Synovus Financial Corp. today reported financial results for the quarter ended March 31, 2016.

First Quarter Highlights

• Net income available to common shareholders for the first quarter 2016 was $50.0 million or $0.39 per diluted share as compared to $55.8 million, or $0.43 per diluted share for the previous quarter and $51.4 million, or $0.38 per diluted share for the first quarter 2015.
  • Adjusted diluted earnings per share of $0.43 excluding loss on early extinguishment of debt, litigation contingency/settlement expense, and restructuring charges, up 14.6% from $0.38 per adjusted diluted share for the first quarter 2015.

• Total loans grew $328.6 million or 5.9% annualized from the previous quarter and $1.65 billion or 7.8% as compared to the first quarter 2015.
• Average core deposits grew $55.9 million or 1.0% annualized from the previous quarter and $2.09 billion or 10.5% as compared to the first quarter 2015.
• Total revenues¹ of $281.3 million, up $2.5 million or 0.9% from the previous quarter and 4.8% from the first quarter 2015.
• Net interest margin of 3.27%, up 9 basis points from the previous quarter and down 1 basis point from the first quarter 2015.
• Credit quality metrics remained favorable with a net charge-off ratio of 13 basis points, up 7 basis points from the previous quarter and down 10 basis points from the first quarter 2015.
• The company continued to return capital to shareholders during the quarter, acquiring an additional $110.9 million of common stock.
  • From inception of the existing $300 million repurchase program announced in October 2015 through April 18, 2016, the company has repurchased $158.5 million of common stock, reducing the total share count by 5.4 million.
• During the quarter, Synovus paid a common stock dividend of $0.12 per share, representing a 20% increase from the fourth quarter 2015 dividend.

“During the first quarter, we demonstrated continued overall progress through increased revenue, driven by balance sheet growth and net interest margin expansion, as well as through improved efficiency. We also continued our return of capital to shareholders, reaching the halfway mark of our current $300 million common share repurchase program,” said Kessel D. Stelling, Synovus Chairman and CEO. "We are making ongoing investments in talent to broaden relationships and increase share in all business lines, especially in key high-growth markets. Our exceptional team remains deeply committed to serving our customers and communities while crisply executing on the right strategic priorities for improved long-term financial performance."

Balance Sheet

• Total loans ended the quarter at $22.76 billion, up $328.6 million or 5.9% annualized from the previous quarter and up $1.65 billion or 7.8% as compared to the first quarter 2015.
  • Commercial real estate loans grew by $216.3 million or 11.8% annualized from the previous quarter and $693.6 million or 10.1% as compared to the first quarter 2015.
  • Commercial and industrial loans grew by $40.0 million or 1.5% annualized from the previous quarter and $514.7 million or 5.0% as compared to the first quarter 2015.
  • Retail loans grew by $71.7 million or 6.7% annualized from the previous quarter and $443.7 million or 11.3% as compared to the first quarter 2015.
• Total average deposits for the quarter were $23.21 billion, down $34.0 million or 0.6% annualized from the previous quarter and up $1.60 billion or 7.4% as compared to the first quarter 2015.
  • Average core deposits for the quarter grew by $55.9 million or 1.0% annualized from the previous quarter and $2.09 billion or 10.5% as compared to the first quarter 2015.
  • Average core deposits, excluding state, county, and municipal deposits, declined $81.6 million or 1.7% annualized from the previous quarter and grew $1.88 billion or 10.6% as compared to the first quarter 2015.
• Period-end core deposits, excluding state, county, and municipal deposits, increased $238.2 million or 4.9% annualized from the previous quarter and $1.61 billion or 8.8% as compared to the first quarter 2015.

Core Performance

• Total revenues¹ were $281.3 million, up $2.5 million or 0.9% from $278.7 million in the previous quarter and up 4.8% as compared to the first quarter 2015.
• Net interest income was $218.2 million, up $5.6 million or 2.6% from $212.6 million in the previous quarter and up 7.3% as compared to the first quarter 2015.
• The net interest margin increased 9 basis points to 3.27% compared to 3.18% in the previous quarter. The yield on earning assets was 3.73%, 10 basis points higher than the previous quarter, and the effective cost of funds increased 1 basis point to 0.46%.
• Total non-interest income was $63.1 million, down $3.0 million or 4.6% from the previous quarter and 3.1% as compared to the first quarter 2015.
  • Mortgage banking income increased $1.3 million or 32.6% from the previous quarter.
  • Financial Management Services revenues, consisting primarily of fiduciary and asset management fees and brokerage revenue, decreased $796 thousand or 4.0% from the previous quarter.
  • Core banking fees² decreased $1.7 million or 4.8% from the previous quarter driven by a decrease in service charges on deposits of $811 thousand.
• Total non-interest expense for the first quarter 2016 was $188.2 million, up $5.2 million or 2.8% from the previous quarter and up $9.3 million or 5.2% as compared to the first quarter 2015.
• Adjusted non-interest expense for the first quarter 2016 was $179.3 million, down $1.1 million or 0.6% from the previous quarter and up $659 thousand or 0.4% as compared to the first quarter 2015.
  • Employment expense of $101.4 million increased $5.8 million or 6.1% from the previous quarter driven by seasonally higher employment taxes.
  • Professional fees of $6.4 million decreased $1.9 million or 22.9% from the previous quarter.
  • Advertising expense of $2.4 million decreased $1.3 million or 34.5% from the previous quarter.

Credit Quality

• Total non-performing assets were $216.6 million at March 31, 2016, up $1.2 million or 0.6% from the previous quarter and down $53.5 million or 19.8% from March 31, 2015. The non-performing asset ratio was 0.95% at March 31, 2016 compared to 0.96% at the end of the previous quarter and 1.28% at March 31, 2015.
• Provision expense increased $4.4 million as compared to the previous quarter.
  • The increase was primarily attributable to a decrease in the volume of recoveries in the first quarter of 2016 as compared to the previous quarter.
• Net charge-offs were $7.4 million in the first quarter 2016, up $3.9 million from $3.4 million in the previous quarter. The annualized net charge-off ratio was 0.13% in the first quarter compared to 0.06% in the previous quarter.
• Total delinquencies (consisting of loans 30 or more days past due and still accruing) remain low at 0.28% of total loans at March 31, 2016 compared to 0.21% the previous quarter and 0.27% at March 31, 2015. Total loans past due 90 days or more and still accruing were 0.01% of total loans at March 31, 2016, unchanged from December 31, 2015 and compared to 0.02% at March 31, 2015.

Capital Ratios

Capital ratios remained strong and include the impact of $110.9 million in common stock repurchases and the repurchase of $124.7 million of the outstanding subordinated notes that mature in 2017.

• Common Equity Tier 1 ratio was 10.05% at March 31, 2016 compared to 10.37% at December 31, 2015.
• Tier 1 Capital ratio was 10.05% at March 31, 2016 compared to 10.37% at December 31, 2015.
• Total Risk Based Capital ratio was 12.26% at March 31, 2016 compared to 12.70% at December 31, 2015.
• Tier 1 Leverage ratio was 9.15% at March 31, 2016 compared to 9.43% at December 31, 2015.
• Tangible Common Equity ratio was 9.62% at March 31, 2016 compared to 9.90% at December 31, 2015.

First Quarter Earnings Conference Call

Synovus will host an earnings highlights conference call at 8:30 a.m. EDT on April 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 investor.synovus.com/events. 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.