Press Release

Synovus Announces Earnings for the Second Quarter of 2015

Company Release - 7/21/2015 6:30 AM ET

Diluted Earnings per Share increased 25.5% as compared to 2Q14

COLUMBUS, Ga.--(BUSINESS WIRE)-- Synovus Financial Corp. (NYSE: SNV) today reported financial results for the quarter ended June 30, 2015.

Second Quarter Highlights

  • Net income available to common shareholders for the second quarter of 2015 was $53.2 million or $0.40 per diluted share as compared to $51.4 million, or $0.38 per diluted share for the previous quarter and $44.3 million, or $0.32 per diluted share for the second quarter 2014.
  • Net income available to common shareholders for the second quarter of 2015 was $55.9 million or $0.42 per diluted share, excluding litigation contingency expense.
  • Total loans grew $388.7 million or 7.4% annualized from the previous quarter and $1.04 billion or 5.1% as compared to the second quarter 2014.
  • Average core deposits grew $889.9 million or 17.8% annualized from the previous quarter and $1.45 billion or 7.4% as compared to the second quarter 2014.
  • Adjusted pre-tax, pre-credit costs income was $103.6 million for the second quarter 2015, an increase of $2.6 million or 2.6% from $101.0 million for the previous quarter and an increase of $4.7 million or 4.7% as compared to the second quarter 2014.
  • The company continued to return capital to shareholders during the quarter, acquiring an additional $50.3 million of common stock. Since October 2014 through July 20, 2015, the company has repurchased $202.9 million of common stock, reducing total share count by 7.5 million or 5.4%.

“We are pleased to report solid second quarter results as evidenced by strong loan and core deposit growth as well as increased fee income driven by strong mortgage production,” said Kessel D. Stelling, chairman and CEO. “During the quarter, we were also proud to be recognized as one of America's Most Reputable Banks by American Banker magazine and the Reputation Institute, and were among only three companies ranked in the top 10 by both customers and non-customers. This recognition, along with our steadily improving financial performance, validates that our focus on relationship banking — defined by local leadership, personal service, and a deep commitment to strengthening our communities — differentiates Synovus and clearly resonates with customers and prospects.”

Balance Sheet

  • Total loans ended the quarter at $21.49 billion, up $388.7 million or 7.4% annualized, from the previous quarter and up $1.04 billion or 5.1% as compared to the second quarter 2014.
    • Commercial real estate loans grew by $164.3 million from the previous quarter, or 9.5% annualized.
    • Retail loans grew by $127.1 million from the previous quarter, or 13.0% annualized.
    • Commercial and industrial loans grew by $97.0 million from the previous quarter, or 3.8% annualized.
  • Total average deposits for the quarter were $22.47 billion, and grew by $851.1 million or 15.8% annualized from the previous quarter and $1.60 billion or 7.7% as compared to the second quarter 2014.
  • Average core deposits for the quarter were $20.91 billion, and grew by $889.9 million or 17.8% annualized from the previous quarter and $1.45 billion or 7.4% as compared to the second quarter 2014.
  • Average core deposits, excluding state, county, and municipal deposits, grew by $836.4 million or 18.9% annualized from the previous quarter and $1.44 billion or 8.4% as compared to the second quarter 2014.

Core Performance

Adjusted pre-tax, pre-credit costs income was $103.6 million for the second quarter 2015, an increase of $2.6 million or 2.6% from $101.0 million for the previous quarter and an increase of $4.7 million or 4.7% as compared to the second quarter 2014.

  • Net interest income was $203.6 million for the second quarter 2015, up $381 thousand from $203.3 million in the previous quarter.
  • Net interest margin declined 13 basis points to 3.15% compared to 3.28% in the previous quarter. Yield on earning assets was 3.61%, 12 basis points lower than the previous quarter, and the effective cost of funds increased 1 basis point to 0.46%.
    • Increased balances at the Fed contributed 7 basis points of the decline in the yield on earning assets.
  • Adjusted non-interest income was $66.8 million, up $1.7 million or 2.6% compared to $65.1 million for the previous quarter and up $3.5 million or 5.5% as compared to the second quarter 2014.
    • Mortgage banking income increased $1.0 million or 15.8% from the previous quarter, driven by a 19.8% increase in production.
    • Core banking fees1 were $32.4 million, up $876 thousand or 2.8% from the previous quarter, primarily driven by higher service charges on deposit accounts and bankcard fees.
    • Gains from the sale of SBA loans of $1.4 million were down $92 thousand from the previous quarter and up $1.6 million year-to-date as compared to 2014.
    • Financial Management Services revenues, consisting primarily of fiduciary and asset management fees and brokerage revenue, decreased 2.8% from the previous quarter and increased 3.7% as compared to the second quarter 2014.
  • Total non-interest expense for the second quarter 2015 was $177.8 million, down $1.1 million from the previous quarter and down $4.4 million or 2.4% as compared to the second quarter 2014.
  • Adjusted non-interest expense for the second quarter 2015 was $166.9 million, down $495 thousand or 0.3% from the previous quarter and down $2.6 million or 1.5% as compared to the second quarter 2014.
    • Employment expense of $94.6 million decreased $1.9 million from the previous quarter.
    • Advertising expense of $2.9 million decreased $578 thousand from the previous quarter.
    • Professional fees of $6.4 million increased $823 thousand from the previous quarter.
    1 Include service charges on deposit accounts, bankcard fees, letter of credit fees, ATM fee income, line of credit non-usage fees, and miscellaneous other service charges.

Credit Quality

Broad-based improvement in credit quality continued.

  • Total credit costs were $12.8 million in the second quarter 2015 compared to $15.7 million in the previous quarter.
  • Non-performing loans, excluding loans held for sale, were $173.6 million at June 30, 2015, down $20.6 million or 10.6% from the previous quarter, and down $85.9 million or 33.1% from June 30, 2014. The non-performing loan ratio was 0.81% at June 30, 2015, compared to 0.92% at the end of the previous quarter and 1.27% at June 30, 2014.
  • Total non-performing assets were $240.1 million at June 30, 2015, down $30.0 million or 11.1% from the previous quarter, and down $123.0 million or 33.9% from June 30, 2014. The non-performing asset ratio was 1.11% at June 30, 2015, compared to 1.28% at the end of the previous quarter and 1.77% at June 30, 2014.
  • Total delinquencies (consisting of loans 30 or more days past due and still accruing) remain low at 0.24% of total loans at June 30, 2015 compared to 0.27% the previous quarter and 0.30% at June 30, 2014. Total loans past due 90 days or more and still accruing were 0.02% of total loans at June 30, 2015, unchanged from March 31, 2015 and June 30, 2014.
  • Net charge-offs were $5.3 million in the second quarter 2015, down $7.0 million or 57.0% from $12.3 million in the previous quarter. The annualized net charge-off ratio was 0.10% in the second quarter compared to 0.23% in the previous quarter.

Capital Ratios

Capital ratios remained strong and include the impact of common stock repurchases completed through June 30, 2015.

  • Common Equity Tier 1 ratio was 10.73% at June 30, 2015 compared to 10.80% at March 31, 2015.
  • Tier 1 Capital ratio was 10.73% at June 30, 2015 compared to 10.80% at March 31, 2015.
  • Total Risk Based Capital ratio was 12.18% at June 30, 2015 compared to 12.65% at March 31, 2015.
  • Tier 1 Leverage ratio was 9.48% at June 30, 2015 compared to 9.66% at March 31, 2015.
  • Tangible Common Equity ratio was 10.13% at June 30, 2015 compared to 10.43% at March 31, 2015.

Second Quarter Earnings Conference Call

Synovus will host an earnings highlights conference call at 8:30 a.m. EDT on July 21, 2015. 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 www.synovus.com/webcasts. The replay will be archived for 12 months and will be available 30-45 minutes after the call.

About Synovus

Synovus Financial Corp. is a financial services company based in Columbus, Georgia with approximately $28 billion in assets. Synovus provides commercial and retail banking, investment, and mortgage services to customers through 28 locally-branded divisions, 258 branches, and 341 ATMs in Georgia, Alabama, South Carolina, Florida, and Tennessee. Synovus Bank, a wholly owned subsidiary of Synovus, was named one of America's Most Reputable Banks by American Banker and the Reputation Institute in 2015. See Synovus on the web at synovus.com.

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 on credit trends and key credit metrics; expectations regarding deposits, loan growth and the net interest margin; expectations on our growth strategy, expense initiatives, and future profitability, 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, 2014 under the captions “Cautionary Notice Regarding Forward-Looking Statements” and “Risk Factors” and in Synovus’ quarterly reports on Form 10-Q and current reports on Form 8-K. We believe these forward-looking statements are reasonable; however, undue reliance should not be placed on any forward-looking statements, which are based on current expectations and speak only as of the date that they are made. We do not assume any obligation to update any forward-looking statements as a result of new information, future developments or otherwise, except as otherwise may be required by law.

Use of Non-GAAP Financial Measures

The measures entitled average core deposits; average core deposits excluding average state, county, and municipal deposits; tangible common equity to tangible assets ratio; adjusted net income per diluted common share; adjusted pre-tax, pre-credit costs income; adjusted non-interest income; and adjusted non-interest expense are not measures recognized under U.S. generally accepted accounting principles (GAAP) and therefore are considered non-GAAP financial measures. The most comparable GAAP measures are total average deposits; total shareholders’ equity to total assets ratio; net income per diluted common share; income before income taxes; total non-interest income; and total non-interest expense, respectively.

Synovus believes that these non-GAAP financial measures provide meaningful additional information about Synovus to assist management and investors in evaluating Synovus’ capital strength and the performance of its core business. These non-GAAP financial measures should not be considered as substitutes for total average deposits; total shareholders’ equity to total assets ratio; net income per diluted common share; income before income taxes; total non-interest income; and total non-interest expense determined in accordance with GAAP and may not be comparable to other similarly titled measures at other companies.

The computations of average core deposits; average core deposits excluding average state, county, and municipal deposits; tangible common equity to tangible assets ratio; adjusted net income per diluted common share; adjusted pre-tax, pre-credit costs income; adjusted non-interest income; and adjusted non-interest expense; and the reconciliation of these measures to total average deposits; total shareholders’ equity to total assets ratio; net income per diluted common share; income before income taxes; total non-interest income; and total non-interest expense are set forth in the tables below.

                                 
Reconciliation of Non-GAAP Financial Measures                      
(dollars in thousands) 2Q15     1Q15     4Q14     3Q14     2Q14
 
Average core deposits
Average core deposits excluding state, county, and municipal deposits
Average total deposits $ 22,466,102 21,615,049 21,336,007 20,938,587 20,863,706
Subtract: Average brokered deposits   (1,555,931 ) (1,594,822 ) (1,602,354 ) (1,494,620 ) (1,401,167 )
Average core deposits   20,910,171   20,020,227   19,733,653   19,443,967   19,462,539  
Subtract: Average state, county, and municipal deposits   (2,277,783 ) (2,224,193 ) (2,184,757 ) (2,045,817 ) (2,268,852 )
Average core deposits excluding state, county, and

municipal deposits

$ 18,632,388   17,796,034   17,548,896   17,398,150   17,193,687  
 
Tangible common equity to tangible assets ratio
Total assets $ 28,205,870 27,633,784 27,051,231 26,519,110 26,627,290
Subtract: Goodwill (24,431 ) (24,431 ) (24,431 ) (24,431 ) (24,431 )
Subtract: Other intangible assets, net   (863 ) (1,061 ) (1,265 ) (1,471 ) (1,678 )
Tangible assets   28,180,576   27,608,292   27,025,535   26,493,208   26,601,181  
 
Total shareholders’ equity 3,006,157 3,030,635 3,041,270 3,076,545 3,053,051

Subtract: Goodwill

(24,431 ) (24,431 ) (24,431 ) (24,431 ) (24,431 )

Subtract: Other intangible assets, net

(863 ) (1,061 ) (1,265 ) (1,471 ) (1,678 )

Subtract: Series C Preferred Stock, no par value

  (125,980 ) (125,980 ) (125,980 ) (125,980 ) (125,980 )
Tangible common equity $ 2,854,883   2,879,163   2,889,594   2,924,663   2,900,962  
Total shareholders’ equity to total assets ratio 10.66 % 10.97 11.24 % 11.60 11.47
Tangible common equity to tangible assets ratio 10.13 % 10.43 10.69 % 11.04 10.91
 
Adjusted net income per diluted common share
Net income available to common shareholders $ 53,234
Add: Litigation contingency expense (after-tax)(1) 2,688
Adjusted net income available to common shareholders $ 55,922  
Weighted average common shares outstanding - diluted 133,625
Adjusted net income per diluted common share       $ 0.42                          

 

 
Reconciliation of Non-GAAP Financial Measures, continued
(dollars in thousands) 2Q15     1Q15     4Q14     3Q14     2Q14
 
Adjusted Pre-tax, Pre-credit Costs Income
Income before income taxes $ 88,035 85,812 78,928 72,656 73,950
Add: Provision for losses on loans 6,636 4,397 8,193 3,843 12,284
Add: Other credit costs(2) 6,175 11,273 8,213 11,858 4,635
Add: Restructuring charges 4 (107 ) 3,484 809 7,716
Add: Litigation contingency/settlement expenses (1) 4,400 - 463 12,349 -
Subtract: Investment securities gains, net (1,985 ) (725 ) - - -
Add: Visa indemnification charges   354   375   310   1,979   356  
Pre-tax, pre-credit costs income $ 103,619   101,025   99,591   103,494   98,941  
 

Adjusted Non-interest Income

Total non-interest income $ 68,832 65,854 64,549 63,985 63,388
Subtract: Investment securities gains, net   (1,985 ) (725 ) -   -   -  
Adjusted non-interest income $ 66,847   65,129   64,549   63,985   63,388  
       
Adjusted Non-interest Expense
Total non-interest expense $ 177,805 178,908 184,883 193,749 182,205
Subtract: Other credit costs(2) (6,175 ) (11,273 ) (8,213 ) (11,858 ) (4,635 )
Subtract: Restructuring charges (4 ) 107 (3,484 ) (809 ) (7,716 )
Subtract: Visa indemnification charges (354 ) (375 ) (310 ) (1,979 ) (356 )

Subtract: Litigation contingency/settlement expenses (1)

  (4,400 ) -   (463 ) (12,349 ) -  
Adjusted non-interest expense $ 166,872   167,367   172,413   166,754   169,498  
                                 
 

(1) Amounts for other periods presented herein are not reported separately as amounts are not material.

(2) Other credit costs consist primarily of foreclosed real estate expense, net.

         
Synovus
 
INCOME STATEMENT DATA Six Months Ended
(Unaudited)
(Dollars in thousands, except per share data) June 30,
 
 
2015 2014 Change
             
 
Interest income $ 465,055 460,595 1.0 %
Interest expense 58,148 55,029 5.7
     
 
Net interest income 406,907 405,566 0.3
Provision for loan losses 11,034 21,795 (49.4 )
     
 
Net interest income after provision for loan losses 395,873 383,771 3.2
     
 
Non-interest income:
Service charges on deposit accounts 38,928 38,451 1.2
Fiduciary and asset management fees 23,414 22,329 4.9
Brokerage revenue 14,032 12,920 8.6
Mortgage banking income 13,995 8,794 59.1
Bankcard fees 16,576 16,212 2.2
Investment securities gains, net 2,710 1,331 103.6
Other fee income 9,851 9,791 0.6
Gain on sale of Memphis branches, net (1) - 5,789 nm
Other non-interest income 15,181 17,952 (15.4 )
     
 
Total non-interest income 134,687 133,569 0.8
     
 
Non-interest expense:
Salaries and other personnel expense 191,054 185,985 2.7
Net occupancy and equipment expense 52,713 52,480 0.4
Third-party processing expense 21,015 19,560 7.4
FDIC insurance and other regulatory fees 13,725 17,531 (21.7 )
Professional fees 12,011 15,901 (24.5 )
Advertising expense 6,309 8,757 (28.0 )
Foreclosed real estate expense, net 13,847 9,745 42.1
Visa indemnification charges 729 752 (3.1 )
Litigation contingency expense (2) 4,400 - nm
Restructuring charges, net (102 ) 16,293 nm
Other operating expenses 41,012 39,361 4.2
     
 
Total non-interest expense 356,713 366,365 (2.6 )
     
 
Income before income taxes 173,847 150,975 15.1
Income tax expense 64,091 55,686 15.1
     
Net income 109,756 95,289 15.2
 
Dividends on preferred stock 5,119   5,119 0.0  
 
 
Net income available to common shareholders $ 104,637   90,170 16.0 %
 
 
Net income per common share, basic $ 0.78 0.65 20.4 %
 
Net income per common share, diluted 0.78 0.65 20.2
 
Cash dividends declared per common share 0.20 0.14 42.9
 
Return on average assets 0.80 % 0.73 7bps
Return on average common equity 7.27 6.33 94
 
 
Weighted average common shares outstanding, basic 133,935 138,961 (3.6 )%
Weighted average common shares outstanding, diluted 134,678 139,535 (3.5 )
 
nm - not meaningful
bps - basis points
 
(1 )

Consists of gain, net of associated costs, from the 1Q14 sale of certain loans, premises, deposits, and other assets and liabilities of the Memphis, Tennessee branches of Trust One Bank, a division of Synovus Bank.

(2 ) Amount for six months ended June 30, 2014 is not reported separately because it is not material.
                   
Synovus
 
INCOME STATEMENT DATA
(Unaudited)
(In thousands, except per share data) 2015

 

2014

2nd Quarter
                               
Second First Fourth Third Second '15 vs. '14
Quarter     Quarter     Quarter     Quarter     Quarter     Change
 
Interest income $ 233,654 231,401 234,703 233,394 232,213 0.6 %
Interest expense 30,010 28,138   27,248 27,131 27,162 10.5  
 
 
Net interest income 203,644 203,263 207,455 206,263 205,051 (0.7 )
Provision for loan losses 6,636 4,397   8,193 3,843 12,284 (46.0 )
 
 
Net interest income after provision for loan losses 197,008 198,866   199,262 202,420 192,767 2.2  
 
 
Non-interest income:
Service charges on deposit accounts 19,795 19,133 20,287 20,159 19,238 2.9
Fiduciary and asset management fees 11,843 11,571 11,690 11,207 11,296 4.8
Brokerage revenue 6,782 7,251 6,887 7,281 6,707 1.1
Mortgage banking income 7,511 6,484 4,895 4,665 5,283 42.2
Bankcard fees 8,499 8,077 8,536 8,182 8,695 (2.3 )
Investment securities gains, net 1,985 725 - - - nm
Other fee income 4,605 5,246 4,635 4,704 4,928 (6.6 )
Other non-interest income 7,812 7,367   7,619 7,787 7,241 7.9  
 
 
Total non-interest income 68,832 65,854   64,549 63,985 63,388 8.6  
 
Non-interest expense:
Salaries and other personnel expense 94,565 96,488 92,049 93,870 92,540 2.2
Net occupancy and equipment expense 26,541 26,172 26,370 26,956 26,425 0.4
Third-party processing expense 10,672 10,343 10,437 10,044 9,464 12.8
FDIC insurance and other regulatory fees 6,767 6,957 8,115 7,839 7,885 (14.2 )
Professional fees 6,417 5,594 8,013 2,526 8,224 (22.0 )
Advertising expense 2,865 3,443 8,102 7,177 6,281 (54.4 )
Foreclosed real estate expense, net 4,351 9,496 6,502 9,074 4,063 7.1
Visa indemnification charges 354 375 310 1,979 356 (0.6 )
Litigation contingency/settlement expenses (1) 4,400 - 463 12,349 - nm
Restructuring charges, net 4 (107 ) 3,484 809 7,716 nm
Other operating expenses 20,869 20,147   21,038 21,126 19,251 8.4  
 
Total non-interest expense 177,805 178,908   184,883 193,749 182,205 (2.4 )
 
 
 
Income before income taxes 88,035 85,812 78,928 72,656 73,950 19.0
Income tax expense 32,242 31,849   25,757 25,868 27,078 19.1  
 
 
Net income 55,793 53,963 53,171 46,788 46,872 19.0
 
Dividends on preferred stock 2,559 2,559   2,559 2,559 2,559 -  
 
Net income available to common shareholders $ 53,234 51,404   50,612 44,229 44,313 20.1   %
 
Net income per common share, basic $ 0.40 0.38 0.37 0.32 0.32 25.6 %
 
Net income per common share, diluted 0.40 0.38 0.37 0.32 0.32 25.5
 
Cash dividends declared per common share 0.10 0.10 0.10 0.07 0.07 42.9
 
Return on average assets * 0.80 % 0.80 0.79 0.70 0.71 9 bps
Return on average common equity * 7.39 7.16 6.89 5.97 6.14 125
 
Weighted average common shares outstanding, basic 132,947 134,933 137,031 139,043 138,991 (4.3 ) %
Weighted average common shares outstanding, diluted 133,625 135,744 137,831 139,726 139,567 (4.3 )
 
nm - not meaningful
bps - basis points
* - ratios are annualized
 
(1 ) Amounts for other periods presented herein are not reported separately as amounts are not material.
           

Synovus

     
BALANCE SHEET DATA June 30, 2015 December 31, 2014 June 30, 2014
(Unaudited)
 
(In thousands, except share data)
 
ASSETS
Cash and cash equivalents $ 360,832 485,489 596,425
Interest bearing funds with Federal Reserve Bank 1,289,205 721,362 689,284
Interest earning deposits with banks 18,694 11,810 7,661

Federal funds sold and securities purchased under resale agreements

72,487 73,111 79,553
Trading account assets, at fair value 11,973 13,863 20,318
Mortgage loans held for sale, at fair value 98,202 63,328 75,957
Investment securities available for sale, at fair value 3,354,673 3,041,406 3,080,185
 
Loans, net of deferred fees and costs 21,494,869 21,097,699 20,455,763
Allowance for loan losses (254,702) (261,317) (277,783)
Loans, net 21,240,167 20,836,382 20,177,980
 
Premises and equipment, net 445,579 455,235 461,610
Goodwill 24,431 24,431 24,431
Other real estate 66,449 85,472 101,533
Deferred tax asset, net 571,402 622,464 677,513
Other assets 651,776 616,878 634,840
 
Total assets $ 28,205,870 27,051,231 26,627,290
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest bearing deposits $ 6,421,815 6,228,472 5,875,301
Interest bearing deposits, excluding brokered deposits 14,775,216 13,660,830 13,668,746
Brokered deposits 1,452,150 1,642,398 1,449,420
 
Total deposits 22,649,181 21,531,700 20,993,467
 
Federal funds purchased and securities sold under repurchase agreements 188,285 126,916 127,840
Long-term debt 2,139,219 2,140,319 2,256,418
Other liabilities 223,028 211,026 196,514
 
Total liabilities 25,199,713 24,009,961 23,574,239
 
 
 
Shareholders' equity:
Series C Preferred Stock - no par value, 5,200,000 shares outstanding at June 30, 2015, December 31, 2014, and June 30, 2014 125,980 125,980 125,980
Common stock - $1.00 par value. 132,257,577 shares outstanding at June 30, 2015, 136,122,843 shares outstanding at December 31, 2014, and 139,021,760 shares outstanding at June 30, 2014 140,425 139,950 139,835
Additional paid-in capital 2,981,434 2,960,825 2,976,811
Treasury stock, at cost - 8,167,677 shares at June 30, 2015, 3,827,579 shares at December 31, 2014, and 813,350 shares at June 30, 2014 (311,859) (187,774) (114,176)
Accumulated other comprehensive loss, net (22,323) (12,605) (13,716)
Retained earnings (deficit) 92,500 14,894 (61,683)
Total shareholders' equity 3,006,157 3,041,270 3,053,051
 
Total liabilities and shareholders' equity $ 28,205,870 27,051,231 26,627,290
               
Synovus
   
AVERAGE BALANCES AND YIELDS/RATES (1)
(Unaudited)
(Dollars in thousands)
2015

 

2014

                           
Second First Fourth Third Second
Quarter Quarter Quarter Quarter Quarter
                           
Interest Earning Assets
   
Taxable investment securities (2) $ 3,165,513 2,998,597 3,027,769 3,035,940 3,091,537
Yield 1.79 % 1.85 1.85 1.84 1.87
 
Tax-exempt investment securities (2) (4) $ 4,595 4,967 5,030 5,168 5,781
Yield (taxable equivalent) 6.15 % 6.21 6.19 6.21 6.23
 
Trading account assets $ 12,564 14,188 12,879 16,818 16,011
Yield 3.72 % 3.02 3.08 2.52 2.25
 
Commercial loans (3) (4) $ 17,297,130 17,176,641 16,956,294 16,603,287 16,673,930
Yield 4.01 % 4.06 4.09 4.17 4.19
 
Consumer loans (3) $ 3,986,151 3,929,188 3,895,397 3,814,160 3,695,010
Yield 4.37 % 4.45 4.42 4.44 4.51
 
Allowance for loan losses $ (254,177)     (257,167)     (268,659)     (274,698)     (293,320)
 
Loans, net (3) $ 21,029,104 20,848,662 20,583,032 20,142,749 20,075,620
Yield 4.14 % 4.19 4.22 4.29 4.32
 
Mortgage loans held for sale $ 90,419 64,507 60,892 70,766 59,678
Yield 3.39 % 3.92 3.84 3.96 4.13
 
Federal funds sold, due from Federal Reserve Bank,
and other short-term investments $ 1,590,114 1,123,250 898,871 974,363 843,018
Yield 0.24 % 0.24 0.23 0.23 0.23
 
Federal Home Loan Bank and Federal Reserve Bank stock (5) $ 76,091 80,813 75,547 78,131 76,172
Yield 4.57 % 3.90 4.53 3.57 4.15
                                 
Total interest earning assets $ 25,968,400 25,134,984 24,664,020 24,323,935 24,167,817
Yield 3.61 % 3.73 3.78 3.81 3.86
                                   
 
Interest Bearing Liabilities
   
 
Interest bearing demand deposits $ 3,919,401 3,800,476 3,781,389 3,722,599 3,830,956
Rate 0.18 % 0.19 0.19 0.19 0.19
 
Money market accounts $ 6,466,610 6,210,704 6,009,897 6,044,138 6,033,523
Rate 0.35 % 0.32 0.29 0.29 0.31
 
Savings deposits $ 675,260 649,597 638,813 645,654 644,103
Rate 0.06 % 0.05 0.07 0.07 0.09
 
Time deposits under $100,000 $ 1,351,299 1,324,513 1,315,905 1,335,848 1,364,322
Rate 0.68 % 0.61 0.57 0.56 0.57
 
Time deposits over $100,000 $ 2,061,434 1,926,380 1,877,602 1,871,136 1,824,349
Rate 0.88 % 0.80 0.76 0.75 0.74
 
Brokered money market accounts $ 185,909 181,754 191,103 174,538 184,233
Rate 0.31 % 0.30 0.28 0.27 0.27
 
Brokered time deposits $ 1,370,022 1,413,068 1,411,252 1,320,082 1,216,934
Rate 0.67 %   0.63     0.58     0.52     0.51
 
Total interest bearing deposits $ 16,029,935 15,506,492 15,225,961 15,113,995 15,098,420
Rate 0.42 % 0.39 0.36 0.35 0.36
 
Federal funds purchased and securities sold under
repurchase agreements $ 232,531 222,658 186,993 171,429 219,490
Rate 0.08 % 0.08 0.07 0.08 0.13
 
Long-term debt $ 2,173,595 2,207,215 2,084,636 2,142,705 2,099,578
Rate 2.39 % 2.41 2.55 2.54 2.58
                                 
 
Total interest bearing liabilities $ 18,436,061 17,936,365 17,497,590 17,428,129 17,417,488
Rate 0.65 % 0.63 0.62 0.62 0.62
                                 
 
Non-interest bearing demand deposits $ 6,436,167 6,108,558 6,110,047 5,824,592 5,765,287
 
Effective cost of funds 0.46 % 0.45 0.44 0.44 0.45
                                 
 
Net interest margin     3.15 %   3.28     3.34     3.37     3.41
 
Taxable equivalent adjustment $ 330 349 372 408 443
 
(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 35%, 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 AND NON-PERFORMING LOANS COMPOSITION
(Unaudited)
(Dollars in thousands)
 
 
June 30, 2015
                       
 
Loans as a % Total Non-performing Loans
of Total Loans Non-performing as a % of Total
Loan Type Total Loans Outstanding Loans Nonperforming Loans
                         
 
 
Multi-Family $ 1,286,747 6.0 % $ 222 $ 0.1 %
Hotels 674,305 3.1 405 0.2
Office Buildings 1,348,234 6.3 728 0.4
Shopping Centers 917,678 4.3 57 0.0
Commercial Development 118,263 0.6 10,966 6.3
Warehouses 524,525 2.4 403 0.2
Other Investment Property 554,141 2.6 385 0.2
       
 
Total Investment Properties 5,423,893 25.2 13,166 7.6
 
 
1-4 Family Construction 147,572 0.7 90 0.1
1-4 Family Investment Mortgage 788,704 3.7 9,288 5.3
Residential Development 161,130 0.7 10,012 5.8
       
 
Total 1-4 Family Properties 1,097,406 5.1 19,390 11.2
 
 
Land Acquisition 554,501 2.5 23,396 13.5
       
 
Total Commercial Real Estate 7,075,800 32.9 55,952 32.3
       
 
Commercial, Financial, and Agricultural 6,259,553 29.0 43,733 25.1
Owner-Occupied 4,140,769 19.3 29,338 16.9
       
 
Total Commercial & Industrial 10,400,322 48.4 73,071 42.1
       
 
Home Equity Lines 1,683,651 7.8 17,802 10.3
Consumer Mortgages 1,793,752 8.3 24,855 14.3
Credit Cards 246,724 1.2 - -
Other Retail Loans 323,741 1.5 1,958 1.1
       
 
Total Retail 4,047,868 18.8 44,615 25.7
       
 
Unearned Income (29,121) (0.1) - nm
       
 
Total $ 21,494,869 100.0 % $ 173,638 100.0 %
 
 
LOANS OUTSTANDING BY TYPE COMPARISON
(Unaudited)
(Dollars in thousands)
         
Total Loans 2Q15 vs. 1Q15 2Q15 vs. 2Q14
Loan Type June 30, 2015 March 31, 2015 % change (1) June 30, 2014 % change
           
 
 
Multi-Family $ 1,286,747 1,227,286 19.4 % $ 1,109,340 16.0 %
Hotels 674,305 645,912 17.6 742,037 (9.1)
Office Buildings 1,348,234 1,287,048 19.1 995,614 35.4
Shopping Centers 917,678 876,667 18.8 838,231 9.5
Commercial Development 118,263 123,679 (17.6) 139,966 (15.5)
Warehouses 524,525 531,234 (5.1) 565,781 (7.3)
Other Investment Property 554,141 538,434 11.7 499,611 10.9
         
 
Total Investment Properties 5,423,893 5,230,260 14.8 4,890,580 10.9
 
 
1-4 Family Construction 147,572 148,248 (1.8) 129,991 13.5
1-4 Family Investment Mortgage 788,704 793,672 (2.5) 842,605 (6.4)
Residential Development 161,130 169,696 (20.2) 178,110 (9.5)
         
 
Total 1-4 Family Properties 1,097,406 1,111,616 (5.1) 1,150,706 (4.6)
 
Land Acquisition 554,501 569,649 (10.7) 609,285 (9.0)
         
 
Total Commercial Real Estate 7,075,800 6,911,525 9.5 6,650,571 6.4
         
 
Commercial, Financial, and Agricultural 6,259,553 6,175,460 5.5 6,059,794 3.3
Owner-Occupied 4,140,769 4,127,863 1.3 4,005,418 3.4
         
 
Total Commercial & Industrial 10,400,322 10,303,323 3.8 10,065,212 3.3
         
 
Home Equity Lines 1,683,651 1,672,038 2.8 1,664,520 1.1
Consumer Mortgages 1,793,752 1,702,388 21.5 1,561,111 14.9
Credit Cards 246,724 242,257 7.4 255,369 (3.4)
Other Retail Loans 323,741 304,050 26.0 287,935 12.4
         
 
Total Retail 4,047,868 3,920,733 13.0 3,768,935 7.4
         
 
Unearned Income (29,121) (29,368) (3.4) (28,955) 0.6
         
 
Total $ 21,494,869 21,106,213 7.4 % $ 20,455,763 5.1 %
 
(1) Percentage change is annualized.
                   
Synovus
 
CREDIT QUALITY DATA
(Unaudited)
(Dollars in thousands) 2015

 

2014

2nd Quarter
                                 
Second First Fourth Third Second '15 vs. '14
Quarter     Quarter     Quarter     Quarter     Quarter     Change
 
Non-performing Loans $ 173,638 194,232 197,757 242,382 259,547 (33.1) %
Other Loans Held for Sale (1) - 1,082 3,606 338 2,045 (100.0)
Other Real Estate 66,449 74,791 85,472 81,636 101,533 (34.6)  
Non-performing Assets 240,087 270,105 286,835 324,356 363,125 (33.9)
 
Allowance for Loan Losses 254,702 253,371 261,317 269,376 277,783 (8.3)
 
Net Charge-Offs - Quarter 5,306 12,343 16,253 12,250 35,371 (85.0)
Net Charge-Offs / Average Loans - Quarter (2) 0.10 % 0.23 0.31 0.24 0.69
 
Non-performing Loans / Loans 0.81 0.92 0.94 1.18 1.27
Non-performing Assets / Loans, Other Loans Held for Sale & ORE 1.11 1.28 1.35 1.57 1.77
Allowance / Loans 1.18 1.20 1.24 1.31 1.36
 
Allowance / Non-performing Loans 146.69 130.45 132.14 111.14 107.03
Allowance / Non-performing Loans (3) 202.08 197.55 197.22 176.47 177.62
 
Past Due Loans over 90 days and Still Accruing $ 4,832 5,025 4,637 4,067 4,798 0.7 %
As a Percentage of Loans Outstanding 0.02 % 0.02 0.02 0.02 0.02
 
Total Past Due Loans and Still Accruing $ 50,860 57,443 51,251 72,712 60,428 (15.8)
As a Percentage of Loans Outstanding 0.24 % 0.27 0.24 0.35 0.30
 
Accruing Troubled Debt Restructurings (TDRs) $ 268,542 313,362 348,427 408,737 444,108 (39.5)
 

(1) Represent impaired loans that are intended to be sold. Held for sale loans are carried at the lower of cost or fair value, less costs to sell.

(2) Ratio is annualized.
(3) Excludes non-performing loans for which the expected loss has been charged off.
 
                                         
 
 
SELECTED CAPITAL INFORMATION (1)
(Unaudited)
(Dollars in thousands)      
June 30, 2015 December 31, 2014 June 30, 2014
 
Capital Rules in effect: Basel III Basel I Basel I
 
Tier 1 Capital $ 2,615,827 2,543,625 2,500,491
Total Risk-Based Capital 2,971,517 2,987,406 2,958,274
Common Equity Tier 1 Ratio (transitional) 10.73 % na na
Common Equity Tier 1 Ratio (fully phased-in) 10.09 na na
Tier 1 Common Equity Ratio na 10.28 10.42
Tier 1 Capital Ratio 10.73 10.86 11.01
Total Risk-Based Capital Ratio 12.18 12.75 13.03
Tier 1 Leverage Ratio 9.48 9.67 9.69
Common Equity as a Percentage of Total Assets (2) 10.21 10.78 10.99
Tangible Common Equity as a Percentage of Tangible Assets (3) 10.13 10.69 10.91
Tangible Common Equity as a Percentage of Risk Weighted Assets (3) 11.71 12.33 12.78
Book Value Per Common Share (4) 21.78 21.42 21.05
Tangible Book Value Per Common Share (3) 21.59 21.23 20.87
 
 

(1) Current quarter regulatory capital information is preliminary. 2015 regulatory capital ratios determined under Basel III capital rules. 2014 ratios were determined under Basel I capital rules.

(2) Common equity consists of Total Shareholders' Equity less Preferred Stock.
(3) Excludes the carrying value of goodwill and other intangible assets from common equity and total assets.
(4) Book Value Per Common Share consists of Total Shareholders' Equity less Preferred Stock divided by total common shares outstanding.

Synovus Financial Corp.
Media Relations:
Lee Underwood, 706-644-0528
or
Investor Relations:
Bob May, 706-649-3555

Source: Synovus Financial Corp.