Synovus Announces Earnings for Third Quarter 2024
Thursday, October 17th, 2024
Synovus Financial Corp. (NYSE: SNV) today reported financial results for the quarter ended Sept. 30, 2024.
"Our third quarter earnings results demonstrate strong fundamental trends. We posted an adjusted return on average assets of 1.3% and adjusted return on tangible common equity of 17.1% while managing down our adjusted tangible efficiency ratio to 53%. As we move to a more favorable environment, I remain optimistic about our ability to accelerate growth given increased loan production and sustained strong core fee generation. Additionally, we have further de-risked our balance sheet this quarter, as evidenced by lower net charge-offs, a reduction in brokered deposits and a preliminary Common Equity Tier 1 ratio at its highest in nine years.
Our thoughts are with those affected by the recent hurricanes across our markets and the broader southeast. We’re committed to supporting recovery and rebuilding efforts. Together, we’ll overcome these challenges and build a brighter future,” said Synovus Chairman, CEO and President Kevin Blair.
Third Quarter 2024 Highlights
- Net income (loss) available to common shareholders was $169.6 million, or $1.18 per diluted share, compared to $(23.7) million or $(0.16) in second quarter 2024 and $87.4 million or $0.60 in third quarter 2023. Earnings were impacted by an $8.7 million valuation adjustment to Visa derivative.
- Adjusted net income available to common shareholders was $177.1 million, or $1.23 per diluted share, compared to $169.6 million or $1.16 in second quarter 2024 and $122.8 million or $0.84 in third quarter 2023.
- Pre-provision net revenue was $251.0 million, which was up sharply as a result of a $257 million securities loss in second quarter 2024 and up 28% compared to third quarter 2023. Adjusted pre-provision net revenue of $262.3 million was stable sequentially and increased $17.7 million, or 7%, compared to third quarter 2023.
- Net interest income increased $5.7 million, or 1%, compared to the prior quarter and was down $2.4 million, or 1%, compared to third quarter 2023. The net interest margin expanded 2 basis points to 3.22% as a result of the May 2024 securities repositioning and higher asset yields somewhat offset by larger average cash balances and a deposit mix shift.
- Period-end loans rose $27.3 million from second quarter 2024 as stronger loan production and core commercial lending growth was offset by higher loan paydowns and strategic declines in certain loan categories such as non-relationship syndicated lending and third-party consumer lending.
- Period-end core deposits (excluding brokered deposits) were $45.1 billion, an increase of $294.6 million sequentially, primarily as a result of growth in money market and interest-bearing demand deposits, offset by a decline in non-interest-bearing deposits, savings and time deposits. Total deposit costs increased 4 basis points from second quarter 2024 to 2.72%, primarily due to a shift in the deposit mix.
- Non-interest revenue of $124.0 million increased $252.8 million sequentially and was up $16.8 million, or 16%, compared to third quarter 2023. Adjusted non-interest revenue of $121.9 million declined $5.3 million, or 4%, sequentially and increased $15.7 million, or 15%, compared to third quarter 2023. The sequential decline in adjusted non-interest revenue was largely from lower capital markets income partially offset by higher treasury and payment solutions and wealth revenue. Year-over-year growth came primarily from higher commercial treasury and payment solutions fees and capital markets income as well as greater commercial sponsorship income.
- On a sequential basis, non-interest expense was $313.7 million, impacted by an $8.7 million valuation adjustment to Visa derivative. Adjusted non-interest expense was flat sequentially and declined 1% year over year due to disciplined expense control and a 4% reduction in total headcount.
- Provision for credit losses of $23.4 million declined 11% sequentially from $26.4 million in second quarter 2024 and fell 68% year over year compared to $72.6 million in third quarter 2023. The allowance for credit losses ratio (to loans) of 1.24% was down 1 basis point from the prior quarter.
- The non-performing loan and asset ratios were both higher sequentially at 0.73%; the net charge-off ratio for the third quarter 2024 was 0.25%, down from 0.32% in prior quarter while total past dues were 0.23% of total loans outstanding.
- The preliminary CET1 ratio rose sequentially to 10.65% as core earnings accretion more than offset the impact of $100 million in common stock repurchases.
|
Third Quarter Summary |
|||||||||||||||||||||||
|
|
Reported |
|
Adjusted |
||||||||||||||||||||
|
(dollars in thousands) |
|
3Q24 |
|
|
|
2Q24 |
|
|
|
3Q23 |
|
|
|
3Q24 |
|
|
|
2Q24 |
|
|
|
3Q23 |
|
|
Net income (loss) available to common shareholders |
$ |
169,628 |
|
|
$ |
(23,741 |
) |
|
$ |
87,423 |
|
|
$ |
177,120 |
|
|
$ |
169,617 |
|
|
$ |
122,770 |
|
|
Diluted earnings (loss) per share(1) |
|
1.18 |
|
|
|
(0.16 |
) |
|
|
0.60 |
|
|
|
1.23 |
|
|
|
1.16 |
|
|
|
0.84 |
|
|
Total revenue |
|
564,720 |
|
|
|
306,147 |
|
|
|
550,298 |
|
|
|
564,051 |
|
|
|
563,597 |
|
|
|
550,552 |
|
|
Total loans |
|
43,120,674 |
|
|
|
43,093,397 |
|
|
|
43,679,910 |
|
|
NA |
|
NA |
|
NA |
||||||
|
Total deposits |
|
50,193,740 |
|
|
|
50,195,778 |
|
|
|
50,203,890 |
|
|
NA |
|
NA |
|
NA |
||||||
|
Return on avg assets(2) |
|
1.2 |
% |
|
|
(0.1 |
)% |
|
|
0.6 |
% |
|
|
1.3 |
% |
|
|
1.2 |
% |
|
|
0.9 |
% |
|
Return on avg common equity(2) |
|
14.4 |
|
|
|
(2.1 |
) |
|
|
8.2 |
|
|
|
15.0 |
|
|
|
15.3 |
|
|
|
11.5 |
|
|
Return on avg tangible common equity(2) |
|
16.4 |
|
|
|
(2.2 |
) |
|
|
9.7 |
|
|
|
17.1 |
|
|
|
17.6 |
|
|
|
13.5 |
|
|
Net interest margin(3) |
|
3.22 |
% |
|
|
3.20 |
% |
|
|
3.11 |
% |
|
NA |
|
NA |
|
NA |
||||||
|
Efficiency ratio-TE(3)(4) |
|
55.41 |
|
|
|
98.15 |
|
|
|
64.11 |
|
|
|
52.97 |
|
|
|
53.05 |
|
|
|
55.01 |
|
|
NCO ratio-QTD |
|
0.25 |
|
|
|
0.32 |
|
|
|
0.61 |
|
|
NA |
|
NA |
|
NA |
||||||
|
NPA ratio |
|
0.73 |
|
|
|
0.60 |
|
|
|
0.64 |
|
|
NA |
|
NA |
|
NA |
||||||
|
(1) |
Diluted shares of 146,034 (in thousands) used to calculate 2Q24 adjusted diluted earnings per share. |
|
|
(2) |
Annualized |
|
|
(3) |
Taxable equivalent |
|
|
(4) |
Adjusted tangible efficiency ratio |
|
|
NA - not applicable |
||
|
Balance Sheet |
||||||||||||||||||||||
|
Loans* |
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
(dollars in millions) |
|
3Q24 |
|
|
2Q24 |
|
Linked Quarter Change |
|
Linked Quarter % Change |
|
|
3Q23 |
|
Year/Year Change |
|
Year/Year % Change |
||||||
|
Commercial & industrial |
$ |
22,664.0 |
|
$ |
22,536.6 |
|
$ |
127.4 |
|
|
1 |
% |
|
$ |
22,781.0 |
|
$ |
(117.0 |
) |
|
(1 |
)% |
|
Commercial real estate |
|
12,177.5 |
|
|
12,215.5 |
|
|
(38.0 |
) |
|
— |
|
|
|
12,394.9 |
|
|
(217.4 |
) |
|
(2 |
) |
|
Consumer |
|
8,279.2 |
|
|
8,341.3 |
|
|
(62.1 |
) |
|
(1 |
) |
|
|
8,504.1 |
|
|
(224.9 |
) |
|
(3 |
) |
|
Total loans |
$ |
43,120.7 |
|
$ |
43,093.4 |
|
$ |
27.3 |
|
|
— |
% |
|
$ |
43,679.9 |
|
$ |
(559.3 |
) |
|
(1 |
)% |
|
*Amounts may not total due to rounding |
||||||||||||||||||||||
|
Deposits* |
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
(dollars in millions) |
|
3Q24 |
|
|
2Q24 |
|
Linked Quarter Change |
|
Linked Quarter % Change |
|
|
3Q23 |
|
Year/Year Change |
|
Year/Year % Change |
||||||
|
Non-interest-bearing DDA |
$ |
11,129.1 |
|
$ |
11,177.7 |
|
$ |
(48.6 |
) |
|
— |
% |
|
$ |
12,395.1 |
|
$ |
(1,266.0 |
) |
|
(10 |
)% |
|
Interest-bearing DDA |
|
6,821.3 |
|
|
6,621.2 |
|
|
200.1 |
|
|
3 |
|
|
|
6,276.1 |
|
|
545.2 |
|
|
9 |
|
|
Money market |
|
11,031.5 |
|
|
10,747.9 |
|
|
283.6 |
|
|
3 |
|
|
|
10,786.3 |
|
|
245.2 |
|
|
2 |
|
|
Savings |
|
983.2 |
|
|
1,009.8 |
|
|
(26.7 |
) |
|
(3 |
) |
|
|
1,132.5 |
|
|
(149.3 |
) |
|
(13 |
) |
|
Public funds |
|
7,047.6 |
|
|
7,111.9 |
|
|
(64.3 |
) |
|
(1 |
) |
|
|
6,885.7 |
|
|
161.9 |
|
|
2 |
|
|
Time deposits |
|
8,075.7 |
|
|
8,125.2 |
|
|
(49.5 |
) |
|
(1 |
) |
|
|
6,506.4 |
|
|
1,569.3 |
|
|
24 |
|
|
Brokered deposits |
|
5,105.4 |
|
|
5,402.0 |
|
|
(296.6 |
) |
|
(5 |
) |
|
|
6,221.8 |
|
|
(1,116.3 |
) |
|
(18 |
) |
|
Total deposits |
$ |
50,193.7 |
|
$ |
50,195.8 |
|
$ |
(2.0 |
) |
|
— |
% |
|
$ |
50,203.9 |
|
$ |
(10.2 |
) |
|
— |
% |
|
*Amounts may not total due to rounding |
||||||||||||||||||||||
|
Income Statement Summary** |
|
|
|
|
|
|
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(in thousands, except per share data) |
|
3Q24 |
|
|
|
2Q24 |
|
|
Linked Quarter Change |
|
Linked Quarter % Change |
|
|
3Q23 |
|
|
Year/Year Change |
|
Year/Year % Change |
||||||
|
Net interest income |
$ |
440,740 |
|
|
$ |
434,998 |
|
|
$ |
5,742 |
|
|
1 |
% |
|
$ |
443,159 |
|
|
$ |
(2,419 |
) |
|
(1 |
)% |
|
Non-interest revenue |
|
123,980 |
|
|
|
(128,851 |
) |
|
|
252,831 |
|
|
NM |
|
|
|
107,139 |
|
|
|
16,841 |
|
|
16 |
|
|
Non-interest expense |
|
313,690 |
|
|
|
301,801 |
|
|
|
11,889 |
|
|
4 |
|
|
|
353,532 |
|
|
|
(39,842 |
) |
|
(11 |
) |
|
Provision for (reversal of) credit losses |
|
23,434 |
|
|
|
26,404 |
|
|
|
(2,970 |
) |
|
(11 |
) |
|
|
72,572 |
|
|
|
(49,138 |
) |
|
(68 |
) |
|
Income (loss) before taxes |
$ |
227,596 |
|
|
$ |
(22,058 |
) |
|
$ |
249,654 |
|
|
NM |
|
|
$ |
124,194 |
|
|
$ |
103,402 |
|
|
83 |
% |
|
Income tax expense (benefit) |
|
46,912 |
|
|
|
(7,378 |
) |
|
|
54,290 |
|
|
NM |
|
|
|
27,729 |
|
|
|
19,183 |
|
|
69 |
|
|
Net income (loss) |
|
180,684 |
|
|
|
(14,680 |
) |
|
|
195,364 |
|
|
NM |
|
|
|
96,465 |
|
|
|
84,219 |
|
|
87 |
|
|
Less: Net income (loss) attributable to noncontrolling interest |
|
(871 |
) |
|
|
(652 |
) |
|
|
(219 |
) |
|
(34 |
) |
|
|
(630 |
) |
|
|
(241 |
) |
|
(38 |
) |
|
Net income (loss) attributable to Synovus Financial Corp. |
|
181,555 |
|
|
|
(14,028 |
) |
|
|
195,583 |
|
|
NM |
|
|
|
97,095 |
|
|
|
84,460 |
|
|
87 |
|
|
Less: Preferred stock dividends |
|
11,927 |
|
|
|
9,713 |
|
|
|
2,214 |
|
|
23 |
|
|
|
9,672 |
|
|
|
2,255 |
|
|
23 |
|
|
Net income (loss) available to common shareholders |
$ |
169,628 |
|
|
$ |
(23,741 |
) |
|
$ |
193,369 |
|
|
NM |
|
|
$ |
87,423 |
|
|
$ |
82,205 |
|
|
94 |
% |
|
Weighted average common shares outstanding, diluted |
|
143,979 |
|
|
|
145,565 |
|
|
|
(1,586 |
) |
|
(1 |
)% |
|
|
146,740 |
|
|
|
(2,761 |
) |
|
(2 |
)% |
|
Diluted earnings (loss) per share |
$ |
1.18 |
|
|
$ |
(0.16 |
) |
|
$ |
1.34 |
|
|
NM |
|
|
$ |
0.60 |
|
|
$ |
0.58 |
|
|
97 |
|
|
Adjusted diluted earnings per share(1) |
|
1.23 |
|
|
|
1.16 |
|
|
|
0.07 |
|
|
6 |
|
|
|
0.84 |
|
|
|
0.39 |
|
|
46 |
|
|
Effective tax rate |
|
20.61 |
% |
|
|
33.45 |
% |
|
|
|
|
|
|
22.33 |
% |
|
|
|
|
||||||
|
(1) |
Diluted shares of 146,034 (in thousands) used to calculate 2Q24 adjusted diluted earnings per share. |
|
** |
Amounts may not total due to rounding |
|
NM - not meaningful |
|
|
Capital Ratios |
|
||||
|
|
|
|
|
|
|
|
|
3Q24 |
|
2Q24 |
|
3Q23 |
|
Common Equity Tier 1 capital (CET1) ratio |
10.65 % |
(1) |
10.60 % |
|
10.13 % |
|
Tier 1 capital ratio |
11.77 |
(1) |
11.72 |
|
11.18 |
|
Total risk-based capital ratio |
13.62 |
(1) |
13.56 |
|
13.12 |
|
Tier 1 leverage ratio |
9.55 |
(1) |
9.44 |
|
9.38 |
|
Tangible common equity ratio |
7.28 |
|
6.76 |
|
5.90 |
|
(1) Ratios are preliminary. |
|||||
Third Quarter Earnings Conference Call
