; total adjusted revenue; adjusted tangible efficiency ratio; pre-provision net revenue; adjusted net income available to common shareholders; adjusted diluted earnings per share; adjusted return on average assets; adjusted return on average common equity; return on average tangible common equity; adjusted return on average tangible common equity; and tangible common equity ratio are not measures recognized under GAAP and therefore are considered non-GAAP financial measures. The most comparable GAAP measures to these measures are total non-interest revenue; total non-interest expense; total TE revenue; efficiency ratio-TE; income before income taxes; net income available to common shareholders; diluted earnings per share; return on average assets; return on average common equity; and the ratio of total shareholders' equity to total assets, respectively.

Management believes that these non-GAAP financial measures provide meaningful additional information about Synovus to assist management and investors in evaluating Synovus’ operating results, financial strength, the performance of its business, and the strength of its capital position. However, these non-GAAP financial measures have inherent limitations as analytical tools and should not be considered in isolation or as a substitute for analyses of operating results or capital position as reported under GAAP. The non-GAAP financial measures should be considered as additional views of the way our financial measures are affected by significant items and other factors, and since they are not required to be uniformly applied, they may not be comparable to other similarly titled measures at other companies. Total adjusted revenue and adjusted non-interest revenue are measures used by management to evaluate total TE revenue and non-interest revenue exclusive of net investment securities gains (losses), gain on sale and changes in the fair value of private equity investments, net, and fair value adjustment on non-qualified deferred compensation. Adjusted non-interest expense and the adjusted tangible efficiency ratio are measures utilized by management to measure the success of expense management initiatives focused on reducing recurring controllable operating costs. Pre-provision net revenue is used by management to evaluate income before income taxes exclusive of (reversal of) provision for credit losses. 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)	3Q21				2Q21				3Q20
Adjusted non-interest revenue
Total non-interest revenue	$	114,955			$	107,087			$	114,411
Subtract/add: Investment securities (gains) losses, net	(962		)		—				1,550
Subtract: Fair value increase of private equity investments	—				—				(260		)
Add/subtract: Fair value adjustment on non-qualified deferred compensation	97				(1,126		)		(796		)
Adjusted non-interest revenue	$	114,090			$	105,961			$	114,905
Adjusted non-interest expense
Total non-interest expense	$	267,032			$	270,531			$	316,655
Add/subtract: Earnout liability adjustment	243				(750		)		—
Subtract: Goodwill impairment	—				—				(44,877		)
Subtract: Restructuring charges	(319		)		(415		)		(2,882		)
Subtract: Loss on early extinguishment of debt, net	—				—				(154		)
Add/subtract: Fair value adjustment on non-qualified deferred compensation	97				(1,126		)		(796		)
Adjusted non-interest expense	$	267,053			$	268,240			$	267,946
Reconciliation of Non-GAAP Financial Measures, continued
(dollars in thousands)	3Q21				2Q21				3Q20
Total adjusted revenue and adjusted tangible efficiency ratio
Adjusted non-interest expense	$	267,053			$	268,240			$	267,946
Subtract: Amortization of intangibles	(2,379		)		(2,379		)		(2,640		)
Adjusted tangible non-interest expense	$	264,674			$	265,861			$	265,306
Net interest income	$	384,917			$	381,860			$	376,990
Add: Tax equivalent adjustment	736				791				956
Add: Total non-interest revenue	114,955				107,087				114,411
Total TE revenue	500,608				489,738				492,357
Subtract/add: Investment securities (gains) losses, net	(962		)		—				1,550
Subtract: Fair value increase of private equity investments	—				—				(260		)
Add/subtract: Fair value adjustment on non-qualified deferred compensation	97				(1,126		)		(796		)
Total adjusted revenue	$	499,743			$	488,612			$	492,851
Efficiency ratio-TE	53.34		%		55.24		%		64.31		%
Adjusted tangible efficiency ratio	52.96				54.41				53.83

Pre-provision net revenue
Net interest income	$	384,917			$	381,860			$	376,990
Add: Total non-interest revenue	114,955				107,087				114,411
Subtract: Total non-interest expense	267,032				270,531				316,655
Pre-provision net revenue	$	232,840			$	218,416			$	174,746

Adjusted return on average assets
Net income	$	186,773			$	186,200			$	91,574
Subtract/add: Earnout liability adjustment	(243		)		750				—
Add: Goodwill impairment	—				—				44,877
Add: Restructuring charges	319				415				2,882
Add: Loss on early extinguishment of debt, net	—				—				154
Subtract/add: Investment securities (gains) losses, net	(962		)		—				1,550
Subtract: Fair value increase of private equity investments	—				—				(260		)
Add/subtract: Tax effect of adjustments (1)	164				(105		)		(1,122		)
Adjusted net income	$	186,051			$	187,260			$	139,655
Net income annualized	$	741,002			$	746,846			$	364,305
Adjusted net income annualized	$	738,137			$	751,098			$	555,584
Total average assets	$	55,326,260			$	55,017,771			$	53,138,334
Return on average assets	1.34		%		1.36		%		0.69		%
Adjusted return on average assets	1.33				1.37				1.05
Adjusted net income available to common shareholders and adjusted diluted earnings per share
Net income available to common shareholders	$	178,482			$	177,909			$	83,283
Subtract/add: Earnout liability adjustment	(243		)		750				—
Add: Goodwill Impairment	—				—				44,877
Add: Restructuring charges	319				415				2,882
Add: Loss on early extinguishment of debt, net	—				—				154
Subtract/add: Investment securities (gains) losses, net	(962		)		—				1,550
Subtract: Fair value increase of private equity investments	—				—				(260		)
Add/subtract: Tax effect of adjustments (1)	164				(105		)		(1,122		)
Adjusted net income available to common shareholders	$	177,760			$	178,969			$	131,364
Weighted average common shares outstanding, diluted	147,701				149,747				147,976
Diluted earnings per share	$	1.21			$	1.19			$	0.56
Adjusted diluted earnings per share	1.20				1.20				0.89

Reconciliation of Non-GAAP Financial Measures, continued
(dollars in thousands)	3Q21				2Q21				3Q20
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	$	178,482			$	177,909			$	83,283
Subtract/add: Earnout liability adjustment	(243		)		750				—
Add: Goodwill impairment	—				—				44,877
Add: Restructuring charges	319				415				2,882
Add: Loss on early extinguishment of debt, net	—				—				154
Subtract/add: Investment securities (gains) losses, net	(962		)		—				1,550
Subtract: Fair value increase of private equity investments	—				—				(260		)
Add/subtract: Tax effect of adjustments (1)	164				(105		)		(1,122		)
Adjusted net income available to common shareholders	$	177,760			$	178,969			$	131,364
Adjusted net income available to common shareholders annualized	$	705,243			$	717,843			$	522,600
Add: Amortization of intangibles, annualized net of tax	7,050				7,128				7,782
Adjusted net income available to common shareholders excluding amortization of intangibles annualized	$	712,293			$	724,971			$	530,382
Net income available to common shareholders annualized	$	708,108			$	713,591			$	331,322
Add: Amortization of intangibles, annualized net of tax	7,050				7,128				7,782
Net income available to common shareholders excluding amortization of intangibles annualized	$	715,158			$	720,719			$	339,104
Total average shareholders' equity less preferred stock	$	4,734,754			$	4,632,568			$	4,553,159
Subtract: Goodwill	(452,390		)		(452,390		)		(497,267		)
Subtract: Other intangible assets, net	(39,109		)		(41,399		)		(49,075		)
Total average tangible shareholders' equity less preferred stock	$	4,243,255			$	4,138,779			$	4,006,817
Return on average common equity	14.96		%		15.40		%		7.28		%
Adjusted return on average common equity	14.90				15.50				11.48
Return on average tangible common equity	16.85				17.41				8.46
Adjusted return on average tangible common equity	16.79				17.52				13.24

Reconciliation of Non-GAAP Financial Measures, continued
(dollars in thousands)	September 30, 2021				June 30, 2021				September 30, 2020
Tangible common equity ratio
Total assets	$	55,509,129			$	54,938,659			$	53,040,538
Subtract: Goodwill	(452,390		)		(452,390		)		(452,390		)
Subtract: Other intangible assets, net	(37,975		)		(40,354		)		(47,752		)
Tangible assets	$	55,018,764			$	54,445,915			$	52,540,396
Total shareholders’ equity	$	5,252,802			$	5,237,714			$	5,064,542
Subtract: Goodwill	(452,390		)		(452,390		)		(452,390		)
Subtract: Other intangible assets, net	(37,975		)		(40,354		)		(47,752		)
Subtract: Preferred Stock, no par value	(537,145		)		(537,145		)		(537,145		)
Tangible common equity	$	4,225,292			$	4,207,825			$	4,027,255
Total shareholders’ equity to total assets ratio	9.46		%		9.53		%		9.55		%
Tangible common equity ratio	7.68				7.73				7.67
(1) An assumed marginal tax rate of 25.3% for 2021 and 25.9% for 2020 was applied.

INCOME STATEMENT DATA
(Unaudited)
(Dollars in thousands, except per share data)	Nine Months Ended
	2021				2020				'21 vs '20
									% Change
Interest income	$	1,235,064			$	1,371,016			(10	)%
Interest expense	94,430				244,200				(61	)
Net interest income	1,140,634				1,126,816				1
(Reversal of) provision for credit losses	(51,041		)		343,956				nm
Net interest income after provision for credit losses	1,191,675				782,860				52
Non-interest revenue:
Service charges on deposit accounts	64,089				54,069				19
Fiduciary and asset management fees	56,545				46,009				23
Card fees	38,538				30,959				24
Brokerage revenue	41,644				32,987				26
Mortgage banking income	47,312				66,987				(29	)
Capital markets income	18,929				22,984				(18	)
Income from bank-owned life insurance	22,851				21,572				6
Investment securities (losses) gains, net	(1,028		)		76,594				nm
Other non-interest revenue	44,117				39,591				11
Total non-interest revenue	332,997				391,752				(15	)
Non-interest expense:
Salaries and other personnel expense	482,408				464,268				4
Net occupancy, equipment, and software expense	126,442				125,475				1
Third-party processing and other services	63,897				67,193				(5	)
Professional fees	23,771				39,358				(40	)
FDIC insurance and other regulatory fees	16,338				18,922				(14	)
Other operating expenses	91,841				161,860				(43	)
Total non-interest expense	804,697				877,076				(8	)
Income before income taxes	719,975				297,536				142
Income tax expense	159,910				74,250				115
Net income	560,065				223,286				151
Less: Preferred stock dividends	24,872				24,872				—
Net income available to common shareholders	$	535,193			$	198,414			170	%
Net income per common share, basic	$	3.63			$	1.35			169	%
Net income per common share, diluted	3.59				1.34				168
Cash dividends declared per common share	0.99				0.99				—
Return on average assets *	1.37		%		0.58		%		79	bps
Return on average common equity *	15.37				5.87				950
Weighted average common shares outstanding, basic	147,622				147,304				0	%
Weighted average common shares outstanding, diluted	149,069				148,037				1
nm - not meaningful
bps - basis points
* - ratios are annualized

Synovus
INCOME STATEMENT DATA
(Unaudited)
(Dollars in thousands, except per share data)	2021										2020						Third Quarter
	Third Quarter				Second Quarter			First Quarter			Fourth Quarter			Third Quarter			'21 vs '20
																	% Change
Interest income	$	412,504			412,743			409,817			433,479			435,550			(5	)%
Interest expense	27,587				30,883			35,960			47,547			58,560			(53	)
Net interest income	384,917				381,860			373,857			385,932			376,990			2
(Reversal of) provision for credit losses	(7,868		)		(24,598	)		(18,575	)		11,066			43,383			nm
Net interest income after provision for credit losses	392,785				406,458			392,432			374,866			333,607			18
Non-interest revenue:
Service charges on deposit accounts	22,641				21,414			20,033			19,063			17,813			27
Fiduciary and asset management fees	19,786				18,805			17,954			17,242			15,885			25
Card fees	13,238				13,304			11,996			11,743			10,823			22
Brokerage revenue	14,745				13,926			12,974			11,794			10,604			39
Mortgage banking income	11,155				13,842			22,315			24,426			31,229			(64	)
Capital markets income	8,089				3,335			7,505			4,352			5,690			42
Income from bank-owned life insurance	6,820				7,188			8,843			9,725			7,778			(12	)
Investment securities gains (losses), net	962				—			(1,990	)		2,337			(1,550	)		nm
Other non-interest revenue	17,519				15,273			11,326			14,079			16,139			9
Total non-interest revenue	114,955				107,087			110,956			114,761			114,411			—
Non-interest expense:
Salaries and other personnel expense	160,364				160,567			161,477			153,946			154,994			3
Net occupancy, equipment, and software expense	43,483				41,825			41,134			44,183			41,554			5
Third-party processing and other services	19,446				24,419			20,032			20,799			21,827			(11	)
Professional fees	6,739				7,947			9,084			17,541			13,377			(50	)
FDIC insurance and other regulatory fees	5,212				5,547			5,579			6,288			6,793			(23	)
Other operating expenses	31,788				30,226			29,828			59,741			78,110			(59	)
Total non-interest expense	267,032				270,531			267,134			302,498			316,655			(16	)
Income before income taxes	240,708				243,014			236,254			187,129			131,363			83
Income tax expense	53,935				56,814			49,161			36,720			39,789			36
Net income	186,773				186,200			187,093			150,409			91,574			104
Less: Preferred stock dividends	8,291				8,291			8,291			8,291			8,291			—
Net income available to common shareholders	$	178,482			177,909			178,802			142,118			83,283			114	%
Net income per common share, basic	$	1.22			1.20			1.20			0.96			0.57			114	%
Net income per common share, diluted	1.21				1.19			1.19			0.96			0.56			116
Cash dividends declared per common share	0.33				0.33			0.33			0.33			0.33			—
Return on average assets *	1.34		%		1.36			1.40			1.11			0.69			65	bps
Return on average common equity *	14.96				15.40			15.77			12.31			7.28			768
											0.31
Weighted average common shares outstanding, basic	146,308				148,113			148,467			147,744			147,314			(1	)%
Weighted average common shares outstanding, diluted	147,701				149,747			149,780			148,725			147,976			—
nm - not meaningful
bps - basis points
* - ratios are annualized

Synovus
BALANCE SHEET DATA		September 30, 2021				December 31, 2020				September 30, 2020
(Unaudited)
(In thousands, except share data)
ASSETS
Cash and due from banks		$	483,035			$	531,579			$	578,026
Interest-bearing funds with Federal Reserve Bank		2,103,497				3,586,565				1,266,313
Interest earning deposits with banks		23,261				20,944				20,929
Federal funds sold and securities purchased under resale agreements		77,627				113,829				120,095
Cash, cash equivalents, and restricted cash		2,687,420				4,252,917				1,985,363
Investment securities available for sale, at fair value		10,481,071				7,962,438				7,566,525
Loans held for sale ($152,258, $216,647, and $285,899 measured at fair value, respectively)		550,948				760,123				745,160
Loans, net of deferred fees and costs		38,341,030				38,252,984				39,549,847
Allowance for loan losses		(492,243		)		(605,736		)		(603,800		)
Loans, net		37,848,787				37,647,248				38,946,047
Cash surrender value of bank-owned life insurance		1,065,256				1,049,373				1,044,046
Premises, equipment, and software, net		441,605				463,959				471,208
Goodwill		452,390				452,390				452,390
Other intangible assets, net		37,975				45,112				47,752
Other assets		1,943,677				1,760,599				1,782,047
Total assets		$	55,509,129			$	54,394,159			$	53,040,538
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest-bearing deposits		$	15,787,882			$	13,477,854			$	13,075,081
Interest-bearing deposits		31,900,537				33,213,717				31,590,823
Total deposits		47,688,419				46,691,571				44,665,904
Federal funds purchased and securities sold under repurchase agreements		262,548				227,922				202,344
Other short-term borrowings		—				7,717				400,000
Long-term debt		1,203,761				1,202,494				1,628,385
Other liabilities		1,101,599				1,103,121				1,079,363
Total liabilities		50,256,327				49,232,825				47,975,996
Shareholders' equity:
Preferred stock - no par value. Authorized 100,000,000 shares; issued 22,000,000		537,145				537,145				537,145
Common stock - $1.00 par value. Authorized 342,857,143 shares; issued 169,170,589, 168,132,522, and 167,410,950; outstanding 145,483,994, 148,039,495, and 147,317,923		169,171				168,133				167,411
Additional paid-in capital		3,883,289				3,851,208				3,832,142
Treasury stock, at cost – 23,686,595, 20,093,027, and 20,093,027 shares		(898,707		)		(731,806		)		(731,806		)
Accumulated other comprehensive (loss) income, net		(5,462		)		158,635				174,914
Retained earnings		1,567,366				1,178,019				1,084,736
Total shareholders’ equity		5,252,802				5,161,334				5,064,542
Total liabilities and shareholders' equity		$	55,509,129			$	54,394,159			$	53,040,538

Synovus
AVERAGE BALANCES AND YIELDS/RATES (1)
(Unaudited)		2021								2020
(Dollars in thousands)
		Third			Second		First			Fourth		Third
		Quarter			Quarter		Quarter			Quarter		Quarter
Interest Earning Assets
Investment securities (2) (4)		$	9,876,651		9,184,691		8,437,563			7,493,822		7,227,400
Yield		1.45		%	1.45		1.40			2.07		2.39
Trading account assets (5)		$	5,192		2,831		3,063			8,496		5,391
Yield		1.15		%	1.15		2.81			1.03		1.69
Commercial loans (3) (4)		$	28,891,164		29,849,029		29,844,491			30,363,102		30,730,135
Yield		3.91		%	3.86		3.95			3.96		3.80
Consumer loans (3)		$	8,642,969		8,647,448		8,367,776			8,521,449		9,032,437
Yield		3.93		%	3.94		3.98			4.00		4.08
Allowance for loan losses		$	(514,828	)	(561,242	)	(599,872	)		(595,547	)	(591,098	)
Loans, net (3)		$	37,019,305		37,935,235		37,612,395			38,289,004		39,171,474
Yield		3.97		%	3.93		4.02			4.03		3.92
Mortgage loans held for sale		$	196,032		242,940		246,962			309,278		244,952
Yield		2.88		%	3.06		2.68			2.74		2.92
Other loans held for sale		$	527,736		615,301		660,753			544,301		493,940
Yield		3.06		%	3.05		2.91			2.81		3.61
Federal funds sold, due from Federal Reserve Bank, and other short-term investments		$	3,271,501		2,705,819		2,838,063			2,716,645		1,265,880
Yield		0.15		%	0.11		0.10			0.10		0.11
Federal Home Loan Bank and Federal Reserve Bank Stock (5)		$	159,741		159,340		157,657			162,537		200,923
Yield		1.26		%	2.01		1.69			2.64		2.73
Total interest earning assets		$	51,056,158		50,846,157		49,956,456			49,524,083		48,609,960
Yield		3.22		%	3.26		3.32			3.49		3.58
Interest-Bearing Liabilities
Interest-bearing demand deposits		$	8,463,325		8,601,262		8,570,753			8,531,415		7,789,095
Rate		0.10		%	0.11		0.14			0.16		0.19
Money Market accounts		$	15,597,723		15,476,262		15,348,916			14,411,860		13,272,972
Rate		0.15		%	0.19		0.23			0.26		0.36
Savings deposits		$	1,377,089		1,333,297		1,219,288			1,147,667		1,114,956
Rate		0.02		%	0.02		0.02			0.01		0.02
Time deposits under $100,000		$	993,284		1,077,931		1,161,306			1,239,592		1,379,923
Rate		0.33		%	0.41		0.56			0.74		1.03
Time deposits over $100,000		$	2,430,744		2,714,451		2,993,996			3,302,959		3,863,821
Rate		0.45		%	0.56		0.74			1.03		1.44
Other brokered deposits		$	1,862,346		1,901,097		1,950,582			1,978,393		1,912,114
Rate		0.21		%	0.19		0.20			0.23		0.23
Brokered time deposits		$	996,777		1,156,510		1,418,751			1,795,982		2,232,940
Rate		1.27		%	1.35		1.50			1.60		1.59
Total interest-bearing deposits		$	31,721,288		32,260,810		32,663,592			32,407,868		31,565,821
Rate		0.20		%	0.24		0.31			0.39		0.54
Federal funds purchased and securities sold under repurchase agreements		$	202,525		204,053		209,448			174,316		180,342
Rate		0.07		%	0.07		0.07			0.07		0.09
Other short-term borrowings		$	—		—		—			—		46,739
Rate		—		%	—		—			—		1.12
Long-term debt		$	1,203,500		1,203,038		1,202,613			1,552,791		2,234,665
Rate		3.81		%	3.82		3.63			3.96		2.71
Total interest-bearing liabilities		$	33,127,313		33,667,901		34,075,653			34,134,975		34,027,567
Rate		0.33		%	0.36		0.42			0.55		0.68
Non-interest-bearing demand deposits		$	15,755,929		15,088,836		13,791,286			13,566,112		12,773,676
Cost of funds		0.22		%	0.25		0.30			0.40		0.50
Effective cost of funds(6)		0.21		%	0.24		0.28			0.37		0.48
Net interest margin		3.01		%	3.02		3.04			3.12		3.10
Taxable equivalent adjustment (4)		$	736		791		774			821		956
(1) Yields and rates are annualized.
(2) Excludes net unrealized gains and losses.
(3) Average loans are shown net of unearned income. Non-performing loans are included.
(4) Reflects taxable-equivalent adjustments, using the statutory federal income tax rate of 21%, in adjusting interest on tax-exempt loans and investment securities to a taxable-equivalent basis.
(5) Included as a component of other assets on the consolidated balance sheet.
(6) Includes the impact of non-interest-bearing capital funding sources.

Synovus
LOANS OUTSTANDING BY TYPE
(Unaudited)		Total Loans			Total Loans			Linked Quarter			Total Loans			Year/Year
(Dollars in thousands)
Loan Type		September 30, 2021			June 30, 2021			% Change			September 30, 2020			% Change
Commercial, Financial, and Agricultural		$	11,771,037		$	12,085,534		(3	)%		$	12,931,095		(9	)%
Owner-Occupied		7,163,751			7,064,599			1			7,192,543			—
Total Commercial & Industrial		18,934,788			19,150,133			(1	)		20,123,638			(6	)
Multi-Family		2,197,139			2,086,641			5			2,359,112			(7	)
Hotels		1,441,414			1,411,443			2			1,407,238			2
Office Buildings		2,341,316			2,340,378			—			2,260,240			4
Shopping Centers		1,570,020			1,645,275			(5	)		1,736,210			(10	)
Warehouses		687,496			657,699			5			728,446			(6	)
Other Investment Property		1,211,078			1,076,577			12			942,962			28
Total Investment Properties		9,448,463			9,218,013			2			9,434,208			—
1-4 Family Construction		191,906			174,009			10			180,277			6
1-4 Family Investment Mortgage		421,968			462,335			(9	)		474,473			(11	)
Total 1-4 Family Properties		613,874			636,344			(4	)		654,750			(6	)
Commercial Development		103,512			120,683			(14	)		111,403			(7	)
Residential Development		186,033			164,950			13			259,617			(28	)
Land Acquisition		188,378			221,061			(15	)		276,085			(32	)
Land and Development		477,923			506,694			(6	)		647,105			(26	)
Total Commercial Real Estate		10,540,260			10,361,051			2			10,736,063			(2	)
Consumer Mortgages		5,108,499			5,200,762			(2	)		5,664,686			(10	)
Home Equity Lines		1,308,254			1,358,211			(4	)		1,629,482			(20	)
Credit Cards		293,026			285,508			3			264,829			11
Other Consumer Loans		2,156,203			1,880,353			15			1,131,149			91
Total Consumer		8,865,982			8,724,834			2			8,690,146			2
Total		$	38,341,030		$	38,236,018		—	%		$	39,549,847		(3	)%
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, 2021			June 30, 2021			% Change			September 30, 2020			% Change
Commercial, Financial, and Agricultural		$	77,349		$	70,943		9	%		$	95,365		(19	)%
Owner-Occupied		13,134			13,155			—			20,261			(35	)
Total Commercial & Industrial		90,483			84,098			8			115,626			(22	)
Multi-Family		2,396			2,407			—			157			nm
Office Buildings		2,488			1,618			54			27,608			(91	)
Shopping Centers		932			124			652			257			263
Warehouses		302			218			39			—			nm
Other Investment Property		624			407			53			238			162
Total Investment Properties		6,742			4,774			41			28,260			(76	)
1-4 Family Construction		522			548			(5	)		1,556			(66	)
1-4 Family Investment Mortgage		2,364			1,927			23			1,815			30
Total 1-4 Family Properties		2,886			2,475			17			3,371			(14	)
Commercial Development		463			560			(17	)		833			(44	)
Residential Development		449			451			—			648			(31	)
Land Acquisition		1,024			1,029			—			910			13
Land and Development		1,936			2,040			(5	)		2,391			(19	)
Total Commercial Real Estate		11,564			9,289			24			34,022			(66	)
Consumer Mortgages		37,541			51,376			(27	)		7,433			405
Home Equity Lines		8,688			8,938			(3	)		10,297			(16	)
Other Consumer Loans		7,189			7,327			(2	)		1,459			393
Total Consumer		53,418			67,641			(21	)		19,189			178
Total		$	155,465		$	161,028		(3	)%		$	168,837		(8	)%

Synovus
CREDIT QUALITY DATA
(Unaudited)
(Dollars in thousands)		2021								2020				Third Quarter
		Third				Second		First		Fourth		Third		'21 vs '20
		Quarter				Quarter		Quarter		Quarter		Quarter		% Change
Non-performing Loans (NPLs)		$	155,465			161,028		155,169		151,079		168,837		(8	)%
Impaired Loans Held for Sale		—				—		23,590		23,590		—		nm
Other Real Estate and Other Assets		16,883				16,806		16,849		17,394		23,280		(27	)
Non-performing Assets (NPAs)		172,348				177,834		195,608		192,063		192,117		(10	)
Allowance for Loan Losses (ALL)		492,243				516,708		563,214		605,736		603,800		(18	)
Reserve for Unfunded Commitments		42,971				46,890		51,528		47,785		60,794		(29	)
Allowance for Credit Losses (ACL)		535,214				563,598		614,742		653,521		664,594		(19	)
Net Charge-Offs - Quarter		20,516				26,547		20,204		22,139		28,466
Net Charge-Offs - YTD		67,266				46,750		20,204		94,712		72,573
Net Charge-Offs / Average Loans - Quarter (1)		0.22		%		0.28		0.21		0.23		0.29
Net Charge-Offs / Average Loans - YTD (1)		0.24				0.24		0.21		0.24		0.25
NPLs / Loans		0.41				0.42		0.40		0.39		0.43
NPAs / Loans, ORE and specific other assets		0.45				0.46		0.50		0.50		0.49
ACL/Loans		1.40				1.47		1.58		1.71		1.68
ALL/Loans		1.28				1.35		1.45		1.58		1.53
ACL/NPLs		344.27				350.00		396.18		432.57		393.63
ALL/NPLs		316.63				320.88		362.97		400.94		357.62
Past Due Loans over 90 days and Still Accruing		$	5,960			4,415		3,804		4,117		7,512		(21	)
As a Percentage of Loans Outstanding		0.02		%		0.01		0.01		0.01		0.02
Total Past Due Loans and Still Accruing		$	60,817			49,321		45,693		47,349		57,316		6
As a Percentage of Loans Outstanding		0.16		%		0.13		0.12		0.12		0.14
Accruing Troubled Debt Restructurings (TDRs)		$	126,055			124,528		129,776		134,972		163,511		(23	)
(1) Ratio is annualized.
SELECTED CAPITAL INFORMATION (1)
(Unaudited)
(Dollars in thousands)
		September 30, 2021				December 31, 2020		September 30, 2020
Tier 1 Capital		$	4,836,672			4,572,010		4,450,547
Total Risk-Based Capital		5,788,290				5,604,230		5,536,918
Common Equity Tier 1 Capital Ratio		9.63		%		9.66		9.30
Tier 1 Capital Ratio		10.83				10.95		10.57
Total Risk-Based Capital Ratio		12.96				13.42		13.16
Tier 1 Leverage Ratio		8.82				8.50		8.48
Common Equity as a Percentage of Total Assets (2)		8.50				8.51		8.54
Tangible Common Equity Ratio (3) (5)		7.68				7.66		7.67
Book Value Per Common Share (4)		$	32.41			31.24		30.73
Tangible Book Value Per Common Share (3)		29.04				27.88		27.34
(1) Current quarter regulatory capital information is preliminary.
(2) Common equity consists of Total Shareholders' Equity less Preferred Stock.
(3) Excludes the carrying value of goodwill and other intangible assets from common equity and total assets.
(4) Book Value Per Common Share consists of Total Shareholders' Equity less Preferred Stock divided by total common shares outstanding.
(5) See "Non-GAAP Financial Measures" of this report for applicable reconciliation.

 

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Source: Synovus Financial Corp.

FAQ

What are the third quarter 2021 earnings for Synovus Financial Corp. (SNV)?

Synovus reported net income of $178.5 million and diluted EPS of $1.21 for the third quarter of 2021.

How did Synovus' deposit and loan growth perform in Q3 2021?

In Q3 2021, Synovus saw total loans increase by $105 million sequentially and core transaction deposits rise by $1.03 billion.

What initiatives is Synovus pursuing for financial efficiency?

Synovus is implementing the Synovus Forward initiative, targeting a total pre-tax run rate benefit of $175 million by the end of 2022.

What was Synovus' net interest income and margin for Q3 2021?

Net interest income for Q3 2021 was $384.9 million, with a net interest margin of 3.01%.

What is the current credit quality status of Synovus (SNV)?

Synovus maintains strong credit quality metrics, with a net charge-off ratio of 0.22% and stable non-performing loan ratios.