Synovus release results of 2Q earnings -, GA News Weather & Sports

Synovus release results of 2Q earnings

COLUMBUS, GA - Synovus announced Thursday its results of operations for the second quarter of 2009.

During the quarter, Synovus took aggressive steps with its asset disposition program and reserve build. The Company's core operating results for the quarter improved, and the Company believes it has the opportunity to return to profitability during 2010.

Business Highlights

  • Net loss for the second quarter of 2009 was $586.9 million, or $1.82 per common share, compared to net income of $12.1 million, or $0.04 per diluted share, for the second quarter of 2008.
  • The second quarter results reflect an effective tax rate of 11.9% versus 38.4% in the previous quarter. The lower tax benefit is primarily driven by a non-cash charge of approximately $170 million to record an increase in the valuation allowance for deferred tax assets, in accordance with the requirements of Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes." This charge does not preclude Synovus from carrying back current year operating losses to obtain refunds from prior periods or using net deferred tax assets to offset future taxable income.
  • Total credit costs for the second quarter were $807.8 million, including provision expense of $631.5 million and foreclosed real estate costs of $172.4 million. These costs were largely driven by a significant increase in the allowance for loan losses as well as the impact of losses on liquidations of non-performing assets.
  • Pre-tax, Pre-credit Costs Income was $144.8 million, up $15.6 million over the first quarter of 2009.
  • Net Interest Margin was 3.23%, up 18 basis points from 3.05% in the first quarter of 2009.
  • Non-performing Assets were down $15.0 million from the first quarter of 2009, as dispositions of non-performing assets reached $404 million in the second quarter.
  • Allowance for Loan Losses increased $276.3 million in the quarter to 3.33% of total loans.
  • Total Past Due Loans and Still Accruing were down $255.3 million in the quarter to 1.20% of loans outstanding, compared to 2.12% in the first quarter of 2009.
  • Mortgage revenues increased $5.3 million from the first quarter of 2009 to $14.6 million in the second quarter of 2009.
  • Capital Ratios - Tangible Common Equity to Tangible Assets Ratio was 6.05%, Tier 1 Capital Ratio was 9.52%, and Total Risk-Based Capital Ratio was 12.76%.
  • Salaries and other personnel expenses were $109.3 million for the quarter, down $2.7 million from the first quarter of 2009. Total employees were 6,465 compared to 6,720 at the end of the first quarter of 2009. Expenses for the quarter reflect the $16.6 million FDIC special assessment.

"Our aggressive approach of charging down and disposing of non-performing assets led to a reduction of these problem assets in the quarter," said Richard Anthony, Chairman and CEO.

"Additionally, we experienced an increase in pre-tax, pre-credit costs income for the first time in the last four quarters which we believe demonstrates our core earnings potential in a more favorable credit environment. With our current capital position, we believe that we will be able to come out of this credit crisis as a strong bank holding company.

We are committed to doing everything we can to return to profitability, repay the U.S. Treasury, and restore our dividend as soon as possible."

Synovus hosted an earnings highlights conference on July 23, 2009.

Source: Synovus


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