Synovus Financial (SNV) Q3 2024 earnings summary

Executive summary

• Adjusted diluted EPS was $1.23, up 6% sequentially and 46% year-over-year, driven by stronger net interest income, lower provision for credit losses, and stable adjusted non-interest expense.

• Net income available to common shareholders for Q3 2024 was $169.6M ($1.18 per diluted share), up from $87.4M ($0.60) in Q3 2023.

• Net interest margin expanded to 3.22%, and net charge-offs improved to 25 basis points annualized.

• Core deposit growth was 1% sequentially, with continued reduction in brokered deposits for the fifth consecutive quarter.

• The company maintained strong liquidity and capital positions, with CET1 at 10.65%, the highest in nine years.

Financial highlights

• Net interest income increased 1% sequentially to $440.7M, but declined 1% year-over-year; net interest margin was 3.22%, up 11 bps year-over-year.

• Adjusted non-interest revenue rose 15% year-over-year to $121.9M, driven by commercial sponsorship and capital markets.

• Adjusted non-interest expense was flat quarter-over-quarter and down 1% year-over-year; headcount reduced by 4%.

• Provision for credit losses declined 11% sequentially and 68% year-over-year to $23.4M; allowance for credit losses stable at 1.24%.

• Total deposits at September 30, 2024 were $50.19B, with a $937.6M decline in brokered deposits offset by $392.1M growth in core deposits.

Outlook and guidance

• Period-end loans expected to be flat in Q4 and down 1% to flat for full year 2024; core deposit growth forecasted at 1%-3% in Q4 and 2%-4% for the full year.

• Adjusted revenue guidance for Q4 is $560M-$575M; full-year adjusted revenue expected to decline 2%-2.5%.

• Net interest margin expected to remain stable in Q4; adjusted non-interest expense forecasted at $305M-$310M.

• Net charge-offs expected to remain within 25-35 basis points annualized in Q4 and 0.30–0.35% for the full year.

• CET1 ratio expected to remain stable at ~10.6%; remaining $80M share repurchase authorization expected to be fully utilized by year-end.