Synovus Financial Corp. today reported financial results for the quarter and year ended December 31, 2016.

Net income available to common shareholders for the fourth quarter 2016 was $66.0 million or $0.54 per diluted share as compared to $62.7 million or $0.51 per diluted share for the third quarter 2016 and $55.8 million or $0.43 per diluted share for the fourth quarter 2015. Adjusted earnings per diluted share for the fourth quarter 2016 were $0.54, a 3.6% increase from the third quarter 2016 and a 22.2% increase from the fourth quarter 2015.

2016 Highlights

• Net income available to common shareholders for 2016 was $236.5 million or $1.89 per diluted share as compared to $215.8 million or $1.62 per diluted share for 2015. Diluted EPS grew 16.7% for 2016 compared to 2015.
• Total average loans¹ for the year were $23.10 billion, a $1.56 billion or 7.2% increase from 2015.
  • Total loans¹ ended the year at $23.86 billion, a $1.43 billion or 6.4% increase from 2015.
• Total average deposits for the year were $23.88 billion, a $1.33 billion or 5.9% increase from 2015.
• Total revenues² of $1.16 billion increased $73.9 million or 6.8% from 2015.
• Efficiency ratio of 64.74% improved 87 basis points from 2015.
  • Adjusted efficiency ratio of 61.06% improved 87 basis points from 2015.
• Non-performing loans of $153.4 million at December 31, 2016 declined 8.9% from December 31, 2015, and the non-performing loan ratio declined 11 basis points from December 31, 2015 to 0.64% at December 31, 2016.
• Returned over $322 million in capital to common shareholders during the year through common share repurchases and dividends.
  • Common Equity Tier 1 ratio was 9.96% at December 31, 2016 compared to 10.37% at December 31, 2015.
• Completed the acquisition of Global One effective October 1, 2016.

“We closed out 2016 with another quarter of improved profitability demonstrated by diluted earnings per share of $0.54, up 26 percent compared to the fourth quarter of 2015,” said Kessel D. Stelling, Synovus Chairman and CEO. “We also achieved strong earnings per share growth for the full year and returned more than $300 million in capital to our shareholders. We are energized about the opportunities in 2017 and beyond as we focus on exceptional and efficient service delivery, understanding and meeting customer needs, further balance sheet diversification, disciplined expense management, and investing in our communities.”

Consolidated Fourth Quarter Financial Results

Balance Sheet

• Total loans¹ ended the quarter at $23.86 billion, up $593.5 million or 10.1% annualized from the previous quarter and up $1.43 billion or 6.4% as compared to the fourth quarter 2015.
  • Commercial and industrial loans¹ grew by $536.0 million or 19.4% annualized from the previous quarter and $779.8 million or 7.2% as compared to the fourth quarter 2015.
  • Retail loans grew by $157.0 million or 13.0% annualized from the previous quarter and $671.7 million or 15.6% as compared to the fourth quarter 2015.
  • Commercial real estate loans declined by $99.6 million or 5.3% annualized from the previous quarter and $28.8 million or 0.4% as compared to the fourth quarter 2015.
• Total average deposits for the quarter were $24.66 billion, up $631.0 million or 10.4% annualized from the previous quarter and $1.42 billion or 6.1% as compared to the fourth quarter 2015.
  • Average core transaction accounts³ grew by $414.1 million or 9.5% annualized from the previous quarter and $1.21 billion or 7.3% as compared to the fourth quarter 2015.

Core Performance

• Total revenues² were $301.7 million, up $7.5 million or 2.6% from the previous quarter and 8.2% from the fourth quarter 2015.
• Net interest income was $233.5 million, up $7.5 million or 3.3% from the previous quarter and 9.8% as compared to the fourth quarter 2015.
• Net interest margin was 3.29%, up 2 basis points from the previous quarter. Yield on earning assets was 3.73%, up 2 basis points from the previous quarter, and the effective cost of funds was 0.44%, unchanged from the previous quarter.
• Total non-interest income was $74.0 million, up $5.9 million or 8.6% compared to the previous quarter and 11.8% as compared to the fourth quarter 2015.
• Adjusted non-interest income was $68.1 million, unchanged from the previous quarter and up 3.0% as compared to the fourth quarter 2015.
  • Core banking fees⁴ were $35.5 million, up $689 thousand or 2.0% from the previous quarter and 1.4% as compared to the fourth quarter 2015.
    • Gains from sale of GGL/SBA loans were $2.2 million, up $878 thousand or 67.7% from the previous quarter and 57.0% as compared to the fourth quarter 2015.
  • Fiduciary and asset management fees, brokerage revenue, and insurance revenues were $20.3 million, up $787 thousand or 4.0% from the previous quarter and 7.9% as compared to the fourth quarter 2015.
  • Mortgage banking income was $5.5 million, down $1.8 million or 24.9% from the previous quarter and up 33.1% as compared to the fourth quarter 2015.
• Total non-interest expense was $193.2 million, up $7.3 million or 3.9% from the previous quarter and 5.6% as compared to the fourth quarter 2015.
  • Fourth quarter 2016 total non-interest expense includes a $4.7 million charge related to changes in the valuation of the Visa derivative and $1.1 million in merger-related expenses.
• Adjusted non-interest expense was $187.0 million, up $3.1 million or 1.7% from the previous quarter and 3.7% as compared to the fourth quarter 2015.
  • Employment expense of $101.7 million decreased $282 thousand or 0.3% from the previous quarter and increased 6.4% as compared to the fourth quarter 2015.
  • Occupancy and equipment expense of $27.9 million decreased $253 thousand or 0.9% from the previous quarter and increased 0.2% as compared to the fourth quarter 2015.
  • Other operating expenses of $23.9 million increased $2.8 million or 13.4% from the previous quarter and 5.1% as compared to the fourth quarter 2015.
  • Efficiency ratio for the fourth quarter was 63.98% as compared to 63.13% in the previous quarter and 65.59% in the fourth quarter 2015.
  • Adjusted efficiency ratio for the fourth quarter was 60.32% as compared to 60.55% in the previous quarter and 62.13% in the fourth quarter 2015.

Credit Quality

• Non-performing loans were $153.4 million at December 31, 2016, up $5.2 million or 3.5% from the previous quarter and down $15.0 million or 8.9% from December 31, 2015. The non-performing loan ratio was 0.64% at December 31, 2016, as compared to 0.64% at the end of the previous quarter and 0.75% at December 31, 2015.
• Total non-performing assets were $175.7 million at December 31, 2016, down $3.4 million or 1.9% from the previous quarter and down $39.7 million or 18.4% from December 31, 2015. The non-performing asset ratio was 0.74% at December 31, 2016, as compared to 0.77% at the end of the previous quarter and 0.96% at December 31, 2015.
• Net charge-offs were $8.3 million in the fourth quarter 2016, up $1.4 million or 20.0% from $6.9 million in the previous quarter. The annualized net charge-off ratio was 0.14% in the fourth quarter as compared to 0.12% in the previous quarter.
• Total delinquencies (consisting of loans 30 or more days past due and still accruing) remain low at 0.27% of total loans at December 31, 2016 as compared to 0.27% the previous quarter and 0.21% at December 31, 2015.

Capital Ratios

• Common Equity Tier 1 ratio was 9.96% at December 31, 2016 compared to 9.96% at September 30, 2016.
• Tier 1 Capital ratio was 10.08% at December 31, 2016 compared to 10.05% at September 30, 2016.
• Total Risk Based Capital ratio was 12.01% at December 31, 2016 compared to 12.04% at September 30, 2016.
• Tier 1 Leverage ratio was 8.99% at December 31, 2016 compared to 8.98% at September 30, 2016.
• Tangible Common Equity ratio was 9.09% at December 31, 2016 compared to 9.28% at September 30, 2016.

Capital Management

• During the fourth quarter, the Company completed the $300 million common stock repurchase program announced in the fourth quarter 2015, which resulted in 9.9 million total shares repurchased and reduced total share count by 7.6%.
• Additionally, during the fourth quarter, the Board of Directors authorized a new share repurchase program of up to $200 million of the Company’s common stock to be executed during 2017.
• The Board of Directors also approved a 25% increase in the Company’s quarterly common stock dividend from $0.12 to $0.15 per share, effective with the quarterly dividend payable in April 2017.

Fourth Quarter Earnings Conference Call

Synovus will host an earnings highlights conference call at 8:30 a.m. EDT on January 17, 2017. 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.