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Section 1: 8-K (8-K)

8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

April 24, 2018

Date of Report

(Date of Earliest Event Reported)

Synovus Financial Corp.

(Exact Name of Registrant as Specified in its Charter)

 

Georgia

(State of Incorporation)

  

1-10312

(Commission File Number)

  

58-1134883

(IRS Employer Identification No.)

1111 Bay Avenue, Suite 500, Columbus, Georgia 31901

(Address of principal executive offices) (Zip Code)

(706) 649-2311

(Registrant’s telephone number, including area code)

 

                                                                                                  

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.


Item 2.02

 

Results of Operations and Financial Condition

 

On April 24, 2018, Synovus Financial Corp. (the “Company”) issued a press release announcing the Company’s financial results for the three month period ended March 31, 2018.

 

Pursuant to General Instruction F to Current Report on Form 8-K, the press release is attached to this Current Report as Exhibit 99.1 and only those portions of the press release related to the historical results of operations of the Company for the three month period ended March 31, 2018 are incorporated into this Item 2.02 by reference. The information contained in this Item 2.02, including the information set forth in the press release filed as Exhibit 99.1 to, and incorporated in, this Current Report is being “furnished” and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information in Exhibit 99.1 furnished pursuant to this Item 2.02 shall not be incorporated by reference into any registration statement or other documents pursuant to the Securities Act of 1933, as amended (the “Securities Act”), or into any filing or other document pursuant to the Exchange Act except as otherwise expressly stated in any such filing.

Item 7.01

 

Regulation FD Disclosure

 

On April 24, 2018, the Company made available the supplemental information (the “Supplemental Information”) and slide presentation (“Slide Presentation”) prepared for use with the press release. The investor call and webcast will be held at 8:30 a.m., ET, on April 24, 2018.

 

The information contained in this Item 7.01 of this Current Report, including the information set forth in the Supplemental Information and the Slide Presentation filed as Exhibits 99.2 and Exhibit 99.3 to, and incorporated in, this Current Report, is being “furnished” and shall not be deemed “filed” for the purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that Section. The information in Exhibit 99.2 and Exhibit 99.3 furnished pursuant to this Item 7.01 shall not be incorporated by reference into any registration statement or other documents pursuant to the Securities Act or into any filing or other document pursuant to the Exchange Act except as otherwise expressly stated in any such filing.

Item 9.01

 

Financial Statements and Exhibits

 

(d)

  

Exhibits

 

Exhibit No.

  

Description

 

99.1

  

Synovus press release dated April 24, 2018

 

99.2

  

Supplemental Information prepared for use with the press release

 

99.3

  

Slide presentation prepared for use with the press release

 

2


Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, Synovus has caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

   

SYNOVUS FINANCIAL CORP.

(“Synovus”)

Dated: April 24, 2018

   

By:

 

/s/Allan E. Kamensky                                    

     

Allan E. Kamensky

     

Executive Vice President, General

Counsel and Secretary

 

3

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Section 2: EX-99.1 (EX-99.1)

EX-99.1

Exhibit 99.1

 

LOGO

 

Media Contact    Investor Contact
Lee Underwood    Steve Adams
Media Relations    Investor Relations
(706) 644-0528    (706) 641-6462

Synovus Announces Earnings for the First Quarter 2018

Diluted Earnings per Share of $0.84, up 49.7% vs. $0.56 in 1Q17

COLUMBUS, Ga., April 24, 2018 – Synovus Financial Corp. (NYSE: SNV) today reported financial results for the quarter ended March 31, 2018.

First Quarter Highlights

 

    Net income available to common shareholders for the first quarter 2018 was $100.6 million or $0.84 per diluted share as compared to $27.0 million or $0.23 per diluted share for the fourth quarter 2017 and $69.3 million or $0.56 per diluted share for the first quarter 2017. The fourth quarter 2017 results included a $23.2 million loss on early extinguishment of debt and a $47.2 million charge related to Federal tax reform.

 

    Adjusted earnings per diluted share for the first quarter 2018 were $0.86, a 19.8% increase from the fourth quarter 2017 and a 50.9% increase from the first quarter 2017.

 

    As a result of Federal tax reform and other one-time and seasonal items, the effective tax rate for the first quarter was 22.6% compared to 32.0% in the first quarter 2017.

 

    Return on average assets for the first quarter 2018 was 1.34%, compared to 0.37% the previous quarter and 0.96% in the first quarter 2017.

 

    Adjusted return on average assets was 1.36%, up 24 basis points from the previous quarter and up 39 basis points from the first quarter 2017.

 

    Return on average common equity was 14.62%, an increase of 465 basis points from the first quarter 2017.

 

    Adjusted return on average common equity was 14.86%, an improvement of 480 basis points from the first quarter 2017.

 

    Adjusted return on average tangible common equity was 15.23%, an increase of 490 basis points from the first quarter 2017.

 

    Total average loans grew $240.8 million or 4.0% annualized from the previous quarter and $816.4 million or 3.4% as compared to the first quarter 2017.

 

    Total average deposits decreased $497.9 million or 7.7% annualized from fourth quarter 2017 and increased $869.2 million or 3.5% as compared to the first quarter 2017.

 

    Total ending deposits increased $105.6 million or 1.6% from fourth quarter 2017 and increased $1.15 billion or 4.6% as compared to the first quarter 2017.

 

    Total revenues1 were $341.3 million, up $37.2 million or 12.2% from the first quarter 2017.

 

    Net interest margin was 3.78%, up 13 basis points from the previous quarter and up 36 basis points from the first quarter 2017.

 

 

1  Total revenues consist of net interest income and non-interest income excluding investment securities gains/(losses).


    Efficiency ratio was 57.16%, compared to 66.77% the previous quarter and 64.84% in the first quarter 2017.

 

    Adjusted efficiency ratio was 57.42%, an improvement of 483 basis points from the first quarter 2017.

 

    Credit quality metrics remained favorable, with a net charge-off ratio of 7 basis points, down 8 basis points from the previous quarter and down 5 basis points from first quarter 2017. The non-performing asset ratio was 0.53%, unchanged from the previous quarter and down 24 basis points from first quarter 2017.

“2018 is off to a good start, with 12 percent growth in revenues and a 50 percent increase in earnings per share year-over-year,” said Kessel D. Stelling, Synovus chairman and CEO. “We delivered another quarter of strong operating leverage through disciplined execution of our growth strategies, including talent acquisition and expansion of our presence in high-potential markets. As we approach completion of the transition to a unified Synovus brand, we are already seeing the benefits of greater name recognition across our footprint. Our team is deeply committed to building on our reputation, improving the customer experience, and executing on core growth strategies to meet and exceed long-term targets.”

Balance Sheet

 

    Total average loans for the quarter were $24.85 billion, up $240.8 million or 4.0% annualized from the previous quarter and up $816.4 million or 3.4% as compared to the first quarter 2017.

 

    Total loans ended the quarter at $24.88 billion, up $95.6 million or 1.6% annualized from the previous quarter and up $624.6 million or 2.6% as compared to the first quarter 2017.

 

    Commercial and industrial loans grew by $78.3 million or 2.6% annualized from the previous quarter and $369.2 million or 3.1% as compared to the first quarter 2017.

 

    Consumer loans grew by $115.5 million or 8.0% annualized from the previous quarter and $885.2 million or 17.4% as compared to the first quarter 2017.

 

    Commercial real estate loans declined by $99.6 million or 5.8% annualized from the previous quarter and declined $631.6 million or 8.5% as compared to first quarter 2017.

 

    Total average deposits for the quarter were $25.79 billion, down $497.9 million or 7.7% annualized from the previous quarter and up $869.2 million or 3.5% as compared to the first quarter 2017.

 

    Average non-time core deposits decreased $120.4 million or 2.3% annualized from the previous quarter and increased $504.1 million or 2.5% as compared to the first quarter 2017.

 

    Total deposits ended the quarter at $26.25 billion, up $105.6 million or 1.6% annualized from fourth quarter 2017 and up $1.15 billion or 4.6% as compared to the first quarter 2017.

 

    The loan to deposit ratio remained stable at 95%.

Core Performance

 

    Total revenues1 were $341.3 million in the first quarter, up from $339.1 million in the previous quarter, and up $37.2 million or 12.2% from $304.1 million in the first quarter 2017.

 

    Net interest income was $274.3 million, up $4.6 million or 1.7% from the previous quarter and up $34.4 million or 14.3% from the first quarter 2017.

 

 

1  Total revenues consist of net interest income and non-interest income excluding investment securities gains/(losses).


    Net interest margin was 3.78%, up 13 basis points from the previous quarter. Yield on earning assets was 4.31%, up 16 basis points from the previous quarter, and the effective cost of funds was 0.53%, up 3 basis points from the previous quarter.

 

    Total non-interest income was $67.0 million, down $2.3 million from the previous quarter and down $4.8 million or 6.7% from first quarter 2017.

 

    The first quarters of 2018 and 2017 include net decreases in fair value of private equity investments of $3.1 million and $1.8 million, respectively. First quarter 2017 also included net investment securities gains of $7.7 million.

 

    Adjusted non-interest income was $70.1 million, up $849 thousand from the previous quarter and up $4.1 million or 6.2% as compared to the first quarter 2017.

 

    Core banking fees2 were $35.6 million, up $303 thousand or 0.9% from the previous quarter and up $900 thousand or 2.6% from first quarter 2017.

 

    Fiduciary and asset management fees, brokerage revenue, and insurance revenues were $23.3 million, up $1.6 million or 7.2% from the previous quarter and up $2.7 million or 12.9% from first quarter 2017.

 

    Total non-interest expense was $195.2 million, down $31.4 million or 13.8% from the previous quarter and down 1.1% from the first quarter 2017.

 

    The first quarter 2018 includes a $2.6 million reduction in litigation contingency accruals. The fourth quarter 2017 included a $23.2 million loss on early extinguishment of debt, and the first quarter 2017 included $6.5 million in restructuring charges.

 

    Adjusted non-interest expense was $197.8 million, down $3.3 million or 1.6% from the previous quarter and up $7.2 million or 3.8% from the first quarter 2017.

 

    Employment expense of $113.7 million increased $2.5 million or 2.2% from the previous quarter and 6.1% from the first quarter 2017.

 

    Occupancy and equipment expense of $31.5 million increased $1.4 million or 4.5% from the previous quarter and 7.3% from the first quarter 2018.

 

    Other expenses were $52.6 million in the quarter, down $7.1 million or 11.9% from the previous quarter and down $1.5 million or 2.7% from the first quarter 2017.

 

    Efficiency ratio for the first quarter was 57.16% as compared to 66.77% in the previous quarter and 64.84% in the first quarter 2017.

 

    Adjusted efficiency ratio for the first quarter was 57.42% as compared to 59.29% in the previous quarter and 62.25% in the first quarter 2017.

Credit Quality

 

    Non-performing loans were $120.1 million at March 31, 2018, up $4.5 million or 3.9% from the previous quarter and down $38.3 million or 24.2% from March 31, 2017. The non-performing loan ratio was 0.48% at March 31, 2018, compared to 0.47% at the end of the previous quarter and 0.65% at March 31, 2017.

 

    Total non-performing assets were $131.2 million at March 31, 2018, compared to $130.6 million in the previous quarter and down $56.1 million or 29.9% from March 31, 2017. The non-performing asset ratio was 0.53% at March 31, 2018, unchanged from the previous quarter and down from 0.77% at March 31, 2017.

 

 

2  Core banking fees include service charges on deposit accounts, card fees, letter of credit fees, ATM fee income, line of credit non-usage fees, gains from sales of government guaranteed loans, and miscellaneous other service charges.


    Net charge-offs were $4.3 million in the first quarter 2017, down $4.7 million or 52.3% from $9.0 million in the previous quarter and down 38.1% from the first quarter 2017. The annualized net charge-off ratio was 0.07% in the first quarter as compared to 0.15% in the previous quarter and 0.12% in the first quarter 2017.

 

    Total delinquencies (consisting of loans 30 or more days past due and still accruing) remain low at 0.22% of total loans at March 31, 2018, as compared to 0.21% in the previous quarter and 0.26% at March 31, 2017.

Capital

 

    During the first quarter 2018, Synovus repurchased $26.7 million in common stock, as part of the previously announced share repurchase program of up to $150 million. Additionally, Synovus declared common dividends of $0.25 per share, a 67% increase from the previous quarter.

 

    Common Equity Tier 1 ratio was 10.11% at March 31, 2018, up from 9.99% at December 31, 2017.

 

    Tier 1 Capital ratio was 10.51% at March 31, 2018, up from 10.38% at December 31, 2017.

 

    Total Risk Based Capital ratio was 12.37% at March 31, 2018, up from 12.23% at December 31, 2017.

 

    Tier 1 Leverage ratio was 9.37% at March 31, 2018, up from 9.19% at December 31, 2017.

 

    Tangible Common Equity ratio was 8.79% at March 31, 2018, compared to 8.88% at December 31, 2017.

First Quarter Earnings Conference Call

Synovus will host an earnings highlights conference call at 8:30 a.m. EDT on April 24, 2018. 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 more than $31 billion in assets. Synovus provides commercial and retail banking, investment, and mortgage services through 250 branches in Georgia, Alabama, South Carolina, Florida, and Tennessee. Synovus Bank, a wholly owned subsidiary of Synovus, was recognized as the “Most Reputable Bank” by American Banker and the Reputation Institute in 2017. 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 deposits, loan growth and the net interest margin; expectations on our growth strategy, expense initiatives, capital management and


future profitability; expectations on credit trends and key credit metrics; 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, 2017, 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 income; adjusted non-interest expense; adjusted efficiency ratio; adjusted earnings per diluted share; adjusted return on average assets; adjusted return on average common equity; adjusted return on average tangible common equity; average non-time core deposits; tangible common equity ratio; and common equity Tier 1 (CET1) ratio (fully phased-in); 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 income; total non-interest expense; efficiency ratio; earnings per diluted common share; return on average assets; return on average common equity; total average deposits; the ratio of total shareholders’ equity to total assets; and the CET1 ratio; 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 income is a measure used by management to evaluate total revenue and non-interest income exclusive of net investment securities gains/losses and changes in fair value of private equity investments, net. Adjusted non-interest expense and the adjusted efficiency ratio are measures utilized by management to measure the success of expense management initiatives focused on reducing recurring controllable operating costs. Adjusted earnings per diluted share, adjusted return on average assets, and adjusted return on average common equity are measurements used by management to evaluate operating results exclusive of items that are not indicative of ongoing operations and impact period-to-period comparisons. Average non-time core deposits is a measure used by management to evaluate organic growth of deposits and the quality of deposits as a funding source. The adjusted return on average tangible common equity is a measure 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 and common equity Tier 1 (CET1) ratio (fully phased-in) are used by management and bank regulators 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)    1Q18     4Q17     1Q17  

Adjusted non-interest income

      

Total non-interest income

   $ 67,046     $ 69,352     $ 71,839  

Subtract: Investment securities gains, net

     —         —         (7,668

Add/subtract: Decrease/(increase) in fair value of private equity investments, net

     3,056       (100     1,814  
  

 

 

   

 

 

   

 

 

 

Adjusted non-interest income

   $ 70,102     $ 69,252     $ 65,985  
  

 

 

   

 

 

   

 

 

 

Adjusted non-interest expense

      

Total non-interest expense

   $ 195,179     $ 226,534     $ 197,388  

Subtract: Earnout liability adjustments

     —         (1,700     —    

Add/subtract: Restructuring charges, net

     315       29       (6,511

Subtract: Loss on early extinguishment of debt

     —         (23,160     —    

Add/subtract: Litigation contingency expense

     2,626       (300     —    

Subtract: Merger-related expense

     —         —         (86

Subtract: Amortization of intangibles

     (292     (292     (183
  

 

 

   

 

 

   

 

 

 

Adjusted non-interest expense

   $ 197,828     $ 201,111     $ 190,608  
  

 

 

   

 

 

   

 

 

 

Adjusted efficiency ratio

      

Adjusted non-interest expense

   $ 197,828     $ 201,111     $ 190,608  

Net interest income

     274,284       269,713       239,927  

Add: Tax equivalent adjustment

     116       234       309  

Add: Total non-interest income

     67,046       69,352       71,839  

Subtract: Investment securities gains, net

     —         —         (7,668
  

 

 

   

 

 

   

 

 

 

Total FTE revenues

     341,446       339,299       304,407  

Add/subtract: Decrease/(increase) in fair value of private equity investments, net

     3,056       (100     1,814  
  

 

 

   

 

 

   

 

 

 

Adjusted total revenues

   $ 344,502     $ 339,199     $ 306,221  

Efficiency ratio

     57.16     66.77     64.84

Adjusted efficiency ratio

     57.42     59.29     62.25
  

 

 

   

 

 

   

 

 

 


Reconciliation of Non-GAAP Financial Measures, continued

 

(in thousands, except per share data)    1Q18     4Q17     1Q17  

Adjusted earnings per diluted share

      

Net income available to common shareholders

   $ 100,607     $ 27,046     $ 69,298  

Add: Earnout liability adjustments

     —         1,700       —    

Add: Income tax expense related to effects of Federal Tax Reform

     —         47,181       —    

Add: Income tax expense related to effects of State DTA remeasurement

     1,325       —         —    

Add: Merger-related expense

     —         —         86  

Subtract/add: Litigation contingency expense

     (2,626     300       —    

Subtract/add: Restructuring charges, net

     (315     (29     6,511  

Add: Amortization of intangibles

     292       292       183  

Add: Loss on early extinguishment of debt

     —         23,160       —    

Subtract: Investment securities gains, net

     —         —         (7,668

Add/subtract: Decrease/(increase) in fair value of private equity investments, net

     3,056       (100     1,814  

Subtract: Income tax benefit related to pre-2017 R&D credits and state taxes

     —         (4,847     —    

Subtract: Tax effect of adjustments

     (96     (8,740     (333
  

 

 

   

 

 

   

 

 

 

Adjusted net income available to common shareholders

   $ 102,243     $ 85,963     $ 69,891  

Weighted average common shares outstanding, diluted

     119,321       120,182       123,059  

Adjusted earnings per diluted share

   $ 0.86     $ 0.72     $ 0.57  
  

 

 

   

 

 

   

 

 

 


Reconciliation of Non-GAAP Financial Measures, continued

 

(dollars in thousands)    1Q18     4Q17     1Q17  

Adjusted return on average assets

      

Net income

   $ 103,166     $ 29,605     $ 71,857  

Add: Earnout liability adjustments

     —         1,700       —    

Add: Income tax expense related to effects of Federal Tax Reform

     —         47,181       —    

Add: Income tax expense related to effects of State DTA remeasurement

     1,325       —         —    

Add: Merger-related expense

     —         —         86  

Subtract/add: Litigation contingency expense

     (2,626     300       —    

Subtract/add: Restructuring charges, net

     (315     (29     6,511  

Add: Amortization of intangibles

     292       292       183  

Add: Loss on early extinguishment of debt

     —         23,160       —    

Subtract: Investment securities gains, net

     —         —         (7,668

Add/subtract: Decrease/(increase) in fair value of private equity investments, net

     3,056       (100     1,814  

Subtract: Income tax benefit related to pre-2017 R&D credits and state taxes

     —         (4,847     —    

Subtract: Tax effect of adjustments

     (96     (8,740     (333
  

 

 

   

 

 

   

 

 

 

Adjusted net income

   $ 104,802     $ 88,522     $ 72,450  

Net income annualized

   $ 425,030     $ 351,201     $ 293,825  

Total average assets

   $ 31,245,708     $ 31,388,724     $ 30,442,089  

Adjusted return on average assets

     1.36     1.12     0.97
  

 

 

   

 

 

   

 

 

 


Reconciliation of Non-GAAP Financial Measures, continued

 

(dollars in thousands)    1Q18     4Q17     1Q17  

Adjusted return on average common equity and adjusted return on average tangible common equity

      

Net income available to common shareholders

   $ 100,607     $ 27,046     $ 69,298  

Add: Earnout liability adjustments

     —         1,700       —    

Add: Income tax expense related to effects of Federal Tax Reform

     —         47,181       —    

Add: Income tax expense related to effects of State DTA remeasurement

     1,325       —         —    

Add: Merger-related expense

     —         —         86  

Subtract/add: Litigation contingency expense

     (2,626     300       —    

Subtract/add: Restructuring charges, net

     (315     (29     6,511  

Add: Amortization of intangibles

     292       292       183  

Add: Loss on early extinguishment of debt

     —         23,160       —    

Subtract: Investment securities gains, net

     —         —         (7,668

Add/subtract: Decrease/(increase) in fair value of private equity investments, net

     3,056       (100     1,814  

Subtract: Income tax benefit related to pre-2017 R&D credits and state taxes

     —         (4,847     —    

Subtract: Tax effect of adjustments

     (96     (8,740     (333
  

 

 

   

 

 

   

 

 

 

Adjusted net income available to common shareholders

   $ 102,243     $ 85,963     $ 69,891  

Net income annualized

   $ 414,652     $ 341,049     $ 283,447  

Total average shareholders’ equity less preferred stock

   $ 2,790,878     $ 2,851,523     $ 2,817,663  

Subtract: Goodwill

     (57,315     (57,315     (59,649

Subtract: Other intangibles assets, net

     (10,915     (11,353     (13,177
  

 

 

   

 

 

   

 

 

 

Total average tangible shareholders’ equity less preferred stock

   $ 2,722,648     $ 2,782,855     $ 2,744,837  

Adjusted return on average common equity

     14.86     11.96     10.06
  

 

 

   

 

 

   

 

 

 

Adjusted return on average tangible common equity

     15.23     12.26     10.33
  

 

 

   

 

 

   

 

 

 


Reconciliation of Non-GAAP Financial Measures, continued

 

(dollars in thousands)    1Q18     4Q17     1Q17  

Tangible common equity ratio

      

Total assets

   $ 31,501,028     $ 31,221,837     $ 30,679,589  

Subtract: Goodwill

     (57,315     (57,315     (57,010

Subtract: Other intangible assets, net

     (10,750     (11,254     (12,137
  

 

 

   

 

 

   

 

 

 

Tangible assets

   $ 31,432,963     $ 31,153,268     $ 30,610,442  
  

 

 

   

 

 

   

 

 

 

Total shareholders’ equity

   $ 2,956,495     $ 2,961,566     $ 2,962,127  

Subtract: Goodwill

     (57,315     (57,315     (57,010

Subtract: Other intangible assets, net

     (10,750     (11,254     (12,137

Subtract: Series C Preferred Stock

     (125,980     (125,980     (125,980
  

 

 

   

 

 

   

 

 

 

Tangible common equity

   $ 2,762,450     $ 2,767,017     $ 2,767,000  
  

 

 

   

 

 

   

 

 

 

Total shareholders’ equity to total assets ratio

     9.39     9.49     9.66

Tangible common equity ratio

     8.79     8.88     9.04

 

Average non-time core deposits

      

Total average deposits

   $ 25,788,073     $ 26,286,009     $ 24,918,855  

Subtract: Average brokered deposits

     (1,951,910     (2,198,333     (1,380,787

Subtract: Average non-brokered time deposits

     (3,039,325     (3,170,444     (3,245,306
  

 

 

   

 

 

   

 

 

 

Average non-time core deposits

   $ 20,796,838     $ 20,917,232     $ 20,292,762  
  

 

 

   

 

 

   

 

 

 

Common equity Tier 1 (CET1) ratio (fully phased-in)

      

Common Equity Tier 1 (CET1)

   $ 2,814,669      

Subtract: Adjustment related to capital components

     (16,365    
  

 

 

     

CET1 (fully phased-in)

   $ 2,798,304      
  

 

 

     

Total risk-weighted assets

   $ 27,831,733      

Total risk-weighted assets (fully phased-in)

   $ 27,957,172      

Common equity Tier 1 (CET 1) ratio

     10.11    

Common Equity Tier 1 (CET1) ratio (fully phased-in)

     10.01    
(Back To Top)

Section 3: EX-99.2 (EX-99.2)

EX-99.2

Exhibit 99.2

Synovus

 

INCOME STATEMENT DATA

             

(Unaudited)

             
(In thousands, except per share data)    2018     2017     First Quarter  
     First     Fourth      Third     Second     First     ‘18 vs. ‘17  
     Quarter     Quarter      Quarter     Quarter     Quarter     Change  

Interest income

   $ 313,134       306,934        297,652       285,510       272,401       15.0

Interest expense

     38,850       37,221        35,080       34,413       32,474       19.6  
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income

     274,284       269,713        262,572       251,097       239,927       14.3  

Provision for loan losses

     12,776       8,565        39,686       10,260       8,674       47.3  
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income after provision for loan losses

     261,508       261,148        222,886       240,837       231,253       13.1  
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Non-interest income:

             

Service charges on deposit accounts

     19,940       20,372        20,678       20,252       20,118       (0.9

Fiduciary and asset management fees

     13,435       13,195        12,615       12,524       12,151       10.6  

Card fees (1)

     10,199       9,762        9,729       10,041       9,844       3.6  

Brokerage revenue

     8,695       7,758        7,511       7,210       7,226       20.3  

Mortgage banking income

     5,047       5,645        5,603       5,784       5,766       (12.5

Income from bank-owned life insurance

     3,681       3,900        3,232       3,272       3,031       21.4  

Cabela’s transaction fee

     —         —          75,000       —         —         nm  

Investment securities (losses) gains, net

     —         —          (7,956     (1     7,668       nm  

(Decrease)/increase in fair value of private equity investments, net

     (3,056     100        (27     (1,352     (1,814     nm  

Other fee income

     4,618       4,042        5,094       6,164       4,868       (5.1

Other non-interest income (1)

     4,487       4,578        3,956       4,807       2,981       50.5  
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total non-interest income

     67,046       69,352        135,435       68,701       71,839       (6.7
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 


INCOME STATEMENT DATA

(Unaudited)

 

(In thousands, except per share data)    2018     2017      First Quarter  
     First     Fourth     Third      Second      First      ‘18 vs. ‘17  
     Quarter     Quarter     Quarter      Quarter      Quarter      Change  

Non-interest expense:

               

Salaries and other personnel expense

     113,720       111,243       109,675        105,213        107,191        6.1  

Net occupancy and equipment expense

     31,480       30,126       30,573        29,933        29,331        7.3  

Third-party processing expense

     13,945       14,827       13,659        13,620        12,603        10.6  

FDIC insurance and other regulatory fees

     6,793       6,288       7,078        6,875        6,770        0.3  

Professional fees

     5,505       6,183       7,141        7,551        5,355        2.8  

Advertising expense

     5,092       8,081       3,610        5,346        5,912        (13.9

Foreclosed real estate expense, net

     856       1,693       7,265        1,448        2,134        (59.9

Earnout liability adjustments

     —         1,700       2,059        1,707        —          nm  

Amortization of intangibles

     292       292       292        292        183        59.6  

Loss on early extinguishment of debt

     —         23,160       —          —          —          nm  

Litigation contingency expense

     (2,626     300       401        —          —          nm  

Restructuring charges, net

     (315     (29     519        13        6,511        nm  

Other operating expenses

     20,437       22,670       23,374        19,749        21,398        (4.5
  

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Total non-interest expense

     195,179       226,534       205,646        191,747        197,388        (1.1
  

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Income before income taxes

     133,375       103,966       152,675        117,791        105,704        26.2  

Income tax expense

     30,209       74,361       54,668        41,788        33,847        (10.7
  

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Net income

     103,166       29,605       98,007        76,003        71,857        43.6  

Dividends on preferred stock

     2,559       2,559       2,559        2,559        2,559        —    
  

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Net income available to common shareholders

   $ 100,607       27,046       95,448        73,444        69,298        45.2
  

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 


INCOME STATEMENT DATA

(Unaudited)

 

(In thousands, except per share data)    2018     2017      First Quarter  
     First     Fourth      Third      Second      First      ‘18 vs. ‘17  
     Quarter     Quarter      Quarter      Quarter      Quarter      Change  

Net income per common share, basic

   $ 0.85       0.23        0.79        0.60        0.57        49.6

Net income per common share, diluted

     0.84       0.23        0.78        0.60        0.56        49.7  

Cash dividends declared per common share

     0.25       0.15        0.15        0.15        0.15        66.7  

Return on average assets *

     1.34 %      0.37        1.27        1.00        0.96        38 bps 

Return on average common equity *

     14.62       3.76        13.24        10.34        9.97        465  

Weighted average common shares outstanding, basic

     118,666       119,282        120,900        122,203        122,300        (3.0 )% 

Weighted average common shares outstanding, diluted

     119,321       120,182        121,814        123,027        123,059        (3.0

nm - not meaningful

bps - basis points

 

* - ratios are annualized

 

(1) Beginning January 1, 2018, Synovus began including merchant fees and other card-related fees in Card fees. For periods prior to January 1, 2018, these amounts were previously presented in Other non-interest income and have been reclassified for comparability.


Synovus

BALANCE SHEET DATA

(Unaudited)

 

(In thousands, except share data)    March 31, 2018     December 31, 2017     March 31, 2017  

ASSETS

      

Cash and due from banks

   $ 348,027       397,848       380,493  

Interest bearing funds with Federal Reserve Bank

     636,947       460,928       622,460  

Interest earning deposits with banks

     16,851       26,311       24,259  

Federal funds sold and securities purchased under resale agreements

     57,192       47,846       50,003  
  

 

 

   

 

 

   

 

 

 

Cash and cash equivalents (1)

     1,059,017       932,933       1,077,215  

Mortgage loans held for sale, at fair value

     50,439       48,024       57,686  

Investment securities available for sale, at fair value

     3,990,978       3,987,069       3,782,942  

Loans, net of deferred fees and costs

     24,883,037       24,787,464       24,258,468  

Allowance for loan losses

     (257,764     (249,268     (253,514
  

 

 

   

 

 

   

 

 

 

Loans, net

     24,625,273       24,538,196       24,004,954  
  

 

 

   

 

 

   

 

 

 

Cash surrender value of bank-owned life insurance

     543,684       540,958       455,474  

Premises and equipment, net

     424,342       426,813       412,725  

Goodwill

     57,315       57,315       57,010  

Other intangible assets

     10,750       11,254       12,137  

Deferred tax asset, net

     179,343       165,788       359,121  

Other assets

     559,887       513,487       460,325  
  

 

 

   

 

 

   

 

 

 

Total assets

   $ 31,501,028       31,221,837       30,679,589  
  

 

 

   

 

 

   

 

 

 


BALANCE SHEET DATA

(Unaudited)

 

     March 31, 2018      December 31, 2017      March 31, 2017  

LIABILITIES AND SHAREHOLDERS’ EQUITY

        

Liabilities:

        

Deposits:

        

Non-interest bearing deposits

   $ 7,381,070        7,686,339        7,264,856  

Interest bearing deposits, excluding brokered deposits

     16,865,859        16,500,436        16,452,703  

Brokered deposits

     2,006,578        1,961,125        1,388,153  
  

 

 

    

 

 

    

 

 

 

Total deposits

     26,253,507        26,147,900        25,105,712  

Federal funds purchased and securities sold under repurchase

     185,531        161,190        146,480  

agreements

        

Long-term debt

     1,856,392        1,706,138        2,160,867  

Other liabilities

     249,103        245,043        304,403  
  

 

 

    

 

 

    

 

 

 

Total liabilities

     28,544,533        28,260,271        27,717,462  
  

 

 

    

 

 

    

 

 

 

Shareholders’ equity:

        

Series C Preferred Stock - no par value, 5,200,000 shares outstanding at March 31, 2018, December 31, 2017, and March 31, 2017

     125,980        125,980        125,980  


BALANCE SHEET DATA

(Unaudited)

 

     March 31, 2018     December 31, 2017     March 31, 2017  

Common stock - $1.00 par value. 118,702,497 shares outstanding at March 31, 2018, 118,897,295 shares outstanding at December 31, 2017, and 122,321,804 shares outstanding at March 31, 2017

     143,017       142,678       142,441  

Additional paid-in capital

     3,039,757       3,043,129       3,025,775  

Treasury stock, at cost - 24,314,804 shares at March 31, 2018, 23,780,154 shares at December 31, 2017, and 20,119,614 shares at March 31, 2017

     (866,407     (839,674     (679,746

Accumulated other comprehensive loss

     (107,952     (54,754     (54,751

Retained earnings

     622,100       544,207       402,428  
  

 

 

   

 

 

   

 

 

 

Total shareholders’ equity

     2,956,495       2,961,566       2,962,127  
  

 

 

   

 

 

   

 

 

 

Total liabilities and shareholders’ equity

   $ 31,501,028       31,221,837       30,679,589  
  

 

 

   

 

 

   

 

 

 

 

(1) In connection with the adoption of ASU 2016-18, Statement of Cash Flows-Restricted Cash, Synovus changed its presentation of cash and cash equivalents to include cash and due from banks as well as interest bearing funds with the Federal Reserve Bank, interest earning deposits with banks, and federal funds sold and securities purchased under resale agreements, which are inclusive of any restricted cash.


Synovus

AVERAGE BALANCES AND YIELDS/RATES (1)

(Unaudited)

 

(Dollars in thousands)    2018     2017  
     First     Fourth     Third     Second     First  
     Quarter     Quarter     Quarter     Quarter     Quarter  

Interest Earning Assets

          

Taxable investment securities (2)

   $ 4,097,162       3,937,278       3,786,436       3,844,688       3,841,556  

Yield

     2.34     2.29       2.11       2.11       2.06  

Tax-exempt investment securities (2) (4)

   $ 140       180       259       340       2,730  

Yield (taxable equivalent)

     6.57     7.97       7.86       6.87       5.81  

Trading account assets (5)

   $ 8,167       7,360       7,823       3,667       6,443  

Yield

     2.66     2.78       2.09       2.28       1.72  

Commercial loans (3) (4)

   $ 18,963,515       18,935,774       19,059,936       19,137,733       19,043,384  

Yield

     4.64     4.49       4.41       4.27       4.16  

Consumer loans (3)

   $ 5,899,015       5,704,629       5,440,765       5,215,258       4,992,683  

Yield

     4.71     4.54       4.55       4.49       4.40  

Allowance for loan losses

   $ (251,635     (252,319     (249,248     (251,219     (253,927
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Loans, net (3)

   $ 24,610,895       24,388,084       24,251,453       24,101,772       23,782,140  

Yield

     4.70     4.55       4.49       4.36       4.25  

Mortgage loans held for sale

   $ 38,360       45,353       52,177       52,224       46,554  

Yield

     3.95     3.96       3.88       3.87       4.01  

Federal funds sold, due from Federal Reserve Bank, and other short-term investments

   $ 516,575       922,296       543,556       561,503       654,322  

Yield

     1.48     1.31       1.23       1.00       0.77  

Federal Home Loan Bank and Federal Reserve Bank stock (5)

   $ 177,381       159,455       175,263       177,323       170,844  

Yield

     3.39     4.03       3.50       2.99       3.42  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total interest earning assets

   $ 29,448,680       29,460,006       28,816,967       28,741,517       28,504,589  

Yield

     4.31     4.15       4.11       3.99       3.88  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 


AVERAGE BALANCES AND YIELDS/RATES (1)

(Unaudited)

 

(Dollars in thousands)    2018     2017  
     First     Fourth      Third      Second      First  
     Quarter     Quarter      Quarter      Quarter      Quarter  

Interest Bearing Liabilities

             

Interest bearing demand deposits

   $ 5,032,000       4,976,239        4,868,372        4,837,053        4,784,329  

Rate

     0.31     0.28        0.27        0.23        0.19  

Money market accounts

   $ 7,561,554       7,514,992        7,528,036        7,427,562        7,424,627  

Rate

     0.43     0.36        0.34        0.32        0.31  

Savings deposits

   $ 811,587       804,853        803,184        805,019        909,660  

Rate

     0.03     0.03        0.03        0.04        0.11  

Time deposits under $100,000

   $ 1,143,780       1,166,413        1,183,582        1,202,746        1,215,593  

Rate

     0.71     0.70        0.68        0.67        0.64  

Time deposits over $100,000

   $ 1,895,545       2,004,031        2,067,347        2,040,924        2,029,713  

Rate

     1.02     0.99        0.97        0.94        0.92  

Non-maturing brokered deposits

   $ 424,118       546,413        547,466        564,043        619,627  

Rate

     1.14     0.81        0.73        0.54        0.41  

Brokered time deposits

   $ 1,527,793       1,651,920        983,423        815,515        761,159  

Rate

     1.75     1.63        1.16        0.94        0.92  
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Total interest bearing deposits

   $ 18,396,377       18,664,861        17,981,410        17,692,862        17,744,708  

Rate

     0.58     0.54        0.46        0.41        0.39  

Federal funds purchased and securities sold under repurchase agreements

   $ 202,226       184,369        191,585        183,400        176,854  


AVERAGE BALANCES AND YIELDS/RATES (1)

(Unaudited)

 

(Dollars in thousands)    2018     2017  
     First     Fourth      Third      Second      First  
     Quarter     Quarter      Quarter      Quarter      Quarter  

Rate

     0.21     0.15        0.08        0.10        0.09  

Long-term debt

   $ 2,127,994       1,713,982        1,985,175        2,270,452        2,184,072  

Rate

     2.32     2.67        2.81        2.83        2.83  
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Total interest bearing liabilities

   $ 20,726,597       20,563,212        20,158,170        20,146,714        20,105,634  

Rate

     0.76     0.72        0.69        0.68        0.65  
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Non-interest bearing demand deposits

   $ 7,391,695       7,621,147        7,305,508        7,298,845        7,174,146  

Effective cost of funds

     0.53     0.50        0.48        0.48        0.46  
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Net interest margin

     3.78     3.65        3.63        3.51        3.42  
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Taxable equivalent adjustment

   $ 116       234        283        298        309  

 

(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 (21% in 2018 and 35% in 2017), 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


Synovus

LOANS OUTSTANDING BY TYPE

(Unaudited)

(Dollars in thousands)

 

Loan Type

   Total Loans
March 31, 2018
     Total Loans
December 31, 2017
     1Q18 vs. 4Q17
% change (1)
    Total Loans
March 31, 2017
     1Q18 vs. 1Q17
% change
 

Commercial, Financial, and Agricultural

   $ 7,191,531        7,179,487        0.7   $ 7,049,193        2.0

Owner-Occupied

     4,910,386        4,844,163        5.5       4,683,508        4.8  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total Commercial & Industrial

     12,101,917        12,023,650        2.6       11,732,701        3.1  

Multi-Family

     1,479,573        1,492,159        (3.4     1,638,250        (9.7

Hotels

     751,232        741,703        5.2       794,685        (5.5

Office Buildings

     1,464,473        1,499,834        (9.6     1,552,817        (5.7

Shopping Centers

     782,580        791,311        (4.5     902,954        (13.3

Warehouses

     583,645        581,410        1.6       533,262        9.4  

Other Investment Property

     557,547        563,648        (4.4     594,084        (6.2
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 


Total Investment Properties

     5,619,050       5,670,065       (3.6     6,016,052       (6.6

1-4 Family Construction

     188,939       198,200       (18.9     203,151       (7.0

1-4 Family Investment Mortgage

     569,965       583,419       (9.4     659,346       (13.6
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total 1-4 Family Properties

     758,904       781,619       (11.8     862,497       (12.0

Commercial Development

     65,371       70,062       (27.2     65,376       (0.0

Residential Development

     104,137       114,079       (35.3     130,653       (20.3

Land Acquisition

     288,265       299,463       (15.2     392,710       (26.6
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Land and Development

     457,773       483,604       (21.7     588,739       (22.2
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Commercial Real Estate

     6,835,727       6,935,288       (5.8     7,467,288       (8.5
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Consumer Mortgages

     2,663,371       2,633,503       4.6       2,350,730       13.3  

Home Equity Lines

     1,472,471       1,514,227       (11.2     1,587,102       (7.2

Credit Cards

     226,713       232,676       (10.4     224,349       1.1  

Other Consumer Loans

     1,606,799       1,473,451       36.7       922,018       74.3  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Consumer

     5,969,354       5,853,857       8.0       5,084,199       17.4  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Unearned Income

     (23,961     (25,331     (21.9     (25,720     (6.8

Total

   $ 24,883,037       24,787,464       1.6   $ 24,258,468       2.6
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) Percentage change is annualized.


NON-PERFORMING LOANS COMPOSITION

(Unaudited)

(Dollars in thousands)

 

     Total      Total            Total         
     Non-performing      Non-performing      1Q18 vs. 4Q17     Non-performing      1Q18 vs. 1Q17  
Loan Type    Loans      Loans      % change     Loans      % change  
     March 31, 2018      December 31, 2017     

 

    March 31, 2017     

 

 

Commercial, Financial, and Agricultural

   $ 81,606        70,130        16.4   $ 60,381        35.2

Owner-Occupied

     4,067        6,654        (38.9     26,564        (84.7
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total Commercial & Industrial

     85,673        76,784        11.6       86,945        (1.5

Multi-Family

     1,028        1,241        (17.2     1,556        (33.9

Hotels

     —          —          —         323        nm  

Office Buildings

     1,272        1,532        (17.0     185        nm  

Shopping Centers

     89        165        (46.1     —          nm  

Warehouses

     —          226        (100.0     226        (100.0

Other Investment Property

     540        640        (15.6     750        (28.0
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total Investment Properties

     2,929        3,804        (23.0     3,040        (3.7

1-4 Family Construction

     —          —          —         306        nm  

1-4 Family Investment Mortgage

     2,634        2,849        (7.5     8,497        (69.0
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total 1-4 Family Properties

     2,634        2,849        (7.5     8,803        (70.1


Commercial Development

     44        45        (2.2     205        (78.5

Residential Development

     3,220        3,257        (1.1     9,033        (64.4

Land Acquisition

     1,311        2,495        (47.5     5,114        (74.4
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Land and Development

     4,575        5,797        (21.1     14,352        (68.1
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total Commercial Real Estate

     10,138        12,450        (18.6     26,195        (61.3
  

 

 

    

 

 

      

 

 

    

 

 

 

Consumer Mortgages

     7,708        7,203        7.0       19,874        (61.2

Home Equity Lines

     14,868        17,455        (14.8     22,918        (35.1

Other Consumer Loans

     1,694        1,669        1.5       2,434        (30.4
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total Consumer

     24,270        26,327        (7.8     45,226        (46.3
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total

   $ 120,081        115,561        3.9   $ 158,366        (24.2 )% 
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 


Synovus

CREDIT QUALITY DATA

(Unaudited)

 

(Dollars in thousands)    2018     2017      1st Quarter  
     First     Fourth      Third      Second      First      ‘18 vs. ‘17  
     Quarter     Quarter      Quarter      Quarter      Quarter      Change  

Non-performing Loans

   $ 120,081       115,561        97,838        159,317        158,366        (24.2 )% 

Impaired Loans Held for Sale (1)

     6,591       11,278        30,197        127        8,442        (21.9

Other Real Estate

     4,496       3,758        10,551        19,476        20,425        (78.0
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Non-performing Assets

     131,168       130,597        138,586        178,920        187,233        (29.9

Allowance for loan losses

     257,764       249,268        249,683        248,095        253,514        1.7  

Net Charge-Offs - Quarter

     4,280       8,979        38,099        15,678        6,919     

Net Charge-Offs / Average Loans - Quarter (2)

     0.07 %      0.15        0.62        0.26        0.12     

Non-performing Loans / Loans

     0.48       0.47        0.40        0.65        0.65     

Non-performing Assets / Loans, Impaired Loans Held for Sale, & ORE

     0.53       0.53        0.57        0.73        0.77     

Allowance / Loans

     1.04       1.01        1.02        1.02        1.05     


Allowance / Non-performing Loans

     214.66       215.70        255.20        155.72        160.08     

Allowance / Non-performing Loans (3)

     241.49       238.44        336.35        217.07        204.94     

Past Due Loans over 90 days and Still Accruing

   $ 5,416       4,414        5,685        4,550        2,777        95.0  

As a Percentage of Loans Outstanding

     0.02     0.02        0.02        0.02        0.01     

Total Past Due Loans and Still Accruing

   $ 54,150       52,032        84,853        66,788        62,137        (12.9

As a Percentage of Loans Outstanding

     0.22     0.21        0.35        0.27        0.26     

Accruing Troubled Debt Restructurings (TDRs)

   $ 129,394       151,271        166,918        167,395        172,421        (25.0

 

(1) Represent impaired loans that have been specifically identified to be sold. Impaired loans held for sale are carried at the lower of cost or fair value, less costs to sell, based primarily on estimated sales proceeds net of selling costs.
(2) Ratio is annualized.
(3) Excludes non-performing loans for which the expected loss has been charged off.    


SELECTED CAPITAL INFORMATION (1)

(Unaudited)

(Dollars in thousands)

 

     March 31,
2018
    December 31,
2017
     March 31,
2017
 

Tier 1 Capital

   $ 2,924,284       2,872,001        2,758,794  

Total Risk-Based Capital

     3,443,096       3,383,081        3,274,612  

Common Equity Tier 1 Ratio (transitional)

     10.11     9.99        9.86  

Common Equity Tier 1 Ratio (fully phased-in) (5)

     10.01       9.88        9.63  

Tier 1 Capital Ratio

     10.51       10.38        10.18  

Total Risk-Based Capital Ratio

     12.37       12.23        12.08  

Tier 1 Leverage Ratio

     9.37       9.19        9.13  

Common Equity as a Percentage of Total Assets (2)

     8.99       9.08        9.24  

Tangible Common Equity as a Percentage of Tangible Assets (3) (5)

     8.79       8.88        9.04  

Book Value Per Common Share (4)

   $ 23.85       23.85        23.19  

Tangible Book Value Per Common Share (3)

     23.27       23.27        22.62  

 

(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 of GAAP measures.
(Back To Top)

Section 4: EX-99.3 (EX-99.3)

EX-99.3

Slide 1

First Quarter 2018 Results April 24, 2018 Exhibit 99.3


Slide 2

Forward Looking Statements This slide presentation 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,” “should,” “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, statements on (1) future loan growth; (2) future deposit growth; (3) future net interest income and net interest margin; (4) future adjusted non-interest income; (5) future non-interest expense levels, efficiency ratios, and operating leverage; (6) future credit trends and key metrics; (7) future effective tax rates; (8) our strategy and initiatives for future growth, capital management, strategic transactions and our brand initiative; and (9) our assumptions underlying these 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 presentation. 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, 2017 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. Use of Non-GAAP Financial Measures This slide presentation contains certain non-GAAP financial measures determined by methods other than in accordance with generally accepted accounting principles. Such non-GAAP financial measures include the following: adjusted diluted earnings per share; adjusted return on average assets; adjusted return on average common equity; adjusted return on average tangible common equity; average non-time core deposits; cost of interest bearing core deposits; adjusted non-interest income; adjusted non-interest expense; adjusted efficiency ratio; tangible common equity ratio; and common equity Tier 1 (CET1) ratio (fully phased-in). The most comparable GAAP measures to these measures are diluted earnings per share; return on average assets; return on average common equity; total average deposits; cost of funds rate; total non-interest income; total non-interest expense; efficiency ratio; total shareholders’ equity to total assets ratio; and CET1 ratio, respectively. Management uses these non-GAAP financial measures to assess the performance of Synovus’ business and the strength of its capital position. Management believes that these non-GAAP financial measures provide meaningful additional information about Synovus to assist management, investors, and bank regulators 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 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. Adjusted return on average tangible common equity is a measure 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. Average non-time core deposits is a measure used by management to evaluate organic growth of deposits and the quality of deposits as a funding source. The cost of interest bearing core deposits is a measure used to evaluate the cost of deposits as a funding source exclusive of brokered deposits and deposits. Adjusted non-interest income is a measure used by management to evaluate non-interest income exclusive of net investment securities gains/losses, changes in fair value of private equity investments, net. Adjusted non-interest expense and the adjusted efficiency ratio are measures utilized by management to measure the success of expense management initiatives focused on reducing recurring controllable operating costs. The tangible common equity ratio is used by management and bank regulators to assess the strength of our capital position. The computations of the non-GAAP financial measures used in this slide presentation are set forth in the Appendix to this slide presentation.


Slide 3

1Q18 Highlights 50.9% YoY (1) 39 b.p.s YoY (1) (in billions) 3.4% YoY Total Average Deposits (in billions) 3.5% YoY 24 b.p.s YoY Return on Average Common Equity (1) (1) (1) Non-GAAP financial measure; see appendix for applicable reconciliation. Annualized 480 b.p.s YoY Diluted EPS of $0.84, vs. $0.23 in 4Q17 and $0.56 in 1Q17 Adjusted diluted EPS(1) of $0.86, up 19.8% vs. 4Q17 and 50.9% vs. 1Q17 ROA of 1.34%, vs. 0.37% in 4Q17 and 0.96% in 1Q17 Adjusted ROA(1) of 1.36%, up 24 b.p.s vs. 4Q17 and 39 b.p.s vs. 1Q17 Total revenues of $341.3 million, up $2.7 million vs. 4Q17 and up $37.2 million or 12.2% vs. 1Q17 Profitability Balance Sheet Growth Total average loans grew $240.8 million or 4.0%(2) vs. 4Q17 and $816.4 million or 3.4% vs. 1Q17 Total average deposits decreased $497.9 million or 7.7%(2) vs. 4Q17 and increased $869.2 million or 3.5% vs. 1Q17 Credit Quality and Capital Management NPA ratio of 0.53% improved 24 b.p.s from 1Q17 Return on average common equity of 14.62% compared to 9.97% in 1Q17 Adjusted ROE(1) of 14.86% increased 480 b.p.s vs. 1Q17 Adjusted ROATCE(1) of 15.23% increased 490 b.p.s vs. 1Q17 (1)


Slide 4

Loans Total average loan growth of $240.8 million or 4.0%(1) vs. 4Q17 and $816.4 million or 3.4% vs. 1Q17 Sequential quarter period-end growth of $95.6 million or 1.6%(1) vs. 4Q17 C&I up $78.3 million or 2.6%(1) Consumer up $115.5 million or 8.0%(1) CRE down $99.6 million or 5.8%(1) Year-over-year period-end growth of $624.6 million or 2.6% C&I up $369.2 million or 3.1% Consumer up $885.2 million or 17.4% CRE down $631.6 million or 8.5% (in billions) $24.26 $24.88 $24.79 48.6% 24.0% 27.5% 48.4% 20.9% 30.7% 48.5% 23.6% 27.9% Sequential quarter loan growth: $402.1 $300.1 $95.6 (in millions) Annualized Total loans are net of deferred fees and costs. (2) (2) (2) Period-end Loan Balances


Slide 5

Deposits 1Q18 total average deposits of $25.79 billion decreased $497.9 million or 7.7%(1) vs. 4Q17 and increased $869.2 million or 3.5% vs. 1Q17 Average non-time core deposits(2) decreased $120.4 million or 2.3%(1) vs. 4Q17 and increased $504.1 million or 2.5% vs. 1Q17 1Q18 average balances reflect the addition of $112 million from sweep MMA product(4) which was previously reported as a component of brokered deposits 1Q18 period-end deposits of $26.25 billion increased $105.6 million or 1.6%(1) vs. 4Q17 and increased $1.15 billion or 4.6% vs. 1Q17 Loan to deposit ratio remained stable vs. 4Q17 at 95% (in billions) $24.92 $25.79 $26.29 Total Average Deposits Annualized Non-time core deposits consist of total deposits excluding time deposits and brokered deposits. Non-GAAP financial measure; see appendix for applicable reconciliation. Excluding brokered deposits Effective February 28, 2018, non-time core deposits include a sweep MMA product offered to Synovus Securities customers which was previously reported as a component of brokered deposits. This change in reporting increased 1Q18 average non-time core deposits by approximately $112 million and March 31, 2018 non-time core deposits by $307 million. (3) (3) (3)


Slide 6

Net interest income Net interest income of $274.3 million increased $4.6 million or 1.7% vs. 4Q17 and $34.4 million or 14.3% vs. 1Q17 Net interest margin of 3.78% up 13 b.p.s vs. 4Q17 Yield on earning assets of 4.31% up 16 b.p.s from 4Q17 Yield on loans of 4.70% up 15 b.p.s from 4Q17 Effective cost of funds of 0.53%(1) up 3 b.p.s from 4Q17 Cost of interest bearing core deposits(2) of 0.46% up 4 b.p.s from 4Q17 (dollars in millions) See slide 25 in the appendix for computation. Non-GAAP financial measure; see appendix for applicable reconciliation.


Slide 7

Non-interest income 1Q18 non-interest income of $67.0 million decreased $2.3 million vs. 4Q17 and $4.8 million vs. 1Q17 1Q18 and 1Q17 other income include net decreases in fair value of private equity investments of $3.1 million and $1.8 million, respectively 1Q17 other income includes net investment securities gains of $7.7 million 1Q18 adjusted non-interest income(1) of $70.1 million increased $849 thousand or 1.2% vs. 4Q17 and $4.1 million or 6.2% vs. 1Q17 Core banking fees(2) of $35.6 million increased $303 thousand or 0.9% vs. 4Q17 and $900 thousand or 2.6% vs. 1Q17 Fiduciary/asset management, brokerage, and insurance revenues of $23.3 million increased $1.6 million or 7.2% vs. 4Q17 and $2.7 million or 12.9% vs. 1Q17 Assets under management of $14.15 billion increased 19.1% vs. 1Q17 (in millions) $71.8 $67.0 $69.4 Non-GAAP financial measure; see appendix for applicable reconciliation. Include service charges on deposit accounts, card fees, letter of credit fees, ATM fee income, line of credit non-usage fees, gains from sales of government guaranteed loans, and miscellaneous other service charges. Certain components of non-interest income which were previously reported as components of other income have been reclassified into Core Banking Fees to conform to the current period’s presentation. (2) (3) (3)


Slide 8

Non-interest expense 1Q18 non-interest expense of $195.2 million decreased $31.4 million or 13.8% vs. 4Q17 and 1.1% vs. 1Q17 1Q18 includes a $2.6 million reduction in litigation contingency accruals. 4Q17 included a $23.2 million loss on early extinguishment of debt 1Q17 included $6.5 million in restructuring charges 1Q18 adjusted non-interest expense(1) of $197.8 million decreased $3.3 million or 1.6% vs. 4Q17 and increased $7.2 million or 3.8% vs. 1Q17 Sequential quarter decrease driven by $3.0 million decrease in advertising and $4.4 million decrease in incentives, partially offset by $4.4 million seasonal increase in employment taxes 1Q18 efficiency ratio of 57.16%; compared to 66.77% in 4Q17 and 64.84% in 1Q17 $23.2 million loss on early extinguishment of debt increased 4Q17 efficiency ratio by 683 b.p.s 1Q18 adjusted efficiency ratio(1) of 57.42%; improved from 59.29% in 4Q17 and 62.25% in 1Q17 (dollars in millions) Non-GAAP financial measure; see appendix for applicable reconciliation. Efficiency Ratio 64.84% 66.77% 57.16% Adjusted Efficiency Ratio(1) 62.25% 59.29% 57.42%


Slide 9

Credit quality (dollars in millions) (2) 0.12% 0.26% 0.06% 0.15% 0.56% $6.9 $15.7 $38.1 $9.0 Net Charge-offs(2) $27.7 Provision Expense Allowance for Loan Losses 1.05% 1.02% 1.02% 1.01% 0.40% NPA, NPL, and Past Due Ratios Excludes impaired loans held for sale Net charge-off ratio is as a percentage of average total loans, annualized. (1) $39.7 $4.3 0.07% 1.04%


Slide 10

Capital ratios 1Q17 4Q17 1Q18 Common equity Tier 1 ratio 9.86 % 9.99 10.11 Tier 1 capital ratio 10.18 10.38 10.51 Total risk-based capital ratio 12.09 12.23 12.37 Leverage ratio 9.13 9.19 9.37 Tangible common equity ratio(2) 9.04 8.88 8.79 Disallowed deferred tax asset(3) (in millions) $182.9 70.4 67.1 (1) Preliminary Non-GAAP financial measure; see appendix for applicable reconciliation. Tier 1 capital disallowed deferred tax asset; CET1 disallowed deferred tax asset is $53.7 million at March 31, 2018 compared to $56.3 million at December 31, 2017 and $146.3 million at March 31, 2017. 1Q18 ratios reflect the impact from adoption of ASU 2018-02, including election to reclassify Federal Tax Reform tax effects from AOCI into retained earnings in 1Q18. The reclassification resulted in an increase in regulatory capital of $7.8 million, a 3 b.p.s increase to Tier 1 capital, common equity Tier 1 capital, and total risk based capital ratios, and a 2 b.p.s increase to the leverage ratio. 1Q18 common equity Tier 1 ratio on a fully phased-in basis estimated at 10.01%(1)(2) Completed $26.7 million in common share repurchases during the quarter (4) (1) (4) (1) (4) (4) (1)


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2018 Outlook Metrics 2018 Guidance 1Q18 Results Balance Sheet   Average loan growth 4% to 6% 3.4% Average total deposit growth 4% to 6% 3.5%             Revenue   Net interest income growth 11% to 13% 14.3% Adjusted non-interest income(1) growth 4% to 6% 6.2%         Non-interest Expense and Taxes   Total non-interest expense growth 0% to 3% (1.1)% Effective tax rate 23% to 24% 22.6%         Credit and Capital   Net charge-off ratio 15 to 25 b.p.s 7 b.p.s Share repurchases Up to $150 million $26.7 million Common dividend per share (year) Up 67% to $1.00 $0.25 Non-GAAP financial measure; see appendix for applicable reconciliation. Growth vs. 1Q17 (2) (2) (2) (2) (2)


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1Q18 Items Excluded from Adjusted EPS and Other Select Items (in thousands, except per share data) Adjusted EPS is a non-GAAP financial measure. See page 26 for adjusted EPS reconciliation. Due to decrease in enacted Georgia statutory rate Included in the computation of adjusted EPS (1) (2) 1Q18 Items Excluded from Adjusted EPS Increase/(decrease) in Pre-tax earnings After-tax earnings Decrease in fair value of private equity investments, net ($3,056.0) ($2,353.1) Reduction in litigation contingency accrual $2,626.0 $2,022.0 Income tax expense related to state DTA remeasurement N/A ($1,325.0) Other, net $23.0 $17.7 Net ($1,638.4) 1Q18 Select Items Increase in Pre-tax earnings After-tax earnings Income tax benefit from share-based compensation N/A $2,752 (3)


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Condensed Income Statement (in thousands, except per share data) 1Q18 4Q17 1Q17 Net interest income $274,284 $269,713 $239,927 Adjusted non-interest income* 70,102 69,252 65,985 Adjusted non-interest expense* (197,828) (201,111) (190,608) Provision expense (12,776) (8,564) (8,674) Investment securities (losses) gains, net - - 7,668 (Decrease) increase in fair value of private equity investments, net (3,056) 100 (1,814) Restructuring charges, net (315) 29 6,511 Litigation contingency expense 2,626 (300) - Earnout liability adjustments - (1,700) - Loss on early extinguishment of debt - (23,160) - Amortization of intangibles (292) (292) (183) Merger-related expense - - 86 Income before taxes 133,375 103,966 105,705 Income tax expense 30,209 74,361 33,847 Dividends on preferred stock 2,559 2,559 2,559 Net income available to common shareholders $100,607 $27,046 $69,298 Net income per diluted common share $0.84 $0.23 $0.56 Weighted average diluted common shares 119,321 120,182 123,059 *Non-GAAP financial measure; see applicable reconciliation.


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Quarterly Highlights Trend 1Q17 2Q17 3Q17 4Q17 1Q18 Diluted EPS $0.56 0.60 0.78 0.23 0.84 Financial Performance Net interest margin 3.42% 3.51 3.63 3.65 3.78 Adjusted efficiency ratio(1) 62.25 59.56 58.59 59.29 57.42 ROA(2) 0.96 1.00 1.27 0.37 1.34 Adjusted ROA(1)(2) 0.97 1.01 1.05 1.12 1.36 Balance Sheet Growth(3) Total loans 6.8% 2.8 0.9 4.9 1.6 Total average deposits 4.2 1.2 4.7 15.7 (7.7) Credit Quality NPA ratio 0.77% 0.73 0.57 0.53 0.53 NCO ratio(2) 0.12 0.26 0.62 0.15 0.07 Capital Common shares outstanding(4) 122,322 121,661 119,567 118,897 118,702 CET1 ratio 9.86% 10.02 10.06 9.99 10.11 TCE ratio(1) 9.04 9.15 8.88 8.88 8.79 (1) Non-GAAP financial measure; see applicable reconciliation. (2) Annualized (3) Sequential quarter growth, annualized. (4) In thousands (5) Preliminary (5)


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Net Interest Margin (2) Immediate change in short-term interest rates (in b.p.s) Estimated % increase in net interest income* +100 2.89% +25 1.19% Net Interest Income Sensitivity * As of March 31, 2018, $184.6 million or 0.7% of total loans were at their floor rate, down from $607.3 million or 2.5% of total loans a year ago.


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Non-interest Income (in thousands) 1Q17 4Q17 1Q18 1Q18 vs. 4Q17 % Change 1Q18 vs. 1Q17 % Change Service charges on deposit accounts(1) $20,118 $20,372 $19,940 (2.1%) (0.8%) Fiduciary and asset management fees 12,151 13,195 13,435 1.8 10.6 Brokerage revenue 7,226 7,758 8,695 12.1 20.3 Mortgage banking income 5,766 5,645 5,047 (10.6) (12.5) Card fees(1) 9,844 9,762 10,199 4.5 3.6 Other fee income 4,868 4,042 4,618 14.3 (5.1) Income from bank-owned life insurance(1) 3,031 3,900 3,681 (5.6) 21.4 Other non-interest income 2,981 4,577 4,488 (1.9) 50.6 Adjusted non-interest income(2) $65,984 $69,252 $70,102 1.2 6.2 Investment securities gains, net 7,668 - - nm nm Increase (decrease) in fair value of private equity investments, net (1,814) 100 (3,056) nm nm Total non-interest income $71,839 $69,352 $67,046 (3.3%) (6.7%) Selected components of non-interest income have been reclassified to conform to the current period’s presentation. Non-GAAP financial measure; see applicable reconciliation. nm = not meaningful


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Portfolio Distribution by Type * Total loans are net of unearned deferred fees and costs, which are not displayed on this table. (dollars in millions) 1Q17 2Q17 3Q17 4Q17 1Q18 C&I 11,733 48.4 11,743 48.1 11,727 47.8 12,024 48.5 12,102 48.5 Investment Properties $6,016 24.8% $6,036 24.7 $5,925 24.2% $5,670 22.8% $5,619 22.6% Residential Properties 862 3.6 836 3.4 795 3.2 782 3.1 759 3.1 Land and Development 589 2.4 550 2.3 507 2.1 484 2.0 457 1.8 Total CRE $7,467 30.8% $7,422 30.4% $7,227 29.5% $6,935 27.9% $6,836 27.5% Consumer 5,084 21.0 5,291 21.7 5,558 22.7 5,854 23.6 5,969 24.0 Total Loans* $24,258 100.0% $24,431 100.0% $24,487 100.0% $24,788 100.0% $24,883 100.0%


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Investment Properties *Annualized Credit Indicator Inv. Prop. Total NPL Ratio 0.05% Net Charge-off Ratio* 0.06% 30+ Days Past Due Ratio 0.04% 90+ Days Past Due Ratio 0.01% Investment Properties portfolio represents 82% of total CRE portfolio The portfolio is well-diversified among the property types Credit quality in Investment Properties portfolio remains excellent


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Residential C&D and Land Acquisition * Annualized Category 1Q18 Performing Balance (in millions) % of Total NPL Ratio 30+ Days Past Due Ratio *Net Charge-off Ratio 1-4 Family Construction 188.9 32.8% 0.00% 0.10% (0.10)% Residential Development 100.9 17.5 3.09 0.05 (0.20) Land Acquisition 287.0 49.8 0.45 0.96 (6.07) Continued reduction in this non-strategic portfolio As of 1Q18, Residential C&D and Land Acquisition Portfolios represent only 2.3% of total performing loans (in millions)


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C&I Portfolio * Annualized Credit Indicator 1Q18 NPL Ratio 0.71% Net Charge-off Ratio 0.16% 30+ Days Past Due Ratio 0.18% 90+ Days Past Due Ratio 0.01% Community and Retail Bank represent 62% of C&I balances Large Corporate/Middle Market/Specialty Lines represent 38% of C&I Balances *


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Consumer Portfolio * Annualized Credit Indicator 1Q18 NPL Ratio 0.41% Net Charge-off Ratio 0.22% 30+ Days Past Due Ratio 0.40% 90+ Days Past Due Ratio 0.04% Credit Card Portfolio continues to perform well Average utilization rate is 21.4% Average credit score is 727 Net charge-off ratio below industry average at 1.80% for the quarter Total Consumer Portfolio $5.97 billion Lending Partnerships with GreenSky and SoFi Currently $1.27 billion in balances, or 5.1% of total portfolio GreenSky is a point-of-sale program where the customer applies with home improvement store, contractor, or other merchant SoFi portfolio primarily consists of refinanced student loan debt Credit Indicator HELOC Mortgage Weighted average credit score of 1Q18 originations 781 775 Weighted average credit score of total portfolio 783 774 Average LTV 75.1% 75.3% Average DTI 41.0% 33.2% Utilization rate 54.5% N/A Mortgage and HELOC, the two largest concentrations, have strong credit indicators *


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Portfolio Risk Distribution Risk Category 1Q17 4Q17 1Q18 1Q18 vs. 4Q17 Change 1Q18 vs. 1Q17 Change Passing Grades $23,554 $24,196 $24,269 $73 $715 Special Mention 304 284 289 5 (15) Substandard Accruing 242 191 204 13 (38) Non-Performing Loans 158 116 120 4 (38) Total Loans $24,258 $24,787 $24,883 $96 $625 (dollars in millions)


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Loan Loss Reserve Coverage Trends (Excluding NPLs for which the expected loss has been charged off) (dollars in millions) 1.05 % % % % %


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Effective cost of funds calculation (dollars in thousands) 1Q18 4Q17 1Q17 Total interest expense $38,850 $37,221 $32,474 Total interest expense, annualized 157,558 147,670 131,691 Total average interest earning assets $29,448,681 $29,460,006 $28,504,589 Effective cost of funds (total interest expense, annualized, divided by total average interest earning assets) 0.53% 0.50% 0.46%


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Non-GAAP Financial Measures (dollars in thousands) 1Q18 4Q17 1Q17 Net income available to common shareholders $100,607 27,046 69,298 Add: Earnout liability adjustments - 1,700 - Add: Income tax expense related to effect of Federal Tax Reform - 47,181 - Add: Income tax expense related to State DTA remeasurement 1,325 - - Add: Merger-related expense - - 86 Subtract/add: Litigation contingency expense (2,626) 300 - Subtract/add: Restructuring charges, net (315) (29) 6,511 Add: Amortization of intangibles 292 292 183 Add: Loss on early extinguishment of debt, net - 23,160 - Subtract: Investment securities losses (gains), net - - (7,668) Add/subtract: (Increase)/decrease in fair value of private equity investments, net 3,056 (100) 1,814 Subtract: Income tax benefit related to pre-2017 R&D credits and state taxes - (4,847) - Add/subtract: Tax effects of adjustments (96) (8,740) (333) Adjusted net income $102,243 85,963 69,891 Weighted average common shares outstanding-diluted 119,321 120,182 123,059 Adjusted diluted earnings per share $0.86 $0.72 $0.57


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Non-GAAP Financial Measures, continued (dollars in thousands) 1Q18 4Q17 3Q17 2Q17 1Q17 Net income $103,166 29,605 98,007 76,003 71,857 Add: Earnout liability adjustments - 1,700 2,059 - - Add: Income tax expense related to effects of Federal Tax Reform - 47,181 - - - Add: Income tax expense related to State DTA remeasurement 1,325 - - - - Add: Merger-related expense - - 23 - 86 Add/subtract: Litigation contingency expense (2,626) 300 401 - - Subtract/add: Restructuring charges, net (315) (29) 519 13 6,511 Add: Amortization of intangibles 292 292 292 292 184 Add: Loss on early extinguishment of debt, net - 23,160 - - - Add: 3Q17 provision expense on loans transferred to held-for-sale - - 27,710 - - Add: 3Q17 discounts to fair value for completed or planned ORE accelerated dispositions - - 7,082 - - Add: 3Q17 asset impairment charges related to accelerated disposition of corporate real estate and other properties - - 1,168 - - Add/subtract: Investment securities losses (gains), net - - 7,956 1 (7,668) Subtract/add: Increase/decrease in fair value of private equity investments, net 3,056 (100) 27 1,352 1,814 Subtract: Cabela’s transaction fee - - (75,000) - - Subtract: Income tax benefit related to pre-2017 R&D credits and state taxes - (4,847) - - - Add/subtract: Tax effects of adjustments (96) (8,740) (11,034) (613) (333) Adjusted net income $104,802 88,522 81,278 77,048 72,450 Net income annualized $425,030 351,201 322,462 309,039 293,791 Total average assets $31,245,708 31,388,724 30,678,388 30,630,748 30,442,089 Adjusted return on average assets 1.36% 1.12 1.05 1.01 0.97


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Non-GAAP Financial Measures, continued (dollars in thousands) 1Q18 4Q17 1Q17 Net income available to common shareholders $100,607 27,046 69,298 Add: Earnout liability adjustments - 1,700 - Add: Income tax expense related to effect of Federal Tax Reform - 47,181 - Add: Income tax expense related to State DTA remeasurement 1,325 - - Add: Merger-related expense - - 86 Add/subtract: Litigation contingency expense (2,626) 300 - Subtract/add: Restructuring charges, net (315) (29) 6,511 Add: Amortization of intangibles 292 292 183 Add: Loss on early extinguishment of debt, net - 23,160 - Subtract: Investment securities gains, net - - (7,668) Subtract/add: Decrease/increase in fair value of private equity investments, net 3,056 (100) 1,814 Subtract: Income tax benefit related to pre-2017 R&D credits and state taxes - (4,847) - Add/subtract: Tax effects of adjustments (96) (8,740) (333) Adjusted net income $102,243 85,963 69,891 Net income annualized $414,652 341,049 283,447 Total average shareholders’ equity less preferred stock $2,790,878 2,851,523 2,817,663 Subtract: Goodwill (57,315) (57,315) (59,649) Subtract: Other intangible assets, net (10,915) (11,353) (13,177) Total average tangible shareholders’ equity less preferred stock $2,722,648 2,782,855 2,774,837 Adjusted return on average common equity 14.86% 11.96 10.06 Adjusted return on average tangible common equity 15.23% 12.26 10.33


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Non-GAAP Financial Measures, continued (dollars in thousands) 1Q18 4Q17 1Q17 Total interest expense 38,850 37,221 $32,474 Total interest expense, annualized 157,558 147,670 131,700 Total average interest bearing liabilities 20,726,597 20,563,212 20,105,634 Cost of funds rate 0.76 0.72 0.65% Total interest expense $38,850 $37,221 $32,474 Subtract: Interest on long-term debt (12,368) (11,698) (15,478) Subtract: Interest on brokered deposits (7,780) (7,886) (2,338) Subtract: Interest on federal funds purchased and securities sold under repurchase agreements (107) (73) (38) Interest expense on interest bearing core deposits $18,595 17,565 14,620 Interest expense on interest bearing core deposits, annualized 75,413 69,687 59,292 Total average interest bearing liabilities $20,726,597 20,563,212 20,105,634 Subtract: Average long-term debt (2,127,994) (1,713,982) (2,184,072) Subtract: Average brokered deposits (1,951,910) (2,198,333) (1,380,787) Subtract: Average federal funds purchased and securities sold under repurchase agreements (202,226) (184,369) (176,854) Total average interest bearing core deposits $16,444,467 16,466,528 16,363,921 Cost of interest bearing core deposits 0.46 0.42 0.36%


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Non-GAAP Financial Measures, continued (dollars in thousands) 1Q18 4Q17 1Q17 Total non-interest expense 195,179 226,534 $197,388 Subtract: Earnout liability adjustments - (1,700) - Subtract: Restructuring charges 315 29 (6,511) Subtract: Loss on early extinguishment of debt, net - (23,160) - Subtract: Litigation contingency expense 2,626 (300) - Subtract: Merger-related expense - - (86) Subtract: Amortization of intangibles (292) (292) (183) Adjusted non-interest expense 197,828 201,111 $190,608 Adjusted non-interest expense 197,828 201,111 $190,608 Net interest income 274,284 269,713 239,927 Add: Tax equivalent adjustment 116 234 309 Add: Total non-interest income 67,046 69,352 71,839 Subtract: Investment securities gains, net - - (7,668) Total FTE revenues 341,446 339,299 304,407 Add/subtract: (Increase)/decrease in fair value of private equity investments, net 3,056 (100) 1,814 Adjusted total revenues 344,502 339,199 $306,221 Efficiency ratio 57.16 66.77 64.84% Adjusted efficiency ratio 57.42 59.29 62.25% Total non-interest income 67,046 69,352 $71,839 Subtract/add: Investment securities (gains) losses, net - - (7,668) Add/subtract: Decrease/(increase) in fair value of private equity investments, net 3,056 (100) 1,814 Adjusted non-interest income 70,102 69,252 $65,985


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Non-GAAP Financial Measures, continued (dollars in thousands) 2017 $ % Total non-interest income, as reported $345,327 $285 million - $290 million (16%) – (18%) Subtract: Cabela’s transaction fee (75,000) Add: Investment securities losses, net 289 Add: Decrease in fair value of private equity investments, net 3,093 Adjusted non-interest income $273,709 $285 million - $290 million 4% - 6% 2018 Current Outlook – Increase (decrease) vs. 2017


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Non-GAAP Financial Measures, continued (dollars in thousands) 1Q18 4Q17 1Q17 Total average deposits 25,788,073 26,286,009 $24,918,855 Subtract: Average brokered deposits (1,951,910) (2,198,333) (1,380,787) Average core deposits $23,836,163 $24,087,676 $23,538,068 Subtract: Average time deposits excluding average SCM time deposits (3,039,325) (3,170,444) (3,245,306) Average non-time core deposits 20,796,838 20,917,232 $20,292,762 (dollars in thousands) 1Q17 2Q17 3Q17 4Q17 1Q18 Total assets $30,679,589 30,687,966 31,642,123 31,221,837 31,501,028 Subtract: Goodwill (57,010) (57,092) (57,315) (57,315) (57,315) Subtract: Other intangible assets, net (12,137) (11,843) (11,548) (11,254) (10,750) Tangible assets $30,610,442 $30,619,031 $30,573,260 $31,153,268 $31,432,963 Total shareholders’ equity $2,962,127 $2,997,947 $2,997,078 $2,961,566 2,956,495 Subtract: Goodwill (57,010) (57,092) (57,315) (57,315) (57,315) Subtract: Other intangible assets, net (12,137) (11,843) (11,548) (11,254) (10,750) Subtract: Series C Preferred Sock (125,980) (125,980) (125,980) (125,980) (125,980) Tangible common equity $2,767,000 $2,803,032 $2,802,235 $2,767,017 $2,762,450 Total shareholders’ equity to total assets ratio 9.66% 9.77 9.47 9.49 9.39 Tangible Common Equity ratio 9.04% 9.15 8.88 8.88 8.79 (dollars in thousands) 1Q18 Common equity Tier 1 (CET1) $2,814,669 Subtract: Adjustment related to capital components (16,365) Common equity Tier 1 (fully phased-in) $2,798,304 Total risk-weighted assets $27,831,733 Total risk-weighted assets (fully phased-in) $27,957,172 Common equity Tier 1 (CET1) ratio 10.11% Common equity Tier 1 (CET1) ratio (fully phased-in) 10.01%

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