Synovus CEO: Expense cutting ahead, branch closures possible

tadams@ledger-enquirer.comApril 27, 2014 

Nearly a week ago, Synovus Financial Corp. posted a profit of just under $46 million in the first quarter of this year.

To put things in perspective, it was in 2006 that the Columbus-based regional bank was at its financial zenith, racking up a full-year profit of nearly $617 million.

That number would tumble to about $526 million in 2007 as the nation's economic wheels were beginning to fly off. Synovus would post a profit of $81 million in early 2008, followed by a minuscule $12 million in the second quarter of that year.

A loss of nearly $27 million in the third quarter of 2008 would trigger a gloomy three-year string of red ink before the company tasted profit again in the fall of 2012.

So it's fair to believe that Synovus Chairman and Chief Executive Officer Kessel Stelling was genuine when, during last Thursday's annual meeting of Synovus shareholders in Columbus, he called the last several years a "very emotional experience" for all involved -- employees, investors and even customers who stuck with the bank through thick and thin.

"We can't thank you enough for your loyalty through some very tough times," Stelling said during the annual meeting. "You all made it possible for us to emerge not just as a survivor, but as a stronger company today."

The painful toll has been heavy since 2008, with restructurings, employee layoffs, branch closures and a frantic yet methodical effort to get a firm handle on loan losses and grow revenue and profit steadily once again.

Of note from last week's annual meeting, Synovus, in its presentation, said the company's five-state employee headcount has been cut sharply from 6,385 in 2009 to 4,696 at the end of 2013.

Stelling said yet another round of cost-cutting is underway, with the bank looking to eliminate $30 million more from its annual budget. That will be countered a bit with the rollout of 200 full-service ATMs and hiring of new talent where the company's management sees growth potential.

Here is what the CEO had to say on a few topics after the annual meeting adjourned:

• Will the $30 million round of cuts be the company's last?

"You never stop," he said. "I don't think any bank ever stops looking for ways to get efficient, because the key is to find ways to get efficient that don't impact the customer so that you can invest more in technology to serve them, or more in people that can serve them."

• Will there be more bank branch closures?

"We'll continue to look for ways to rationalize the branch structure," he said. "So it could mean closing some. It could mean consolidating some. It could also mean building some -- building a branch of the future, which we do think has more technology in it and less square footage in it. Historically, banks have built big branches, and that's not what banks need to do in the future."

• Has your employee headcount bottomed out at just under 4,700?

"I don't want to say that because I don't know that," he said. "I think as we look at our branch network -- in all banks, not just Synovus -- traffic has shifted from traditional branch banking to ATMs and mobile banking, to people wanting to bank from their iPhone. They want to bank from their iPad, their laptop. That just means less traffic (in traditional branches). So we've got to make sure that the staffing model in our branch system is right and it's right to serve the customers."

Synovus oversees about $26 billion in assets through its 28 individually branded banks in Georgia, Alabama, Florida, South Carolina and Tennessee. It should report its second-quarter earnings information in mid- to late July.

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