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

Attached files

file	filename
8-K - FORM 8-K - SYNOVUS FINANCIAL CORP	d426968d8k.htm
EX-99.3 - EX-99.3 - SYNOVUS FINANCIAL CORP	d426968dex993.htm
EX-99.1 - EX-99.1 - SYNOVUS FINANCIAL CORP	d426968dex991.htm

Exhibit 99.2

Synovus

INCOME STATEMENT DATA

(Unaudited)

(Dollars in thousands, except per share data)


	Six Months Ended June 30,
	2017			2016			Change
Interest income	$	557,911			501,716			11.2	%
Interest expense		66,887			62,073			7.8

Net interest income		491,024			439,643			11.7
Provision for loan losses		18,934			16,070			17.8

Net interest income after provision for loan losses		472,090			423,573			11.5

Non-interest income:
Service charges on deposit accounts		39,593			39,950			(0.9	)
Fiduciary and asset management fees		24,676			22,854			8.0
Brokerage revenue		14,436			13,821			4.4
Mortgage banking income		11,548			11,425			1.1
Bankcard fees		16,438			16,718			(1.7	)
Investment securities gains, net		7,667			67			nm
(Decrease) increase in fair value of private equity investments, net		(3,166	)		(278	)		nm
Other fee income		11,033			10,084			9.4
Other non-interest income		18,314			16,392			11.7

Total non-interest income		140,539			131,033			7.3

Non-interest expense:
Salaries and other personnel expense		212,404			198,419			7.0
Net occupancy and equipment expense		59,264			53,360			11.1
Third-party processing expense		26,223			22,814			14.9
FDIC insurance and other regulatory fees		13,645			13,344			2.3
Professional fees		12,907			13,307			(3.0	)
Advertising expense		11,258			9,761			15.3
Foreclosed real estate expense, net		3,582			7,272			(50.7	)
Earnout liability adjustments		1,707			—			nm
Merger-related expense		86			—			nm
Amortization of intangibles		475			121			292.6
Fair value adjustment to Visa derivative		—			720			nm
Loss on early extinguishment of debt		—			4,735			nm
Litigation settlement expense		—			2,700			nm
Restructuring charges, net		6,524			6,981			(6.5	)
Other operating expenses		41,058			43,310			(5.2	)

Total non-interest expense		389,133			376,844			3.3

Income before income taxes		223,496			177,762			25.7
Income tax expense		75,635			64,773			16.8

Net income		147,861			112,989			30.9
Dividends on preferred stock		5,119			5,119			—

Net income available to common shareholders	$	142,742			107,870			32.3	%

Net income per common share, basic	$	1.17			0.85			37.4	%
Net income per common share, diluted		1.16			0.85			36.5
Cash dividends declared per common share		0.30			0.24			25.0
Return on average assets		0.98	%		0.78			20	bp
Return on average common equity		10.16			7.66			250
Weighted average common shares outstanding, basic		122,251			126,164			(3.1	)%
Weighted average common shares outstanding, diluted		123,042			126,778			(2.9	)

nm - not meaningful

bps - basis points

Synovus

INCOME STATEMENT DATA

(Unaudited)

(In thousands, except per share data)


	2017						2016								2nd Quarter
	Second			First			Fourth			Third			Second		‘17 vs. ‘16
	Quarter			Quarter			Quarter			Quarter			Quarter		Change
Interest income	$	285,510			272,401			264,534			256,554			252,393		13.1	%
Interest expense		34,413			32,474			31,004			30,547			30,944		11.2

Net interest income		251,097			239,927			233,530			226,007			221,449		13.4
Provision for loan losses		10,260			8,674			6,259			5,671			6,693		53.3

Net interest income after provision for loan losses		240,837			231,253			227,271			220,336			214,756		12.1

Non-interest income:
Service charges on deposit accounts		19,820			19,774			20,653			20,822			20,240		(2.1	)
Fiduciary and asset management fees		12,524			12,151			11,903			11,837			11,580		8.2
Brokerage revenue		7,210			7,226			7,009			6,199			7,338		(1.7	)
Mortgage banking income		5,784			5,766			5,504			7,329			5,941		(2.6	)
Bankcard fees		8,253			8,185			8,330			8,269			8,346		(1.1	)
Investment securities gains (losses), net		(1	)		7,668			5,885			59			—		nm
(Decrease) increase in fair value of private equity investments, net		(1,352	)		(1,814	)		(499	)		(249	)		113		nm
Other fee income		6,164			4,868			4,965			5,171			5,280		16.7
Other non-interest income		10,299			8,015			10,256			8,718			9,048		13.8

Total non-interest income		68,701			71,839			74,006			68,155			67,886		1.2

Non-interest expense:
Salaries and other personnel expense		105,213			107,191			101,662			101,945			97,061		8.4
Net occupancy and equipment expense		29,933			29,331			27,867			28,120			26,783		11.8
Third-party processing expense		13,620			12,603			12,287			11,219			11,698		16.4
FDIC insurance and other regulatory fees		6,875			6,770			6,614			6,756			6,625		3.8
Professional fees		7,551			5,355			6,904			6,486			6,938		8.8
Advertising expense		5,346			5,912			4,905			5,597			7,351		(27.3	)
Foreclosed real estate expense, net		1,448			2,134			2,840			2,725			4,588		(68.4	)
Earnout liability adjustments		1,707			—			—			—			—		nm
Merger-related expense		—			86			1,086			550			—		nm
Amortization of intangibles		292			183			400			—			—		nm
Fair value adjustment to Visa derivative		—			—			4,716			360			360		nm
Litigation settlement (recovery) expense		—			—			—			(189	)		—		nm
Restructuring charges, net		13			6,511			42			1,243			5,841		nm
Other operating expenses		19,749			21,312			23,886			21,059			21,366		(7.6	)

Total non-interest expense		191,747			197,388			193,209			185,871			188,611		1.7

Income before income taxes		117,791			105,704			108,068			102,620			94,031		25.3
Income tax expense		41,788			33,847			39,519			37,375			33,574		24.5

Net income		76,003			71,857			68,549			65,245			60,457		25.7
Dividends on preferred stock		2,559			2,559			2,559			2,559			2,559		—

Net income available to common shareholders	$	73,444			69,298			65,990			62,686			57,898		26.9	%

Net income per common share, basic	$	0.60			0.57			0.54			0.51			0.46		29.9	%
Net income per common share, diluted		0.60			0.56			0.54			0.51			0.46		29.6
Cash dividends declared per common share		0.15			0.15			0.12			0.12			0.12		25.0
Return on average assets *		1.00	%		0.96			0.90			0.88			0.83		17	bps
Return on average common equity *		10.34			9.97			9.42			8.89			8.26		208
Weighted average common shares outstanding, basic		122,203			122,300			122,341			122,924			125,100		(2.3	)%
Weighted average common shares outstanding, diluted		123,027			123,059			123,187			123,604			125,699		(2.1	)

nm - not meaningful

bps - basis points

* - ratios are annualized

Synovus

BALANCE SHEET DATA

(Unaudited)

(In thousands, except share data)


	June 30, 2017			December 31, 2016			June 30, 2016
ASSETS
Cash and cash equivalents	$	377,213			395,175			377,334
Interest bearing funds with Federal Reserve Bank		468,148			527,090			904,406
Interest earning deposits with banks		6,012			18,720			24,541
Federal funds sold and securities purchased under resale agreements		46,847			58,060			77,685
Trading account assets, at fair value		3,045			9,314			1,001
Mortgage loans held for sale, at fair value		61,893			51,545			87,824
Investment securities available for sale, at fair value		3,827,058			3,718,195			3,580,359
Loans, net of deferred fees and costs		24,430,512			23,856,391			23,060,908
Allowance for loan losses		(248,095	)		(251,758	)		(255,076	)

Loans, net		24,182,417			23,604,633			22,805,832

Premises and equipment, net		416,364			417,485			424,967
Goodwill		57,092			59,678			24,431
Other intangible assets		11,843			13,223			228
Other real estate		19,476			22,308			33,289
Deferred tax asset, net		320,403			395,356			425,160
Other assets		890,155			813,220			692,634

Total assets	$	30,687,966			30,104,002			29,459,691

LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Deposits:
Non-interest bearing deposits	$	7,363,476			7,085,804			6,934,443
Interest bearing deposits, excluding brokered deposits		16,387,032			16,183,273			15,495,318
Brokered deposits		1,468,308			1,378,983			1,496,161

Total deposits		25,218,816			24,648,060			23,925,922
Federal funds purchased and securities sold under repurchase agreements		150,379			159,699			247,179
Long-term debt		2,107,245			2,160,881			2,135,892
Other liabilities		213,579			207,438			199,039

Total liabilities		27,690,019			27,176,078			26,508,032

Shareholders’ equity:
Series C Preferred Stock - no par value, 5,200,000 shares outstanding at June 30, 2017, December 31, 2016, and June 30, 2016		125,980			125,980			125,980
Common stock - $1.00 par value. 121,661,092 shares outstanding at June 30, 2017, 122,266,106 shares outstanding at December 31, 2016, and 124,047,659 shares outstanding at June 30, 2016		142,499			142,026			141,008
Additional paid-in capital		3,029,754			3,028,405			2,993,985
Treasury stock, at cost - 20,837,814 shares at June 30, 2017, 19,759,614 shares at December 31, 2016, and 16,959,977 shares at June 30, 2016		(709,944	)		(664,595	)		(573,058	)
Accumulated other comprehensive income (loss)		(47,865	)		(55,659	)		11,005
Retained earnings		457,523			351,767			252,739

Total shareholders’ equity		2,997,947			2,927,924			2,951,659

Total liabilities and shareholders’ equity	$	30,687,966			30,104,002			29,459,691

Synovus

AVERAGE BALANCES AND YIELDS/RATES (1)

(Unaudited)

(Dollars in thousands)


	2017						2016
	Second Quarter			First Quarter			Fourth Quarter			Third Quarter			Second Quarter
Interest Earning Assets
Taxable investment securities ⁽²⁾	$	3,844,688			3,841,556			3,643,510			3,544,933			3,529,030
Yield		2.11	%		2.06			1.92			1.83			1.89
Tax-exempt investment securities ^(2) (4)	$	340			2,730			2,824			2,943			3,491
Yield (taxable equivalent)		6.87	%		5.81			5.82			5.96			6.08
Trading account assets	$	3,667			6,443			6,799			5,493			3,803
Yield		2.28	%		1.72			2.63			0.93			1.27
Commercial loans ^{(3) (4)}	$	19,137,733			19,043,384			18,812,659			18,419,484			18,433,638
Yield		4.27	%		4.16			4.05			4.03			4.04
Consumer loans ⁽³⁾	$	5,215,258			4,992,683			4,911,149			4,720,082			4,497,147
Yield		4.49	%		4.40			4.27			4.30			4.32
Allowance for loan losses	$	(251,219	)		(253,927	)		(253,713	)		(255,675	)		(251,101	)

Loans, net ⁽³⁾	$	24,101,772			23,782,140			23,470,095			22,883,891			22,679,684
Yield		4.36	%		4.25			4.14			4.14			4.15
Mortgage loans held for sale	$	52,224			46,554			77,652			87,524			72,477
Yield		3.87	%		4.01			3.51			3.32			3.59
Federal funds sold, due from Federal Reserve Bank, and other short-term investments	$	561,503			654,322			982,355			998,565			907,614
Yield		1.00	%		0.77			0.49			0.48			0.47
Federal Home Loan Bank and Federal Reserve Bank stock ⁽⁵⁾	$	177,323			170,844			121,079			70,570			77,571
Yield		2.99	%		3.42			3.75			4.99			5.15

Total interest earning assets	$	28,741,517			28,504,589			28,304,314			27,593,919			27,273,670
Yield		3.99	%		3.88			3.73			3.71			3.73

Interest Bearing Liabilities
Interest bearing demand deposits	$	4,837,053			4,784,329			4,488,135			4,274,117			4,233,310
Rate		0.23	%		0.19			0.16			0.16			0.18
Money market accounts	$	7,427,562			7,424,627			7,359,067			7,227,030			7,082,759
Rate		0.32	%		0.31			0.29			0.29			0.31
Savings deposits	$	805,019			909,660			908,725			797,961			746,225
Rate		0.04	%		0.11			0.12			0.07			0.06
Time deposits under $100,000	$	1,202,746			1,215,593			1,229,809			1,248,294			1,262,280
Rate		0.67	%		0.64			0.64			0.64			0.64
Time deposits over $100,000	$	2,040,924			2,029,713			2,014,564			2,030,242			2,016,116
Rate		0.94	%		0.92			0.90			0.88			0.89
Non maturing brokered deposits	$	564,043			619,627			638,779			634,596			451,398
Rate		0.54	%		0.41			0.31			0.29			0.39
Brokered time deposits	$	815,515			761,159			742,153			775,143			885,603
Rate		0.94	%		0.92			0.90			0.88			0.85

Total interest bearing deposits	$	17,692,862			17,744,708			17,381,232			16,987,383			16,677,691
Rate		0.41	%		0.39			0.37			0.37			0.39
Federal funds purchased and securities sold under repurchase agreements	$	183,400			176,854			219,429			247,378			221,276
Rate		0.10	%		0.09			0.08			0.09			0.09
Long-term debt	$	2,270,452			2,184,072			2,190,716			2,114,193			2,279,043
Rate		2.83	%		2.83			2.65			2.71			2.55

Total interest bearing liabilities	$	20,146,714			20,105,634			19,791,377			19,348,954			19,178,010
Rate		0.68	%		0.65			0.62			0.63			0.65

Non-interest bearing demand deposits	$	7,298,845			7,174,146			7,280,033			7,042,908			6,930,336
Effective cost of funds		0.48	%		0.46			0.44			0.44			0.46

Net interest margin		3.51	%		3.42			3.29			3.27			3.27

Taxable equivalent adjustment	$	298			309			322			330			329

(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

NON-PERFORMING LOANS COMPOSITION

(Unaudited)

(Dollars in thousands)


Loan Type	Total Non-performing Loans June 30, 2017		Total Non-performing Loans March 31, 2017		2Q17 vs. 1Q17 % change ⁽¹⁾			Total Non-performing Loans June 30, 2016		2Q17 vs. 2Q16 % change
Multi-Family	$	1,621		1,556		16.8	%	$	4,070		nm
Hotels		376		323		65.8			5,052		(92.6	)%
Office Buildings		326		185		305.7			2,563		(87.3	)
Shopping Centers		161		—		nm			358		nm
Warehouses		41		226		(328.3	)		1,128		(96.4	)
Other Investment Property		1,187		750		233.7			580		104.7

Total Investment Properties		3,712		3,040		88.7			13,751		(73.0	)
1-4 Family Construction		—		306		(401.1	)		304		(100.0	)
1-4 Family Investment Mortgage		8,535		8,497		1.8			7,994		6.8

Total 1-4 Family Properties		8,535		8,803		(12.2	)		8,298		2.9
Commercial Development		269		205		125.2			398		(32.4	)
Residential Development		5,585		9,033		(153.1	)		9,571		(41.6	)
Land Acquisition		5,077		5,114		(2.9	)		7,610		(33.3	)

Land and Development		10,931		14,352		(95.6	)		17,579		(37.8	)

Total Commercial Real Estate		23,178		26,195		(46.2	)		39,628		(41.5	)

Commercial, Financial, and Agricultural		69,550		60,381		60.9			55,821		24.6
Owner-Occupied		24,918		26,564		(24.9	)		17,118		45.6

Total Commercial & Industrial		94,468		86,945		34.7			72,939		29.5

Home Equity Lines		20,648		22,918		(39.7	)		16,912		22.1
Consumer Mortgages		18,035		19,874		(37.1	)		21,895		(17.6	)
Credit Cards		—		—		nm			—		nm
Other Consumer Loans		2,988		2,434		91.3			2,698		10.7

Total Consumer		41,671		45,226		(31.5	)		41,505		0.4

Total	$	159,317		158,366		2.4	%	$	154,072		3.4	%

(1)	Percentage change is annualized.

LOANS OUTSTANDING BY TYPE COMPARISON

(Unaudited)

(Dollars in thousands)


Loan Type	Total Loans June 30, 2017			Total Loans March 31, 2017			2Q17 vs. 1Q17 % change ⁽¹⁾			Total Loans June 30, 2016			2Q17 vs. 2Q16 % change
Multi-Family	$	1,724,917			1,638,250			21.2	%	$	1,528,191			12.9	%
Hotels		835,110			794,685			20.4			746,397			11.9
Office Buildings		1,567,984			1,581,460			(3.4	)		1,559,631			0.5
Shopping Centers		864,868			902,954			(16.9	)		926,147			(6.6	)
Warehouses		467,369			504,619			(29.6	)		535,889			(12.8	)
Other Investment Property		575,415			594,084			(12.6	)		554,715			3.7

Total Investment Properties		6,035,663			6,016,052			1.3			5,850,970			3.2
1-4 Family Construction		198,419			203,151			(9.3	)		208,871			(5.0	)
1-4 Family Investment Mortgage		637,201			658,120			(12.7	)		758,463			(16.0	)

Total 1-4 Family Properties		835,620			861,271			(11.9	)		967,334			(13.6	)
Commercial Development		59,299			58,537			5.2			69,691			(14.9	)
Residential Development		118,032			130,653			(38.7	)		160,446			(26.4	)
Land Acquisition		365,657			392,710			(27.6	)		459,254			(20.4	)

Land and Development		542,988			581,900			(26.8	)		689,391			(21.2	)

Total Commercial Real Estate		7,414,271			7,459,223			(2.4	)		7,507,695			(1.2	)

Commercial, Financial, and Agricultural		7,000,573			7,056,032			(3.2	)		6,596,835			6.1
Owner-Occupied		4,750,335			4,684,734			5.6			4,358,595			9.0

Total Commercial & Industrial		11,750,908			11,740,766			0.3			10,955,430			7.3

Home Equity Lines		1,563,167			1,587,102			(6.0	)		1,657,109			(5.7	)
Consumer Mortgages		2,470,665			2,350,730			20.5			2,132,114			15.9
Credit Cards		225,900			224,349			2.8			236,034			(4.3	)
Other Consumer Loans		1,031,639			922,018			47.7			600,153			71.9

Total Consumer		5,291,371			5,084,199			16.3			4,625,410			14.4

Unearned Income		(26,038	)		(25,720	)		5.0			(27,627	)		(5.8	)

Total	$	24,430,512			24,258,468			2.8	%	$	23,060,908			5.9	%

(1)	Percentage change is annualized.

Synovus

CREDIT QUALITY DATA

(Unaudited)

(Dollars in thousands)


	2017					2016						2nd Quarter
	Second Quarter			First Quarter		Fourth Quarter		Third Quarter		Second Quarter		‘17 vs. ‘16 Change
Non-performing Loans	$	159,317			158,366		153,378		148,155		154,072		3.4	%
Impaired Loans Held for Sale ⁽¹⁾		127			8,442		—		2,473		—		nm
Other Real Estate		19,476			20,425		22,308		28,438		33,289		(41.5	)

Non-performing Assets		178,920			187,233		175,686		179,066		187,361		(4.5	)
Allowance for loan losses		248,095			253,514		251,758		253,817		255,076		(2.7	)
Net Charge-Offs - Quarter		15,678			6,919		8,319		6,930		6,133		155.6
Net Charge-Offs - YTD		22,597			6,919		28,739		20,420		13,490		67.5
Net Charge-Offs / Average Loans - Quarter ⁽²⁾		0.26	%		0.12		0.14		0.12		0.11
Net Charge-Offs / Average Loans - YTD ⁽²⁾		0.19			0.12		0.12		0.12		0.12
Non-performing Loans / Loans		0.65			0.65		0.64		0.64		0.67
Non-performing Assets / Loans, Other Loans Held for Sale & ORE		0.73			0.77		0.74		0.77		0.81
Allowance / Loans		1.02			1.05		1.06		1.09		1.11
Allowance / Non-performing Loans		155.72			160.08		164.14		171.32		165.56
Allowance / Non-performing Loans ⁽³⁾		217.07			204.94		202.01		198.94		195.25
Past Due Loans over 90 days and Still Accruing	$	4,550			2,777		3,135		5,358		5,964		(23.7	)
As a Percentage of Loans Outstanding		0.02	%		0.01		0.01		0.02		0.03
Total Past Due Loans and Still Accruing	$	66,788			62,137		65,106		61,781		55,716		19.9
As a Percentage of Loans Outstanding		0.27	%		0.26		0.27		0.27		0.24
Accruing Troubled Debt Restructurings (TDRs)	$	167,395			172,421		195,776		201,896		205,165		(18.4	)

(1)	Represent only impaired loans that have been specifically identified to be sold. Impaired loans held for sale are carried at the lower of cost or fair value, less costs to sell, based primarily on estimated sales proceeds net of selling costs.

(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)


	June 30, 2017			December 31, 2016		June 30, 2016
Tier 1 Capital	$	2,827,892			2,685,880		2,627,574
Total Risk-Based Capital		3,338,707			3,201,268		3,146,898
Common Equity Tier 1 Ratio (transitional)		10.02	%		9.96		10.01
Common Equity Tier 1 Ratio (fully phased-in)		9.81			9.51		9.49
Tier 1 Capital Ratio		10.36			10.07		10.06
Total Risk-Based Capital Ratio		12.24			12.01		12.05
Tier 1 Leverage Ratio		9.29			8.99		9.10
Common Equity as a Percentage of Total Assets⁽²⁾		9.36			9.31		9.59
Tangible Common Equity as a Percentage of Tangible Assets ⁽³⁾		9.15			9.09		9.52
Tangible Common Equity as a Percentage of Risk Weighted Assets ⁽³⁾		10.27			10.24		10.72
Book Value Per Common Share ⁽⁴⁾	$	23.61			22.92		22.78
Tangible Book Value Per Common Share⁽³⁾		23.04			22.32		22.58

(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.

SYNOVUS FINANCIAL CORP - FORM 8-K - EX-99.2 - July 18, 2017

Attached files

SYNOVUS FINANCIAL CORP Reports