- News Releases
- Synovus Announces Changes to Board of Directors
- Synovus Announces REACH Awards
- Synovus Presents Annual Awards
- Synovus Receives 20 Customer Service Excellence Awards in Middle and Small Business Banking
- Kamensky Named Synovus Executive Vice President and General Counsel
- Synovus Reports Earnings for Fourth Quarter of 2013
- Dunlevie Named Managing Director of Synovus Family Asset Management
- Synovus Announces Quarterly Stock Dividend
|Synovus Reports Net Loss of $0.08 per Share for Third Quarter 2008
“Credit issues, along with a weakening economy, created the need for aggressive actions to appropriately value, write down and dispose of problem credits,” said Richard Anthony, Chairman and CEO. “Additionally, we have grown our deposits to enhance our liquidity position and plan to participate in the capital purchase program announced by the Treasury Department on
The ratio of nonperforming assets to loans, impaired loans held for sale, and other real estate was 3.58%, as of
During the third quarter, Synovus reassessed its largest loans, representing approximately 14% of the entire portfolio. While all except for one of these loans were performing, Synovus concluded that the financial condition of certain borrowers had weakened. This resulted in the downgrade of certain credits and a corresponding increase in provision expense of $40 million in the quarter.
In the current environment, Synovus has focused on growing deposits faster than loans. Total deposits grew 27.8% (annualized) on a sequential quarter basis, while Federal funds purchased were reduced by 88.6% enhancing Synovus’ overall liquidity position. Total core deposits (excludes brokered deposits) grew 4.3% (annualized) on a sequential quarter basis.
Total loans grew 2.9% (annualized) on a sequential quarter basis. The net interest margin for the quarter was 3.42%, compared to 3.57% last quarter and 3.97% in the third quarter of 2007. Net interest income for the third quarter was $267.8 million compared to $290.8 million in the third quarter of 2007.
Non-interest expense was $258.8 million for the quarter, up $46.4 million compared to the third quarter last year. The increase consists primarily of a $41.5 million increase in losses and costs related to foreclosed real estate (which includes a $17 million loss related to the aforementioned auctions), $9.0 million in restructuring charges associated with Project Optimus, and a $3.4 million increase in FDIC insurance and other regulatory fees. Core non-interest expense was down from the same period last year primarily due to a headcount reduction of 274 during the third quarter of 2008.
Shareholders’ equity as of
During the three months ended
Anthony concluded, “As we look out into the fourth quarter of 2008, we believe that the third quarter elevated level of charge-offs and loan loss provision should decrease and should drive improved performance in the quarter as compared to the third quarter. In looking out to 2009, based upon our assumptions regarding current economic conditions and credit conditions persisting throughout 2009, we believe that the 2009 charge-off ratio will be in the 1.15% to 1.30% range.”
Synovus will host an earnings highlights conference call at
Synovus (NYSE: “
This press release and certain of our other filings with the Securities and Exchange Commission contains statements that constitute “forward-looking statements” within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934 as amended by the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, among others, our expectations that we we will be able to participate in the U.S. Treasury’s capital purchase program and the level of our participation, expected reductions in non-performing assets as a result of asset sales, any additional impact to our third quarter earnings from the completion of our annual goodwill impairment evaluation or the settlement of the Visa litigation, and our expectations regarding our charge-offs and charge-off ratio, loan loss provision, and credit during the remainder of 2008 and 2009 and the assumptions underlying our expectations. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. A number of important factors could cause actual results to differ materially from those contemplated by the forward- looking statements in this press release and our filings with the Securities and Exchange Commission. Many of these factors are beyond Synovus’ ability to control or predict. Factors that could cause actual results to differ materially from those contemplated in this press release and our filings with the Securities and Exchange Commission include: (1) further deteriorations in credit quality, particularly in residential construction and development loans, may continue to result in increased non-performing assets and credit losses, which will adversely impact us; (2) declining values of residential real estate may result in further write-downs of assets, which may increase our credit losses and negatively affect our financial results; (3) our ability to manage fluctuations in the value of our assets and liabilities to maintain sufficient capital and liquidity to support our operations; (4) continuing deteriorations in general economic conditions and conditions in the financial markets; (5) inadequacy of our allowance for loan losses, or the risk that the allowance may prove to be inadequate or may be negatively affected by credit risk exposures; (6) changes in the interest rate environment which may increase funding costs and reduce earning assets yields, thus reducing margins; (7) changes in accounting standards, particularly those related to determination of allowance for loan losses and fair value of assets; (8) slower than anticipated rates of growth in non-interest income; (9) impact of the Emergency Economic Stabilization Act and other recent and proposed changes in the regulation of banks and financial institutions; (10) restrictions or limitations on access to funds from subsidiaries, thereby restricting our ability to make payments on our obligations or dividend payments; (11) risks associated with litigation; (12) inability to satisfy all conditions required to participate in the U.S. Treasury’s capital participation program or to otherwise access the capital markets on terms that are satisfactory; (13) the volatility of our stock price; (14) and the other factors set forth in Synovus’ filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K, 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. We do not assume any obligation to update any forward-looking statements as a result of new information, future developments or otherwise.