Synovus reports results for 1Q 2010

Press Release 

COLUMBUS, GA - Synovus Financial Corp. (NYSE: SNV) announced Tuesday its results of operations for the first quarter of 2010.

Business Highlights

  • The net loss for the first quarter of 2010 was $215.7 million, or $0.47 per common share.
  • The first quarter results include a $43 million after-tax gain from the sale of the merchant services business.
  • Total credit costs for the first quarter were $394.5 million, compared to $427.8 million in the fourth quarter of 2009. Credit costs primarily include provision expense of $341.0 million and foreclosed real estate costs of $45.5 million. Allowances and cumulative write-downs on all remaining non-performing assets are approximately 49% of unpaid principal balances, compared to 45% in the fourth quarter of 2009.
  • Net charge-offs decreased by $45.9 million versus the previous quarter, while non-performing assets were up slightly by $11.5 million, from the fourth quarter of 2009. Non-performing asset inflows totaled $531 million for the quarter, down from $661 million in the fourth quarter.
  • Problem asset disposition strategy remains on track with $271 million in sales for the first quarter.
  • The allowance for loan losses increased 25 basis points, or $25 million, to 3.97% of total loans.
  • Total loans past due and still accruing remained low at 1.21% of total loans.
  • The net interest margin was 3.39%, up 14 basis points from the fourth quarter of 2009. Excluding the negative impact of non-performing assets, the net interest margin was 3.77% for the first quarter.
  • Core deposits grew slightly compared to the fourth quarter of 2009. The mix of core deposits continued to improve with non-interest bearing demand deposits and money market accounts replacing higher priced time deposits.
  • Salaries and other personnel expenses were $104.0 million for the quarter, down $7.1 million, or 6.4% from the first quarter of 2009.
  • As of March 31, 2010, the tangible common equity to tangible assets ratio was 5.08%, Tier 1 Capital Ratio was 9.69%, Tier 1 common equity was 6.04%, and total risk-based capital ratio was 13.04%.

"During the quarter, we continued our aggressive approach of recognizing, charging down, and disposing of non-performing assets," said Richard Anthony, Chairman and CEO.

"For the fourth consecutive quarter, our non-performing asset inflows declined, a trend which we believe to be the best predictor of future credit costs.

Our core deposit mix continued to improve with solid growth in non-interest bearing deposits and money market accounts. As we look into the future, we expect our credit costs will continue to decline and that our capital ratios will exceed current regulatory standards as we pursue all alternatives to bolster our capital position.

With the expected decline in credit costs, which will drive a reduction in the loan loss reserve, we continue to believe that we have an opportunity to return to profitability at some point during 2010.

Additionally, we look forward to the recovery of the regulatory allowable portion of the $550 million valuation allowance for deferred tax assets once we demonstrate a sustainable return to profitability."

Synovus today reaffirms that it continues to identify, consider, and pursue additional strategic initiatives to bolster its capital position, including potential capital market transactions, additional liability management initiatives, and certain non-dilutive transactions.

Synovus is exploring these strategic initiatives in response to, among other factors, regulatory expectations, evolving industry capital standards, and a challenging economic environment. Among the transactions being considered are those that would raise significant amounts of cash and non-cash capital.

Synovus will host an earnings highlights conference call at 4:30 pm EDT, on April 20, 2010. The earnings call will be accompanied by a slide presentation.

Shareholders and other interested persons may access the slide presentation and listen to this conference call via simultaneous Internet broadcast at www.synovus.com by clicking on the "Live Webcast" icon. 

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.

Synovus is a financial services holding company with over $32 billion in assets based in Columbus, Georgia. 

Synovus provides commercial and retail banking, as well as investment services, to customers through 327 offices and 461 ATMs in Georgia, Alabama, South Carolina, Florida and Tennessee. 

The company focuses on its unique decentralized customer delivery model, position in high-growth Southeast markets and commitment to being a great place to work to ensure unparalleled customer experiences. See Synovus on the Web at www.synovus.com. 

 Source: Synovus.com