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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

July 16, 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))

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of each exchange on which registered
Common Stock, $1.00 Par Value
SNV
New York Stock Exchange
Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series D
SNV-PrD
New York Stock Exchange
Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series E
SNV-PrE
New York Stock Exchange

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 July 16, 2019, Synovus Financial Corp. (the “Company”) issued a press release announcing the Company’s financial results for the three and six month period ended June 30, 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 and six month period June 30, 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 July 16, 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 July 16, 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: July 16, 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
398747642_synovusa03.jpg
Media Contact
 
Investor Contact
Lee Underwood
 
Steve Adams
Media Relations
 
Investor Relations
(706) 644-0528
 
(706) 641-6462

Synovus Announces Earnings for the Second Quarter 2019
Diluted Earnings per Share of $0.96, up 5.5% vs. $0.91 in 2Q18
Adjusted Diluted Earnings per Share of $1.00, up 8.4% vs. $0.92 in 2Q18

COLUMBUS, Ga., July 16, 2019 - Synovus Financial Corp. (NYSE: SNV) today reported financial results for the quarter ended June 30, 2019.

Second Quarter 2019 Highlights
Diluted EPS of $0.96; adjusted diluted EPS of $1.00, up 1.5% sequentially and 8.4% year over year.
Period-end loan growth of $504.1 million, or 5.7% annualized, from prior quarter.
Average non-interest-bearing deposits excluding public funds up $312.4 million or 15.1% sequentially.
Non-interest income growth of 13.1% sequentially, or 15.0% on an adjusted basis.
Key credit metrics continued to improve, with non-performing asset (NPA) and non-performing loan ratios declining 5 and 6 basis points, respectively.
Completed integration of all Florida Community Bank (FCB) systems, customers, branches, and branding.
Increased the 2019 share repurchase authorization from $400 million to $725 million.
Announced and priced a public offering of $350 million of Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series E.

Second Quarter Summary
 
Reported
 
Adjusted
(dollars in thousands)
2Q19
 
1Q19
 
2Q18
 
2Q19
 
1Q19
 
2Q18
Net income available to common shareholders
$
153,034

 
$
117,036

 
$
108,622

 
$
158,892

 
$
160,155

 
$
109,824

Diluted earnings per share
0.96

 
0.72

 
0.91

 
1.00

 
0.98

 
0.92

Total loans
36,138,561

 
35,634,501

 
25,134,056

 
N/A

 
N/A

 
N/A

Total deposits
37,966,722

 
38,075,190

 
26,442,688

 
N/A

 
N/A

 
N/A

Total revenues
487,880

 
477,183

 
358,084

 
488,270

 
476,250

 
359,417

Return on avg assets
1.35
%
 
1.06
%
 
1.42
%
 
1.40
%
 
1.45
%
 
1.43
%
Return on avg common equity
14.32

 
10.98

 
15.39

 
14.87

 
15.03

 
15.56

Return on avg tangible common equity
16.66

 
12.88

 
15.80

 
17.29

 
17.52

 
15.97

Net interest margin
3.69

 
3.78

 
3.86

 
3.48

 
3.59

 
N/A

Efficiency ratio
54.14

 
61.28

 
56.99

 
52.08

 
50.24

 
56.41

Net charge-off ratio
0.13

 
0.19

 
0.29

 
N/A

 
N/A

 
N/A

NPA ratio
0.39

 
0.44

 
0.50

 
N/A

 
N/A

 
N/A





“Our results in the second quarter reflect the strength of our core business and our geography, with broad-based loan growth and solid credit and profitability metrics,” said Kessel D. Stelling, Synovus chairman and CEO.  “We are pleased with the early wins in our expanded Florida footprint as we introduce our broader capabilities to new customers and prospects.  We not only expect continued successes in that region, but across our entire footprint, as our core and specialty bankers work together to serve customers.  The real and sustaining competitive differentiator for our company remains our talented team that is passionate about the important work they do and proud to represent our brand of relationship-centered banking and financial services in our markets.”

Balance Sheet

Loans**
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(dollars in millions)
2Q19
 
1Q19
 
Linked Quarter Change
 
Linked Quarter % Change*
 
2Q18
 
Year/Year Change
 
Year/Year % Change
Commercial & industrial
$
16,247.5

 
$
16,127.6

 
$
119.9

 
3.0
 %
 
$
12,275.5

 
$
3,972.1

 
32.4
%
Commercial real estate
10,348.4

 
10,268.4

 
80.0

 
3.1

 
6,644.2

 
3,704.3

 
55.8

Consumer
9,566.1

 
9,262.1

 
304.0

 
13.2

 
6,237.1

 
3,329.0

 
53.4

Unearned income
(23.6
)
 
(23.7
)
 
0.1

 
(1.7
)
 
(22.7
)
 
(0.9
)
 
3.8

Total loans
$
36,138.6

 
$
35,634.5

 
$
504.1

 
5.7
 %
 
$
25,134.1

 
$
11,004.5

 
43.8
%
* 
Annualized
** 
Amounts may not total due to rounding

Total loans ended the quarter at $36.14 billion, up $504.1 million or 5.7% annualized from the previous quarter, with growth across all categories.
Steady growth in commercial and industrial loans, with strong contributions from a number of markets and teams.
Commercial real estate loan growth led by investment properties, including multi-family, hotel and shopping centers, which grew a combined $121.2 million, partially offset by declines in office and warehouse.
Continued positive trends in the consumer category, driven by lending partnerships, up $211.9 million, and by mortgage and HELOC growth, up $42.1 million and $44.5 million, respectively.


Deposits**
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(dollars in millions)
2Q19
 
1Q19
 
Linked Quarter Change
 
Linked Quarter % Change*
 
2Q18
 
Year/Year Change
 
Year/Year % Change
Non-interest-bearing DDA
$
8,577.6

 
$
8,440.5

 
$
137.1

 
6.5
 %
 
$
6,820.0

 
$
1,757.6

 
25.8
%
Interest-bearing DDA
4,847.2

 
4,911.2

 
(64.0
)
 
(5.2
)
 
4,060.3

 
786.9

 
19.4

Money market
8,952.9

 
8,912.5

 
40.3

 
1.8

 
7,388.2

 
1,564.7

 
21.2

Savings
891.2

 
903.8

 
(12.6
)
 
(5.6
)
 
822.6

 
68.6

 
8.3

Public funds
4,351.3

 
4,630.0

 
(278.7
)
 
(24.1
)
 
2,224.6

 
2,126.7

 
95.6

Time deposits
7,343.0

 
7,568.1

 
(225.1
)
 
(11.9
)
 
3,275.9

 
4,067.0

 
124.1

Brokered deposits
3,003.5

 
2,709.0

 
294.5

 
43.6

 
1,851.0

 
1,152.5

 
62.3

Total deposits
$
37,966.7

 
$
38,075.2

 
$
(108.5
)
 
(1.1
)%
 
$
26,442.7

 
$
11,524.0

 
43.6
%
* 
Annualized
** 
Amounts may not total due to rounding

Total deposits ended the quarter at $37.97 billion, down $108.5 million or 1.1% annualized from first quarter 2019.



Managed deposit cost and mix during the quarter, with growth in core transaction deposits of $100.8 million and a lower composition of public funds and CDs. Core transaction deposits consist of non-interest bearing, NOW/savings, and money market deposits excluding public funds.
The decline in public funds and CDs was partially offset by growth in brokered deposits of $294.5 million, which replaced maturing CDs at shorter durations and lower rates.
On an average basis, non-interest bearing demand deposit accounts grew $249.9 million, or 11.1% annualized over the first quarter. Excluding the impact of public funds deposit runoff, non-interest bearing demand deposits increased $312.4 million from the previous quarter.
The loan to deposit ratio was 95.2%, up from 93.6% in the prior quarter.

Income Statement Summary**
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(in thousands, except per share data)
2Q19
 
1Q19
 
Linked Quarter Change
 
Linked Quarter % Change
 
2Q18
 
Year/Year Change
 
Year/Year % Change
Net interest income
$
397,262

 
$
397,175

 
$
87

 
nm

 
$
284,577

 
$
112,685

 
39.6
%
Non-interest income
89,807

 
79,378

 
10,429

 
13.1
 %
 
73,387

 
16,420

 
22.4

Non-interest expense
264,126

 
292,410

 
(28,284
)
 
(9.7
)
 
204,057

 
60,069

 
29.4

Provision expense
12,119

 
23,569

 
(11,450
)
 
(48.6
)
 
11,790

 
329

 
2.8

Income before taxes
$
210,824

 
$
160,574

 
$
50,250

 
31.3
 %
 
$
142,117

 
$
68,707

 
48.3
%
Income tax expense
54,640

 
40,388

 
14,252

 
35.3

 
30,936

 
23,704

 
76.6

Preferred stock dividends
3,150

 
3,150

 

 
nm

 
2,559

 
591

 
23.1

Net income available to common shareholders
$
153,034

 
$
117,036

 
$
35,998

 
30.8
 %
 
$
108,622

 
$
44,412

 
40.9
%
Weighted average common shares outstanding, diluted
159,077

 
162,760

 
(3,683
)
 
(2.3
)
 
119,139

 
39,938

 
33.5

Diluted earnings per share
$
0.96

 
$
0.72

 
$
0.24

 
33.8
 %
 
$
0.91

 
$
0.05

 
5.5
%
Adjusted diluted earnings per share
$
1.00

 
$
0.98

 
$
0.02

 
1.5
 %
 
$
0.92

 
$
0.08

 
8.4
%
** 
Amounts may not total due to rounding
nm - not meaningful

Core Performance

Total revenues were $487.9 million in the second quarter, up $10.7 million or 2.2% from the previous quarter.
Net interest income was flat compared to the prior quarter.
Net interest margin was 3.69%, down 9 basis points from the previous quarter; includes $21.0 million or 21 basis points of purchase accounting adjustments (PAA) compared to $18.8 million or 19 basis points in first quarter.
The sequential decrease in net interest margin was driven by the declining rate environment and full quarter effect of subordinated debt that was issued in the first quarter.
Excluding the impact of PAA, earning asset yields declined 3 basis points and the effective cost of funds increased 8 basis points.
Non-interest income increased $10.4 million or 13.1% from the prior quarter and $16.4 million or 22.4% compared to second quarter 2018.
The sequential increase was primarily attributable to a $3.5 million, or 70.9%, increase in capital markets income and a $2.8 million, or 56.4%, increase in mortgage banking income.
Non-interest expense declined $28.3 million or 9.7% due to lower merger-related expenses, and adjusted non-interest expense increased $14.1 million or 5.8% from the prior quarter.
The increase in adjusted expenses resulted mainly from higher producer commissions, increased servicing fees related to growth in our lending partnership portfolio, and higher consulting fees tied to various business and technology initiatives.
Employment taxes were seasonally lower by $3.3 million.



Provision expense was $12.1 million, an $11.5 million decrease from the previous quarter, primarily due to lower charge-off activity.
The effective tax rate was 25.9% for the quarter.

Capital Ratios
 
 
 
 
 
 
 
 
2Q19
 
1Q19
 
2Q18
Common equity Tier 1 capital (CET1) ratio
9.61
%
(1) 
9.52
%
 
10.12
%
Tier 1 capital ratio
10.09

(1) 
10.01

 
11.25

Total risk-based capital ratio
12.11

(1) 
12.06

 
13.08

Tier 1 leverage ratio
8.92

(1) 
8.81

 
10.03

Tangible common equity ratio(2)
8.56

 
8.30

 
8.77

(1) 
Ratios are preliminary
(2) 
Non-GAAP measure; see applicable reconciliation

Capital

Capital ratios remained strong and all increased slightly during the quarter.
During the second quarter 2019, Synovus announced an increase in the share repurchase authorization from $400 million to $725 million, and completed repurchases of $25.0 million.
Year-to-date share repurchases total $345.0 million and share count has declined by 8.0% since January 1, 2019.
During the second quarter 2019, Synovus announced and priced a public offering of $350 million of Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series E. This transaction closed on July 1 and is not included in second quarter results.



Second Quarter Earnings Conference Call
Synovus will host an earnings highlights conference call at 8:30 a.m. EDT on July 16, 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 297 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 “Most Reputable Banks” by American Banker and the Reputation Institute. Synovus is on the web at synovus.com, and on Twitter, Facebook, LinkedIn, and Instagram.


Forward-Looking Statements
This press release and certain of our other filings with the Securities and Exchange Commission contain statements that constitute “forward-looking statements” within the meaning of, and subject to the protections of, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are forward-looking statements. You can identify these forward-looking statements through Synovus’ use of words such as “believes,” “anticipates,” “expects,” “may,” “will,” “assumes,” “should,” “predicts,” “could,” “would,” “intends,” “targets,” “estimates,” “projects,” “plans,” “potential” and other similar words and expressions of the future or otherwise regarding the outlook for Synovus’ future business and financial performance and/or the performance of the banking industry and economy in general. These forward-looking statements include, among others, our expectations regarding 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 ratio; and common equity Tier 1 capital (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-FTE; 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 capital 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 ratio and common equity Tier 1 capital (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)
2Q19
 
1Q19
 
2Q18
Adjusted non-interest income
 
 
 
 
 
Total non-interest income
$
89,807

 
$
79,378

 
$
73,387

Add/subtract: Investment securities losses (gains), net
1,845

 
(75
)
 
1,296

Subtract/add: (Increase) decrease in fair value of private equity investments, net
(1,455
)
 
(858
)
 
37

Adjusted non-interest income
$
90,197

 
$
78,445

 
$
74,720

 
 
 
 
 
 
Adjusted non-interest expense
 
 
 
 
 
Total non-interest expense
$
264,126

 
$
292,410

 
$
204,057

Subtract: Merger-related expense
(7,401
)
 
(49,738
)
 

Add: Litigation settlement/contingency expense

 

 
1,400

Subtract: Restructuring charges, net
(18
)
 
(19
)
 
(103
)
Subtract: Fair value adjustment to Visa derivative
$

 
$

 
$
(2,328
)
Adjusted non-interest expense
$
256,707

 
$
242,653

 
$
203,026

 
 
 
 
 
 
Adjusted total revenues and adjusted tangible efficiency ratio
 
 
 
 
 
Adjusted non-interest expense
$
256,707

 
$
242,653

 
$
203,026

Subtract: Amortization of intangibles
(2,410
)
 
(3,392
)
 
(292
)
Adjusted tangible non-interest expense
$
254,297


$
239,261


$
202,734

 
 
 
 
 
 
Net interest income
$
397,262

 
$
397,175

 
$
284,577

Add: Tax equivalent adjustment
811

 
630

 
120

Add: Total non-interest income
89,807

 
79,378

 
73,387

Total FTE revenues
487,880

 
477,183

 
358,084

Add/subtract: Investment securities losses (gains), net
1,845

 
(75
)
 
1,296

Subtract/add: (Increase) decrease in fair value of private equity investments, net
(1,455
)
 
(858
)
 
37

Adjusted total revenues
$
488,270

 
$
476,250

 
$
359,417

Efficiency ratio-FTE
54.14
%
 
61.28
%
 
56.99
%
Adjusted tangible efficiency ratio
52.08


50.24


56.41

 
 
 
 
 
 














Reconciliation of Non-GAAP Financial Measures, continued
 
 
 
 
 
 
 
 
 
 
 
(in thousands, except per share data)
2Q19
 
1Q19
 
2Q18
Adjusted Return on Average Assets
 
 
 
 
 
Net income
$
156,184

 
$
120,186

 
$
111,181

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

 

 
(608
)
Add: Merger-related expense
7,401

 
49,738

 

Subtract: Litigation settlement/contingency expense

 

 
(1,400
)
Add: Restructuring charges, net
18

 
19

 
103

Add: Fair value adjustment to Visa derivative

 

 
2,328

Add/subtract: Investment securities losses (gains), net
1,845

 
(75
)
 
1,296

Subtract/add: (Increase) decrease in fair value of private equity investments, net
(1,455
)
 
(858
)
 
37

Subtract: Tax effect of adjustments
(1,951
)
 
(5,705
)
 
(554
)
Adjusted net income
$
162,042

 
$
163,305

 
$
112,383

Net income annualized
$
626,452

 
$
487,421

 
$
445,946

Adjusted net income annualized
$
649,949

 
$
662,293

 
$
450,767

Total average assets
$
46,549,432

 
$
45,794,621

 
$
31,502,758

Return on average assets
1.35
%
 
1.06
%
 
1.42
%
Adjusted return on average assets
1.40

 
1.45

 
1.43

 
 
 
 
 
 
Adjusted net income available to common shareholders and adjusted net income per common share, diluted
 
 
 
 
 
Net income available to common shareholders
$
153,034

 
$
117,036

 
$
108,622

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

 

 
(608
)
Add: Merger-related expense
7,401

 
49,738

 

Subtract: Litigation settlement/contingency expense

 

 
(1,400
)
Add: Restructuring charges, net
18

 
19

 
103

Add: Fair value adjustment to Visa derivative

 

 
2,328

Add/subtract: Investment securities losses (gains), net
1,845

 
(75
)
 
1,296

Subtract/add: (Increase) decrease in fair value of private equity investments, net
(1,455
)
 
(858
)
 
37

Subtract: Tax effect of adjustments
(1,951
)
 
(5,705
)
 
(554
)
Adjusted net income available to common shareholders
$
158,892

 
$
160,155

 
$
109,824

Weighted average common shares outstanding, diluted
159,077

 
162,760

 
119,139

Net income per common share, diluted
$
0.96

 
$
0.72

 
$
0.91

Adjusted net income per common share, diluted
1.00

 
0.98

 
0.92

 
 
 
 
 
 





Reconciliation of Non-GAAP Financial Measures, continued
 
 
 
 
 
(dollars in thousands)
2Q19
 
1Q19
 
2Q18
 
 
 
 
 
 
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
$
153,034

 
$
117,036

 
$
108,622

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

 

 
(608
)
Add: Merger-related expense
7,401

 
49,738

 

Subtract: Litigation settlement/contingency expense

 

 
(1,400
)
Add: Restructuring charges, net
18

 
19

 
103

Add: Fair value adjustment to Visa derivative

 

 
2,328

Add/subtract: Investment securities losses (gains), net
1,845

 
(75
)
 
1,296

Subtract/add: (Increase) decrease in fair value of private equity investments, net
(1,455
)
 
(858
)
 
37

Subtract: Tax effect of adjustments
(1,951
)
 
(5,705
)
 
(554
)
Adjusted net income available to common shareholders
$
158,892

 
$
160,155


$
109,824

 
 
 
 
 
 
Adjusted net income available to common shareholders annualized
$
637,314

 
$
649,518

 
$
440,502

Add: Amortization of intangibles
7,250

 
10,317

 
896

Adjusted net income available to common shareholders excluding amortization of intangibles annualized
$
644,564


$
659,835


$
441,398

 
 
 
 
 
 
Net income available to common shareholders annualized
$
613,818

 
$
474,646

 
$
435,682

Add: Amortization of intangibles
7,250

 
10,317

 
896

Net income available to common shareholders excluding amortization of intangibles annualized
$
621,068

 
$
484,963


$
436,578

 
 
 
 
 
 
Total average shareholders' equity less preferred stock
$
4,286,369

 
$
4,321,561

 
$
2,831,368

Subtract: Goodwill
(487,601
)
 
(480,215
)
 
(57,315
)
Subtract: Other intangible assets, net
(69,853
)
 
(75,191
)
 
(10,555
)
Total average tangible shareholders' equity less preferred stock
$
3,728,915

 
$
3,766,155


$
2,763,498

Return on average common equity
14.32
%

10.98
%

15.39
%
Adjusted return on average common equity
14.87


15.03


15.56

Return on average tangible common equity
16.66


12.88


15.80

Adjusted return on average tangible common equity
17.29


17.52


15.97







Reconciliation of Non-GAAP Financial Measures, continued
 
 
 
 
 
 
June 30,
 
March 31,
 
June 30,
(dollars in thousands)
2019
 
2019
 
2018
Tangible Common Equity Ratio
 
 
 
 
 
 
 
 
 
 
 
Total assets
$
47,318,203

 
$
46,604,344

 
$
31,740,305

Subtract: Goodwill
(492,390
)
 
(480,215
)
 
(57,315
)
Subtract: Other intangible assets, net
(61,473
)
 
(74,683
)
 
(10,458
)
Tangible assets
$
46,764,340

 
$
46,049,446

 
$
31,672,532

 
 
 
 
 
 
Total shareholders’ equity
$
4,753,816

 
$
4,572,072

 
$
3,167,694

Subtract: Goodwill
(492,390
)
 
(480,215
)
 
(57,315
)
Subtract: Other intangible assets, net
(61,473
)
 
(74,683
)
 
(10,458
)
Subtract: Preferred Stock, no par value
(195,140
)
 
(195,140
)
 
(321,118
)
Tangible common equity
$
4,004,813

 
$
3,822,034

 
$
2,778,803

Total shareholders’ equity to total assets ratio
10.05
%
 
9.81
%
 
9.98
%
Tangible common equity ratio
8.56

 
8.30

 
8.77

 
 
 
 
 
 

Reconciliation of Non-GAAP Financial Measures, continued
 
 
 
 
 
 
June 30,
 
 
 
 
(dollars in thousands)
2019
 
 
 
 
CET1 capital ratio (fully phased-in)
 
 
 
 
 
CET1 capital
$
3,899,532

 
 
 
 
Total risk-weighted assets
$
40,564,781

 
 
 
 
Total risk-weighted assets (fully phased-in)
$
40,633,187

 
 
 
 
CET1 capital ratio
9.61
%




CET1 capital ratio (fully phased-in)
9.60





 
 
 
 
 
 






(Back To Top)

Section 3: EX-99.2 (EXHIBIT 99.2)

Exhibit
Synovus
 
 
 
 
 
Exhibit 99.2

 
 
 
 
 
 
 
 
 
INCOME STATEMENT DATA
 
 
 
(Unaudited)
 
Six Months Ended
 
(Dollars in thousands, except per share data)
 
June 30,
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2019
 
2018
 
% Change
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
 
$
1,020,970

 
$
642,968

 
58.8
 %
 
Interest expense
 
226,532

 
84,107

 
169.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
 
794,438

 
558,861

 
42.2

 
Provision for loan losses
 
35,688

 
24,566

 
45.3

 
 
 
 
 
 
 
 
 
Net interest income after provision for loan losses
 
758,750

 
534,295

 
42.0

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-interest income:
 
 
 
 
 
 
 
    Service charges on deposit accounts
 
42,853

 
39,938

 
7.3

 
    Fiduciary and asset management fees
 
28,057

 
27,419

 
2.3

 
    Card fees
 
22,037

 
21,032

 
4.8

 
    Brokerage revenue
 
19,431

 
17,085

 
13.7

 
    Capital markets income
 
13,291

 
2,086

 
 nm

 
    Mortgage banking income
 
12,962

 
9,887

 
31.1

 
    Income from bank-owned life insurance
 
10,466

 
7,949

 
31.7

 
    Investment securities losses, net
 
(1,771
)
 
(1,296
)
 
 nm

 
    Increase/(decrease) in fair value of private equity investments, net
 
2,313

 
(3,093
)
 
 nm

 
    Other non-interest income
 
19,546

 
19,426

 
0.6

 
 
 
 
 
 
 
 
 
Total non-interest income
 
169,185

 
140,433

 
20.5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-interest expense:
 
 
 
 
 
 
 
   Salaries and other personnel expense
 
282,436

 
225,583

 
25.2

 
   Net occupancy and equipment expense
 
78,245

 
64,134

 
22.0

 
   Third-party processing expense
 
36,875

 
29,012

 
27.1

 
   Professional fees
 
15,660

 
11,789

 
32.8

 
   FDIC insurance and other regulatory fees
 
14,629

 
13,335

 
9.7

 
   Advertising expense
 
11,045

 
10,312

 
7.1

 
   Merger-related expense
 
57,140

 

 
 nm

 
   Amortization of intangibles
 
5,802

 
583

 
 nm

 
   Other operating expenses
 
54,705

 
44,486

 
23.0

 
 
 
 
 
 
 
 
 
Total non-interest expense
 
556,537

 
399,234

 
39.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income before income taxes
 
371,398

 
275,494

 
34.8

 
Income tax expense
 
95,028

 
61,146

 
55.4

 
 
 
 
 
 
 
 
 
Net income
 
276,370

 
214,348

 
28.9

 
 
 
 
 
 
 
 
 
Less: Preferred stock dividends
 
6,300

 
5,119

 
23.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income available to common shareholders
 
$
270,070

 
$
209,229

 
29.1
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income per common share, basic
 
1.70


1.77

 
(3.9
)%
 
 
 
 
 
 
 
 
 
Net income per common share, diluted
 
1.68


1.75

 
(4.4
)
 
 
 
 
 
 
 
 
 
Cash dividends declared per common share
 
0.60

 
0.50

 
20.0

 
 
 
 
 
 
 
 
 
Return on average assets*
 
1.21
%
 
1.38

 
(17
)bps
 
Return on average common equity*
 
12.65

 
15.01

 
(236
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding, basic
 
159,148

 
118,531

 
34.3
 %
 
Weighted average common shares outstanding, diluted
 
160,908

 
119,229

 
35.0

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





Synovus
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INCOME STATEMENT DATA
 
 
 
 
 
 
 
 
 
 
 
 
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
(In thousands, except per share data)
2019
 
2018
 
Second Quarter
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Second Quarter
 
First Quarter
 
Fourth Quarter
 
Third Quarter
 
Second Quarter
 
'19 vs '18
 
 
 
 
 
 
% Change
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
$
516,131

 
504,839

 
357,394

 
343,942

 
329,834

 
56.5
 %
 
Interest expense
118,869

 
107,664

 
59,461

 
52,323

 
45,257

 
162.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
397,262

 
397,175

 
297,933

 
291,619

 
284,577

 
39.6

 
Provision for loan losses
12,119

 
23,569

 
12,148

 
14,982

 
11,790

 
2.8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income after provision for loan losses
385,143

 
373,606

 
285,785

 
276,637

 
272,787

 
41.2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-interest income:
 
 
 
 
 
 
 
 
 
 
 
 
Service charges on deposit accounts
21,994

 
20,859

 
20,320

 
20,582

 
19,999

 
10.0

 
Fiduciary and asset management fees
14,478

 
13,578

 
13,805

 
13,462

 
13,983

 
3.5

 
Card fees
11,161

 
10,877

 
10,862

 
10,608

 
10,833

 
3.0

 
Brokerage revenue
10,052

 
9,379

 
9,241

 
9,041

 
8,709

 
15.4

 
Capital markets income
8,385

 
4,906

 
1,693

 
836

 
1,118

 
nm

 
Mortgage banking income
7,907

 
5,054

 
3,781

 
5,290

 
4,839

 
63.4

 
Income from bank-owned life insurance
5,176

 
5,290

 
3,682

 
3,771

 
3,733

 
38.7

 
Investment securities (losses)/gains, net
(1,845
)
 
75

 

 

 
(1,296
)
 
nm

 
Increase/(decrease) in fair value of private equity investments, net
1,455

 
858

 
(2,084
)
 
434

 
(37
)
 
nm

 
Other non-interest income
11,044

 
8,502

 
6,691

 
7,644

 
11,506

 
(4.0
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total non-interest income
89,807

 
79,378

 
67,991

 
71,668

 
73,387

 
22.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-interest expense:
 
 
 
 
 
 
 
 
 
 
 
 
Salaries and other personnel expense
143,009

 
139,427

 
113,496

 
114,341

 
111,863

 
27.8

 
Net occupancy and equipment expense
39,851

 
38,394

 
34,260

 
32,088

 
32,654

 
22.0

 
Third-party processing expense
19,118

 
17,758

 
14,803

 
14,810

 
15,067

 
26.9

 
Professional Fees
9,312

 
6,348

 
8,650

 
6,298

 
6,284

 
48.2

 
FDIC insurance and other regulatory fees
7,867

 
6,761

 
4,728

 
6,430

 
6,543

 
20.2

 
Advertising expense
5,923

 
5,123

 
6,834

 
3,735

 
5,220

 
13.5

 
Earnout liability adjustments

 

 

 
11,652

 

 
nm

 
Merger-related expense
7,401

 
49,738

 
3,381

 
6,684

 

 
nm

 
   Amortization of intangibles
2,410

 
3,392

 
292

 
292

 
292

 
nm

 
Other operating expenses
29,235

 
25,469

 
23,478

 
23,967

 
26,134

 
11.9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total non-interest expense
264,126

 
292,410

 
209,922

 
220,297

 
204,057

 
29.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income before income taxes
210,824

 
160,574

 
143,854

 
128,008

 
142,117

 
48.3

 
Income tax expense
54,640

 
40,388

 
38,784

 
18,949

 
30,936

 
76.6

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
156,184

 
120,186

 
105,070

 
109,059

 
111,181

 
40.5

 
 
 
 
 
 
 
 
 
 
 
 


 
Less: Preferred stock dividends and redemption charge
3,150

 
3,150

 
3,151

 
9,729

 
2,559

 
23.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income available to common shareholders
$
153,034

 
117,036

 
101,919

 
99,330

 
108,622

 
40.9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income per common share, basic
$
0.97

 
0.73

 
0.88

 
0.85

 
0.92

 
6.0
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income per common share, diluted
0.96

 
0.72

 
0.87

 
0.84

 
0.91

 
5.5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash dividends declared per common share
0.30

 
0.30

 
0.25

 
0.25

 
0.25

 
20.0

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on average assets *
1.35
%
 
1.06

 
1.29

 
1.36

 
1.42

 
(7
)bps
 
Return on average common equity *
14.32

 
10.98

 
14.25

 
13.95

 
15.39

 
(107
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding, basic
157,389

 
160,927

 
116,303

 
117,241

 
118,397

 
32.9
 %
 
Weighted average common shares outstanding, diluted
159,077

 
162,760

 
116,986

 
118,095

 
119,139

 
33.5

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





Synovus
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
BALANCE SHEET DATA
 
June 30, 2019
 
December 31, 2018
 
June 30, 2018
 
 
 
 
 
 
 
 
 
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(In thousands, except share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ASSETS
 
 
 
 
 
 
 
Cash and due from banks
 
$
549,616

 
$
468,426

 
$
404,080

 
Interest-bearing funds with Federal Reserve Bank
 
531,488

 
641,476

 
613,082

 
Interest earning deposits with banks
 
20,271

 
19,841

 
33,754

 
Federal funds sold and securities purchased under resale agreements
 
49,946

 
13,821

 
40,872

 
Cash and cash equivalents
 
1,151,321

 
1,143,564

 
1,091,788

 
 
 
 
 
 
 
 
 
Investment securities available for sale, at fair value
 
7,007,012

 
3,991,632

 
3,929,962

 
Mortgage loans held for sale, at fair value
 
81,855

 
37,129

 
53,673

 
 
 
 
 
 
 
 
 
Loans
 
36,138,561

 
25,946,573

 
25,134,056

 
Allowance for loan losses
 
(257,376
)
 
(250,555
)
 
(251,725
)
 
Loans, net
 
35,881,185

 
25,696,018

 
24,882,331

 
 
 
 
 
 
 
 
 
Cash surrender value of bank-owned life insurance
 
766,287

 
554,134

 
547,261

 
Premises and equipment, net
 
490,644

 
434,307

 
428,633

 
Goodwill
 
492,390

 
57,315

 
57,315

 
Other intangible assets
 
61,473

 
9,875