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Synovus Shares Gains as Q3 Earnings Top Estimates on Higher NIR
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Synovus Financial Corp. (SNV - Free Report) reported third-quarter 2024 adjusted earnings per share of $1.23, which surpassed the Zacks Consensus Estimate of $1.09 per share. This compares to earnings of 84 cents a year ago.
Find the latest earnings estimates and surprises on the Zacks Earnings Calendar.
Synovus shares increased 2.2% on a better-than-expected performance.
Results benefited from strong growth in non-interest revenues (NIR), a fall in expenses and provisions for credit losses. Also, improving loans and deposit balances were tailwinds. However, a decline in net interest income (NII) and a rise in non-performing loans were major headwinds.
Net income (GAAP basis) available to common shareholders was $169.6 million, surging 94% from the net income available to common shareholders of $87.4 million in the prior-year quarter.
Synovus’ Revenues Rise, Expenses Dip Y/Y
Total revenues in the third quarter were $564.7 million, up 2.6% from the prior-year quarter. Also, the top line surpassed the Zacks Consensus Estimate by 1.34%.
NII fell 1% year over year to $440.7 million, while the net interest margin (NIM) expanded 2 basis points to 3.22%.
Non-interest revenues were $123.9 million, up 16% year over year. The rise resulted from increased treasury and payment solutions and capital markets fees, and greater commercial sponsorship income.
Non-interest expenses were $313.7 million, down 11% year over year. The fall was mainly due to the company’s disciplined expense control and a 4% reduction in total headcount.
The adjusted tangible efficiency ratio was 53%, down from the 55% reported in the year-earlier quarter. A decline in the efficiency ratio indicates an increase in profitability.
As of Sept. 30, 2024, total loans of $43.12 billion increased marginally from the previous quarter. Total core deposits (excluding brokered deposits) were $50.2 billion, which increased nearly 1% from the previous quarter.
SNV’s Credit Quality: Mixed Bag
Non-performing loans were $312.9 million, up 12% from the year-ago quarter. Total non-performing assets amounted to $313.4 million, also increasing 12% year over year.
Provision for credit losses was $23.4 million, which decreased 68% year over year.
The non-performing assets ratio was 0.73%, up from 0.64% in the year-ago period.
Net charge-offs decreased 59.5% to $27.1 million from the prior-year quarter. The net charge-off ratio was 0.25%, down from 0.61% in the prior-year quarter.
SNV’s Capital Ratios & Profitability Ratios Improve Y/Y
As of Sept. 30, 2024, the Tier 1 capital ratio and total risk-based capital ratio were 11.77% and 13.62%, respectively, compared with 11.18% and 13.12% in the year-ago quarter. As of the same date, the Common Equity Tier 1 capital ratio was 10.65%, up from 10.13% in the year-ago quarter.
Adjusted return on average assets was 1.3%, up from 0.9% in the prior-year quarter. Adjusted return on average common equity was 15%, up from 11.5% in the year-earlier quarter.
Our Take on Synovus
The company’s solid capital position will aid capital distribution activities in the upcoming period, boosting investors’ confidence in the stock. Also, lower expenses and provisions, along with improving loans and deposit balances, will support its financials in the upcoming period. However, the decline in NII and the rise in non-performing loans were concerns.
Synovus Financial Corp. Price, Consensus and EPS Surprise
BOK Financial Corporation (BOKF - Free Report) is slated to report third-quarter 2024 results on Oct. 21. It carries a Zacks Rank #3 at present.
The Zacks Consensus Estimate for BOKF’s quarterly earnings has been unchanged at $2 over the past seven days.
Regions Financial Corporation (RF - Free Report) is slated to report third-quarter 2024 results on Oct. 18. It carries a Zacks Rank #2 (Buy) at present.
The Zacks Consensus Estimate for RF’s quarterly earnings has been unchanged at 53 cents over the past seven days.
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Synovus Shares Gains as Q3 Earnings Top Estimates on Higher NIR
Synovus Financial Corp. (SNV - Free Report) reported third-quarter 2024 adjusted earnings per share of $1.23, which surpassed the Zacks Consensus Estimate of $1.09 per share. This compares to earnings of 84 cents a year ago.
Find the latest earnings estimates and surprises on the Zacks Earnings Calendar.
Synovus shares increased 2.2% on a better-than-expected performance.
Results benefited from strong growth in non-interest revenues (NIR), a fall in expenses and provisions for credit losses. Also, improving loans and deposit balances were tailwinds. However, a decline in net interest income (NII) and a rise in non-performing loans were major headwinds.
Net income (GAAP basis) available to common shareholders was $169.6 million, surging 94% from the net income available to common shareholders of $87.4 million in the prior-year quarter.
Synovus’ Revenues Rise, Expenses Dip Y/Y
Total revenues in the third quarter were $564.7 million, up 2.6% from the prior-year quarter. Also, the top line surpassed the Zacks Consensus Estimate by 1.34%.
NII fell 1% year over year to $440.7 million, while the net interest margin (NIM) expanded 2 basis points to 3.22%.
Non-interest revenues were $123.9 million, up 16% year over year. The rise resulted from increased treasury and payment solutions and capital markets fees, and greater commercial sponsorship income.
Non-interest expenses were $313.7 million, down 11% year over year. The fall was mainly due to the company’s disciplined expense control and a 4% reduction in total headcount.
The adjusted tangible efficiency ratio was 53%, down from the 55% reported in the year-earlier quarter. A decline in the efficiency ratio indicates an increase in profitability.
SNV’s Loans & Deposit Balance Increases Sequentially
As of Sept. 30, 2024, total loans of $43.12 billion increased marginally from the previous quarter. Total core deposits (excluding brokered deposits) were $50.2 billion, which increased nearly 1% from the previous quarter.
SNV’s Credit Quality: Mixed Bag
Non-performing loans were $312.9 million, up 12% from the year-ago quarter. Total non-performing assets amounted to $313.4 million, also increasing 12% year over year.
Provision for credit losses was $23.4 million, which decreased 68% year over year.
The non-performing assets ratio was 0.73%, up from 0.64% in the year-ago period.
Net charge-offs decreased 59.5% to $27.1 million from the prior-year quarter. The net charge-off ratio was 0.25%, down from 0.61% in the prior-year quarter.
SNV’s Capital Ratios & Profitability Ratios Improve Y/Y
As of Sept. 30, 2024, the Tier 1 capital ratio and total risk-based capital ratio were 11.77% and 13.62%, respectively, compared with 11.18% and 13.12% in the year-ago quarter. As of the same date, the Common Equity Tier 1 capital ratio was 10.65%, up from 10.13% in the year-ago quarter.
Adjusted return on average assets was 1.3%, up from 0.9% in the prior-year quarter. Adjusted return on average common equity was 15%, up from 11.5% in the year-earlier quarter.
Our Take on Synovus
The company’s solid capital position will aid capital distribution activities in the upcoming period, boosting investors’ confidence in the stock. Also, lower expenses and provisions, along with improving loans and deposit balances, will support its financials in the upcoming period. However, the decline in NII and the rise in non-performing loans were concerns.
Synovus Financial Corp. Price, Consensus and EPS Surprise
Synovus Financial Corp. price-consensus-eps-surprise-chart | Synovus Financial Corp. Quote
Currently, Synovus carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Dates & Expectations of Bank Stocks
BOK Financial Corporation (BOKF - Free Report) is slated to report third-quarter 2024 results on Oct. 21. It carries a Zacks Rank #3 at present.
The Zacks Consensus Estimate for BOKF’s quarterly earnings has been unchanged at $2 over the past seven days.
Regions Financial Corporation (RF - Free Report) is slated to report third-quarter 2024 results on Oct. 18. It carries a Zacks Rank #2 (Buy) at present.
The Zacks Consensus Estimate for RF’s quarterly earnings has been unchanged at 53 cents over the past seven days.