Synovus announces earnings for the third quarter 2023

Rhea-AI Summary

Synovus Financial Corp. reports financial results for Q3 2023, with diluted earnings per share of $0.60 compared to $1.33 in Q3 2022. Total revenue declined by 5% compared to the previous year, driven by a decrease in net interest income. The company completed the sale of third-party consumer loans and medical office building loans, as well as the sale of asset management firm GLOBALT to its management team. Credit quality metrics increased from historically low levels. The CET1 ratio increased to 10.13%. The company remains focused on strengthening core client relationships and positioning for future growth.

Positive

• Completed sales of $338 million of third-party consumer loans and $1.2 billion of medical office building loans
• Increased CET1 ratio to 10.13%
• Focus on strengthening and growing core client relationships
• Optimizing balance sheet and business mix

Negative

• Diluted earnings per share decreased from $1.33 to $0.60 compared to Q3 2022
• Total revenue declined by 5% compared to the previous year
• Net interest income decreased by 7%
• Non-interest revenue fell by 5% sequentially

Diluted earnings per share of $0.60 vs. $1.33 in 3Q22

Adjusted diluted earnings per share of $0.84 vs. $1.34 in 3Q22

COLUMBUS, Ga.--(BUSINESS WIRE)-- Synovus Financial Corp. (NYSE: SNV) today reported financial results for the quarter ended Sept. 30, 2023. “Our third quarter financial results reflect agility and disciplined execution amid complex market dynamics,” said Synovus Chairman, CEO and President Kevin Blair. “While we navigate through this uncertain economic landscape, our primary focus remains on strengthening and growing our core client relationships and strategically positioning Synovus for future growth. This includes efforts to optimize the balance sheet as well as business mix. Our proactive measures taken in the third quarter have further derisked the company by reducing our wholesale funding ratio to 15% and elevating the CET1 ratio beyond 10%, while also streamlining ongoing expenses. We are confidently looking forward to a strong close for 2023, and we are optimistic about the return to a stronger growth orientation as we progress through 2024.”

Third Quarter 2023 Highlights

• Completed the previously announced sales of $338 million of third-party consumer loans and $1.2 billion of medical office building loans as well as the sale of asset management firm GLOBALT to its management team.
• Total revenue of $550.3 million declined $31.9 million, or 5%, compared to the third quarter 2022, driven by net interest income decrease of 7%, partially offset by growth in client fee income, excluding mortgage, of 5% year over year.
• Pre-provision net revenue of $196.8 million declined $91.4 million, or 32%, compared to the third quarter 2022, mostly driven by increases in funding costs, losses on the aforementioned loan sales and restructuring charges related to a voluntary early retirement program.
• Period-end loans declined $673.6 million sequentially, primarily driven by the $1.2 billion medical office building loans sale.
• Total deposits increased $123.5 million sequentially, while core deposits (excluding brokered deposits) grew $431.5 million, as remixing began to slow.
• As expected, credit quality metrics continued to increase from historically low levels and included a net charge-off ratio of 0.61% (driven by the previously disclosed medical office loan sale and a shared national C&I credit), a 3 bps increase in the ACL ratio to 1.22%, and non-performing loan and asset ratios both at 0.64%.
• The preliminary CET1 ratio of 10.13% increased 27 bps sequentially as capital preservation remains the near-term priority given persistent economic uncertainty.

Third Quarter Summary

	Reported												Adjusted
(dollars in thousands)		3Q23				2Q23				3Q22				3Q23				2Q23				3Q22
Net income available to common shareholders	$	87,423			$	165,819			$	194,753			$	122,770			$	169,526			$	195,481
Diluted earnings per share		0.60				1.13				1.33				0.84				1.16				1.34
Total revenue		550,298				567,807				582,217				550,552				567,347				584,265
Total loans		43,679,910				44,353,537				42,571,458				N/A				N/A				N/A
Total deposits		50,203,890				50,080,392				47,697,564				N/A				N/A				N/A
Return on avg assets		0.64	%			1.15	%			1.39	%			0.87	%			1.18	%			1.39	%
Return on avg common equity		8.2				15.5				18.7				11.5				15.8				18.7
Return on avg tangible common equity		9.7				17.7				21.3				13.5				18.1				21.4
Net interest margin		3.11				3.20				3.47				N/A				N/A				N/A
Efficiency ratio-TE(1)(2)		64.11				53.99				50.41				55.01				52.57				49.98
NCO ratio-QTD		0.61				0.24				0.04				N/A				N/A				N/A
NPA ratio		0.64				0.59				0.32				N/A				N/A				N/A
(1) Taxable equivalent (2) Adjusted tangible efficiency ratio

Balance Sheet

Loans*
(dollars in millions)	3Q23			2Q23			Linked Quarter Change				Linked Quarter % Change			3Q22			Year/Year Change				Year/Year % Change
Commercial & industrial	$	22,781.0		$	22,531.2		$	249.7			1	%		$	21,212.5		$	1,568.4			7	%
Commercial real estate		12,394.9			13,293.9			(899.0	)		(7	)			12,288.0			106.9			1
Consumer		8,504.1			8,528.4			(24.3	)		—				9,071.0			(566.9	)		(6	)
Total loans	$	43,679.9		$	44,353.5		$	(673.6	)		(2	)%		$	42,571.5		$	1,108.4			3	%
*Amounts may not total due to rounding

• Total loans ended the quarter at $43.68 billion, down $673.6 million sequentially, primarily driven by the $1.2 billion medical office building loans sale.
• Commercial and industrial (C&I) loans rose $249.7 million sequentially as activity in middle market commercial, Corporate and Investment Banking, and specialty lines contributed to the growth.
• CRE loans declined $899.0 million sequentially, driven by the aforementioned medical office building loans sale partially offset by draws on existing multi-family commitments and continued low levels of pay-offs.
• Consumer loans declined $24.3 million sequentially, largely a result of continued third-party contraction from sales as well as runoff somewhat offset by growth in portfolio mortgages.

Deposits*
(dollars in millions)	3Q23			2Q23			Linked Quarter Change				Linked Quarter % Change			3Q22			Year/Year Change				Year/Year % Change
Non-interest-bearing DDA	$	12,395.1		$	12,945.5		$	(550.4	)		(4	)%		$	15,373.7		$	(2,978.6	)		(19	)%
Interest-bearing DDA		6,276.1			6,255.3			20.8			—				5,777.7			498.4			9
Money market		10,786.3			10,803.7			(17.4	)		—				12,917.6			(2,131.3	)		(16	)
Savings		1,132.5			1,222.9			(90.4	)		(7	)			1,470.1			(337.6	)		(23	)
Public funds		6,885.7			7,031.4			(145.7	)		(2	)			5,549.7			1,336.0			24
Time deposits		6,506.4			5,291.8			1,214.6			23				2,110.9			4,395.5			208
Brokered deposits		6,221.8			6,529.8			(308.0	)		(5	)			4,497.8			1,724.0			38
Total deposits	$	50,203.9		$	50,080.4		$	123.5			—	%		$	47,697.6		$	2,506.3			5	%
*Amounts may not total due to rounding

• Total deposits ended the quarter at $50.20 billion, up $123.5 million sequentially, while core deposits (excluding brokered deposits) grew $431.5 million.
  • Time deposits growth was partially offset by a decline in non-interest-bearing DDA deposits, a byproduct of cash deployment of excess funds and continued pressures from the higher rate environment, the rate of which has slowed.
• Total deposit costs increased 36 bps sequentially to 2.31% and continued to be impacted by pricing lags on core interest-bearing deposits (excluding brokered deposits) as well as the decline in non-interest-bearing DDAs.

Income Statement Summary**
(in thousands, except per share data)	3Q23				2Q23				Linked Quarter Change				Linked Quarter % Change			3Q22				Year/Year Change				Year/Year % Change
Net interest income	$	443,159			$	455,531			$	(12,372	)		(3	)%		$	477,919			$	(34,760	)		(7	)%
Non-interest revenue		107,139				112,276				(5,137	)		(5	)			104,298				2,841			3
Non-interest expense		353,532				307,181				46,351			15				294,010				59,522			20
Provision for (reversal of) credit losses		72,572				38,881				33,691			87				25,581				46,991			184
Income before taxes	$	124,194			$	221,745			$	(97,551	)		(44	)%		$	262,626			$	(138,432	)		(53	)%
Income tax expense		27,729				47,801				(20,072	)		(42	)			59,582				(31,853	)		(53	)
Net income		96,465				173,944				(77,479	)		(45	)			203,044				(106,579	)		(52	)
Less: Net income (loss) attributable to noncontrolling interest		(630	)			(166	)			(464	)		NM				—				(630	)		NM
Net income attributable to Synovus Financial Corp.		97,095				174,110				(77,015	)		(44	)			203,044				(105,949	)		(52	)
Less: Preferred stock dividends		9,672				8,291				1,381			17				8,291				1,381			17
Net income available to common shareholders	$	87,423			$	165,819			$	(78,396	)		(47	)%		$	194,753			$	(107,330	)		(55	)%
Weighted average common shares outstanding, diluted		146,740				146,550				190			—	%			146,418				322			—	%
Diluted earnings per share	$	0.60			$	1.13			$	(0.53	)		(47	)		$	1.33			$	(0.73	)		(55	)
Adjusted diluted earnings per share		0.84				1.16				(0.32	)		(28	)			1.34				(0.50	)		(37	)
Effective tax rate		22.33	%			21.56	%										22.69	%
** Amounts may not total due to rounding

Core Performance

• Net interest income of $443.2 million was down $12.4 million sequentially, or 3%, and fell $34.8 million, or 7%, compared to the third quarter 2022.
  • The quarter-over-quarter decline was largely driven by modest increases in deposit costs and a continued decline in non-interest-bearing DDA deposits, but at a slower pace, partially offset by modestly better asset yields.
    • Net interest margin was 3.11%, down 9 bps sequentially, impacted by the same factors mentioned above.
  • The year-over-year decline resulted primarily from higher deposit costs and negative remixing from non-interest DDA deposits somewhat offset by higher asset yields.
• Non-interest revenue fell $5.1 million, or 5%, sequentially and increased $2.8 million, or 3%, compared to the third quarter 2022. Adjusted non-interest revenue declined $4.4 million, or 4%, sequentially and increased $0.9 million, or 1%, compared to the third quarter 2022.
  • The quarter-over-quarter decrease was impacted by recent changes to the NSF/overdraft program, a soft mortgage lending market and more muted capital markets activity.
  • The year-over-year increase primarily related to higher wealth revenue and increased card fees.
• Non-interest expense increased $46.4 million, or 15%, sequentially and increased $59.5 million, or 20%, compared to the third quarter 2022. Adjusted non-interest expense increased $5.2 million, or 2%, sequentially and increased $11.8 million, or 4%, compared to the third quarter 2022.
  • The quarter-over-quarter and year-over-year increases were largely impacted by a $31.0 million loss from loan sales and $18.4 million in voluntary early retirement charges. The year-over-year increase was also affected by new business initiatives and infrastructure investments as well as higher FDIC insurance and healthcare costs.
• As expected, credit quality metrics continued to increase from historically low levels. The non-performing loan and asset ratios both moved to 0.64%; the net charge-off ratio for the quarter was 0.61%, largely driven by the medical office building loan sale and a shared national C&I credit, while total past dues were 0.13% of total loans outstanding.
• Provision for credit losses of $72.6 million increased $33.7 million sequentially and rose $47.0 million compared to the third quarter 2022.
  • Drivers of the quarter-over-quarter and year-over-year increases included higher net charge-offs and increases of 3 bps and 9 bps, respectively, in the allowance for credit losses coverage ratio (to loans), reflecting migration trends and the uncertain economic environment.

Capital Ratios
	3Q23			2Q23			3Q22
Common equity Tier 1 capital (CET1) ratio	10.13	%	*	9.86	%		9.52	%
Tier 1 capital ratio	11.18		*	10.89			10.59
Total risk-based capital ratio	13.12		*	12.80			12.45
Tier 1 leverage ratio	9.38		*	9.23			9.04
Tangible common equity ratio	5.90			6.17			5.52
* Ratios are preliminary.

Capital

• The preliminary CET1 ratio improved 27 bps during the quarter to 10.13%, and the preliminary total risk-based capital ratio of 13.12% increased 32 bps from the previous quarter as capital preservation remains the near-term priority given persistent economic uncertainty.

Third Quarter Earnings Conference Call

Synovus will host an earnings highlights conference call at 8:30 a.m. ET on October 19, 2023. The earnings call will be accompanied by a slide presentation. Shareholders and other interested parties may listen to this conference call via simultaneous internet broadcast. For a link to the webcast, go to investor.synovus.com/event. The replay will be archived for 12 months and will be available 30-45 minutes after the call.

Synovus Financial Corp. is a financial services company based in Columbus, Georgia, with approximately $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 246 branches in Georgia, Alabama, South Carolina, Florida and Tennessee. Synovus is a Great Place to Work-Certified Company and is on the web at synovus.com and on Twitter, Facebook, LinkedIn and Instagram.

Forward-Looking Statements

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

These forward-looking statements are based upon information presently known to Synovus’ management and are inherently subjective, uncertain and subject to change due to any number of risks and uncertainties, including, without limitation, the risks and other factors set forth in Synovus’ filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2022, under the captions “Cautionary Notice Regarding Forward-Looking Statements” and “Risk Factors” and in Synovus’ quarterly reports on Form 10-Q and current reports on Form 8-K. We believe these forward-looking statements are reasonable; however, undue reliance should not be placed on any forward-looking statements, which are based on current expectations and speak only as of the date that they are made. We do not assume any obligation to update any forward-looking statements as a result of new information, future developments or otherwise, except as otherwise may be required by law.

Non-GAAP Financial Measures

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

Management believes that these non-GAAP financial measures provide meaningful additional information about Synovus to assist management and investors in evaluating Synovus’ operating results, financial strength, the performance of its business, and the strength of its capital position. However, these non-GAAP financial measures have inherent limitations as analytical tools and should not be considered in isolation or as a substitute for analyses of operating results or capital position as reported under GAAP. The non-GAAP financial measures should be considered as additional views of the way our financial measures are affected by significant items and other factors, and since they are not required to be uniformly applied, they may not be comparable to other similarly titled measures at other companies. Adjusted non-interest revenue and adjusted revenue are measures used by management to evaluate non-interest revenue and total revenue exclusive of fair value adjustment on non-qualified deferred compensation and other items not indicative of ongoing operations that could impact period-to-period comparisons. Adjusted non-interest expense and the adjusted tangible efficiency ratio are measures utilized by management to measure the success of expense management initiatives focused on reducing recurring controllable operating costs. Adjusted net income available to common shareholders, adjusted diluted earnings per share, adjusted return on average assets, and adjusted return on average common equity are measures used by management to evaluate operating results exclusive of items that are not indicative of ongoing operations and impact period-to-period comparisons. Return on average tangible common equity and adjusted return on average tangible common equity are measures used by management to compare Synovus’ performance with other financial institutions because it calculates the return available to common shareholders without the impact of intangible assets and their related amortization, thereby allowing management to evaluate the performance of the business consistently. The tangible common equity ratio is used by management to assess the strength of our capital position. The computations of these measures are set forth in the tables below.

Reconciliation of Non-GAAP Financial Measures
(dollars in thousands)		3Q23				2Q23				3Q22
Adjusted non-interest revenue
Total non-interest revenue	$	107,139			$	112,276			$	104,298
Gain on sale of GLOBALT		(1,929	)			—				—
Fair value adjustment on non-qualified deferred compensation		1,035				(1,598	)			1,076
Adjusted non-interest revenue	$	106,245			$	110,678			$	105,374
Adjusted non-interest expense
Total non-interest expense	$	353,532			$	307,181			$	294,010
(Loss) gain on other loans held for sale		(30,954	)			(2,360	)			—
Gain (loss) on early extinguishment of debt		526				377				—
Restructuring (charges) reversals		(17,319	)			110				(956	)
Valuation adjustment to Visa derivative		(900	)			(3,027	)			—
Fair value adjustment on non-qualified deferred compensation		1,035				(1,598	)			1,076
Adjusted non-interest expense	$	305,920			$	300,683			$	294,130
Reconciliation of Non-GAAP Financial Measures, continued
(dollars in thousands)		3Q23				2Q23				3Q22
Adjusted revenue and tangible efficiency ratio
Adjusted non-interest expense	$	305,920			$	300,683			$	294,130
Amortization of intangibles		(3,042	)			(2,420	)			(2,118	)
Adjusted tangible non-interest expense	$	302,878			$	298,263			$	292,012
Net interest income	$	443,159			$	455,531			$	477,919
Total non-interest revenue		107,139				112,276				104,298
Total revenue	$	550,298			$	567,807			$	582,217
Tax equivalent adjustment		1,148				1,138				972
Total TE revenue		551,446				568,945				583,189
Gain on sale of GLOBALT		(1,929	)			—				—
Fair value adjustment on non-qualified deferred compensation		1,035				(1,598	)			1,076
Adjusted revenue	$	550,552			$	567,347			$	584,265
Efficiency ratio-TE		64.11	%			53.99	%			50.41	%
Adjusted tangible efficiency ratio		55.01				52.57				49.98

Adjusted return on average assets
Net income	$	96,465			$	173,944			$	203,044
Loss (gain) on other loans held for sale		30,954				2,360				—
(Gain) loss on early extinguishment of debt		(526	)			(377	)			—
Gain on sale of GLOBALT		(1,929	)			—				—
Restructuring charges (reversals)		17,319				(110	)			956
Valuation adjustment to Visa derivative		900				3,027				—
Tax effect of adjustments(1)		(11,371	)			(1,193	)			(228	)
Adjusted net income	$	131,812			$	177,651			$	203,772
Net income annualized	$	382,714			$	697,687			$	805,555
Adjusted net income annualized	$	522,950			$	712,556			$	808,443
Total average assets	$	59,916,679			$	60,515,077			$	58,055,978
Return on average assets		0.64	%			1.15	%			1.39	%
Adjusted return on average assets		0.87				1.18				1.39
Adjusted net income available to common shareholders and adjusted diluted earnings per share
Net income available to common shareholders	$	87,423			$	165,819			$	194,753
Gain on sale of GLOBALT		(1,929	)			—				—
Loss (gain) on other loans held for sale		30,954				2,360				—
(Gain) loss on early extinguishment of debt		(526	)			(377	)			—
Restructuring charges (reversals)		17,319				(110	)			956
Valuation adjustment to Visa derivative		900				3,027				—
Tax effect of adjustments(1)		(11,371	)			(1,193	)			(228	)
Adjusted net income available to common shareholders	$	122,770			$	169,526			$	195,481
Weighted average common shares outstanding, diluted		146,740				146,550				146,418
Diluted earnings per share	$	0.60			$	1.13			$	1.33
Adjusted diluted earnings per share		0.84				1.16				1.34

Reconciliation of Non-GAAP Financial Measures, continued
(dollars in thousands)		3Q23				2Q23				3Q22
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	$	87,423			$	165,819			$	194,753
Loss (gain) on other loans held for sale		30,954				2,360				—
(Gain) loss on early extinguishment of debt		(526	)			(377	)			—
Gain on sale of GLOBALT		(1,929	)			—				—
Restructuring charges (reversals)		17,319				(110	)			956
Valuation adjustment to Visa derivative		900				3,027				—
Tax effect of adjustments(1)		(11,371	)			(1,193	)			(228	)
Adjusted net income available to common shareholders	$	122,770			$	169,526			$	195,481
Adjusted net income available to common shareholders annualized	$	487,077			$	679,967			$	775,550
Amortization of intangibles, tax effected, annualized		9,131				7,344				6,401
Adjusted net income available to common shareholders excluding amortization of intangibles annualized	$	496,208			$	687,311			$	781,951
Net income available to common shareholders annualized	$	346,841			$	665,098			$	772,661
Amortization of intangibles, tax effected, annualized		9,131				7,344				6,401
Net income available to common shareholders excluding amortization of intangibles annualized	$	355,972			$	672,442			$	779,062
Total average Synovus Financial Corp. shareholders' equity less preferred stock	$	4,223,422			$	4,303,722			$	4,141,516
Average goodwill		(476,408	)			(460,118	)			(452,390	)
Average other intangible assets, net		(59,016	)			(36,738	)			(30,214	)
Total average Synovus Financial Corp. tangible shareholders' equity less preferred stock	$	3,687,998			$	3,806,866			$	3,658,912
Return on average common equity		8.2	%			15.5	%			18.7	%
Adjusted return on average common equity		11.5				15.8				18.7
Return on average tangible common equity		9.7				17.7				21.3
Adjusted return on average tangible common equity		13.5				18.1				21.4

(dollars in thousands)	September 30, 2023				December 31, 2022				September 30, 2022
Tangible common equity ratio
Total assets	$	59,342,930			$	59,731,378			$	58,639,522
Goodwill		(479,851	)			(452,390	)			(452,390	)
Other intangible assets, net		(49,096	)			(27,124	)			(29,242	)
Tangible assets	$	58,813,983			$	59,251,864			$	58,157,890
Total Synovus Financial Corp. shareholders’ equity	$	4,536,958			$	4,475,801			$	4,229,715
Goodwill		(479,851	)			(452,390	)			(452,390	)
Other intangible assets, net		(49,096	)			(27,124	)			(29,242	)
Preferred Stock, no par value		(537,145	)			(537,145	)			(537,145	)
Tangible common equity	$	3,470,866			$	3,459,142			$	3,210,938
Total Synovus Financial Corp. shareholders’ equity to total assets ratio		7.65	%			7.49	%			7.21	%
Tangible common equity ratio		5.90				5.84				5.52
(1) An assumed marginal tax rate of 24.3% for 3Q23 and 2Q23 and 23.8% for 3Q22 was applied.
Amounts may not total due to rounding

Synovus
INCOME STATEMENT DATA
(Unaudited)
(Dollars in thousands, except per share data)	Nine Months Ended September 30,
	2023				2022				'23 vs '22
									% Change
Interest income	$	2,262,061			$	1,421,133			59	%
Interest expense		882,619				125,578			603
Net interest income		1,379,442				1,295,555			6
Provision for (reversal of) credit losses		143,607				49,669			189
Net interest income after provision for credit losses		1,235,835				1,245,886			(1	)
Non-interest revenue:
Service charges on deposit accounts		67,836				69,428			(2	)
Fiduciary and asset management fees		59,928				59,577			1
Card fees		51,485				45,946			12
Brokerage revenue		63,703				47,038			35
Mortgage banking income		12,138				14,922			(19	)
Capital markets income		27,077				19,704			37
Income from bank-owned life insurance		21,106				22,514			(6	)
Investment securities gains (losses), net		1,030				—			nm
Recovery of NPA		13,126				—			nm
Other non-interest revenue		35,112				27,768			26
Total non-interest revenue		352,541				306,897			15
Non-interest expense:
Salaries and other personnel expense		551,667				499,081			11
Net occupancy, equipment, and software expense		131,435				129,538			1
Third-party processing and other services		64,932				65,486			(1	)
Professional fees		28,707				26,094			10
FDIC insurance and other regulatory fees		33,266				20,851			60
Restructuring charges (reversals)		16,476				(7,318	)		nm
Loss on other loans held for sale		50,064				—			nm
Other operating expenses		106,019				114,779			(8	)
Total non-interest expense		982,566				848,511			16
Income before income taxes		605,810				704,272			(14	)
Income tax expense		133,242				152,140			(12	)
Net income		472,568				552,132			(14	)
Less: Net income attributable to noncontrolling interest		(796	)			—			nm
Net income attributable to Synovus Financial Corp.		473,364				552,132			(14	)
Less: Preferred stock dividends		26,254				24,872			6
Net income available to common shareholders	$	447,110			$	527,260			(15	)%
Net income per common share, basic	$	3.06			$	3.63			(16	)%
Net income per common share, diluted		3.05				3.60			(15	)
Cash dividends declared per common share		1.14				1.02			12
Return on average assets *		1.05	%			1.29	%		(24) bps
Return on average common equity *		14.23				16.37			(214	)
Weighted average common shares outstanding, basic		146,028				145,329			—	%
Weighted average common shares outstanding, diluted		146,683				146,465			—
nm - not meaningful
bps - basis points
* - ratios are annualized
Amounts may not total due to rounding

Synovus
INCOME STATEMENT DATA
(Unaudited)
(Dollars in thousands, except per share data)	2023										2022					Third Quarter
	Third Quarter				Second Quarter			First Quarter			Fourth Quarter			Third Quarter		'23 vs '22
																% Change
Interest income	$	786,039			759,143			716,879			654,654			551,299		43	%
Interest expense		342,880			303,612			236,128			153,308			73,380		367
Net interest income		443,159			455,531			480,751			501,346			477,919		(7	)
Provision for (reversal of) credit losses		72,572			38,881			32,154			34,884			25,581		184
Net interest income after provision for credit losses		370,587			416,650			448,597			466,462			452,338		(18	)
Non-interest revenue:
Service charges on deposit accounts		21,385			23,477			22,974			23,639			23,398		(9	)
Fiduciary and asset management fees		20,205			20,027			19,696			18,836			19,201		5
Card fees		18,602			17,059			15,824			15,887			15,101		23
Brokerage revenue		20,237			20,908			22,558			19,996			17,140		18
Mortgage banking income		3,671			4,609			3,858			2,554			5,065		(28	)
Capital markets income		6,377			6,975			13,725			6,998			6,839		(7	)
Income from bank-owned life insurance		6,965			6,878			7,262			7,206			6,792		3
Investment securities gains (losses), net		—			—			1,030			—			—		nm
Recovery of NPA		—			—			13,126			—			—		nm
Other non-interest revenue		9,697			12,343			13,073			7,323			10,762		(10	)
Total non-interest revenue		107,139			112,276			133,126			102,439			104,298		3
Non-interest expense:
Salaries and other personnel expense		179,741			183,001			188,924			182,629			173,334		4
Net occupancy, equipment, and software expense		45,790			42,785			42,860			45,192			43,462		5
Third-party processing and other services		21,439			21,659			21,833			23,130			22,539		(5	)
Professional fees		10,147			9,597			8,963			11,096			6,755		50
FDIC insurance and other regulatory fees		11,837			11,162			10,268			8,232			7,707		54
Restructuring charges (reversals)		17,319			(110	)		(733	)		(2,372	)		956		nm
Loss on other loans held for sale		30,954			2,360			16,750			—			—		nm
Other operating expenses		36,305			36,727			32,987			41,089			39,257		(8	)
Total non-interest expense		353,532			307,181			321,852			308,996			294,010		20
Income before income taxes		124,194			221,745			259,871			259,905			262,626		(53	)
Income tax expense		27,729			47,801			57,712			54,135			59,582		(53	)
Net income		96,465			173,944			202,159			205,770			203,044		(52	)
Less: Net income attributable to noncontrolling interest		(630	)		(166	)		—			—			—		nm
Net income attributable to Synovus Financial Corp.		97,095			174,110			202,159			205,770			203,044		(52	)
Less: Preferred stock dividends		9,672			8,291			8,291			8,291			8,291		17
Net income available to common shareholders	$	87,423			165,819			193,868			197,479			194,753		(55	)%
Net income per common share, basic	$	0.60			1.13			1.33			1.36			1.34		(55	)%
Net income per common share, diluted		0.60			1.13			1.32			1.35			1.33		(55	)
Cash dividends declared per common share		0.38			0.38			0.38			0.34			0.34		12
Return on average assets *		0.64	%		1.15			1.36			1.38			1.39		(75) bps
Return on average common equity *		8.2			15.5			19.2			20.9			18.7		(1,050	)
Weighted average common shares outstanding, basic		146,170			146,113			145,799			145,467			145,386		1	%
Weighted average common shares outstanding, diluted		146,740			146,550			146,727			146,528			146,418		—
nm - not meaningful
bps - basis points
* - ratios are annualized
Amounts may not total due to rounding

Synovus
BALANCE SHEET DATA		September 30, 2023				December 31, 2022				September 30, 2022
(Unaudited)
(In thousands, except share data)
ASSETS
Cash and due from banks		$	604,631			$	624,097			$	516,163
Interest-bearing funds with Federal Reserve Bank			1,431,356				1,280,684				1,260,748
Interest earning deposits with banks			65,468				34,632				32,445
Federal funds sold and securities purchased under resale agreements			36,176				38,367				58,448
Cash, cash equivalents, and restricted cash			2,137,631				1,977,780				1,867,804
Investment securities available for sale, at fair value			9,237,191				9,678,103				9,587,508
Loans held for sale (includes $48,994, $51,136 and $56,517 measured at fair value, respectively)			66,558				391,502				696,450
Loans, net of deferred fees and costs			43,679,910				43,716,353				42,571,458
Allowance for loan losses			(477,532	)			(443,424	)			(421,359	)
Loans, net			43,202,378				43,272,929				42,150,099
Cash surrender value of bank-owned life insurance			1,107,092				1,089,280				1,084,060
Premises, equipment, and software, net			364,054				370,632				376,823
Goodwill			479,851				452,390				452,390
Other intangible assets, net			49,096				27,124				29,242
Other assets			2,699,079				2,471,638				2,395,146
Total assets		$	59,342,930			$	59,731,378			$	58,639,522
LIABILITIES AND EQUITY
Liabilities:
Deposits:
Non-interest-bearing deposits		$	12,976,574			$	15,639,899			$	16,359,551
Interest-bearing deposits			37,227,316				33,231,660				31,338,013
Total deposits			50,203,890				48,871,559				47,697,564
Federal funds purchased and securities sold under repurchase agreements			98,270				146,588				240,210
Other short-term borrowings			2,362				603,384				614,232
Long-term debt			2,704,701				4,109,597				4,434,327
Other liabilities			1,772,139				1,524,449				1,423,474
Total liabilities			54,781,362				55,255,577				54,409,807
Equity:
Shareholders' equity:
Preferred stock - no par value. Authorized 100,000,000 shares; issued 22,000,000			537,145				537,145				537,145
Common stock - $1.00 par value. Authorized 342,857,143 shares; issued 170,859,506, 170,141,492 and 170,097,791 respectively; outstanding 146,204,648, 145,486,634 and 145,442,933 respectively			170,860				170,141				170,098
Additional paid-in capital			3,940,507				3,920,346				3,916,729
Treasury stock, at cost; 24,654,858 shares			(944,484	)			(944,484	)			(944,484	)
Accumulated other comprehensive income (loss), net			(1,679,404	)			(1,442,117	)			(1,534,314	)
Retained earnings			2,512,334				2,234,770				2,084,541
Total Synovus Financial Corp. shareholders’ equity			4,536,958				4,475,801				4,229,715
Noncontrolling interest in subsidiary			24,610				—				—
Total equity			4,561,568				4,475,801				4,229,715
Total liabilities and equity		$	59,342,930			$	59,731,378			$	58,639,522

Synovus
AVERAGE BALANCES, INTEREST, AND YIELDS/RATES
(Unaudited)
	Third Quarter 2023										Second Quarter 2023										Third Quarter 2022
(dollars in thousands)	Average Balance				Interest			Yield/ Rate			Average Balance				Interest			Yield/ Rate			Average Balance				Interest			Yield/ Rate
Assets
Interest earning assets:
Commercial loans (1) (2) (3)	$	34,990,459			$	579,177		6.57	%		$	35,628,637			$	566,823		6.38	%		$	32,836,799			$	384,995		4.65	%
Consumer loans (1) (2)		8,509,757				108,065		5.06				8,470,478				104,545		4.94				8,931,573				94,425		4.21
Less: Allowance for loan losses		(461,385	)			—		—				(466,700	)			—		—				(419,160	)			—		—
Loans, net		43,038,831				687,242		6.34				43,632,415				671,368		6.17				41,349,212				479,420		4.60
Investment securities available for sale		11,194,291				61,642		2.20				11,200,717				60,421		2.16				11,126,705				53,550		1.92
Trading account assets		16,186				237		5.86				21,328				309		5.80				16,771				81		1.93
Other earning assets(4)		1,237,445				16,369		5.17				1,446,425				18,081		4.95				1,012,717				5,791		2.24
FHLB and Federal Reserve Bank stock		244,906				3,783		6.18				280,248				4,301		6.14				244,879				1,412		2.31
Mortgage loans held for sale		53,904				879		6.52				54,603				852		6.24				66,601				862		5.18
Other loans held for sale		881,067				17,035		7.57				546,224				4,949		3.58				892,805				11,155		4.89
Total interest earning assets		56,666,630			$	787,187		5.51	%			57,181,960			$	760,281		5.33	%			54,709,690			$	552,271		4.00	%
Cash and due from banks		509,511										646,066										557,537
Premises and equipment		365,568										369,039										383,189
Other real estate		—										—										2,398
Cash surrender value of bank-owned life insurance		1,102,626										1,095,866										1,080,914
Other assets(5)		1,272,344										1,222,146										1,322,251
Total assets	$	59,916,679									$	60,515,077									$	58,055,979
Liabilities and Equity
Interest-bearing liabilities:
Interest-bearing demand deposits	$	10,114,171			$	52,983		2.08	%		$	9,891,375			$	41,803		1.70	%		$	8,437,408			$	5,782		0.27	%
Money market accounts		13,147,465				95,339		2.88				13,468,210				85,397		2.54				15,410,964				20,696		0.53
Savings deposits		1,178,322				280		0.09				1,276,040				281		0.09				1,508,312				84		0.02
Time deposits		6,180,584				59,972		3.85				4,866,221				39,551		3.26				2,270,163				2,428		0.42
Brokered deposits		6,442,690				83,486		5.14				6,342,751				74,748		4.73				3,899,669				17,927		1.82
Federal funds purchased and securities sold under repurchase agreements		73,344				296		1.58				88,591				351		1.57				240,412				641		1.04
Other short-term borrowings		1,722				—		—				455,050				5,566		4.84				709,078				3,666		2.02
Long-term debt		3,230,374				50,524		6.18				3,821,126				55,915		5.82				2,656,939				22,156		3.29
Total interest-bearing liabilities		40,368,672			$	342,880		3.37	%			40,209,364			$	303,612		3.03	%			35,132,945			$	73,380		0.83	%
Non-interest-bearing demand deposits		13,049,343										13,874,482										16,904,353
Other liabilities		1,713,131										1,556,863										1,340,020
Total equity		4,785,533										4,874,368										4,678,661
Total liabilities and equity	$	59,916,679									$	60,515,077									$	58,055,979
Net interest income and net interest margin, taxable equivalent (6)					$	444,307		3.11	%						$	456,669		3.20	%						$	478,891		3.47	%
Less: taxable-equivalent adjustment						1,148										1,138										972
Net interest income					$	443,159									$	455,531									$	477,919

(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 2023 — $11.8 million, Second Quarter 2023 — $11.3 million, and Third Quarter 2022 — $11.9 million.
(3)	Reflects taxable-equivalent adjustments, using the statutory federal tax rate of 21%, in adjusting interest on tax-exempt loans to a taxable-equivalent basis.
(4)	Includes interest-bearing funds with Federal Reserve Bank, interest earning deposits with banks, and federal funds sold and securities purchased under resale agreements.
(5)	Includes average net unrealized gains/(losses) on investment securities available for sale of $(1.60) billion, $(1.46) billion, and $(1.06) billion for the Third Quarter 2023, Second Quarter 2023, and Third Quarter 2022, respectively.
(6)	The net interest margin is calculated by dividing annualized net interest income-taxable equivalent by average total interest earning assets.

Synovus
AVERAGE BALANCES, INTEREST, AND YIELDS/RATES
(Unaudited)
	Nine Months Ended September 30,
	2023										2022
(dollars in thousands)	Average Balance				Interest			Yield/ Rate			Average Balance				Interest			Yield/ Rate
Assets
Interest earning assets:
Commercial loans (1) (2) (3)	$	35,216,487			$	1,672,529		6.35	%		$	31,828,932			$	974,024		4.09	%
Consumer loans (1) (2)		8,580,029				316,757		4.92				8,749,927				259,619		3.95
Less: Allowance for loan losses		(457,818	)									(419,478	)
Loans, net		43,338,698				1,989,286		6.14				40,159,381				1,233,643		4.11
Investment securities available for sale		11,229,290				183,118		2.17				11,179,378				151,111		1.80
Trading account assets		16,302				671		5.49				12,640				193		2.04
Other earning assets(4)		1,398,211				51,660		4.87				1,245,102				8,267		0.88
FHLB and Federal Reserve Bank stock		277,136				11,439		5.50				195,238				3,917		2.67
Mortgage loans held for sale		48,398				2,297		6.33				85,126				2,665		4.17
Other loans held for sale		625,262				26,995		5.69				739,627				24,133		4.30
Total interest earning assets		56,933,297			$	2,265,466		5.32	%			53,616,492			$	1,423,929		3.55	%
Cash and due from banks		593,023										548,322
Premises and equipment		367,332										389,083
Other real estate		—										8,498
Cash surrender value of bank-owned life insurance		1,096,567										1,076,381
Other assets(5)		1,187,026										1,515,226
Total assets	$	60,177,245									$	57,154,002
Liabilities and Equity
Interest-bearing liabilities:
Interest-bearing demand deposits	$	9,702,651			$	118,007		1.63	%		$	9,162,684			$	11,752		0.17	%
Money market accounts		13,665,672				253,351		2.48				15,592,671				32,896		0.28
Savings deposits		1,274,142				771		0.08				1,491,893				223		0.02
Time deposits		4,892,146				121,019		3.31				2,700,505				6,254		0.31
Brokered deposits		6,116,392				214,627		4.69				3,192,848				27,952		1.17
Federal funds purchased and securities sold under repurchase agreements		98,212				1,317		1.77				227,335				871		0.51
Other short-term borrowings		705,292				24,559		4.59				400,862				4,561		1.50
Long-term debt		3,400,156				148,968		5.80				1,512,059				41,069		3.61
Total interest-bearing liabilities		39,854,663			$	882,619		2.96	%			34,280,857			$	125,578		0.49	%
Non-interest-bearing demand deposits		13,972,152										16,786,794
Other liabilities		1,592,230										1,243,900
Total equity		4,758,200										4,842,451
Total liabilities and equity	$	60,177,245									$	57,154,002
Net interest income, taxable equivalent net interest margin (6)					$	1,382,847		3.25	%						$	1,298,351		3.24	%
Less: taxable-equivalent adjustment						3,405										2,796
Net interest income					$	1,379,442									$	1,295,555

(1)	Average loans are shown net of deferred fees and costs. NPLs are included.
(2)	Interest income includes net loan fees as follows: 2023 — $34.6 million and 2022 — $45.6 million.
(3)	Reflects taxable-equivalent adjustments, using the statutory federal tax rate of 21%, in adjusting interest on tax-exempt loans to a taxable-equivalent basis.
(4)	Includes interest-bearing funds with Federal Reserve Bank, interest earning deposits with banks, and federal funds sold and securities purchased under resale agreements.
(5)	Includes average net unrealized gains/(losses) on investment securities available for sale of $(1.53) billion and $(747.7) million for the nine months ended September 30, 2023 and 2022, respectively.
(6)	The net interest margin is calculated by dividing annualized net interest income-taxable equivalent by average total interest earning assets.

Synovus LOANS OUTSTANDING BY TYPE (Unaudited)		Total Loans			Total Loans			Linked Quarter			Total Loans			Year/Year
(Dollars in thousands)
Loan Type		September 30, 2023			June 30, 2023			% Change			September 30, 2022			% Change
Commercial, Financial, and Agricultural		$	14,498,966		$	14,166,890		2	%		$	13,254,966		9	%
Owner-Occupied			8,281,988			8,364,342		(1	)			7,957,550		4
Total Commercial & Industrial			22,780,954			22,531,232		1				21,212,516		7
Multi-Family			3,930,617			3,597,497		9				2,949,172		33
Hotels			1,790,094			1,771,381		1				1,712,016		5
Office Buildings			1,911,095			3,031,806		(37	)			2,945,771		(35	)
Shopping Centers			1,327,770			1,329,492		—				1,441,385		(8	)
Warehouses			985,723			1,068,734		(8	)			943,961		4
Other Investment Property			1,432,456			1,471,356		(3	)			1,246,099		15
Total Investment Properties			11,377,755			12,270,266		(7	)			11,238,404		1
1-4 Family Construction			224,091			205,459		9				249,840		(10	)
1-4 Family Investment Mortgage			396,813			410,267		(3	)			389,787		2
Total 1-4 Family Properties			620,904			615,726		1				639,627		(3	)
Commercial Development			64,212			60,910		5				92,159		(30	)
Residential Development			92,209			98,229		(6	)			119,019		(23	)
Land Acquisition			239,773			248,767		(4	)			198,756		21
Land and Development			396,194			407,906		(3	)			409,934		(3	)
Total Commercial Real Estate			12,394,853			13,293,898		(7	)			12,287,965		1
Consumer Mortgages			5,391,282			5,379,284		—				5,166,928		4
Home Equity			1,784,356			1,773,987		1				1,708,246		4
Credit Cards			191,046			187,677		2				197,978		(4	)
Other Consumer Loans			1,137,419			1,187,459		(4	)			1,997,825		(43	)
Total Consumer			8,504,103			8,528,407		—				9,070,977		(6	)
Total		$	43,679,910		$	44,353,537		(2	)%		$	42,571,458		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, 2023			June 30, 2023			% Change			September 30, 2022			% Change
Commercial, Financial, and Agricultural		$	97,468		$	144,415		(33	)%		$	59,275		64	%
Owner-Occupied			84,505			22,197		281				8,433		902
Total Commercial & Industrial			181,973			166,612		9				67,708		169
Multi-Family			1,702			1,748		(3	)			2,550		(33	)
Office Buildings			27,810			28,024		(1	)			884		nm
Shopping Centers			653			699		(7	)			742		(12	)
Warehouses			207			218		(5	)			223		(7	)
Other Investment Property			572			664		(14	)			641		(11	)
Total Investment Properties			30,944			31,353		(1	)			5,040		514
1-4 Family Construction			—			632		nm				55		nm
1-4 Family Investment Mortgage			3,386			3,525		(4	)			3,036		12
Total 1-4 Family Properties			3,386			4,157		(19	)			3,091		10
Commercial Development			—			—		nm				422		(100	)
Residential Development			267			267		—				267		—
Land Acquisition			538			871		(38	)			980		(45	)
Land and Development			805			1,138		(29	)			1,669		(52	)
Total Commercial Real Estate			35,135			36,648		(4	)			9,800		259
Consumer Mortgages			43,863			41,877		5				32,527		35
Home Equity			11,620			9,936		17				7,121		63
Other Consumer Loans			7,941			6,433		23				4,938		61
Total Consumer			63,424			58,246		9				44,586		42
Total		$	280,532		$	261,506		7	%		$	122,094		130	%

Synovus
CREDIT QUALITY DATA
(Unaudited)
(Dollars in thousands)		2023								2022				Third Quarter
		Third				Second		First		Fourth		Third		'23 vs '22
		Quarter				Quarter		Quarter		Quarter		Quarter		% Change
Non-performing Loans (NPLs)		$	280,532			261,506		182,460		128,061		122,094		130	%
Impaired Loans Held for Sale			—			—		—		—		447		(100	)
Other Real Estate and Other Assets			—			—		—		15,320		15,320		(100	)
Non-performing Assets (NPAs)			280,532			261,506		182,460		143,381		137,861		103
Allowance for Loan Losses (ALL)			477,532			471,238		457,010		443,424		421,359		13
Reserve for Unfunded Commitments			55,185			55,729		57,473		57,455		57,936		(5	)
Allowance for Credit Losses (ACL)			532,717			526,967		514,483		500,879		479,295		11
Net Charge-Offs - Quarter			66,822			26,396		18,550		13,300		4,682
Net Charge-Offs - YTD			111,768			44,946		18,550		53,156		39,856
Net Charge-Offs / Average Loans - Quarter (1)			0.61	%		0.24		0.17		0.12		0.04
Net Charge-Offs / Average Loans - YTD (1)			0.34			0.20		0.17		0.13		0.13
NPLs / Loans			0.64			0.59		0.41		0.29		0.29
NPAs / Loans, ORE and specific other assets			0.64			0.59		0.41		0.33		0.32
ACL/Loans			1.22			1.19		1.17		1.15		1.13
ALL/Loans			1.09			1.06		1.04		1.01		0.99
ACL/NPLs			189.90			201.51		281.97		391.13		392.56
ALL/NPLs			170.22			180.20		250.47		346.26		345.11
Past Due Loans over 90 days and Still Accruing		$	3,792			3,643		3,529		3,373		3,443		10
As a Percentage of Loans Outstanding			0.01	%		0.01		0.01		0.01		0.01
Total Past Due Loans and Still Accruing		$	54,974			84,946		55,053		65,568		63,545		(13	)
As a Percentage of Loans Outstanding			0.13	%		0.19		0.12		0.15		0.15
(1) Ratio is annualized.
SELECTED CAPITAL INFORMATION (1)
(Unaudited)
(Dollars in thousands)
		September 30, 2023				December 31, 2022		September 30, 2022
Common Equity Tier 1 Capital Ratio			10.13	%		9.63		9.52
Tier 1 Capital Ratio			11.18			10.68		10.59
Total Risk-Based Capital Ratio			13.12			12.54		12.45
Tier 1 Leverage Ratio			9.38			9.07		9.04
Total Synovus Financial Corp. shareholders' equity as a Percentage of Total Assets			7.65			7.49		7.21
Tangible Common Equity Ratio (2) (4)			5.90			5.84		5.52
Book Value Per Common Share (3)		$	27.36			27.07		25.39
Tangible Book Value Per Common Share (2)			23.74			23.78		22.08
(1) Current quarter regulatory capital information is preliminary.
(2) Excludes the carrying value of goodwill and other intangible assets from common equity and total assets.
(3) Book Value Per Common Share consists of Total Synovus Financial Corp. shareholders’ equity less Preferred stock divided by total common shares outstanding.
(4) See "Non-GAAP Financial Measures" for applicable reconciliation.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20231018816984/en/

Media Contact

Audria Belton

Media Relations

media@synovus.com

Investor Contact

Jennifer Demba

Investor Relations

investorrelations@synovus.com

Source: Synovus Financial Corp.

FAQ

What were the diluted earnings per share for Q3 2023?

$0.60

What was the change in total revenue compared to the previous year?

-5%

What sales did the company complete during the quarter?

Sales of $338 million of third-party consumer loans and $1.2 billion of medical office building loans

What is the CET1 ratio for Q3 2023?

10.13%

What is the company's focus for future growth?

Strengthening and growing core client relationships, optimizing balance sheet and business mix