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|Synovus Reports Earnings of $713 Million for Fourth Quarter of 2012
January 22, 2013
Distressed Asset Sales Drive Acceleration of Credit Quality Improvement Results Reflect Deferred Tax Asset Recapture
Columbus, Ga., January 22, 2013 – Synovus Financial Corp. (NYSE: SNV) today reported financial results for the quarter ended December 31, 2012.
Fourth Quarter Results
“Our fourth quarter performance represents another huge step forward for our company,” said Kessel D. Stelling, Chairman and CEO of Synovus. “The recapture of the deferred tax asset is a significant milestone that reflects years of progress and further demonstrates our company’s return to a position of strength. Additionally, the successful execution of the bulk sale during the fourth quarter accelerates credit quality improvement and also enhances our future financial performance.”
Pre-tax, pre-credit costs income was $108.0 million for the fourth quarter of 2012, down $3.5 million from $111.5 million for the third quarter of 2012.
“We have made substantial progress in aligning our operating costs with the current size of our organization,” said Stelling. “Core expenses decreased by $25.1 million and $95.3 million in 2012 and 2011, respectively, reflecting the impact of the efficiency initiatives implemented during those two years. We have identified new expense savings initiatives of approximately $30 million, with the implementation of these initiatives already underway and continuing throughout 2013. We remain keenly focused on improving efficiency while we also strategically invest in talent and infrastructure that drive growth and improve our customers’ experience.”
Balance Sheet Fundamentals
Stelling concluded, “While we are certainly mindful of the continued headwinds facing our entire industry, including slow growth as well as economic and political uncertainty, we are encouraged by our momentum heading into 2013. Our deferred tax asset recapture and a successful bulk sale are behind us, and we expect to repay TARP by the end of this year. Our customers remain our primary focus, and the efforts of our dedicated bankers, along with our relationship style of banking, continue to drive improved performance across our footprint, as evidenced by net loan growth of $345.4 million for the fourth quarter and $588.8 million for the year. We also saw positive growth trends in mortgage and investment services during 2012, and our Family Asset Management team was recently recognized by Bloomberg Markets Magazine as one of the ‘Top 50 Family Offices’ in the world. This has been a transformational year for our company, and I want to thank all of our team members for their loyalty, perseverance, and intense passion for serving our customers and communities. I also want to thank our customers for their continued trust and confidence in us. We look forward to earning the right to be their bank for many years to come.”
Synovus will host an earnings highlights conference call at 8:30 a.m. EST on January 22, 2013. The earnings call will be accompanied by a slide presentation. Shareholders and other interested parties can access the slide presentation and listen to the conference call via simultaneous Internet broadcast at www.synovus.com/webcasts. RealPlayer or Windows Media Player can be downloaded 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.
This press release and certain of our other filings with the Securities and Exchange Commission contain statements that constitute “forward-looking statements” within the meaning of, and subject to the protections of, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are forward-looking statements. You can identify these forward-looking statements through Synovus’ use of words such as “believes,” “anticipates,” “expects,” “may,” “will,” “assumes,” “should,” “predicts,” “could,” “would,” “intends,” “targets,” “estimates,” “projects,” “plans,” “potential” and other similar words and expressions of the future or otherwise regarding the outlook for Synovus’ future business and financial performance and/or the performance of the commercial banking industry and economy in general. These forward-looking statements include, among others, our expectations on credit trends and key credit metrics (including classified assets and NPL inflows), deposits, loan growth and our loan portfolio; expectations on growth and future profitability; expectations regarding the deferred tax asset, including realization of the net deferred tax asset and on our ability to include all of the deferred tax asset in future regulatory capital; our expectations regarding repayment of our obligations under TARP; expectations regarding the impact of our ongoing efficiency initiatives and future cost savings; and the assumptions underlying our expectations. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve known and unknown risks and uncertainties which may cause the actual results, performance or achievements of Synovus to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are based on the information known to, and current beliefs and expectations of, Synovus’ management and are subject to significant risks and uncertainties. Actual results may differ materially from those contemplated by such forward-looking statements. A number of factors could cause actual results to differ materially from those contemplated by the forward-looking statements in this report. Many of these factors are beyond Synovus’ ability to control or predict.
These forward-looking statements are based upon information presently known to Synovus’ management and are inherently subjective, uncertain and subject to change due to any number of risks and uncertainties, including, without limitation, the risks and other factors set forth in Synovus’ filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2011 under the captions “Cautionary Notice Regarding Forward-Looking Statements” and “Risk Factors” and in Synovus’ 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 and speak only as of the date that they are made. We do not assume any obligation to update any forward-looking statements as a result of new information, future developments or otherwise, except as otherwise may be required by law.
Use of Non-GAAP Financial Measures
The measures entitled core deposits, core deposits excluding time deposits, Tier 1 common equity ratio, tangible common equity to tangible assets ratio, tangible book value per common share, pre-tax, pre-credit costs income, core expenses, non-interest income excluding investment securities gains, net and net sequential quarter loan growth (decline) are not measures recognized under U.S. generally accepted accounting principles (GAAP) and therefore are considered non-GAAP financial measures. The most comparable GAAP measures are total deposits, total shareholders’ equity to total assets ratio, book value per common share, income (loss) before income taxes, total non-interest expense, total non-interest income, and sequential quarter total loan growth (decline), respectively.
Synovus believes that these non-GAAP financial measures provide meaningful additional information about Synovus to assist management and investors in evaluating Synovus’ capital strength and the performance of its core business. These non-GAAP financial measures should not be considered as substitutes for total deposits, total shareholders’ equity to total assets ratio, book value per common share, (loss) income before income taxes, total non-interest expense, total non-interest income, or sequential quarter total loan growth (decline) determined in accordance with GAAP and may not be comparable to other similarly titled measures at other companies.
The computations of core deposits, core deposits excluding time deposits, Tier 1 common equity ratio, tangible common equity to tangible assets ratio, tangible book value per common share, pre-tax, pre-credit costs income, core expenses, non-interest income excluding investment gains, net and net sequential quarter loan growth (decline) and the reconciliation of these measures to total deposits, total shareholders’ equity to total assets ratio, book value per common share, (loss) income before income taxes, total non-interest expense, total non-interest income, and sequential quarter total loan growth (decline) are set forth in the attached tables.