|
Open Letter to Our Shareholders
Dear Shareholders,
On January 28, we reported our fourth quarter earnings and officially closed the books on 2009. It was a challenging year for our industry, our region and our bank. The good news is we believe we are on firm footing heading into 2010. We are planning to take some additional steps that will further advance our plan to emerge stronger from these challenging times and return to profitability later this year.
Our fourth quarter 2009 earnings demonstrate our continued aggressive management of credit losses. As we look into 2010, we expect our credit costs to continue to decline, our net interest margin to improve and our capital ratios to continue to exceed current regulatory standards. We will also remain focused on continuing core deposit growth and managing expenses.
Along with our earnings, we disclosed two important steps we will take during first quarter 2010 to ensure we continue momentum toward a return to profitability later this year:
Charter Consolidation
During 2010, Synovus expects to transition from 30 charters to a single charter, pending receipt of regulatory approvals. This legal change in our charter structure will enable us to better manage our capital, cash flow and risk amidst the evolving regulatory environment, and simplify our complex regulatory oversight currently shared by seven state and federal agencies. This change DOES NOT affect our relationship-based business model in any way. Local bankers will continue to make local decisions that are best for their customers. Relationships have always been the heart of our approach to doing business and will continue to differentiate the way we serve customers. As our local bankers spend less time and resources preparing for multiple visits from regulators, they can spend more time focusing on what we do best: community banking.
Merchant Services Portfolio Divestiture
We are taking the next steps in the capital plan we laid out in 2009, which includes raising non-dilutive capital to fortify our already strong capital reserves through Synovus-affiliate Columbus Bank and Trust’s pursuit of the sale of its portfolio of Merchant Services accounts. The sale of the portfolio means that the servicing of these accounts will be provided by the acquiring company, although we will maintain our relationships with these merchant banking customers. The final decision on this potential sale will be made during the first quarter. Selling the portfolio of Merchant Services accounts is expected to generate significant non-dilutive capital for our company.
Optimism About 2010
These decisions reflect the broader strategic approach we are taking to emerge stronger in 2010. More than ever before, we are relying on our core strengths to build our business. This starts with relationship banking, which empowers each of our banks to get to know and make the right decisions for their customers. We are focused specifically on relationship-based banking with small to medium sized businesses because that is where our approach to banking brings real value through customized, flexible solutions and access to sophisticated products, services and banking expertise. Lastly, asset disposition, deposit growth, and risk and expense management will continue to be priorities going forward.
Looking ahead, I remain optimistic about the vitality of the Southeast economy. Despite the challenging economic environment, Synovus’ five-state footprint extends across some of the most promising markets in the country. In our back yard, median household income growth for the next five years is projected to be 6.49%, versus 4.06% for the entire U.S.
Thank you for your continued support for and interest in our company. I believe 2010 will put Synovus firmly on the road to long-term, sustainable growth, and I look forward to having you as a vital part of the journey.
Sincerely,
Richard Anthony
|
