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Exhibit 99.1

 

LOGO

 

Media Contact

Greg Hudgison

Media Relations

(706) 644-0528

  

Investor Contact

Bob May

Investor Relations

(706) 649-3555

Synovus Announces Earnings for the Fourth Quarter

Diluted Earnings per Share Increased 16.0% to $0.37; Total Loans Grew $509 Million or 9.8% Annualized

COLUMBUS, Ga., January 27, 2015 – Synovus Financial Corp. (NYSE: SNV) today reported financial results for the quarter ended December 31, 2014.

Net income available to common shareholders for the fourth quarter of 2014 was $50.6 million, or $0.37 per diluted share as compared to $44.2 million, or $0.32 per diluted share for the third quarter of 2014 and $35.8 million, or $0.26 per diluted share for the fourth quarter of 2013. Adjusted earnings per diluted share for the fourth quarter of 2014 were $0.39, a 5.2% increase from the third quarter of 2014 adjusted earnings per diluted share of $0.37.

“We are pleased with our fourth quarter performance, which contributed to an overall solid 2014,” said Kessel D. Stelling, Synovus Chairman and CEO. “For the year, net income available to common shareholders was $185 million, a 56.1% increase over 2013. Loans grew by 5.2%, and we saw continued broad-based improvement in credit quality, especially in the non-performing loan ratio which ended the year at 0.94%. We continued to maintain strong capital levels throughout 2014, and announced in October our plan to return excess capital to shareholders through a $250 million stock repurchase plan and a 43% increase in the common stock dividend. As we enter 2015, our focus remains on caring for customers and improving profitability through balance sheet and fee income growth, as well as a continued focus on efficiency.”

2014 Highlights

 

    Net income available to common shareholders for 2014 was $185.0 million, or $1.33 per diluted share as compared to $118.6 million, or $0.88 per diluted share for 2013. Diluted EPS grew 50.5% for 2014 compared to 2013.

 

    Total loans ended the year at $21.10 billion, a $1.04 billion or 5.2% increase from 2013.

 

    Low-cost core deposits1 ended the year at $16.72 billion, a $589.0 million or 3.7% increase from 2013.

 

    Non-performing loans, excluding loans held for sale, of $197.8 million at December 31, 2014 declined 52.5% from December 31, 2013, and the non-performing loan ratio declined 114 basis points from December 31, 2013 to 0.94% at December 31, 2014.

 

    The net-charge off ratio for 2014 was 0.39%, down 30 basis points from 2013.

 

 

1  Excludes the impact from the sale of deposits of the Memphis, Tennessee branches in January 2014.


    The allowance for loan losses to non-performing loans ratio2 increased to 197.22% at December 31, 2014 compared to 95.43% at December 31, 2013.

 

    Tier 1 common equity ratio increased 35 basis points from December 31, 2013 to 10.28% at December 31, 2014.

Fourth Quarter 2014 Highlights

Income Statement

Adjusted pre-tax, pre-credit costs income was $99.6 million for the fourth quarter of 2014, a decrease of $3.9 million from $103.5 million for the third quarter of 2014. The third quarter of 2014 included the benefit from a $3.6 million net insurance recovery for incurred legal fees related to litigation.

 

    Net interest income was $207.5 million for the fourth quarter of 2014, up $1.2 million from $206.3 million in the previous quarter.

 

    The net interest margin declined three basis points to 3.34% compared to 3.37% in the third quarter of 2014. The yield on earning assets was 3.78%, three basis points lower than the third quarter of 2014, and the effective cost of funds remained unchanged at 0.44%.

 

    Total non-interest income was $64.5 million, up $564 thousand or 0.9% compared to $64.0 million for the third quarter of 2014.

 

    Core banking fees3 were $33.0 million, up $208 thousand or 0.6%, driven by a $355 thousand or 4.3% increase in bankcard fees.

 

    Financial Management Services revenues, consisting primarily of fiduciary and asset management fees and brokerage revenue, increased $205 thousand or 1.1%, driven by a $483 thousand increase in fiduciary and asset management fees.

 

    Mortgage banking income increased $230 thousand or 4.9%.

 

    Total non-interest expense for the fourth quarter of 2014 was $184.9 million, down $8.9 million from the third quarter of 2014.

 

    Adjusted non-interest expense for the fourth quarter of 2014 was $172.4 million, up $5.7 million or 3.4% compared to the third quarter of 2014.

 

    Professional fees were $8.0 million, up $5.5 million compared to the third quarter of 2014.

 

    The fourth quarter of 2014 reflects elevated attorney fees related to the final resolution of one credit.

 

    The third quarter of 2014 included the benefit from a $3.6 million net insurance recovery for incurred legal fees related to litigation.

 

    Advertising expense was $8.1 million, an increase of $925 thousand compared to the third quarter of 2014.

Balance Sheet

 

    Total loans grew $509.1 million or 9.8% annualized compared to the third quarter of 2014.

 

    Commercial and industrial loans grew by $275.9 million, or 10.9% annualized.

 

 

2  Excludes impaired loans with no reserve.
3  Include service charges on deposit accounts, bankcard fees, letter of credit fees, ATM fee income, line of credit non-usage fees, and miscellaneous other service charges.


    Commercial real estate loans grew by $155.9 million or 9.2% annualized.

 

    Retail loans grew by $79.2 million, or 8.2% annualized.

 

    Total average deposits for the quarter were $21.34 billion, up $397.4 million or 7.5% annualized from the previous quarter.

 

    Average core deposits for the quarter were $19.73 billion, up $289.7 million or 5.9% annualized compared to the third quarter of 2014.

 

    Average core deposits, excluding state, county, and municipal deposits, grew by $150.7 million or 3.4% annualized compared to the previous quarter.

Credit Quality

Broad-based improvement in credit quality continued.

 

    Total credit costs were $16.4 million in the fourth quarter of 2014 compared to $15.7 million in the third quarter of 2014.

 

    Non-performing loans, excluding loans held for sale, were $197.8 million at December 31, 2014, down $44.6 million or 18.4% from the previous quarter, and down $218.5 million or 52.5% from the fourth quarter of 2013. The non-performing loan ratio was 0.94% at December 31, 2014, down from 1.18% at the end of the previous quarter and 2.08% at December 31, 2013.

 

    Total non-performing assets were $286.8 million at December 31, 2014, down $37.5 million or 11.6% from the previous quarter, and down $252.8 million or 46.8% from the fourth quarter of 2013. The non-performing asset ratio was 1.35% at December 31, 2014, compared to 1.57% at the end of the previous quarter and 2.67% at December 31, 2013.

 

    Total delinquencies (consisting of loans 30 or more days past due and still accruing) declined to 0.24% at December 31, 2014 compared to 0.35% at September 30, 2014 and 0.36% at December 31, 2013. Total loans past due 90 days or more and still accruing were 0.02% at December, 31, 2014, unchanged from September 30, 2014 and December 31, 2013.

 

    Net charge-offs were $16.3 million in the fourth quarter of 2014, up $4.0 million or 32.7% from $12.3 million in the third quarter of 2014. The annualized net charge-off ratio was 0.31% in the fourth quarter compared to 0.24% in the previous quarter.

Capital Ratios

Capital ratios remained strong and include the impact of common stock repurchases totaling $88.1 million completed during the fourth quarter of 2014.

 

    Tier 1 Common Equity ratio was 10.28% at December 31, 2014 compared to 10.60% at September 30, 2014.

 

    Tier 1 Capital ratio was 10.86% at December 31, 2014 compared to 11.19% at September 30, 2014.

 

    Total Risk Based Capital ratio was 12.75% at December 31, 2014 compared to 13.17% at September 30, 2014.

 

    Tier 1 Leverage ratio was 9.67% at December 31, 2014 compared to 9.85% at September 30, 2014.

 

    Tangible Common Equity ratio was 10.69% at December 31, 2014 compared to 11.04% at September 30, 2014.


Fourth Quarter Earnings Conference Call

Synovus will host an earnings highlights conference call at 8:30 a.m. EDT on January 27, 2015. 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 www.synovus.com/webcasts. You may download RealPlayer or Windows Media Player (free download available) prior to accessing the actual call or the replay. The replay will be archived for 12 months and will be available 30-45 minutes after the call.

About Synovus

Synovus Financial Corp. is a financial services company based in Columbus, Georgia, with approximately $27 billion in assets. Synovus Financial Corp. provides commercial and retail banking, investment and mortgage services to customers through 28 locally branded divisions, 258 branches and 341 ATMs in Georgia, Alabama, South Carolina, Florida and Tennessee. See Synovus Financial Corp. on the web at www.synovus.com.

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 on credit trends and key credit metrics; expectations regarding deposits, loan growth and the net interest margin; expectations on our growth strategy, expense initiatives, and future profitability; expectations regarding our capital management, including our announced share repurchase program, 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, 2013 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.

Use of Non-GAAP Financial Measures

The measures entitled average core deposits; average core deposits excluding average state, county, and municipal deposits; low-cost core deposits excluding the impact from the sale of deposits of the Memphis, Tennessee branches in January 2014; Tier 1 common equity ratio; tangible common equity to tangible assets ratio; adjusted earnings per diluted share; adjusted pre-tax, pre-credit costs income; and adjusted non-interest expense are not measures recognized under U.S. generally accepted accounting principles (GAAP) and therefore are considered non-GAAP financial measures. The most comparable GAAP measures are total average deposits; total deposits; Tier 1 capital to risk-weighted assets ratio; total shareholders’ equity to total assets ratio; net income per common share, diluted; income before income taxes; and total non-interest expense, respectively.

Synovus believes that these non-GAAP financial measures provide meaningful additional information about Synovus to assist management and investors in evaluating Synovus’ capital strength and the performance of its core business. These non-GAAP financial measures should not be considered as substitutes for total average deposits; total deposits; Tier 1 capital to risk-weighted assets ratio; total shareholders’ equity to total assets ratio; net income per common share, diluted; income before income taxes; and total non-interest expense determined in accordance with GAAP and may not be comparable to other similarly titled measures at other companies.

The computations of average core deposits; average core deposits excluding average state, county, and municipal deposits; low-cost core deposits excluding the impact from the sale of deposits of the Memphis, Tennessee branches in January 2014; Tier 1 common equity ratio; tangible common equity to tangible assets ratio; adjusted earnings per diluted share; adjusted pre-tax, pre-credit costs income; and adjusted non-interest expense; and the reconciliation of these measures to total average deposits; total deposits; Tier 1 capital to risk-weighted assets ratio; total shareholders’ equity to total assets ratio; net income per common share, diluted; income before income taxes; and total non-interest expense are set forth in the tables below.


Reconciliation of Non-GAAP Financial Measures                               
(dollars in thousands)    4Q14     3Q14     2Q14     1Q14     4Q13  

Average core deposits

          

Average core deposits excluding state, county, and municipal deposits

          

Average total deposits

   $ 21,336,007        20,938,587        20,863,706        20,725,259        21,150,068   

Subtract: Average brokered deposits

     (1,602,354     (1,494,620     (1,401,167     (1,234,847     (1,194,427
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Average core deposits

     19,733,653        19,443,967        19,462,539        19,490,412        19,955,641   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Subtract: Average state, county, and municipal deposits

     (2,184,757     (2,045,817     (2,268,852     (2,365,096     (2,354,731
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Average core deposits excluding state, county, and municipal deposits

   $ 17,548,896        17,398,150        17,193,687        17,125,316        17,600,910   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Low-cost core deposits excluding the impact from the

sale of deposits of the Memphis, Tennessee branches

in January 2014

   4Q14                       4Q13  

Total deposits

   $ 21,531,699              20,876,790   

Brokered deposits

     (1,642,398           (1,094,002
  

 

 

         

 

 

 

Core deposits

     19,889,301              19,782,788   

Time deposits

     (3,167,950           (3,498,200
  

 

 

         

 

 

 

Low-cost core deposits

     16,721,351              16,284,588   

Impact from the sale of deposits of the Memphis, Tennessee branches in January 2014

     —                (152,222
  

 

 

         

 

 

 

Low-cost core deposits excluding the impact from the sale of deposits of the Memphis, Tennessee branches in January 2014

   $ 16,721,351            $ 16,132,366   
  

 

 

         

 

 

 

Tier 1 Common Equity Ratio

          

Total shareholders’ equity

   $ 3,041,271        3,076,545        3,053,051        2,998,496        2,948,985   

Add/subtract: Accumulated other comprehensive loss (income)

     12,605        24,827        13,716        30,463        41,258   

Subtract: Goodwill

     (24,431     (24,431     (24,431     (24,431     (24,431

Subtract: Other intangible assets, net

     (1,265     (1,471     (1,678     (1,883     (3,415

Subtract: Disallowed deferred tax asset

     (492,199     (529,342     (547,786     (579,537     (618,516

Other items

     7,644        7,637        7,619        7,682        7,612   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Tier 1 capital

     2,543,625        2,553,765        2,500,491        2,430,790        2,351,493   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Subtract: Qualifying trust preferred securities

     (10,000     (10,000     (10,000     (10,000     (10,000

Subtract: Series C Preferred Stock, no par value

     (125,980     (125,980     (125,980     (125,980     (125,862
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Tier 1 common equity

   $ 2,407,645        2,417,785        2,364,511        2,294,810        2,215,631   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Risk-weighted assets

   $ 23,431,497 (1)      22,817,378        22,702,108        22,404,099        22,316,091   

Tier 1 common equity ratio

     10.28 %(1)      10.60        10.42        10.24        9.93   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 


Reconciliation of Non-GAAP Financial Measures                               
(dollars in thousands)    4Q14     3Q14     2Q14     1Q14     4Q13  

Tangible common equity to tangible assets ratio

          

Total assets

   $ 27,051,231        26,519,110        26,627,290        26,435,426        26,201,604   

Subtract: Goodwill

     (24,431     (24,431     (24,431     (24,431     (24,431

Subtract: Other intangible assets, net

     (1,265     (1,471     (1,678     (1,883     (3,415
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Tangible assets

     27,025,535        26,493,208        26,601,181        26,409,112        26,173,758   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total shareholders’ equity

     3,041,271        3,076,545        3,053,051        2,998,496        2,948,985   

Subtract: Goodwill

     (24,431     (24,431     (24,431     (24,431     (24,431

Subtract: Other intangible assets, net

     (1,265     (1,471     (1,678     (1,883     (3,415

Subtract: Series C Preferred Stock, no par value

     (125,980     (125,980     (125,980     (125,980     (125,862
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Tangible common equity

   $ 2,889,595        2,924,663        2,900,962        2,846,202        2,795,277   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total shareholders’ equity to total assets ratio

     11.24     11.60        11.47        11.34        11.25   

Tangible common equity to tangible assets ratio

     10.69     11.04        10.91        10.78        10.68   

Adjusted earnings per diluted share

          

Net income available to common shareholders

   $ 50,612      $ 44,229         

Add: Litigation settlement expenses (after-tax)

     283        7,545         

Add: Recovery of previously incurred legal costs related to certain legal matters, net of legal cost incurred in 3Q14 related to those same legal matters (after-tax) (2)

     —          (2,211      

Add: Restructuring charges (after-tax)

     2,129        494         

Add: Visa indemnification charges (after-tax)

     189        1,209         
  

 

 

   

 

 

       

Adjusted net income available to common shareholders

   $ 53,213        51,266         
  

 

 

   

 

 

       

Weighted average common shares outstanding—diluted

     137,831        139,726         

Adjusted earnings per diluted share

   $ 0.39        0.37         


Reconciliation of Non-GAAP Financial Measures, continued                    
(dollars in thousands)    4Q14     3Q14     2Q14     1Q14     4Q13  

Adjusted Pre-tax, Pre-credit Costs Income

          

Income before income taxes

   $ 78,928        72,656        73,950        77,024        59,710   

Add: Provision for losses on loans

     8,193        3,843        12,284        9,511        14,064   

Add: Other credit costs(3)

     8,213        11,858        4,635        8,128        8,285   

Add: Restructuring charges

     3,484        809        7,716        8,577        3,770   

Add: Litigation settlement expenses (4)

     463        12,349        —          —          10,000   

Subtract: Investment securities gains, net

     —          —          —          (1,331     (373

Add: Visa indemnification charges

     310        1,979        356        396        799   

Subtract: Gain on sale of Memphis branches, net (5)

     —          —          —          (5,789     —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Pre-tax, pre-credit costs income

   $ 99,591        103,494        98,941        96,516        96,255   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Non-interest Expense

          

Total non-interest expense

   $ 184,883        193,749        182,205        184,161        190,738   

Subtract: Other credit costs(3)

     (8,213     (11,858     (4,635     (8,128     (8,285

Subtract: Restructuring charges

     (3,484     (809     (7,716     (8,577     (3,770

Subtract: Visa indemnification charges

     (310     (1,979     (356     (396     (799

Subtract: Litigation settlement expenses (4)

     (463     (12,349     —          —          (10,000
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted non-interest expense

   $ 172,413        166,754        169,498        167,060        167,884   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)  Preliminary
(2)  Recovery of previously incurred legal costs represents a reimbursement from an insurance carrier for attorney fees incurred in previous periods in connection with certain litigation. This amount, net of attorney fees incurred in 3Q14 relating to the same legal matters, is recorded as a component of professional fees in the consolidated income statement. These items are also a component of adjusted pre-tax, pre-credit costs income.
(3)  Other credit costs consist primarily of foreclosed real estate expense, net.
(4) Amounts consist of litigation settlement expenses, including loss contingency accruals, with respect to certain legal matters. Amounts for other periods presented herein are not reported separately as amounts are not material.
(5) Consists of gain, net of associated costs, from the sale of certain loans, premises, deposits, and other assets and liabilities of the Memphis, Tennessee branches of Trust One Bank, a division of Synovus Bank.