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Synovus Q3 Earnings Top Estimates on Higher NII, Lower Provisions
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Key Takeaways
Synovus reported Q3 adjusted EPS of $1.46, beating estimates and rising from $1.23 a year earlier.
Revenues climbed 8.2% y/y to $611.1 million, driven by higher NII, fee income and lower deposit costs.
Credit quality improved with non-performing loans down 33% and net charge-offs falling 44%.
Synovus Financial Corp.'s (SNV - Free Report) third-quarter 2025 adjusted earnings per share of $1.46 surpassed the Zacks Consensus Estimate of $1.36 per share. This compares favorably with earnings of $1.23 per share a year ago.
Results benefited from strong year-over-year growth in net interest income (NII) and non-interest revenues, along with a fall in provisions for credit losses. Also, improving loan balances was a tailwind. However, an increase in expenses was a major headwind.
Results of the reported quarter excluded a merger-related expense of $23.8 million, net investment securities loss of $1.7 million, and other non-core items. After considering these, the net income (GAAP basis) available to common shareholders was $185.6 million, up 9% from the prior-year quarter level.
Synovus Revenues & Expenses Rise Y/Y
Total revenues were $611.1 million, up 8.2% from the prior-year quarter. Also, the top line surpassed the Zacks Consensus Estimate by 1%.
NII rose 8% year over year to $474.7 million, while the net interest margin expanded 4 basis points to 3.41%. Both increases were a result of a decline in deposit costs, higher loan yields and hedge maturities.
Non-interest revenues were $140.7 million, up 13% from the prior-year quarter. The rise was due to higher core banking fees, wealth management income and capital markets income.
Non-interest expenses were $348.7 million, up 11% year over year. The rise was mainly due to higher merger-related expenses of $23.8 million during the quarter.
The adjusted tangible efficiency ratio was 51.8%, down from 53% in the year-earlier quarter. A decline in the efficiency ratio indicates an increase in profitability.
SNV’s Loan Balance Rises, Deposit Declines
As of Sept. 30, 2025, total loans of $43.8 billion rose marginally from the previous quarter. Total core deposits (excluding brokered deposits) were $44.9 billion, which declined slightly from the previous quarter.
SNV’s Credit Quality Improves
Non-performing loans were $209.3 million, down 33% from the year-ago quarter. Total non-performing assets amounted to $231.7 million, down 26% year over year.
Provision for credit losses was $21.7 million, which plummeted 7% year over year.
The non-performing assets ratio was 0.53%, down from 0.73% in the year-ago period.
Net charge-offs decreased 43.7% to $15.2 million from the prior-year quarter. The net charge-off ratio was 0.14%, down from 0.25% in the prior-year quarter.
SNV’s Capital Ratios & Profitability Ratios Improve Y/Y
As of Sept. 30, 2025, the Tier 1 capital ratio and total risk-based capital ratio were 12.34% and 14.07%, respectively, compared with 11.76% and 13.60% in the year-ago quarter. As of the same date, the Common Equity Tier 1 capital ratio was 11.24%, up from 10.64% in the year-ago quarter.
Adjusted return on average assets was 1.42%, up from 1.26% in the prior-year quarter. Adjusted return on average common equity was 15.78%, up from 15.02% in the year-earlier quarter.
Update on Synovus-Pinnacle Financial Partners Pending Merger
SNV continues to expect its pending merger with Pinnacle Financial Partners (announced in July 2025) to close in the first quarter of 2026, subject to regulatory and shareholder approvals and customary closing conditions.
Both companies have been making progress on integration planning and have finalized the post-closing executive leadership team. Though the merger-related financial assumptions shared in July remain unchanged, SNV now expects a pro-forma CET1 ratio of 10.1% at merger close, reflecting a more favorable rate environment and strong third-quarter 2025 capital generation. Notably, Synovus plans to issue 2026 pro-forma company guidance after the merger closes early next year.
Our Take on Synovus
The company delivered a strong third-quarter performance, exceeding earnings expectations on the back of robust NII and higher non-interest revenues. Loan growth and improving credit quality supported profitability, while capital ratios remained solid, positioning the company well for strategic initiatives. While rising non-interest expenses and merger-related costs remain near-term headwinds, the overall financial performance and strong capital position provide a favorable long-term outlook for Synovus.
Synovus Financial Corp. Price, Consensus and EPS Surprise
Image: Bigstock
Synovus Q3 Earnings Top Estimates on Higher NII, Lower Provisions
Key Takeaways
Synovus Financial Corp.'s (SNV - Free Report) third-quarter 2025 adjusted earnings per share of $1.46 surpassed the Zacks Consensus Estimate of $1.36 per share. This compares favorably with earnings of $1.23 per share a year ago.
Results benefited from strong year-over-year growth in net interest income (NII) and non-interest revenues, along with a fall in provisions for credit losses. Also, improving loan balances was a tailwind. However, an increase in expenses was a major headwind.
Results of the reported quarter excluded a merger-related expense of $23.8 million, net investment securities loss of $1.7 million, and other non-core items. After considering these, the net income (GAAP basis) available to common shareholders was $185.6 million, up 9% from the prior-year quarter level.
Synovus Revenues & Expenses Rise Y/Y
Total revenues were $611.1 million, up 8.2% from the prior-year quarter. Also, the top line surpassed the Zacks Consensus Estimate by 1%.
NII rose 8% year over year to $474.7 million, while the net interest margin expanded 4 basis points to 3.41%. Both increases were a result of a decline in deposit costs, higher loan yields and hedge maturities.
Non-interest revenues were $140.7 million, up 13% from the prior-year quarter. The rise was due to higher core banking fees, wealth management income and capital markets income.
Non-interest expenses were $348.7 million, up 11% year over year. The rise was mainly due to higher merger-related expenses of $23.8 million during the quarter.
The adjusted tangible efficiency ratio was 51.8%, down from 53% in the year-earlier quarter. A decline in the efficiency ratio indicates an increase in profitability.
SNV’s Loan Balance Rises, Deposit Declines
As of Sept. 30, 2025, total loans of $43.8 billion rose marginally from the previous quarter. Total core deposits (excluding brokered deposits) were $44.9 billion, which declined slightly from the previous quarter.
SNV’s Credit Quality Improves
Non-performing loans were $209.3 million, down 33% from the year-ago quarter. Total non-performing assets amounted to $231.7 million, down 26% year over year.
Provision for credit losses was $21.7 million, which plummeted 7% year over year.
The non-performing assets ratio was 0.53%, down from 0.73% in the year-ago period.
Net charge-offs decreased 43.7% to $15.2 million from the prior-year quarter. The net charge-off ratio was 0.14%, down from 0.25% in the prior-year quarter.
SNV’s Capital Ratios & Profitability Ratios Improve Y/Y
As of Sept. 30, 2025, the Tier 1 capital ratio and total risk-based capital ratio were 12.34% and 14.07%, respectively, compared with 11.76% and 13.60% in the year-ago quarter. As of the same date, the Common Equity Tier 1 capital ratio was 11.24%, up from 10.64% in the year-ago quarter.
Adjusted return on average assets was 1.42%, up from 1.26% in the prior-year quarter. Adjusted return on average common equity was 15.78%, up from 15.02% in the year-earlier quarter.
Update on Synovus-Pinnacle Financial Partners Pending Merger
SNV continues to expect its pending merger with Pinnacle Financial Partners (announced in July 2025) to close in the first quarter of 2026, subject to regulatory and shareholder approvals and customary closing conditions.
Both companies have been making progress on integration planning and have finalized the post-closing executive leadership team. Though the merger-related financial assumptions shared in July remain unchanged, SNV now expects a pro-forma CET1 ratio of 10.1% at merger close, reflecting a more favorable rate environment and strong third-quarter 2025 capital generation. Notably, Synovus plans to issue 2026 pro-forma company guidance after the merger closes early next year.
Our Take on Synovus
The company delivered a strong third-quarter performance, exceeding earnings expectations on the back of robust NII and higher non-interest revenues. Loan growth and improving credit quality supported profitability, while capital ratios remained solid, positioning the company well for strategic initiatives. While rising non-interest expenses and merger-related costs remain near-term headwinds, the overall financial performance and strong capital position provide a favorable long-term outlook for Synovus.
Synovus Financial Corp. Price, Consensus and EPS Surprise
Synovus Financial Corp. price-consensus-eps-surprise-chart | Synovus Financial Corp. Quote
Currently, SNV 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
Bank of Hawaii (BOH - Free Report) is scheduled to announce third-quarter 2025 numbers on Oct. 27.
Over the past seven days, the Zacks Consensus Estimate for BOH’s quarterly earnings has been unchanged at $1.13 per share.
Huntington Bancshares Inc. (HBAN - Free Report) is slated to report third-quarter 2025 results on Oct. 17.
Over the past seven days, the Zacks Consensus Estimate for HBAN’s quarterly earnings has been unchanged at 38 cents per share.