Nearly three years after retiring as chairman of Synovus Financial Corp., James Blanchard has been elevated to the top of the regional bankholding firm’s executive committee.
Columbus-based Synovus confirmed Monday that Blanchard, who turns 68 in July, has replaced V. Nathaniel Hansford as chairman of the board of directors committee that advises the firm’s management on key matters.
Hansford, a retired president of North Georgia College and State University in Dahlonega, Ga., will retain his position of lead director of the board.
“(Hansford) decided it would be advantageous for him to solely focus on one of those roles and have someone else focus on the other,” said Synovus spokesman Greg Hudgison. “He chose to continue as the lead director, so the executive committee elected Blanchard as chairman.”
Blanchard retired as Synovus chairman in October 2006. He had held that position since giving up the chief executive officer title in 2005.
The most recent move puts Blanchard front and center in the role of helping Synovus Chairman and CEO Richard Anthony develop a strategy for dealing with a river of red ink over the last two years stemming from soured loans to residential and commercial developers across the Southeast.
The Atlanta market, swamped by foreclosures, has stung the company the worst. Synovus has had to write off hundreds of millions of dollars in loan losses. Last December, it also received nearly $970 million in federal money after selling preferred shares of stock to the U.S. government as part of the Troubled Asset Relief Program.
The company also has posted several quarters of losses and cut its quarterly dividend to a penny earlier this year.
Neither Blanchard nor Anthony was available for comment Monday, Hudgison said.
Electing Blanchard to the executive committee chairmanship does not put him in the middle of daily management and decision-making at the banking firm, Hudgison stressed.
“The day-to-day operations and strategic direction is still that of Richard and the senior leadership team,” he said.
Corporate boards of directors, however, do advise management routinely, particularly when it comes to critical decisions impacting a company and its shareholders. For instance, board compensation committees determine how much top officers are paid.
Blanchard’s resurgence near the top of the Synovus hierarchy also follows the departure of Fred Green, the firm’s president and chief operating officer, a job he held since 2006. Green’s abrupt resignation was tendered May 28. He had been with the company since 1995, when Synovus bought The National Bank of South Carolina, where he served as president and CEO.
Synovus has 30 banks with 336 offices in Georgia, Alabama, South Carolina, Florida and Tennessee. The firm posted a $136.7 million loss in the first quarter of this year, compared to an $81 million profit a year earlier.
In March, Synovus eliminated 200 jobs companywide in a cost-cutting effort. About 75 of those jobs were in Columbus. A separate round of cuts announced last September, eliminating 650 positions companywide, won’t be completed until next year, the company has said.
The firm’s work force so far has shrunk from 7,275 people to just under 6,600.
Less than a week ago, the company also received tough news on the credit front. Standard & Poor’s, a credit ratings agency, cut its rating for Synovus to “junk” status from investment-grade levels. Carolina First Bank, Citizens Republic Bancorp and Huntington Bancshares also were cut to junk status.
Standard & Poor’s said the ratings declines reflect more weakening in the financial sector, forecasting that loan losses are likely to continue to pile up. S&P also said tighter regulatory oversight is likely to occur. Lower credit ratings can impact companies’ ability to borrow money.
“We believe the banking industry is undergoing a structural transformation that may include radical changes with permanent repercussions,” S&P credit analyst Rodrigo Quintanilla said in a release.
On the flip side, a week ago SunTrust Robinson Humphrey analyst Jennifer Demba upgraded Synovus stock from “neutral” to “buy” based on the bank’s efforts to get a handle on expenses and improve earnings. Demba wrote in a note to clients that the firm is “being more aggressive” with its loan portfolio and that the Atlanta housing market was showing signs of improvement, possibly helping the bank shed problem loans and property.
Staff writer Chuck Williams and the Associated Press contributed to this report.