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On Jun 9, we issued an updated research report on Synovus Financial Corporation (SNV - Free Report) . Cost control, pruning of assets, improving credit quality and a strong capital position are major driving factors. However, top line pressure and a stringent regulatory landscape are key concerns.
At the time when most of the banks are struggling to control expenses, Synovus has managed to lower expenses through a series of cost-cutting and streamlining initiatives. While the company expects spending levels to increase in 2016 as brand awareness activities in selected high-growth markets will be undertaken, we believe its expense-savings initiatives will likely ease pressure.
Synovus has been substantially reducing the percentage of loans in the residential construction and development, and land acquisition portfolios. Also, credit quality trends continue to show broad-based improvement. This is expected to continue in the near term with a modest decline in non-performing assets and net charge-offs to be within the 20 to 30 basis point range in 2016.
Synovus’ strategy to aggressively dispose its distressed assets is supporting its capital base. The company expects to continue with its asset disposition strategy in the near future which will strengthen its balance sheet, improve asset quality and boost earnings.
Analysts have been bullish on the stock. The Zacks Consensus Estimates for 2016 remain unchanged at $1.87 per share over the last 30 days, while the same rose slightly to $2.10 for 2017 over the same time frame.
Nevertheless, the current low interest rate environment has kept Synovus' net interest revenue under pressure. Though the Federal Reserve has raised the interest rates, we believe the impact of the same will be minimal unless there is a significant turnaround.
Currently, Synovus carries a Zacks Rank #3 (Hold).
Key Picks from the Sector
Better-ranked finance stocks include State Bank Financial Corporation , Monarch Financial Holdings, Inc. and First Bancorp (FBP - Free Report) . All the three stocks sport a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
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Synovus Controls Costs Effectively, Regulatory Woes Rife
On Jun 9, we issued an updated research report on Synovus Financial Corporation (SNV - Free Report) . Cost control, pruning of assets, improving credit quality and a strong capital position are major driving factors. However, top line pressure and a stringent regulatory landscape are key concerns.
At the time when most of the banks are struggling to control expenses, Synovus has managed to lower expenses through a series of cost-cutting and streamlining initiatives. While the company expects spending levels to increase in 2016 as brand awareness activities in selected high-growth markets will be undertaken, we believe its expense-savings initiatives will likely ease pressure.
Synovus has been substantially reducing the percentage of loans in the residential construction and development, and land acquisition portfolios. Also, credit quality trends continue to show broad-based improvement. This is expected to continue in the near term with a modest decline in non-performing assets and net charge-offs to be within the 20 to 30 basis point range in 2016.
Synovus’ strategy to aggressively dispose its distressed assets is supporting its capital base. The company expects to continue with its asset disposition strategy in the near future which will strengthen its balance sheet, improve asset quality and boost earnings.
Analysts have been bullish on the stock. The Zacks Consensus Estimates for 2016 remain unchanged at $1.87 per share over the last 30 days, while the same rose slightly to $2.10 for 2017 over the same time frame.
Nevertheless, the current low interest rate environment has kept Synovus' net interest revenue under pressure. Though the Federal Reserve has raised the interest rates, we believe the impact of the same will be minimal unless there is a significant turnaround.
Currently, Synovus carries a Zacks Rank #3 (Hold).
Key Picks from the Sector
Better-ranked finance stocks include State Bank Financial Corporation , Monarch Financial Holdings, Inc. and First Bancorp (FBP - Free Report) . All the three stocks sport a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>