Synovus Financial Corp. today reported financial results for the quarter ended December 31, 2015.

Net income available to common shareholders for the fourth quarter of 2015 was $55.8 million or $0.43 per diluted share as compared to $55.4 million or $0.42 per diluted share for the third quarter of 2015 and $50.6 million or $0.37 per diluted share for the fourth quarter of 2014. Adjusted earnings per diluted share for the fourth quarter of 2015 were $0.44, a 4.2% increase from the third quarter of 2015 and a 13.5% increase from the fourth quarter of 2014.

2015 Highlights

• Net income available to common shareholders for 2015 was $215.8 million or $1.62 per diluted share as compared to $185.0 million or $1.33 per diluted share for 2014. Diluted EPS grew 21.9% for 2015 compared to 2014.
• Total loans ended the year at $22.43 billion, a $1.33 billion or 6.3% increase from 2014.
• Average core deposits for the year were $21.13 billion, a $1.60 billion or 8.2% increase from 2014.
• Non-performing assets of $215.4 million at December 31, 2015 declined 24.9% from December 31, 2014, and the non-performing asset ratio declined 39 basis points from December 31, 2014 to 0.96% at December 31, 2015.
• The net-charge off ratio for 2015 was 0.13%, down 26 basis points from 2014.
• We returned over $250 million in capital to common shareholders through common stock share repurchases and dividends.
  • Common Equity Tier 1 ratio was 10.37% at December 31, 2015 compared to 10.74% at December 31, 2014.

“We finished 2015 with strong performance in the fourth quarter, closing out another year of double digit growth in net income and balanced loan growth supported by strong core deposits,” said Kessel D. Stelling, Synovus Chairman and CEO. “Our team is excited about 2016 as we seek new ways to better serve our customers and prospects in this dynamic and highly-competitive environment. Our relationship-based approach, combined with our strategic initiatives and investments, creates an effective formula for driving continued growth, achieving greater efficiencies, and improving financial performance.”

Fourth Quarter 2015 Highlights

Balance Sheet

• Total loans ended the quarter at $22.43 billion, up $565.3 million or 10.3% annualized from the previous quarter.
  • Commercial and industrial loans grew by $248.3 million or 9.3% annualized.
  • Commercial real estate loans grew by $185.2 million or 10.2% annualized.
  • Retail loans grew by $133.5 million or 12.7% annualized.
• Total average deposits for the quarter were $23.24 billion, up $384.2 million or 6.7% annualized from the previous quarter.
• Average core deposits grew $556.3 million or 10.3% annualized from the previous quarter.
• Average core deposits, excluding state, county, and municipal deposits, grew by $377.8 million or 7.7% annualized compared to the previous quarter.

Income Statement

Adjusted pre-tax, pre-credit costs income was $105.3 million for the fourth quarter of 2015, an increase of $533 thousand from $104.7 million for the third quarter of 2015.

• Net interest income was $212.6 million for the fourth quarter of 2015, up $4.8 million from $207.8 million in the previous quarter.
• The net interest margin increased four basis points to 3.18% compared to 3.14% in the third quarter of 2015. The yield on earning assets was 3.63%, up three basis points from the third quarter of 2015, and the effective cost of funds was 0.45%, down one basis point from the third quarter of 2015.
• Total non-interest income was $66.2 million, down $884 thousand or 1.3% compared to $67.1 million for the third quarter of 2015.
  • Core banking fees^[1] were $33.6 million, down $271 thousand or 0.8% from the third quarter of 2015.
  • Financial Management Services revenues, consisting primarily of fiduciary and asset management fees and brokerage revenue, were $19.8 million, unchanged from the third quarter of 2015.
  • Mortgage banking income decreased $1.8 million or 30.7% compared to the third quarter of 2015, due to a decrease in production volume of 34.1%.

• Total non-interest expense for the fourth quarter of 2015 was $183.0 million, up $5.1 million or 2.9% from the previous quarter and down $1.8 million or 1.0% as compared to the fourth quarter of 2014.
• Adjusted non-interest expense for the fourth quarter of 2015 was $173.5 million, up $3.4 million or 2.0% from the previous quarter and up $1.1 million or 0.6% as compared to the fourth quarter of 2014.
  • Employment expense of $95.5 million increased $1.2 million or 1.3% from the previous quarter.
  • Occupancy and equipment expense increased $879 thousand or 3.3% from the prior quarter, driven by a $1.2 million charge related to lease exit costs.
  • Other expenses increased $1.3 million or 2.6% sequentially, driven by a $2.2 million increase in consulting fees.

Credit Quality

Broad-based improvement in credit quality continued.

• Total credit costs were $11.9 million in the fourth quarter of 2015 compared to $10.3 million in the third quarter of 2015.
• Total non-performing assets were $215.4 million at December 31, 2015, a $6.6 million or 3.0% decline from the previous quarter, and a $71.4 million or 24.9% decline from the fourth quarter of 2014. The non-performing asset ratio was 0.96% at December 31, 2015, compared to 1.01% at the end of the previous quarter and 1.35% at December 31, 2014.
• Non-performing loans, excluding loans held for sale, were $168.4 million at December 31, 2015, an increase of $10.7 million or 6.8% from the previous quarter, and a decrease of $29.4 million or 14.9% from the fourth quarter of 2014. The non-performing loan ratio was 0.75% at December 31, 2015, compared to 0.72% at the end of the previous quarter and 0.94% at December 31, 2014.
• Total delinquencies (consisting of loans 30 or more days past due and still accruing) were 0.21% at December 31, 2015 compared to 0.18% at September 30, 2015 and 0.24% at December 31, 2014. Total loans past due 90 days or more and still accruing were 0.01% at December, 31, 2015, unchanged from September 30, 2015 and down from 0.02% at December 31, 2014.
• Net charge-offs were $3.4 million in the fourth quarter of 2015, a decrease of $3.3 million from $6.8 million in the third quarter of 2015. The annualized net charge-off ratio was 0.06% in the fourth quarter compared to 0.12% in the previous quarter.

Capital Ratios

Capital ratios remained strong and include the impact of common stock repurchases totaling $37.1 million, the issuance of $250 million in subordinated debt with a ten year maturity, and the repurchase of $46.7 million of the outstanding subordinated notes that mature in 2017.

• Common Equity Tier 1 ratio was 10.37% at December 31, 2015 compared to 10.60% at September 30, 2015.
• Tier 1 Capital ratio was 10.37% at December 31, 2015 compared to 10.60% at September 30, 2015.
• Total Risk Based Capital ratio was 12.70% at December 31, 2015 compared to 12.02% at September 30, 2015.
• Tier 1 Leverage ratio was 9.43% at December 31, 2015 compared to 9.45% at September 30, 2015.
• Tangible Common Equity ratio was 9.90% at December 31, 2015 compared to 10.18% at September 30, 2015.

Fourth Quarter Earnings Conference Call

Synovus will host an earnings highlights conference call at 8:30 a.m. Eastern on January 19, 2016. 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 www.synovus.com/webcasts. You may download RealPlayer or Windows Media Player (free download available) 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.