Earnings Recap: Synovus Financial Corp. (NYSE: SNV)

On Friday, Shares of Synovus Financial Corp. (NYSE: SNV) inclined 2.47% to $34.05. The stock traded total volume of 3,642,447 shares higher than the average volume of 2.40M shares.

Synovus Financial Corp. (SNV) recently stated financial results for the quarter ended September 30, 2018.

Third Quarter Highlights:

  • Net income available to common shareholders was $99.30M or $0.84 per diluted share as contrast to $108.60M or $0.91 per diluted share for the second quarter 2018 and $95.40M or $0.78 per diluted share for the third quarter 2017. Adjusted diluted earnings per share were $0.95 as contrast to $0.92 for the second quarter 2018 and $0.65 for the third quarter 2017. Return on average assets was 1.36% and adjusted return on average assets was 1.47%. Return on average common equity was 13.95%, adjusted return on average common equity was 15.69%, and adjusted return on average tangible common equity was 16.08%.
  • Total loans ended the quarter at $25.58B, up $443.10M or 7.0% annualized from the previous quarter and up $1.09B or 4.5% as contrast to the third quarter 2017.
  • Total average deposits grew $119.20M or 1.8% annualized from the previous quarter and $1.10B or 4.4% as contrast to the third quarter 2017. Net interest margin was 3.89%, up 3 basis points from the previous quarter and up 26 basis points from the third quarter 2017. Efficiency ratio was 60.62%, contrast to 56.78% in the second quarter 2018 and 50.62% in the prior-year quarter. Adjusted efficiency ratio was 55.55%, as compared to 56.41% in the previous quarter and 58.59% in the third quarter 2017. Credit quality metrics remained favorable, with a non-performing asset ratio of 46 basis points, down 4 basis points from the previous quarter and down 11 basis points from the third quarter 2017. The effective year-to-date tax rate through the third quarter 2018 was 19.8% contrast to 34.6% in the prior-year quarter.

Balance Sheet:

  • Total loans ended the quarter at $25.58B, up $443.10M or 7.0% annualized from the previous quarter and up $1.09B or 4.5% as contrast to the third quarter 2017.
  • Commercial and industrial loans grew by $227.80M or 7.4% annualized from the previous quarter and $776.20M or 6.6% as contrast to the third quarter 2017.
  • Consumer loans grew by $148.10M or 9.4% annualized from the previous quarter and $827.60M or 14.9% as contrast to the third quarter 2017.
  • Commercial real estate loans grew $68.20M or 4.1% annualized from the previous quarter and declined $514.50M or 7.1% as contrast to the third quarter 2017.
  • Total average loans were $25.32B, up $376.30M or 6.0% annualized from the previous quarter and up $822.70M or 3.4% as contrast to the third quarter 2017.
  • Total average deposits were $26.39B, up $119.20M or 1.8% annualized from the previous quarter and up $1.10B or 4.4% as contrast to the third quarter 2017.
  • Excluding brokered deposits, average deposits increased $269.20M or 4.4% annualized from the previous quarter.

Core Performance:

  • Total revenues were $363.30M, up $4.00M from the previous quarter and down $34.70M or 8.7% from the third quarter 2017.
  • Adjusted total revenues were $363.00M, up $3.60M from the previous quarter and up $31.70M or 9.6% from the third quarter 2017.
  • Net interest income was $291.60M, up $7.00M or 2.5% from the previous quarter and up 11.1% from the third quarter 2017. Net interest margin was 3.89%, up 3 basis points from the previous quarter. Yield on earning assets was 4.58%, up 11 basis points from the previous quarter, and the effective cost of funds was 0.69%, up 8 basis points from the previous quarter.
  • Total non-interest income was $71.70M, down $1.70M from the previous quarter and down $63.70M from the third quarter 2017, which included the $75.0M Cabela’s transaction fee, partially offset by $8.00M in investment securities losses.
  • Adjusted non-interest income was $71.20M, down $3.50M or 4.7% from the previous quarter and up $2.80M or 4.1% year-over-year.
  • Core banking fees were $35.70M, down $1.70M or 4.7% from the previous quarter and flat from third quarter 2017.
  • Fiduciary and asset management fees, brokerage revenue, and insurance revenues were $23.90M, down $825 thousand from the previous quarter and up $2.80M or 13.0% from the prior-year quarter.
  • Mortgage banking income was $5.30M, up 9.3% from the previous quarter and down 5.6% from the third quarter 2017.
  • Total non-interest expense was $220.30M, up $16.20M or 8.0% from the previous quarter and up 7.1% year-over-year.
  • Adjusted non-interest expense was $201.60M, a decline of $1.10M from the previous quarter and a boost of $7.50M or 3.9% from the third quarter 2017.
  • Employment expense of $114.30M increased 2.2% from the previous quarter and increased 4.3% from the third quarter 2017.
  • Occupancy and equipment expense of $32.10M declined 1.7% from the previous quarter and increased 5.0% from the prior-year quarter.
  • Adjusted other expenses of $55.20M reduced $3.00M or 5.1% from the previous quarter and increased 2.5% from the third quarter 2017. Efficiency ratio was 60.62%, contrast to 56.78% in the second quarter 2018 and 50.62% in the prior-year quarter. Adjusted efficiency ratio was 55.55%, as compared to 56.41% in the previous quarter and 58.59% in the third quarter 2017.

Credit Quality:

  • Non-performing loans were $108.40M at September 30, 2018, down $8.90M or 7.6% from June 30, 2018, and up $10.60M or 10.8% from September 30, 2017. The non-performing loan ratio was 0.42% at September 30, 2018, contrast to 0.47% at June 30, 2018, and 0.40% at September 30, 2017.
  • Total non-performing assets were $117.00M at September 30, 2018, down $9.40M or 7.4% from June 30, 2018, and down $21.60M or 15.6% from September 30, 2017. The non-performing asset ratio was 0.46% at September 30, 2018, as contrast to 0.50% at June 30, 2018, and 0.57% at September 30, 2017.
  • Net charge-offs were $15.30M in the third quarter 2018, down $2.50M from the previous quarter and down $23.20M from $38.10M in the third quarter 2017. The annualized net charge-off ratio was 0.24% in the third quarter as contrast to 0.29% in the previous quarter. Total delinquencies (consisting of loans 30 or more days past due and still accruing) remained low at 0.31% of total loans at September 30, 2018, up from 0.22% in the previous quarter and down 4 basis points from September 30, 2017.

SNV has the market capitalization of $3.92B and its EPS growth ratio for the past five years was -15.50%. The return on assets ratio of the Company was 1.10% while its return on investment ratio stands at 23.50%. Price to sales ratio was 3.03 while 82.70% of the stock was owned by institutional investors.

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