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

Attached files

file	filename
EX-99.3 - EXHIBIT 99.3 - SYNOVUS FINANCIAL CORP	a4q18earningsdeck5fb.htm
EX-99.1 - EXHIBIT 99.1 - SYNOVUS FINANCIAL CORP	a12312018-8kexhibit991news.htm
8-K - 8-K - SYNOVUS FINANCIAL CORP	a12312018-8kcoverpage.htm



Synovus							Exhibit 99.2

	INCOME STATEMENT DATA
	(Unaudited)	Twelve Months Ended
	(Dollars in thousands, except per share data)	December 31,


		2018			2017		% Change


	Interest income	$	1,344,305		1,162,497		15.6	%
	Interest expense	195,892			139,188		40.7


	Net interest income	1,148,413			1,023,309		12.2
	Provision for loan losses	51,697			67,185		(23.1	)

	Net interest income after provision for loan losses	1,096,716			956,124		14.7


	Non-interest income:
	Service charges on deposit accounts	80,840			81,419		(0.7	)
	Fiduciary and asset management fees	54,685			50,485		8.3
	Card fees	42,503			39,376		7.9
	Brokerage revenue	36,567			29,705		23.1
	Mortgage banking income	18,958			22,798		(16.8	)
	Income from bank-owned life insurance	15,403			13,460		14.4
	Cabela's Transaction Fee	—			75,000		nm
	Decrease in fair value of private equity investments, net	(4,743		)	(3,093	)	nm
	Investment securities losses, net	(1,296		)	(289	)	nm
	Other fee income	19,974			20,168		(1.0	)
	Other non-interest income	17,202			16,298		5.5

	Total non-interest income	280,093			345,327		(18.9	)



	Non-interest expense:
	Salaries and other personnel expense	453,420			433,321		4.6
	Net occupancy and equipment expense	130,482			119,964		8.8
	Third-party processing expense	58,625			54,708		7.2
	FDIC insurance and other regulatory fees	24,494			27,011		(9.3	)
	Professional fees	26,737			26,232		1.9
	Advertising expense	20,881			22,948		(9.0	)
	Foreclosed real estate expense, net	2,204			12,540		(82.4	)
	Loss on early extinguishment of debt	—			23,160		nm
	Earnout liability adjustments	11,652			5,466		113.2
	Merger-related expense	10,065			110		nm
	Amortization of intangibles	1,167			1,059		10.2
	Fair value adjustment to Visa derivative	2,328			—		nm
	Litigation settlement/contingency expense	(4,026		)	701		nm
	Restructuring charges, net	(51		)	7,014		nm
	Other operating expenses	91,477			87,079		5.1

	Total non-interest expense	829,455			821,313		1.0




	Income before income taxes	547,354			480,138		14.0
	Income tax expense	118,878			204,664		(41.9	)

	Net income	428,476			275,474		55.5

	Less: Preferred stock dividends and redemption charge	17,998			10,238		75.8


	Net income available to common shareholders	$	410,478		265,236		54.8


	Net income per common share, basic	$	3.49		2.19		59.4	%

	Net income per common share, diluted	3.47			2.17		59.5

	Cash dividends declared per common share	1.00			0.60		66.7

	Return on average assets*	1.35		%	0.89		46	bps
	Return on average common equity*	14.55			9.32		523


	Weighted average common shares outstanding, basic	117,644			121,162		(2.9	)%
	Weighted average common shares outstanding, diluted	118,378			122,012		(3.0	)

	nm - not meaningful
	bps - basis points
	* - ratios are annualized



Synovus

	INCOME STATEMENT DATA
	(Unaudited)
	(In thousands, except per share data)	2018								2017

		Fourth			Third	Second		First		Fourth		Year/Year
		Quarter			Quarter	Quarter		Quarter		Quarter		% Change

	Interest income	$	357,394		343,942	329,834		313,134		306,934		16.4	%
	Interest expense	59,461			52,323	45,257		38,850		37,222		59.7


	Net interest income	297,933			291,619	284,577		274,284		269,712		10.5
	Provision for loan losses	12,148			14,982	11,790		12,776		8,565		41.8

	Net interest income after provision for loan losses	285,785			276,637	272,787		261,508		261,147		9.4


	Non-interest income:
	Service charges on deposit accounts	20,320			20,582	19,999		19,940		20,371		(0.3	)
	Fiduciary and asset management fees	13,805			13,462	13,983		13,435		13,195		4.6
	Card fees	10,862			10,608	10,833		10,199		9,762		11.3
	Brokerage revenue	9,643			9,329	8,900		8,695		7,758		24.3
	Mortgage banking income	3,781			5,290	4,839		5,047		5,647		(33.0	)
	Income from bank-owned life insurance	3,682			3,771	3,733		4,217		3,900		(5.6	)
	(Decrease)/increase in fair value of private equity investments, net	(2,084		)	434	(37	)	(3,056	)	100		nm
	Investment securities losses, net	—			—	(1,296	)	—		—		—
	Other fee income	5,587			4,510	5,259		4,618		4,041		38.3
	Other non-interest income	2,395			3,682	7,174		3,951		4,579		(47.7	)

	Total non-interest income	67,991			71,668	73,387		67,046		69,353		(2.0	)



	Non-interest expense:
	Salaries and other personnel expense	113,496			114,341	111,863		113,720		111,242		2.0
	Net occupancy and equipment expense	34,260			32,088	32,654		31,480		30,127		13.7
	Third-party processing expense	14,803			14,810	15,067		13,945		14,826		(0.2	)
	FDIC insurance and other regulatory fees	4,728			6,430	6,543		6,793		6,288		(24.8	)
	Professional fees	8,650			6,298	6,284		5,505		6,184		39.9
	Advertising expense	6,834			3,735	5,220		5,092		8,080		(15.4	)
	Foreclosed real estate expense, net	1,095			360	(107	)	856		1,693		(35.3	)
	Loss on early extinguishment of debt	—			—	—		—		23,160		nm
	Earnout liability adjustments	—			11,652	—		—		1,700		nm
	Merger-related expense	3,381			6,684	—		—		—		nm
	Amortization of intangibles	292			292	292		292		292		—
	Fair value adjustment to Visa derivative	—			—	2,328		—		—		—
	Litigation settlement/contingency expense	—			—	(1,400	)	(2,626	)	300		nm
	Restructuring charges, net	140			21	103		(315	)	(29	)	nm
	Other operating expenses	22,243			23,586	25,210		20,437		22,670		(1.9	)

	Total non-interest expense	209,922			220,297	204,057		195,179		226,533		(7.3	)



	Income before income taxes	143,854			128,008	142,117		133,375		103,967		38.4
	Income tax expense	38,784			18,949	30,936		30,209		74,361		(47.8	)

	Net income	105,070			109,059	111,181		103,166		29,606		254.9

	Less: Preferred stock dividends and redemption charge	3,151			9,729	2,559		2,559		2,560		23.1

	Net income available to common shareholders	$	101,919		99,330	108,622		100,607		27,046		276.8

	Net income per common share, basic	$	0.88		0.85	0.92		0.85		0.23		286.5	%

	Net income per common share, diluted	0.87			0.84	0.91		0.84		0.23		287.2

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

	Return on average assets *	1.29		%	1.36	1.42		1.34		0.37		92	bps
	Return on average common equity *	14.25			13.95	15.39		14.62		3.76		1,049

	Weighted average common shares outstanding, basic	116,303			117,241	118,397		118,666		119,282		(2.5	)%
	Weighted average common shares outstanding, diluted	116,986			118,095	119,139		119,321		120,182		(2.7	)

	nm - not meaningful
	bps - basis points
	* - ratios are annualized



Synovus


	BALANCE SHEET DATA	December 31, 2018			September 30, 2018		December 31, 2017

	(Unaudited)

	(In thousands, except share data)

	ASSETS
	Cash and due from banks	$	468,426		436,540		397,848
	Interest-bearing funds with Federal Reserve Bank	641,476			515,493		460,928
	Interest earning deposits with banks	19,841			34,470		26,311
	Federal funds sold and securities purchased under resale agreements	13,821			25,430		47,846
	Cash and cash equivalents	1,143,564			1,011,933		932,933

	Mortgage loans held for sale, at fair value	37,129			37,276		48,024
	Investment securities available for sale, at fair value	3,991,632			3,883,574		3,987,069

	Loans, net of deferred fees and costs	25,946,573			25,577,116		24,787,464
	Allowance for loan losses	(250,555		)	(251,450	)	(249,268	)
	Loans, net	25,696,018			25,325,666		24,538,196

	Cash surrender value of bank-owned life insurance	554,134			551,061		540,958
	Premises and equipment, net	434,307			431,012		426,813
	Goodwill	57,315			57,315		57,315
	Other intangible assets	9,875			10,166		11,254
	Deferred tax assets, net	141,134			185,116		165,788
	Other assets	604,084			582,001		513,487

	Total assets	$	32,669,192		32,075,120		31,221,837

	LIABILITIES AND SHAREHOLDERS' EQUITY
	Liabilities:
	Deposits:
	Non-interest-bearing deposits	$	7,650,967		7,628,736		7,686,339
	Interest-bearing deposits	19,069,355			18,804,922		18,461,561

	Total deposits	26,720,322			26,433,658		26,147,900

	Federal funds purchased and securities sold under repurchase agreements	237,692			191,145		161,190
	Other short-term borrowings	650,000			478,540		100,000
	Long-term debt	1,657,157			1,656,909		1,606,138
	Other liabilities	270,419			274,795		245,043

	Total liabilities	29,535,590			29,035,047		28,260,271


	Shareholders' equity:
	Series D Preferred Stock - no par value. Authorized 100,000,000 shares; 8,000,000 shares issued and outstanding at December 31,2018 and September 30, 2018	195,140			195,138		—

	Series C Preferred Stock - no par value. 5,200,000 outstanding at December 31, 2017	—			—		125,980

	Common stock - $1.00 par value. Authorized 342,857,143 shares; 143,300,449 issued at December 31, 2018, 143,093,317 issued at September 30, 2018, and 142,677,449 issued at December 31, 2017; 115,865,510 outstanding at December 31, 2018, 116,714,463 outstanding at September 30, 2018 and 118,897,295 outstanding at December 31, 2017	143,300			143,093		142,678

	Additional paid-in capital	3,060,561			3,049,233		3,043,129

	Treasury stock, at cost – 27,434,939 shares at December 31, 2018, 26,378,854 shares at September 30, 2018, and 23,780,154 shares at December 31. 2017	(1,014,746		)	(974,478	)	(839,674	)

	Accumulated other comprehensive loss, net	(94,420		)	(143,720	)	(54,754	)

	Retained Earnings	843,767			770,807		544,207

	Total shareholders’ equity	3,133,602			3,040,073		2,961,566

	Total liabilities and shareholders' equity	$	32,669,192		32,075,120		31,221,837



Synovus

	AVERAGE BALANCES AND YIELDS/RATES⁽¹⁾
	(Unaudited)
	(Dollars in thousands)
		2018									2017
		Fourth			Third		Second		First		Fourth
		Quarter			Quarter		Quarter		Quarter		Quarter
	Interest Earning Assets
	Taxable investment securities⁽²⁾	$	4,073,685		4,061,239		4,077,564		4,097,162		3,937,278
	Yield	2.45		%	2.38		2.34		2.34		2.29
	Tax-exempt investment securities⁽²⁾⁽⁴⁾	$	—		89		115		140		180
	Yield (taxable equivalent)	—		%	5.91		6.87		6.57		7.97
	Trading account assets⁽⁵⁾	$	7,493		16,646		23,772		8,167		7,360
	Yield	1.90		%	2.52		2.79		2.66		2.78
	Commercial loans⁽³⁾⁽⁴⁾	$	19,150,252		19,025,830		18,857,271		18,963,515		18,935,774
	Yield	5.13		%	4.98		4.85		4.64		4.49
	Consumer loans⁽³⁾	$	6,476,026		6,298,643		6,092,899		5,899,015		5,704,629
	Yield	4.85		%	4.80		4.76		4.71		4.54
	Allowance for loan losses	$	(251,098	)	(251,684	)	(257,966	)	(251,635	)	(252,319	)
	Loans, net⁽³⁾	$	25,375,180		25,072,789		24,692,204		24,610,895		24,388,084
	Yield	5.11		%	4.99		4.88		4.70		4.55
	Mortgage loans held for sale	$	36,477		49,030		50,366		38,360		45,353
	Yield	4.79		%	4.71		4.42		3.95		3.96
	Federal funds sold, due from Federal Reserve Bank, and other short-term investments	$	641,832		544,704		724,537		516,575		922,296
	Yield	2.20		%	1.90		1.77		1.48		1.31
	Federal Home Loan Bank and Federal Reserve Bank Stock⁽⁵⁾	$	162,369		163,568		165,845		177,381		159,455
	Yield	4.31		%	4.41		4.63		3.39		4.03
	Total interest earning assets	$	30,297,036		29,908,065		29,734,403		29,448,680		29,460,006
	Yield	4.69		%	4.58		4.47		4.31		4.15
	Interest Bearing Liabilities
	Interest bearing demand deposits	$	4,692,804		4,701,204		5,001,826		5,032,000		4,976,239
	Rate	0.41		%	0.38		0.35		0.31		0.28
	Money Market accounts	$	8,050,732		7,936,621		7,791,107		7,561,554		7,514,992
	Rate	0.89		%	0.72		0.55		0.43		0.36
	Savings deposits	$	815,588		824,935		829,800		811,587		804,853
	Rate	0.04		%	0.03		0.03		0.03		0.03
	Time deposits under $100,000	$	1,242,811		1,205,987		1,161,890		1,143,780		1,166,413
	Rate	1.16		%	0.99		0.82		0.71		0.70
	Time deposits over $100,000	$	2,478,649		2,273,582		2,021,084		1,895,545		2,004,031
	Rate	1.67		%	1.46		1.22		1.02		0.99
	Non-maturing brokered deposits	$	349,480		358,277		262,976		424,118		546,413
	Rate	2.46		%	2.10		1.94		1.14		0.81
	Brokered time deposits	$	1,275,276		1,414,700		1,659,941		1,527,793		1,651,920
	Rate	2.03		%	1.94		1.85		1.75		1.63
	Total interest-bearing deposits	$	18,905,340		18,715,306		18,728,624		18,396,377		18,664,861
	Rate	0.96		%	0.83		0.70		0.58		0.54
	Federal funds purchased and securities sold under repurchase agreements	$	194,370		230,504		207,655		202,226		184,369
	Rate	0.18		%	0.25		0.35		0.21		0.15
	Other short-term borrowings	$	112,228		146,794		3,024		394,056		3,261
	Rate	2.51		%	2.12		2.84		1.52		1.42
	Long-term debt	$	1,657,022		1,656,743		1,852,094		1,733,938		1,710,721
	Rate	3.06		%	2.87		2.66		2.51		2.67
	Total interest-bearing liabilities	$	20,868,960		20,749,347		20,791,397		20,726,597		20,563,212
	Rate	1.12		%	0.99		0.87		0.76		0.72
	Non-interest bearing demand deposits	$	8,014,761		7,672,006		7,539,451		7,391,695		7,621,147
	Cost of funds	0.81		%	0.73		0.64		0.56		0.52
	Net interest margin	3.92		%	3.89		3.86		3.78		3.65

	Taxable equivalent adjustment	$	181		136		120		116		234

	⁽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 BY TYPE
(Unaudited)
(Dollars in thousands)
	Total Loans			Total Loans		Linked Quarter		Total Loans			Year/Year
Loan Type	December 31, 2018			September 30, 2018		% Change ⁽¹⁾		December 31, 2017			% Change

Commercial, Financial, and Agricultural	$	7,449,698		7,281,466		9.2	%	$	7,179,487		3.8	%
Owner-Occupied	5,331,508			5,221,828		8.3		4,844,163			10.1

Total Commercial & Industrial	12,781,206			12,503,294		8.8		12,023,650			6.3

Multi-Family	1,208,033			1,330,006		(36.4	)	1,492,159			(19.0	)
Hotels	704,319			760,885		(29.5	)	741,703			(5.0	)
Office Buildings	1,451,048			1,368,608		23.9		1,499,834			(3.3	)
Shopping Centers	808,540			815,696		(3.5	)	791,311			2.2
Warehouses	627,353			679,184		(30.3	)	581,410			7.9
Other Investment Property	761,658			711,311		28.1		563,648			35.1

Total Investment Properties	5,560,951			5,665,690		(7.3	)	5,670,065			(1.9	)

1-4 Family Construction	174,259			183,044		(19.0	)	198,200			(12.1	)
1-4 Family Investment Mortgage	505,611			524,152		(14.0	)	583,419			(13.3	)

Total 1-4 Family Properties	679,870			707,196		(15.3	)	781,619			(13.0	)

Commercial Development	60,675			61,608		(6.0	)	70,062			(13.4	)
Residential Development	93,166			91,578		6.9		114,079			(18.3	)
Land Acquisition	169,829			186,334		(35.1	)	299,463			(43.3	)

Land and Development	323,670			339,520		(18.5	)	483,604			(33.1	)

Total Commercial Real Estate	6,564,491			6,712,406		(8.7	)	6,935,288			(5.3	)

Consumer Mortgages	2,934,235			2,843,244		12.7		2,633,503			11.4
Home Equity Lines	1,515,796			1,465,419		13.6		1,514,227			0.1
Credit Cards	258,245			245,149		21.2		232,676			11.0
Other Consumer Loans	1,916,743			1,831,385		18.5		1,473,451			30.1

Total Consumer	6,625,019			6,385,197		14.9		5,853,857			13.2

Unearned Income	(24,143		)	(23,781	)	6.0		(25,331		)	(4.7	)

Total	$	25,946,573		25,577,116		5.7		$	24,787,464		4.7	%

⁽¹⁾ Percentage change is annualized.


NON-PERFORMING LOANS COMPOSITION
(Unaudited)
(Dollars in thousands)

	Total			Total				Total
	Non-performing			Non-performing		Linked Quarter		Non-performing			Year/Year
Loan Type	Loans			Loans		% Change		Loans			% Change
	December 31, 2018			September 30, 2018				December 31, 2017

Commercial, Financial, and Agricultural	$	69,295		69,010		0.4	%	$	70,130		(1.2	)%
Owner-Occupied	8,971			5,708		57.2		6,654			34.8

Total Commercial & Industrial	78,266			74,718		4.7		76,784			1.9

Multi-Family	237			234		1.3		1,241			(80.9	)
Hotels	—			—		—		—			—
Office Buildings	165			166		(0.6	)	1,532			(89.2	)
Shopping Centers	89			89		—		165			(46.1	)
Warehouses	—			—		—		226			(100.0	)
Other Investment Property	1,890			1,666		13.4		640			195.3

Total Investment Properties	2,381			2,155		10.5		3,804			(37.4	)

1-4 Family Investment Mortgage	2,381			3,139		(24.1	)	2,849			(16.4	)

Total 1-4 Family Properties	2,381			3,139		(24.1	)	2,849			(16.4	)

Commercial Development	93			42		121.4		45			106.7
Residential Development	1,444			3,184		(54.6	)	3,257			(55.7	)
Land Acquisition	1,416			1,603		(11.7	)	2,495			(43.2	)

Land and Development	2,953			4,829		(38.8	)	5,797			(49.1	)

Total Commercial Real Estate	7,715			10,123		(23.8	)	12,450			(38.0	)

Consumer Mortgages	4,949			5,313		(6.9	)	7,203			(31.3	)
Home Equity Lines	12,114			14,498		(16.4	)	17,455			(30.6	)
Other Consumer Loans	3,689			3,773		(2.2	)	1,669			121.0

Total Consumer	20,752			23,584		(12.0	)	26,327			(21.2	)

Total	$	106,733		108,425		(1.6	)%	$	115,561		(7.6	)%



Synovus

	CREDIT QUALITY DATA
	(Unaudited)
	(Dollars in thousands)	2018						2017

		Fourth			Third	Second	First	Fourth	Year/Year % change
		Quarter			Quarter	Quarter	Quarter	Quarter	Year/Year % change

	Non-performing Loans	$	106,733		108,425	117,328	120,081	115,561	(7.6	)%
	Impaired Loans Held for Sale ⁽¹⁾	1,506			12	2,733	6,591	11,278	nm
	Other Real Estate	6,220			8,542	6,288	4,496	3,758	65.5

	Non-performing Assets	114,459			116,979	126,349	131,168	130,597	(12.4	)

	Allowance for loan losses	250,555			251,450	251,725	257,764	249,268	0.5

	Net Charge-Offs - Quarter	13,044			15,257	17,829	4,280	8,979
	Net Charge-Offs - YTD	50,410			37,366	22,109	4,280	69,675
	Net Charge-Offs / Average Loans - Quarter ⁽²⁾	0.20		%	0.24	0.29	0.07	0.15
	Net Charge-Offs / Average Loans - YTD ⁽²⁾	0.20			0.20	0.18	0.07	0.29

	Non-performing Loans / Loans	0.41			0.42	0.47	0.48	0.47
	Non-performing Assets / Loans, Impaired Loans Held for Sale, & ORE	0.44			0.46	0.50	0.53	0.53
	Allowance / Loans	0.97			0.98	1.00	1.04	1.01

	Allowance / Non-performing Loans	234.75			231.91	214.55	214.66	215.70
	Allowance / Non-performing Loans ⁽³⁾	297.68			288.21	262.99	241.49	238.44

	Past Due Loans over 90 days and Still Accruing	$	3,798		4,856	3,222	5,416	4,414	(14.0	)
	As a Percentage of Loans Outstanding	0.01		%	0.02	0.01	0.02	0.02

	Total Past Due Loans and Still Accruing	$	56,927		78,323	55,614	54,150	52,032	9.4
	As a Percentage of Loans Outstanding	0.22		%	0.31	0.22	0.22	0.21

	Accruing Troubled Debt Restructurings (TDRs)	$	115,588		114,740	125,310	129,394	151,271	(23.6	)


	⁽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)
		December 31, 2018			September 30, 2018	December 31, 2017


	Tier 1 Capital	$	3,090,418		3,038,768	2,872,001
	Total Risk-Based Capital	3,601,377			3,550,686	3,383,081
	Common Equity Tier 1 Ratio (transitional)	10.04		%	9.90	9.99
	Common Equity Tier 1 Ratio (fully phased-in) ⁽⁵⁾	10.00			9.86	9.88
	Tier 1 Capital Ratio	10.70			10.57	10.38
	Total Risk-Based Capital Ratio	12.47			12.36	12.23
	Tier 1 Leverage Ratio	9.60			9.58	9.19
	Common Equity as a Percentage of Total Assets ⁽²⁾	8.99			8.87	9.08
	Tangible Common Equity as a Percentage of Tangible Assets ^{(3) (5)}	8.81			8.68	8.88
	Book Value Per Common Share⁽⁴⁾	$	25.36		24.38	23.85
	Tangible Book Value Per Common Share ⁽³⁾	24.78			23.80	23.27


	⁽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.

SYNOVUS FINANCIAL CORP - FORM 8-K - EX-99.2 - EXHIBIT 99.2 - January 15, 2019

Attached files

SYNOVUS FINANCIAL CORP Reports