Synovus Financial Corp. reported financial results for the quarter ended March 31, 2017.

First Quarter Highlights

Net income available to common shareholders for the first quarter 2017 was $69.3 million or $0.56 per diluted share as compared to $66.0 million or $0.54 per diluted share for the fourth quarter 2016 and $50.0 million or $0.39 per diluted share for the first quarter 2016.

Adjusted earnings per diluted share for the first quarter 2017 were $0.57, a 5.4% increase from the fourth quarter 2016 and a 29.8% increase from the first quarter 2016.

Total average loans grew $313.0 million or 5.4% annualized from the previous quarter and $1.45 billion or 6.4% as compared to the first quarter 2016.

Total average deposits grew $257.6 million or 4.2% annualized from the previous quarter and $1.71 billion or 7.4% as compared to the first quarter 2016.

Total revenues1 of $304.1 million, up $2.4 million or 0.8% from the previous quarter and 8.1% from the first quarter 2016.

Net interest margin of 3.42%, up 13 basis points from the previous quarter and up 15 basis points from the first quarter 2016.

Efficiency ratio of 64.84% improved 201 basis points from the first quarter 2016.

Adjusted efficiency ratio2 of 62.25% improved 129 basis points from the first quarter 2016.

Credit quality metrics remained favorable with a net charge-off ratio of 12 basis points, down 2 basis points from the previous quarter and down 1 basis point from the first quarter 2016.

Return on average common equity of 9.97%, up 55 basis points from the previous quarter and up 289 basis points from the first quarter 2016.

Return on average tangible common equity of 10.26%, up 61 basis points from the previous quarter and up 311 basis points from the first quarter 2016.

“We are pleased with our strong first quarter performance, highlighted by an 8 percent year-over-year revenue increase driven by steady balance sheet growth and expanded net interest margin,” said Kessel D. Stelling, Synovus chairman and CEO. “We remain confident in our ability to deliver on our 2017 financial targets, and we are excited about the work underway to prepare for our 2018 transition to a single brand. Leveraging a common brand while maintaining our local, relationship-centered delivery model will further boost Synovus brand awareness and enhance our ability to promote our broader banking capabilities to prospects and existing customers.”

Balance Sheet

Total loans ended the quarter at $24.26 billion, up $402.1 million or 6.8% annualized from the previous quarter and up $1.50 billion or 6.6% as compared to the first quarter 2016.

Commercial and industrial loans grew by $188.8 million or 6.6% annualized from the previous quarter and $931.3 million or 8.6% as compared to the first quarter 2016.

Consumer loans grew by $119.7 million or 9.8% annualized from the previous quarter and $719.8 million or 16.5% as compared to the first quarter 2016.

Commercial real estate loans grew by $93.2 million or 5.1% annualized from the previous quarter and declined $154.4 million or 2.0% as compared to the first quarter 2016.

Total average loans grew $313.0 million or 5.4% annualized from the previous quarter and $1.45 billion or 6.4% as compared to the first quarter 2016.

Total average deposits for the quarter were $24.92 billion, up $257.6 million or 4.2% annualized from the previous quarter and $1.71 billion or 7.4% as compared to the first quarter 2016.

Average core transaction deposits3 grew $371.7 million or 8.5% annualized from the previous quarter and $1.61 billion or 9.7% as compared to the first quarter 2016.

Core Performance

Total revenues1 were $304.1 million, up $2.4 million or 0.8% from the previous quarter and 8.1% from the first quarter 2016.

Net interest income was $239.9 million, up $6.4 million or 2.7% from the previous quarter and 10.0% from the first quarter 2016.

Net interest margin was 3.42%, up 13 basis points from the previous quarter. Yield on earning assets was 3.88%, up 15 basis points from the previous quarter, and the effective cost of funds was 0.46%, up 2 basis points from the previous quarter.

Total non-interest income was $71.8 million, down $2.2 million or 2.9% compared to the previous quarter and up 13.8% from first quarter 2016.

Adjusted non-interest income was $66.0 million, down $2.6 million or 3.8% from the previous quarter and up 4.0% as compared to the first quarter 2016.

Core banking fees4 were $32.7 million, down $2.8 million or 7.8% from the previous quarter and 1.8% from the first quarter 2016.

Gains from sale of GGL/SBA loans were $730 thousand, down $1.4 million or 66.4% from the previous quarter and up 2.7% from the first quarter 2016.

Fiduciary and asset management fees, brokerage revenue, and insurance revenues were $20.7 million, up $334 thousand or 1.6% from the previous quarter and 10.3% from the first quarter 2016.

Mortgage banking income was $5.8 million, up $262 thousand or 4.8% from the previous quarter and 5.1% from the first quarter 2016.

Total non-interest expense was $197.4 million, up $4.2 million or 2.2% from the previous quarter and 4.9% from the first quarter 2016.

First quarter 2017 total non-interest expense includes $6.5 million in restructuring charges consisting primarily of termination benefits incurred in conjunction with a voluntary early retirement program offered during the quarter.

Adjusted non-interest expense was $190.6 million, up $3.6 million or 1.9% from the previous quarter and 6.4% from the first quarter 2016.

Employment expense of $107.2 million increased $5.5 million or 5.4% from the previous quarter and 5.8% from the first quarter 2016.

Occupancy and equipment expense of $29.3 million increased $1.5 million or 5.3% from the previous quarter and 10.4% from the first quarter 2016.

Other operating expenses of $54.1 million decreased $3.4 million or 5.8% from the previous quarter and increased 5.5% from the first quarter 2016.

Efficiency ratio for the first quarter was 64.84% as compared to 63.98% in the previous quarter and 66.85% in the first quarter 2016.

Adjusted efficiency ratio2 for the first quarter was 62.25% as compared to 61.81% in the previous quarter and 63.54% in the first quarter 2016.

Credit Quality

Non-performing loans were $158.4 million at March 31, 2017, up $5.0 million or 3.3% from the previous quarter and down $19.8 million or 11.1% from March 31, 2016. The non-performing loan ratio was 0.65% at March 31, 2017, as compared to 0.64% at the end of the previous quarter and 0.78% at March 31, 2016.

Total non-performing assets were $187.2 million at March 31, 2017, down $11.5 million or 6.6% from the previous quarter and down $29.4 million or 13.6% from March 31, 2016. The non-performing asset ratio was 0.77% at March 31, 2017, as compared to 0.74% at the end of the previous quarter and 0.95% at March 31, 2016.

Net charge-offs were $6.9 million in the first quarter 2017, down $1.4 million or 16.8% from $8.3 million in the previous quarter and 6.0% from the first quarter 2016. The annualized net charge-off ratio was 0.12% in the first quarter as compared to 0.14% in the previous quarter and 0.13% in the first quarter 2016.

Total delinquencies (consisting of loans 30 or more days past due and still accruing) remain low at 0.26% of total loans at March 31, 2017 as compared to 0.27% the previous quarter and 0.28% at March 31, 2016.

Capital Ratios

Ratios reflect repurchase of $15.1 million in common stock during the first quarter 2017.

Common Equity Tier 1 ratio was 9.86% at March 31, 2017 compared to 9.96% at December 31, 2016.

Tier 1 Capital ratio was 10.18% at March 31, 2017 compared to 10.07% at December 31, 2016.

Total Risk Based Capital ratio was 12.09% at March 31, 2017 compared to 12.01% at December 31, 2016.

Tier 1 Leverage ratio was 9.13% at March 31, 2017 compared to 8.99% at December 31, 2016.

Tangible Common Equity ratio was 9.04% at March 31, 2017 compared to 9.09% at December 31, 2016.

Definitive Agreement with World’s Foremost Bank and Capital One

On April 17, 2017, Synovus Bank entered into a definitive agreement to acquire certain assets and assume certain liabilities of World’s Foremost Bank, a wholly-owned subsidiary of Cabela’s Incorporated. Immediately following the closing of this transaction, Synovus will sell the credit card assets and related liabilities to Capital One Bank, National Association, a bank subsidiary of Capital One Financial Corporation, while retaining the approximately $1.2 billion brokered time deposit portfolio. Pursuant to the terms of the agreement, Synovus will receive $75 million in consideration from Cabela’s and Capital One. The transaction is expected to close in the third quarter of 2017 and is subject to customary regulatory approvals as well as completion of the Cabela’s and Bass Pro Shops merger announced in October 2016.

“This transaction will provide Synovus with additional liquidity to support organic growth, as well as incremental capital that can be utilized to accelerate progress toward achieving our stated long-term ROA and efficiency goals,” said Stelling.