SYNOVUS FINANCIAL CORP - FORM 8-K - EX-99.2

Attached files

file	filename
8-K - FORM 8-K - SYNOVUS FINANCIAL CORP	d858323d8k.htm
EX-99.3 - EX-99.3 - SYNOVUS FINANCIAL CORP	d858323dex993.htm
EX-99.1 - EX-99.1 - SYNOVUS FINANCIAL CORP	d858323dex991.htm

Exhibit 99.2

Synovus

INCOME STATEMENT DATA

(Unaudited)


(Dollars in thousands, except per share data)	Twelve Months Ended December 31,
	2014			2013			Change
Interest income	$	928,692			929,014			(0.0	)%
Interest expense		109,408			118,822			(7.9	)

Net interest income		819,284			810,192			1.1
Provision for loan losses		33,831			69,598			(51.4	)

Net interest income after provision for loan losses		785,453			740,594			6.1

Non-interest income:
Service charges on deposit accounts		78,897			77,789			1.4
Fiduciary and asset management fees		45,226			43,450			4.1
Brokerage revenue		27,088			27,538			(1.6	)
Mortgage banking income		18,354			22,482			(18.4	)
Bankcard fees		32,931			30,641			7.5
Investment securities gains, net		1,331			2,945			(54.8	)
Other fee income		19,130			22,567			(15.2	)
Decrease in fair value of private equity investments, net		(378	)		(2,963	)		87.2
Gain on sale of Memphis branches, net⁽¹⁾		5,789			—			nm
Other non-interest income		33,736			29,122			15.8

Total non-interest income		262,104			253,571			3.4

Non-interest expense:
Salaries and other personnel expense		371,904			368,152			1.0
Net occupancy and equipment expense		105,806			103,339			2.4
Third-party processing expense		40,042			40,135			(0.2	)
FDIC insurance and other regulatory fees		34,043			32,758			3.9
Professional fees		26,440			38,776			(31.8	)
Advertising expense		24,037			8,971			167.9
Foreclosed real estate expense, net		25,321			33,864			(25.2	)
Losses on other loans held for sale, net		1,567			329			376.3
Visa indemnification charges		3,041			1,600			90.1
Litigation settlement expenses ⁽²⁾		12,812			10,000			28.1
Restructuring charges		20,585			11,064			86.1
Other operating expenses		79,400			92,549			(14.2	)

Total non-interest expense		744,998			741,537			0.5

Income before income taxes		302,559			252,628			19.8
Income tax expense		107,310			93,245			15.1

Net income		195,249			159,383			22.5
Dividends and accretion of discount on preferred stock		10,238			40,830			(74.9	)

Net income available to common shareholders	$	185,011			118,553			56.1

Net income per common share, basic⁽³⁾		1.34			0.93			43.7
Net income per common share, diluted⁽³⁾		1.33			0.88			50.5
Cash dividends declared per common share ⁽³⁾		0.31			0.28			10.7
Return on average assets		0.74	%		0.61			21.3
Return on average common equity		6.38			4.39			45.3
Weighted average common shares outstanding, basic ⁽³⁾		138,495			127,495			8.6	%
Weighted average common shares outstanding, diluted⁽³⁾		139,154			134,226			3.7

nm—not meaningful

(1)	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.

(2)	Amounts consist of litigation settlement expenses, including loss contingency accruals, with respect to certain legal matters.

(3)	Share and per share data for prior periods has been restated to reflect the 1-for-7 reverse stock split which was effective on May 16, 2014.

Synovus

INCOME STATEMENT DATA

(Unaudited)


(In thousands, except per share data)	2014												2013			4th Quarter
	Fourth Quarter			Third Quarter			Second Quarter			First Quarter			Fourth Quarter			‘14 vs. ‘13 Change
Interest income	$	234,703			233,394			232,213			228,382			233,258			0.6	%
Interest expense		27,248			27,131			27,162			27,868			28,927			(5.8	)

Net interest income		207,455			206,263			205,051			200,514			204,331			1.5
Provision for loan losses		8,193			3,843			12,284			9,511			14,064			(41.7	)

Net interest income after provision for loan losses		199,262			202,420			192,767			191,003			190,267			4.7

Non-interest income:
Service charges on deposit accounts		20,287			20,159			19,238			19,214			19,647			3.3
Fiduciary and asset management fees		11,690			11,207			11,296			11,033			10,978			6.5
Brokerage revenue		6,887			7,281			6,707			6,213			6,307			9.2
Mortgage banking income		4,895			4,665			5,283			3,511			2,913			68.0
Bankcard fees		8,536			8,182			8,695			7,518			7,979			7.0
Investment securities gains, net		—			—			—			1,331			373			nm
Other fee income		4,635			4,704			4,928			4,863			6,106			(24.1	)
Increase (decrease) in fair value of private equity investments, net		136			(144	)		(119	)		(250	)		(2,108	)		nm
Gain on sale of Memphis branches, net ⁽¹⁾		—			—			—			5,789			—			nm
Other non-interest income		7,483			7,931			7,360			10,960			7,986			(6.3	)

Total non-interest income		64,549			63,985			63,388			70,182			60,181			7.3

Non-interest expense:
Salaries and other personnel expense		92,049			93,870			92,540			93,445			91,962			0.1
Net occupancy and equipment expense		26,370			26,956			26,425			26,056			26,314			0.2
Third-party processing expense		10,437			10,044			9,464			10,097			9,689			7.7
FDIC insurance and other regulatory fees		8,262			8,013			8,049			9,719			8,699			(5.0	)
Professional fees		8,013			2,526			8,224			7,677			9,855			(18.7	)
Advertising expense		8,102			7,177			6,281			2,477			2,458			229.6
Foreclosed real estate expense, net		6,502			9,074			4,063			5,681			5,064			28.4
(Gains) losses on other loans held for sale, net		(482	)		(176	)		(40	)		2,266			(159	)		nm
Visa indemnification charges		310			1,979			356			396			799			(61.2	)
Litigation settlement expenses ⁽²⁾		463			12,349			—			—			10,000			(95.4	)
Restructuring charges		3,484			809			7,716			8,577			3,770			(7.6	)
Other operating expenses		21,373			21,128			19,127			17,770			22,287			(4.1	)

Total non-interest expense		184,883			193,749			182,205			184,161			190,738			(3.1	)

Income before income taxes		78,928			72,656			73,950			77,024			59,710			32.2
Income tax expense		25,757			25,868			27,078			28,608			21,130			21.9

Net income		53,171			46,788			46,872			48,416			38,580			37.8
Dividends on preferred stock		2,559			2,559			2,559			2,559			2,730			(6.3	)

Net income available to common shareholders	$	50,612			44,229			44,313			45,857			35,850			41.2	%

Net income per common share, basic⁽³⁾	$	0.37			0.32			0.32			0.33			0.26			43.1	%
Net income per common share, diluted ⁽³⁾		0.37			0.32			0.32			0.33			0.26			42.8
Cash dividends declared per common share ⁽³⁾		0.10			0.07			0.07			0.07			0.07			42.9
Return on average assets		0.79	%		0.70	%		0.71			0.75			0.58			36.2
Return on average common equity		6.89			5.97			6.14			6.52			5.04			36.7
Weighted average common shares outstanding, basic ⁽³⁾		137,031			139,043			138,991			138,932			138,897			(1.3	)
Weighted average common shares outstanding, diluted ⁽³⁾		137,831			139,726			139,567			139,504			139,419			(1.1	)

nm—not meaningful

*—ratios are annualized

(1)	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.

(2)	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.

(3)	Share and per share data for prior periods has been restated to reflect the 1-for-7 reverse stock split which was effective on May 16, 2014.

Synovus

BALANCE SHEET DATA

(Unaudited)


(In thousands, except share data)	December 31, 2014			September 30, 2014			December 31, 2013
ASSETS
Cash and cash equivalents	$	485,489			386,402			469,630
Interest bearing funds with Federal Reserve Bank		721,362			750,446			644,528
Interest earning deposits with banks		11,810			13,612			24,325
Federal funds sold and securities purchased under resale agreements		73,111			70,918			80,975
Trading account assets, at fair value		13,863			12,705			6,113
Mortgage loans held for sale, at fair value		63,328			72,333			45,384
Other loans held for sale		3,606			338			10,685
Investment securities available for sale, at fair value		3,041,406			3,050,257			3,199,358
Loans, net of deferred fees and costs		21,097,699			20,588,566			20,057,798
Allowance for loan losses		(261,317	)		(269,376	)		(307,560	)

Loans, net		20,836,382			20,319,190			19,750,238

Premises and equipment, net		455,235			456,633			468,871
Goodwill		24,431			24,431			24,431
Other intangible assets, net		1,265			1,471			3,415
Other real estate		85,472			81,636			112,629
Deferred tax asset, net		622,464			656,151			744,646
Other assets		612,007			622,587			616,376

Total assets	$	27,051,231			26,519,110			26,201,604

LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Deposits:
Non-interest bearing deposits	$	6,228,472			5,813,809			5,642,751
Interest bearing deposits, excluding brokered deposits		13,660,830			13,609,038			14,140,037
Brokered deposits		1,642,398			1,566,934			1,094,002

Total deposits		21,531,700			20,989,781			20,876,790
Federal funds purchased and securities sold under repurchase agreements		126,916			107,160			148,132
Long-term debt		2,140,319			2,130,934			2,033,141
Other liabilities		211,026			214,690			194,556

Total liabilities		24,009,961			23,442,565			23,252,619

Shareholders’ equity:
Series C Preferred Stock—no par value, 5,200,000 shares outstanding at December 31, 2014, September 30, 2014, and December 31, 2013		125,980			125,980			125,862
Common stock—$1.00 par value. 136,122,843 shares outstanding at December 31, 2014, 139,064,621 shares outstanding at September 30, 2014, and 138,907,351 shares outstanding at December 31, 2013⁽¹⁾		139,950			139,878			139,721
Additional paid-in capital		2,960,825			2,974,319			2,976,348
Treasury stock, at cost—3,827,579 shares at December 31, 2014, 813,350 shares at September 30, 2014 and December 31, 2013 ⁽¹⁾		(187,774	)		(114,176	)		(114,176	)
Accumulated other comprehensive loss, net		(12,605	)		(24,827	)		(41,258	)
Retained earnings (deficit)		14,894			(24,629	)		(137,512	)

Total shareholders’ equity		3,041,270			3,076,545			2,948,985
Total liabilities and shareholders’ equity	$	27,051,231			26,519,110			26,201,604

(1)	Share and per share data for prior periods has been restated to reflect the 1-for-7 reverse stock split which was effective on May 16, 2014.

Synovus

AVERAGE BALANCES AND YIELDS/RATES (1)

(Unaudited)


(Dollars in thousands)	2014												2013
	Fourth Quarter			Third Quarter			Second Quarter			First Quarter			Fourth Quarter
Interest Earning Assets
Taxable investment securities ⁽²⁾	$	3,027,769			3,035,940			3,091,537			3,181,678			3,196,561
Yield		1.85	%		1.84			1.87			1.91			1.90
Tax-exempt investment securities ^{(2) (4)}	$	5,030			5,168			5,781			6,421			7,758
Yield (taxable equivalent)		6.19	%		6.21			6.23			6.24			6.14
Trading account assets	$	12,879			16,818			16,011			20,346			10,021
Yield		3.08	%		2.52			2.25			3.16			4.60
Commercial loans ^{(3) (4)}	$	16,956,294			16,603,287			16,673,930			16,451,594			16,217,373
Yield		4.09	%		4.17			4.19			4.21			4.28
Consumer loans ⁽³⁾	$	3,895,397			3,814,160			3,695,010			3,628,347			3,615,836
Yield		4.42	%		4.44			4.51			4.53			4.50
Allowance for loan losses	$	(268,659	)		(274,698	)		(293,320	)		(307,078	)		(316,001	)

Loans, net ⁽³⁾	$	20,583,032			20,142,749			20,075,620			19,772,863			19,517,208
Yield		4.22	%		4.29			4.32			4.34			4.40
Mortgage loans held for sale	$	60,892			70,766			59,678			38,699			46,036
Yield		3.84	%		3.96			4.13			4.15			3.94
Federal funds sold, due from Federal Reserve Bank, and other short-term investments	$	898,871			974,363			843,018			935,300			1,235,144
Yield		0.23	%		0.23			0.23			0.23			0.24
Federal Home Loan Bank and Federal Reserve Bank stock ⁽⁵⁾	$	75,547			78,131			76,172			82,585			70,815
Yield		4.53	%		3.57			4.15			3.21			2.85

Total interest earning assets	$	24,664,020			24,323,935			24,167,817			24,037,892			24,083,543
Yield		3.78	%		3.81			3.86			3.86			3.85


Interest Bearing Liabilities
Interest bearing demand deposits	$	3,781,389			3,722,599			3,830,956			3,878,590			4,102,398
Rate		0.19	%		0.19			0.19			0.19			0.19
Money market accounts	$	6,009,897			6,044,138			6,033,523			6,077,357			6,161,893
Rate		0.29	%		0.29			0.31			0.32			0.33
Savings deposits	$	638,813			645,654			644,103			616,962			605,054
Rate		0.07	%		0.07			0.09			0.10			0.10
Time deposits under $100,000	$	1,315,905			1,335,848			1,364,322			1,423,487			1,491,673
Rate		0.57	%		0.56			0.57			0.59			0.61
Time deposits over $100,000	$	1,877,602			1,871,136			1,824,349			1,956,925			2,049,094
Rate		0.76	%		0.75			0.74			0.76			0.80
Brokered money market accounts	$	191,103			174,538			184,233			207,681			210,380
Rate		0.28	%		0.27			0.27			0.26			0.27
Brokered time deposits	$	1,411,252			1,320,082			1,216,934			1,027,167			984,047
Rate		0.58	%		0.52			0.51			0.62			0.65

Total interest bearing deposits	$	15,225,961			15,113,995			15,098,420			15,188,169			15,604,539
Rate		0.36	%		0.35			0.36			0.38			0.39
Federal funds purchased and securities sold under repurchase agreements	$	186,993			171,429			219,490			215,027			216,757
Rate		0.07	%		0.08			0.13			0.14			0.15
Long-term debt	$	2,084,636			2,142,705			2,099,578			2,156,836			1,886,223
Rate		2.55	%		2.54			2.58			2.52			2.85

Total interest bearing liabilities	$	17,497,590			17,428,129			17,417,488			17,560,032			17,707,519
Rate		0.62	%		0.62			0.62			0.64			0.65

Non-interest bearing demand deposits	$	6,110,047			5,824,592			5,765,287			5,537,090			5,545,529
Effective cost of funds		0.44	%		0.44			0.45			0.47			0.47

Net interest margin		3.34	%		3.37			3.41			3.39			3.38

Taxable equivalent adjustment	$	372			408			443			455			481

(1)	Yields and rates are annualized.

(2)	Excludes net unrealized gains and losses.

(3)	Average loans are shown net of unearned income. Non-performing loans are included.

(4)	Reflects taxable-equivalent adjustments, using the statutory federal income tax rate of 35%, in adjusting interest on tax-exempt loans and investment securities to a taxable-equivalent basis.

(5)	Included as a component of Other Assets on the consolidated balance sheet

Synovus

LOANS OUTSTANDING AND NON-PERFORMING LOANS COMPOSITION

(Unaudited)


(Dollars in thousands)	December 31, 2014
Loan Type	Total Loans			Loans as a % of Total Loans Outstanding			Total Non-performing Loans		Non-performing Loans as a % of Total Nonperforming Loans
Multi-Family	$	1,205,095			5.7	%	$	224		0.1	%
Hotels		692,018			3.3			427		0.2
Office Buildings		1,188,389			5.6			488		0.1
Shopping Centers		881,396			4.2			5,726		2.9
Commercial Development		121,990			0.6			12,303		6.2
Warehouses		558,594			2.6			184		0.1
Other Investment Property		540,840			2.6			1,368		0.7

Total Investment Properties		5,188,322			24.6			20,720		10.4
1-4 Family Construction		148,821			0.7			309		0.2
1-4 Family Investment Mortgage		808,893			3.8			9,973		5.0
Residential Development		177,848			0.8			13,915		7.0

Total 1-4 Family Properties		1,135,562			5.4			24,197		12.2
Land Acquisition		577,424			2.7			34,120		17.3

Total Commercial Real Estate		6,901,308			32.7			79,037		39.9

Commercial, Financial, and Agricultural		6,226,034			29.5			40,614		20.5
Owner-Occupied		4,066,979			19.3			26,099		13.2

Total Commercial & Industrial		10,293,013			48.8			66,713		33.7

Home Equity Lines		1,683,998			8.0			16,434		8.3
Consumer Mortgages		1,694,061			8.0			33,278		16.9
Credit Cards		253,649			1.3			—		—
Other Retail Loans		302,460			1.4			2,295		1.2

Total Retail		3,934,168			18.6			52,007		26.3

Unearned Income		(30,790	)		(0.1	)		—		nm

Total	$	21,097,699			100.0	%	$	197,757		100.0	%

LOANS OUTSTANDING BY TYPE COMPARISON

(Unaudited)


(Dollars in thousands)
Loan Type	Total Loans December 31, 2014			September 30, 2014			4Q14 vs. 3Q14 % change ⁽¹⁾			December 31, 2013			4Q14 vs. 4Q13 % change
Multi-Family	$	1,205,095			1,152,728			18.0	%		957,002			25.9	%
Hotels		692,018			668,603			13.9			687,177			0.7
Office Buildings		1,188,389			1,107,012			29.2			889,499			33.6
Shopping Centers		881,396			856,399			11.6			854,607			3.1
Commercial Development		121,990			131,011			(27.3	)		156,344			(22.0	)
Warehouses		558,594			565,011			(4.5	)		564,448			(1.0	)
Other Investment Property		540,840			538,282			1.9			507,409			6.6

Total Investment Properties		5,188,322			5,019,046			13.4			4,616,486			12.4
1-4 Family Construction		148,821			143,888			13.6			138,973			7.1
1-4 Family Investment Mortgage		808,893			813,867			(2.4	)		857,556			(5.7	)
Residential Development		177,848			179,799			(4.3	)		188,531			(5.7	)

Total 1-4 Family Properties		1,135,562			1,137,554			(0.7	)		1,185,060			(4.2	)
Land Acquisition		577,424			588,779			(7.7	)		705,431			(18.1	)

Total Commercial Real Estate		6,901,308			6,745,379			9.2			6,506,977			6.1

Commercial, Financial, and Agricultural		6,226,034			6,003,409			14.7			5,895,265			5.6
Owner-Occupied		4,066,979			4,013,666			5.3			4,036,186			0.8

Total Commercial & Industrial		10,293,013			10,017,075			10.9			9,931,451			3.6

Home Equity Lines		1,683,998			1,685,972			(0.5	)		1,587,541			6.1
Consumer Mortgages		1,694,061			1,621,904			17.7			1,519,068			11.5
Credit Cards		253,649			253,853			(0.3	)		256,846			(1.2	)
Other Retail Loans		302,460			293,232			12.5			284,777			6.2

Total Retail		3,934,168			3,854,961			8.2			3,648,232			7.8

Unearned Income		(30,790	)		(28,849	)		26.7			(28,862	)		6.7

Total	$	21,097,699			20,588,566			9.8	%		20,057,798			5.2	%

(1)	Percentage change is annualized.

Synovus

CREDIT QUALITY DATA

(Unaudited)


(Dollars in thousands)	2014									2013		4th Quarter
	Fourth Quarter			Third Quarter		Second Quarter		First Quarter		Fourth Quarter		‘14 vs. ‘13 Change
Non-performing Loans	$	197,757			242,382		259,547		384,324		416,300		(52.5	)%
Other Loans Held for Sale ⁽¹⁾		3,606			338		2,045		3,120		10,685		(66.3	)
Other Real Estate		85,472			81,636		101,533		110,757		112,629		(24.1	)

Non-performing Assets		286,835			324,356		363,125		498,201		539,614		(46.8	)
Allowance for Loan Losses		261,317			269,376		277,783		300,871		307,560		(15.0	)
Net Charge-Offs—Quarter		16,253			12,250		35,371		15,181		25,116		(35.3	)
Net Charge-Offs—YTD		79,055			62,802		50,552		15,181		135,443		(41.6	)
Net Charge-Offs / Average Loans—Quarter ⁽²⁾		0.31	%		0.24		0.69		0.30		0.51
Non-performing Loans / Loans		0.94			1.18		1.27		1.91		2.08
Non-performing Assets / Loans, Other Loans Held for Sale & ORE		1.35			1.57		1.77		2.46		2.67
Allowance / Loans		1.24			1.31		1.36		1.49		1.53
Allowance / Non-performing Loans		132.14			111.14		107.03		78.29		73.88
Allowance / Non-performing Loans ⁽³⁾		197.22			176.47		177.62		100.16		95.43
Past Due Loans over 90 days and Still Accruing	$	4,637			4,067		4,798		6,563		4,489		3.3	%
As a Percentage of Loans Outstanding		0.02	%		0.02		0.02		0.03		0.02
Total Past Dues Loans and Still Accruing	$	51,251			72,712		60,428		75,038		72,600		(29.4	)
As a Percentage of Loans Outstanding		0.24	%		0.35		0.30		0.37		0.36
Accruing Troubled Debt Restructurings (TDRs)	$	348,427			408,737		444,108		495,390		556,410		(37.4	)

(1)	Represent impaired loans that are intended to be sold. Held for sale loans are carried at the lower of cost or fair value, less costs to sell.

(2)	Ratio is annualized.

(3)	Excludes non-performing loans for which the expected loss has been charged off.

SELECTED CAPITAL INFORMATION⁽¹⁾

(Unaudited)


(Dollars in thousands)
	December 31, 2014			December 31, 2013
Tier 1 Capital	$	2,543,625			2,351,493
Total Risk-Based Capital		2,987,406			2,900,865
Tier 1 Capital Ratio		10.86	%		10.54
Tier 1 Common Equity Ratio		10.28			9.93
Total Risk-Based Capital Ratio		12.75			13.00
Tier 1 Leverage Ratio		9.67			9.13
Common Equity as a Percentage of Total Assets⁽²⁾		10.78			10.77
Tangible Common Equity as a Percentage of Tangible Assets ⁽³⁾		10.69			10.68
Tangible Common Equity as a Percentage of Risk Weighted Assets ⁽³⁾		12.33			12.53
Book Value Per Common Share ⁽⁴⁾⁽⁵⁾		21.42			20.32
Tangible Book Value Per Common Share⁽³⁾⁽⁵⁾		21.23			20.12

(1)	Current quarter regulatory capital information is preliminary.

(2)	Common equity consists of Total Shareholders’ Equity less Preferred Stock.

(3)	Excludes the carrying value of goodwill and other intangible assets from common equity and total assets.

(4)	Book Value Per Common Share consists of Total Shareholders’ Equity less Preferred Stock divided by total common shares outstanding.

(5)	Per share data for prior periods has been restated to reflect the 1-for-7 reverse stock split which was effective on May 16, 2014.

SYNOVUS FINANCIAL CORP - FORM 8-K - EX-99.2 - January 27, 2015

Attached files

SYNOVUS FINANCIAL CORP Reports