Synovus Financial Corp. on Thursday reported a loss of $264.1 million, or 54 cents per share, in the fourth quarter of 2009, although it appears the financial bleeding may be starting to slow.
In the fourth quarter a year ago, the company posted a loss of $637.5 million, or $1.39 per share.
The regional bankholding firm, headquartered in Columbus, did beat the consensus expectations of 24 stock analysts by four cents. They were expecting Synovus to show a loss of 58 cents per share for the October-December period, according to Thomson Reuters.
The company reported revenue of $499.7 million for the quarter. That compares to $525.9 million in the same period a year ago.
“I think we have some good trends. Nothing ever happens as quickly as you want it to,” Synovus Chairman and Chief Executive Officer Richard Anthony said after the earnings were released.
“The loss was lower,” he said. “It was in expected ranges. There were no surprises. We did have moderation and improving trends in the non-performing loan migration number.”
Synovus has been scrambling to rid bad residential real estate loans from its books, selling the assets it has seized from failed developers at distressed prices. The worst areas have been coastal portions of Florida, parts of South Carolina, much of Georgia and, more specifically, the Atlanta market.
The company reported that credit costs for the fourth quarter were nearly $428 million, which included loan charge-offs of $387 million. That compares to $606 million in total failed loan write-offs and foreclosure costs in the third quarter of the 2009.
“We’ve been through a lot with just having covered so much ground in this residential construction and development exposure,” Anthony said. “There’s still a little bit more to be felt, but a lot of that is behind us.”
Another problem area for the bank is its commercial real estate loan portfolio, or investment properties, which includes Sea Island Co., a luxury resort on the Georgia coast that Synovus helped build with loans reportedly between $300 million and $400 million.
“We have had some deterioration, and we know we’ll have more,” Anthony said of the commercial real estate sector. “But these are not asset-conversion loans like land and houses, where when the borrower runs out of liquidity, you just have to take over the property.”
Anthony said Synovus and other lenders are working with Sea Island to find a resolution. There have been media reports that the resort has hired an investment banking firm to possibly find a buyer.
Synovus recently had fresh appraisals done on Sea Island and has already earmarked enough funds to cover losses should the resort enter bankruptcy court and wipe out much of what it owes, Anthony said.
Should a sale materialize, the Synovus CEO said, Sea Island “will come to us with any proposal and we as the lending group will look at that. A lot of this is predictable as you go through the cycle in this downturn that has impacted them. But we are staying current with our collateral position through the proper supporting valuations that are necessary.”
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Synovus earnings release and charts
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