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Section 1: 8-K (8-K)

Document


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 23, 2019
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:

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

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

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

o    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 o

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. o







Item 2.02
Results of Operations and Financial Condition
 
 
 
 
On April 23, 2019, Synovus Financial Corp. (the “Company”) issued a press release announcing the Company’s financial results for the three month period ended March 31, 2019.
 
 
 
 
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 March 31, 2019 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 23, 2019, 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 23, 2019.
 
 
 
 
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 Exhibit 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
 
 
 
 
99.2
 
 
 
 
99.3






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.
 
 
Date: April 23, 2019
By: /s/ Allan E. Kamensky
 
Name: Allan E. Kamensky
 
Title: Executive Vice President, General Counsel
 
          and Secretary
 
 
 
 
 
 



(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit
Exhibit 99.1
397609697_synovusa02.jpg
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 2019
Diluted Earnings per Share of $0.72
Adjusted Diluted Earnings per Share of $0.98, up 15.1% from 1Q18

COLUMBUS, Ga., April 23, 2019 - Synovus Financial Corp. (NYSE: SNV) today reported financial results for the quarter ended March 31, 2019.

First Quarter 2019 Highlights
Diluted EPS of $0.72; adjusted diluted EPS of $0.98, up 7.6% sequentially and 15.1% year over year.
Organic loan and deposit growth1 of $400.1 million and $423.7 million, respectively.
Return on average assets (ROA) of 1.06%, adjusted ROA of 1.45%.
Return on average common equity (ROE) of 10.98%, adjusted ROE of 15.03%.
Adjusted return on average tangible common equity (ROATCE) of 17.52%.
Non-performing asset (NPA) ratio of 0.44%.
Efficiency ratio of 61.29%, adjusted tangible efficiency ratio of 50.24%.
Completed acquisition of FCB Financial Holdings, Inc.; merger-related expenses impacting EPS by $0.27.
Completed issuance of $300 million in subordinated debt.
Executed share repurchases of $320 million or 8.5 million shares.

First Quarter Summary
 
 
 
 
 
 
 
 
 
Reported
 
Adjusted
(dollars in thousands)
1Q19
4Q18
1Q18
 
1Q19
4Q18
1Q18
Net Income available to common shareholders
$
117,036

$
101,919

$
100,607

 
$
160,155

$
107,002

$
102,020

Diluted earnings per share
0.72

0.87

0.84

 
0.98

0.91

0.86

Total loans
35,634,501

25,946,573

24,883,037

 
N/A

N/A

N/A

Total deposits
38,075,190

26,720,322

26,253,507

 
N/A

N/A

N/A

Total revenues
476,478

365,924

341,330

 
476,250

368,189

344,502

Return on avg assets
1.06
%
1.29
%
1.34
%
 
1.45
%
1.36
%
1.36
%
Return on avg common equity
10.98

14.25

14.62

 
15.03

14.96

14.82

Return on avg tangible common equity
12.88

14.63

15.02

 
17.52

15.36

15.23

Net interest margin
3.78

3.92

3.78

 
3.59

N/A

N/A

Efficiency ratio
61.29

57.34

57.16

 
50.24

55.98

57.42

Net charge-off ratio
0.19

0.20

0.07

 
N/A

N/A

N/A

NPA ratio
0.44

0.44

0.53

 
N/A

N/A

N/A





“We are pleased with our first quarter results, with solid gains in earnings per share, balanced growth in loans and deposits, and strong contributions from our newly acquired FCB franchise,” said Kessel D. Stelling, Synovus chairman and CEO. “We continued to demonstrate prudent expense discipline while investing in a number of strategically important initiatives, including transforming our digital capabilities, improving the customer experience, and recruiting and investing in high-performing talent. We also continued our capital optimization program by executing $320 million in share repurchases.

“As the May 6 FCB conversion date approaches, we are very pleased with the crisp execution of the FCB integration, including seamless alignment of our teams into an efficient and synergistic operating model, successful retention of key customers and team members, and realization of merger-related cost savings ahead of plan,” Stelling concluded. 

Balance Sheet

Total loans ended the quarter at $35.63 billion, up $9.69 billion or 37.3% from the previous quarter, including FCB-acquired loan balances of $9.29 billion.
Fair value discount on acquired loans was $169 million.
Excluding FCB-acquired balances, period-end loans increased $400.1 million from the fourth quarter of 2018, including:
Commercial and industrial loans up $55.9 million
Consumer loans up $184.7 million
CRE loans up $151.5 million
Legacy FCB contributed $213.7 million in organic loan growth in the first quarter.
Total deposits ended the quarter at $38.08 billion, up $11.35 billion or 42.5% from fourth quarter 2018, including FCB-acquired deposit balances of $10.93 billion.
Excluding FCB-acquired deposit balances, period-end deposits increased $423.7 million from the fourth quarter of 2018, including:
CDs up $614.6 million
DDAs2 up $77.4 million
MMA/Savings down $169.1 million
Brokered deposits down $99.2 million
The loan to deposit ratio was 93.6%, down from 97.1% in the prior quarter.

Core Performance

Results are impacted by the merger with FCB, which closed on January 1, 2019.
Total revenues were $476.5 million in the first quarter, up $110.6 million or 30.2% from the previous quarter, and up $135.1 million or 39.6% in the first quarter 2018.
Net interest income was $397.2 million, up $99.2 million or 33.3% from the previous quarter and up $122.9 million or 44.8% from the first quarter 2018.
Net interest margin was 3.78%, down 14 basis points from the previous quarter, which includes $18.8 million or 19 basis points of purchase accounting accretion. Yield on earning assets was 4.80%, up 11 basis points from the previous quarter, and the effective cost of funds was 1.02%, up 25 basis points from the fourth quarter of 2018.
Total non-interest income was $79.4 million, up $11.4 million from the previous quarter and up $12.3 million or 18.4% from first quarter 2018.
Non-interest income in the quarter included a favorable adjustment in the fair value of private equity investments of $858 thousand compared to an unfavorable adjustment of $2.1 million in the prior quarter. 
Adjusted non-interest income was $78.4 million, up $8.4 million from the previous quarter.
Legacy FCB contributed adjusted non-interest income of $7.3 million during the quarter.
Core banking fees3 were $36.8 million, flat from the previous quarter, including $1.8 million in additional income from FCB.
Fiduciary and asset management fees, brokerage revenue, and insurance revenues were $24.5 million, down $161 thousand from the previous quarter.



Mortgage banking income was $5.1 million, up $1.3 million from the fourth quarter of 2018, including $204 thousand from FCB.
Total non-interest expense was $292.4 million, up $82.5 million or 39.3% from the previous quarter and up 49.8% from the first quarter 2018.
First quarter 2019 results included merger-related expenses of $49.7 million, which impacted EPS by $0.27.
Adjusted non-interest expense was $242.7 million, up $36.3 million or 17.6% from the previous quarter and up $44.5 million or 22.5% from the first quarter 2018.
Non-interest expense associated with FCB was $26.8 million.
Employment expense of $139.4 million increased $25.9 million or 22.8% from the previous quarter.
Occupancy and equipment expense of $38.4 million increased $4.1 million or 12.1% from the fourth quarter of 2018.
Amortization of intangibles was $3.1 million in the first quarter of 2019.
Other expenses were $64.8 million in the quarter, up $6.2 million or 10.5% from the previous quarter and up $11.9 million or 22.5% from the first quarter 2018.
Efficiency ratio for the first quarter was 61.29% as compared to 57.34% in the previous quarter and 57.16% in the first quarter 2018.
Adjusted tangible efficiency ratio for the first quarter was 50.24% as compared to 55.98% in the previous quarter and 57.42% in the first quarter 2018.
As a result of non-deductible merger-related expenses, other disallowances, and increased state taxes, the effective tax rate was 25.2% in the quarter.

Credit Quality

The non-performing loan ratio was 0.40% at March 31, 2019, compared to 0.41% at the end of the previous quarter and 0.48% at March 31, 2018.
The non-performing asset ratio was 0.44% at March 31, 2019, unchanged from the previous quarter and down from 0.53% at March 31, 2018.
The annualized net charge-off ratio was 0.19% in the first quarter as compared to 0.20% in the previous quarter and 0.07% in the first quarter 2018.
Total delinquencies (consisting of loans 30 or more days past due and still accruing) remain low at 0.25% of total loans at March 31, 2019, as compared to 0.22% in the previous quarter and 0.22% at March 31, 2018.

Capital

First quarter 2019 includes the impact of $1.6 billion in stock consideration issued in the FCB acquisition.
During the first quarter 2019, Synovus repurchased $320 million in common stock, as part of the previously announced share repurchase program. Additionally, Synovus declared common stock dividends of $0.30 per share, a 20% increase from the previous quarter.
On February 7, Synovus completed a public offering of $300 million in subordinated debt.
Common Equity Tier 1 ratio was 9.44% at March 31, 2019, down from 9.95% at December 31, 2018.
Tier 1 Capital ratio was 9.93% at March 31, 2019, down from 10.61% at December 31, 2018.
Total Risk Based Capital ratio was 11.98% at March 31, 2019, down from 12.37% at December 31, 2018.
Tier 1 Leverage ratio was 8.77% at March 31, 2019, down from 9.60% at December 31, 2018.
Tangible Common Equity ratio was 8.30% at March 31, 2019, compared to 8.81% at December 31, 2018.

1 Organic loan and deposit growth excludes FCB-acquired balances of $9.29 billion and $10.93 billion, respectively.
2 Includes interest-bearing and non-interest-bearing DDAs.
3 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.

First Quarter Earnings Conference Call
Synovus will host an earnings highlights conference call at 8:30 a.m. EDT on April 23, 2019. The earnings call will be accompanied by a slide presentation. Shareholders and other interested parties may listen to this conference call



via simultaneous Internet broadcast. For a link to the webcast, go to investor.synovus.com/event. The replay will be archived for 12 months and will be available 30-45 minutes after the call.

Synovus Financial Corp. is a financial services company based in Columbus, Georgia, with approximately $47 billion in assets. Synovus provides commercial and retail banking, investment, and mortgage services through 300 branches in Georgia, Alabama, South Carolina, Florida, and Tennessee. Synovus Bank, a wholly owned subsidiary of Synovus, was named one of American Banker’s “Best Banks to Work For” in 2018 and has been recognized as one of the country’s 10 “Most Reputable Banks” by American Banker and the Reputation Institute for four consecutive years. 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 deposit growth, loan growth and the net interest margin; expectations on our growth strategy, strategic transactions (including the FCB transaction), 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, 2018, 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 total revenues; adjusted tangible efficiency ratio; adjusted net income available to common shareholders; adjusted earnings per diluted share; adjusted return on average assets; adjusted return on average common equity; return on average tangible common equity; adjusted return on average tangible common equity; tangible common equity to tangible assets 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; total revenues; efficiency ratio; net income available to common shareholders; earnings per diluted common share; return on average assets; return on average common equity; 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 total revenues and adjusted non-interest income are measures used by management to evaluate total revenues and non-interest income exclusive of net investment securities gains (losses) and changes in the fair value of private equity investments, net. Adjusted non-interest expense and the adjusted tangible efficiency ratio are measures utilized by management to measure the success of expense management initiatives focused on reducing recurring controllable operating costs. Adjusted net income available to common shareholders, adjusted earnings per diluted share, adjusted return on average assets, and adjusted return on average common equity are measures used by management to evaluate operating results exclusive of items that are not indicative of ongoing operations and impact period-to-period comparisons. Return on average tangible common equity and adjusted return on average tangible common equity are measures used by management to compare Synovus’ performance with other financial institutions because it calculates the return available to common shareholders without the impact of intangible assets and their related amortization, thereby allowing management to evaluate the performance of the business consistently. The tangible common equity to tangible assets 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)
1Q19
 
4Q18
 
1Q18
Adjusted non-interest income
 
 
 
 
 
Total non-interest income
$
79,378

 
$
67,991

 
$
67,046

Subtract: Investment securities gains, net
(75
)
 

 

Subtract/add: (Increase) decrease in fair value of private equity investments, net
(858
)
 
2,084

 
3,056

Adjusted non-interest income
$
78,445

 
$
70,075

 
$
70,102

 
 
 
 
 
 
Adjusted non-interest expense
 
 
 
 
 
Total non-interest expense
$
292,410

 
$
209,922

 
$
195,179

Subtract: Merger-related expense
(49,738
)
 
(3,381
)
 

Add: Litigation settlement/contingency expense

 

 
2,626

Subtract/add: Restructuring charges, net
(19
)
 
(140
)
 
315

Adjusted non-interest expense
$
242,653

 
$
206,401

 
$
198,120

 
 
 
 
 
 
Adjusted total revenues and adjusted tangible efficiency ratio
 
 
 
 
 
Adjusted non-interest expense
$
242,653

 
$
206,401

 
$
198,120

Subtract: Amortization of intangibles
(3,392
)
 
(292
)
 
(292
)
Adjusted tangible non-interest expense
$
239,261


$
206,109


$
197,828

 
 
 
 
 
 
Net interest income
$
397,175

 
$
297,933

 
$
274,284

Add: Tax equivalent adjustment
630

 
181

 
116

Add: Total non-interest income
79,378

 
67,991

 
67,046

Subtract: Investment securities gains, net
(75
)
 

 

Total FTE revenues
477,108

 
366,105

 
341,446

Subtract/add: (Increase) decrease in fair value of private equity investments, net
(858
)
 
2,084

 
3,056

Adjusted total revenues
$
476,250

 
$
368,189

 
$
344,502

Efficiency ratio
61.29
%
 
57.34
%
 
57.16
%
Adjusted tangible efficiency ratio
50.24


55.98


57.42

 
 
 
 
 
 














Reconciliation of Non-GAAP Financial Measures, continued
 
 
 
 
 
 
 
 
 
 
 
(in thousands, except per share data)
1Q19
 
4Q18
 
1Q18
Adjusted Return on Average Assets
 
 
 
 
 
Net income
$
120,186

 
$
105,070

 
$
103,166

Add: Income tax expense, net related to State Tax Reform

 

 
1,325

Add: Merger-related expense
49,738

 
3,381

 

Subtract: Litigation settlement/contingency expense

 

 
(2,626
)
Add/subtract: Restructuring charges, net
19

 
140

 
(315
)
Subtract: Investment securities gains, net
(75
)
 

 

Subtract/add: (Increase) decrease in fair value of private equity investments, net
(858
)
 
2,084

 
3,056

Subtract: Tax effect of adjustments
(5,705
)
 
(522
)
 
(27
)
Adjusted net income
$
163,305

 
$
110,153

 
$
104,579

Net income annualized
$
487,421

 
$
416,854

 
$
418,395

Adjusted net income annualized
$
662,293

 
$
437,020

 
$
424,126

Total average assets
$
45,794,621

 
$
32,190,303

 
$
31,245,708

Return on average assets
1.06
%
 
1.29
%
 
1.34
%
Adjusted return on average assets
1.45

 
1.36

 
1.36

 
 
 
 
 
 
Adjusted net income available to common shareholders and adjusted net income per common share, diluted
 
 
 
 
 
Net income available to common shareholders
$
117,036

 
$
101,919

 
$
100,607

Add: Income tax expense, net related to State Tax Reform

 

 
1,325

Add: Merger-related expense
49,738

 
3,381

 

Subtract: Litigation settlement/contingency expense

 

 
(2,626
)
Add/subtract: Restructuring charges, net
19

 
140

 
(315
)
Subtract: Investment securities gains, net
(75
)
 

 

Subtract/add: (Increase) decrease in fair value of private equity investments, net
(858
)
 
2,084

 
3,056

Subtract: Tax effect of adjustments
(5,705
)
 
(522
)
 
(27
)
Adjusted net income available to common shareholders
$
160,155

 
$
107,002

 
$
102,020

Weighted average common shares outstanding, diluted
162,760

 
116,986

 
119,321

Net income per common share, diluted
$
0.72

 
$
0.87

 
$
0.84

Adjusted net income per common share, diluted
0.98

 
0.91

 
0.86

 
 
 
 
 
 





Reconciliation of Non-GAAP Financial Measures, continued
 
 
 
 
 
(dollars in thousands)
1Q19
 
4Q18
 
1Q18
 
 
 
 
 
 
Adjusted return on average common equity, return on average tangible common equity, and adjusted return on average tangible common equity
 
 
 
 
 
Net income available to common shareholders
$
117,036

 
$
101,919

 
$
100,607

Add: Income tax expense, net related to State Tax Reform

 

 
1,325

Add: Merger-related expense
49,738

 
3,381

 

Subtract: Litigation settlement/contingency expense

 

 
(2,626
)
Add/subtract: Restructuring charges, net
19

 
140

 
(315
)
Subtract: Investment securities gains, net
(75
)
 

 

Subtract/add: (Increase) decrease in fair value of private equity investments, net
(858
)
 
2,084

 
3,056

Subtract: Tax effect of adjustments
(5,705
)
 
(522
)
 
(27
)
Adjusted net income available to common shareholders
$
160,155

 
$
107,002


$
102,020

 
 
 
 
 
 
Adjusted net income available to common shareholders annualized
$
649,518

 
$
424,519

 
$
413,747

Add: Amortization of intangibles
10,317

 
886

 
906

Adjusted net income available to common shareholders excluding amortization of intangibles annualized
$
659,835


$
425,405


$
414,653

 
 
 
 
 
 
Net income available to common shareholders annualized
$
474,646

 
$
404,353

 
$
408,017

Add: Amortization of intangibles
10,317

 
886

 
906

Net income available to common shareholders excluding amortization of intangibles annualized
$
484,963

 
$
405,239


$
408,923

 
 
 
 
 
 
Total average shareholders' equity less preferred stock
$
4,321,561

 
$
2,837,740

 
$
2,790,878

Subtract: Goodwill
(480,215
)
 
(57,315
)
 
(57,315
)
Subtract: Other intangible assets, net
(75,191
)
 
(9,972
)
 
(10,915
)
Total average tangible shareholders' equity less preferred stock
$
3,766,155

 
$
2,770,453


$
2,722,648

Return on average common equity
10.98
%

14.25
%

14.62
%
Adjusted return on average common equity
15.03


14.96


14.82

Return on average tangible common equity
12.88


14.63


15.02

Adjusted return on average tangible common equity
17.52


15.36


15.23







Reconciliation of Non-GAAP Financial Measures, continued
 
 
 
 
 
 
March 31,
 
December 31,
 
March 31,
(dollars in thousands)
2019
 
2018
 
2018
Tangible Common Equity to Tangible Assets Ratio
 
 
 
 
 
 
 
 
 
 
 
Total assets
$
46,604,344

 
$
32,669,192

 
$
31,501,028

Subtract: Goodwill
(480,215
)
 
(57,315
)
 
(57,315
)
Subtract: Other intangible assets, net
(74,683
)
 
(9,875
)
 
(10,750
)
Tangible assets
$
46,049,446

 
$
32,602,002

 
$
31,432,963

 
 
 
 
 
 
Total shareholders’ equity
$
4,572,072

 
$
3,133,602

 
$
2,956,495

Subtract: Goodwill
(480,215
)
 
(57,315
)
 
(57,315
)
Subtract: Other intangible assets, net
(74,683
)
 
(9,875
)
 
(10,750
)
Subtract: Preferred Stock, no par value
(195,140
)
 
(195,140
)
 
(125,980
)
Tangible common equity
$
3,822,034

 
$
2,871,272

 
$
2,762,450

Total shareholders’ equity to total assets ratio
9.81
%
 
9.59
%
 
9.39
%
Tangible common equity to tangible assets ratio
8.30

 
8.81

 
8.79

 
 
 
 
 
 

Reconciliation of Non-GAAP Financial Measures, continued
 
 
 
 
 
 
March 31,
 
 
 
 
(dollars in thousands)
2019
 
 
 
 
CET1 ratio (fully phased-in)
 
 
 
 
 
CET1
$
3,772,682

 
 
 
 
Total risk-weighted assets
$
39,954,750

 
 
 
 
Total risk-weighted assets (fully phased-in)
$
40,095,768

 
 
 
 
CET1 ratio
9.44
%




CET1 ratio (fully phased-in)
9.41





 
 
 
 
 
 






(Back To Top)

Section 3: EX-99.2 (EXHIBIT 99.2)

Exhibit


Synovus
 
 
 
 
 
 
 
 
Exhibit 99.2
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INCOME STATEMENT DATA
 
 
 
 
 
 
 
 
 
 
 
 
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
(In thousands, except per share data)
2019
 
2018
 
First Quarter
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
First Quarter
 
Fourth Quarter
 
Third Quarter
 
Second Quarter
 
First Quarter
 
'19 vs '18
 
 
 
 
 
 
 
% Change
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
$
504,839

 
357,394

 
343,942

 
329,834

 
313,134

 
61.2
 %
 
Interest expense
107,664

 
59,461

 
52,323

 
45,257

 
38,850

 
177.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
397,175

 
297,933

 
291,619

 
284,577

 
274,284

 
44.8

 
Provision for loan losses
23,569

 
12,148

 
14,982

 
11,790

 
12,776

 
84.5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income after provision for loan losses
373,606

 
285,785

 
276,637

 
272,787

 
261,508

 
42.9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-interest income:
 
 
 
 
 
 
 
 
 
 
 
 
Service charges on deposit accounts
20,859

 
20,320

 
20,582

 
19,999

 
19,940

 
4.6

 
Fiduciary and asset management fees
13,578

 
13,805

 
13,462

 
13,983

 
13,435

 
1.1

 
Card fees
10,877

 
10,862

 
10,608

 
10,833

 
10,199

 
6.6

 
Brokerage revenue
9,406

 
9,643

 
9,329

 
8,900

 
8,695

 
8.2

 
Mortgage banking income
5,054

 
3,781

 
5,290

 
4,839

 
5,047

 
0.1

 
Income from bank-owned life insurance
5,290

 
3,682

 
3,771

 
3,733

 
4,217

 
25.4

 
Swap fee income
4,778

 
1,128

 
516

 
1,003

 
690

 
nm

 
Investment securities gains/(losses), net
75

 

 

 
(1,296
)
 

 
nm

 
Increase/(decrease) in fair value of private equity investments, net
858

 
(2,084
)
 
434

 
(37
)
 
(3,056
)
 
nm

 
Other non-interest income
8,603

 
6,854

 
7,676

 
11,430

 
7,879

 
9.2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total non-interest income
79,378

 
67,991

 
71,668

 
73,387

 
67,046

 
18.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-interest expense:
 
 
 
 
 
 
 
 
 
 
 
 
Salaries and other personnel expense
139,427

 
113,496

 
114,341

 
111,863

 
113,720

 
22.6

 
Net occupancy and equipment expense
38,394

 
34,260

 
32,088

 
32,654

 
31,480

 
22.0

 
Third-party processing expense
17,758

 
14,803

 
14,810

 
15,067

 
13,945

 
27.3

 
FDIC insurance and other regulatory fees
6,761

 
4,728

 
6,430

 
6,543

 
6,793

 
(0.5
)
 
Professional fees
6,348

 
8,650

 
6,298

 
6,284

 
5,505

 
15.3

 
Advertising expense
5,123

 
6,834

 
3,735

 
5,220

 
5,092

 
0.6

 
Earnout liability adjustments

 

 
11,652

 

 

 
nm

 
Merger-related expense
49,738

 
3,381

 
6,684

 

 

 
nm

 
   Amortization of intangibles
3,392

 
292

 
292

 
292

 
292

 
nm

 
Other operating expenses
25,469

 
23,478

 
23,967

 
26,134

 
18,352

 
38.8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total non-interest expense
292,410

 
209,922

 
220,297

 
204,057

 
195,179

 
49.8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income before income taxes
160,574

 
143,854

 
128,008

 
142,117

 
133,375

 
20.4

 
Income tax expense
40,388

 
38,784

 
18,949

 
30,936

 
30,209

 
33.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
120,186

 
105,070

 
109,059

 
111,181

 
103,166

 
16.5

 
 
 
 
 
 
 
 
 
 
 
 


 
Less: Preferred stock dividends and redemption charge
3,150

 
3,151

 
9,729

 
2,559

 
2,559

 
23.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income available to common shareholders
$
117,036

 
101,919

 
99,330

 
108,622

 
100,607

 
16.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income per common share, basic
$
0.73

 
0.88

 
0.85

 
0.92

 
0.85

 
(14.2
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income per common share, diluted
0.72

 
0.87

 
0.84

 
0.91

 
0.84

 
(14.7
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash dividends declared per common share
0.30

 
0.25

 
0.25

 
0.25

 
0.25

 
20.0

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on average assets *
1.06
%
 
1.29

 
1.36

 
1.42

 
1.34

 
(28
)bps
 
Return on average common equity *
10.98

 
14.25

 
13.95

 
15.39

 
14.62

 
(364
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding, basic
160,927

 
116,303

 
117,241

 
118,397

 
118,666

 
35.6
 %
 
Weighted average common shares outstanding, diluted
162,760

 
116,986

 
118,095

 
119,139

 
119,321

 
36.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 nm - not meaningful
 
 
 
 
 
 
 
 
 
 
 
 
 bps - basis points
 
 
 
 
 
 
 
 
 
 
 
 
* - ratios are annualized
 
 
 
 
 
 
 
 
 
 
 





Synovus
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
BALANCE SHEET DATA
 
March 31, 2019
 
December 31, 2018
 
March 31, 2018
 
 
 
 
 
 
 
 
 
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(In thousands, except share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ASSETS
 
 
 
 
 
 
 
Cash and due from banks
 
$
519,681

 
468,426

 
348,027

 
Interest-bearing funds with Federal Reserve Bank
 
688,470

 
641,476

 
636,947

 
Interest earning deposits with banks
 
24,147

 
19,841

 
16,851

 
Federal funds sold and securities purchased under resale agreements
 
33,627

 
13,821

 
57,192

 
Cash and cash equivalents
 
1,265,925

 
1,143,564

 
1,059,017

 
 
 
 
 
 
 
 
 
Mortgage loans held for sale, at fair value
 
55,970

 
37,129

 
50,439

 
Investment securities available for sale, at fair value
 
6,808,191

 
3,991,632

 
3,990,978

 
 
 
 
 
 
 
 
 
Loans
 
35,634,501

 
25,946,573

 
24,883,037

 
Allowance for loan losses
 
(257,036
)
 
(250,555
)
 
(257,764
)
 
Loans, net
 
35,377,465

 
25,696,018

 
24,625,273

 
 
 
 
 
 
 
 
 
Cash surrender value of bank-owned life insurance
 
761,098

 
554,134

 
543,684

 
Premises and equipment, net
 
479,965

 
434,307

 
424,342

 
Goodwill
 
480,215

 
57,315

 
57,315

 
Other intangible assets
 
74,683

 
9,875

 
10,750

 
Other assets
 
1,300,832

 
745,218

 
739,230

 
Total assets
 
$
46,604,344

 
32,669,192

 
31,501,028

 
 
 
 
 
 
 
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
 
Non-interest-bearing deposits
 
$
9,144,315

 
7,650,967

 
7,381,070

 
Interest-bearing deposits
 
28,930,875

 
19,069,355

 
18,872,437

 
 
 
 
 
 
 
 
 
Total deposits
 
38,075,190

 
26,720,322

 
26,253,507

 
 
 
 
 
 
 
 
 
Federal funds purchased and securities sold under repurchase agreements
 
314,383

 
237,692

 
185,531

 
Other short-term borrowings
 
853,000

 
650,000

 

 
Long-term debt
 
2,106,037

 
1,657,157

 
1,856,392

 
Other liabilities
 
683,662

 
270,419

 
249,103

 
Total liabilities
 
42,032,272

 
29,535,590

 
28,544,533

 
 
 
 
 
 
 
 
 
Shareholders' equity:
 

 

 
 
 
Series C Preferred Stock - no par value; 5,200,000 outstanding at March 31, 2018
 

 

 
125,980

 
Series D Preferred Stock - no par value. Authorized 100,000,000 shares; 8,000,000 shares issued and outstanding at March 31, 2019 and December 31, 2018
 
195,140

 
195,140

 

 
Common stock - $1.00 par value. Authorized 342,857,143 shares; 165,929,349 issued at March 31, 2019, 143,300,449 issued at December 31, 2018, and 143,017,301 issued at March 31, 2018; 157,454,007 outstanding at March 31, 2019, 115,865,510 outstanding at December 31, 2018, and 118,702,497 outstanding at March 31, 2018
 
165,929

 
143,300

 
143,017

 
Additional paid-in capital
 
3,782,847

 
3,060,561

 
3,039,757

 
Treasury stock, at cost – 8,475,342 shares at March 31, 2019, 27,434,939 shares at December 31, 2018, and 24,314,804 shares at March 31, 2018
 
(319,898
)
 
(1,014,746
)
 
(866,407
)
 
Accumulated other comprehensive loss, net
 
(18,342
)
 
(94,420
)
 
(107,777
)
 
Retained earnings
 
766,396

 
843,767

 
621,925

 
Total shareholders’ equity
 
4,572,072

 
3,133,602

 
2,956,495

 
Total liabilities and shareholders' equity
 
$
46,604,344

 
32,669,192

 
31,501,028








Synovus
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
AVERAGE BALANCES AND YIELDS/RATES (1)
 
 
 
 
 
 
 
 
(Unaudited)
 
 
 
 
 
 
 
 
(Dollars in thousands)
 
 
 
 
 
 
 
 
 
 
2019
 
2018
 
 
 
First
 
Fourth
Third
Second
First
 
 
 
Quarter
 
Quarter
Quarter
Quarter
Quarter
 
Interest Earning Assets
 
 
 
 
 
 
 
 
Taxable investment securities (2)
 
$
6,515,561

 
4,073,685

4,061,239

4,077,564

4,097,162

 
Yield
 
3.05
%
 
2.45

2.38

2.34

2.34

 
Tax-exempt investment securities(2)(4)
 
$
20,638

 

89

115

140

 
Yield (taxable equivalent)
 
4.45
%
 

5.91

6.87

6.57

 
Trading account assets(5)
 
$
2,049

 
7,493

16,646

23,772

8,167

 
Yield
 
1.30
%
 
1.90

2.52

2.79

2.66

 
Commercial loans(3)(4)
 
$
26,140,672

 
19,150,252

19,025,830

18,857,271

18,963,515

 
Yield
 
5.16
%
 
5.13

4.98

4.85

4.64

 
Consumer loans(3)
 
$
9,180,679

 
6,476,026

6,298,643

6,092,899

5,899,015

 
Yield
 
5.10
%
 
4.85

4.80

4.76

4.71

 
Allowance for loan losses
 
$
(252,815
)
 
(251,098
)
(251,684
)
(257,966
)
(251,635
)
 
Loans, net(3)
 
$
35,068,536

 
25,375,180

25,072,789

24,692,204

24,610,895

 
Yield
 
5.17
%
 
5.11

4.99

4.88

4.70

 
Mortgage loans held for sale
 
$
34,913

 
36,477

49,030

50,366

38,360

 
Yield
 
4.48
%
 
4.79

4.71

4.42

3.95

 
Federal funds sold, due from Federal Reserve Bank, and other short-term investments
 
$
679,477

 
641,832

544,704

724,537

516,575

 
Yield
 
2.45
%
 
2.20

1.90

1.77

1.48

 
Federal Home Loan Bank and Federal Reserve Bank Stock(5)
 
$
211,408

 
162,369

163,568

165,845

177,381

 
Yield
 
4.82
%
 
4.31

4.41

4.63

3.39

 
Total interest earning assets
 
$
42,532,582

 
30,297,036

29,908,065

29,734,403

29,448,680

 
Yield
 
4.80
%
 
4.69

4.58

4.47

4.31

 
Interest-Bearing Liabilities
 
 
 
 
 
 
 
 
Interest-bearing demand deposits
 
$
6,393,304

 
4,692,804

4,701,204

5,001,826

5,032,000

 
Rate
 
0.68
%
 
0.41

0.38

0.35

0.31

 
Money Market accounts
 
$
10,244,556

 
8,050,732

7,936,621

7,791,107

7,561,554

 
Rate
 
1.18
%
 
0.89

0.72

0.55

0.43

 
Savings deposits
 
$
901,059

 
815,588

824,935

829,800

811,587

 
Rate
 
0.06
%
 
0.04

0.03

0.03

0.03

 
Time deposits under $100,000
 
$
2,238,568

 
1,242,811

1,205,987

1,161,890

1,143,780

 
Rate
 
1.24
%
 
1.16

0.99

0.82

0.71

 
Time deposits over $100,000
 
$
6,211,067

 
2,478,649

2,273,582

2,021,084

1,895,545

 
Rate
 
1.60
%
 
1.67

1.46

1.22

1.02

 
Non-maturing brokered deposits
 
$
937,629

 
349,480

358,277

262,976

424,118

 
Rate
 
2.60
%
 
2.46

2.10

1.94

1.14

 
Brokered time deposits
 
$
1,845,819

 
1,275,276

1,414,700

1,659,941

1,527,793

 
Rate
 
2.13
%
 
2.03

1.94

1.85

1.75

 
Total interest-bearing deposits
 
$
28,772,002

 
18,905,340

18,715,306

18,728,624

18,396,377

 
Rate
 
1.24
%
 
0.96

0.83

0.70

0.58

 
Federal funds purchased and securities sold under repurchase agreements
 
$
233,076

 
194,370

230,504

207,655

202,226

 
Rate
 
0.22
%
 
0.18

0.25

0.35

0.21

 
Other short-term borrowings
 
$
517,456

 
112,228

146,794

3,024

394,056

 
Rate
 
2.58
%
 
2.51

2.12

2.84

1.52

 
Long-term debt
 
$
1,983,910

 
1,657,022

1,656,743

1,852,094

1,733,938

 
Rate
 
3.33
%
 
3.06

2.87

2.66

2.51

 
Total interest-bearing liabilities
 
$
31,506,444

 
20,868,960

20,749,347

20,791,397

20,726,597

 
Rate
 
1.38
%
 
1.12

0.99

0.87

0.76

 
Non-interest-bearing demand deposits
 
$
9,054,949

 
8,014,761

7,672,006

7,539,451

7,391,695

 
Cost of funds
 
1.07
%
 
0.81

0.73

0.64

0.56

 
Net interest margin
 
3.78
%
 
3.92

3.89

3.86

3.78

 
Taxable equivalent adjustment 
 
$
630

 
181

136

120

116

 
 
 
 
 
 
 
 
 
 
(1) Yields and rates are annualized.
 
 
 
 
 
 
 
 
(2) Excludes net unrealized gains and losses.
 
 
 
 
 
 
 
 
(3) Average loans are shown net of unearned income. Non-performing loans are included.
 
 
 
(4) Reflects taxable-equivalent adjustments, using the statutory federal income tax rate of 21%, in adjusting interest on tax-exempt loans and investment securities to a taxable-equivalent basis.
 
(5) Included as a component of other assets on the consolidated balance sheet.





Synovus
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LOANS OUTSTANDING BY TYPE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Loans
 
Total Originated Loans
 
Total Acquired Loans (1)
 
Total Loans
 
Linked Quarter
 
Total Loans
 
Year/Year
Loan Type
 
March 31, 2019
 
March 31, 2019
 
March 31, 2019
 
December 31, 2018
 
% Change
 
March 31, 2018
 
% Change
Commercial, Financial, and Agricultural
 
$
9,547,816

 
7,661,252

 
1,886,564

 
7,449,698

 
28.2
 %
 
$
7,191,531

 
32.8
 %
Owner-Occupied
 
6,560,681

 
5,375,678

 
1,185,003

 
5,331,508

 
23.1

 
4,910,386

 
33.6

Total Commercial & Industrial
 
16,108,497

 
13,036,930

 
3,071,567

 
12,781,206

 
26.0

 
12,101,917

 
33.1

 
 
 
 
 
 
 
 
 
 


 
 
 
 
Multi-Family
 
2,077,666

 
1,242,076

 
835,590

 
1,208,033

 
72.0

 
1,479,573

 
40.4

Hotels
 
1,179,395

 
704,057

 
475,338

 
704,319

 
67.5

 
751,232

 
57.0

Office Buildings
 
2,211,901

 
1,498,491

 
713,410

 
1,451,048

 
52.4

 
1,464,473

 
51.0

Shopping Centers
 
1,654,531

 
870,231

 
784,300

 
808,540

 
104.6

 
782,580

 
111.4

Warehouses
 
771,007

 
585,699

 
185,308

 
627,353

 
22.9

 
583,645

 
32.1

Other Investment Property
 
1,022,280

 
820,391

 
201,889

 
761,658

 
34.2

 
557,547

 
83.4

Total Investment Properties
 
8,916,780

 
5,720,945

 
3,195,835

 
5,560,951

 
60.3

 
5,619,050

 
58.7

 
 
 
 
 
 
 
 
 
 


 
 
 
 
1-4 Family Construction
 
215,881

 
172,631

 
43,250

 
174,259

 
23.9

 
188,939

 
14.3

1-4 Family Investment Mortgage
 
549,120

 
485,168

 
63,952

 
505,611

 
8.6

 
569,965

 
(3.7
)
Total 1-4 Family Properties
 
765,001

 
657,799

 
107,202

 
679,870

 
12.5

 
758,904