Synovus earnings and revenues rise, board boosts quarterly dividend

In a fourth quarter with plenty of financial moving parts, Synovus Financial Corp. on Tuesday reported adjusted earnings, or net income, of just under $86 million. That was up from $66.5 million in the fourth quarter of 2016.

The adjusted earnings, which subtract one-time items such as investment gains, losses and special charge-offs, translated to adjusted earnings per share of 72 cents, up more than 32 percent from 54 cents in the same three-month period a year ago.

Synovus released its earnings report before the opening of the New York Stock Exchange. The adjusted earnings topped the 68-cents-per-share consensus estimate of Wall Street analysts surveyed by Zacks Investment Research. The firm’s stock closed up 30 cents per share at $51.08 in trading Tuesday. Its 52-week price range is a low of $37.95 per share and a high of $51.62.

The net income posted by the bank came on total revenues of $339.1 million in the quarter, compared to $307.5 million in the October-December period a year ago. Those revenues include income earned on interest charged by the regional banking company, as well as non-interest income from things such as service charges on deposit accounts, asset management fees, brokerage and mortgage revenue, and bankcard fees.

“2017 was another outstanding year for Synovus, with strong financial and operating results,” Synovus Chairman and Chief Executive Officer Kessel Stelling said in a statement with the Columbus-based firm’s earnings report.

“We achieved a number of long-term goals, including double-digit earnings-per-share growth, 1-plus percent adjusted ROA (return on assets), and an efficiency ratio below 60 percent,” he said. “The year was highlighted by our ranking as the country’s most reputable bank by Reputation Institute and American Banker, successful completion of the Cabela’s transaction, and implementation of a single-bank operating environment. We are pleased to begin 2018 by announcing a 67-percent increase in our common dividend, and our team is energized as we intensify our focus on improving the customer experience and complete the transition to a unified Synovus brand.”

The fourth-quarter earnings reported by Synovus were complicated by the fact that they included a $23.2 million loss on early extinguishment of debt. It also took a $47.2 million charge related to the federal tax reform passed and signed into law in late December.

If not subtracted from the earnings as the adjusted figures do, the net income numbers would have appeared more dire. Without taking out the debt loss and tax reform charge, the bank’s net income for the quarter would have totaled $27 million, or 23 cents per diluted share, down sharply from $66 million, or 54 cents per share, in the fourth quarter of 2016.

That aside, Synovus made some moves benefiting those who own its common stock. Those included repurchasing $39.2 million in shares as part of the firm’s $200 million share buyback program. That brought the total repurchased last year to just over $175 million, taking 4 million shares out of circulation. The company’s board of directors also authorized up to $150 million more in share repurchases in 2018.

The board also approved a quarterly cash dividend of 25 cents per share, payable to shareholders in April, which is 66 percent higher than the previous dividend of 15 cents per share.

Synovus also reported its full-year 2017 financial figures on Tuesday. Net income came in at $265.2 million, or $2.17 per diluted share, which is up from $236.5 million, or $1.89 per share, in 2016. Adjusted earnings per diluted share were $2.53, an increase from $1.98 per share in 2016.

Total revenues for 2017 were just over $1.3 billion, a nearly 14 percent increase from $1.14 billion in 2016.

Here are other highlights reported Tuesday by Synovus:

▪ Total average loans for the year grew $1.28 billion, or 5.5 percent, compared to 2016. Total loans ended the year at $24.79 billion, a $931.1 million, or 3.9 percent, increase from 2016.

▪ Total average deposits grew $1.49 billion, or 6.3 percent, compared to 2016.

▪ Non-performing loans of $115.6 million, as of Dec. 31, 2017, declined 24.7 percent from Dec. 31, 2016.

▪ The bank helped to complete the Cabela’s transaction (bought by Bass Pro Shops) in September, with Synovus receiving a $75 million transaction fee for its efforts, as well as keeping $1.1 billion in deposits from World's Foremost Bank, which Cabela’s owned.

▪ The firm completed the systems transition to a single-bank operation and and began transitioning to a single Synovus brand across all markets, which will be completed soon. That includes dropping the name of Columbus Bank and Trust for the simpler “Synovus.”

Headquartered overlooking the Chattahoochee River in downtown Columbus, Synovus oversees about $31 billion in assets through its commercial and retail banking, and investment and mortgage services. It operates 250 branches in Georgia, Alabama, South Carolina, Florida and Tennessee.

This story was originally published January 23, 2018 at 8:45 AM with the headline "Synovus earnings and revenues rise, board boosts quarterly dividend."