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Synovus Reports Earnings per Share of $1.60 for 2007
 
Earnings per share of $1.76 for 2007 excluding expenses related to TSYS spin-off and Visa litigation

Columbus, Ga., January 24, 2008 - Synovus reports diluted earnings per share of $1.60 for 2007 compared to $1.90 for 2006. Net income was $526.3 million for the year compared to $616.9 million last year. The 2007 results include $31.0 million (net of income taxes and minority interest) in expenses related to the distribution of Synovus’ ownership interest in TSYS to Synovus’ shareholders in a spin-off transaction and $22.5 million (net of income taxes) of litigation expenses associated with indemnification obligations arising from Synovus’ ownership interest in Visa. Excluding these expenses, diluted earnings per share for 2007 was $1.76. The 2006 results included $33.2 million (net of income taxes and minority interest) for the impact of the Bank of America contract termination fee of $68.9 million, which was partially offset by the acceleration of the amortization of related contract acquisition costs of $6.0 million. Excluding these items, diluted earnings per share for 2006 was $1.80.

For the fourth quarter, diluted earnings per share was $0.25 compared to $0.54 for the fourth quarter of 2006. Net income was $81.9 million for the fourth quarter compared to $175.5 million for the same period last year. The fourth quarter of 2007 results include $25.0 million (net of income taxes and minority interest) in expenses related to the distribution of Synovus’ ownership interest in TSYS to Synovus’ shareholders in a spin-off transaction and $15.2 million (net of income taxes) in Visa litigation expenses. Excluding these expenses and the aforementioned 2006 contract termination fee, diluted earnings per share for the fourth quarter of 2007 was $0.37, compared to $0.44 in the same period a year ago.

Shareholders’ equity at December 31, 2007, was $3.44 billion, which representeda strong 10.45% of year-end assets. Total assets ended the year at $32.9 billion, an increase of 3.3% over December 31, 2006. The ratio of nonperforming assets to loans and other real estate was 1.67%, compared to 1.16% last quarter and 0.50% at December 31, 2006. The net charge-off ratio for the fourth quarter of 2007 was 0.91% compared to 0.51% last quarter and 0.39% in the fourth quarter of last year. The allowance for loan losses at December 31, 2007 was 1.39% of loans, compared to 1.38% last quarter and 1.28% at December 31, 2006. The provision for loan losses covered net charge-offs by 1.18x for the quarter.

Synovus Chairman and Chief Executive Officer Richard E. Anthony said, “2007 was a challenging year for credit. We continued to experience further weakness in our residential construction and residential development portfolios. These loan categories represent 54.1% of nonperforming loans at the end of the year and 41.7% of net charge-offs recognized in 2007. We continue to take actions to aggressively manage these portfolios. The increases in nonperforming residential construction and development loans were in the panhandle of Florida, Atlanta, and Tampa Bay areas. At December 31, 2007, 70% of Synovus’ total nonperforming assets and 81% of total residential construction and development nonperforming loans are in these markets.”

Income from continuing operations (which represents the previously reported net income for the Financial Services segment) was $53.1 million for the fourth quarter of 2007 compared to $105.0 million for the fourth quarter last year. Excluding the Visa litigation related expenses, fourth quarter 2007 income from continuing operations was $68.3 million. Net interest income was $286.7 million compared to $288.9 million in the fourth quarter of last year. Total loans grew 7.5% in 2007. On a sequential quarter basis (annualized), commercial and industrial loans grew 8.7% and retail loans grew 13.5% while commercial real estate loans grew 12.5%. Residential construction and development loans declined 1.9%. Total core deposits (excludes brokered time deposits) increased 0.7% over the fourth quarter of 2006. The net interest margin for the quarter was 3.86%, compared to 3.97% last quarter and 4.16% in the fourth quarter of last year. Of the 11 basis point decrease in the net interest margin from the previous quarter, 7 basis points were due to a higher level of interest charge-offs and non-performing assets.

Non-interest income was up 1.4% over the fourth quarter last year with increases in brokerage and investment banking revenue of 27.9%, fiduciary and asset management fees – which include trust, financial planning and asset management fees – of 1.5%, and bankcard fees of 10.5%.

Discontinued Operations
In accordance with the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” and SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities,” the current period and historical consolidated results of operations of TSYS, as well as all costs associated with the spin-off of TSYS, are now presented as a component of income from discontinued operations.

The following table shows the components of income from discontinued operations for the three and twelve months ended December 31, 2007 and 2006:

             
 

Three Months Ended

   

 Years Ended

   
 

           December 31,          

   

           December 31,         

   

(In thousands)

      2007     

      2006    

   

      2007     

      2006    

   
                 

TSYS net income, net of minority interest.......

$      53,720

        70,571

 

 

      210,147

      201,814

   

(excluding spin-off related expenses)

     

 

       

Spin-off related expenses, net of income taxes:

     

 

       

   TSYS, net of minority interest.....................

       (16,880)

                --

 

 

       (18,248)

                --

   

Financial Services........................................

         (8,123)

                --

 

 

       (12,729)

                --

   
       

 

       

Gain on transfer of mutual funds, net of income taxes................................................

 

                 --

 

                --

 

 

 

          4,200

 

                --

   

Total income from discontinued operations, net of income taxes and minority interest....

 

$      28,717

 

        70,571

 

 

 

      183,370

 

      201,814

   
       

 

       

Non-GAAP Financial Measures
Presentation of net income and diluted net income per share excluding the expenses associated with the Visa litigation, TSYS spin-off, and Bank of America termination fee are non-GAAP (Generally Accepted Accounting Principles) financial measures. The following tables reconcile net income and diluted net income per share, comparing non-GAAP financial measures to GAAP financial measures:

             
 

Three Months Ended

   

Year Ended

   
 

           December 31,          

   

           December 31,         

   

(In thousands, except per share data)

      2007    

      2006     

% Chg

 

      2007    

      2006     

% Chg

 
                 

Consolidated:

     

 

       

   Net income, as reported.........................

$      81,859

      175,547

(53.4%)

 

      526,305

      616,917

(14.7%)

 

Visa litigation expense, net of income taxes...................................................

        15,144

                 --

  nm

 

        22,478

                 --

  nm

 

Spin-off related expenses, net of income taxes and minority interest..................

 

        25,003

 

                 --

 

  nm   

 

 

        30,977

 

                 --

 

  nm   

 

Bank of America termination fee, net of accelerated amortization, income taxes, and minority interest...........................

 

                --

 

       (33,200)                  

 

  nm   

 

 

                --

 

       (33,200)

 

  nm   

 

      Net income, as adjusted......................

$    122,006

      142,347

(14.3%)

 

      579,760

      583,717

  (0.7%)

 
       

 

       

Diluted net income per share:

     

 

       

Net income, as reported.........................

$          0.25

            0.54

(53.6%)

 

            1.60

            1.90

(16.1%)

 

Visa litigation expense, net of income taxes...................................................

            0.05

                 --

  nm

 

            0.07

                 --

  nm

 

Spin-off related expenses, net of income taxes and minority interest..................

 

            0.07

 

                 --

 

  nm   

 

 

            0.09

 

                 --

 

  nm   

 

Bank of America termination fee, net of accelerated amortization, income taxes, and minority interest...........................

 

                --

 

          (0.10)

 

  nm   

 

 

                --

 

          (0.10)

 

  nm   

 

      Diluted net income per share, as adjusted.....................................................

$          0.37

            0.44

(14.6%)

 

            1.76

            1.80

  (2.4%)

 
       

 

       

Notes:
nm = not meaningful

     

 

       

             
 

Three Months Ended

   

Year Ended

   
 

           December 31,          

   

           December 31,         

   

(In thousands, except per share data)

      2007    

      2006    

% Chg

 

      2007    

      2006    

% Chg

 
                 

 

     

 

       

   Income from continuing operations, as                                        reported.............................................     

 

$      53,142

 

      104,976

    
(49.4%)

 

 

      342,935

 

 

 
SNV 4Q2007 Earnings Charts.pdf SNV 4Q2007 Earnings Charts
 
Contact
Patrick A. Reynolds
Title: Director of Investor Relations
Phone: (706) 649-4973