Synovus Financial Corp., putting a major financial hurdle behind it, said Friday it has finally repaid the nearly $1 billion it owed the federal Troubled Asset Relief Program.
The exact amount: $967,870,000.
The regional bank, headquartered in downtown Columbus, financed its exit from the bank bailout program through a $680 million dividend from its subsidiary, Synovus Bank, and two stock sales. It raised $185 million from a common stock offering and $130 million through sales of preferred common stock.
“It’s an exclamation point on our recovery,” Kessel Stelling, Synovus chairman and chief executive officer, said by phone Friday. “In one week, to have a strong earnings report, three ratings agency upgrades, two successful capital offerings, and now pay back TARP, that’s a pretty good week’s work.”
He said the company and its employees will take a breather over the weekend, reflect on what has transpired, then quickly get back to taking care of customers and growing both revenue and earnings for investors.
“I can tell you it’s given everybody a little bit of extra energy. Everybody’s got a little extra spring in their step,” said Stelling, who reached out to his predecessors — retired CEOs Richard Anthony and Jim Blanchard — to thank them for their efforts in turning the company around.
He’s also heard from employees across the bank’s five-state footprint in Alabama, Georgia, Florida, South Carolina and Tennessee.
“I think my computer might crash with messages that are coming in from around our system, from team members that are just elated at the news,” said Stelling, who plans to answer every email or call.
This moment has been a long time arriving. Synovus, parent company of Columbus Bank and Trust, the city’s largest financial institution, accepted the TARP funding through the Capital Purchase Program in December 2008.
As other bank’s repaid the money they had received through issuance of Series A preferred stock to the U.S. government, Synovus eventually had the dubious distinction of owing the most of any financial institution.
That now becomes Popular Inc., a bank in San Juan, Puerto Rico, which owes $935 million, according to U.S. Treasury spokesman Adam Hodge. Next in the indebted line is First BanCorp, also a San Juan bank, with $400 million. Hodge said there are now 124 banks still in TARP, out of about 700 initially.
“On the bank program alone, the taxpayers have received about $26 billion profit,” he said.
The Troubled Asset Relief Program was authorized by Congress, and signed into law by President George W. Bush, to put a safety net under financial institutions as the U.S. housing crisis put them under great duress.
The housing market meltdown was sparked by subprime lending to customers with little or no means to repay their loans. It led to the Great Recession, which officially ended in mid-2009, although the U.S. economy remains on a slow road to recovery.
Synovus was scheduled to report its second-quarter earnings this week, but accelerated it to last Thursday, unveiling the stock sale and dividend moves that led to Friday’s big development — a Columbus bank finally putting TARP behind it.