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

Attached files

file	filename
EX-99.3 - EX-99.3 - SYNOVUS FINANCIAL CORP	d459341dex993.htm
EX-99.1 - EX-99.1 - SYNOVUS FINANCIAL CORP	d459341dex991.htm
8-K - FORM 8-K - SYNOVUS FINANCIAL CORP	d459341d8k.htm

Exhibit 99.2

Synovus

INCOME STATEMENT DATA

(Unaudited)

(Dollars in thousands, except per share data)


	Nine Months Ended
	September 30,
	2017			2016			Change
Interest income	$	855,563			758,270			12.8	%
Interest expense		101,966			92,620			10.1

Net interest income		753,597			665,650			13.2
Provision for loan losses		58,620			21,741			169.6

Net interest income after provision for loan losses		694,977			643,909			7.9

Non-interest income:
Service charges on deposit accounts		59,848			60,772			(1.5	)
Fiduciary and asset management fees		37,290			34,691			7.5
Brokerage revenue		21,947			20,019			9.6
Mortgage banking income		17,151			18,755			(8.6	)
Bankcard fees		24,339			24,988			(2.6	)
Cabela’s transaction fee		75,000			—			nm
Investment securities (losses) gains, net		(289	)		126			nm
Decrease in fair value of private equity investments, net		(3,193	)		(527	)		nm
Other fee income		16,127			15,255			5.7
Other non-interest income		27,754			25,109			10.5

Total non-interest income		275,974			199,188			38.5

Non-interest expense:
Salaries and other personnel expense		322,079			300,364			7.2
Net occupancy and equipment expense		89,837			81,480			10.3
Third-party processing expense		39,882			34,033			17.2
FDIC insurance and other regulatory fees		20,723			20,100			3.1
Professional fees		20,048			19,794			1.3
Advertising expense		14,868			15,358			(3.2	)
Foreclosed real estate expense, net		10,847			9,998			8.5
Earnout liability adjustments		3,766			—			nm
Merger-related expense		110			550			nm
Amortization of intangibles		767			121			nm
Fair value adjustment to Visa derivative		—			1,079			nm
Loss on early extinguishment of debt		—			4,735			nm
Litigation contingency/settlement expense		401			2,511			nm
Restructuring charges, net		7,043			8,225			(14.4	)
Other operating expenses		64,409			64,368			0.1

Total non-interest expense		594,780			562,716			5.7

Income before income taxes		376,171			280,381			34.2
Income tax expense		130,303			102,148			27.6

Net income		245,868			178,233			37.9
Dividends on preferred stock		7,678			7,678			—

Net income available to common shareholders	$	238,190			170,555			39.7	%

Net income per common share, basic	$	1.96			1.36			43.4	%
Net income per common share, diluted		1.94			1.36			43.2
Cash dividends declared per common share		0.45			0.36			25.0
Return on average assets		1.07	%		0.81			26	bp
Return on average common equity		11.20			8.07			313
Weighted average common shares outstanding, basic		121,796			125,076			(2.6	)%
Weighted average common shares outstanding, diluted		122,628			125,712			(2.5	)

nm - not meaningful

bps - basis points

Synovus

INCOME STATEMENT DATA

(Unaudited)

(In thousands, except per share data)


	2017									2016						3rd Quarter
	Third Quarter			Second Quarter			First Quarter			Fourth Quarter			Third Quarter			‘17 vs. ‘16 Change
Interest income	$	297,652			285,510			272,401			264,534			256,554			16.0	%
Interest expense		35,080			34,413			32,474			31,004			30,547			14.8

Net interest income		262,572			251,097			239,927			233,530			226,007			16.2
Provision for loan losses		39,686			10,260			8,674			6,259			5,671			nm

Net interest income after provision for loan losses		222,886			240,837			231,253			227,271			220,336			1.2

Non-interest income:
Service charges on deposit accounts		20,255			19,820			19,774			20,653			20,822			(2.7	)
Fiduciary and asset management fees		12,615			12,524			12,151			11,903			11,837			6.6
Brokerage revenue		7,511			7,210			7,226			7,009			6,199			21.2
Mortgage banking income		5,603			5,784			5,766			5,504			7,329			(23.6	)
Bankcard fees		7,901			8,253			8,185			8,330			8,269			(4.5	)
Cabela’s transaction fee		75,000			—			—			—			—			nm
Investment securities (losses) gains, net		(7,956	)		(1	)		7,668			5,885			59			nm
Decrease in fair value of private equity investments, net		(27	)		(1,352	)		(1,814	)		(499	)		(249	)		nm
Other fee income		5,094			6,164			4,868			4,965			5,171			(1.5	)
Other non-interest income		9,439			10,299			8,015			10,256			8,718			8.3

Total non-interest income		135,435			68,701			71,839			74,006			68,155			98.7

Non-interest expense:
Salaries and other personnel expense		109,675			105,213			107,191			101,662			101,945			7.6
Net occupancy and equipment expense		30,573			29,933			29,331			27,867			28,120			8.7
Third-party processing expense		13,659			13,620			12,603			12,287			11,219			21.7
FDIC insurance and other regulatory fees		7,078			6,875			6,770			6,614			6,756			4.8
Professional fees		7,141			7,551			5,355			6,904			6,486			10.1
Advertising expense		3,610			5,346			5,912			4,905			5,597			(35.5	)
Foreclosed real estate expense, net		7,265			1,448			2,134			2,840			2,725			166.6
Earnout liability adjustments		2,059			1,707			—			—			—			nm
Merger-related expense		23			—			86			1,086			550			nm
Amortization of intangibles		292			292			183			400			—			nm
Fair value adjustment to Visa derivative		—			—			—			4,716			360			nm
Litigation contingency (recovery) expense		401			—			—			—			(189	)		nm
Restructuring charges, net		519			13			6,511			42			1,243			nm
Other operating expenses		23,351			19,749			21,312			23,886			21,059			10.9

Total non-interest expense		205,646			191,747			197,388			193,209			185,871			10.6

Income before income taxes		152,675			117,791			105,704			108,068			102,620			48.8
Income tax expense		54,668			41,788			33,847			39,519			37,375			46.3

Net income		98,007			76,003			71,857			68,549			65,245			50.2
Dividends on preferred stock		2,559			2,559			2,559			2,559			2,559			—

Net income available to common shareholders	$	95,448			73,444			69,298			65,990			62,686			52.3	%

Net income per common share, basic	$	0.79			0.60			0.57			0.54			0.51			54.8	%
Net income per common share, diluted		0.78			0.60			0.56			0.54			0.51			54.5
Cash dividends declared per common share		0.15			0.15			0.15			0.12			0.12			25.0
Return on average assets *		1.27	%		1.00			0.96			0.90			0.88			39 bps
Return on average common equity *		13.24			10.34			9.97			9.42			8.89			435
Weighted average common shares outstanding, basic		120,900			122,203			122,300			122,341			122,924			(1.6	)%
Weighted average common shares outstanding, diluted		121,814			123,027			123,059			123,187			123,604			(1.4	)

nm - not meaningful

bps - basis points

* - ratios are annualized

Synovus

BALANCE SHEET DATA

(Unaudited)


(In thousands, except share data)	September 30, 2017			December 31, 2016			September 30, 2016
ASSETS
Cash and cash equivalents	$	386,459			395,175			367,342
Interest bearing funds with Federal Reserve Bank		1,297,581			527,090			985,776
Interest earning deposits with banks		6,047			18,720			18,375
Federal funds sold and securities purchased under resale agreements		48,820			58,060			71,753
Trading account assets, at fair value		12,329			9,314			7,309
Mortgage loans held for sale, at fair value		54,072			51,545			95,769
Other loans held for sale		31,253			127			2,474
Investment securities available for sale, at fair value		3,825,443			3,718,195			3,603,153
Loans, net of deferred fees and costs		24,487,360			23,856,391			23,262,887
Allowance for loan losses		(249,683	)		(251,758	)		(253,817	)

Loans, net		24,237,677			23,604,633			23,009,070

Premises and equipment, net		423,245			417,485			418,091
Goodwill		57,315			59,678			24,431
Other intangible assets		11,548			13,223			225
Other real estate		10,551			22,308			28,438
Deferred tax asset, net		272,052			395,356			395,795
Other assets		967,731			813,093			699,095

Total assets	$	31,642,123			30,104,002			29,727,096

LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Deposits:
Non-interest bearing deposits	$	7,302,682			7,085,804			7,059,059
Interest bearing deposits, excluding brokered deposits		16,420,319			16,183,273			15,817,596
Brokered deposits		2,463,227			1,378,983			1,315,348

Total deposits		26,186,228			24,648,060			24,192,003
Federal funds purchased and securities sold under repurchase agreements		141,539			159,699			195,025
Long-term debt		1,882,607			2,160,881			2,160,985
Other liabilities		434,671			207,438			272,424

Total liabilities		28,645,045			27,176,078			26,820,437

Shareholders’ equity:
Series C Preferred Stock - no par value, 5,200,000 shares outstanding at September 30, 2017, December 31, 2016, and September 30, 2016		125,980			125,980			125,980
Common stock - $1.00 par value. 119,566,625 shares outstanding at September 30, 2017, 122,266,106 shares outstanding at December 31, 2016, and 121,453,772 shares outstanding at September 30, 2016		142,525			142,026			141,066
Additional paid-in capital		3,033,681			3,028,405			2,987,760
Treasury stock, at cost - 22,958,514 shares at September 30, 2017, 19,759,614 shares at December 31, 2016, and 19,612,435 shares at September 30, 2016		(800,509	)		(664,595	)		(654,014	)
Accumulated other comprehensive income (loss)		(39,596	)		(55,659	)		5,165
Retained earnings		534,997			351,767			300,702

Total shareholders’ equity		2,997,078			2,927,924			2,906,659

Total liabilities and shareholders’ equity	$	31,642,123			30,104,002			29,727,096

Synovus

AVERAGE BALANCES AND YIELDS/RATES (1)

(Unaudited)

(Dollars in thousands)


	2017									2016
	Third Quarter			Second Quarter			First Quarter			Fourth Quarter			Third Quarter
Interest Earning Assets
Taxable investment securities ⁽²⁾	$	3,786,436			3,844,688			3,841,556			3,643,510			3,544,933
Yield		2.11	%		2.11			2.06			1.92			1.83
Tax-exempt investment securities ^{(2) (4)}	$	259			340			2,730			2,824			2,943
Yield (taxable equivalent)		7.86	%		6.87			5.81			5.82			5.96
Trading account assets	$	7,823			3,667			6,443			6,799			5,493
Yield		2.09	%		2.28			1.72			2.63			0.93
Commercial loans ^{(3) (4)}	$	19,059,936			19,137,733			19,043,384			18,812,659			18,419,484
Yield		4.41	%		4.27			4.16			4.05			4.03
Consumer loans	$	5,440,765			5,215,258			4,992,683			4,911,149			4,720,082
Yield		4.55	%		4.49			4.40			4.27			4.30
Allowance for loan losses	$	(249,248	)		(251,219	)		(253,927	)		(253,713	)		(255,675	)

Loans, net ⁽³⁾	$	24,251,453			24,101,772			23,782,140			23,470,095			22,883,891
Yield		4.49	%		4.36			4.25			4.14			4.14
Mortgage loans held for sale	$	52,177			52,224			46,554			77,652			87,524
Yield		3.88	%		3.87			4.01			3.51			3.32
Federal funds sold, due from Federal Reserve Bank, and other short-term investments	$	543,556			561,503			654,322			982,355			998,565
Yield		1.23	%		1.00			0.77			0.49			0.48
Federal Home Loan Bank and Federal Reserve Bank stock ⁽⁵⁾	$	175,263			177,323			170,844			121,079			70,570
Yield		3.50	%		2.99			3.42			3.75			4.99

Total interest earning assets	$	28,816,967			28,741,517			28,504,589			28,304,314			27,593,919
Yield		4.11	%		3.99			3.88			3.73			3.71


Interest Bearing Liabilities

Interest bearing demand deposits	$	4,868,372			4,837,053			4,784,329			4,488,135			4,274,117
Rate		0.27	%		0.23			0.19			0.16			0.16
Money market accounts	$	7,528,036			7,427,562			7,424,627			7,359,067			7,227,030
Rate		0.34	%		0.32			0.31			0.29			0.29
Savings deposits	$	803,184			805,019			909,660			908,725			797,961
Rate		0.03	%		0.04			0.11			0.12			0.07
Time deposits under $100,000	$	1,183,582			1,202,746			1,215,593			1,229,809			1,248,294
Rate		0.68	%		0.67			0.64			0.64			0.64
Time deposits over $100,000	$	2,067,347			2,040,924			2,029,713			2,014,564			2,030,242
Rate		0.97	%		0.94			0.92			0.90			0.88
Non maturing brokered deposits	$	547,466			564,043			619,627			638,779			634,596
Rate		0.73	%		0.54			0.41			0.31			0.29
Brokered time deposits	$	983,423			815,515			761,159			742,153			775,143
Rate		1.16	%		0.94			0.92			0.90			0.88

Total interest bearing deposits	$	17,981,410			17,692,862			17,744,708			17,381,232			16,987,383
Rate		0.46	%		0.41			0.39			0.37			0.37
Federal funds purchased and securities sold under repurchase agreements	$	191,585			183,400			176,854			219,429			247,378
Rate		0.08	%		0.10			0.09			0.08			0.09
Long-term debt	$	1,985,175			2,270,452			2,184,072			2,190,716			2,114,193
Rate		2.81	%		2.83			2.83			2.65			2.71

Total interest bearing liabilities	$	20,158,170			20,146,714			20,105,634			19,791,377			19,348,954
Rate		0.69	%		0.68			0.65			0.62			0.63

Non-interest bearing demand deposits	$	7,305,508			7,298,845			7,174,146			7,280,033			7,042,908
Effective cost of funds		0.48	%		0.48			0.46			0.44			0.44

Net interest margin		3.63	%		3.51			3.42			3.29			3.27

Taxable equivalent adjustment	$	283			298			309			322			330

(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 September 30, 2017		Total Non-performing Loans June 30, 2017		3Q17 vs. 2Q17 % change ⁽¹⁾			Total Non-performing Loans September 30, 2016		3Q17 vs. 3Q16 % change
Multi-Family	$	1,096		1,621		(128.5	)%	$	3,912		(72.0	)
Hotels		—		376		(396.7	)		346		nm	%
Office Buildings		234		326		(112.0	)		931		(74.9	)
Shopping Centers		327		161		409.1			354		(7.6	)
Warehouses		38		41		(29.0	)		1,108		(96.6	)
Other Investment Property		367		1,187		(274.1	)		1,833		(80.0	)

Total Investment Properties		2,062		3,712		(176.4	)		8,484		(75.7	)
1-4 Family Construction		—		—		—			304		nm
1-4 Family Investment Mortgage		2,712		8,535		(270.7	)		7,658		(64.6	)

Total 1-4 Family Properties		2,712		8,535		(270.7	)		7,962		(65.9	)
Commercial Development		47		269		(327.4	)		400		(88.3	)
Residential Development		4,720		5,585		(61.4	)		9,190		(48.6	)
Land Acquisition		2,161		5,077		(227.9	)		6,672		(67.6	)

Land and Development		6,928		10,931		(145.3	)		16,262		(57.4	)

Total Commercial Real Estate		11,702		23,178		(196.4	)		32,708		(64.2	)

Commercial, Financial, and Agricultural		58,139		69,550		(65.1	)		49,874		16.6
Owner-Occupied		3,960		24,918		(333.7	)		21,443		(81.5	)

Total Commercial & Industrial		62,099		94,468		(135.9	)		71,317		(12.9	)

Home Equity Lines		15,638		20,648		(96.3	)		19,815		(21.1	)
Consumer Mortgages		6,332		18,035		(257.4	)		21,284		(70.2	)
Other Consumer Loans		2,067		2,988		(122.3	)		3,031		(31.8	)

Total Consumer		24,037		41,671		(167.9	)		44,130		(45.5	)

Total	$	97,838		159,317		(153.1	)%	$	148,155		(34.0	)%

(1)	Percentage change is annualized.

LOANS OUTSTANDING BY TYPE COMPARISON

(Unaudited)

(Dollars in thousands)


Loan Type	Total Loans September 30, 2017			Total Loans June 30, 2017			3Q17 vs. 2Q17 % change ⁽¹⁾			Total Loans September 30, 2016			3Q17 vs. 3Q16 % change
Multi-Family	$	1,636,449			1,724,917			(20.3	)%	$	1,553,275			5.4	%
Hotels		832,990			835,110			(1.0	)		774,873			7.5
Office Buildings		1,576,672			1,567,984			2.2			1,575,190			0.1
Shopping Centers		840,367			864,868			(11.2	)		917,284			(8.4	)
Warehouses		494,570			467,369			23.1			522,170			(5.3	)
Other Investment Property		544,048			575,415			(21.6	)		555,839			(2.1	)

Total Investment Properties		5,925,096			6,035,663			(7.3	)		5,898,631			0.4
1-4 Family Construction		195,273			198,419			(6.3	)		193,791			0.8
1-4 Family Investment Mortgage		599,342			637,201			(23.6	)		727,897			(17.7	)

Total 1-4 Family Properties		794,615			835,620			(19.5	)		921,688			(13.8	)
Commercial Development		66,521			66,055			2.8			77,807			(14.5	)
Residential Development		117,878			118,032			(0.5	)		149,366			(21.1	)
Land Acquisition		322,814			365,657			(46.5	)		425,058			(24.1	)

Land and Development		507,213			549,744			(30.7	)		652,231			(22.2	)

Total Commercial Real Estate		7,226,924			7,421,027			(10.4	)		7,472,550			(3.3	)

Commercial, Financial, and Agricultural		6,961,709			6,993,817			(1.8	)		6,537,657			6.5
Owner-Occupied		4,765,433			4,750,335			1.3			4,471,365			6.6

Total Commercial & Industrial		11,727,142			11,744,152			(0.6	)		11,009,022			6.5

Home Equity Lines		1,528,889			1,563,167			(8.7	)		1,638,844			(6.7	)
Consumer Mortgages		2,557,680			2,470,665			14.0			2,243,154			14.0
Credit Cards		225,726			225,900			(0.3	)		232,309			(2.8	)
Other Consumer Loans		1,245,277			1,031,639			82.2			693,204			79.6

Total Consumer		5,557,572			5,291,371			20.0			4,807,511			15.6

Unearned Income		(24,278	)		(26,038	)		(26.8	)		(26,196	)		(7.3	)

Total	$	24,487,360			24,430,512			0.9	%	$	23,262,887			5.3	%

(1)	Percentage change is annualized.

Synovus

CREDIT QUALITY DATA

(Unaudited)

(Dollars in thousands)


	2017							2016				3rd Quarter
	Third Quarter			Second Quarter		First Quarter		Fourth Quarter		Third Quarter		’17 vs. ’16 Change
Non-performing Loans	$	97,838			159,317		158,366		153,378		148,155		(34.0	)%
Impaired Loans Held for Sale ⁽¹⁾		30,197			127		8,442		—		2,473		nm
Other Real Estate		10,551			19,476		20,425		22,308		28,438		(62.9	)

Non-performing Assets		138,586			178,920		187,233		175,686		179,066		(22.6	)

Allowance for loan losses		249,683			248,095		253,514		251,758		253,817		(1.6	)

Net Charge-Offs - Quarter		38,099			15,678		6,919		8,319		6,930
Net Charge-Offs - YTD		60,695			22,597		6,919		28,739		20,420
Net Charge-Offs / Average Loans - Quarter ⁽²⁾		0.62	%		0.26		0.12		0.14		0.12
Net Charge-Offs / Average Loans - YTD ⁽²⁾		0.33			0.19		0.12		0.12		0.12

Non-performing Loans / Loans		0.40			0.65		0.65		0.64		0.64
Non-performing Assets / Loans, Other Loans Held for Sale & ORE		0.57			0.73		0.77		0.74		0.77
Allowance / Loans		1.02			1.02		1.05		1.06		1.09
Allowance / Non-performing Loans		255.20			155.72		160.08		164.14		171.32
Allowance / Non-performing Loans ⁽³⁾		336.35			217.07		204.94		202.01		198.94

Past Due Loans over 90 days and Still Accruing	$	5,685			4,550		2,777		3,135		5,358		6.1
As a Percentage of Loans Outstanding		0.02	%		0.02		0.01		0.01		0.02

Total Past Due Loans and Still Accruing	$	84,853			66,788		62,137		65,106		61,781		37.3
As a Percentage of Loans Outstanding		0.35	%		0.27		0.26		0.27		0.27
Accruing Troubled Debt Restructurings (TDRs)	$	166,918			167,395		172,421		195,776		201,896		(17.3	)

(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)


	September 30, 2017			December 31, 2016		September 30, 2016
Tier 1 Capital	$	2,849,579			2,685,880		2,620,379
Total Risk-Based Capital		3,362,126			3,201,268		3,139,465
Common Equity Tier 1 Ratio (transitional)		10.04	%		9.96		9.96
Common Equity Tier 1 Ratio (fully phased-in)		9.87			9.51		9.48
Tier 1 Capital Ratio		10.41			10.07		10.05
Total Risk-Based Capital Ratio		12.28			12.01		12.04
Tier 1 Leverage Ratio		9.34			8.99		8.98
Common Equity as a Percentage of Total Assets⁽²⁾		9.07			9.31		9.35
Tangible Common Equity as a Percentage of Tangible Assets ⁽³⁾		8.88			9.09		9.28
Tangible Common Equity as a Percentage of Risk Weighted Assets ⁽³⁾		10.24			10.24		10.57
Book Value Per Common Share ⁽⁴⁾	$	24.01			22.92		22.89
Tangible Book Value Per Common Share⁽³⁾		23.44			22.32		22.69

(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 - October 17, 2017

Attached files

SYNOVUS FINANCIAL CORP Reports