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Section 1: 8-K (8-K)

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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

October 22, 2019
Date of Report
(Date of Earliest Event Reported)

Synovus Financial Corp.
(Exact Name of Registrant as Specified in its Charter)

Georgia
1-10312
58-1134883
(State of Incorporation)
(Commission File Number)
(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))

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

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 October 22, 2019, Synovus Financial Corp. (the "Company") issued a press release announcing the Company’s financial results for the three and nine month period ended September 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 nine month period September 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 October 22, 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 October 22, 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: October 22, 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
400533701_synovusa04.jpg
Media Contact
 
Investor Contact
Lee Underwood
 
Steve Adams
Media Relations
 
Investor Relations
(706) 644-0528
 
(706) 641-6462
Synovus Announces Earnings for the Third Quarter 2019
Diluted Earnings per Share of $0.83, down 1.6% vs. $0.84 in 3Q18
Adjusted Diluted Earnings per Share of $0.97, up 2.9% vs. $0.94 in 3Q18

COLUMBUS, Ga., October 22, 2019 - Synovus Financial Corp. (NYSE: SNV) today reported financial results for the quarter ended September 30, 2019.

Third Quarter 2019 Highlights
Diluted EPS of $0.83; adjusted diluted EPS of $0.97, down 2.7% sequentially and up 2.9% year-over-year.
Period-end loan growth of $279.3 million, or 3.1% annualized, from prior quarter.
Non-interest-bearing deposits excluding public funds increased $392.6 million sequentially
or 18.2% annualized.
Net interest margin of 3.69%, unchanged from the previous quarter. Excluding the impact of purchase accounting adjustments (PAA), net interest margin was 3.42%, down 6 basis points from the prior quarter.
Non-interest income declined by $1.0 million from the second quarter but grew $1.1 million or 1.2% sequentially on an adjusted basis.
Credit quality metrics remained solid, with non-performing loan (NPL) ratio declining 2 basis points and the non-performing asset (NPA) ratio increasing 3 basis points.
Repurchased $343.5 million in common stock during the quarter; year-to-date repurchases total $688.5 million of the $725 million repurchase authorization.
Completed $350 million Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series E offering on July 1.
Third Quarter Summary
 
Reported
 
Adjusted
(dollars in thousands)
3Q19
 
2Q19
 
3Q18
 
3Q19
 
2Q19
 
3Q18
Net income available to common shareholders
$
127,435

 
$
153,034

 
$
99,330

 
$
149,732

 
$
158,892

 
$
111,504

Diluted earnings per share
0.83

 
0.96

 
0.84

 
0.97

 
1.00

 
0.94

Total loans
36,417,826

 
36,138,561

 
25,577,116

 
N/A

 
N/A

 
N/A

Total deposits
37,433,070

 
37,966,722

 
26,433,658

 
N/A

 
N/A

 
N/A

Total revenues
491,676

 
487,880

 
363,423

 
494,213

 
488,270

 
362,989

Return on avg assets
1.14
%
 
1.34
%
 
1.36
%
 
1.33
%
 
1.39
%
 
1.47
%
Return on avg common equity
11.36

 
13.90

 
13.95

 
13.35

 
14.43

 
15.66

Return on avg tangible common equity
13.19

 
16.09

 
14.33

 
15.46

 
16.70

 
16.08

Net interest margin
3.69

 
3.69

 
3.89

 
3.42

 
3.48

 
N/A

Efficiency ratio
56.20

 
54.14

 
60.62

 
51.71

 
52.08

 
55.55

Net charge-off ratio
0.22

 
0.13

 
0.24

 
N/A

 
N/A

 
N/A

NPA ratio
0.42

 
0.39

 
0.46

 
N/A

 
N/A

 
N/A




“Our team continues to execute on our strategic priorities, with core transaction deposit growth of $525.5 million, strong funded loan production of $2.6 billion, and solid fee income growth led by our mortgage, wealth, and capital markets teams,” said Kessel D. Stelling, Synovus chairman and CEO. “Credit quality remains strong, and we continue to focus on efficiency and expense management, the crisp execution of our FCB acquisition, talent and technology, and growth in our core business and specialty lines.”
Balance Sheet
Loans**
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(dollars in millions)
3Q19
 
2Q19
 
Linked Quarter Change
 
Linked Quarter % Change*
 
3Q18
 
Year/Year Change
 
Year/Year % Change
Commercial & industrial
$
16,445.3

 
$
16,247.5

 
$
197.7

 
4.8
 %
 
$
12,503.3

 
$
3,942.0

 
31.5
 %
Commercial real estate
10,286.0

 
10,348.4

 
(62.4
)
 
(2.4
)
 
6,712.4

 
3,573.6

 
53.2

Consumer
9,709.2

 
9,566.1

 
143.1

 
5.9

 
6,385.2

 
3,324.0

 
52.1

Unearned income
(22.7
)
 
(23.6
)
 
0.9

 
(15.1
)
 
(23.8
)
 
1.1

 
(4.7
)
Total loans
$
36,417.8

 
$
36,138.6

 
$
279.3

 
3.1
 %
 
$
25,577.1

 
$
10,840.7

 
42.4
 %
* 
Annualized
** 
Amounts may not total due to rounding

Total loans ended the quarter at $36.42 billion, up $279.3 million or 3.1% annualized from the previous quarter.
Total funded loan production in the quarter was approximately $2.6 billion.
Commercial and industrial loans increased $197.7 million from the second quarter, with contributions from middle market, senior housing, health care, premium finance, and ABL teams.
Commercial real estate loans declined by $62.4 million from the prior quarter, as payoff activity accelerated.
Consumer loan growth was broad-based, with meaningful contributions from mortgage, lending partnerships, and HELOC growth.


Deposits**
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(dollars in millions)
3Q19
 
2Q19
 
Linked Quarter Change
 
Linked Quarter % Change*
 
3Q18
 
Year/Year Change
 
Year/Year % Change
Non-interest-bearing DDA
$
8,970.2

 
$
8,577.6

 
$
392.6

 
18.2
 %
 
$
6,936.7

 
$
2,033.5

 
29.3
%
Interest-bearing DDA
4,714.8

 
4,847.2

 
(132.4
)
 
(10.8
)
 
3,943.2

 
771.6

 
19.6

Money market
9,212.1

 
8,952.9

 
259.3

 
11.5

 
7,536.2

 
1,675.9

 
22.2

Savings
897.3

 
891.2

 
6.1

 
2.7

 
816.5

 
80.8

 
9.9

Public funds
3,795.3

 
4,351.3

 
(556.0
)
 
(50.7
)
 
2,024.7

 
1,770.6

 
87.5

Time deposits
6,647.8

 
7,343.0

 
(695.2
)
 
(37.6
)
 
3,492.5

 
3,155.3

 
90.3

Brokered deposits
3,195.5

 
3,003.5

 
192.0

 
25.4

 
1,683.8

 
1,511.7

 
89.8

Total deposits
$
37,433.1

 
$
37,966.7

 
$
(533.7
)
 
(5.6
)%
 
$
26,433.7

 
$
10,999.4

 
41.6
%
* 
Annualized
** 
Amounts may not total due to rounding

Total deposits ended the quarter at $37.43 billion, down $533.7 million or 5.6% annualized from second quarter 2019.
Deposit costs and mix improved in the quarter, with core transaction deposits increasing $525.5 million, while public funds and CDs declined by $556.0 million and $695.2 million, respectively. Core transaction deposits consist of non-interest bearing, NOW/savings, and money market deposits excluding public and brokered funds.
Deposit costs peaked in July; core deposit costs, excluding brokered deposits and PAA, declined 1 basis point from the prior quarter to 0.99%.



On a period-end basis, non-interest bearing demand deposit accounts grew $392.6 million, or 18.2% annualized from the second quarter, while money market accounts increased $259.3 million, or 11.5% sequentially. Brokered deposits increased $192.0 million from the prior quarter.
The loan to deposit ratio for the quarter was 97.3%, up from 95.2% in the prior quarter, and within our targeted range.

Income Statement Summary**
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(in thousands, except per share data)
3Q19
 
2Q19
 
Linked Quarter Change
 
Linked Quarter % Change
 
3Q18
 
Year/Year Change
 
Year/Year % Change
Net interest income
$
402,097

 
$
397,262

 
$
4,835

 
1.2
 %
 
$
291,619

 
$
110,478

 
37.9
 %
Non-interest income
88,760

 
89,807

 
(1,047
)
 
(1.2
)%
 
71,668

 
17,092

 
23.8

Non-interest expense
276,310

 
264,126

 
12,184

 
4.6

 
220,297

 
56,013

 
25.4

Provision expense
27,562

 
12,119

 
15,443

 
127.4

 
14,982

 
12,580

 
84.0

Income before taxes
$
186,985

 
$
210,824

 
$
(23,839
)
 
(11.3
)%
 
$
128,008

 
$
58,977

 
46.1
 %
Income tax expense
51,259

 
54,640

 
(3,381
)
 
(6.2
)
 
18,949

 
32,310

 
170.5

Preferred stock dividends
8,291

 
3,150

 
5,141

 
163.2

 
9,729

 
(1,438
)
 
(14.8
)
Net income available to common shareholders
$
127,435

 
$
153,034

 
$
(25,599
)
 
(16.7
)%
 
$
99,330

 
$
28,105

 
28.3
 %
Weighted average common shares outstanding, diluted
154,043

 
159,077

 
(5,034
)
 
(3.2
)
 
118,095

 
35,948

 
30.4
 %
Diluted earnings per share
$
0.83

 
$
0.96

 
$
(0.13
)
 
(14.0
)%
 
$
0.84

 
$
(0.01
)
 
(1.6
)
Adjusted diluted earnings per share
$
0.97

 
$
1.00

 
$
(0.03
)
 
(2.7
)%
 
$
0.94

 
$
0.03

 
2.9

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

Core Performance

Total revenues were $491.7 million in the third quarter, up $3.8 million from the previous quarter.
Net interest income increased $4.8 million or 1.2% compared to the prior quarter.
Net interest margin was 3.69%, unchanged from the previous quarter, and favorably impacted by $16.1 million of loan accretion, $1.7 million of investment securities accretion, and $11.0 million of deposit premium amortization. Excluding the impact of PAA, net interest margin was 3.42%, down 6 basis points from the prior quarter.
The sequential decrease in net interest margin was driven by an 8 basis points decline in total earning asset yields and a 2 basis points decrease in the effective cost of funds.
Non-interest income decreased $1.0 million or 1.2% from the prior quarter and increased $17.1 million or 23.8% compared to third quarter 2018. Adjusted non-interest income increased $1.1 million or 1.2% from the second quarter and $20.1 million or 28.2% year-over-year.
Capital markets fee income in the quarter was $7.4 million, up $6.2 million from the third quarter of 2018. Mortgage revenues in the quarter were $10.4 million, up $2.4 million or 30.9% from the previous quarter and up $5.1 million or 95.7% year-over-year.
Non-interest expense increased $12.2 million or 4.6% from the second quarter due primarily to a $10.5 million increase in the earnout liability associated with our 2016 Global One acquisition and a $4.6 million loss on early extinguishment of debt. Adjusted non-interest expense increased $1.8 million or 0.7% from the prior quarter.
The increase in adjusted expenses resulted mainly from merit raises and commission expenses, higher occupancy and equipment expenses, amortization of intangibles, and professional expenses.
Provision expense was $27.6 million, a $15.4 million increase from the previous quarter, primarily resulting from charge-offs and the impact of gross loan production.



The effective tax rate was 27.4% for the quarter and included a $4.4 million discrete tax item associated with state tax reform.

Capital Ratios
 
 
 
 
 
 
 
 
3Q19
 
2Q19
 
3Q18
Common equity Tier 1 capital (CET1) ratio
8.96
%
(1) 
9.61
%
 
9.90
%
Tier 1 capital ratio
10.27

(1) 
10.09

 
10.57

Total risk-based capital ratio
12.30

(1) 
12.11

 
12.36

Tier 1 leverage ratio
9.02

(1) 
8.89

 
9.58

Tangible common equity ratio(2)
8.04

 
8.56

 
8.68

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

Capital

Capital ratios remained strong.
As a result of capital actions during the quarter, the Total Risk Based capital ratio increased to 12.30% and the CET1 ratio decreased to 8.96%, consistent with the low end of our operating range.
Repurchased $343.5 million in common stock, or 9.6 million shares, during the quarter; year-to-date repurchases total $688.5 million, or 18.8 million shares, of the $725 million repurchase authorization.
Share count has declined by 10.7% from January 1, 2019.
Completed $350 million Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series E offering on
July 1.

Third Quarter Earnings Conference Call
Synovus will host an earnings highlights conference call at 8:30 a.m. EDT on October 22, 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 $48 billion in assets. Synovus provides commercial and retail banking, investment, and mortgage services through 298 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 our future operating and financial performance, including our outlook for future growth; our expectations regarding net interest income and net interest margin; expectations on our growth strategy, strategic transactions, expense initiatives, capital management and future profitability; expectations on credit quality and performance; and the assumptions



underlying our expectations. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve known and unknown risks and uncertainties which may cause the actual results, performance or achievements of Synovus to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are based on the information known to, and current beliefs and expectations of, Synovus’ management and are subject to significant risks and uncertainties. Actual results may differ materially from those contemplated by such forward-looking statements. A number of factors could cause actual results to differ materially from those contemplated by the forward-looking statements in this press release. Many of these factors are beyond Synovus’ ability to control or predict.

These forward-looking statements are based upon information presently known to Synovus’ management and are inherently subjective, uncertain and subject to change due to any number of risks and uncertainties, including, without limitation, the risks and other factors set forth in Synovus’ filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 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 gains on sales 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)
3Q19
 
2Q19
 
3Q18
Adjusted non-interest income
 
 
 
 
 
Total non-interest income
$
88,760

 
$
89,807

 
$
71,668

Add: Investment securities losses, net
3,731

 
1,845

 

Subtract: Gain on sale and fair value increase of private equity investments
(1,194
)
 
(1,455
)
 
(434
)
Adjusted non-interest income
$
91,297

 
$
90,197

 
$
71,234

 
 
 
 
 
 
Adjusted non-interest expense
 
 
 
 
 
Total non-interest expense
$
276,310

 
$
264,126

 
$
220,297

Subtract: Earnout liability adjustments
(10,457
)
 

 
(11,652
)
Subtract: Merger-related expense
(353
)
 
(7,401
)
 
(6,684
)
Add/subtract: Restructuring charges, net
66

 
(18
)
 
(21
)
Subtract: Valuation adjustment to Visa derivative
(2,500
)
 

 

Subtract: Loss on early extinguishment of debt, net
(4,592
)
 

 

Adjusted non-interest expense
$
258,474

 
$
256,707

 
$
201,940

 
 
 
 
 
 
Adjusted total revenues and adjusted tangible efficiency ratio
 
 
 
 
 
Adjusted non-interest expense
$
258,474

 
$
256,707

 
$
201,940

Subtract: Amortization of intangibles
(2,901
)
 
(2,410
)
 
(292
)
Adjusted tangible non-interest expense
$
255,573


$
254,297


$
201,648

 
 
 
 
 
 
Net interest income
$
402,097

 
$
397,262

 
$
291,619

Add: Tax equivalent adjustment
819

 
811

 
136

Add: Total non-interest income
88,760

 
89,807

 
71,668

Total FTE revenues
491,676

 
487,880

 
363,423

Add: Investment securities losses, net
3,731

 
1,845

 

Subtract: Gain on sale and fair value increase of private equity investments
(1,194
)
 
(1,455
)
 
(434
)
Adjusted total revenues
$
494,213

 
$
488,270

 
$
362,989

Efficiency ratio-FTE
56.20
%
 
54.14
%
 
60.62
%
Adjusted tangible efficiency ratio
51.71


52.08


55.55

 
 
 
 
 
 














Reconciliation of Non-GAAP Financial Measures, continued
 
 
 
 
 
 
 
 
 
 
 
(in thousands, except per share data)
3Q19
 
2Q19
 
3Q18
Adjusted Return on Average Assets
 
 
 
 
 
Net income
$
135,726

 
$
156,184

 
$
109,059

Add/subtract: Income tax expense (benefit), net related to State Tax Reform and SAB 118
4,402

 

 
(9,865
)
Add: Earnout liability adjustments
10,457

 

 
11,652

Add: Merger-related expense
353

 
7,401

 
6,684

Subtract/add: Restructuring charges, net
(66
)
 
18

 
21

Add: Valuation adjustment to Visa derivative
2,500

 

 

Add: Loss on early extinguishment of debt, net
4,592

 

 

Add: Investment securities losses, net
3,731

 
1,845

 

Subtract: Gain on sale and fair value increase of private equity investments
(1,194
)
 
(1,455
)
 
(434
)
Subtract/add: Tax effect of adjustments
(2,478
)
 
(1,951
)
 
96

Adjusted net income
$
158,023

 
$
162,042

 
$
117,213

Net income annualized
$
538,478

 
$
626,452

 
$
432,680

Adjusted net income annualized
$
626,939

 
$
649,949

 
$
465,030

Total average assets
$
47,211,026

 
$
46,679,769

 
$
31,725,604

Return on average assets
1.14
%
 
1.34
%
 
1.36
%
Adjusted return on average assets
1.33

 
1.39

 
1.47

 
 
 
 
 
 
Adjusted net income available to common shareholders and adjusted net income per common share, diluted
 
 
 
 
 
Net income available to common shareholders
$
127,435

 
$
153,034

 
$
99,330

Add/subtract: Income tax expense (benefit), net related to State Tax Reform and SAB 118
4,402

 

 
(9,865
)
Add: Earnout liability adjustments
10,457

 

 
11,652

Add: Preferred stock redemption charge

 

 
4,020

Add: Merger-related expense
353

 
7,401

 
6,684

Subtract/add: Restructuring charges, net
(66
)
 
18

 
21

Add: Valuation adjustment to Visa derivative
2,500

 

 

Add: Loss on early extinguishment of debt, net
4,592

 

 

Add: Investment securities losses, net
3,731

 
1,845

 

Subtract: Gain on sale and fair value increase of private equity investments
(1,194
)
 
(1,455
)
 
(434
)
Subtract/add: Tax effect of adjustments
(2,478
)
 
(1,951
)
 
96

Adjusted net income available to common shareholders
$
149,732

 
$
158,892

 
$
111,504

Weighted average common shares outstanding, diluted
154,043

 
159,077

 
118,095

Net income per common share, diluted
$
0.83

 
$
0.96

 
$
0.84

Adjusted net income per common share, diluted
0.97

 
1.00

 
0.94

 
 
 
 
 
 





Reconciliation of Non-GAAP Financial Measures, continued
 
 
 
 
 
(dollars in thousands)
3Q19
 
2Q19
 
3Q18
 
 
 
 
 
 
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
$
127,435

 
$
153,034

 
$
99,330

Add/subtract: Income tax expense (benefit), net related to State Tax Reform and SAB 118
4,402

 

 
(9,865
)
Add: Earnout liability adjustments
10,457

 

 
11,652

Add: Preferred stock redemption charge

 

 
4,020

Add: Merger-related expense
353

 
7,401

 
6,684

Subtract/add: Restructuring charges, net
(66
)
 
18

 
21

Add: Valuation adjustment to Visa derivative
2,500

 

 

Add: Loss on early extinguishment of debt, net
4,592

 

 

Add: Investment securities losses, net
3,731

 
1,845

 

Subtract: Gain on sale and fair value increase of private equity investments
(1,194
)
 
(1,455
)
 
(434
)
Subtract/add: Tax effect of adjustments
(2,478
)
 
(1,951
)
 
96

Adjusted net income available to common shareholders
$
149,732

 
$
158,892


$
111,504

 
 
 
 
 
 
Adjusted net income available to common shareholders annualized
$
594,045

 
$
637,314

 
$
442,379

Add: Amortization of intangibles
8,632

 
7,250

 
886

Adjusted net income available to common shareholders excluding amortization of intangibles annualized
$
602,677


$
644,564


$
443,265

 
 
 
 
 
 
Net income available to common shareholders annualized
$
505,585

 
$
613,818

 
$
394,081

Add: Amortization of intangibles
8,632

 
7,250

 
886

Net income available to common shareholders excluding amortization of intangibles annualized
$
514,217

 
$
621,068


$
394,967

 
 
 
 
 
 
Total average shareholders' equity less preferred stock
$
4,450,301

 
$
4,416,705

 
$
2,824,707

Subtract: Goodwill
(492,320
)
 
(487,601
)
 
(57,315
)
Subtract: Other intangible assets, net
(60,278
)
 
(69,853
)
 
(10,265
)
Total average tangible shareholders' equity less preferred stock
$
3,897,703

 
$
3,859,251


$
2,757,127

Return on average common equity
11.36
%

13.90
%

13.95
%
Adjusted return on average common equity
13.35


14.43


15.66

Return on average tangible common equity
13.19


16.09


14.33

Adjusted return on average tangible common equity
15.46


16.70


16.08







Reconciliation of Non-GAAP Financial Measures, continued
 
 
 
 
 
 
September 30,
 
June 30,
 
September 30,
(dollars in thousands)
2019
 
2019
 
2018
Tangible Common Equity Ratio
 
 
 
 
 
 
 
 
 
 
 
Total assets
$
47,661,182

 
$
47,318,203

 
$
32,075,120

Subtract: Goodwill
(487,865
)
 
(492,390
)
 
(57,315
)
Subtract: Other intangible assets, net
(58,572
)
 
(61,473
)
 
(10,166
)
Tangible assets
$
47,114,745

 
$
46,764,340

 
$
32,007,639

 
 
 
 
 
 
Total shareholders’ equity
$
4,868,838

 
$
4,753,816

 
$
3,040,073

Subtract: Goodwill
(487,865
)
 
(492,390
)
 
(57,315
)
Subtract: Other intangible assets, net
(58,572
)
 
(61,473
)
 
(10,166
)
Subtract: Preferred Stock, no par value
(536,550
)
 
(195,140
)
 
(195,138
)
Tangible common equity
$
3,785,851

 
$
4,004,813

 
$
2,777,454

Total shareholders’ equity to total assets ratio
10.22
%
 
10.05
%
 
9.48
%
Tangible common equity ratio
8.04

 
8.56

 
8.68

 
 
 
 
 
 

Reconciliation of Non-GAAP Financial Measures, continued
 
 
 
 
 
 
September 30,
 
 
 
 
(dollars in thousands)
2019
 
 
 
 
CET1 capital ratio (fully phased-in)
 
 
 
 
 
CET1 capital
$
3,660,078

 
 
 
 
Total risk-weighted assets
$
40,844,402

 
 
 
 
Total risk-weighted assets (fully phased-in)
$
40,912,808

 
 
 
 
CET1 capital ratio
8.96
%




CET1 capital ratio (fully phased-in)
8.95





 
 
 
 
 
 






(Back To Top)

Section 3: EX-99.2 (EXHIBIT 99.2)

Exhibit
Synovus
 
 
 
 
 
Exhibit 99.2

 
 
 
 
 
 
 
 
 
INCOME STATEMENT DATA
 
 
 
(Unaudited)
 
Nine Months Ended
 
(Dollars in thousands, except per share data)
 
September 30,
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2019
 
2018
 
% Change
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
 
$
1,544,385

 
$
986,911

 
56.5
 %
 
Interest expense
 
347,850

 
136,431

 
155.0

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
 
1,196,535

 
850,480

 
40.7

 
Provision for loan losses
 
63,250

 
39,548

 
59.9

 
 
 
 
 
 
 
 
 
Net interest income after provision for loan losses
 
1,133,285

 
810,932

 
39.8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-interest income:
 
 
 
 
 
 
 
    Service charges on deposit accounts
 
65,805

 
60,521

 
8.7

 
    Fiduciary and asset management fees
 
42,743

 
40,881

 
4.6

 
    Card fees
 
34,334

 
31,640

 
8.5

 
    Brokerage revenue
 
30,502

 
26,125

 
16.8

 
    Mortgage banking income
 
23,313

 
15,177

 
53.6

 
    Capital markets income
 
21,557

 
3,826

 
463.4

 
    Income from bank-owned life insurance
 
15,605

 
11,720

 
33.1

 
    Investment securities losses, net
 
(5,502
)
 
(1,296
)
 
 nm

 
    Gain on sale and fair value increase/(decrease) of private equity
    investments
 
3,507

 
(2,659
)
 
 nm

 
    Other non-interest income
 
26,081

 
26,166

 
(0.3
)
 
 
 
 
 
 
 
 
 
Total non-interest income
 
257,945

 
212,101

 
21.6

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-interest expense:
 
 
 
 
 
 
 
   Salaries and other personnel expense
 
424,952

 
339,924

 
25.0

 
   Net occupancy and equipment expense
 
119,262

 
96,222

 
23.9

 
   Third-party processing expense
 
55,403

 
43,822

 
26.4

 
   Professional fees
 
25,379

 
18,087

 
40.3

 
   FDIC insurance and other regulatory fees
 
21,872

 
19,765

 
10.7

 
   Advertising expense
 
16,996

 
14,046

 
21.0

 
   Amortization of intangibles
 
8,702

 
875

 
nm

 
   Merger-related expense
 
57,493

 
6,684

 
 nm

 
   Earnout liability adjustments
 
10,457

 
11,652

 
(10.3
)
 
   Loss on early extinguishment of debt, net
 
4,592

 

 
 nm

 
   Valuation adjustment to Visa derivative
 
2,500

 
2,328

 
7.4

 
   Other operating expenses
 
85,239

 
66,126

 
28.9

 
 
 
 
 
 
 
 
 
Total non-interest expense
 
832,847

 
619,531

 
34.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income before income taxes
 
558,383

 
403,502

 
38.4

 
Income tax expense
 
146,287

 
80,095

 
82.6

 
 
 
 
 
 
 
 
 
Net income
 
412,096

 
323,407

 
27.4

 
 
 
 
 
 
 
 
 
Less: Preferred stock dividends and redemption charge
 
14,591

 
14,848

 
(1.7
)
 
 
 
 
 
 
 
 
 
Net income available to common shareholders
 
$
397,505

 
$
308,559

 
28.8
 %
 
 
 
 
 
 
 
 
 
Net income per common share, basic
 
2.53


2.61

 
(3.0
)%
 
 
 
 
 
 
 
 
 
Net income per common share, diluted
 
2.51


2.60

 
(3.5
)
 
 
 
 
 
 
 
 
 
Cash dividends declared per common share
 
0.90

 
0.75

 
20.0

 
 
 
 
 
 
 
 
 
Return on average assets*
 
1.18
%
 
1.37

 
(19
)bps
 
Return on average common equity*
 
12.09

 
14.65

 
(256
)
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding, basic
 
156,819

 
118,096

 
32.8
 %
 
Weighted average common shares outstanding, diluted
 
158,595

 
118,847

 
33.4

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





Synovus
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INCOME STATEMENT DATA
 
 
 
 
 
 
 
 
 
 
 
 
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars in thousands, except per share data)
2019
 
2018
 
Third Quarter
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Third Quarter
 
Second Quarter
 
First Quarter
 
Fourth Quarter
 
Third Quarter
 
'19 vs '18
 
 
 
 
 
% Change
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
$
523,415

 
516,131

 
504,839

 
357,394

 
343,942

 
52.2
 %
 
Interest expense
121,318

 
118,869

 
107,664

 
59,461

 
52,323

 
131.9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
402,097

 
397,262

 
397,175

 
297,933

 
291,619

 
37.9

 
Provision for loan losses
27,562

 
12,119

 
23,569

 
12,148

 
14,982

 
84.0

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income after provision for loan losses
374,535

 
385,143

 
373,606

 
285,785

 
276,637

 
35.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-interest income:
 
 
 
 
 
 
 
 
 
 
 
 
Service charges on deposit accounts
22,952

 
21,994

 
20,859

 
20,320

 
20,582

 
11.5

 
Fiduciary and asset management fees
14,686

 
14,478

 
13,578

 
13,805

 
13,462

 
9.1

 
Card fees
12,297

 
11,161

 
10,877

 
10,862

 
10,608

 
15.9

 
Brokerage revenue
11,071

 
10,052

 
9,379

 
9,241

 
9,041

 
22.5

 
Mortgage banking income
10,351

 
7,907

 
5,054

 
3,781

 
5,290

 
95.7

 
Capital markets income
7,396

 
8,916

 
5,245

 
1,977

 
1,155

 
540.3

 
Income from bank-owned life insurance
5,139

 
5,176

 
5,290

 
3,682

 
3,771

 
36.3

 
Investment securities (losses)/gains, net
(3,731
)
 
(1,845
)
 
75

 

 

 
nm

 
Gain on sale and fair value increase/(decrease) of private equity investments
1,194

 
1,455

 
858

 
(2,084
)
 
434

 
nm

 
Other non-interest income
7,405

 
10,513

 
8,163

 
6,407

 
7,325

 
1.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total non-interest income
88,760

 
89,807

 
79,378

 
67,991

 
71,668

 
23.8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-interest expense:
 
 
 
 
 
 
 
 
 
 
 
 
Salaries and other personnel expense
142,516

 
143,009

 
139,427

 
113,496

 
114,341

 
24.6

 
Net occupancy and equipment expense
41,017

 
39,851

 
38,394

 
34,260

 
32,088

 
27.8

 
Third-party processing expense
18,528

 
19,118

 
17,758

 
14,803

 
14,810

 
25.1

 
Professional Fees
9,719

 
9,312

 
6,348

 
8,650

 
6,298

 
54.3

 
FDIC insurance and other regulatory fees
7,242

 
7,867

 
6,761

 
4,728

 
6,430

 
12.6

 
Advertising expense
5,950

 
5,923

 
5,123

 
6,834

 
3,735

 
59.3

 
   Amortization of intangibles
2,901

 
2,410

 
3,392

 
292

 
292

 
nm

 
Merger-related expense
353

 
7,401

 
49,738

 
3,381

 
6,684

 
nm

 
Earnout liability adjustments
10,457

 

 

 

 
11,652

 
(10.3
)
 
   Loss on early extinguishment of debt, net
4,592

 

 

 

 

 
nm

 
   Valuation adjustment to Visa derivative
2,500

 

 

 

 

 
nm

 
Other operating expenses
30,535

 
29,235

 
25,469

 
23,478

 
23,967

 
27.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total non-interest expense
276,310

 
264,126

 
292,410

 
209,922

 
220,297

 
25.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income before income taxes
186,985

 
210,824

 
160,574

 
143,854

 
128,008

 
46.1

 
Income tax expense
51,259

 
54,640

 
40,388

 
38,784

 
18,949

 
170.5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
135,726

 
156,184

 
120,186

 
105,070

 
109,059

 
24.5

 
 
 
 
 
 
 
 
 
 
 
 


 
Less: Preferred stock dividends and redemption charge
8,291

 
3,150

 
3,150

 
3,151

 
9,729

 
(14.8
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income available to common shareholders
$
127,435

 
153,034

 
117,036

 
101,919

 
99,330

 
28.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income per common share, basic
$
0.84

 
0.97

 
0.73

 
0.88

 
0.85

 
(1.2
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income per common share, diluted
0.83

 
0.96

 
0.72

 
0.87

 
0.84

 
(1.6
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash dividends declared per common share
0.30

 
0.30

 
0.30

 
0.25

 
0.25

 
20.0

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on average assets *
1.14
%
 
1.34

 
1.06

 
1.29

 
1.36

 
(22
)bps
 
Return on average common equity *
11.36

 
13.90

 
10.98

 
14.25

 
13.95

 
(259
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding, basic
152,238

 
157,389

 
160,927

 
116,303

 
117,241

 
29.9
 %
 
Weighted average common shares outstanding, diluted
154,043

 
159,077

 
162,760

 
116,986

 
118,095

 
30.4

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





Synovus
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
BALANCE SHEET DATA
 
September 30, 2019
 
December 31, 2018
 
September 30, 2018
 
 
 
 
 
 
 
 
 
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(In thousands, except share data)