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Synovus Announces Earnings for the First Quarter 2021

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·17 min read
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Diluted Earnings per Share of $1.19 vs. $0.20 in 1Q20

Adjusted Diluted Earnings per Share of $1.21 vs. $0.21 in 1Q20

Synovus Financial Corp. (NYSE: SNV) today reported financial results for the quarter ended March 31, 2021.

First Quarter 2021 Highlights

  • Net income available to common shareholders of $178.8 million or $1.19 per diluted share, up $0.23 sequentially and $0.99 compared to prior year.

    • Adjusted diluted EPS of $1.21, up $0.13 sequentially and $1.00 compared to prior year.

  • Period-end loans increased $552.1 million or 1% sequentially.

    • Paycheck Protection Program (PPP) loans increased $170.1 million and third-party consumer loan balances, including a prime auto purchase of $476 million, increased $503.2 million sequentially.

  • Core transaction deposits (non-interest bearing, NOW/savings, and money market deposits excluding public and brokered funds) increased $2.05 billion or 6% sequentially.

  • Total deposit costs of 0.22% down 6 bps sequentially due to ongoing repricing and product remixing.

  • Net interest income of $373.9 million declined $12.1 million sequentially as lower deposit costs and deployment of excess liquidity partially offset a lower day count, continued fixed-rate asset repricing, and accelerated prepayment activity.

    • Net interest margin of 3.04% vs 3.12% sequentially.

  • Non-interest revenue declined $3.8 million sequentially and increased $7.1 million compared to prior year.

    • Adjusted non-interest revenue increased $0.6 million sequentially as broad-based growth helped offset normalization of net mortgage revenue.

  • Non-interest expense declined $35.4 million sequentially and $9.1 million compared to prior year.

    • Adjusted non-interest expense declined $8.5 million sequentially led by reduction in professional fees, partially offset by seasonal increases in payroll taxes and benefits.

  • Reversal of provision for credit losses of $18.6 million, primarily from a more favorable economic outlook.

    • Allowance for credit losses coverage ratio (to loans) of 1.58%, or 1.69% excluding PPP loans.

  • Credit quality metrics remain relatively stable with a net charge-off ratio of 0.21%; non-performing assets, non-performing loans, and past dues remained near prior cycle lows.

  • Preliminary CET1 ratio increased 8 bps sequentially to 9.74%, with strong core earnings helping offset a $1.20 billion increase in risk-weighted assets.

  • In April, executed share repurchases of approximately $10 million as part of the $200 million authorization for 2021.

First Quarter Summary

Reported

Adjusted

(dollars in thousands)

1Q21

4Q20

1Q20

1Q21

4Q20

1Q20

Net income available to common shareholders

$

178,802

$

142,118

$

30,230

$

180,685

$

160,618

$

30,708

Diluted earnings per share

1.19

0.96

0.20

1.21

1.08

0.21

Total loans

38,805,101

38,252,984

38,258,024

N/A

N/A

N/A

Total deposits

47,368,951

46,691,571

39,826,585

N/A

N/A

N/A

Total FTE revenue

485,587

501,514

477,903

487,577

499,114

473,424

Return on avg assets

1.40

%

1.11

%

0.32

%

1.41

%

1.25

%

0.32

%

Return on avg common equity

15.77

12.31

2.75

15.93

13.91

2.79

Return on avg tangible common equity

17.85

14.00

3.34

18.04

15.79

3.39

Net interest margin

3.04

3.12

3.37

N/A

N/A

N/A

Efficiency ratio

55.01

60.32

57.81

54.19

54.60

56.72

NCO ratio

0.21

0.23

0.21

N/A

N/A

N/A

NPA ratio

0.50

0.50

0.50

N/A

N/A

N/A

"Our results in the first quarter of 2021 reflect strong financial performance as we continue to position the company for long-term growth," said Kessel Stelling, Synovus Chairman and CEO. "Solid earnings drove capital growth, core transaction deposits grew $2 billion from the previous quarter, credit quality remained strong, and our efficiency initiatives enabled additional investments in improving the customer experience. We continued to support our customers and communities through the Paycheck Protection Program in the first quarter, including approximately $1 billion in phase two fundings. As the economic recovery accelerates and Kevin Blair steps in as CEO, the energy and optimism among our team are high, and I have never been more confident in our future."

Kevin Blair, Synovus President and COO, said, "I’m honored for the opportunity to lead this exceptional team, and to build upon our strong foundation in driving growth as we deliver differentiated, value-adding solutions and advice to attract and build relationships with our clients."

Balance Sheet

Loans*

(dollars in millions)

1Q21

4Q20

Linked
Quarter
Change

Linked
Quarter %
Change

1Q20

Year/Year
Change

Year/Year
% Change

Commercial & industrial

$

19,693.8

$

19,520.2

$

173.7

1

%

$

17,810.3

$

1,883.5

11

%

Commercial real estate

10,533.9

10,325.7

208.2

2

10,475.4

58.6

1

Consumer

8,577.3

8,407.1

170.2

2

9,972.3

(1,395.0

)

(14

)

Total loans

$

38,805.1

$

38,253.0

$

552.1

1

%

$

38,258.0

$

547.1

1

%

*Amounts may not total due to rounding

  • Total loans ended the quarter at $38.81 billion, up $552.1 million or 1% sequentially.

  • Commercial and industrial (C&I) loan growth of $173.7 million sequentially.

    • Total PPP loans increased by $170.1 million.

      • Phase 1 forgiveness of $711 million, or $687 million net of unearned, and Phase 2 fundings of $894 million, or $857 million net of unearned.

    • C&I line utilization remains near historic lows ~40%.

  • CRE loans increased $208.2 million as the recovery in commercial real estate continues.

  • Consumer loans increased $170.2 million sequentially, with a prime auto portfolio purchase of $476 million partially offset by declines in consumer mortgages and HELOCs of $214.3 million and $105.4 million, respectively.

Deposits*

(dollars in millions)

1Q21

4Q20

Linked
Quarter
Change

Linked
Quarter %
Change

1Q20

Year/Year
Change

Year/Year
% Change

Non-interest-bearing DDA

$

13,742.1

$

12,382.7

$

1,359.4

11

%

$

8,968.8

$

4,773.3

53

%

Interest-bearing DDA

5,841.7

5,674.4

167.3

3

4,617.4

1,224.4

27

Money market

13,943.7

13,541.2

402.5

3

10,255.0

3,688.7

36

Savings

1,277.0

1,156.2

120.8

10

949.5

327.6

35

Public funds

6,154.9

6,760.6

(605.7

)

(9

)

5,261.4

893.6

17

Time deposits

3,214.8

3,605.9

(391.2

)

(11

)

5,786.6

(2,571.9

)

(44

)

Brokered deposits

3,194.7

3,570.4

(375.7

)

(11

)

3,987.9

(793.3

)

(20

)

Total deposits

$

47,369.0

$

46,691.6

$

677.4

1

%

$

39,826.6

$

7,542.4

19

%

*Amounts may not total due to rounding

  • Total deposits ended the quarter at $47.37 billion, up $677.4 million or 1% sequentially.

  • Core transaction deposits increased $2.05 billion or 6% sequentially.

    • Broad-based growth in all categories including MMA, DDA, NOW, and savings supported declines in higher cost deposits.

  • Total deposit costs declined 6 bps to 0.22% sequentially.

Income Statement Summary**

(in thousands, except per share data)

1Q21

4Q20

Linked
Quarter
Change

Linked
Quarter %
Change

1Q20

Year/Year
Change

Year/Year
% Change

Net interest income

$

373,857

$

385,932

$

(12,075

)

(3

)%

$

373,260

$

597

%

Non-interest revenue

110,956

114,761

(3,805

)

(3

)

103,857

7,099

7

Non-interest expense

267,134

302,498

(35,364

)

(12

)

276,279

(9,145

)

(3

)

(Reversal of) provision for credit losses

(18,575

)

11,066

(29,641

)

nm

158,722

(177,297

)

nm

Income before taxes

$

236,254

$

187,129

$

49,125

26

%

$

42,116

$

194,138

461

%

Income tax expense

49,161

36,720

12,441

34

3,595

45,566

nm

Preferred stock dividends

8,291

8,291

8,291

Net income available to common shareholders

$

178,802

$

142,118

$

36,684

26

%

$

30,230

$

148,572

491

%

Weighted average common shares outstanding, diluted

149,780

148,725

1,055

1

%

148,401

1,379

1

%

Diluted earnings per share

$

1.19

$

0.96

$

0.23

25

$

0.20

$

0.99

486

Adjusted diluted earnings per share

1.21

1.08

0.13

12

0.21

1.00

483

** Amounts may not total due to rounding

Core Performance

  • Net interest income of $373.9 million in the first quarter, down $12.1 million sequentially as lower deposit costs and deployment of excess liquidity helped offset declines from continued fixed-rate repricing and accelerated prepayment activity.

    • Net PPP fee accretion of $24.9 million, up $0.1 million sequentially.

    • Net interest margin was 3.04%, down 8 bps sequentially.

  • Non-interest revenue decreased $3.8 million, or 3% sequentially, and increased $7.1 million, or 7% compared to prior year. Adjusted non-interest revenue increased $0.6 million, or 1% sequentially, and $13.6 million, or 14% compared to prior year.

    • Broad-based growth including $3.2 million in capital markets income helped offset normalization of net mortgage revenue, which declined $2.1 million sequentially.

  • Non-interest expense decreased $35.4 million, or 12% sequentially. Adjusted non-interest expense decreased $8.5 million, or 3% sequentially.

    • Seasonal increases in employment-related expenses such as payroll taxes and benefits more than offset by lower headcount and day count as well as lower professional fees associated with Synovus Forward and COVID/PPP.

  • Reversal of provision for credit losses of $18.6 million; allowance for credit losses coverage ratio (to loans) of 1.58%, or 1.69% excluding PPP loans.

  • Tax expense was $49.2 million, an increase of $12.4 million driven by higher taxable income.

    • Effective tax rate of 20.81%.

Capital Ratios

1Q21

4Q20

1Q20

Common equity Tier 1 capital (CET1) ratio

9.74

%

*

9.66

%

8.70

%

Tier 1 capital ratio

10.99

*

10.95

9.95

Total risk-based capital ratio

13.34

*

13.42

12.29

Tier 1 leverage ratio

8.80

*

8.50

8.92

Tangible common equity ratio

7.55

7.66

7.94

* Ratios are preliminary.

Capital

  • CET1 ratio improved 8 bps during the quarter to 9.74% as strong core performance helped offset a $1.20 billion increase in risk-weighted assets.

  • Total risk-based capital ratio of 13.34% declined 8 bps from the prior quarter following a reduction in the ACL.

First Quarter Earnings Conference Call

Synovus will host an earnings highlights conference call at 8:30 a.m. EDT on April 20, 2021. 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 $55 billion in assets. Synovus provides commercial and retail banking, investment, and mortgage services through 288 branches in Alabama, Florida, Georgia, South Carolina, and Tennessee. Synovus Bank, a wholly owned subsidiary of Synovus, 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; our expectations regarding net interest income and net interest margin; expectations on our growth strategy, expense and revenue initiatives, capital management, balance sheet 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, 2020, 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 revenue; adjusted non-interest expense; total adjusted revenue; adjusted tangible efficiency ratio; adjusted net income available to common shareholders; adjusted diluted earnings per 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; and tangible common equity ratio 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 revenue; total non-interest expense; total FTE revenue; efficiency ratio-FTE; net income available to common shareholders; diluted earnings per share; return on average assets; return on average common equity; and the ratio of total shareholders' equity to total assets, 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. Total adjusted revenue and adjusted non-interest revenue are measures used by management to evaluate total FTE revenue and non-interest revenue 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 diluted earnings per share, adjusted return on average assets, and adjusted return on average common equity are measures used by management to evaluate operating results exclusive of items that are not indicative of ongoing operations and impact period-to-period comparisons. 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 is used by management 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)

1Q21

4Q20

1Q20

Adjusted non-interest revenue

Total non-interest revenue

$

110,956

$

114,761

$

103,857

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

1,990

(2,337

)

(8,734

)

Subtract/add: Fair value (increase) decrease of private equity investments

(63

)

4,255

Adjusted non-interest revenue

$

112,946

$

112,361

$

99,378

Adjusted non-interest expense

Total non-interest expense

$

267,134

$

302,498

$

276,279

Subtract: Restructuring charges

(531

)

(18,068

)

(3,220

)

Subtract: Valuation adjustment to Visa derivative

(890

)

Subtract: Loss on early extinguishment of debt

(8,409

)

(1,904

)

Adjusted non-interest expense

$

266,603

$

275,131

$

271,155

Reconciliation of Non-GAAP Financial Measures, continued

(dollars in thousands)

1Q21

4Q20

1Q20

Total adjusted revenue and adjusted tangible efficiency ratio

Adjusted non-interest expense

$

266,603

$

275,131

$

271,155

Subtract: Amortization of intangibles

(2,379

)

(2,640

)

(2,640

)

Adjusted tangible non-interest expense

$

264,224

$

272,491

$

268,515

Net interest income

$

373,857

$

385,932

$

373,260

Add: Tax equivalent adjustment

774

821

786

Add: Total non-interest revenue

110,956

114,761

103,857

Total FTE revenue

485,587

501,514

477,903

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

1,990

(2,337

)

(8,734

)

Subtract/add: Fair value (increase) decrease of private equity investments

(63

)

4,255

Total adjusted revenue

$

487,577

$

499,114

$

473,424

Efficiency ratio-FTE

55.01

%

60.32

%

57.81

%

Adjusted tangible efficiency ratio

54.19

54.60

56.72

Adjusted return on average assets

Net income

$

187,093

$

150,409

$

38,521

Add: Restructuring charges

531

18,068

3,220

Add: Valuation adjustment to Visa derivative

890

Add: Loss on early extinguishment of debt

8,409

1,904

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

1,990

(2,337

)

(8,734

)

Subtract/add: Fair value (increase) decrease of private equity investments

(63

)

4,255

Subtract: Tax effect of adjustments (1)

(638

)

(6,467

)

(167

)

Adjusted net income

$

188,976

$

168,909

$

38,999

Net income annualized

$

758,766

$

598,366

$

154,931

Adjusted net income annualized

$

766,403

$

671,964

$

156,853

Total average assets

$

54,188,504

$

53,833,909

$

48,696,595

Return on average assets

1.40

%

1.11

%

0.32

%

Adjusted return on average assets

1.41

1.25

0.32

Adjusted net income available to common shareholders and adjusted diluted earnings per share

Net income available to common shareholders

$

178,802

$

142,118

$

30,230

Add: Restructuring charges

531

18,068

Add: Valuation adjustment to Visa derivative

890

Add: Loss on early extinguishment of debt

8,409

1,904

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

1,990

(2,337

)

(8,734

)

Subtract/add: Fair value (increase) decrease of private equity investments

(63

)

4,255

Subtract: Tax effect of adjustments (1)

(638

)

(6,467

)

(167

)

Adjusted net income available to common shareholders

$

180,685

$

160,618

$

30,708

Weighted average common shares outstanding, diluted

149,780

148,725

148,401

Diluted earnings per share

$

1.19

$

0.96

$

0.20

Adjusted diluted earnings per share

1.21

1.08

0.21

Reconciliation of Non-GAAP Financial Measures, continued

(dollars in thousands)

1Q21

4Q20

1Q20

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

$

178,802

$

142,118

$

30,230

Add: Restructuring charges

531

18,068

3,220

Add: Valuation adjustment to Visa derivative

890

Add: Loss on early extinguishment of debt

8,409

1,904

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

1,990

(2,337

)

(8,734

)

Subtract/add: Fair value (increase) decrease of private equity investments

(63

)

4,255

Subtract: Tax effect of adjustments (1)

(638

)

(6,467

)

(167

)

Adjusted net income available to common shareholders

$

180,685

$

160,618

$

30,708

Adjusted net income available to common shareholders annualized

$

732,778

$

638,980

$

123,507

Add: Amortization of intangibles, annualized net of tax

7,207

7,782

7,868

Adjusted net income available to common shareholders excluding amortization of intangibles annualized

$

739,985

$

646,762

$

131,375

Net income available to common shareholders annualized

$

725,141

$

565,382

$

121,584

Add: Amortization of intangibles, annualized net of tax

7,207

7,782

7,868

Net income available to common shareholders excluding amortization of intangibles annualized

$

732,348

$

573,164

$

129,452

Total average shareholders' equity less preferred stock

$

4,599,076

$

4,594,199

$

4,424,278

Subtract: Goodwill

(452,390

)

(452,390

)

(497,267

)

Subtract: Other intangible assets, net

(44,005

)

(46,511

)

(54,514

)

Total average tangible shareholders' equity less preferred stock

$

4,102,681

$

4,095,298

$

3,872,497

Return on average common equity

15.77

%

12.31

%

2.75

%

Adjusted return on average common equity

15.93

13.91

2.79

Return on average tangible common equity

17.85

14.00

3.34

Adjusted return on average tangible common equity

18.04

15.79

3.39

Reconciliation of Non-GAAP Financial Measures, continued

(dollars in thousands)

March 31,
2021

December 31,
2020

March 31,
2020

Tangible common equity ratio

Total assets

$

55,159,011

$

54,394,159

$

50,619,585

Subtract: Goodwill

(452,390

)

(452,390

)

(497,267

)

Subtract: Other intangible assets, net

(42,733

)

(45,112

)

(53,032

)

Tangible assets

$

54,663,888

$

53,896,657

$

50,069,286

Total shareholders’ equity

$

5,161,717

$

5,161,334

$

5,065,205

Subtract: Goodwill

(452,390

)

(452,390

)

(497,267

)

Subtract: Other intangible assets, net

(42,733

)

(45,112

)

(53,032

)

Subtract: Preferred Stock, no par value

(537,145

)

(537,145

)

(537,145

)

Tangible common equity

$

4,129,449

$

4,126,687

$

3,977,761

Total shareholders’ equity to total assets ratio

9.36

%

9.49

%

10.01

%

Tangible common equity ratio

7.55

7.66

7.94

(1) An assumed marginal tax rate of 25.3% for 2021 and 25.9% for 2020 was applied.

Synovus

INCOME STATEMENT DATA

(Unaudited)

(Dollars in thousands, except per share data)

2021

2020

First Quarter

First
Quarter

Fourth
Quarter

Third
Quarter

Second
Quarter

First
Quarter

'21 vs '20

% Change

Interest income

$

409,817

433,479

435,550

451,569

483,897

(15

)%

Interest expense

35,960

47,547

58,560

75,003

110,637

(67

)

Net interest income

373,857

385,932

376,990

376,566

373,260

(Reversal of) provision for credit losses

(18,575

)

11,066

43,383

141,851

158,722

nm

Net interest income after provision for credit losses

392,432

374,866

333,607

234,715

214,538

83

Non-interest revenue:

Service charges on deposit accounts

20,033

19,063

17,813

15,567

20,689

(3

)

Fiduciary and asset management fees

17,954

17,242

15,885

14,950

15,174

18

Card fees

11,996

11,743

10,823

9,186

10,950

10

Brokerage revenue

12,974

11,794

10,604

9,984

12,398

5

Mortgage banking income

22,315

24,426

31,229

23,530

12,227

83

Capital markets income

7,505

4,352

5,690

6,050

11,243

(33

)

Income from bank-owned life insurance

8,843

9,725

7,778

7,756

6,038

46

Investment securities (losses)/gains, net

(1,990

)

2,337

(1,550

)

69,409

8,734

nm

Gain on sale and fair value increase/(decrease) on private equity investments

63

260

8,707

(4,255

)

nm

Other non-interest revenue

11,326

14,016

15,879

8,345

10,659

6

Total non-interest revenue

110,956

114,761

114,411

173,484

103,857

7

Non-interest expense:

Salaries and other personnel expense

161,477

153,946

154,994

159,597

149,678

8

Net occupancy, equipment, and software expense

41,134

44,183

41,554

41,727

42,194

(3

)

Third-party processing and other services

20,032

20,799

21,827

22,666

22,700

(12

)

Professional fees

9,084

17,541

13,377

15,305

10,675

(15

)

FDIC insurance and other regulatory fees

5,579

6,288

6,793

6,851

5,278

6

Amortization of intangibles

2,379

2,640

2,640

2,640

2,640

(10

)

Goodwill impairment

44,877

nm

Restructuring charges

531

18,068

2,882

2,822

3,220

nm

Loss on early extinguishment of debt

8,409

154

1,904

nm

Earnout liability adjustments

4,908

nm

Other operating expenses

26,918

30,624

27,557

27,625

37,990

(29

)

Total non-interest expense

267,134

302,498

316,655

284,141

276,279

(3

)

Income before income taxes

236,254

187,129

131,363

124,058

42,116

461

Income tax expense

49,161

36,720

39,789

30,866

3,595

nm

Net income

187,093

150,409

91,574

93,192

38,521

386

Less: Preferred stock dividends

8,291

8,291

8,291

8,291

8,291

Net income available to common shareholders

$

178,802

142,118

83,283

84,901

30,230

491

%

Net income per common share, basic

$

1.20

0.96

0.57

0.58

0.21

487

%

Net income per common share, diluted

1.19

0.96

0.56

0.57

0.20

486

Cash dividends declared per common share

0.33

0.33

0.33

0.33

0.33

Return on average assets *

1.40

%

1.11

0.69

0.71

0.32

108

bps

Return on average common equity *

15.77

12.31

7.28

7.48

2.75

1,302

Weighted average common shares outstanding, basic

148,467

147,744

147,314

147,288

147,311

1

%

Weighted average common shares outstanding, diluted

149,780

148,725

147,976

147,733

148,401

1

nm - not meaningful

bps - basis points

* - ratios are annualized

Synovus

BALANCE SHEET DATA

March 31, 2021

December 31, 2020

March 31, 2020

(Unaudited)

(In thousands, except share data)

ASSETS

Cash and due from banks

$

493,645

$

531,625

$

652,451

Interest-bearing funds with Federal Reserve Bank

2,722,100

3,586,565

1,020,775

Interest earning deposits with banks

23,969

20,944

20,717

Federal funds sold and securities purchased under resale agreements

88,552

113,783

129,891

Cash and cash equivalents

3,328,266

4,252,917

1,823,834

Investment securities available for sale, at fair value

8,825,757

7,962,438

6,937,240

Loans held for sale ($242,010, $216,647, and $119,841 measured at fair value, respectively)

993,887

760,123

119,841

Loans, net of deferred fees and costs

38,805,101

38,252,984

38,258,024

Allowance for loan losses

(563,214

)

(605,736

)

(493,452

)

Loans, net

38,241,887

37,647,248

37,764,572

Cash surrender value of bank-owned life insurance

1,054,475

1,049,373

1,031,544

Premises, equipment and software, net

454,911

463,959

482,462

Goodwill

452,390

452,390

497,267

Other intangible assets, net

42,733

45,112

53,032

Other assets

1,764,705

1,760,599

1,909,793

Total assets

$

55,159,011

$

54,394,159

$

50,619,585

LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:

Deposits:

Non-interest-bearing deposits

$

14,660,287

$

13,477,854

$

9,659,451

Interest-bearing deposits

32,708,664

33,213,717

30,167,134

Total deposits

47,368,951

46,691,571

39,826,585

Federal funds purchased and securities sold under repurchase agreements

293,659

227,922

312,776

Other short-term borrowings

7,717

1,175,000

Long-term debt

1,202,825

1,202,494

3,152,339

Other liabilities

1,131,859

1,103,121

1,087,680

Total liabilities

49,997,294

49,232,825

45,554,380

Shareholders' equity:

Preferred stock - no par value. Authorized 100,000,000 shares; issued 22,000,000

537,145

537,145

537,145

Common stock - $1.00 par value. Authorized 342,857,143 shares; issued 168,978,380, 168,132,522, and 167,359,689; outstanding 148,888,513, 148,039,495, and 147,266,662

168,978

168,133

167,360

Additional paid-in capital

3,864,281

3,851,208

3,821,357

Treasury stock, at cost – 20,089,867, 20,093,027, and 20,093,027 shares

(731,690

)

(731,806

)

(731,806

)

Accumulated other comprehensive income, net

15,278

158,635

256,911

Retained earnings

1,307,725

1,178,019

1,014,238

Total shareholders’ equity

5,161,717

5,161,334

5,065,205

Total liabilities and shareholders' equity

$

55,159,011

$

54,394,159

$

50,619,585

Synovus

AVERAGE BALANCES AND YIELDS/RATES (1)

(Unaudited)

2021

2020

(Dollars in thousands)

First

Fourth

Third

Second

First

Quarter

Quarter

Quarter

Quarter

Quarter

Interest Earning Assets

Investment securities (2) (4)

$

8,437,563

7,493,822

7,227,400

6,618,533

6,680,047

Yield

1.40

%

2.07

2.39

2.72

3.09

Trading account assets (5)

$

3,063

8,496

5,391

6,173

6,306

Yield

2.81

%

1.03

1.69

2.19

2.70

Commercial loans (3) (4)

$

29,844,491

30,363,102

30,730,135

30,236,919

27,607,343

Yield

3.95

%

3.96

3.80

3.95

4.57

Consumer loans (3)

$

8,367,776

8,521,449

9,032,437

9,899,172

9,985,702

Yield

3.98

%

4.00

4.08

4.34

4.60

Allowance for loan losses

$

(599,872

)

(595,547

)

(591,098

)

(498,545

)

(368,033

)

Loans, net (3)

$

37,612,395

38,289,004

39,171,474

39,637,546

37,225,012

Yield

4.02

%

4.03

3.92

4.08

4.62

Mortgage loans held for sale

$

246,962

309,278

244,952

221,157

86,415

Yield

2.68

%

2.74

2.92

3.09

3.67

Other loans held for sale

$

660,753

544,301

493,940

19,246

Yield

2.91

%

2.81

3.61

4.19

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

$

2,838,021

2,716,645

1,265,880

1,709,086

652,130

Yield

0.10

%

0.10

0.11

0.11

1.02

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

$

157,657

162,537

200,923

247,801

284,082

Yield

1.69

%

2.64

2.73

3.60

3.38

Total interest earning assets

$

49,956,414

49,524,083

48,609,960

48,459,542

44,933,992

Yield

3.32

%

3.49

3.58

3.75

4.33

Interest-Bearing Liabilities

Interest-bearing demand deposits

$

8,570,753

8,531,415

7,789,095

7,260,940

6,445,986

Rate

0.14

%

0.16

0.19

0.21

0.51

Money Market accounts

$

15,348,916

14,411,860

13,272,972

12,238,479

11,548,014

Rate

0.23

%

0.26

0.36

0.46

1.00

Savings deposits

$

1,219,288

1,147,667

1,114,956

1,036,024

926,822

Rate

0.02

%

0.01

0.02

0.02

0.05

Time deposits under $100,000

$

1,161,306

1,239,592

1,379,923

1,621,943

1,761,741

Rate

0.56

%

0.74

1.03

1.43

1.64

Time deposits over $100,000

$

2,993,996

3,302,959

3,863,821

4,772,555

5,051,705

Rate

0.74

%

1.03

1.44

1.80

2.04

Other brokered deposits

$

1,950,582

1,978,393

1,912,114

1,998,571

1,376,669

Rate

0.20

%

0.23

0.23

0.25

1.42

Brokered time deposits

$

1,418,751

1,795,982

2,232,940

2,244,429

2,166,496

Rate

1.50

%

1.60

1.59

1.86

2.11

Total interest-bearing deposits

$

32,663,592

32,407,868

31,565,821

31,172,941

29,277,433

Rate

0.31

%

0.39

0.54

0.73

1.18

Federal funds purchased and securities sold under repurchase agreements

$

209,448

174,316

180,342

250,232

167,324

Rate

0.07

%

0.07

0.09

0.12

0.30

Other short-term borrowings

$

46,739

550,000

1,384,362

Rate

%

1.12

1.23

1.66

Long-term debt

$

1,202,613

1,552,791

2,234,665

2,834,188

2,678,651

Rate

3.63

%

3.96

2.71

2.36

2.78

Total interest-bearing liabilities

$

34,075,653

34,134,975

34,027,567

34,807,361

33,507,770

Rate

0.42

%

0.55

0.68

0.86

1.30

Non-interest-bearing demand deposits

$

13,791,286

13,566,112

12,773,676

11,923,534

9,409,774

Cost of funds

0.30

%

0.40

0.50

0.65

1.04

Effective cost of funds(6)

0.28

%

0.37

0.48

0.62

0.96

Net interest margin

3.04

%

3.12

3.10

3.13

3.37

Taxable equivalent adjustment (4)

$

774

821

956

861

786

(1) Yields and rates are annualized.

(2) Excludes net unrealized gains and losses.

(3) Average loans are shown net of unearned income. Non-performing loans are included.

(4) Reflects taxable-equivalent adjustments, using the statutory federal income tax rate of 21%, in adjusting interest on tax-exempt loans and investment securities to a taxable-equivalent basis.

(5) Included as a component of other assets on the consolidated balance sheet.

(6) Includes the impact of non-interest-bearing capital funding sources.

Synovus

LOANS OUTSTANDING BY TYPE

(Unaudited)

Total Loans

Total Loans

Linked Quarter

Total Loans

Year/Year

(Dollars in thousands)

Loan Type

March 31, 2021

December 31, 2020

% Change

March 31, 2020

% Change

Commercial, Financial, and Agricultural

$

12,662,329

$

12,410,152

2

%

$

10,902,455

16

%

Owner-Occupied

7,031,505

7,110,016

(1

)

6,907,893

2

Total Commercial & Industrial

19,693,834

19,520,168

1

17,810,348

11

Multi-Family

2,220,939

2,190,534

1

2,103,566

6

Hotels

1,462,370

1,442,242

1

1,311,614

11

Office Buildings

2,280,053

2,207,744

3

2,211,525

3

Shopping Centers

1,662,158

1,644,519

1

1,778,627

(7

)

Warehouses

692,267

700,050

(1

)

759,858

(9

)

Other Investment Property

1,017,938

918,290

11

859,726

18

Total Investment Properties

9,335,725

9,103,379

3

9,024,916

3

1-4 Family Construction

189,626

182,981

4

254,495

(25

)

1-4 Family Investment Mortgage

449,328

445,714

1

482,442

(7

)

Total 1-4 Family Properties

638,954

628,695

2

736,937

(13

)

Commercial Development

142,380

130,678

9

107,219

33

Residential Development

196,653

245,170

(20

)

302,516

(35

)

Land Acquisition

220,216

217,785

1

303,770

(28

)

Land and Development

559,249

593,633

(6

)

713,505

(22

)

Total Commercial Real Estate

10,533,928

10,325,707

2

10,475,358

1

Consumer Mortgages

5,299,175

5,513,491

(4

)

5,613,997

(6

)

Home Equity Lines

1,432,367

1,537,726

(7

)

1,793,486

(20

)

Credit Cards

267,371

281,018

(5

)

261,581

2

Other Consumer Loans

1,578,426

1,074,874

47

2,303,254

(31

)

Total Consumer

8,577,339

8,407,109

2

9,972,318

(14

)

Total

$

38,805,101

$

38,252,984

1

%

$

38,258,024

1

%

NON-PERFORMING LOANS COMPOSITION

(Unaudited)

Total
Non-performing
Loans

Total
Non-performing
Loans

Linked Quarter

Total
Non-performing
Loans

Year/Year

(Dollars in thousands)

Loan Type

March 31, 2021

December 31, 2020

% Change

March 31, 2020

% Change

Commercial, Financial, and Agricultural

$

76,460

$

77,386

(1

)%

$

99,287

(23

)%

Owner-Occupied

17,192

20,019

(14

)

17,357

(1

)

Total Commercial & Industrial

93,652

97,405

(4

)

116,644

(20

)

Multi-Family

2,698

168

nm

356

658

Office Buildings

1,645

1,134

45

836

97

Shopping Centers

20,138

21,082

(4

)

712

nm

Warehouses

221

217

2

nm

Other Investment Property

887

2,030

(56

)

308

188

Total Investment Properties

25,589

24,631

4

2,212

nm

1-4 Family Construction

1,291

1,236

4

278

364

1-4 Family Investment Mortgage

2,760

2,383

16

2,047

35

Total 1-4 Family Properties

4,051

3,619

12

2,325

74

Commercial Development

567

582

(3

)

596

(5

)

Residential Development

452

533

(15

)

561

(19

)

Land Acquisition

782

1,048

(25

)

1,043

(25

)

Land and Development

1,801

2,163

(17

)

2,200

(18

)

Total Commercial Real Estate

31,441

30,413

3

6,737

367

Consumer Mortgages

11,201

8,740

28

13,571

(17

)

Home Equity Lines

12,191

12,145

12,475

(2

)

Other Consumer Loans

6,684

2,376

181

6,860

(3

)

Total Consumer

30,076

23,261

29

32,906

(9

)

Total

$

155,169

$

151,079

3

%

$

156,287

(1

)%

Synovus

CREDIT QUALITY DATA

(Unaudited)

(Dollars in thousands)

2021

2020

First Quarter

First

Fourth

Third

Second

First

'21 vs '20

Quarter

Quarter

Quarter

Quarter

Quarter

% Change

Non-performing Loans (NPLs)

$

155,169

151,079

168,837

147,437

156,287

(1

)%

Impaired Loans Held for Sale

23,590

23,590

nm

Other Real Estate and Other Assets

16,849

17,394

23,280

30,242

33,679

(50

)

Non-performing Assets (NPAs)

195,608

192,063

192,117

177,679

189,966

3

Allowance for Loan Losses (ALL)

563,214

605,736

603,800

588,648

493,452

14

Reserve for Unfunded Commitments

51,528

47,785

60,794

61,029

38,420

34

Allowance for Credit Losses (ACL)

614,742

653,521

664,594

649,677

531,872

16

Net Charge-Offs - Quarter

20,204

22,139

28,466

24,046

20,061

Net Charge-Offs / Average Loans - Quarter (1)

0.21

%

0.23

0.29

0.24

0.21

NPLs / Loans

0.40

0.39

0.43

0.37

0.41

NPAs / Loans, ORE and specific other assets

0.50

0.50

0.49

0.44

0.50

ACL/Loans

1.58

1.71

1.68

1.63

1.39

ALL/Loans

1.45

1.58

1.53

1.47

1.29

ACL/NPLs

396.18

432.57

393.63

440.65

340.32

ALL/NPLs

362.97

400.94

357.62

399.25

315.74

Past Due Loans over 90 days and Still Accruing

$

3,804

4,117

7,512

8,391

6,398

(41

)

As a Percentage of Loans Outstanding

0.01

%

0.01

0.02

0.02

0.02

Total Past Due Loans and Still Accruing

$

45,693

47,349

57,316

46,390

83,235

(45

)

As a Percentage of Loans Outstanding

0.12

%

0.12

0.14

0.12

0.22

Accruing Troubled Debt Restructurings (TDRs)

$

129,776

134,972

163,511

166,461

160,128

(19

)

(1) Ratio is annualized.

SELECTED CAPITAL INFORMATION (1)

(Unaudited)

(Dollars in thousands)

March 31,
2021

December 31,
2020

March 31,
2020

Tier 1 Capital

$

4,721,859

4,572,010

4,281,560

Total Risk-Based Capital

5,733,955

5,604,230

5,289,039

Common Equity Tier 1 Capital Ratio

9.74

%

9.66

8.70

Tier 1 Capital Ratio

10.99

10.95

9.95

Total Risk-Based Capital Ratio

13.34

13.42

12.29

Tier 1 Leverage Ratio

8.80

8.50

8.92

Common Equity as a Percentage of Total Assets (2)

8.38

8.51

8.95

Tangible Common Equity Ratio (3) (5)

7.55

7.66

7.94

Book Value Per Common Share (4)

$

31.06

31.24

30.75

Tangible Book Value Per Common Share (3)

27.74

27.88

27.01

(1) Current quarter regulatory capital information is preliminary.

(2) Common equity consists of Total Shareholders' Equity less Preferred Stock.

(3) Excludes the carrying value of goodwill and other intangible assets from common equity and total assets.

(4) Book Value Per Common Share consists of Total Shareholders' Equity less Preferred Stock divided by total common shares outstanding.

(5) See "Non-GAAP Financial Measures" of this report for applicable reconciliation.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210420005452/en/

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Media Relations
(706) 644-0528

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Investor Relations
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