Synovus Financial Corp. today reported financial results for the quarter ended September 30, 2016.

Third Quarter Highlights

• Net income available to common shareholders for the third quarter 2016 was $62.7 million or $0.51 per diluted share as compared to $57.9 million or $0.46 per diluted share for the previous quarter and $55.4 million or $0.42 per diluted share for the third quarter 2015.
  • Adjusted diluted earnings per share of $0.52 grew 23.0% from $0.42 for the third quarter 2015.
  • Return on average assets improved to 0.88% from 0.83% in the previous quarter and 0.81% in the third quarter 2015.
• Total revenues¹ of $294.1 million grew $4.8 million or 1.6% from the previous quarter and 7.0% from the third quarter 2015.
• Synovus continued to achieve positive operating leverage which resulted in an improved adjusted efficiency ratio of 60.55% in the third quarter as compared to 61.54% in the previous quarter and 61.83% in the third quarter 2015.
• Total loans grew $202.0 million or 3.5% annualized from the previous quarter and $1.40 billion or 6.4% as compared to the third quarter 2015.
• Total average deposits grew $422.3 million or 7.1% annualized from the previous quarter and $1.17 billion or 5.1% as compared to the third quarter 2015.
• Credit quality metrics improved with the NPL ratio declining to 0.64% from 0.67% in the previous quarter and 0.72% in the third quarter 2015.
• Return on average common equity improved to 8.89% from 8.26% in the previous quarter and 7.64% in the third quarter 2015.
• Return on average tangible common equity improved to 8.96% from 8.33% in the previous quarter and 7.70% in the third quarter 2015.
• Effective September 29, 2016, the company entered into an accelerated share repurchase agreement (ASR) to repurchase $50 million of Synovus common stock. Upon settlement of the ASR scheduled on or before December 28, 2016, the $300 million share repurchase program will be complete.

“We were pleased with our third quarter performance, marked by strong earnings per share and revenue growth,” said Kessel Stelling, Synovus Chairman and CEO. “We continued to drive diversified loan growth in the quarter and, with the successful closing of the Entaire acquisition in October, we gained an additional entry point for expanded C&I relationships in the future. With another solid quarter behind us, our team remains committed to deepening customer relationships and enhancing profitability.”

Consolidated Financial Results

Balance Sheet

• Total loans ended the quarter at $23.26 billion, up $202.0 million or 3.5% annualized from the previous quarter and up $1.40 billion or 6.4% as compared to the third quarter 2015.
  • Retail loans grew by $182.1 million or 15.7% annualized from the previous quarter and $648.3 million or 15.6% as compared to the third quarter 2015.
  • Commercial and industrial loans grew by $60.6 million or 2.2% annualized from the previous quarter and $490.0 million or 4.7% as compared to the third quarter 2015.
  • Commercial real estate loans declined by $42.1 million or 2.2% annualized from the previous quarter and grew $258.1 million or 3.6% as compared to the third quarter 2015.
• Total average deposits for the quarter were $24.03 billion, and grew by $422.3 million or 7.1% annualized from the previous quarter and $1.17 billion or 5.1% as compared to the third quarter 2015.
  • Average core transaction accounts² grew by $512.7 million or 12.1% annualized from the previous quarter and $1.26 billion or 7.8% as compared to the third quarter 2015.

Core Performance

• Total revenues¹ of $294.1 million grew $4.8 million or 1.6% from the previous quarter and 7.0% from the third quarter 2015.

• Net interest income was $226.0 million, up $4.6 million or 2.1% from the previous quarter and 8.8% as compared to the third quarter 2015.
• Net interest margin was 3.27%, unchanged from the previous quarter. Yield on earning assets was 3.71% and the effective cost of funds was 0.44%, both of which declined two basis points from the previous quarter.
• Total non-interest income was $68.2 million, up $269 thousand or 0.4% compared to the previous quarter and 1.6% as compared to the third quarter 2015.
  • Core banking fees³ were $34.8 million, up $989 thousand or 2.9% from the previous quarter and down 0.6% as compared to the third quarter 2015.
  • Fiduciary and asset management fees, brokerage revenue, and insurance revenues of $19.6 million were down $250 thousand or 1.3% from the previous quarter and up 2.0% as compared to the third quarter 2015.
  • Mortgage banking income of $7.3 million was up $1.4 million or 23.4% from the previous quarter and 22.9% as compared to the third quarter 2015.

• Total non-interest expense for the third quarter 2016 was $185.9 million, down $2.7 million or 1.5% from the previous quarter and up $8.0 million or 4.5% as compared to the third quarter 2015.
• Adjusted non-interest expense for the third quarter 2016 was $183.9 million, up $1.5 million or 0.8% from the previous quarter and up $6.4 million or 3.6% as compared to the third quarter 2015.
  • Employment expense of $101.9 million increased $4.9 million or 5.0% from the previous quarter.
  • Advertising expense of $5.6 million decreased $1.8 million from the previous quarter.
  • Adjusted efficiency ratio for the third quarter was 60.55% as compared to 61.54% in the previous quarter and 61.83% in the third quarter 2015.
  • Efficiency ratio for the third quarter was 63.13% as compared to 65.11% in the previous quarter and 64.65% in the third quarter 2015.
• On a year-to-date basis, adjusted non-interest expense of $545.6 million increased $16.5 million or 3.1% as compared to a year ago.

Credit Quality

• Non-performing loans were $148.2 million at September 30, 2016, down $5.9 million or 3.8% from the previous quarter and down $9.5 million or 6.0% from September 30, 2015. The non-performing loan ratio was 0.64% at September 30, 2016, as compared to 0.67% at the end of the previous quarter and 0.72% at September 30, 2015.
• Total non-performing assets were $179.1 million at September 30, 2016, down $8.3 million or 4.4% from the previous quarter and down $42.9 million or 19.3% from September 30, 2015. The non-performing asset ratio was 0.77% at September 30, 2016, as compared to 0.81% at the end of the previous quarter and 1.01% at September 30, 2015.
• Net charge-offs were $6.9 million in the third quarter 2016, up $797 thousand or 13.0% from $6.1 million in the previous quarter. The annualized net charge-off ratio was 0.12% in the third quarter as compared to 0.11% in the previous quarter.
• Total delinquencies (consisting of loans 30 or more days past due and still accruing) remain low at 0.27% of total loans at September 30, 2016 as compared to 0.24% the previous quarter and 0.18% at September 30, 2015.

Capital Ratios

• Common Equity Tier 1 ratio was 9.97% at September 30, 2016 compared to 10.01% at June 30, 2016.
• Tier 1 Capital ratio was 10.06% at September 30, 2016, unchanged from June 30, 2016.
• Total Risk Based Capital ratio was 12.05% at September 30, 2016, unchanged from June 30, 2016.

• Tier 1 Leverage ratio was 8.98% at September 30, 2016 compared to 9.10% at June 30, 2016.
• Tangible Common Equity ratio was 9.28% at September 30, 2016 compared to 9.52% at June 30, 2016.

Third Quarter Earnings Conference Call

Synovus will host an earnings highlights conference call at 8:30 a.m. EDT on October 18, 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 investor.synovus.com/event. The replay will be archived for 12 months and will be available 30-45 minutes after the call.