SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
July 24, 2018
Date of Report
(Date of Earliest Event Reported)
Synovus Financial Corp.
(Exact Name of Registrant as Specified in its Charter)
Georgia (State of Incorporation) |
1-10312 (Commission File Number) |
58-1134883 (IRS Employer Identification No.) |
1111 Bay Avenue, Suite 500, Columbus, Georgia 31901
(Address of principal executive offices) (Zip Code)
(706) 649-2311
(Registrants telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 | Results of Operations and Financial Condition |
On July 24, 2018, Synovus Financial Corp. (the Company) issued a press release announcing the Companys financial results for the three and six month period ended June 30, 2018.
Pursuant to General Instruction F to Current Report on Form 8-K, the press release is attached to this Current Report as Exhibit 99.1 and only those portions of the press release related to the historical results of operations of the Company for the three and six month period ended June 30, 2018 are incorporated into this Item 2.02 by reference. The information contained in this Item 2.02, including the information set forth in the press release filed as Exhibit 99.1 to, and incorporated in, this Current Report is being furnished and shall not be deemed filed for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the liabilities of that Section. The information in Exhibit 99.1 furnished pursuant to this Item 2.02 shall not be incorporated by reference into any registration statement or other documents pursuant to the Securities Act of 1933, as amended (the Securities Act), or into any filing or other document pursuant to the Exchange Act except as otherwise expressly stated in any such filing.
Item 7.01 | Regulation FD Disclosure |
On July 24, 2018, the Company made available the supplemental information (the Supplemental Information) and slide presentation (Slide Presentation) prepared for use with the press release. The investor call and webcast will be held at 8:30 a.m., ET, on July 24, 2018.
The information contained in this Item 7.01 of this Current Report, including the information set forth in the Supplemental Information and the Slide Presentation filed as Exhibits 99.2 and Exhibit 99.3 to, and incorporated in, this Current Report, is being furnished and shall not be deemed filed for the purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that Section. The information in Exhibit 99.2 and Exhibit 99.3 furnished pursuant to this Item 7.01 shall not be incorporated by reference into any registration statement or other documents pursuant to the Securities Act or into any filing or other document pursuant to the Exchange Act except as otherwise expressly stated in any such filing.
Item 9.01 | Financial Statements and Exhibits |
(d) | Exhibits | |
Exhibit No. | Description | |
99.1 | Synovus press release dated July 24, 2018 | |
99.2 | Supplemental Information prepared for use with the press release | |
99.3 | Slide presentation prepared for use with the press release |
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, Synovus has caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
SYNOVUS FINANCIAL CORP. | ||||||
(Synovus) | ||||||
Dated: July 24, 2018 | By: | /s/ Allan E. Kamensky | ||||
Allan E. Kamensky | ||||||
Executive Vice President, General | ||||||
Counsel and Secretary |
Exhibit 99.1
Media Contact | Investor Contact | |
Lee Underwood Media Relations (706) 644-0528 |
Steve Adams Investor Relations (706) 641-6462 |
Synovus Announces Earnings for the Second Quarter 2018
Diluted Earnings per Share of $0.91, up 52.7% vs. $0.60 in 2Q17
COLUMBUS, Ga., July 24, 2018 Synovus Financial Corp. (NYSE: SNV) today reported financial results for the quarter ended June 30, 2018.
Second Quarter Highlights
| Net income available to common shareholders was $108.6 million or $0.91 per diluted share as compared to $100.6 million or $0.84 per diluted share for the first quarter 2018 and $73.4 million or $0.60 per diluted share for the second quarter 2017. |
○ | Adjusted earnings per diluted share for the second quarter 2018 were $0.92, up 7.8% from the first quarter 2018 and a 52.6% increase from the second quarter 2017. |
| Return on average assets was 1.42%, up 8 basis points from the previous quarter and up 42 basis points from the second quarter 2017. |
| Return on average common equity was 15.39%, up 77 basis points from the previous quarter and up 505 basis points from the second quarter 2017. |
○ | Adjusted return on average common equity was 15.59%, an improvement of 510 basis points from the second quarter 2017. |
○ | Adjusted return on average tangible common equity was 15.97%, an increase of 522 basis points from the second quarter 2017. |
| Total loans ended the quarter at $25.13 billion, up $251.0 million or 4.0% annualized from the previous quarter and up $703.5 million or 2.9% as compared to the second quarter 2017. |
| Total average deposits grew $480.0 million or 7.5% annualized from the previous quarter and $1.28 billion or 5.1% versus the second quarter 2017. |
| Total ending deposits increased $189.2 million or 2.9% from the previous quarter and increased $1.22 billion or 4.9% from the second quarter 2017. |
| Total revenues1 were $359.3 million, an increase of 12.3% from the prior-year quarter. |
| Net interest margin was 3.86%, up 8 basis points from the previous quarter and up 35 basis points from the second quarter 2017. |
| Efficiency ratio was 56.78%, down 38 basis points from the previous quarter and down 312 basis points from the prior-year quarter. |
| Credit quality metrics remained favorable, with a non-performing asset ratio of 50 basis points, down 3 basis points from the previous quarter and down 23 basis points from the second quarter 2017. |
| The effective tax rate in the second quarter of 2018 was 21.8% compared to 35.5% in the prior-year quarter. |
1 | Total revenues consist of net interest income and non-interest income excluding investment securities gains/(losses). |
| On June 21, Synovus completed a public offering of $200 million of Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series D. |
This was another solid quarter of performance for Synovus, with strong earnings and revenue growth, said Kessel Stelling, Synovus chairman and CEO. During the first half of the year, we successfully completed our transition to a unified brand, completed a public offering of $200 million of Series D Preferred Stock, and were ranked among American Bankers most reputable banks for the fourth consecutive year. We are energized about the strong momentum going into the second half of the year as we focus on growing relationships and strengthening our communities.
Balance Sheet
| Total average loans were $24.95 billion, up $93.9 million or 1.5% annualized from the previous quarter and $596.3 million or 2.4% as compared to the second quarter 2017. |
| Total loans ended the quarter at $25.13 billion, up $251.0 million or 4.0% annualized from the previous quarter and up $703.5 million or 2.9% as compared to the second quarter 2017. |
○ | Commercial and industrial loans grew by $173.6 million or 5.8% annualized from the previous quarter and $532.5 million or 4.5% as compared to the second quarter 2017. |
○ | Consumer loans grew by $267.8 million or 18.0% annualized from the previous quarter and $945.8 million or 17.9% as compared to the second quarter 2017. |
○ | Commercial real estate loans declined by $191.6 million or 11.2% annualized from the previous quarter and declined $778.1 million or 10.5% as compared to the second quarter 2017. |
| Total average deposits were $26.27 billion, up $480.0 million or 7.5% annualized from the previous quarter and $1.28 billion or 5.1% as compared to the second quarter 2017. |
Core Performance
| Total revenues1 were $359.3 million, up $17.9 million or 5.3% from the previous quarter and $39.5 million or 12.3% from the second quarter 2017. |
| Net interest income was $284.6 million, up $10.3 million or 3.8% from the previous quarter and up 13.3% from the second quarter 2017. |
| Net interest margin was 3.86%, up 8 basis points from the previous quarter. Yield on earning assets was 4.46%, up 16 basis points from the previous quarter, and the effective cost of funds was 0.61%, up 8 basis points from the previous quarter. |
| Total non-interest income was $73.4 million, up $6.3 million or 9.5% compared to the previous quarter and up $4.7 million or 6.8% from second quarter 2017. |
○ | Adjusted non-interest income was $74.7 million, up $4.6 million or 6.6% from the previous quarter and up $4.7 million or 6.7% as compared to the second quarter 2017. |
| Core banking fees2 were $37.4 million, up $1.6 million or 4.4% from the previous quarter and $757 thousand or 2.1% year-over-year. |
| Fiduciary and asset management fees, brokerage revenue, and insurance revenues were $24.8 million, up $1.5 million or 6.1% from the previous quarter and 19.1% from the prior-year quarter. |
1 | Total revenues consist of net interest income and non-interest income excluding investment securities gains/(losses). |
2 | Core banking fees include service charges on deposit accounts, card fees, letter of credit fees, ATM fee income, line of credit non-usage fees, gains from sales of government guaranteed loans, and miscellaneous other service charges. |
| Mortgage banking income was $4.8 million, down 4.1% from the previous quarter and down 16.3% from the second quarter 2017. |
| Total non-interest expense was $204.1 million, up $8.9 million or 4.5% from the previous quarter and up 6.4% from the second quarter 2017. |
○ | Second quarter 2018 includes a $2.3 million expense for a valuation adjustment to the Visa derivative, partially offset by a $1.4 million benefit from recovery of litigation settlement expenses. |
| Adjusted non-interest expense was $202.7 million, up $4.9 million or 2.5% from the previous quarter and $11.3 million or 5.9% from the second quarter 2017. |
○ | Employment expense of $111.9 million declined 1.6% from the previous quarter and increased 6.3% from the second quarter 2017. |
○ | Occupancy and equipment expense of $32.7 million increased 3.7% from the previous quarter and increased 9.1% from the prior-year quarter. |
○ | Other expenses of $25.2 million increased $4.8 million or 23.3% from the previous quarter and increased 27.7% from the second quarter 2017. |
○ | Efficiency ratio was 56.78%, compared to 57.16% the previous quarter and 59.90% in the second quarter 2017. |
◾ | Adjusted efficiency ratio was 56.41%, an improvement of 101 basis points from the first quarter 2018 and 315 basis points from the second quarter 2017. |
Credit Quality
| Non-performing loans were $117.3 million at June 30, 2018, down $2.8 million from March 31, 2018, and down $42.0 million or 26.4% from June 30, 2017. The non-performing loan ratio was 0.47% at June 30, 2018, compared to 0.48% at March 31, 2018, and 0.65% at June 30, 2017. |
| Total non-performing assets were $126.3 million at June 30, 2018, down $4.8 million from March 31, 2018 and down $52.6 million or 29.4% from June 30, 2017. The non-performing asset ratio was 0.50% at June 30, 2018, as compared to 0.53% at March 31, 2018, and 0.73% at June 30, 2017. |
| Net charge-offs were $17.8 million in the second quarter 2018, up $13.6 million from $4.3 million in the previous quarter and up $2.2 million from $15.7 million in the second quarter 2017. The annualized net charge-off ratio was 0.29% in the second quarter as compared to 0.07% in the previous quarter and 0.26% in the second quarter 2017. |
| Total delinquencies (consisting of loans 30 or more days past due and still accruing) remained low at 0.22% of total loans at June 30, 2018, unchanged from the previous quarter and down 5 basis points from June 30, 2017. |
Capital
| During the second quarter 2018, Synovus repurchased $50.0 million in common stock, as part of the previously announced share repurchase program of up to $150 million. |
| On June 21, Synovus completed a public offering of $200 million of Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series D. |
| Common Equity Tier 1 ratio was 10.11% at June 30, 2018, compared to 10.09% at March 31, 2018. |
| Tier 1 Capital ratio was 11.25% at June 30, 2018, compared to 10.53% at March 31, 2018. |
| Total Risk Based Capital ratio was 13.07% at June 30, 2018, compared to 12.40% at March 31, 2018. |
| Tier 1 Leverage ratio was 10.03% at June 30, 2018, compared to 9.37% at March 31, 2018. |
| Tangible Common Equity ratio was 8.77% at June 30, 2018, compared to 8.79% at March 31, 2018. |
Second Quarter Earnings Conference Call
Synovus will host an earnings highlights conference call at 8:30 a.m. EDT on July 24, 2018. The earnings call will be accompanied by a slide presentation. Shareholders and other interested parties may listen to this conference call via simultaneous Internet broadcast. For a link to the webcast, go to investor.synovus.com/event. The replay will be archived for 12 months and will be available 30-45 minutes after the call.
Synovus Financial Corp. is a financial services company based in Columbus, Georgia, with approximately $32 billion in assets. Synovus provides commercial and retail banking, investment, and mortgage services through 250 branches in Georgia, Alabama, South Carolina, Florida, and Tennessee. Synovus Bank, a wholly owned subsidiary of Synovus, has been recognized as one the countrys 10 Most Reputable Banks by American Banker and the Reputation Institute for four consecutive years. Synovus is on the web at synovus.com, and on Twitter, Facebook, LinkedIn, and Instagram.
Forward-Looking Statements
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 banking industry and economy in general. These forward-looking statements include, among others, our expectations regarding deposits, loan growth and the net interest margin; expectations on our growth strategy, expense initiatives, capital management and future profitability; expectations on credit trends and key credit metrics; 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 press release. 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, 2017, 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.
Non-GAAP Financial Measures
The measures entitled adjusted non-interest income; adjusted non-interest expense; adjusted efficiency ratio; adjusted earnings per diluted share; adjusted return on average common equity; adjusted return on average tangible common equity; tangible common equity ratio; and common equity Tier 1 (CET1) ratio (fully phased-in) are not measures recognized under GAAP and therefore are considered non-GAAP financial measures. The most comparable GAAP measures to these measures are total non-interest income; total non-interest expense; efficiency ratio; earnings per diluted common share; return on average common equity; the ratio of total shareholders equity to total assets; and the CET1 ratio, respectively.
Management believes that these non-GAAP financial measures provide meaningful additional information about Synovus to assist management and investors in evaluating Synovus operating results, financial strength, the performance of its business, and the strength of its capital position. However, these non-GAAP financial measures have inherent limitations as analytical tools and should not be considered in isolation or as a substitute for analyses of operating results or capital position as reported under GAAP. The non-GAAP financial measures should be considered as additional views of the way our financial measures are affected by significant items and other factors, and since they are not required to be uniformly applied, they may not be comparable to other similarly titled measures at other companies. Adjusted non-interest income is a measure used by management to evaluate total revenue and non-interest income exclusive of net investment securities gains/losses and changes in fair value of private equity investments, net. Adjusted non-interest expense and the adjusted efficiency ratio are measures utilized by management to measure the success of expense management initiatives focused on reducing recurring controllable operating costs. Adjusted earnings per diluted share and adjusted return on average common equity are measures used by management to evaluate operating results exclusive of items that are not indicative of ongoing operations and impact period-to-period comparisons. The adjusted return on average tangible common equity is a measure used by management to compare Synovus performance with other financial institutions because it calculates the return available to common shareholders without the impact of intangible assets and their related amortization, thereby allowing management to evaluate the performance of the business consistently. The tangible common equity ratio and common equity Tier 1 (CET1) ratio (fully phased-in) are used by management and bank regulators to assess the strength of our capital position. The computations of these measures are set forth in the tables below.
Reconciliation of Non-GAAP Financial Measures
(dollars in thousands) | 2Q18 |
1Q18 |
2Q17 |
|||||||||
Adjusted non-interest income |
||||||||||||
Total non-interest income |
$73,387 | $67,046 | $68,701 | |||||||||
Add: Investment securities losses, net |
1,296 | - | 1 | |||||||||
Add: Decrease in fair value of private equity investments, net |
37 | 3,056 | 1,352 | |||||||||
Adjusted non-interest income |
$74,720 | $70,102 | $70,054 | |||||||||
Adjusted non-interest expense |
||||||||||||
Total non-interest expense |
$ 204,057 | $ 195,179 | $191,747 | |||||||||
Add: Litigation settlement/contingency expense |
1,400 | 2,626 | - | |||||||||
Subtract/add: Restructuring charges, net |
(103) | 315 | (13) | |||||||||
Subtract: Amortization of intangibles |
(292) | (292) | (292) | |||||||||
Subtract: Valuation adjustment to Visa derivative |
(2,328) | - | - | |||||||||
Adjusted non-interest expense |
$ 202,734 | $ 197,828 | $191,442 | |||||||||
Adjusted efficiency ratio |
||||||||||||
Adjusted non-interest expense |
$ 202,734 | $ 197,828 | $191,442 | |||||||||
Net interest income |
284,577 | 274,284 | 251,097 | |||||||||
Add: Tax equivalent adjustment |
120 | 116 | 298 | |||||||||
Add: Total non-interest income |
73,387 | 67,046 | 68,701 | |||||||||
Add: Investment securities losses, net |
1,296 | - | 1 | |||||||||
Total FTE revenues |
359,380 | 341,446 | 320,097 | |||||||||
Add: Decrease in fair value of private equity investments, net |
37 | 3,056 | 1,352 | |||||||||
Adjusted total revenues |
$ 359,417 | $ 344,502 | $321,449 | |||||||||
Efficiency ratio |
56.78% | 57.16% | 59.90% | |||||||||
Adjusted efficiency ratio |
56.41% | 57.42% | 59.56% |
Reconciliation of Non-GAAP Financial Measures, continued
(in thousands, except per share data) | 2Q18 |
1Q18 |
2Q17 |
|||||||||
Adjusted earnings per diluted share |
||||||||||||
Net income available to common shareholders |
$ 108,622 | $ 100,607 | $73,444 | |||||||||
Subtract/add: Income tax expense related to effects of State Tax Reform |
(608) | 1,325 | - | |||||||||
Subtract: Litigation settlement/contingency expense |
(1,400) | (2,626) | - | |||||||||
Add/subtract: Restructuring charges, net |
103 | (315) | 13 | |||||||||
Add: Amortization of intangibles |
292 | 292 | 292 | |||||||||
Add: Valuation adjustment to Visa derivative |
2,328 | - | - | |||||||||
Add: Investment securities losses, net |
1,296 | - | 1 | |||||||||
Add: Decrease in fair value of private equity investments, net |
37 | 3,056 | 1,352 | |||||||||
Subtract: Tax effect of adjustments |
(624) | (96) | (613) | |||||||||
Adjusted net income available to common shareholders |
$ 110,046 | $ 102,243 | $74,489 | |||||||||
Weighted average common shares outstanding, diluted |
119,139 | 119,321 | 123,027 | |||||||||
Adjusted earnings per diluted share |
$0.92 | $0.86 | $0.61 |
Reconciliation of Non-GAAP Financial Measures, continued
(dollars in thousands) | 2Q18 |
1Q18 |
2Q17 |
|||||||||
Adjusted return on average common equity and adjusted return on average tangible common equity | ||||||||||||
Net income available to common shareholders |
$108,622 | $100,607 | $73,444 | |||||||||
Subtract/add: Income tax expense related to effects of State Tax Reform | (608) | 1,325 | - | |||||||||
Subtract: Litigation settlement/contingency expense |
(1,400) | (2,626) | - | |||||||||
Add/subtract: Restructuring charges, net |
103 | (315) | 13 | |||||||||
Add: Amortization of intangibles |
292 | 292 | 292 | |||||||||
Add: Valuation adjustment to Visa derivative |
2,328 | - | - | |||||||||
Add: Investment securities losses, net |
1,296 | - | 1 | |||||||||
Add: Decrease in fair value of private equity investments, net |
37 | 3,056 | 1,352 | |||||||||
Subtract: Tax effect of adjustments |
(624) | (96) | (613) | |||||||||
Adjusted net income available to common shareholders |
$110,046 | $102,243 | $74,489 | |||||||||
Net income annualized |
$441,339 | $414,652 | $298,775 | |||||||||
Total average shareholders equity less preferred stock |
$2,831,368 | $2,790,878 | $2,849,069 | |||||||||
Subtract: Goodwill |
(57,315) | (57,315) | (57,018) | |||||||||
Subtract: Other intangibles assets, net |
(10,555) | (10,915) | (11,966) | |||||||||
Total average tangible shareholders equity less preferred stock |
$2,763,498 | $2,722,648 | $2,780,085 | |||||||||
Adjusted return on average common equity |
15.59% | 14.86% | 10.49% | |||||||||
Adjusted return on average tangible common equity |
15.97% | 15.23% | 10.75% |
Reconciliation of Non-GAAP Financial Measures,
continued
(dollars in thousands) | 2Q18 |
1Q18 |
2Q17 |
|||||||||
Tangible common equity ratio |
||||||||||||
Total assets |
$31,740,305 | $31,501,028 | $30,687,966 | |||||||||
Subtract: Goodwill |
(57,315) | (57,315) | (57,092) | |||||||||
Subtract: Other intangible assets, net |
(10,458) | (10,750) | (11,843) | |||||||||
Tangible assets |
$ 31,672,532 | $ 31,432,963 | $ 30,619,031 | |||||||||
Total shareholders equity |
$3,167,694 | $2,956,495 | $2,997,947 | |||||||||
Subtract: Goodwill |
(57,315) | (57,315) | (57,092) | |||||||||
Subtract: Other intangible assets, net |
(10,458) | (10,750) | (11,843) | |||||||||
Subtract: Preferred Stock |
(321,118) | (125,980) | (125,980) | |||||||||
Tangible common equity |
$ 2,778,803 | $ 2,762,450 | $ 2,803,032 | |||||||||
Total shareholders equity to total assets ratio |
9.98% | 9.39% | 9.77% | |||||||||
Tangible common equity ratio |
8.77% | 8.79% | 9.15% | |||||||||
Common equity Tier 1 (CET1) ratio (fully phased-in) |
||||||||||||
Common Equity Tier 1 (CET1) |
$2,838,616 | |||||||||||
Subtract: Adjustment related to capital components |
(3,599) | |||||||||||
CET1 (fully phased-in) |
$ 2,835,017 | |||||||||||
Total risk-weighted assets |
$28,070,857 | |||||||||||
Total risk-weighted assets (fully phased-in) |
$28,197,301 | |||||||||||
Common equity Tier 1 (CET 1) ratio |
10.11% | |||||||||||
Common Equity Tier 1 (CET1) ratio (fully phased-in) |
10.05% |
Exhibit 99.2
Synovus
INCOME STATEMENT DATA (Unaudited) (Dollars in thousands, except per share data) |
Six Months Ended
June 30,
|
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2018
|
2017
|
Change
|
||||||||||||||||||
|
|
|
||||||||||||||||||
Interest income |
$ | 642,968 | 557,911 | 15.2 | % | |||||||||||||||
Interest expense |
84,107 | 66,887 | 25.7 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||
Net interest income |
558,861 | 491,024 | 13.8 | |||||||||||||||||
Provision for loan losses |
24,566 | 18,934 | 29.7 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||
Net interest income after provision for loan losses |
534,295 | 472,090 | 13.2 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||
Non-interest income: |
||||||||||||||||||||
Service charges on deposit accounts |
39,938 | 40,370 | (1.1 | ) | ||||||||||||||||
Fiduciary and asset management fees |
27,419 | 24,676 | 11.1 | |||||||||||||||||
Card fees |
21,032 | 19,885 | 5.8 | |||||||||||||||||
Brokerage revenue |
17,596 | 14,436 | 21.9 | |||||||||||||||||
Mortgage banking income |
9,887 | 11,548 | (14.4 | ) | ||||||||||||||||
Income from bank-owned life insurance |
7,949 | 6,328 | 25.6 | |||||||||||||||||
Investment securities (losses) gains, net |
(1,296 | ) | 7,667 | nm | ||||||||||||||||
Decrease in fair value of private equity investments, net |
(3,093 | ) | (3,166 | ) | nm | |||||||||||||||
Other fee income |
9,877 | 11,033 | (10.5 | ) | ||||||||||||||||
Other non-interest income |
11,124 | 7,762 | 43.3 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||
Total non-interest income |
140,433 | 140,539 | (0.1 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||
Non-interest expense: |
||||||||||||||||||||
Salaries and other personnel expense |
225,583 | 212,404 | 6.2 | |||||||||||||||||
Net occupancy and equipment expense |
64,134 | 59,264 | 8.2 | |||||||||||||||||
Third-party processing expense |
29,012 | 26,223 | 10.6 | |||||||||||||||||
FDIC insurance and other regulatory fees |
13,335 | 13,645 | (2.3 | ) | ||||||||||||||||
Professional fees |
11,789 | 12,907 | (8.7 | ) | ||||||||||||||||
Advertising expense |
10,312 | 11,258 | (8.4 | ) | ||||||||||||||||
Foreclosed real estate expense, net |
749 | 3,582 | (79.1 | ) | ||||||||||||||||
Earnout liability adjustments |
- | 1,707 | nm | |||||||||||||||||
Amortization of intangibles |
583 | 475 | 22.7 | |||||||||||||||||
Valuation adjustment to Visa derivative |
2,328 | - | nm | |||||||||||||||||
Litigation settlement/contingency expense |
(4,026 | ) | - | nm | ||||||||||||||||
Restructuring charges, net |
(212 | ) | 6,524 | nm | ||||||||||||||||
Other operating expenses |
45,647 | 41,144 | 10.9 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||
Total non-interest expense |
399,234 | 389,133 | 2.6 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||
Income before income taxes |
275,494 | 223,496 | 23.3 | |||||||||||||||||
Income tax expense |
61,146 | 75,635 | (19.2 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||
Net income |
214,348 | 147,861 | 45.0 | |||||||||||||||||
Dividends on preferred stock |
5,119 | 5,119 | - | |||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||
Net income available to common shareholders |
$ | 209,229 | 142,742 | 46.6 | % | |||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||
Net income per common share, basic |
$ | 1.77 | 1.17 | 51.2 | % | |||||||||||||||
Net income per common share, diluted |
1.75 | 1.16 | 51.3 | |||||||||||||||||
Cash dividends declared per common share |
0.50 | 0.30 | 66.7 | |||||||||||||||||
Return on average assets* |
1.38 | % | 0.98 | 40 | bps | |||||||||||||||
Return on average common equity* |
15.01 | 10.16 | 485 | |||||||||||||||||
Weighted average common shares outstanding, basic |
118,531 | 122,251 | (3.0 | ) | % | |||||||||||||||
Weighted average common shares outstanding, diluted |
119,229 | 123,043 | (3.1 | ) |
nm - not meaningful
bps - basis points
* - ratios are annualized
Synovus
INCOME STATEMENT DATA (Unaudited) (In thousands, except per share data) |
2018 | 2017 | Second Quarter | |||||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||||
Second Quarter |
First Quarter | Fourth Quarter |
Third Quarter |
Second Quarter |
18 vs. 17 Change |
|||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||||
Interest income |
$ | 329,834 | 313,134 | 306,934 | 297,652 | 285,510 | 15.5 | % | ||||||||||||||||||||||||||
Interest expense |
45,257 | 38,850 | 37,221 | 35,080 | 34,413 | 31.5 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Net interest income |
284,577 | 274,284 | 269,713 | 262,572 | 251,097 | 13.3 | ||||||||||||||||||||||||||||
Provision for loan losses |
11,790 | 12,776 | 8,565 | 39,686 | 10,260 | 14.9 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Net interest income after provision for loan losses |
272,787 | 261,508 | 261,148 | 222,886 | 240,837 | 13.3 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Non-interest income: |
||||||||||||||||||||||||||||||||||
Service charges on deposit accounts |
19,999 | 19,940 | 20,372 | 20,678 | 20,252 | (1.2 | ) | |||||||||||||||||||||||||||
Fiduciary and asset management fees |
13,983 | 13,435 | 13,195 | 12,615 | 12,524 | 11.6 | ||||||||||||||||||||||||||||
Card fees |
10,833 | 10,199 | 9,762 | 9,729 | 10,041 | 7.9 | ||||||||||||||||||||||||||||
Brokerage revenue |
8,900 | 8,695 | 7,758 | 7,511 | 7,210 | 23.4 | ||||||||||||||||||||||||||||
Mortgage banking income |
4,839 | 5,047 | 5,645 | 5,603 | 5,784 | (16.3 | ) | |||||||||||||||||||||||||||
Income from bank-owned life insurance |
3,733 | 4,217 | 3,900 | 3,232 | 3,272 | 14.1 | ||||||||||||||||||||||||||||
Cabelas transaction fee |
- | - | - | 75,000 | - | nm | ||||||||||||||||||||||||||||
Investment securities (losses) gains, net |
(1,296 | ) | - | - | (7,956 | ) | (1 | ) | nm | |||||||||||||||||||||||||
(Decrease)/increase in fair value of private equity investments, net |
(37 | ) | (3,056 | ) | 100 | (27 | ) | (1,352 | ) | nm | ||||||||||||||||||||||||
Other fee income |
5,259 | 4,618 | 4,042 | 5,094 | 6,164 | (14.7 | ) | |||||||||||||||||||||||||||
Other non-interest income |
7,174 | 3,951 | 4,578 | 3,956 | 4,807 | 49.2 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Total non-interest income |
73,387 | 67,046 | 69,352 | 135,435 | 68,701 | 6.8 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Non-interest expense: |
||||||||||||||||||||||||||||||||||
Salaries and other personnel expense |
111,863 | 113,720 | 111,243 | 109,675 | 105,213 | 6.3 | ||||||||||||||||||||||||||||
Net occupancy and equipment expense |
32,654 | 31,480 | 30,126 | 30,573 | 29,933 | 9.1 | ||||||||||||||||||||||||||||
Third-party processing expense |
15,067 | 13,945 | 14,827 | 13,659 | 13,620 | 10.6 | ||||||||||||||||||||||||||||
FDIC insurance and other regulatory fees |
6,543 | 6,793 | 6,288 | 7,078 | 6,875 | (4.8 | ) | |||||||||||||||||||||||||||
Professional fees |
6,284 | 5,505 | 6,183 | 7,141 | 7,551 | (16.8 | ) | |||||||||||||||||||||||||||
Advertising expense |
5,220 | 5,092 | 8,081 | 3,610 | 5,346 | (2.4 | ) | |||||||||||||||||||||||||||
Foreclosed real estate expense, net |
(107 | ) | 856 | 1,693 | 7,265 | 1,448 | nm | |||||||||||||||||||||||||||
Earnout liability adjustments |
- | - | 1,700 | 2,059 | 1,707 | nm | ||||||||||||||||||||||||||||
Amortization of intangibles |
292 | 292 | 292 | 292 | 292 | - | ||||||||||||||||||||||||||||
Valuation adjustment to Visa derivative |
2,328 | - | - | - | - | nm | ||||||||||||||||||||||||||||
Loss on early extinguishment of debt |
- | - | 23,160 | - | - | nm | ||||||||||||||||||||||||||||
Litigation settlement/contingency expense |
(1,400 | ) | (2,626 | ) | 300 | 401 | - | nm | ||||||||||||||||||||||||||
Restructuring charges, net |
103 | (315 | ) | (29 | ) | 519 | 13 | nm | ||||||||||||||||||||||||||
Other operating expenses |
25,210 | 20,437 | 22,670 | 23,374 | 19,749 | 27.7 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Total non-interest expense |
204,057 | 195,179 | 226,534 | 205,646 | 191,747 | 6.4 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Income before income taxes |
142,117 | 133,375 | 103,966 | 152,675 | 117,791 | 20.7 | ||||||||||||||||||||||||||||
Income tax expense |
30,936 | 30,209 | 74,361 | 54,668 | 41,788 | (26.0 | ) | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Net income |
111,181 | 103,166 | 29,605 | 98,007 | 76,003 | 46.3 | ||||||||||||||||||||||||||||
Dividends on preferred stock |
2,559 | 2,559 | 2,559 | 2,559 | 2,559 | - | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Net income available to common shareholders |
$ | 108,622 | 100,607 | 27,046 | 95,448 | 73,444 | 47.9 | % | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Net income per common share, basic |
$ | 0.92 | 0.85 | 0.23 | 0.79 | 0.60 | 52.7 | % | ||||||||||||||||||||||||||
Net income per common share, diluted |
0.91 | 0.84 | 0.23 | 0.78 | 0.60 | 52.7 | ||||||||||||||||||||||||||||
Cash dividends declared per common share |
0.25 | 0.25 | 0.15 | 0.15 | 0.15 | 66.7 | ||||||||||||||||||||||||||||
Return on average assets * |
1.42 | % | 1.34 | 0.37 | 1.27 | 1.00 | 42 | bps | ||||||||||||||||||||||||||
Return on average common equity * |
15.39 | 14.62 | 3.76 | 13.24 | 10.34 | 505 | ||||||||||||||||||||||||||||
Weighted average common shares outstanding, basic |
118,397 | 118,666 | 119,282 | 120,900 | 122,203 | (3.1 | ) | % | ||||||||||||||||||||||||||
Weighted average common shares outstanding, diluted |
119,139 | 119,321 | 120,182 | 121,814 | 123,027 | (3.2 | ) |
nm - not meaningful
bps - basis points
* - ratios are annualized
Synovus
BALANCE SHEET DATA | June 30, 2018 | December 31, 2017 | June 30, 2017 | |||||||||||||
(Unaudited) | ||||||||||||||||
(In thousands, except share data) |
||||||||||||||||
ASSETS |
||||||||||||||||
Cash and due from banks |
$ | 404,080 | 397,848 | 377,213 | ||||||||||||
Interest bearing funds with Federal Reserve Bank |
613,082 | 460,928 | 468,148 | |||||||||||||
Interest earning deposits with banks |
33,754 | 26,311 | 6,012 | |||||||||||||
Federal funds sold and securities purchased under resale agreements |
40,872 | 47,846 | 46,847 | |||||||||||||
|
|
|
|
|
|
|
|
| ||||||||
Cash and cash equivalents |
1,091,788 | 932,933 | 898,220 | |||||||||||||
Mortgage loans held for sale, at fair value |
53,673 | 48,024 | 61,893 | |||||||||||||
Investment securities available for sale, at fair value |
3,929,962 | 3,987,069 | 3,827,058 | |||||||||||||
Loans, net of deferred fees and costs |
25,134,056 | 24,787,464 | 24,430,512 | |||||||||||||
Allowance for loan losses |
(251,725 | ) | (249,268 | ) | (248,095 | ) | ||||||||||
|
|
|
|
|
|
|
|
| ||||||||
Loans, net |
24,882,331 | 24,538,196 | 24,182,417 | |||||||||||||
|
|
|
|
|
|
|
|
| ||||||||
Cash surrender value of bank-owned life insurance |
547,261 | 540,958 | 458,753 | |||||||||||||
Premises and equipment, net |
428,633 | 426,813 | 416,364 | |||||||||||||
Goodwill |
57,315 | 57,315 | 57,092 | |||||||||||||
Other intangible assets |
10,458 | 11,254 | 11,843 | |||||||||||||
Deferred tax asset, net |
182,983 | 165,788 | 320,403 | |||||||||||||
Other assets |
555,901 | 513,487 | 453,923 | |||||||||||||
|
|
|
|
|
|
|
|
| ||||||||
Total assets |
$ | 31,740,305 | 31,221,837 | 30,687,966 | ||||||||||||
|
|
|
|
|
|
|
|
| ||||||||
LIABILITIES AND SHAREHOLDERS EQUITY |
||||||||||||||||
Liabilities: |
||||||||||||||||
Deposits: |
||||||||||||||||
Non-interest bearing deposits |
$ | 7,630,491 | 7,686,339 | 7,363,476 | ||||||||||||
Interest bearing deposits, excluding brokered deposits |
16,961,187 | 16,500,436 | 16,387,032 | |||||||||||||
Brokered deposits |
1,851,010 | 1,961,125 | 1,468,308 | |||||||||||||
|
|
|
|
|
|
|
|
| ||||||||
Total deposits |
26,442,688 | 26,147,900 | 25,218,816 | |||||||||||||
Federal funds purchased and securities sold under repurchase agreements |
207,580 | 161,190 | 150,379 | |||||||||||||
Long-term debt |
1,656,647 | 1,706,138 | 2,107,245 | |||||||||||||
Other liabilities |
265,696 | 245,043 | 213,579 | |||||||||||||
|
|
|
|
|
|
|
|
| ||||||||
Total liabilities |
28,572,611 | 28,260,271 | 27,690,019 | |||||||||||||
|
|
|
|
|
|
|
|
| ||||||||
Shareholders equity: |
||||||||||||||||
Series D Preferred Stock - no par value, 8,000,000 shares outstanding at June 30, 2018 |
195,138 | - | - | |||||||||||||
Series C Preferred Stock - no par value, 5,200,000 shares outstanding at June 30, 2018, December 31, 2017, and June 30, 2017 |
125,980 | 125,980 | 125,980 | |||||||||||||
Common stock - $1.00 par value. 117,841,369 shares outstanding at June 30, 2018, 118,897,295 shares outstanding at December 31, 2017, and 121,661,092 shares outstanding at June 30, 2017 |
143,078 | 142,678 | 142,499 | |||||||||||||
Additional paid-in capital |
3,045,014 | 3,043,129 | 3,029,754 | |||||||||||||
Treasury stock, at cost - 25,236,604 shares at June 30, 2018, 23,780,154 shares at December 31, 2017, and 20,837,814 shares at June 30, 2017 |
(916,484 | ) | (839,674 | ) | (709,944 | ) | ||||||||||
Accumulated other comprehensive loss |
(125,720 | ) | (54,754 | ) | (47,865 | ) | ||||||||||
Retained earnings |
700,688 | 544,207 | 457,523 | |||||||||||||
|
|
|
|
|
|
|
|
| ||||||||
Total shareholders equity |
3,167,694 | 2,961,566 | 2,997,947 | |||||||||||||
|
|
|
|
|
|
|
|
| ||||||||
Total liabilities and shareholders equity |
$ | 31,740,305 | 31,221,837 | 30,687,966 | ||||||||||||
|
|
|
|
|
|
|
|
|
Synovus
AVERAGE BALANCES AND YIELDS/RATES (1)
(Unaudited)
(Dollars in thousands)
2018
|
2017
|
|||||||||||||||||||||||||||
Second Quarter
|
First Quarter
|
Fourth Quarter
|
Third Quarter
|
Second Quarter
|
||||||||||||||||||||||||
Interest Earning Assets
|
||||||||||||||||||||||||||||
Taxable investment securities (2) |
$ | 4,077,564 | 4,097,162 | 3,937,278 | 3,786,436 | 3,844,688 | ||||||||||||||||||||||
Yield |
2.34 | % | 2.34 | 2.29 | 2.11 | 2.11 | ||||||||||||||||||||||
Tax-exempt investment securities (2) (4) |
$ | 115 | 140 | 180 | 259 | 340 | ||||||||||||||||||||||
Yield (taxable equivalent) |
6.87 | % | 6.57 | 7.97 | 7.86 | 6.87 | ||||||||||||||||||||||
Trading account assets (5) |
$ | 23,772 | 8,167 | 7,360 | 7,823 | 3,667 | ||||||||||||||||||||||
Yield |
2.79 | % | 2.66 | 2.78 | 2.09 | 2.28 | ||||||||||||||||||||||
Commercial loans (3) (4) |
$ | 18,857,271 | 18,963,515 | 18,935,774 | 19,059,936 | 19,137,733 | ||||||||||||||||||||||
Yield |
4.85 | % | 4.64 | 4.49 | 4.41 | 4.27 | ||||||||||||||||||||||
Consumer loans (3) |
$ | 6,092,899 | 5,899,015 | 5,704,629 | 5,440,765 | 5,215,258 | ||||||||||||||||||||||
Yield |
4.76 | % | 4.71 | 4.54 | 4.55 | 4.49 | ||||||||||||||||||||||
Allowance for loan losses |
$ | (257,966 | ) | (251,635 | ) | (252,319 | ) | (249,248 | ) | (251,219 | ) | |||||||||||||||||
|
|
|||||||||||||||||||||||||||
Loans, net (3) |
$ | 24,692,204 | 24,610,895 | 24,388,084 | 24,251,453 | 24,101,772 | ||||||||||||||||||||||
Yield |
4.88 | % | 4.70 | 4.55 | 4.49 | 4.36 | ||||||||||||||||||||||
Mortgage loans held for sale |
$ | 50,366 | 38,360 | 45,353 | 52,177 | 52,224 | ||||||||||||||||||||||
Yield |
4.42 | % | 3.95 | 3.96 | 3.88 | 3.87 | ||||||||||||||||||||||
Federal funds sold, due from Federal Reserve Bank, and other short-term investments |
$ | 724,537 | 516,575 | 922,296 | 543,556 | 561,503 | ||||||||||||||||||||||
Yield |
1.77 | % | 1.48 | 1.31 | 1.23 | 1.00 | ||||||||||||||||||||||
Federal Home Loan Bank and Federal Reserve Bank stock (5) |
$ | 165,845 | 177,381 | 159,455 | 175,263 | 177,323 | ||||||||||||||||||||||
Yield |
4.63 | % | 3.39 | 4.03 | 3.50 | 2.99 | ||||||||||||||||||||||
Total interest earning assets |
$ | 29,734,403 | 29,448,680 | 29,460,006 | 28,816,967 | 28,741,517 | ||||||||||||||||||||||
Yield |
4.46 | % | 4.31 | 4.15 | 4.11 | 3.99 | ||||||||||||||||||||||
Interest Bearing Liabilities
|
||||||||||||||||||||||||||||
Interest bearing demand deposits |
$ | 5,001,826 | 5,032,000 | 4,976,239 | 4,868,372 | 4,837,053 | ||||||||||||||||||||||
Rate |
0.35 | % | 0.31 | 0.28 | 0.27 | 0.23 | ||||||||||||||||||||||
Money market accounts |
$ | 7,791,107 | 7,561,554 | 7,514,992 | 7,528,036 | 7,427,562 | ||||||||||||||||||||||
Rate |
0.55 | % | 0.43 | 0.36 | 0.34 | 0.32 | ||||||||||||||||||||||
Savings deposits |
$ | 829,800 | 811,587 | 804,853 | 803,184 | 805,019 | ||||||||||||||||||||||
Rate |
0.03 | % | 0.03 | 0.03 | 0.03 | 0.04 | ||||||||||||||||||||||
Time deposits under $100,000 |
$ | 1,161,890 | 1,143,780 | 1,166,413 | 1,183,582 | 1,202,746 | ||||||||||||||||||||||
Rate |
0.82 | % | 0.71 | 0.70 | 0.68 | 0.67 | ||||||||||||||||||||||
Time deposits over $100,000 |
$ | 2,021,084 | 1,895,545 | 2,004,031 | 2,067,347 | 2,040,924 | ||||||||||||||||||||||
Rate |
1.22 | % | 1.02 | 0.99 | 0.97 | 0.94 | ||||||||||||||||||||||
Non-maturing brokered deposits |
$ | 262,976 | 424,118 | 546,413 | 547,466 | 564,043 | ||||||||||||||||||||||
Rate |
1.94 | % | 1.14 | 0.81 | 0.73 | 0.54 | ||||||||||||||||||||||
Brokered time deposits |
$ | 1,659,941 | 1,527,793 | 1,651,920 | 983,423 | 815,515 | ||||||||||||||||||||||
Rate |
1.85 | % | 1.75 | 1.63 | 1.16 | 0.94 | ||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||
Total interest bearing deposits |
$ | 18,728,624 | 18,396,377 | 18,664,861 | 17,981,410 | 17,692,862 | ||||||||||||||||||||||
Rate |
0.70 | % | 0.58 | 0.54 | 0.46 | 0.41 | ||||||||||||||||||||||
Federal funds purchased and securities sold under repurchase agreements |
$ | 210,679 | 202,226 | 184,369 | 191,585 | 183,400 | ||||||||||||||||||||||
Rate |
0.38 | % | 0.21 | 0.15 | 0.08 | 0.10 | ||||||||||||||||||||||
Long-term debt |
$ | 1,852,094 | 2,127,994 | 1,713,982 | 1,985,175 | 2,270,452 | ||||||||||||||||||||||
Rate |
2.66 | % | 2.32 | 2.67 | 2.81 | 2.83 | ||||||||||||||||||||||
Total interest bearing liabilities |
$ |
|
|
|
20,791,397 |
|
|
20,726,597 |
|
|
20,563,212 |
|
|
20,158,170 |
|
|
20,146,714 |
| ||||||||||
Rate
|
|
0.87
|
|
|
%
|
|
|
0.76
|
|
|
0.72
|
|
|
0.69
|
|
|
0.68
|
| ||||||||||
Non-interest bearing demand deposits |
$ | 7,539,451 | 7,391,695 | 7,621,147 | 7,305,508 | 7,298,845 | ||||||||||||||||||||||
Effective cost of funds |
0.61 | % | 0.53 | 0.50 | 0.48 | 0.48 | ||||||||||||||||||||||
Net interest margin |
3.86 | % | 3.78 | 3.65 | 3.63 | 3.51 | ||||||||||||||||||||||
Taxable equivalent adjustment |
$ | 120 | 116 | 234 | 283 | 298 |
(1) | Yields and rates are annualized. |
(2) | Excludes net unrealized gains and losses. |
(3) | Average loans are shown net of unearned income. Non-performing loans are included. |
(4) | Reflects taxable-equivalent adjustments, using the statutory federal income tax rate (21% in 2018 and 35% in 2017), in adjusting interest on tax-exempt loans and investment securities to a taxable-equivalent basis. |
(5) | Included as a component of Other Assets on the consolidated balance sheet |
Synovus
LOANS OUTSTANDING BY TYPE
(Unaudited)
(Dollars in thousands)
Loan Type
|
Total Loans June 30, 2018
|
Total Loans March 31, 2018
|
2Q18 vs. 1Q18 % change (1)
|
Total Loans June 30, 2017
|
2Q18 vs. 2Q17 % change
|
|||||||||||||||||||||||
Commercial, Financial, and Agricultural |
$ | 7,271,080 | 7,191,531 | 4.4 | % | $ | 6,993,817 | 4.0 | % | |||||||||||||||||||
Owner-Occupied |
5,004,392 | 4,910,386 | 7.7 | 4,749,128 | 5.4 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total Commercial & Industrial |
12,275,472 | 12,101,917 | 5.8 | 11,742,945 | 4.5 | |||||||||||||||||||||||
Multi-Family |
1,358,211 | 1,479,573 | (32.9) | 1,724,917 | (21.3) | |||||||||||||||||||||||
Hotels |
755,125 | 751,232 | 2.1 | 835,110 | (9.6) | |||||||||||||||||||||||
Office Buildings |
1,429,166 | 1,464,473 | (9.7) | 1,539,494 | (7.2) | |||||||||||||||||||||||
Shopping Centers |
811,186 | 782,580 | 14.7 | 864,868 | (6.2) | |||||||||||||||||||||||
Warehouses |
602,707 | 583,645 | 13.1 | 495,860 | 21.5 | |||||||||||||||||||||||
Other Investment Property |
553,201 | 557,547 | (3.1) | 575,415 | (3.9) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total Investment Properties |
5,509,596 | 5,619,050 | (7.8) | 6,035,664 | (8.7) | |||||||||||||||||||||||
1-4 Family Construction |
177,140 | 188,939 | (25.0) | 198,419 | (10.7) | |||||||||||||||||||||||
1-4 Family Investment Mortgage |
543,570 | 569,965 | (18.6) | 638,407 | (14.9) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total 1-4 Family Properties |
720,710 | 758,904 | (20.2) | 836,826 | (13.9) | |||||||||||||||||||||||
Commercial Development |
61,375 | 65,371 | (24.5) | 66,055 | (7.1) | |||||||||||||||||||||||
Residential Development |
100,246 | 104,137 | (15.0) | 118,032 | (15.1) | |||||||||||||||||||||||
Land Acquisition |
252,244 | 288,265 | (50.1) | 365,657 | (31.0) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Land and Development |
413,865 | 457,773 | (38.5) | 549,744 | (24.7) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total Commercial Real Estate |
6,644,171 | 6,835,727 | (11.2) | 7,422,234 | (10.5) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Consumer Mortgages |
2,750,935 | 2,663,371 | 13.2 | 2,470,665 | 11.3 | |||||||||||||||||||||||
Home Equity Lines |
1,453,855 | 1,472,471 | (5.1) | 1,563,167 | (7.0) | |||||||||||||||||||||||
Credit Cards |
238,424 | 226,713 | 20.7 | 225,900 | 5.5 | |||||||||||||||||||||||
Other Consumer Loans |
1,793,916 | 1,606,799 | 46.7 | 1,031,639 | 73.9 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total Consumer |
6,237,130 | 5,969,354 | 18.0 | 5,291,371 | 17.9 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Unearned Income |
(22,717) | (23,961) | (20.8) | (26,038) | (12.8) | |||||||||||||||||||||||
Total |
$ | 25,134,056 | 24,883,037 | 4.0 | % | $ | 24,430,512 | 2.9 | % | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
(1) | Percentage change is annualized. |
NON-PERFORMING LOANS COMPOSITION
(Unaudited)
(Dollars in thousands)
|
|
|
|
|
||||||||||||||||||||||||
Loan Type
|
Total Non-performing Loans June 30, 2018 |
Total Non-performing Loans March 31, 2018 |
2Q18 vs. 1Q18 % change |
Total Non-performing Loans June 30, 2017 |
2Q18 vs. 2Q17 % change |
|||||||||||||||||||||||
Commercial, Financial, and Agricultural |
$ | 81,231 | 81,606 | (0.5) | % | $ | 69,550 | 16.8 | % | |||||||||||||||||||
Owner-Occupied |
6,076 | 4,067 | 49.4 | 24,918 | (75.6) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total Commercial & Industrial |
87,307 | 85,673 | 1.9 | 94,468 | (7.6) | |||||||||||||||||||||||
Multi-Family |
176 | 1,028 | (82.9) | 1,621 | (89.1) | |||||||||||||||||||||||
Hotels |
- | - | - | 376 | nm | |||||||||||||||||||||||
Office Buildings |
670 | 1,272 | (47.3) | 326 | nm | |||||||||||||||||||||||
Shopping Centers |
412 | 89 | 362.9 | 161 | nm | |||||||||||||||||||||||
Warehouses |
21 | - | nm | 41 | (48.8) | |||||||||||||||||||||||
Other Investment Property |
459 | 540 | (15.0) | 1,187 | (61.3) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total Investment Properties |
1,738 | 2,929 | (40.7) | 3,712 | (53.2) | |||||||||||||||||||||||
1-4 Family Investment Mortgage |
3,247 | 2,634 | 23.3 | 8,535 | (62.0) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total 1-4 Family Properties |
3,247 | 2,634 | 23.3 | 8,535 | (62.0) | |||||||||||||||||||||||
Commercial Development |
42 | 44 | (4.5) | 269 | (84.4) | |||||||||||||||||||||||
Residential Development |
3,184 | 3,220 | (1.1) | 5,585 | (43.0) | |||||||||||||||||||||||
Land Acquisition |
1,398 | 1,311 | 6.6 | 5,077 | (72.5) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Land and Development |
4,624 | 4,575 | 1.1 | 10,931 | (57.7) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total Commercial Real Estate |
9,609 | 10,138 | (5.2) | 23,178 | (58.5) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Consumer Mortgages |
4,822 | 7,708 | (37.4) | 18,035 | (73.3) | |||||||||||||||||||||||
Home Equity Lines |
14,265 | 14,868 | (4.1) | 20,648 | (30.9) | |||||||||||||||||||||||
Other Consumer Loans |
1,325 | 1,694 | (21.8) | 2,988 | (55.7) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total Consumer |
20,412 | 24,270 | (15.9) | 41,671 | (51.0) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total |
$ | 117,328 | 120,081 | (2.3 | ) % | $ | 159,317 | (26.4) | % | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
Synovus
CREDIT QUALITY DATA
(Unaudited)
(Dollars in thousands)
2018 | 2017 | 2nd Quarter | ||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||
Second Quarter |
First Quarter |
Fourth Quarter |
Third Quarter |
Second Quarter |
18 vs. 17 Change |
|||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||
Non-performing Loans |
$ | 117,328 | 120,081 | 115,561 | 97,838 | 159,317 | (26.4) % | |||||||||||||||||||||
Impaired Loans Held for Sale (1) |
2,733 | 6,591 | 11,278 | 30,197 | 127 | nm | ||||||||||||||||||||||
Other Real Estate |
6,288 | 4,496 | 3,758 | 10,551 | 19,476 | (67.7) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Non-performing Assets |
126,349 | 131,168 | 130,597 | 138,586 | 178,920 | (29.4) | ||||||||||||||||||||||
Allowance for loan losses |
251,725 | 257,764 | 249,268 | 249,683 | 248,095 | 1.5 | ||||||||||||||||||||||
Net Charge-Offs - Quarter |
17,829 | 4,280 | 8,979 | 38,099 | 15,678 | |||||||||||||||||||||||
Net Charge-Offs - YTD |
22,109 | 4,280 | 69,675 | 60,695 | 22,597 | |||||||||||||||||||||||
Net Charge-Offs / Average Loans - Quarter (2) |
0.29 | % | 0.07 | 0.15 | 0.62 | 0.26 | ||||||||||||||||||||||
Net Charge-Offs / Average Loans - YTD (2) |
0.18 | 0.07 | 0.29 | 0.33 | 0.19 | |||||||||||||||||||||||
Non-performing Loans / Loans |
0.47 | 0.48 | 0.47 | 0.40 | 0.65 | |||||||||||||||||||||||
Non-performing Assets / Loans, Impaired Loans Held for Sale, & ORE |
0.50 | 0.53 | 0.53 | 0.57 | 0.73 | |||||||||||||||||||||||
Allowance / Loans |
1.00 | 1.04 | 1.01 | 1.02 | 1.02 | |||||||||||||||||||||||
Allowance / Non-performing Loans |
214.55 | 214.66 | 215.70 | 255.20 | 155.72 | |||||||||||||||||||||||
Allowance / Non-performing Loans (3) |
262.99 | 241.49 | 238.44 | 336.35 | 217.07 | |||||||||||||||||||||||
Past Due Loans over 90 days and Still Accruing |
$ | 3,222 | 5,416 | 4,414 | 5,685 | 4,550 | (29.2) | |||||||||||||||||||||
As a Percentage of Loans Outstanding |
0.01 | % | 0.02 | 0.02 | 0.02 | 0.02 | ||||||||||||||||||||||
Total Past Due Loans and Still Accruing |
$ | 55,614 | 54,150 | 52,032 | 84,853 | 66,788 | (16.7) | |||||||||||||||||||||
As a Percentage of Loans Outstanding |
0.22 | % | 0.22 | 0.21 | 0.35 | 0.27 | ||||||||||||||||||||||
Accruing Troubled Debt Restructurings (TDRs) |
$ | 125,310 | 129,394 | 151,271 | 166,918 | 167,395 | (25.1) | |||||||||||||||||||||
(1) Represent impaired loans that have been specifically identified to be sold. Impaired loans held for sale are carried at the lower of cost or fair value, less costs to sell, based primarily on estimated sales proceeds net of selling costs. (2) Ratio is annualized. (3) Excludes non-performing loans for which the expected loss has been charged off. |
| |||||||||||||||||||||||||||
SELECTED CAPITAL INFORMATION (1) (Unaudited) (Dollars in thousands) |
| |||||||||||||||||||||||||||
|
|
|
||||||||||||||||||||||||||
June 30, 2018 | December 31, 2017 |
June 30, 2017 | ||||||||||||||||||||||||||
Tier 1 Capital |
$ | 3,156,805 | 2,872,001 | 2,829,340 | ||||||||||||||||||||||||
Total Risk-Based Capital |
3,668,904 | 3,383,081 | 3,340,155 | |||||||||||||||||||||||||
Common Equity Tier 1 Ratio (transitional) |
10.11 | % | 9.99 | 10.02 | ||||||||||||||||||||||||
Common Equity Tier 1 Ratio (fully phased-in) (5) |
10.05 | 9.88 | 9.82 | |||||||||||||||||||||||||
Tier 1 Capital Ratio |
11.25 | 10.38 | 10.37 | |||||||||||||||||||||||||
Total Risk-Based Capital Ratio |
13.07 | 12.23 | 12.24 | |||||||||||||||||||||||||
Tier 1 Leverage Ratio |
10.03 | 9.19 | 9.30 | |||||||||||||||||||||||||
Common Equity as a Percentage of Total Assets (2) |
8.97 | 9.08 | 9.36 | |||||||||||||||||||||||||
Tangible Common Equity as a Percentage of Tangible Assets (3) (5) |
8.77 | 8.88 | 9.15 | |||||||||||||||||||||||||
Book Value Per Common Share (4) |
$ | 24.16 | 23.85 | 23.61 | ||||||||||||||||||||||||
Tangible Book Value Per Common Share (3) |
23.58 | 23.27 | 23.04 | |||||||||||||||||||||||||
(1) Current quarter regulatory capital information is preliminary. (2) Common equity consists of Total Shareholders Equity less Preferred Stock. (3) Excludes the carrying value of goodwill and other intangible assets from common equity and total assets. (4) Book Value Per Common Share consists of Total Shareholders Equity less Preferred Stock divided by total common shares outstanding. (5) See Non-GAAP Financial Measures of this report for applicable reconciliation of GAAP measures. |
|
Exhibit 99.3
Second Quarter 2018 Results
July 24, 2018
Forward Looking Statements
This slide presentation
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, should,
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 banking industry and economy in general. These forward-looking statements include, among others, statements on (1) future loan growth; (2) future deposit
growth; (3) future net interest income and net interest margin; (4) future adjusted non-interest income; (5) future non-interest expense levels;
(6) future credit trends and key metrics; (7) future effective tax rates; (8) future capital ratios; (9) our strategy and initiatives for future growth, capital management, and strategic transactions; and (10) our
assumptions underlying these 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 presentation. 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, 2017 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
This slide presentation contains certain non-GAAP financial measures determined by methods other than in accordance with generally accepted
accounting principles. Such non-GAAP financial measures include the following: adjusted diluted earnings per share; adjusted return on average assets; adjusted return on average common equity; adjusted return
on average tangible common equity; average core deposits; cost of interest bearing core deposits; adjusted non-interest income; adjusted non-interest expense; adjusted
efficiency ratio; tangible common equity ratio; and common equity Tier 1 (CET1) ratio (fully phased-in). The most comparable GAAP measures to these measures are diluted earnings per share; return on average
assets; return on average common equity; total average deposits; cost of funds rate; total non-interest income; total non-interest expense; efficiency ratio; total
shareholders equity to total assets ratio; and CET1 ratio, respectively. Management uses these non-GAAP financial measures to assess the performance of Synovus business and the strength of its
capital position. Management believes that these non-GAAP financial measures provide meaningful additional information about
Synovus to assist management, investors, and bank regulators in evaluating Synovus operating results, financial strength, the performance of its business and
the strength of its capital position. However, these non-GAAP financial measures have inherent limitations as analytical tools and should not be considered in isolation or as a substitute for analyses of
operating results or capital position as reported under GAAP. The non-GAAP financial measures should be considered as additional views of the way our financial measures are affected by significant items and
other factors, and since they are not required to be uniformly applied, they may not be comparable to other similarly titled measures at other companies. Adjusted diluted earnings per share, adjusted return on average assets, and adjusted return on
average common equity are measures used by management to evaluate operating results exclusive of items that are not indicative of ongoing operations and impact
period-to-period comparisons. Adjusted return on average tangible common equity is a measure used by management to compare Synovus performance with other financial
institutions because it calculates the return available to common shareholders without the impact of intangible assets and their related amortization, thereby allowing management to evaluate the performance of the business consistently. Average core
deposits is a measure used by management to evaluate organic growth of deposits and the quality of deposits as a funding source. The cost of interest bearing core deposits is a measure used to evaluate the cost of deposits as a funding source
exclusive of brokered deposits and deposits. Adjusted non-interest income is a measure used by management to evaluate non-interest income exclusive of net investment
securities gains/losses, changes in fair value of private equity investments, net. Adjusted non-interest expense and the adjusted efficiency ratio are measures utilized by management to measure the success of
expense management initiatives focused on reducing recurring controllable operating costs. The tangible common equity ratio is used by management and bank regulators to assess the strength of our capital position. The computations of the non-GAAP financial measures used in this slide presentation are set forth in the Appendix to this slide presentation.
2
2Q18 Highlights
Profitability
Diluted EPS of $0.91, vs. $0.84 in 1Q18 and $0.60 in 2Q17
$
Adjusted diluted EPS(1) of $0.92, up 7.8% vs. 1Q18 and 52.6% vs. 2Q17
ROA of 1.42%, vs. 1.34%
in 1Q18 and 1.00% in 2Q17 Adjusted ROA(1) of 1.43%, up 7 b.p.s vs. 1Q18 and 42 b.p.s vs. 2Q17 Total revenues of $359.3 million, up $17.9 million vs.
1Q18
and up $39.5 million or 12.3% vs. 2Q17
Balance Sheet Growth
(in
Total average loans grew $93.9 million or 1.5%(2) vs. 1Q18 and $596.3 million or 2.4% vs. 2Q17
Total average deposits increased $480.0 million or 7.5%(2) vs. 1Q18 and increased $1.28 billion or 5.1% vs.
2Q17
Credit Quality and Capital Management
NPA ratio of 0.50% improved 23 b.p.s from 2Q17
Return on average common equity of 15.39%
compared to 10.34% in 2Q17 Adjusted ROE(1) of 15.59% increased 510 b.p.s vs. 2Q17 Adjusted ROATCE(1) of 15.97% increased 522 b.p.s vs.
2Q17
(1) Non-GAAP financial measure; see appendix for applicable reconciliation. (2) Annualized
Diluted EPS
$0.91 $0.92
$0.84 $0.86
$0.60 $0.61
Return on Average Assets
(1)
52.6% YoY
NPA Ratio
0.73%
0.53% 0.50%
2Q17 1Q18 2Q18
23 b.p.s YoY
1.42% 1.43%
1.34% 1.36%
1.00% 1.01%
2Q17 1Q18 2Q18
(1)
Reported Adjusted
(1)
Reported Adjusted
(1)
42 b.p.s YoY
Total Average Loans
(in billions)
$24.85 $24.95
$24.35
2.4% YoY
2Q17 1Q18 2Q18
(1)
Reported Adjusted
3
Loans
Period-end Loan Balances
(in
billions)
$24.43(2) 11.74
48.1%
5.28
21.6%
7.41
30.3%
2Q17
$24.88(2) 12.10
48.5%
5.97
24.0%
6.84
27.5%
1Q18
$95.6
$25.13 (2)
12.28
48.8%
6.24
24.8%
6.64
26.4%
2Q18
$251.0
Sequential quarter period-end growth of $251.0 million or 4.0%(1) vs. 1Q18 C&I up $173.6 million or 5.8%(1) Consumer up
$267.8 million or 18.0%(1) CRE down $191.6 million or 11.2%(1) Year-over-year period-end growth of $703.5 million or 2.9% C&I up $532.5 million or 4.5% Consumer up $945.8
million or 17.9% CRE down $778.1 million or 10.5% Total average loan growth of $93.9 million or 1.5%(1) vs. 1Q18 and $596.3 million or 2.4% vs. 2Q17
Sequential quarter $172.0
loan growth:
(in millions)
CRE Consumer C&I
Sequential quarter period-end growth of $251.0 million or 4.0%(1) vs. 1Q18 C&I up $173.6 million or 5.8%(1) Consumer up
$267.8 million or 18.0%(1) CRE down $191.6 million or 11.2%(1) Year-over-year period-end growth of $703.5 million or 2.9% C&I up $532.5 million or 4.5% Consumer up $945.8 million
or 17.9% CRE down $778.1 million or 10.5% Total average loan growth of $93.9 million or 1.5%(1) vs. 1Q18 and $596.3 million or 2.4% vs. 2Q17 Annualized
Total loans are net of deferred fees and costs.
4
Deposits
Total Average Deposits
(in billions)
$24.99 1.38 3.25
0.81
4.84
7.42 7.30 2Q17
$25.79
1.95
3.04
0.81
5.03
7.56
7.39
1Q18
$26.27
1.92 3.18 0.83
5.00 7.79 7.54 2Q18
2Q18 total average deposits of $26.27 billion increased $480.0 million or 7.5%(1) vs. 1Q18 and increased $1.28 billion or 5.1% vs. 2Q17 Average core deposits(2)
increased $509.0 million or 8.6%(1) vs. 1Q18 and increased $733.0 million or 3.1% vs. 2Q17 2Q18 average balances reflect $310 million from sweep MMA product(4) compared to $112 million in 1Q18.
Prior to February 28, 2018, balances were reported as a component of brokered deposits 2Q18 period-end deposits of $26.44 billion
increased $189.2 million or 2.9%(1) vs. 1Q18 and increased $1.22 billion or 4.9% vs. 2Q17 Loan to deposit ratio remained stable vs. 1Q18 at 95%
Non-interest bearing DDA
(3)
Interest
bearing DDA Time deposits(3)
MMA(3) Savings
Brokered deposits
(1) Annualized
(2) Core deposits consist of total deposits excluding brokered deposits. Non-GAAP financial measure; see appendix for applicable reconciliation. (3) Excluding brokered deposits
(4) Effective
February 28, 2018, core deposits include a sweep MMA product offered to Synovus Securities customers which was previously reported as a component of brokered deposits.
5
Net interest income
(dollars in millions)
$284.6
$274.3
$251.1
3.86% 3.78%
3.51%
2Q17 1Q18 2Q18 Net Interest Income Net Interest Margin
(1) See slide 23 in the appendix for computation.
(2)
Non-GAAP financial measure; see appendix for applicable reconciliation.
Net interest income of $284.6 million
increased
$10.3 million or 3.8% vs. 1Q18 and $33.5 million or 13.3% vs. 2Q17
Net interest margin of 3.86% up 8 b.p.s vs. 1Q18ï,¡ Yield on earning assets of 4.46% up 16 b.p.s from 1Q18ï,¡ Yield on loans of 4.88% up 18 b.p.s from
1Q18ï,¡ Effective cost of funds of 0.61%(1) up 8 b.p.s from 1Q18ï,¡ Cost of interest bearing core deposits(2) of 0.57% up 11 b.p.s from 1Q18
6
Non-interest income
(in millions)
$73.4
$68.7 6.4
$67.0
5.4 2.8 4.8 5.8 5.0
24.8
20.8 23.3
36.7 35.9 37.4
2Q17 1Q18 2Q18
Other income
Mortgage banking income
Fiduciary/asset management, brokerage, and insurance revenues
Core banking fees(2)
2Q18
non-interest income of $73.4 million increased $6.3 million vs. 1Q18 and increased $4.7 million vs. 2Q17ï,¡ 1Q18 and 2Q17 include the impact from net decreases in fair value of private
equity investments of $3.1 million and $1.4 million, respectivelyï,¡ 2Q18 includes net investment securities losses of $1.3 million 2Q18 adjusted non-interest income(1) of
$74.7 million increased $4.6 million or 6.6% vs. 1Q18 and $4.7 million or 6.7% vs. 2Q17 Core banking fees(2) of $37.4 million increased $1.6 million or 4.4% vs. 1Q18 and $757 thousand or 2.1% vs. 2Q17 Fiduciary/asset
management, brokerage, and insurance revenues of $24.8 million increased $1.5 million or 6.1% vs. 1Q18 and $4.0 million or 19.1% vs. 2Q17ï,¡ Assets under management of $14.37 billion increased 16% vs. 2Q17
(1) Non-GAAP financial measure; see appendix for applicable reconciliation.
(2) Include service charges on deposit accounts, card fees, letter of credit fees, ATM fee income, line of credit non-usage fees, gains from
sales of government guaranteed loans, and miscellaneous other service charges.
7
Non-interest expense
(dollars in millions)
$204.1 $202.7 $195.2 $197.8 $191.7 $191.4
2Q17 1Q18 2Q18
Reported Adjusted
Efficiency
59.90% 57.16% 56.78% Ratio
Adjusted
Efficiency 59.56% 57.42% 56.41% Ratio(1)
(1) Non-GAAP financial measure; see appendix for applicable reconciliation.
2Q18 non-interest expense of $204.1 million increased $8.9 million or 4.5% vs. 1Q18 and 6.4% vs. 2Q17
2Q18 includes a $2.3 million expense for a valuation adjustment to the Visa derivative offset somewhat by a $1.4 million benefit from a recovery of litigation settlement
expense
2Q18 adjusted non-interest expense(1) of $202.7 million increased $4.9 million or 2.5% vs. 1Q18 and
increased $11.3 million or 5.9% vs. 2Q17
Sequential quarter increase driven by $4.8 million increase in other operating expense and $1.2 million
increase in occupancy and equipment expense
2Q18 efficiency ratio of 56.78%; compared to
57.16% in 1Q18 and 59.90% in 2Q17
2Q18 adjusted efficiency ratio(1) of 56.41%; improved from
57.42% in 1Q18 and 59.56% in 2Q17
8
Credit quality
(dollars in millions)
0.73% NPA, NPL, and Past Due Ratios
0.57%
0.53% 0.53% (2) 0.65% 0.50% 0.40% 0.47% 0.48% 0.47% 0.35% 0.27% 0.22% 0.22% 0.21%
2Q17 3Q17
4Q17 1Q18 2Q18
(1)
NPA Ratio NPL Ratio Total Past Dues > 30 Days Ratio
Provision Expense
$39.7
$27.7
$27.7
$12.0 $12.8 $11.8
$10.3 $8.6
2Q17 3Q17 4Q17 1Q18 2Q18
Held-for-Sale Transfers
(1) Excludes impaired loans held for sale
(2) Net
charge-off ratio is as a percentage of average total loans, annualized.
Net Charge-offs(2)
$38.1
0.56% 0.56%
$17.8 $15.7
0.29%
0.26%
$9.0
0.15% 0. $15% 4.3
0.06% 0.07%
2Q17 3Q17 4Q17 1Q18 2Q18
Held-for-Sale Transfers
Allowance for Loan Losses
1.04%
1.00%
1.02% 1.02% 1.01% $257.8 $249.7 $251.7 $248.1 $249.3
2Q17 3Q17 4Q17 1Q18 2Q18
9
Capital ratios
2Q17 1Q18 2Q18
(1)
Common equity Tier 1 ratio 10.02% 10.09 10.11
Tier 1 capital ratio 10.37 10.53 11.25(1)
Total risk-based capital ratio 12.24 12.40 13.07(1)
Leverage ratio 9.30 9.37 10.03
Tangible common equity ratio(2) 9.15 8.79 8.77
tax (3) (1) Disallowed deferred asset (in millions) $142.0 67.1 64.0
On
June 21, Synovus completed a public offering of $200 million of Series D Preferred Stock Completed $50.0 million in common share repurchases during the quarter. Year to date common share repurchases total $76.8
million 2Q18 common equity Tier 1 ratio on a fully phased-in basis estimated at 10.05%(1)(2)
(1)
Preliminary
(2) Non-GAAP financial measure; see appendix for applicable reconciliation.
(3) Tier 1 capital disallowed deferred tax asset; CET1 disallowed deferred tax asset is $51.5 million at June 30, 2018 compared to $53.7 million at March 31,
2018 and $114.7 million at June 30, 2017.
10
2018 Outlook
Balance Sheet
Revenue
Non-interest Expense and Taxes
Credit and Capital
Metrics
Average loan growth
Average total deposit growth
Net interest income growth
Adjusted non-interest
income(1) growth
Total non-interest expense growth
Effective tax rate
Net charge-off ratio
Share repurchases
Common dividend per share (year)
2018 Guidance
4% to 6%
4% to 6%
11% to 13%
4% to 6%
0% to 3%
23% to 24%
15 to 25 b.p.s
Up to $150 million
Up 67% to $1.00
YTD through 6/30/18 Results
2.9%(2)
(2)
4.3%
13.8%(2) 6.5%(2)
(2)
2.6%
22.2%
18 b.p.s
$76.8 million $0.50
(1) Non-GAAP financial measure; see appendix for applicable reconciliation. (2) Growth vs. YTD 6/30/17
11
Appendix
Condensed Income Statement
(in thousands, except
per share data)
Net interest income
Adjusted
non-interest income* Adjusted non-interest expense* Provision expense Investment securities (losses) gains, net
(Decrease) increase in fair value of private equity investments, net Restructuring charges, net Litigation settlement/contingency expense Valuation adjustment to Visa derivative
Amortization of intangibles Income before taxes Income tax expense Dividends on preferred stock
Net income available to common shareholders
Net income per diluted common share
Weighted average diluted common shares
2Q18
$284,577 74,720 (202,734) (11,790) (1,296) (37) (103) 1,400 (2,328) (292) 142,117 30,936
2,559 $108,622 $0.91
119,139
1Q18
$274,284 70,102 (197,828) (12,776) -(3,056) 315 2,626 -(292) 133,375 30,209 2,559 $100,607 $0.84
119,321
2Q17
$251,097 70,054 (191,442) (10,260) (1) (1,352) (13) --(292) 117,791 41,788 2,559 $73,444 $0.60
123,027
*Non-GAAP financial measure;
see applicable reconciliation.
13
Quarterly Highlights Trend
Financial Performance
Balance Sheet Growth(3)
Credit Quality
Capital
Diluted EPS Net interest margin Adjusted efficiency ratio(1) ROA(2) Adjusted ROA(1)(2)
Total loans
Total average deposits
NPA ratio
NCO ratio(2)
Common shares outstanding(4) CET1 ratio TCE ratio(1)
2Q17
0.60 3.51 59.56 1.00 1.01
2.8
1.2
0.73
0.26
121,661 10.02 9.15
3Q17 4Q17 1Q18 2Q18
0.78 0.23 0.840.91
3.63 3.65 3.783.86
58.59 59.29
57.4256.41
1.27 0.37 1.341.42
1.05 1.12 1.361.43
0.9 4.9
1.64.0
4.7 15.7 (7.7)7.5
0.57 0.53 0.530.50
0.62 0.15
0.070.29
119,567 118,897 118,702117,841
10.06 9.99 10.0910.11 (5)
8.88 8.88 8.798.77
(1)
Non-GAAP financial measure; see applicable reconciliation. (2) Annualized (3) Sequential quarter growth, annualized. (4) In thousands (5) Preliminary
14
Net Interest Margin
Investment Securities
Portfolio
4.3 4.1 3.8 3.6 3.6
2.30% 2.34% 2.36% 2.11% 2.12%
2Q17 3Q17 4Q17 1Q18 2Q18 Duration (in years) Yield
Loan Portfolio Rate Mix
37.4% 37.4% 37.0% 36.9% 36.7%
17.2% 16.8% 17.0% 17.0% 16.2%
45.4% 45.8% 46.0% 46.1% 47.1%
2Q17 3Q17 4Q17 1Q18 2Q18
Fixed rate Prime floating rate* LIBOR floating rate*
Loan Portfolio
1.4 1.4 1.3 1.4 1.3
4.88% 4.70% 4.55% 4.49% 4.36%
2Q17 3Q17 4Q17 1Q18 2Q18 Duration (in years) Yield
Net Interest Income Sensitivity
Immediate change in
Estimated % increase in short-term interest rates net interest income* (in
b.p.s)
+100 2.98%
+25 1.04%
* As of June 30, 2018, $114.4 million or 0.5% of total loans were at their floor rate, down from $384.7 million or 1.6% of total loans a year ago.
15
Non-interest Income
(in thousands)
Service charges on deposit accounts Fiduciary and asset management fees
Brokerage revenue Mortgage banking income Card fees Other fee income Income from bank-owned life insurance Other non-interest income Adjusted non-interest income(1)
Investment securities gains/(losses), net
Increase (decrease) in fair value
of private equity investments, net
Total non-interest income
2Q17 1Q18 2Q182Q18 vs.2Q18 vs.
1Q18 %2Q17 %
ChangeChange
$20,252 $19,940 $19,9990.3(1.2)
12,524 13,435 13,9834.111.6
7,210 8,695
8,9002.423.4
5,784 5,047 4,839(4.1)(16.3)
10,041 10,199 10,8336.27.9
6,164 4,618 5,25913.9(14.7)
3,272 4,217 3,733(11.5)14.1
4,807 3,951 7,17481.649.2
$70,054 $70,102 $74,7206.66.7
(1) - (1,296)nmnm
(1,352) (3,056) (37)nmnm
$68,701 $67,046 $73,3879.5%6.8%
(1) Non-GAAP financial measure; see applicable reconciliation.
nm = not meaningful
16
Portfolio Distribution by Type
(dollars in
millions) 2Q17 3Q174Q171Q182Q18
Investment Properties $6,036 24.7$5,92524.2%$5,67022.8%$5,61922.6%$5,51021.9%
Residential Properties 836 3.47953.27823.17593.17212.9
Land Acquisition 550 2.35072.14842.04571.84141.6
Total
CRE $7,422 30.4%$7,22729.5%$6,93527.9%$6,83627.5%$6,64426.4%
C&I 11,743
48.111,72747.812,02448.512,10248.512,27548.8
Consumer 5,291 21.75,55822.75,85423.65,96924.06,23724.8
Total Loans* $24,431 100.0%$24,487100.0%$24,788100.0%$24,883100.0%$25,134100.0%
* Total loans are net of unearned deferred fees and costs, which are not displayed on this table.
17
Commercial Real Estate
Commercial Real Estate
Portfolio Total Portfolio $6.64 billion
Residential Development
2% Land
Acquisition Commercial Development 4% 1%
1-4 Family
1-4 Family Construction
3% Perm/Mini Perm 8%
Office Building 22%
Hotels 11%
Shopping Centers 12%
Multi-Family
20% Warehouses 9%
Other Investment Properties 8%
*Annualized
Investment Properties portfolio represents 83% of total CRE portfolio
The portfolio is well diversified among the property types
Credit quality in Investment Properties portfolio remains excellent
Continued reduction in non-strategic CRE
property types (Residential and Land)
As of 2Q18, Residential C&D and Land Acquisition Portfolios represent only 2.1% of total performing loans
Commercial Real Estate 2Q18 Credit Metrics:
Credit
Indicator CRE Total
NPL Ratio 0.14%
Net Charge-off Ratio* 0.00%
30+
Days Past Due Ratio 0.10%
90+ Days Past Due Ratio 0.01%
18
Commercial Real Estate 2Q18 Credit Metrics:
Credit
Indicator CRE Total
NPL Ratio 0.14%
Net Charge-off Ratio* 0.00%
30+
Days Past Due Ratio 0.10%
90+ Days Past Due Ratio 0.01%
5.65%
2.11%
4.03%
23.31%
4.78%
6.75%
6.34% 6.38%
4.37% 4.86%
8.27% 6.85%
5.92% 5.60%
2.15%
2.63%
2.15%
Health Care Retail Trade Ag, Forestry, Fishing Construction Accommoda. & Food Svcs.
All Other
* Annualized
Finance/Insurance
Wholesale Trade
Admin., Support, Waste Mgmt., Remediation Other Services Transport. &
Warehousing
R/E Leasing
Prof., Scientific, Tech. Svcs Manufacturing R/E Other
Educational Svcs.
Large Corporate/Middle Market/Specialty Lines represent 38.4% of C&I Balances
Community/Retail Bank represents 61.6% of C&I balances
Credit
Indicator 2Q18
NPL Ratio 0.71%
Net Charge-off Ratio * 0.47%
30+ Days Past Due Ratio 0.19%
90+ Days Past Due
Ratio 0.01%
19
Consumer Portfolio
Total Consumer Portfolio
$6.24 billion
Other Consumer, 6%
HELOC, 23% Consumer Lending
Partnerships, 23%
Credit Card, 4%
Consumer Mortgage, 44%
Mortgage and HELOC, the two largest concentrations, have strong
credit
indicators
Credit Indicator Heloc Mortgage
Weighted Average Credit Score 786 770
of 2Q17
Originations
Weighted average credit score 786 764
of total portfolio
Average LTV 74.9% 74.9%
Average DTI 33.0% 32.4%
Utilization
Rate 53.7% N/A
* Annualized
Credit Indicator 2Q18
NPL
Ratio 0.33%
Net Charge-off Ratio * 0.24%
30+ Days Past Due Ratio 0.42%
90+ Days Past Due
Ratio 0.03%
Credit Card Portfolio continues to perform well
Average utilization rate is 22.6%
Average credit score is 730
Charge-offs below industry average at 2.09% for the year
Lending Partnerships
with GreenSky and SoFi
Currently $1.44 billion in balances, or 5.7% of total portfolio
GreenSky is a point-of-sale program where the customer applies with home improvement store,
contractor, or other merchant
SoFi portfolio primarily consists of refinanced student loan debt
20
Portfolio Risk Distribution (dollars in millions) 2Q18 vs. 1Q18 2Q18 vs. 2Q17 Risk Category 2Q17 1Q18 2Q18 Change Change Passing Grades $23,671 $24,269 $24,546 $277 $875 Special Mention 303 289 261 (28) (42) Substandard Accruing 236 204 210 6 (26) Non-Performing Loans 159 120 117 (3) (42) Total Loans $24,431 $24,883 $25,134 $251 $703
Loan Loss Reserve Coverage Trends (dollars in millions) 1.04% 1.02% 1.01% 1.00 % 1.02% $258 $250 $249 $252 $248 336% 263% 255% 238% 241% 217% 215% 216% 215% 156% 2Q17 3Q17 4Q17 1Q18 2Q18 Loan Loss Reserve LLR to NPLs LLR to NPLs (Excluding NPLs for which the expected loss has been charged off)
Effective cost of funds calculation (dollars in thousands) 2Q18 1Q18 2Q17 Total interest expense $45,257 $38,850 $34,413 Total interest expense, annualized 181,525 157,558 138,030 Total average interest earning assets $29,734,403 $29,448,680 $28,741,517 Effective cost of funds (total interest expense, annualized, 0.61% 0.53% 0.48% divided by total average interest earning assets)
Non-GAAP Financial Measures (dollars in thousands) 2Q18 1Q18 2Q17 Net income available to common shareholders $108,622 100,607 73,444 Add: Earnout liability adjustments Add: Income tax expense related to effect of Federal Tax Reform Subtract/add: Income tax expense related to effects of State Tax (608) 1,325 -Reform Add: Merger-related expense Subtract: Litigation settlement/contingency expense (1,400) (2,626) -Subtract/add: Restructuring charges, net 103 (315) 13 Add: Amortization of intangibles 292 292 292 Add: Loss on early extinguishment of debt, net Add: Valuation adjustment to Visa derivative 2,328 Add: Investment securities losses (gains), net 1,2961 Add/subtract: (Increase)/decrease in fair value of private equity 37 3,056 1,352 investments, net Add/subtract: Tax effects of adjustments (624) (96) (613) Adjusted net income $110,046 102,243 74,489 Weighted average common shares outstanding-diluted 119,139 119,321 123,027 Adjusted diluted earnings per share $0.92 $0.86 $0.61
Non-GAAP Financial Measures, continued (dollars in thousands) 2Q18 1Q18 4Q17 3Q17 2Q17 Net income $111,181 103,166 29,605 98,007 76,003 Add: Earnout liability adjustments 1,700 2,059Add: Income tax expense related to effects of Federal Tax Reform 47,181 Add/subtract: Income tax expense related to effects of State Tax Reform (608) 1,325 Add: Merger-related expense 23 -Add/subtract: Litigation settlement/contingency expense (1,400) (2,626) 300 401 -Subtract/add: Restructuring charges, net 103 (315) (29) 519 13 Add: Valuation adjustment to Visa derivative 2,328 -Add: Amortization of intangibles 292 292 292 292 292 Add: Loss on early extinguishment of debt, net 23,160 Add: 3Q17 provision expense on loans transferred to held-for-sale 27,710Add: 3Q17 discounts to fair value for completed or planned ORE accelerated dispositions 7,082Add: 3Q17 asset impairment charges related to accelerated disposition of corporate real 1,168 -estate and other properties Add/subtract: Investment securities losses (gains), net 1,296 7,956 1 Subtract/add: Increase/decrease in fair value of private equity investments, net 37 3,056 (100) 27 1,352 Subtract: Cabelas transaction fee (75,000) -Subtract: Income tax benefit related to pre-2017 R&D credits and state taxes (4,847) Add/subtract: Tax effects of adjustments (624) (96) (8,740) 11,034 (613) Adjusted net income $112,605 104,802 88,522 81,278 77,048 Net income annualized $451,657 425,030 351,201 322,462 309,039 Total average assets $31,502,758 31,245,708 31,388,724 30,678,388 30,630,748 Adjusted return on average assets 1.43% 1.36 1.12 1.05 1.01
Non-GAAP Financial Measures, continued (dollars in thousands) 2Q18 1Q18 2Q17 Net income available to common shareholders $108,622 100,607 73,444 Add: Earnout liability adjustments Add: Income tax expense related to effect of Federal Tax Reform Subtract/add: Income tax expense related to effects of State Tax Reform (608) 1,325 -Add: Merger-related expense Subtract: Litigation settlement/contingency expense (1,400) (2,626) -Subtract/add: Restructuring charges, net 103 (315) 13 Add: Amortization of intangibles 292 292 292 Add: Valuation adjustment to Visa derivative 2,328 Add: Loss on early extinguishment of debt, net Add/Subtract: Investment securities losses/(gains), net 1,2961 Subtract/add: Decrease/increase in fair value of private equity investments, net 37 3,056 1,352 Subtract: Income tax benefit related to pre-2017 R&D credits and state taxes Add/subtract: Tax effects of adjustments (624) (96) (613) Adjusted net income $110,046 102,243 74,489 Net income annualized $441,339 414,652 298,775 Total average shareholders? equity less preferred stock $2,831,368 2,790,878 2,849,069 Subtract: Goodwill (57,315) (57,315) (57,017) Subtract: Other intangible assets, net (10,555) (10,915) (11,966) Total average tangible shareholders equity less preferred stock $2,763,498 2,722,648 2,780,086 Adjusted return on average common equity 15.59% 14.86 10.49 Adjusted return on average tangible common equity 15.97% 15.23 10.75
Non-GAAP Financial Measures, continued 2Q18 1Q18 2Q17 (dollars in thousands) Total interest expense 45,257 38,850 34,413 Total interest expense, annualized 181,525 157,558 138,030 Total average interest bearing liabilities 29,734,403 20,726,597 20,146,714 Cost of funds rate 0.87% 0.76 0.68 Total interest expense $45,257 38,850 34,413 Subtract: Interest on long-term debt (12,455) (12,368) (16,250) Subtract: Interest on brokered deposits (8,918) (7,780) (2,672) Subtract: Interest on federal funds purchased and securities sold under repurchase agreements (203) (107) (45) Interest expense on interest bearing core deposits $23,681 18,595 15,446 Interest expense on interest bearing core deposits, annualized 94,984 75,413 61,954 Total average interest bearing liabilities $20,791,397 20,726,597 20,146,714 Subtract: Average long-term debt (1,852,094) (2,127,994) (2,270,452) Subtract: Average brokered deposits (1,922,917) (1,951,910) (1,379,559) Subtract: Average federal funds purchased and securities sold under repurchase agreements (210,679) (202,226) (183,400) Total average interest bearing core deposits $16,805,705 16,444,467 16,313,303 Cost of interest bearing core deposits 0.57% 0.46 0.38
Non-GAAP Financial Measures, continued (dollars in thousands) 2Q18 1Q18 2Q17 Total non-interest expense $204,057 195,179 191,747 Subtract: Earnout liability adjustments Subtract/add: Restructuring charges, net (103) 315 (13) Subtract: Loss on early extinguishment of debt, net Add: Litigation settlement/contingency expense 1,400 2,626 -Subtract: Merger-related expense Subtract: Valuation adjustment to Visa derivative (2,328) Subtract: Amortization of intangibles (292) (292) (292) Adjusted non-interest expense $202,734 197,828 191,442 Adjusted non-interest expense $202,734 197,828 191,442 Net interest income 284,577 274,284 251,097 Add: Tax equivalent adjustment 120 116 298 Add: Total non-interest income 73,387 67,046 68,701 Subtract/Add: Investment securities (gains) losses, net 1,2961 Total FTE revenues 359,380 341,446 320,097 Add/subtract: (Increase)/decrease in fair value of private equity investments, net 37 3,056 1,352 Adjusted total revenues $359,417 344,502 321,449 Efficiency ratio 56.78% 57.16 59.90 Adjusted efficiency ratio 56.41% 57.42 59.56 Total non-interest income $73,387 67,046 68,701 Subtract/add: Investment securities (gains) losses, net 1,2961 Add/subtract: Decrease/(increase) in fair value of private equity investments, net 37 3,056 1,352 Adjusted non-interest income $74,720 70,102 70,054 28
Non-GAAP Financial Measures, continued 2018 Current Outlook Increase (decrease) vs. 2017 (dollars in thousands) 2017 $ % Total
non-interest income, as reported $345,327 $285 million$290 million (16%) (18%) Subtract: Cabelas transaction fee (75,000) Add: Investment securities losses, net 289 Add: Decrease in fair value of private equity investments, net 3,093
Adjusted non-interest income $273,709 $285 million$290 million 4%6%
Six Months Ended (dollars in thousands) June 30, 2018 June 30, 2017 Total
non-interest income $140,433 140,539
Subtract/add: Investment securities (gains) losses, net 1,296 (7,667) Add/subtract: Decrease/(increase) in fair value of
private equity investments, net 3,093 3,166 Adjusted non-interest income $144,822 $136,038
Non-GAAP Financial Measures, continued (dollars in thousands) 2Q18 1Q18 2Q17 Total average deposits $26,268,074 25,788,073 24,991,708 Subtract: Average brokered deposits (1,922,917) (1,951,910) (1,379,559) Average core deposits $24,345,157 23,836,163 23,612,149 (dollars in thousands) 2Q17 3Q17 4Q17 1Q18 2Q18 Total assets 30,687,966 31,642,123 31,221,837 31,501,028 31,740,305 Subtract: Goodwill (57,092) (57,315) (57,315) (57,315) (57,315) Subtract: Other intangible assets, net (11,843) (11,548) (11,254) (10,750) (10,458) Tangible assets $30,619,031 $31,573,260 $31,153,268 $31,432,963 $31,672,532 Total shareholders equity $2,997,947 $2,997,079 $2,961,566 2,956,495 3,167,694 Subtract: Goodwill (57,092) (57,315) (57,315) (57,315) (57,315) Subtract: Other intangible assets, net (11,843) (11,548) (11,254) (10,750) (10,458) Subtract: Preferred Sock (125,980) (125,980) (125,980) (125,980) (321,118) Tangible common equity $2,803,032 $2,802,236 $2,767,017 $2,762,450 $2,778,803 Total shareholders equity to total assets ratio 9.77% 9.47% 9.49% 9.39% 9.98% Tangible Common Equity ratio 9.15% 8.88% 8.88% 8.79% 8.77% (dollars in thousands) 2Q18 Common equity Tier 1 (CET1) $2,838,616 Subtract: Adjustment related to capital components (3,599) Common equity Tier 1 (fully phased-in) $2,835,017 Total risk-weighted assets $28,070,857 Total risk-weighted assets (fully phased-in) $28,197,301 Common equity Tier 1 (CET1) ratio 10.11% Common equity Tier 1 (CET1) ratio (fully phased-in) 10.05% 30
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