Synovus Announces Earnings for the Fourth Quarter
Source: Business Wire
Diluted Earnings per Share Increased 21.9% in 2015
Synovus Financial Corp. (NYSE: SNV) today reported financial results for the quarter ended December 31, 2015.
Net income available to common shareholders for the fourth quarter of 2015 was $55.8 million or $0.43 per diluted share as compared to $55.4 million or $0.42 per diluted share for the third quarter of 2015 and $50.6 million or $0.37 per diluted share for the fourth quarter of 2014. Adjusted earnings per diluted share for the fourth quarter of 2015 were $0.44, a 4.2% increase from the third quarter of 2015 and a 13.5% increase from the fourth quarter of 2014.
2015 Highlights
Net income available to common shareholders for 2015 was $215.8 million or $1.62 per diluted share as compared to $185.0 million or $1.33 per diluted share for 2014. Diluted EPS grew 21.9% for 2015 compared to 2014.Total loans ended the year at $22.43 billion, a $1.33 billion or 6.3% increase from 2014.Average core deposits for the year were $21.13 billion, a $1.60 billion or 8.2% increase from 2014.Non-performing assets of $215.4 million at December 31, 2015 declined 24.9% from December 31, 2014, and the non-performing asset ratio declined 39 basis points from December 31, 2014 to 0.96% at December 31, 2015.The net-charge off ratio for 2015 was 0.13%, down 26 basis points from 2014.We returned over $250 million in capital to common shareholders through common stock share repurchases and dividends.Common Equity Tier 1 ratio was 10.37% at December 31, 2015 compared to 10.74% at December 31, 2014.
“We finished 2015 with strong performance in the fourth quarter, closing out another year of double digit growth in net income and balanced loan growth supported by strong core deposits,” said Kessel D. Stelling, Synovus Chairman and CEO. “Our team is excited about 2016 as we seek new ways to better serve our customers and prospects in this dynamic and highly-competitive environment. Our relationship-based approach, combined with our strategic initiatives and investments, creates an effective formula for driving continued growth, achieving greater efficiencies, and improving financial performance.”
Fourth Quarter 2015 Highlights
Balance Sheet
Total loans ended the quarter at $22.43 billion, up $565.3 million or 10.3% annualized from the previous quarter.Commercial and industrial loans grew by $248.3 million or 9.3% annualized.Commercial real estate loans grew by $185.2 million or 10.2% annualized.Retail loans grew by $133.5 million or 12.7% annualized.Total average deposits for the quarter were $23.24 billion, up $384.2 million or 6.7% annualized from the previous quarter.Average core deposits grew $556.3 million or 10.3% annualized from the previous quarter.Average core deposits, excluding state, county, and municipal deposits, grew by $377.8 million or 7.7% annualized compared to the previous quarter.
Income Statement
Adjusted pre-tax, pre-credit costs income was $105.3 million for the fourth quarter of 2015, an increase of $533 thousand from $104.7 million for the third quarter of 2015.
Net interest income was $212.6 million for the fourth quarter of 2015, up $4.8 million from $207.8 million in the previous quarter.The net interest margin increased four basis points to 3.18% compared to 3.14% in the third quarter of 2015. The yield on earning assets was 3.63%, up three basis points from the third quarter of 2015, and the effective cost of funds was 0.45%, down one basis point from the third quarter of 2015.Total non-interest income was $66.2 million, down $884 thousand or 1.3% compared to $67.1 million for the third quarter of 2015.Core banking fees[1] were $33.6 million, down $271 thousand or 0.8% from the third quarter of 2015.Financial Management Services revenues, consisting primarily of fiduciary and asset management fees and brokerage revenue, were $19.8 million, unchanged from the third quarter of 2015.Mortgage banking income decreased $1.8 million or 30.7% compared to the third quarter of 2015, due to a decrease in production volume of 34.1%.Total non-interest expense for the fourth quarter of 2015 was $183.0 million, up $5.1 million or 2.9% from the previous quarter and down $1.8 million or 1.0% as compared to the fourth quarter of 2014.Adjusted non-interest expense for the fourth quarter of 2015 was $173.5 million, up $3.4 million or 2.0% from the previous quarter and up $1.1 million or 0.6% as compared to the fourth quarter of 2014.Employment expense of $95.5 million increased $1.2 million or 1.3% from the previous quarter.Occupancy and equipment expense increased $879 thousand or 3.3% from the prior quarter, driven by a $1.2 million charge related to lease exit costs.Other expenses increased $1.3 million or 2.6% sequentially, driven by a $2.2 million increase in consulting fees.
Credit Quality
Broad-based improvement in credit quality continued.
Total credit costs were $11.9 million in the fourth quarter of 2015 compared to $10.3 million in the third quarter of 2015.Total non-performing assets were $215.4 million at December 31, 2015, a $6.6 million or 3.0% decline from the previous quarter, and a $71.4 million or 24.9% decline from the fourth quarter of 2014. The non-performing asset ratio was 0.96% at December 31, 2015, compared to 1.01% at the end of the previous quarter and 1.35% at December 31, 2014.Non-performing loans, excluding loans held for sale, were $168.4 million at December 31, 2015, an increase of $10.7 million or 6.8% from the previous quarter, and a decrease of $29.4 million or 14.9% from the fourth quarter of 2014. The non-performing loan ratio was 0.75% at December 31, 2015, compared to 0.72% at the end of the previous quarter and 0.94% at December 31, 2014.Total delinquencies (consisting of loans 30 or more days past due and still accruing) were 0.21% at December 31, 2015 compared to 0.18% at September 30, 2015 and 0.24% at December 31, 2014. Total loans past due 90 days or more and still accruing were 0.01% at December, 31, 2015, unchanged from September 30, 2015 and down from 0.02% at December 31, 2014.Net charge-offs were $3.4 million in the fourth quarter of 2015, a decrease of $3.3 million from $6.8 million in the third quarter of 2015. The annualized net charge-off ratio was 0.06% in the fourth quarter compared to 0.12% in the previous quarter.
Capital Ratios
Capital ratios remained strong and include the impact of common stock repurchases totaling $37.1 million, the issuance of $250 million in subordinated debt with a ten year maturity, and the repurchase of $46.7 million of the outstanding subordinated notes that mature in 2017.
Common Equity Tier 1 ratio was 10.37% at December 31, 2015 compared to 10.60% at September 30, 2015.Tier 1 Capital ratio was 10.37% at December 31, 2015 compared to 10.60% at September 30, 2015.Total Risk Based Capital ratio was 12.70% at December 31, 2015 compared to 12.02% at September 30, 2015.Tier 1 Leverage ratio was 9.43% at December 31, 2015 compared to 9.45% at September 30, 2015.Tangible Common Equity ratio was 9.90% at December 31, 2015 compared to 10.18% at September 30, 2015.
Fourth Quarter Earnings Conference Call
Synovus will host an earnings highlights conference call at 8:30 a.m. Eastern on January 19, 2016. The earnings call will be accompanied by a slide presentation. Shareholders and other interested parties may listen to this conference call via simultaneous Internet broadcast. For a link to the webcast, go to www.synovus.com/webcasts. You may download RealPlayer or Windows Media Player (free download available) prior to accessing the actual call or the replay. The replay will be archived for 12 months and will be available 30-45 minutes after the call.
About Synovus
Synovus Financial Corp. is a financial services company based in Columbus, Georgia, with approximately $29 billion in assets. Synovus provides commercial and retail banking, investment, and mortgage services to customers through 28 locally-branded divisions, 257 branches, and 336 ATMs in Georgia, Alabama, South Carolina, Florida, and Tennessee. Synovus Bank, a wholly owned subsidiary of Synovus, was recognized as one of America's Most Reputable Banks by American Banker and the Reputation Institute in 2015. Synovus is on the web at synovus.com, on Twitter @synovus, and on LinkedIn at http://linkedin.com/company/synovus.
Forward-Looking Statements
This press release and certain of our other filings with the Securities and Exchange Commission contain statements that constitute “forward-looking statements” within the meaning of, and subject to the protections of, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are forward-looking statements. You can identify these forward-looking statements through Synovus’ use of words such as “believes,” “anticipates,” “expects,” “may,” “will,” “assumes,” “should,” “predicts,” “could,” “would,” “intends,” “targets,” “estimates,” “projects,” “plans,” “potential” and other similar words and expressions of the future or otherwise regarding the outlook for Synovus’ future business and financial performance and/or the performance of the banking industry and economy in general. These forward-looking statements include, among others, our expectations regarding deposit growth, loan growth and the net interest margin; expectations on our growth strategy, expense initiatives, and future profitability; expectations on credit trends and key credit metrics; expectations regarding our capital management plan; and the assumptions underlying our expectations. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve known and unknown risks and uncertainties which may cause the actual results, performance or achievements of Synovus to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are based on the information known to, and current beliefs and expectations of, Synovus’ management and are subject to significant risks and uncertainties. Actual results may differ materially from those contemplated by such forward-looking statements. A number of factors could cause actual results to differ materially from those contemplated by the forward-looking statements in this press release. Many of these factors are beyond Synovus’ ability to control or predict.
These forward-looking statements are based upon information presently known to Synovus’ management and are inherently subjective, uncertain and subject to change due to any number of risks and uncertainties, including, without limitation, the risks and other factors set forth in Synovus’ filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2014 under the captions “Cautionary Notice Regarding Forward-Looking Statements” and “Risk Factors” and in Synovus’ quarterly reports on Form 10-Q and current reports on Form 8-K. We believe these forward-looking statements are reasonable; however, undue reliance should not be placed on any forward-looking statements, which are based on current expectations and speak only as of the date that they are made. We do not assume any obligation to update any forward-looking statements as a result of new information, future developments or otherwise, except as otherwise may be required by law.
Use of Non-GAAP Financial Measures
The measures entitled average core deposits; average core deposits excluding average state, county, and municipal deposits; estimated Common Equity Tier 1 (CET1) ratio under Basel III (as of December 31, 2014); Tangible Common Equity ratio; adjusted earnings per diluted share; adjusted pre-tax, pre-credit costs income; and adjusted non-interest expense are not measures recognized under U.S. generally accepted accounting principles (GAAP) and therefore are considered non-GAAP financial measures. The most comparable GAAP measures are total average deposits; total shareholders’ equity to total assets ratio; net income per common share, diluted; income before income taxes; and total non-interest expense, respectively.
Synovus believes that these non-GAAP financial measures provide meaningful additional information about Synovus to assist management and investors in evaluating Synovus’ capital strength and the performance of its core business. These non-GAAP financial measures should not be considered as substitutes for total average deposits; total shareholders’ equity to total assets ratio; net income per common share, diluted; income before income taxes; and total non-interest expense determined in accordance with GAAP and may not be comparable to other similarly titled measures at other companies.
The computations of average core deposits; average core deposits excluding average state, county, and municipal deposits; estimated Common Equity Tier 1 (CET1) ratio under Basel III (as of December 31, 2014); Tangible Common Equity ratio; adjusted earnings per diluted share; adjusted pre-tax, pre-credit costs income; and adjusted non-interest expense; and the reconciliation of these measures to total average deposits; total shareholders’ equity to total assets ratio; net income per common share, diluted; income before income taxes; and total non-interest expense are set forth in the tables below.
Reconciliation of Non-GAAP Financial Measures(dollars in thousands)4Q15 3Q15 4Q14 YTD 2015 YTD 2014 Average core deposits
Average core deposits excluding state, county, and municipal deposits
Average total deposits$23,244,25622,860,01921,336,00722,551,67920,967,488Subtract: Average brokered deposits (1,185,093)(1,357,163)(1,602,354)(1,421,949) (1,434,422)Average core deposits 22,059,163 21,502,856 19,733,653 21,129,730 19,533,066
Subtract: Average state, county, and municipal deposits
(2,303,278)(2,124,812)(2,184,757)(2,232,438) (2,215,170)
Average core deposits excluding state, county, and municipal deposits
$19,755,885 19,378,044 17,548,896 18,897,292 17,317,896 4Q15 3Q15 2Q15 1Q15 4Q14Tangible Common Equity ratioTotal assets$28,792,65328,167,13528,205,07827,632,89027,050,237Subtract: Goodwill(24,431)(24,431)(24,431)(24,431)(24,431)Subtract: Other intangible assets, net (471)(667)(863)(1,061) (1,265)Tangible assets 28,767,751 28,142,037 28,179,784 27,607,398 27,024,541 Total shareholders’ equity3,000,1963,017,1163,006,1573,030,6353,041,270
Subtract: Goodwill
(24,431)(24,431)(24,431)(24,431)(24,431)
Subtract: Other intangible assets, net
(471)(667)(863)(1,061)(1,265)
Subtract: Series C Preferred Stock, no par value
(125,980)(125,980)(125,980)(125,980) (125,980)Tangible common equity$2,849,314 2,866,038 2,854,883 2,879,163 2,889,594
Total shareholders’ equity to total assets ratio
10.42%10.71%10.6610.9711.24Tangible Common Equity ratio9.90%10.18%10.1310.4310.69
Estimated Common Equity Tier 1 (CET1) ratio under Basel III (as of December 31, 2014)
Tier 1 common equity (Basel I)$2,407,645Add: Adjustment to capital components 157,765
Estimated common equity Tier 1 (CET1) under Basel III
2,565,410Estimated risk-weighted assets under Basel III$23,891,728Estimated Common Equity Tier 1 (CET1) ratio under Basel III10.74% Reconciliation of Non-GAAP Financial Measures, continued (dollars in thousands)4Q15 3Q15 2Q15 1Q15 4Q14 Adjusted net income per common share, dilutedNet income available to common shareholders$55,83955,36953,23351,40450,612Add: Litigation settlement expenses (after-tax)434-2,688-283Add: Restructuring charges (after-tax)42423(65)2,129Add: Loss on extinguishment of debt (after-tax)937----Add: Visa indemnification charges (after-tax) 227 222 216 229 189
Adjusted net income available to common shareholders
$57,47955,63356,14051,56853,213
Weighted average common shares outstanding - diluted
131,197132,297133,625135,744137,831Adjusted net income per common share, diluted$0.44 0.42 0.42 0.38 0.39 Adjusted Pre-tax, Pre-credit Costs IncomeIncome before income taxes$90,74193,98688,03485,81278,928Add: Provision for losses on loans5,0212,9566,6364,3978,193Add: Other credit costs(1)6,8647,3446,17511,2738,213Add: Restructuring charges69695(107)3,484Add: Litigation contingency/settlement expenses710-4,400-463Add: Loss on extinguishment of debt1,533----Add: Visa indemnification charges371363354375310Subtract: Investment securities gains, net (58)- (1,985)(725)- Pre-tax, pre-credit costs income$105,251 104,718 103,619 101,025 99,591 Adjusted Non-interest ExpenseTotal non-interest expense$183,033177,907177,806178,908184,883Subtract: Other credit costs(1)(6,864)(7,344)(6,175)(11,273)(8,213)Subtract: Restructuring charges(69)(69)(5)107(3,484)Subtract: Visa indemnification charges(371)(363)(354)(375)(310)Subtract: Loss on extinguishment of debt(1,533)----
Subtract: Litigation contingency/settlement expenses
(710)- (4,400)- (463)Adjusted non-interest expense$173,486 170,131 166,872 167,367 172,413 (1) Other credit costs consist primarily of foreclosed real estate expense, net.
Synovus
INCOME STATEMENT DATA Twelve Months Ended(Unaudited)(Dollars in thousands, except per share data)December 31, 2015 2014 Change Interest income$945,962928,692
1.9
%
Interest expense118,644109,4088.4 Net interest income827,318819,2841.0Provision for loan losses19,01033,831(43.
Net interest income after provision for loan losses808,308785,4532.9 Non-interest income:Service charges on deposit accounts80,14278,8971.6Fiduciary and asset management fees45,92845,2261.6Brokerage revenue27,85527,0882.8Mortgage banking income24,09618,35431.3Bankcard fees33,17232,9310.7Investment securities gains, net2,7691,331108.0Other fee income21,17019,13010.7Gain on sale of Memphis branches, net(1)-5,789nmOther non-interest income32,78833,358(1.7) Total non-interest income267,920262,1042.2 Non-interest expense:Salaries and other personnel expense380,918371,9042.4Net occupancy and equipment expense107,466105,8061.6Third-party processing expense42,85140,0427.0FDIC insurance and other regulatory fees27,09133,485(19.1)Professional fees26,64626,4400.8Advertising expense15,47724,037(35.6)Foreclosed real estate expense, net22,80325,321(9.9)Visa indemnification charges1,4643,041(51.9)Loss on extinguishment of debt1,533-nmLitigation contingency/settlement expenses5,11012,812(60.1)Restructuring charges, net3620,585(99.8)Other operating expenses86,26081,5255.8 Total non-interest expense717,655744,998(3.7) Income before income taxes358,573302,55918.5Income tax expense132,491107,31023.5 Net income226,082195,24915.8 Dividends on preferred stock10,23810,238- Net income available to common shareholders$215,844185,011
16.7
%
Net income per common share, basic$1.631.34
22.0
%
Net income per common share, diluted1.621.3321.9 Cash dividends declared per common share0.420.3135.5 Return on average assets0.80%0.74
6 bps
Return on average common equity7.466.38108 Weighted average common shares outstanding, basic132,423138,495
(4.4
)%
Weighted average common shares outstanding, diluted133,201139,154(4.3)
nm - not meaningful
bps - basis points
(1) Consists of gain, net of associated costs, from the 1Q14 sale of certain loans, premises, deposits, and other assets and liabilities of the Memphis, Tennessee branches of Trust One Bank, a division of Synovus Bank.
Synovus INCOME STATEMENT DATA(Unaudited)(In thousands, except per share data) 2015 2014 4th QuarterFourth Third Second First Fourth '15 vs. '14Quarter Quarter Quarter Quarter Quarter Change Interest income$242,814238,093233,654231,401234,703
3.5
%
Interest expense30,19430,30330,01028,138 27,24810.8 Net interest income212,620207,790203,644203,263207,4552.5Provision for loan losses5,0212,9566,6364,397 8,193(38.7) Net interest income after provision for loan losses207,599204,834197,008198,866 199,2624.2 Non-interest income:Service charges on deposit accounts20,52220,69219,79519,13320,2871.2Fiduciary and asset management fees11,20611,30811,84311,57111,690(4.1)Brokerage revenue6,8776,9466,7827,2516,887(0.1)Mortgage banking income4,1365,9657,5116,4844,895(15.5)Bankcard fees8,2628,3348,4998,0778,536(3.2)Investment securities gains, net58-1,985725-nmOther fee income5,7985,5214,6055,2464,63525.1Other non-interest income9,3168,2937,8127,367 7,61922.3 Total non-interest income66,17567,05968,83265,854 64,5492.5 Non-interest expense:Salaries and other personnel expense95,52494,34194,56596,48892,0493.8Net occupancy and equipment expense27,81626,93726,54126,17226,3705.5Third-party processing expense10,99310,84410,67210,34310,4375.3FDIC insurance and other regulatory fees6,7766,5916,7676,9578,115(16.5)Professional fees8,2656,3716,4175,5948,0133.1Advertising expense3,6805,4882,8653,4438,102(54.6)Foreclosed real estate expense, net4,4544,5034,3519,4966,502(31.5)Visa indemnification charges37136335437531019.7Loss on extinguishment of debt1,533----nmLitigation contingency/settlement expenses710-4,400-46353.3Restructuring charges, net69695(107)3,484(98.0)Other operating expenses22,84222,40020,86920,147 21,0388.6 Total non-interest expense183,033177,907177,806178,908 184,883(1.0) Income before income taxes90,74193,98688,03485,81278,92815.0Income tax expense32,34336,05832,24231,849 25,75725.6 Net income58,39857,92855,79253,96353,1719.8 Dividends on preferred stock2,5592,5592,5592,559 2,559- Net income available to common shareholders$55,83955,36953,23351,404 50,612
10.3
%
Net income per common share, basic$0.430.420.400.380.37
16.0
%
Net income per common share, diluted0.430.420.400.380.3715.9 Cash dividends declared per common share0.120.100.100.100.1020.0 Return on average assets *0.81%0.810.800.800.79
2 bps
Return on average common equity *7.677.647.397.166.8978 Weighted average common shares outstanding, basic130,354131,516132,947134,933137,031
(4.9
)%
Weighted average common shares outstanding, diluted131,197132,297133,625135,744137,831(4. nm - not meaningfulbps - basis points* - ratios are annualized Synovus BALANCE SHEET DATADecember 31, 2015September 30, 2015December 31, 2014(Unaudited) (In thousands, except share data) ASSETSCash and cash equivalents
$
367,092
329,396485,489Interest bearing funds with Federal Reserve Bank829,887837,641721,362Interest earning deposits with banks17,38721,17011,810
Federal funds sold and securities purchased under resale agreements
69,819
69,73273,111Trading account assets, at fair value5,0975,84413,863Mortgage loans held for sale, at fair value59,27573,62363,328Investment securities available for sale, at fair value3,587,8183,487,3323,041,406 Loans, net of deferred fees and costs22,429,56521,864,30921,097,699Allowance for loan losses (252,496)(250,900)(261,317)Loans, net 22,177,069 21,613,409 20,836,382 Premises and equipment, net445,155449,078455,235Goodwill24,43124,43124,431Other real estate47,03064,34685,472Deferred tax asset, net511,948526,492622,464Other assets 650,645 664,641 615,884 Total assets
$
28,792,653
28,167,135 27,050,237 LIABILITIES AND SHAREHOLDERS' EQUITYLiabilities
eposits:Non-interest bearing deposits
$
6,732,970
6,570,2276,228,472Interest bearing deposits, excluding brokered deposits15,434,17114,961,38813,660,830Brokered deposits 1,075,520 1,245,798 1,642,398 Total deposits23,242,66122,777,41321,531,700 Federal funds purchased and securities sold under repurchase agreements177,025135,475126,916Long-term debt2,186,8932,038,0282,139,325Other liabilities 185,878 199,103 211,026 Total liabilities 25,792,457 25,150,019 24,008,967 Shareholders' equity:Series C Preferred Stock - no par value, 5,200,000 shares outstanding at December 31, 2015, September 30, 2015, and December 31, 2014125,980125,980125,980Common stock - $1.00 par value. 129,547,032 shares outstanding at December 31, 2015, 130,632,731 shares outstanding at September 30, 2015, and 136,122,843 shares outstanding at December 31, 2014140,592140,526139,950Additional paid-in capital2,989,9812,986,3332,960,825Treasury stock, at cost - 11,045,377 shares at December 31, 2015, 9,892,877 shares at September 30, 2015, and 3,827,579 shares at December 31, 2014(401,511)(364,428)(187,774)Accumulated other comprehensive loss, net(29,819)(6,092)(12,605)Retained earnings 174,973 134,797 14,894 Total shareholders' equity 3,000,196 3,017,116 3,041,270 Total liabilities and shareholders' equity
$
28,792,653
28,167,135 27,050,237 Synovus AVERAGE BALANCES AND YIELDS/RATES (1)(Unaudited)(Dollars in thousands) 2015 2014Fourth Third Second First FourthQuarter Quarter Quarter Quarter Quarter Interest Earning AssetsTaxable investment securities(2)$3,481,1843,380,5433,165,5132,998,5973,027,769Yield1.85%1.761.791.851.85 Tax-exempt investment securities(2) (4)$4,3524,5094,5954,9675,030Yield (taxable equivalent)6.16%6.216.156.216.19 Trading account assets$8,0677,27812,56414,18812,879Yield2.24%1.843.723.023.08 Commercial loans (3) (4)$17,884,66117,522,73517,297,13017,176,64116,956,294Yield3.97%3.994.014.064.09 Consumer loans (3)$4,233,0614,105,6393,986,1513,929,1883,895,397Yield4.27%4.314.374.454.42 Allowance for loan losses$(252,049) (256,102) (254,177) (257,167) (268,659) Loans, net(3)$21,865,67321,372,27221,029,10420,848,66220,583,032Yield4.08%4.104.144.194.22 Mortgage loans held for sale$50,66869,43890,41964,50760,892Yield3.84%3.823.393.923.84
Federal funds sold, due from Federal Reserve Bank, and other short-term investments
$1,081,6041,380,6861,590,1141,123,250898,871Yield0.27%0.240.240.240.23 Federal Home Loan Bank and Federal Reserve Bank stock(5)$66,79071,85276,09180,81375,547Yield5.08%4.714.573.904.53 Total interest earning assets$26,558,33826,286,57825,968,40025,134,98424,664,020Yield 3.63 %3.60 3.61 3.73 3.78 Interest Bearing Liabilities Interest bearing demand deposits$4,117,1163,955,8033,919,4013,800,4763,781,389Rate0.17%0.180.180.190.19 Money market accounts$7,062,5176,893,5636,466,6106,210,7046,009,897Rate0.35%0.360.350.320.29 Savings deposits$692,536685,813675,260649,597638,813Rate0.06%0.060.060.050.07 Time deposits under $100,000$1,307,6011,338,9941,351,2991,324,5131,315,905Rate0.65%0.660.680.610.57 Time deposits over $100,000$2,033,1932,086,8512,061,4341,926,3801,877,602Rate0.88%0.880.880.800.76 Brokered money market accounts$297,925221,817185,909181,754191,103Rate0.31%0.310.310.300.28 Brokered time deposits$887,1681,135,3461,370,0221,413,0681,411,252Rate0.76 %0.71 0.67 0.63 0.58 Total interest bearing deposits$16,398,05616,318,18716,029,93515,506,49215,225,961Rate0.40%0.420.420.390.36
Federal funds purchased and securities sold under repurchase agreements
$158,810207,894232,531222,658186,993Rate0.08%0.090.080.080.07 Long-term debt$2,007,9242,073,1852,173,5952,207,2152,084,636Rate2.63%2.462.392.412.55 Total interest bearing liabilities$18,564,79018,599,26618,436,06117,936,36517,497,590Rate 0.65 %0.65 0.65 0.63 0.62 Non-interest bearing demand deposits$6,846,2006,541,8326,436,1676,108,5586,110,047 Effective cost of funds0.45%0.460.460.450.44 Net interest margin 3.18 %3.14 3.15 3.28 3.34 Taxable equivalent adjustment$311315330349372 (1) Yields and rates are annualized.(2) Excludes net unrealized gains and losses.(3) Average loans are shown net of unearned income. Non-performing loans are included.
(4) Reflects taxable-equivalent adjustments, using the statutory federal income tax rate of 35%, in adjusting interest on tax-exempt loans and investment securities to a taxable-equivalent basis.
(5) Included as a component of Other Assets on the consolidated balance sheet
Synovus
LOANS OUTSTANDING AND NON-PERFORMING LOANS COMPOSITION(Unaudited)(Dollars in thousands)
December 31, 2015
Loans as a %TotalNon-performing Loansof Total LoansNon-performingas a % of Total
Loan Type
Total Loans Outstanding Loans Nonperforming Loans Multi-Family
$
1,391,453
6.2
%
$
223
$
0.1
%
Hotels703,8253.13810.2Office Buildings1,495,2476.71,1700.7Shopping Centers956,3944.39070.5Commercial Development92,8090.48,9415.3Warehouses563,2172.52080.1Other Investment Property 548,686 2.4 11,210 6.7 Total Investment Properties5,751,63125.623,04013.7 1-4 Family Construction168,2430.8-0.01-4 Family Investment Mortgage786,7973.57,7084.6Residential Development 154,814 0.7 9,130 5.4 Total 1-4 Family Properties1,109,8544.916,83810.0 Land Acquisition 513,981 2.2 17,768 10.6 Total Commercial Real Estate 7,375,466 32.9 57,646 34.3
Commercial, Financial, and Agricultural
6,472,48228.849,13729.1Owner-Occupied 4,318,950 19.3 20,294 12.1 Total Commercial & Industrial 10,791,432 48.1 69,431 41.2 Home Equity Lines1,689,9147.516,4809.8Consumer Mortgages1,938,6838.622,24813.2Credit Cards240,8511.2--Other Retail Loans 423,318 1.9 2,565 1.5 Total Retail 4,292,766 19.1 41,293 24.5 Unearned Income (30,099)(0.1) -nm Total
$
22,429,565
100.0
%
$
168,370
100.0
%
LOANS OUTSTANDING BY TYPE COMPARISON(Unaudited)(Dollars in thousands) Total Loans4Q15 vs. 3Q154Q15 vs. 4Q14Loan TypeDecember 31, 2015 September 30, 2015 % change(1) December 31, 2014 % change Multi-Family
$
1,391,453
1,345,688
13.5
%
$
1,205,095
15.5
%
Hotels703,825684,10611.4697,9870.8Office Buildings1,495,2471,388,96530.41,196,53725.0Shopping Centers956,394944,6904.9881,8218.5Commercial Development92,809101,946(35.6)121,990(23.9)Warehouses563,217545,34613.0559,3200.7Other Investment Property 548,686 546,835 1.3 543,925 0.9 Total Investment Properties5,751,6315,557,57613.95,206,67510.5 1-4 Family Construction168,243159,23722.4143,61917.11-4 Family Investment Mortgage786,797777,1964.9813,047(3.2)Residential Development 154,814 158,120 (8.3) 177,217 (12.6) Total 1-4 Family Properties1,109,8541,094,5535.51,133,883(2.1) Land Acquisition 513,981 538,127 (17. 586,045 (12.3) Total Commercial Real Estate 7,375,466 7,190,256 10.2 6,926,603 6.5 Commercial, Financial, and Agricultural6,472,4826,277,76812.36,182,3114.7Owner-Occupied 4,318,950 4,265,409 5.0 4,085,407 5.7 Total Commercial & Industrial 10,791,432 10,543,177 9.3 10,267,718 5.1 Home Equity Lines1,689,9141,684,0461.41,683,9980.4Consumer Mortgages1,938,6831,888,45610.61,694,06114.4Credit Cards240,851241,315(0.8)253,649(5.0)Other Retail Loans 423,318 345,426 89.5 302,460 40.0 Total Retail 4,292,766 4,159,243 12.7 3,934,168 9.1 Unearned Income (30,099)(28,367)24.2 (30,790)(2.2) Total
$
22,429,565
21,864,309
10.3
%
$
21,097,699
6.3
%
(1) Percentage change is annualized.
Synovus CREDIT QUALITY DATA(Unaudited)(Dollars in thousands)2015 20144th QuarterFourthThirdSecondFirstFourth'15 vs. '14Quarter Quarter Quarter Quarter QuarterChange Non-performing Loans
$
168,370
157,640173,638194,232197,757
(14.9
)%
Other Loans Held for Sale(1)---1,0823,606(100.0)Other Real Estate 47,030 64,34666,44974,79185,472(45.0)Non-performing Assets215,400221,986240,087270,105286,835(24.9) Allowance for loan losses252,496250,900254,702253,371261,317(3.4) Net Charge-Offs - Quarter3,4256,7585,30612,34316,253(78.9)Net Charge-Offs - YTD27,83124,40717,64912,34379,055(64.8)Net Charge-Offs / Average Loans - Quarter (2)
0.06
%
0.120.100.230.31Net Charge-Offs / Average Loans - YTD(2)0.130.150.170.230.39 Non-performing Loans / Loans0.750.720.810.920.94Non-performing Assets / Loans, Other Loans Held for Sale & ORE0.961.011.111.281.35Allowance / Loans1.131.151.181.201.24 Allowance / Non-performing Loans149.96159.16146.69130.45132.14Allowance / Non-performing Loans (3)189.47205.90202.08197.55197.22
Past Due Loans over 90 days and Still Accruing
$
2,621
2,9984,8325,0254,637
(43.5
)%
As a Percentage of Loans Outstanding
0.01
%
0.010.020.020.02 Total Past Due Loans and Still Accruing
$
47,912
39,35050,86057,44351,251(6.5)As a Percentage of Loans Outstanding
0.21
%
0.180.240.270.24 Accruing Troubled Debt Restructurings (TDRs)
$
223,873
240,370268,542313,362348,427(35.7) (1) Represent impaired loans that are intended to be sold. Held for sale loans are carried at the lower of cost or fair value, less costs to sell.(2) Ratio is annualized.(3) Excludes non-performing loans for which the expected loss has been charged off. SELECTED CAPITAL INFORMATION(1)(Unaudited)(Dollars in thousands)
December 31, 2015
September 30, 2015December 31, 2014 Capital Rules in effect:Basel IIIBasel IIIBasel I Tier 1 Capital
$
2,660,015
2,637,4622,543,625Total Risk-Based Capital3,255,7572,990,0992,987,406Common Equity Tier 1 Ratio (transitional)
10.37
%
10.60naCommon Equity Tier 1 Ratio (fully phased-in)9.779.98naTier 1 Common Equity Rationana10.28Tier 1 Capital Ratio10.3710.6010.86Total Risk-Based Capital Ratio12.7012.0212.75Tier 1 Leverage Ratio9.439.459.67Common Equity as a Percentage of Total Assets(2)9.9810.2610.78
Tangible Common Equity as a Percentage of Tangible Assets (3)
9.9010.1810.69
Tangible Common Equity as a Percentage of Risk Weighted Assets (3)
11.1111.5412.33Book Value Per Common Share (4)22.1922.1321.42Tangible Book Value Per Common Share (3)21.9921.9421.23
(1) Current quarter regulatory capital information is preliminary. 2015 regulatory capital ratios determined under Basel III capital rules. 2014 ratios were determined under Basel I capital rules.
(2) Common equity consists of Total Shareholders' Equity less Preferred Stock.(3) Excludes the carrying value of goodwill and other intangible assets from common equity and total assets.(4) Book Value Per Common Share consists of Total Shareholders' Equity less Preferred Stock divided by total common shares outstanding.
[1] Include service charges on deposit accounts, bankcard fees, letter of credit fees, ATM fee income, line of credit non-usage fees, and miscellaneous other service charges.

View source version on businesswire.com:http://www.businesswire.com/news/home/20160119005705/en/
Synovus Financial Corp.
Media Contact:
Lee Underwood, 706-644-0528
Media Relations
or
Investor Contact:
Bob May, 706-649-3555
Investor Relations
Source: Business Wire
Diluted Earnings per Share Increased 21.9% in 2015
Synovus Financial Corp. (NYSE: SNV) today reported financial results for the quarter ended December 31, 2015.
Net income available to common shareholders for the fourth quarter of 2015 was $55.8 million or $0.43 per diluted share as compared to $55.4 million or $0.42 per diluted share for the third quarter of 2015 and $50.6 million or $0.37 per diluted share for the fourth quarter of 2014. Adjusted earnings per diluted share for the fourth quarter of 2015 were $0.44, a 4.2% increase from the third quarter of 2015 and a 13.5% increase from the fourth quarter of 2014.
2015 Highlights
Net income available to common shareholders for 2015 was $215.8 million or $1.62 per diluted share as compared to $185.0 million or $1.33 per diluted share for 2014. Diluted EPS grew 21.9% for 2015 compared to 2014.Total loans ended the year at $22.43 billion, a $1.33 billion or 6.3% increase from 2014.Average core deposits for the year were $21.13 billion, a $1.60 billion or 8.2% increase from 2014.Non-performing assets of $215.4 million at December 31, 2015 declined 24.9% from December 31, 2014, and the non-performing asset ratio declined 39 basis points from December 31, 2014 to 0.96% at December 31, 2015.The net-charge off ratio for 2015 was 0.13%, down 26 basis points from 2014.We returned over $250 million in capital to common shareholders through common stock share repurchases and dividends.Common Equity Tier 1 ratio was 10.37% at December 31, 2015 compared to 10.74% at December 31, 2014.
“We finished 2015 with strong performance in the fourth quarter, closing out another year of double digit growth in net income and balanced loan growth supported by strong core deposits,” said Kessel D. Stelling, Synovus Chairman and CEO. “Our team is excited about 2016 as we seek new ways to better serve our customers and prospects in this dynamic and highly-competitive environment. Our relationship-based approach, combined with our strategic initiatives and investments, creates an effective formula for driving continued growth, achieving greater efficiencies, and improving financial performance.”
Fourth Quarter 2015 Highlights
Balance Sheet
Total loans ended the quarter at $22.43 billion, up $565.3 million or 10.3% annualized from the previous quarter.Commercial and industrial loans grew by $248.3 million or 9.3% annualized.Commercial real estate loans grew by $185.2 million or 10.2% annualized.Retail loans grew by $133.5 million or 12.7% annualized.Total average deposits for the quarter were $23.24 billion, up $384.2 million or 6.7% annualized from the previous quarter.Average core deposits grew $556.3 million or 10.3% annualized from the previous quarter.Average core deposits, excluding state, county, and municipal deposits, grew by $377.8 million or 7.7% annualized compared to the previous quarter.
Income Statement
Adjusted pre-tax, pre-credit costs income was $105.3 million for the fourth quarter of 2015, an increase of $533 thousand from $104.7 million for the third quarter of 2015.
Net interest income was $212.6 million for the fourth quarter of 2015, up $4.8 million from $207.8 million in the previous quarter.The net interest margin increased four basis points to 3.18% compared to 3.14% in the third quarter of 2015. The yield on earning assets was 3.63%, up three basis points from the third quarter of 2015, and the effective cost of funds was 0.45%, down one basis point from the third quarter of 2015.Total non-interest income was $66.2 million, down $884 thousand or 1.3% compared to $67.1 million for the third quarter of 2015.Core banking fees[1] were $33.6 million, down $271 thousand or 0.8% from the third quarter of 2015.Financial Management Services revenues, consisting primarily of fiduciary and asset management fees and brokerage revenue, were $19.8 million, unchanged from the third quarter of 2015.Mortgage banking income decreased $1.8 million or 30.7% compared to the third quarter of 2015, due to a decrease in production volume of 34.1%.Total non-interest expense for the fourth quarter of 2015 was $183.0 million, up $5.1 million or 2.9% from the previous quarter and down $1.8 million or 1.0% as compared to the fourth quarter of 2014.Adjusted non-interest expense for the fourth quarter of 2015 was $173.5 million, up $3.4 million or 2.0% from the previous quarter and up $1.1 million or 0.6% as compared to the fourth quarter of 2014.Employment expense of $95.5 million increased $1.2 million or 1.3% from the previous quarter.Occupancy and equipment expense increased $879 thousand or 3.3% from the prior quarter, driven by a $1.2 million charge related to lease exit costs.Other expenses increased $1.3 million or 2.6% sequentially, driven by a $2.2 million increase in consulting fees.
Credit Quality
Broad-based improvement in credit quality continued.
Total credit costs were $11.9 million in the fourth quarter of 2015 compared to $10.3 million in the third quarter of 2015.Total non-performing assets were $215.4 million at December 31, 2015, a $6.6 million or 3.0% decline from the previous quarter, and a $71.4 million or 24.9% decline from the fourth quarter of 2014. The non-performing asset ratio was 0.96% at December 31, 2015, compared to 1.01% at the end of the previous quarter and 1.35% at December 31, 2014.Non-performing loans, excluding loans held for sale, were $168.4 million at December 31, 2015, an increase of $10.7 million or 6.8% from the previous quarter, and a decrease of $29.4 million or 14.9% from the fourth quarter of 2014. The non-performing loan ratio was 0.75% at December 31, 2015, compared to 0.72% at the end of the previous quarter and 0.94% at December 31, 2014.Total delinquencies (consisting of loans 30 or more days past due and still accruing) were 0.21% at December 31, 2015 compared to 0.18% at September 30, 2015 and 0.24% at December 31, 2014. Total loans past due 90 days or more and still accruing were 0.01% at December, 31, 2015, unchanged from September 30, 2015 and down from 0.02% at December 31, 2014.Net charge-offs were $3.4 million in the fourth quarter of 2015, a decrease of $3.3 million from $6.8 million in the third quarter of 2015. The annualized net charge-off ratio was 0.06% in the fourth quarter compared to 0.12% in the previous quarter.
Capital Ratios
Capital ratios remained strong and include the impact of common stock repurchases totaling $37.1 million, the issuance of $250 million in subordinated debt with a ten year maturity, and the repurchase of $46.7 million of the outstanding subordinated notes that mature in 2017.
Common Equity Tier 1 ratio was 10.37% at December 31, 2015 compared to 10.60% at September 30, 2015.Tier 1 Capital ratio was 10.37% at December 31, 2015 compared to 10.60% at September 30, 2015.Total Risk Based Capital ratio was 12.70% at December 31, 2015 compared to 12.02% at September 30, 2015.Tier 1 Leverage ratio was 9.43% at December 31, 2015 compared to 9.45% at September 30, 2015.Tangible Common Equity ratio was 9.90% at December 31, 2015 compared to 10.18% at September 30, 2015.
Fourth Quarter Earnings Conference Call
Synovus will host an earnings highlights conference call at 8:30 a.m. Eastern on January 19, 2016. The earnings call will be accompanied by a slide presentation. Shareholders and other interested parties may listen to this conference call via simultaneous Internet broadcast. For a link to the webcast, go to www.synovus.com/webcasts. You may download RealPlayer or Windows Media Player (free download available) prior to accessing the actual call or the replay. The replay will be archived for 12 months and will be available 30-45 minutes after the call.
About Synovus
Synovus Financial Corp. is a financial services company based in Columbus, Georgia, with approximately $29 billion in assets. Synovus provides commercial and retail banking, investment, and mortgage services to customers through 28 locally-branded divisions, 257 branches, and 336 ATMs in Georgia, Alabama, South Carolina, Florida, and Tennessee. Synovus Bank, a wholly owned subsidiary of Synovus, was recognized as one of America's Most Reputable Banks by American Banker and the Reputation Institute in 2015. Synovus is on the web at synovus.com, on Twitter @synovus, and on LinkedIn at http://linkedin.com/company/synovus.
Forward-Looking Statements
This press release and certain of our other filings with the Securities and Exchange Commission contain statements that constitute “forward-looking statements” within the meaning of, and subject to the protections of, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are forward-looking statements. You can identify these forward-looking statements through Synovus’ use of words such as “believes,” “anticipates,” “expects,” “may,” “will,” “assumes,” “should,” “predicts,” “could,” “would,” “intends,” “targets,” “estimates,” “projects,” “plans,” “potential” and other similar words and expressions of the future or otherwise regarding the outlook for Synovus’ future business and financial performance and/or the performance of the banking industry and economy in general. These forward-looking statements include, among others, our expectations regarding deposit growth, loan growth and the net interest margin; expectations on our growth strategy, expense initiatives, and future profitability; expectations on credit trends and key credit metrics; expectations regarding our capital management plan; and the assumptions underlying our expectations. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve known and unknown risks and uncertainties which may cause the actual results, performance or achievements of Synovus to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are based on the information known to, and current beliefs and expectations of, Synovus’ management and are subject to significant risks and uncertainties. Actual results may differ materially from those contemplated by such forward-looking statements. A number of factors could cause actual results to differ materially from those contemplated by the forward-looking statements in this press release. Many of these factors are beyond Synovus’ ability to control or predict.
These forward-looking statements are based upon information presently known to Synovus’ management and are inherently subjective, uncertain and subject to change due to any number of risks and uncertainties, including, without limitation, the risks and other factors set forth in Synovus’ filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2014 under the captions “Cautionary Notice Regarding Forward-Looking Statements” and “Risk Factors” and in Synovus’ quarterly reports on Form 10-Q and current reports on Form 8-K. We believe these forward-looking statements are reasonable; however, undue reliance should not be placed on any forward-looking statements, which are based on current expectations and speak only as of the date that they are made. We do not assume any obligation to update any forward-looking statements as a result of new information, future developments or otherwise, except as otherwise may be required by law.
Use of Non-GAAP Financial Measures
The measures entitled average core deposits; average core deposits excluding average state, county, and municipal deposits; estimated Common Equity Tier 1 (CET1) ratio under Basel III (as of December 31, 2014); Tangible Common Equity ratio; adjusted earnings per diluted share; adjusted pre-tax, pre-credit costs income; and adjusted non-interest expense are not measures recognized under U.S. generally accepted accounting principles (GAAP) and therefore are considered non-GAAP financial measures. The most comparable GAAP measures are total average deposits; total shareholders’ equity to total assets ratio; net income per common share, diluted; income before income taxes; and total non-interest expense, respectively.
Synovus believes that these non-GAAP financial measures provide meaningful additional information about Synovus to assist management and investors in evaluating Synovus’ capital strength and the performance of its core business. These non-GAAP financial measures should not be considered as substitutes for total average deposits; total shareholders’ equity to total assets ratio; net income per common share, diluted; income before income taxes; and total non-interest expense determined in accordance with GAAP and may not be comparable to other similarly titled measures at other companies.
The computations of average core deposits; average core deposits excluding average state, county, and municipal deposits; estimated Common Equity Tier 1 (CET1) ratio under Basel III (as of December 31, 2014); Tangible Common Equity ratio; adjusted earnings per diluted share; adjusted pre-tax, pre-credit costs income; and adjusted non-interest expense; and the reconciliation of these measures to total average deposits; total shareholders’ equity to total assets ratio; net income per common share, diluted; income before income taxes; and total non-interest expense are set forth in the tables below.
Reconciliation of Non-GAAP Financial Measures(dollars in thousands)4Q15 3Q15 4Q14 YTD 2015 YTD 2014 Average core deposits
Average core deposits excluding state, county, and municipal deposits
Average total deposits$23,244,25622,860,01921,336,00722,551,67920,967,488Subtract: Average brokered deposits (1,185,093)(1,357,163)(1,602,354)(1,421,949) (1,434,422)Average core deposits 22,059,163 21,502,856 19,733,653 21,129,730 19,533,066
Subtract: Average state, county, and municipal deposits
(2,303,278)(2,124,812)(2,184,757)(2,232,438) (2,215,170)
Average core deposits excluding state, county, and municipal deposits
$19,755,885 19,378,044 17,548,896 18,897,292 17,317,896 4Q15 3Q15 2Q15 1Q15 4Q14Tangible Common Equity ratioTotal assets$28,792,65328,167,13528,205,07827,632,89027,050,237Subtract: Goodwill(24,431)(24,431)(24,431)(24,431)(24,431)Subtract: Other intangible assets, net (471)(667)(863)(1,061) (1,265)Tangible assets 28,767,751 28,142,037 28,179,784 27,607,398 27,024,541 Total shareholders’ equity3,000,1963,017,1163,006,1573,030,6353,041,270
Subtract: Goodwill
(24,431)(24,431)(24,431)(24,431)(24,431)
Subtract: Other intangible assets, net
(471)(667)(863)(1,061)(1,265)
Subtract: Series C Preferred Stock, no par value
(125,980)(125,980)(125,980)(125,980) (125,980)Tangible common equity$2,849,314 2,866,038 2,854,883 2,879,163 2,889,594
Total shareholders’ equity to total assets ratio
10.42%10.71%10.6610.9711.24Tangible Common Equity ratio9.90%10.18%10.1310.4310.69
Estimated Common Equity Tier 1 (CET1) ratio under Basel III (as of December 31, 2014)
Tier 1 common equity (Basel I)$2,407,645Add: Adjustment to capital components 157,765
Estimated common equity Tier 1 (CET1) under Basel III
2,565,410Estimated risk-weighted assets under Basel III$23,891,728Estimated Common Equity Tier 1 (CET1) ratio under Basel III10.74% Reconciliation of Non-GAAP Financial Measures, continued (dollars in thousands)4Q15 3Q15 2Q15 1Q15 4Q14 Adjusted net income per common share, dilutedNet income available to common shareholders$55,83955,36953,23351,40450,612Add: Litigation settlement expenses (after-tax)434-2,688-283Add: Restructuring charges (after-tax)42423(65)2,129Add: Loss on extinguishment of debt (after-tax)937----Add: Visa indemnification charges (after-tax) 227 222 216 229 189
Adjusted net income available to common shareholders
$57,47955,63356,14051,56853,213
Weighted average common shares outstanding - diluted
131,197132,297133,625135,744137,831Adjusted net income per common share, diluted$0.44 0.42 0.42 0.38 0.39 Adjusted Pre-tax, Pre-credit Costs IncomeIncome before income taxes$90,74193,98688,03485,81278,928Add: Provision for losses on loans5,0212,9566,6364,3978,193Add: Other credit costs(1)6,8647,3446,17511,2738,213Add: Restructuring charges69695(107)3,484Add: Litigation contingency/settlement expenses710-4,400-463Add: Loss on extinguishment of debt1,533----Add: Visa indemnification charges371363354375310Subtract: Investment securities gains, net (58)- (1,985)(725)- Pre-tax, pre-credit costs income$105,251 104,718 103,619 101,025 99,591 Adjusted Non-interest ExpenseTotal non-interest expense$183,033177,907177,806178,908184,883Subtract: Other credit costs(1)(6,864)(7,344)(6,175)(11,273)(8,213)Subtract: Restructuring charges(69)(69)(5)107(3,484)Subtract: Visa indemnification charges(371)(363)(354)(375)(310)Subtract: Loss on extinguishment of debt(1,533)----
Subtract: Litigation contingency/settlement expenses
(710)- (4,400)- (463)Adjusted non-interest expense$173,486 170,131 166,872 167,367 172,413 (1) Other credit costs consist primarily of foreclosed real estate expense, net.
Synovus
INCOME STATEMENT DATA Twelve Months Ended(Unaudited)(Dollars in thousands, except per share data)December 31, 2015 2014 Change Interest income$945,962928,692
1.9
%
Interest expense118,644109,4088.4 Net interest income827,318819,2841.0Provision for loan losses19,01033,831(43.
Net interest income after provision for loan losses808,308785,4532.9 Non-interest income:Service charges on deposit accounts80,14278,8971.6Fiduciary and asset management fees45,92845,2261.6Brokerage revenue27,85527,0882.8Mortgage banking income24,09618,35431.3Bankcard fees33,17232,9310.7Investment securities gains, net2,7691,331108.0Other fee income21,17019,13010.7Gain on sale of Memphis branches, net(1)-5,789nmOther non-interest income32,78833,358(1.7) Total non-interest income267,920262,1042.2 Non-interest expense:Salaries and other personnel expense380,918371,9042.4Net occupancy and equipment expense107,466105,8061.6Third-party processing expense42,85140,0427.0FDIC insurance and other regulatory fees27,09133,485(19.1)Professional fees26,64626,4400.8Advertising expense15,47724,037(35.6)Foreclosed real estate expense, net22,80325,321(9.9)Visa indemnification charges1,4643,041(51.9)Loss on extinguishment of debt1,533-nmLitigation contingency/settlement expenses5,11012,812(60.1)Restructuring charges, net3620,585(99.8)Other operating expenses86,26081,5255.8 Total non-interest expense717,655744,998(3.7) Income before income taxes358,573302,55918.5Income tax expense132,491107,31023.5 Net income226,082195,24915.8 Dividends on preferred stock10,23810,238- Net income available to common shareholders$215,844185,011 16.7
%
Net income per common share, basic$1.631.34
22.0
%
Net income per common share, diluted1.621.3321.9 Cash dividends declared per common share0.420.3135.5 Return on average assets0.80%0.74
6 bps
Return on average common equity7.466.38108 Weighted average common shares outstanding, basic132,423138,495
(4.4
)%
Weighted average common shares outstanding, diluted133,201139,154(4.3)
nm - not meaningful
bps - basis points
(1) Consists of gain, net of associated costs, from the 1Q14 sale of certain loans, premises, deposits, and other assets and liabilities of the Memphis, Tennessee branches of Trust One Bank, a division of Synovus Bank.
Synovus INCOME STATEMENT DATA(Unaudited)(In thousands, except per share data) 2015 2014 4th QuarterFourth Third Second First Fourth '15 vs. '14Quarter Quarter Quarter Quarter Quarter Change Interest income$242,814238,093233,654231,401234,703
3.5
%
Interest expense30,19430,30330,01028,138 27,24810.8 Net interest income212,620207,790203,644203,263207,4552.5Provision for loan losses5,0212,9566,6364,397 8,193(38.7) Net interest income after provision for loan losses207,599204,834197,008198,866 199,2624.2 Non-interest income:Service charges on deposit accounts20,52220,69219,79519,13320,2871.2Fiduciary and asset management fees11,20611,30811,84311,57111,690(4.1)Brokerage revenue6,8776,9466,7827,2516,887(0.1)Mortgage banking income4,1365,9657,5116,4844,895(15.5)Bankcard fees8,2628,3348,4998,0778,536(3.2)Investment securities gains, net58-1,985725-nmOther fee income5,7985,5214,6055,2464,63525.1Other non-interest income9,3168,2937,8127,367 7,61922.3 Total non-interest income66,17567,05968,83265,854 64,5492.5 Non-interest expense:Salaries and other personnel expense95,52494,34194,56596,48892,0493.8Net occupancy and equipment expense27,81626,93726,54126,17226,3705.5Third-party processing expense10,99310,84410,67210,34310,4375.3FDIC insurance and other regulatory fees6,7766,5916,7676,9578,115(16.5)Professional fees8,2656,3716,4175,5948,0133.1Advertising expense3,6805,4882,8653,4438,102(54.6)Foreclosed real estate expense, net4,4544,5034,3519,4966,502(31.5)Visa indemnification charges37136335437531019.7Loss on extinguishment of debt1,533----nmLitigation contingency/settlement expenses710-4,400-46353.3Restructuring charges, net69695(107)3,484(98.0)Other operating expenses22,84222,40020,86920,147 21,0388.6 Total non-interest expense183,033177,907177,806178,908 184,883(1.0) Income before income taxes90,74193,98688,03485,81278,92815.0Income tax expense32,34336,05832,24231,849 25,75725.6 Net income58,39857,92855,79253,96353,1719.8 Dividends on preferred stock2,5592,5592,5592,559 2,559- Net income available to common shareholders$55,83955,36953,23351,404 50,612
10.3
%
Net income per common share, basic$0.430.420.400.380.37
16.0
%
Net income per common share, diluted0.430.420.400.380.3715.9 Cash dividends declared per common share0.120.100.100.100.1020.0 Return on average assets *0.81%0.810.800.800.79
2 bps
Return on average common equity *7.677.647.397.166.8978 Weighted average common shares outstanding, basic130,354131,516132,947134,933137,031
(4.9
)%
Weighted average common shares outstanding, diluted131,197132,297133,625135,744137,831(4.
nm - not meaningfulbps - basis points* - ratios are annualized Synovus BALANCE SHEET DATADecember 31, 2015September 30, 2015December 31, 2014(Unaudited) (In thousands, except share data) ASSETSCash and cash equivalents $
367,092
329,396485,489Interest bearing funds with Federal Reserve Bank829,887837,641721,362Interest earning deposits with banks17,38721,17011,810
Federal funds sold and securities purchased under resale agreements
69,819
69,73273,111Trading account assets, at fair value5,0975,84413,863Mortgage loans held for sale, at fair value59,27573,62363,328Investment securities available for sale, at fair value3,587,8183,487,3323,041,406 Loans, net of deferred fees and costs22,429,56521,864,30921,097,699Allowance for loan losses (252,496)(250,900)(261,317)Loans, net 22,177,069 21,613,409 20,836,382 Premises and equipment, net445,155449,078455,235Goodwill24,43124,43124,431Other real estate47,03064,34685,472Deferred tax asset, net511,948526,492622,464Other assets 650,645 664,641 615,884 Total assets
$
28,792,653
28,167,135 27,050,237 LIABILITIES AND SHAREHOLDERS' EQUITYLiabilities
eposits:Non-interest bearing deposits $
6,732,970
6,570,2276,228,472Interest bearing deposits, excluding brokered deposits15,434,17114,961,38813,660,830Brokered deposits 1,075,520 1,245,798 1,642,398 Total deposits23,242,66122,777,41321,531,700 Federal funds purchased and securities sold under repurchase agreements177,025135,475126,916Long-term debt2,186,8932,038,0282,139,325Other liabilities 185,878 199,103 211,026 Total liabilities 25,792,457 25,150,019 24,008,967 Shareholders' equity:Series C Preferred Stock - no par value, 5,200,000 shares outstanding at December 31, 2015, September 30, 2015, and December 31, 2014125,980125,980125,980Common stock - $1.00 par value. 129,547,032 shares outstanding at December 31, 2015, 130,632,731 shares outstanding at September 30, 2015, and 136,122,843 shares outstanding at December 31, 2014140,592140,526139,950Additional paid-in capital2,989,9812,986,3332,960,825Treasury stock, at cost - 11,045,377 shares at December 31, 2015, 9,892,877 shares at September 30, 2015, and 3,827,579 shares at December 31, 2014(401,511)(364,428)(187,774)Accumulated other comprehensive loss, net(29,819)(6,092)(12,605)Retained earnings 174,973 134,797 14,894 Total shareholders' equity 3,000,196 3,017,116 3,041,270 Total liabilities and shareholders' equity
$
28,792,653
28,167,135 27,050,237 Synovus AVERAGE BALANCES AND YIELDS/RATES (1)(Unaudited)(Dollars in thousands) 2015 2014Fourth Third Second First FourthQuarter Quarter Quarter Quarter Quarter Interest Earning AssetsTaxable investment securities(2)$3,481,1843,380,5433,165,5132,998,5973,027,769Yield1.85%1.761.791.851.85 Tax-exempt investment securities(2) (4)$4,3524,5094,5954,9675,030Yield (taxable equivalent)6.16%6.216.156.216.19 Trading account assets$8,0677,27812,56414,18812,879Yield2.24%1.843.723.023.08 Commercial loans (3) (4)$17,884,66117,522,73517,297,13017,176,64116,956,294Yield3.97%3.994.014.064.09 Consumer loans (3)$4,233,0614,105,6393,986,1513,929,1883,895,397Yield4.27%4.314.374.454.42 Allowance for loan losses$(252,049) (256,102) (254,177) (257,167) (268,659) Loans, net(3)$21,865,67321,372,27221,029,10420,848,66220,583,032Yield4.08%4.104.144.194.22 Mortgage loans held for sale$50,66869,43890,41964,50760,892Yield3.84%3.823.393.923.84
Federal funds sold, due from Federal Reserve Bank, and other short-term investments
$1,081,6041,380,6861,590,1141,123,250898,871Yield0.27%0.240.240.240.23 Federal Home Loan Bank and Federal Reserve Bank stock(5)$66,79071,85276,09180,81375,547Yield5.08%4.714.573.904.53 Total interest earning assets$26,558,33826,286,57825,968,40025,134,98424,664,020Yield 3.63 %3.60 3.61 3.73 3.78 Interest Bearing Liabilities Interest bearing demand deposits$4,117,1163,955,8033,919,4013,800,4763,781,389Rate0.17%0.180.180.190.19 Money market accounts$7,062,5176,893,5636,466,6106,210,7046,009,897Rate0.35%0.360.350.320.29 Savings deposits$692,536685,813675,260649,597638,813Rate0.06%0.060.060.050.07 Time deposits under $100,000$1,307,6011,338,9941,351,2991,324,5131,315,905Rate0.65%0.660.680.610.57 Time deposits over $100,000$2,033,1932,086,8512,061,4341,926,3801,877,602Rate0.88%0.880.880.800.76 Brokered money market accounts$297,925221,817185,909181,754191,103Rate0.31%0.310.310.300.28 Brokered time deposits$887,1681,135,3461,370,0221,413,0681,411,252Rate0.76 %0.71 0.67 0.63 0.58 Total interest bearing deposits$16,398,05616,318,18716,029,93515,506,49215,225,961Rate0.40%0.420.420.390.36
Federal funds purchased and securities sold under repurchase agreements
$158,810207,894232,531222,658186,993Rate0.08%0.090.080.080.07 Long-term debt$2,007,9242,073,1852,173,5952,207,2152,084,636Rate2.63%2.462.392.412.55 Total interest bearing liabilities$18,564,79018,599,26618,436,06117,936,36517,497,590Rate 0.65 %0.65 0.65 0.63 0.62 Non-interest bearing demand deposits$6,846,2006,541,8326,436,1676,108,5586,110,047 Effective cost of funds0.45%0.460.460.450.44 Net interest margin 3.18 %3.14 3.15 3.28 3.34 Taxable equivalent adjustment$311315330349372 (1) Yields and rates are annualized.(2) Excludes net unrealized gains and losses.(3) Average loans are shown net of unearned income. Non-performing loans are included.
(4) Reflects taxable-equivalent adjustments, using the statutory federal income tax rate of 35%, in adjusting interest on tax-exempt loans and investment securities to a taxable-equivalent basis.
(5) Included as a component of Other Assets on the consolidated balance sheet
Synovus
LOANS OUTSTANDING AND NON-PERFORMING LOANS COMPOSITION(Unaudited)(Dollars in thousands)
December 31, 2015
Loans as a %TotalNon-performing Loansof Total LoansNon-performingas a % of Total
Loan Type
Total Loans Outstanding Loans Nonperforming Loans Multi-Family
$
1,391,453
6.2
%
$
223
$
0.1
%
Hotels703,8253.13810.2Office Buildings1,495,2476.71,1700.7Shopping Centers956,3944.39070.5Commercial Development92,8090.48,9415.3Warehouses563,2172.52080.1Other Investment Property 548,686 2.4 11,210 6.7 Total Investment Properties5,751,63125.623,04013.7 1-4 Family Construction168,2430.8-0.01-4 Family Investment Mortgage786,7973.57,7084.6Residential Development 154,814 0.7 9,130 5.4 Total 1-4 Family Properties1,109,8544.916,83810.0 Land Acquisition 513,981 2.2 17,768 10.6 Total Commercial Real Estate 7,375,466 32.9 57,646 34.3
Commercial, Financial, and Agricultural
6,472,48228.849,13729.1Owner-Occupied 4,318,950 19.3 20,294 12.1 Total Commercial & Industrial 10,791,432 48.1 69,431 41.2 Home Equity Lines1,689,9147.516,4809.8Consumer Mortgages1,938,6838.622,24813.2Credit Cards240,8511.2--Other Retail Loans 423,318 1.9 2,565 1.5 Total Retail 4,292,766 19.1 41,293 24.5 Unearned Income (30,099)(0.1) -nm Total
$
22,429,565
100.0
%
$
168,370
100.0
%
LOANS OUTSTANDING BY TYPE COMPARISON(Unaudited)(Dollars in thousands) Total Loans4Q15 vs. 3Q154Q15 vs. 4Q14Loan TypeDecember 31, 2015 September 30, 2015 % change(1) December 31, 2014 % change Multi-Family
$
1,391,453
1,345,688
13.5
%
$
1,205,095
15.5
%
Hotels703,825684,10611.4697,9870.8Office Buildings1,495,2471,388,96530.41,196,53725.0Shopping Centers956,394944,6904.9881,8218.5Commercial Development92,809101,946(35.6)121,990(23.9)Warehouses563,217545,34613.0559,3200.7Other Investment Property 548,686 546,835 1.3 543,925 0.9 Total Investment Properties5,751,6315,557,57613.95,206,67510.5 1-4 Family Construction168,243159,23722.4143,61917.11-4 Family Investment Mortgage786,797777,1964.9813,047(3.2)Residential Development 154,814 158,120 (8.3) 177,217 (12.6) Total 1-4 Family Properties1,109,8541,094,5535.51,133,883(2.1) Land Acquisition 513,981 538,127 (17.
586,045 (12.3) Total Commercial Real Estate 7,375,466 7,190,256 10.2 6,926,603 6.5 Commercial, Financial, and Agricultural6,472,4826,277,76812.36,182,3114.7Owner-Occupied 4,318,950 4,265,409 5.0 4,085,407 5.7 Total Commercial & Industrial 10,791,432 10,543,177 9.3 10,267,718 5.1 Home Equity Lines1,689,9141,684,0461.41,683,9980.4Consumer Mortgages1,938,6831,888,45610.61,694,06114.4Credit Cards240,851241,315(0.8)253,649(5.0)Other Retail Loans 423,318 345,426 89.5 302,460 40.0 Total Retail 4,292,766 4,159,243 12.7 3,934,168 9.1 Unearned Income (30,099)(28,367)24.2 (30,790)(2.2) Total $
22,429,565
21,864,309
10.3
%
$
21,097,699
6.3
%
(1) Percentage change is annualized.
Synovus CREDIT QUALITY DATA(Unaudited)(Dollars in thousands)2015 20144th QuarterFourthThirdSecondFirstFourth'15 vs. '14Quarter Quarter Quarter Quarter QuarterChange Non-performing Loans
$
168,370
157,640173,638194,232197,757
(14.9
)%
Other Loans Held for Sale(1)---1,0823,606(100.0)Other Real Estate 47,030 64,34666,44974,79185,472(45.0)Non-performing Assets215,400221,986240,087270,105286,835(24.9) Allowance for loan losses252,496250,900254,702253,371261,317(3.4) Net Charge-Offs - Quarter3,4256,7585,30612,34316,253(78.9)Net Charge-Offs - YTD27,83124,40717,64912,34379,055(64.8)Net Charge-Offs / Average Loans - Quarter (2)
0.06
%
0.120.100.230.31Net Charge-Offs / Average Loans - YTD(2)0.130.150.170.230.39 Non-performing Loans / Loans0.750.720.810.920.94Non-performing Assets / Loans, Other Loans Held for Sale & ORE0.961.011.111.281.35Allowance / Loans1.131.151.181.201.24 Allowance / Non-performing Loans149.96159.16146.69130.45132.14Allowance / Non-performing Loans (3)189.47205.90202.08197.55197.22
Past Due Loans over 90 days and Still Accruing
$
2,621
2,9984,8325,0254,637
(43.5
)%
As a Percentage of Loans Outstanding
0.01
%
0.010.020.020.02 Total Past Due Loans and Still Accruing
$
47,912
39,35050,86057,44351,251(6.5)As a Percentage of Loans Outstanding
0.21
%
0.180.240.270.24 Accruing Troubled Debt Restructurings (TDRs)
$
223,873
240,370268,542313,362348,427(35.7) (1) Represent impaired loans that are intended to be sold. Held for sale loans are carried at the lower of cost or fair value, less costs to sell.(2) Ratio is annualized.(3) Excludes non-performing loans for which the expected loss has been charged off. SELECTED CAPITAL INFORMATION(1)(Unaudited)(Dollars in thousands)
December 31, 2015
September 30, 2015December 31, 2014 Capital Rules in effect:Basel IIIBasel IIIBasel I Tier 1 Capital
$
2,660,015
2,637,4622,543,625Total Risk-Based Capital3,255,7572,990,0992,987,406Common Equity Tier 1 Ratio (transitional)
10.37
%
10.60naCommon Equity Tier 1 Ratio (fully phased-in)9.779.98naTier 1 Common Equity Rationana10.28Tier 1 Capital Ratio10.3710.6010.86Total Risk-Based Capital Ratio12.7012.0212.75Tier 1 Leverage Ratio9.439.459.67Common Equity as a Percentage of Total Assets(2)9.9810.2610.78
Tangible Common Equity as a Percentage of Tangible Assets (3)
9.9010.1810.69
Tangible Common Equity as a Percentage of Risk Weighted Assets (3)
11.1111.5412.33Book Value Per Common Share (4)22.1922.1321.42Tangible Book Value Per Common Share (3)21.9921.9421.23
(1) Current quarter regulatory capital information is preliminary. 2015 regulatory capital ratios determined under Basel III capital rules. 2014 ratios were determined under Basel I capital rules.
(2) Common equity consists of Total Shareholders' Equity less Preferred Stock.(3) Excludes the carrying value of goodwill and other intangible assets from common equity and total assets.(4) Book Value Per Common Share consists of Total Shareholders' Equity less Preferred Stock divided by total common shares outstanding.
[1] Include service charges on deposit accounts, bankcard fees, letter of credit fees, ATM fee income, line of credit non-usage fees, and miscellaneous other service charges.

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Synovus Financial Corp.
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Media Relations
or
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