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1. Company Snapshot

1.a. Company Description

Synovus Financial Corp.operates as the bank holding company for Synovus Bank that provides commercial and retail banking products and services.It operates through three segments: Community Banking, Wholesale Banking, and Financial Management Services.


The company's commercial banking services include treasury management, asset management, capital market, and institutional trust services, as well as commercial, financial, and real estate loans.Its retail banking services comprise accepting customary types of demand and savings deposits accounts; mortgage, installment, and other consumer loans; investment and brokerage services; safe deposit services; automated banking services; automated fund transfers; Internet-based banking services; and bank credit and debit card services.The company also offers various other financial services, including portfolio management for fixed-income securities, investment banking, execution of securities transactions as a broker/dealer, and financial planning services, as well as provides individual investment advice on equity and other securities.


As of December 31, 2020, it operated through 289 branches and 389 ATMs in Alabama, Florida, Georgia, South Carolina, and Tennessee.The company was founded in 1888 and is headquartered in Columbus, Georgia.

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1.b. Last Insights on SNV

Synovus Financial Corp.'s recent performance was negatively impacted by various factors. Despite beating Q3 earnings and revenue estimates, with quarterly earnings of $1.46 per share, the company's growth prospects are being closely watched. The impending merger with Pinnacle Financial Partners, approved by shareholders, presents both opportunities and challenges. Rising expenses and a competitive banking landscape may pressure the company's margins. Additionally, with no recent share buyback announcements, investors may view this as a neutral or negative factor. (Source: Q3 earnings report)

1.c. Company Highlights

2. Synovus Delivers Robust Q2 Results with Strong EPS Beat and Solid Loan Growth

Synovus reported a standout second-quarter performance, with GAAP and adjusted earnings per share (EPS) of $1.48, surpassing consensus estimates of $1.25. This represents a 14% increase from the first quarter and a 28% year-over-year rise. The strong results were driven by net interest margin (NIM) expansion, lower provision for credit losses, and disciplined operating expense management. Adjusted revenue grew 3% sequentially and 5% year-over-year, demonstrating positive operating leverage. The company's net interest margin improved modestly, supported by lower funding costs and cash balances, while capital market fees rebounded, contributing to the strong top-line performance.

Publication Date: Jul -21

📋 Highlights
  • Strong Earnings Growth: Adjusted EPS increased 14% from Q1 and 28% YoY to $1.48, driven by net interest margin expansion and lower credit loss provisions.
  • Robust Loan Growth: Loans grew $888 million (2%) from Q1, with strong performance in middle market, specialty, and corporate banking verticals.
  • Net Interest Margin Expansion: NIM increased sequentially, with expectations to reach the low 3.40s by year-end, supported by lower funding costs and cash balances.
  • Revenue Growth and Leverage: Adjusted revenue grew 5% YoY, with a CET1 ratio of 10.91%, prioritizing loan growth over share repurchases.
  • Strategic Hiring Initiatives: Added 12 commercial bankers in Q2, with plans to increase commercial bankers by 20-30% over three years, focusing on key markets.

Loan Growth and Strategic Initiatives

Loan growth was a highlight, with a $888 million, or 2%, increase from the first quarter, driven by high-growth verticals such as middle market, specialty, and corporate and investment banking lending. Synovus' strategic focus on hiring relationship managers is paying off, with 12 new commercial bankers added during the quarter and a robust pipeline for further expansion in the second half. The company is targeting a 20-30% increase in commercial bankers over the next three years, with a focus on talent acquisition in key markets like the Carolinas and Florida. This initiative is expected to drive organic growth and enhance market share.

Capital Management and Outlook

Synovus maintained a strong capital position, with a preliminary common equity Tier 1 (CET1) ratio of 10.91% and total risk-based capital of 13.74%. The company prioritized loan growth over share repurchases, repurchasing only 500,000 shares during the quarter. Management reiterated its 2025 guidance, expecting 4-6% period-end loan growth and adjusted revenue growth of 5-7%. The company also emphasized its ability to navigate competitive pricing by delivering exceptional service and relationship value. Synovus' loan production yield was 6.78%, down 12 basis points from the previous quarter, while deposit production pricing was 2.49%, resulting in a 4.30% spread.

Valuation and Risk Considerations

At current levels, Synovus trades at a Price-to-Tangible Book Value (P/TBV) of 1.39, slightly above its historical average, reflecting the market's confidence in its growth prospects. The stock's dividend yield of 2.76% and free cash flow yield of 10.36% provide attractive returns for investors. While the company's net debt-to-EBITDA ratio of 1.14 indicates moderate leverage, its strong capital ratios and improving credit quality position it well to manage risks. Synovus' ability to balance growth and profitability, combined with its strategic investments in talent and technology, supports its valuation premium in the banking sector.

3. NewsRoom

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As Synovus Preps for a Major Merger, One Fund Buys Up $7.5 Million in Stock

Dec -05

Source: fool.com

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Fisher Asset Management LLC Grows Position in Synovus Financial Corp. $SNV

Dec -04

Source: defenseworld.net

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Pinnacle and Synovus Name Board of Directors for Combined Company

Dec -01

Source: businesswire.com

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Synovus Secures Federal Regulatory Approval for Merger With Pinnacle

Nov -26

Source: zacks.com

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Pinnacle and Synovus Receive Federal Bank Regulatory Approval to Combine

Nov -26

Source: businesswire.com

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Synovus donates $50,000 to Feeding America to combat food insecurity

Nov -25

Source: businesswire.com

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Creative Planning Acquires 3,534 Shares of Synovus Financial Corp. $SNV

Nov -24

Source: defenseworld.net

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Envestnet Asset Management Inc. Acquires 4,181 Shares of Synovus Financial Corp. $SNV

Nov -17

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.13%)

6. Segments

Wholesale Banking

Expected Growth: 8.5%

Synovus Financial Corp.'s Wholesale Banking segment growth of 8.5% is driven by strong commercial loan growth, increased treasury management services, and expansion of specialized industry verticals. Additionally, strategic investments in digital capabilities and talent acquisition have enhanced customer experience, leading to increased market share and revenue growth.

Consumer Banking

Expected Growth: 8.0%

Synovus Financial Corp.'s 8.0% growth in Consumer Banking is driven by strategic expansion into new markets, increased adoption of digital banking channels, and a focus on customer experience. Additionally, the company's efforts to enhance its credit card offerings and expand its mortgage lending business have contributed to the growth.

Community Banking

Expected Growth: 7.5%

Synovus Financial Corp.'s 7.5% community banking growth driven by strategic branch expansion, enhanced digital banking capabilities, and targeted marketing efforts. Strong loan growth, fueled by commercial and industrial lending, and solid deposit growth, supported by a low-cost deposit base, also contribute to the segment's growth.

Financial Management Services

Expected Growth: 8.2%

Synovus Financial Corp.'s 8.2% growth in Financial Management Services is driven by increasing demand for digital banking solutions, strategic acquisitions, and expansion of commercial banking services. Additionally, the company's focus on customer experience, investment in technology, and diversification of revenue streams have contributed to this growth.

Treasury and Corporate Other

Expected Growth: 8.8%

Treasury and Corporate Other segment of Synovus Financial Corp. achieved 8.8% growth driven by increased commercial loan growth, expansion of treasury management services, and higher interest income from investment securities. Additionally, strategic acquisitions and effective cost management contributed to the segment's growth.

7. Detailed Products

Consumer Banking

Synovus offers a range of personal banking services, including checking and savings accounts, credit cards, personal loans, and mortgages.

Commercial Banking

Synovus provides commercial banking services, including cash management, treasury management, and commercial lending, to businesses of all sizes.

Wealth Management

Synovus offers investment and wealth management services, including financial planning, investment management, and trust services.

Mortgage Banking

Synovus provides mortgage lending services, including residential and commercial mortgage loans, to individuals and businesses.

Treasury Management

Synovus offers treasury management services, including cash management, wire transfer, and account services, to businesses.

Credit Cards

Synovus offers a range of credit card products, including cash back, rewards, and low-interest credit cards, to individuals and businesses.

Insurance

Synovus offers insurance products, including life insurance, disability insurance, and long-term care insurance, to individuals and businesses.

8. Synovus Financial Corp.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Synovus Financial Corp. operates in a highly competitive industry, but the threat of substitutes is mitigated by the complexity of financial services and the need for specialized expertise.

Bargaining Power Of Customers

Synovus Financial Corp. has a large customer base, but customers have significant bargaining power due to the ease of switching to alternative financial institutions.

Bargaining Power Of Suppliers

Synovus Financial Corp. has a diverse supplier base, and suppliers have limited bargaining power due to the company's scale and negotiating power.

Threat Of New Entrants

The financial services industry has significant barriers to entry, including regulatory hurdles and capital requirements, which limits the threat of new entrants.

Intensity Of Rivalry

Synovus Financial Corp. operates in a highly competitive industry, with many established players and a high level of rivalry for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 29.33%
Debt Cost 11.07%
Equity Weight 70.67%
Equity Cost 11.07%
WACC 11.07%
Leverage 41.51%

11. Quality Control: Synovus Financial Corp. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Popular

A-Score: 6.9/10

Value: 6.3

Growth: 5.9

Quality: 7.0

Yield: 6.0

Momentum: 8.0

Volatility: 8.3

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First Hawaiian

A-Score: 6.6/10

Value: 6.1

Growth: 4.4

Quality: 6.8

Yield: 8.0

Momentum: 6.0

Volatility: 8.3

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Regions Financial

A-Score: 6.6/10

Value: 5.1

Growth: 4.8

Quality: 7.8

Yield: 8.0

Momentum: 6.0

Volatility: 7.7

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Citizens Financial Group

A-Score: 6.5/10

Value: 5.8

Growth: 5.2

Quality: 6.4

Yield: 7.0

Momentum: 7.5

Volatility: 7.0

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First Horizon

A-Score: 6.4/10

Value: 5.8

Growth: 4.7

Quality: 5.8

Yield: 7.0

Momentum: 9.0

Volatility: 6.3

1-Year Total Return ->

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Synovus

A-Score: 6.2/10

Value: 6.9

Growth: 5.4

Quality: 7.1

Yield: 6.0

Momentum: 6.0

Volatility: 5.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

50.5$

Current Price

50.5$

Potential

-0.00%

Expected Cash-Flows