Synovus Financial Corp (SNV) Q3 2024 Earnings Call Highlights: Strong EPS Growth and Record ...

GuruFocus News
4 min read

In This Article:

  • GAAP Earnings Per Share (EPS): $1.18, including an $8.7 million Visa valuation adjustment.

  • Adjusted Diluted EPS: $1.23, a 6% sequential increase.

  • Net Interest Margin: Increased 2 basis points to 3.22%.

  • Net Charge-Offs: Improved to 25 basis points from 32 basis points in the previous quarter.

  • Common Equity Tier 1 Ratio: 10.65%, the highest in 9 years.

  • Net Interest Income: $441 million, a 1% increase quarter over quarter.

  • Adjusted Noninterest Revenue: Declined 4% from the prior quarter but increased 15% year over year.

  • Adjusted Noninterest Expense: Relatively flat quarter over quarter and down 1% year over year.

  • Period-End Loans: Grew by $27 million from the prior quarter.

  • Core Deposit Growth: Increased by 1% on a linked quarter basis.

  • Provision for Credit Losses: Declined 11% from the second quarter to $23 million.

  • Allowance for Credit Losses: Stable at 1.24%.

  • Adjusted Return on Average Assets: 1.3%.

  • Adjusted Return on Tangible Common Equity: 17.1%.

  • Adjusted Tangible Efficiency Ratio: 53%.

Release Date: October 17, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Synovus Financial Corp (NYSE:SNV) reported adjusted diluted EPS of $1.23, a 6% sequential increase, driven by stronger net interest income and lower provision for credit losses.

  • Net interest margin expanded by 2 basis points to 3.22%, with funded loan production rising 8% sequentially.

  • The company demonstrated strong noninterest revenue growth, with a 15% year-over-year increase, supported by commercial sponsorship income and partnerships.

  • Synovus Financial Corp (NYSE:SNV) maintained a strong liquidity and capital position, with the common equity Tier 1 ratio reaching its highest level in 9 years at 10.65%.

  • The company successfully reduced broker deposits for the fifth consecutive quarter, focusing on core funding generation through sales activities and product expansion.

Negative Points

  • Loan paydown and payoff activity, along with strategic rationalization of nonrelationship credit, posed a headwind to third-quarter outstanding growth.

  • Adjusted noninterest revenue declined 4% from the prior quarter, primarily due to lower capital markets income.

  • Nonperforming loans increased to 0.73% of loans, up from 0.59% in the second quarter, primarily due to a single office loan relationship.

  • The criticized and classified ratio rose slightly to 3.9%, indicating a manageable but present level of credit risk.

  • Deposit costs increased by 4 basis points from the prior quarter to 2.72%, influenced by a mix shift and higher average noninterest-bearing deposit balances.

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