Columbus-based financial services company Synovus reported today in first quarter earnings that it is continuing to struggle with non-performing loans.
It has been a trend over the last 12 months as the nation's mortgage crisis has deepened.
Synovus' ratio of nonperforming assets to loans, impaired loans held for sale, and other real estate was 2.49 percent, compared to 1.67 percent last quarter and 0.68 percent in the first quarter of last year. That is a $173 million increase in nonperforming loans, 84 percent of which are in the metro Atlanta area.
The loan instability helped drive the company's quarterly income down compared to a year ago. Net income in the first quarter was $81 million, or 24 cents per diluted share, compared to income from continuing operations of $100.4 million, or 30 cents per diluted share, for the same period last year.
"I am confident that we will come out of this credit cycle as a strong financial services institution," said Synovus Chairman and Chief Executive Officer Richard E. Anthony. "With the deterioration in our residential construction and residential development portfolios, primarily in and around Atlanta, we continue to take actions to aggressively deal with these portfolios and get these issues behind us as quickly as possible."
The good news for Synovus, which owns 37 banks, 331 banking offices, 440 ATMs, and other Synovus offices in Georgia, Alabama, South Carolina, Florida and Tennessee, is residential loans in Florida have become more stable. The majority of Synovus' Florida holdings are in the panhandle and the Tampa Bay area.
"The residential construction and development portfolios in Florida have become more stable than the Atlanta area portfolios," Anthony said. "Our primary focus is to proactively manage the credit issues until they are resolved so that we can be the high performing company that we have historically been. We have added resources in our special assets group and are working with our customers to assist them during this challenging economic environment."