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

Attached files

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EX-99.3 - EX-99.3 - SYNOVUS FINANCIAL CORP	d571865dex993.htm
EX-99.1 - EX-99.1 - SYNOVUS FINANCIAL CORP	d571865dex991.htm
8-K - 8-K - SYNOVUS FINANCIAL CORP	d571865d8k.htm

Exhibit 99.2

Synovus


INCOME STATEMENT DATA
(Unaudited)

(In thousands, except per share data)	2018			2017											First Quarter
	First			Fourth		Third			Second			First			‘18 vs. ‘17
	Quarter			Quarter		Quarter			Quarter			Quarter			Change
Interest income	$	313,134			306,934		297,652			285,510			272,401			15.0	%
Interest expense		38,850			37,221		35,080			34,413			32,474			19.6

Net interest income		274,284			269,713		262,572			251,097			239,927			14.3
Provision for loan losses		12,776			8,565		39,686			10,260			8,674			47.3

Net interest income after provision for loan losses		261,508			261,148		222,886			240,837			231,253			13.1

Non-interest income:
Service charges on deposit accounts		19,940			20,372		20,678			20,252			20,118			(0.9	)
Fiduciary and asset management fees		13,435			13,195		12,615			12,524			12,151			10.6
Card fees ⁽¹⁾		10,199			9,762		9,729			10,041			9,844			3.6
Brokerage revenue		8,695			7,758		7,511			7,210			7,226			20.3
Mortgage banking income		5,047			5,645		5,603			5,784			5,766			(12.5	)
Income from bank-owned life insurance		3,681			3,900		3,232			3,272			3,031			21.4
Cabela’s transaction fee		—			—		75,000			—			—			nm
Investment securities (losses) gains, net		—			—		(7,956	)		(1	)		7,668			nm
(Decrease)/increase in fair value of private equity investments, net		(3,056	)		100		(27	)		(1,352	)		(1,814	)		nm
Other fee income		4,618			4,042		5,094			6,164			4,868			(5.1	)
Other non-interest income ⁽¹⁾		4,487			4,578		3,956			4,807			2,981			50.5

Total non-interest income		67,046			69,352		135,435			68,701			71,839			(6.7	)

INCOME STATEMENT DATA

(Unaudited)


(In thousands, except per share data)	2018			2017									First Quarter
	First			Fourth			Third		Second		First		‘18 vs. ‘17
	Quarter			Quarter			Quarter		Quarter		Quarter		Change
Non-interest expense:
Salaries and other personnel expense		113,720			111,243			109,675		105,213		107,191		6.1
Net occupancy and equipment expense		31,480			30,126			30,573		29,933		29,331		7.3
Third-party processing expense		13,945			14,827			13,659		13,620		12,603		10.6
FDIC insurance and other regulatory fees		6,793			6,288			7,078		6,875		6,770		0.3
Professional fees		5,505			6,183			7,141		7,551		5,355		2.8
Advertising expense		5,092			8,081			3,610		5,346		5,912		(13.9	)
Foreclosed real estate expense, net		856			1,693			7,265		1,448		2,134		(59.9	)
Earnout liability adjustments		—			1,700			2,059		1,707		—		nm
Amortization of intangibles		292			292			292		292		183		59.6
Loss on early extinguishment of debt		—			23,160			—		—		—		nm
Litigation contingency expense		(2,626	)		300			401		—		—		nm
Restructuring charges, net		(315	)		(29	)		519		13		6,511		nm
Other operating expenses		20,437			22,670			23,374		19,749		21,398		(4.5	)

Total non-interest expense		195,179			226,534			205,646		191,747		197,388		(1.1	)

Income before income taxes		133,375			103,966			152,675		117,791		105,704		26.2
Income tax expense		30,209			74,361			54,668		41,788		33,847		(10.7	)

Net income		103,166			29,605			98,007		76,003		71,857		43.6
Dividends on preferred stock		2,559			2,559			2,559		2,559		2,559		—

Net income available to common shareholders	$	100,607			27,046			95,448		73,444		69,298		45.2	%

INCOME STATEMENT DATA

(Unaudited)


(In thousands, except per share data)	2018			2017								First Quarter
	First			Fourth		Third		Second		First		‘18 vs. ‘17
	Quarter			Quarter		Quarter		Quarter		Quarter		Change
Net income per common share, basic	$	0.85			0.23		0.79		0.60		0.57		49.6	%

Net income per common share, diluted		0.84			0.23		0.78		0.60		0.56		49.7

Cash dividends declared per common share		0.25			0.15		0.15		0.15		0.15		66.7

Return on average assets *		1.34	%		0.37		1.27		1.00		0.96		38	bps
Return on average common equity *		14.62			3.76		13.24		10.34		9.97		465

Weighted average common shares outstanding, basic		118,666			119,282		120,900		122,203		122,300		(3.0	)%
Weighted average common shares outstanding, diluted		119,321			120,182		121,814		123,027		123,059		(3.0	)

nm - not meaningful

bps - basis points

*	- ratios are annualized

⁽¹⁾	Beginning January 1, 2018, Synovus began including merchant fees and other card-related fees in Card fees. For periods prior to January 1, 2018, these amounts were previously presented in Other non-interest income and have been reclassified for comparability.

Synovus

BALANCE SHEET DATA

(Unaudited)


(In thousands, except share data)	March 31, 2018			December 31, 2017			March 31, 2017
ASSETS
Cash and due from banks	$	348,027			397,848			380,493
Interest bearing funds with Federal Reserve Bank		636,947			460,928			622,460
Interest earning deposits with banks		16,851			26,311			24,259
Federal funds sold and securities purchased under resale agreements		57,192			47,846			50,003

Cash and cash equivalents ⁽¹⁾		1,059,017			932,933			1,077,215
Mortgage loans held for sale, at fair value		50,439			48,024			57,686
Investment securities available for sale, at fair value		3,990,978			3,987,069			3,782,942
Loans, net of deferred fees and costs		24,883,037			24,787,464			24,258,468
Allowance for loan losses		(257,764	)		(249,268	)		(253,514	)

Loans, net		24,625,273			24,538,196			24,004,954

Cash surrender value of bank-owned life insurance		543,684			540,958			455,474
Premises and equipment, net		424,342			426,813			412,725
Goodwill		57,315			57,315			57,010
Other intangible assets		10,750			11,254			12,137
Deferred tax asset, net		179,343			165,788			359,121
Other assets		559,887			513,487			460,325

Total assets	$	31,501,028			31,221,837			30,679,589

BALANCE SHEET DATA

(Unaudited)


	March 31, 2018		December 31, 2017		March 31, 2017
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Deposits:
Non-interest bearing deposits	$	7,381,070		7,686,339		7,264,856
Interest bearing deposits, excluding brokered deposits		16,865,859		16,500,436		16,452,703
Brokered deposits		2,006,578		1,961,125		1,388,153

Total deposits		26,253,507		26,147,900		25,105,712
Federal funds purchased and securities sold under repurchase		185,531		161,190		146,480
agreements
Long-term debt		1,856,392		1,706,138		2,160,867
Other liabilities		249,103		245,043		304,403

Total liabilities		28,544,533		28,260,271		27,717,462

Shareholders’ equity:
Series C Preferred Stock - no par value, 5,200,000 shares outstanding at March 31, 2018, December 31, 2017, and March 31, 2017		125,980		125,980		125,980

BALANCE SHEET DATA

(Unaudited)


	March 31, 2018			December 31, 2017			March 31, 2017
Common stock - $1.00 par value. 118,702,497 shares outstanding at March 31, 2018, 118,897,295 shares outstanding at December 31, 2017, and 122,321,804 shares outstanding at March 31, 2017		143,017			142,678			142,441
Additional paid-in capital		3,039,757			3,043,129			3,025,775
Treasury stock, at cost - 24,314,804 shares at March 31, 2018, 23,780,154 shares at December 31, 2017, and 20,119,614 shares at March 31, 2017		(866,407	)		(839,674	)		(679,746	)
Accumulated other comprehensive loss		(107,952	)		(54,754	)		(54,751	)
Retained earnings		622,100			544,207			402,428

Total shareholders’ equity		2,956,495			2,961,566			2,962,127

Total liabilities and shareholders’ equity	$	31,501,028			31,221,837			30,679,589

(1)

In connection with the adoption of ASU 2016-18, Statement of Cash Flows-Restricted Cash, Synovus changed its presentation of cash and cash equivalents to include cash and due from banks as well as interest bearing funds with the Federal Reserve Bank, interest earning deposits with banks, and federal funds sold and securities purchased under resale agreements, which are inclusive of any restricted cash.

Synovus

AVERAGE BALANCES AND YIELDS/RATES (1)

(Unaudited)


(Dollars in thousands)	2018			2017
	First			Fourth			Third			Second			First
	Quarter			Quarter			Quarter			Quarter			Quarter
Interest Earning Assets
Taxable investment securities ⁽²⁾	$	4,097,162			3,937,278			3,786,436			3,844,688			3,841,556
Yield		2.34	%		2.29			2.11			2.11			2.06
Tax-exempt investment securities ^{(2) (4)}	$	140			180			259			340			2,730
Yield (taxable equivalent)		6.57	%		7.97			7.86			6.87			5.81
Trading account assets ⁽⁵⁾	$	8,167			7,360			7,823			3,667			6,443
Yield		2.66	%		2.78			2.09			2.28			1.72
Commercial loans ^{(3) (4)}	$	18,963,515			18,935,774			19,059,936			19,137,733			19,043,384
Yield		4.64	%		4.49			4.41			4.27			4.16
Consumer loans ⁽³⁾	$	5,899,015			5,704,629			5,440,765			5,215,258			4,992,683
Yield		4.71	%		4.54			4.55			4.49			4.40
Allowance for loan losses	$	(251,635	)		(252,319	)		(249,248	)		(251,219	)		(253,927	)

Loans, net ⁽³⁾	$	24,610,895			24,388,084			24,251,453			24,101,772			23,782,140
Yield		4.70	%		4.55			4.49			4.36			4.25
Mortgage loans held for sale	$	38,360			45,353			52,177			52,224			46,554
Yield		3.95	%		3.96			3.88			3.87			4.01
Federal funds sold, due from Federal Reserve Bank, and other short-term investments	$	516,575			922,296			543,556			561,503			654,322
Yield		1.48	%		1.31			1.23			1.00			0.77
Federal Home Loan Bank and Federal Reserve Bank stock ⁽⁵⁾	$	177,381			159,455			175,263			177,323			170,844
Yield		3.39	%		4.03			3.50			2.99			3.42

Total interest earning assets	$	29,448,680			29,460,006			28,816,967			28,741,517			28,504,589
Yield		4.31	%		4.15			4.11			3.99			3.88

AVERAGE BALANCES AND YIELDS/RATES (1)

(Unaudited)


(Dollars in thousands)	2018			2017
	First			Fourth		Third		Second		First
	Quarter			Quarter		Quarter		Quarter		Quarter
Interest Bearing Liabilities
Interest bearing demand deposits	$	5,032,000			4,976,239		4,868,372		4,837,053		4,784,329
Rate		0.31	%		0.28		0.27		0.23		0.19
Money market accounts	$	7,561,554			7,514,992		7,528,036		7,427,562		7,424,627
Rate		0.43	%		0.36		0.34		0.32		0.31
Savings deposits	$	811,587			804,853		803,184		805,019		909,660
Rate		0.03	%		0.03		0.03		0.04		0.11
Time deposits under $100,000	$	1,143,780			1,166,413		1,183,582		1,202,746		1,215,593
Rate		0.71	%		0.70		0.68		0.67		0.64
Time deposits over $100,000	$	1,895,545			2,004,031		2,067,347		2,040,924		2,029,713
Rate		1.02	%		0.99		0.97		0.94		0.92
Non-maturing brokered deposits	$	424,118			546,413		547,466		564,043		619,627
Rate		1.14	%		0.81		0.73		0.54		0.41
Brokered time deposits	$	1,527,793			1,651,920		983,423		815,515		761,159
Rate		1.75	%		1.63		1.16		0.94		0.92

Total interest bearing deposits	$	18,396,377			18,664,861		17,981,410		17,692,862		17,744,708
Rate		0.58	%		0.54		0.46		0.41		0.39
Federal funds purchased and securities sold under repurchase agreements	$	202,226			184,369		191,585		183,400		176,854

AVERAGE BALANCES AND YIELDS/RATES (1)

(Unaudited)


(Dollars in thousands)	2018			2017
	First			Fourth		Third		Second		First
	Quarter			Quarter		Quarter		Quarter		Quarter
Rate		0.21	%		0.15		0.08		0.10		0.09
Long-term debt	$	2,127,994			1,713,982		1,985,175		2,270,452		2,184,072
Rate		2.32	%		2.67		2.81		2.83		2.83

Total interest bearing liabilities	$	20,726,597			20,563,212		20,158,170		20,146,714		20,105,634
Rate		0.76	%		0.72		0.69		0.68		0.65

Non-interest bearing demand deposits	$	7,391,695			7,621,147		7,305,508		7,298,845		7,174,146
Effective cost of funds		0.53	%		0.50		0.48		0.48		0.46

Net interest margin		3.78	%		3.65		3.63		3.51		3.42

Taxable equivalent adjustment	$	116			234		283		298		309

(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 (21% in 2018 and 35% in 2017), 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 BY TYPE

(Unaudited)

(Dollars in thousands)


Loan Type	Total Loans March 31, 2018		Total Loans December 31, 2017		1Q18 vs. 4Q17 % change ⁽¹⁾			Total Loans March 31, 2017		1Q18 vs. 1Q17 % change
Commercial, Financial, and Agricultural	$	7,191,531		7,179,487		0.7	%	$	7,049,193		2.0	%
Owner-Occupied		4,910,386		4,844,163		5.5			4,683,508		4.8

Total Commercial & Industrial		12,101,917		12,023,650		2.6			11,732,701		3.1
Multi-Family		1,479,573		1,492,159		(3.4	)		1,638,250		(9.7	)
Hotels		751,232		741,703		5.2			794,685		(5.5	)
Office Buildings		1,464,473		1,499,834		(9.6	)		1,552,817		(5.7	)
Shopping Centers		782,580		791,311		(4.5	)		902,954		(13.3	)
Warehouses		583,645		581,410		1.6			533,262		9.4
Other Investment Property		557,547		563,648		(4.4	)		594,084		(6.2	)


Total Investment Properties		5,619,050		5,670,065		(3.6	)		6,016,052		(6.6	)
1-4 Family Construction		188,939		198,200		(18.9	)		203,151		(7.0	)
1-4 Family Investment Mortgage		569,965		583,419		(9.4	)		659,346		(13.6	)

Total 1-4 Family Properties		758,904		781,619		(11.8	)		862,497		(12.0	)
Commercial Development		65,371		70,062		(27.2	)		65,376		(0.0	)
Residential Development		104,137		114,079		(35.3	)		130,653		(20.3	)
Land Acquisition		288,265		299,463		(15.2	)		392,710		(26.6	)

Land and Development		457,773		483,604		(21.7	)		588,739		(22.2	)

Total Commercial Real Estate		6,835,727		6,935,288		(5.8	)		7,467,288		(8.5	)

Consumer Mortgages		2,663,371		2,633,503		4.6			2,350,730		13.3
Home Equity Lines		1,472,471		1,514,227		(11.2	)		1,587,102		(7.2	)
Credit Cards		226,713		232,676		(10.4	)		224,349		1.1
Other Consumer Loans		1,606,799		1,473,451		36.7			922,018		74.3

Total Consumer		5,969,354		5,853,857		8.0			5,084,199		17.4

Unearned Income		(23,961	)	(25,331	)	(21.9	)		(25,720	)	(6.8	)
Total	$	24,883,037		24,787,464		1.6	%	$	24,258,468		2.6	%

(1)	Percentage change is annualized.

NON-PERFORMING LOANS COMPOSITION

(Unaudited)

(Dollars in thousands)


	Total		Total					Total
	Non-performing		Non-performing		1Q18 vs. 4Q17			Non-performing		1Q18 vs. 1Q17
Loan Type	Loans		Loans		% change			Loans		% change
	March 31, 2018		December 31, 2017					March 31, 2017
Commercial, Financial, and Agricultural	$	81,606		70,130		16.4	%	$	60,381		35.2	%
Owner-Occupied		4,067		6,654		(38.9	)		26,564		(84.7	)

Total Commercial & Industrial		85,673		76,784		11.6			86,945		(1.5	)
Multi-Family		1,028		1,241		(17.2	)		1,556		(33.9	)
Hotels		—		—		—			323		nm
Office Buildings		1,272		1,532		(17.0	)		185		nm
Shopping Centers		89		165		(46.1	)		—		nm
Warehouses		—		226		(100.0	)		226		(100.0	)
Other Investment Property		540		640		(15.6	)		750		(28.0	)

Total Investment Properties		2,929		3,804		(23.0	)		3,040		(3.7	)
1-4 Family Construction		—		—		—			306		nm
1-4 Family Investment Mortgage		2,634		2,849		(7.5	)		8,497		(69.0	)

Total 1-4 Family Properties		2,634		2,849		(7.5	)		8,803		(70.1	)


Commercial Development		44	45	(2.2	)		205	(78.5	)
Residential Development		3,220	3,257	(1.1	)		9,033	(64.4	)
Land Acquisition		1,311	2,495	(47.5	)		5,114	(74.4	)

Land and Development		4,575	5,797	(21.1	)		14,352	(68.1	)

Total Commercial Real Estate		10,138	12,450	(18.6	)		26,195	(61.3	)

Consumer Mortgages		7,708	7,203	7.0			19,874	(61.2	)
Home Equity Lines		14,868	17,455	(14.8	)		22,918	(35.1	)
Other Consumer Loans		1,694	1,669	1.5			2,434	(30.4	)

Total Consumer		24,270	26,327	(7.8	)		45,226	(46.3	)

Total	$	120,081	115,561	3.9	%	$	158,366	(24.2	)%

Synovus

CREDIT QUALITY DATA

(Unaudited)


(Dollars in thousands)	2018			2017								1st Quarter
	First			Fourth		Third		Second		First		‘18 vs. ‘17
	Quarter			Quarter		Quarter		Quarter		Quarter		Change
Non-performing Loans	$	120,081			115,561		97,838		159,317		158,366		(24.2	)%
Impaired Loans Held for Sale ⁽¹⁾		6,591			11,278		30,197		127		8,442		(21.9	)
Other Real Estate		4,496			3,758		10,551		19,476		20,425		(78.0	)

Non-performing Assets		131,168			130,597		138,586		178,920		187,233		(29.9	)
Allowance for loan losses		257,764			249,268		249,683		248,095		253,514		1.7
Net Charge-Offs - Quarter		4,280			8,979		38,099		15,678		6,919
Net Charge-Offs / Average Loans - Quarter ⁽²⁾		0.07	%		0.15		0.62		0.26		0.12
Non-performing Loans / Loans		0.48			0.47		0.40		0.65		0.65
Non-performing Assets / Loans, Impaired Loans Held for Sale, & ORE		0.53			0.53		0.57		0.73		0.77
Allowance / Loans		1.04			1.01		1.02		1.02		1.05


Allowance / Non-performing Loans		214.66		215.70	255.20	155.72	160.08
Allowance / Non-performing Loans ⁽³⁾		241.49		238.44	336.35	217.07	204.94
Past Due Loans over 90 days and Still Accruing	$	5,416		4,414	5,685	4,550	2,777	95.0
As a Percentage of Loans Outstanding		0.02	%	0.02	0.02	0.02	0.01
Total Past Due Loans and Still Accruing	$	54,150		52,032	84,853	66,788	62,137	(12.9	)
As a Percentage of Loans Outstanding		0.22	%	0.21	0.35	0.27	0.26
Accruing Troubled Debt Restructurings (TDRs)	$	129,394		151,271	166,918	167,395	172,421	(25.0	)

(1)	Represent 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)


	March 31, 2018			December 31, 2017		March 31, 2017
Tier 1 Capital	$	2,924,284			2,872,001		2,758,794
Total Risk-Based Capital		3,443,096			3,383,081		3,274,612
Common Equity Tier 1 Ratio (transitional)		10.11	%		9.99		9.86
Common Equity Tier 1 Ratio (fully phased-in) ⁽⁵⁾		10.01			9.88		9.63
Tier 1 Capital Ratio		10.51			10.38		10.18
Total Risk-Based Capital Ratio		12.37			12.23		12.08
Tier 1 Leverage Ratio		9.37			9.19		9.13
Common Equity as a Percentage of Total Assets⁽²⁾		8.99			9.08		9.24
Tangible Common Equity as a Percentage of Tangible Assets ^{(3) (5)}		8.79			8.88		9.04
Book Value Per Common Share ⁽⁴⁾	$	23.85			23.85		23.19
Tangible Book Value Per Common Share⁽³⁾		23.27			23.27		22.62

(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)	See “Non-GAAP Financial Measures” of this report for applicable reconciliation of GAAP measures.

Attached files

SYNOVUS FINANCIAL CORP Reports

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