Shares of Synovus Financial Corp. (SNV) slid 2.1% after it announced that the third-quarter 2024 net interest income (NII) is likely to be impacted by the muted loan growth environment and the impact of expected Federal Reserve rate cuts. Other banks like Regions Financial Corporation's (RF) third-quarter 2024 NII is expected to be flat to up 2% from $1.2 billion in the second quarter. PNC Financial (PNC) anticipates its NII to rise 1-2% in third-quarter 2024 from $3.3 billion reported in the second quarter ...

Company Overview - Synovus Financial Corp. is the holding company for Synovus Bank, ranking as the 38th largest commercial bank in the U.S. with $59 billion in assets and 246 branches [3] - The company has issued a preferred stock, the Fixed-Rate Reset Non-Cumulative Preferred E, which was initially fixed and reset to an adjustable rate on July 1, 2023 [3][4] Preferred Stock Details - The E preferred stock has a yield of 8.507% based on a reference price of $25, combining a five-year Treasury rate of 4.38% and a spread of 4.127% [3] - The forward yield is approximately 8.3%, with the first payment at this rate scheduled for October 1, 2023, and an ex-dividend date of September 13, 2023 [3] - The E preferred became callable in July 2023, but the next call date and dividend reset will not occur until July 2029 [3] Comparative Analysis - Synovus' E preferreds yield 67 basis points lower than its D series, which floats based on SOFR and is expected to decline with Fed rate changes [4] - Other regional banks generally offer higher rates to attract investors, with Synovus' preferreds compared to those from Fifth Third Bancorp, Zions Bancorporation, Regions Financial, First Horizon, Banc of California, and KeyCorp [4] - The E preferred stock is expected to maintain a higher yield compared to floating rate securities if the Fed cuts rates significantly [4] Financial Metrics - Synovus maintains a Tier 1 capital ratio of 11.74%, which is above the regulatory minimum of 8.5% [6][7] - The net interest margin for Synovus in the second quarter was 3.20%, higher than the median for comparison banks [7] - The preferred stock is rated BB-, which is lower than some of its peers [6][7] Conclusion - The yield of over 8% on the E preferred stock appears attractive relative to the associated risks, suggesting a potential investment opportunity [8]

Core Viewpoint - Synovus Financial (SNV) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system tracks the Zacks Consensus Estimate, which reflects EPS estimates from sell-side analysts, and is crucial for understanding a company's earnings outlook [1][4]. - Changes in earnings estimates are strongly correlated with near-term stock price movements, largely due to institutional investors who adjust their valuations based on these estimates [4][6]. Recent Performance and Projections - Synovus is projected to earn $4.06 per share for the fiscal year ending December 2024, reflecting a year-over-year change of -1.5% [8]. - Over the past three months, the Zacks Consensus Estimate for Synovus has increased by 6.4%, indicating a positive trend in earnings estimates [8]. Zacks Rating System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 (Strong Buy) stocks historically generating an average annual return of +25% since 1988 [7]. - The upgrade of Synovus to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

A month has gone by since the last earnings report for Synovus Financial (SNV) . Shares have lost about 4.7% in that time frame, underperforming the S&P 500. Will the recent negative trend continue leading up to its next earnings release, or is Synovus due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers. Synovus Q2 Earnings Beat Estimates, Revenues Fall ...

Core Viewpoint - Adding Synovus Financial Corp. (SNV) stock to a portfolio is considered a wise decision due to strong fundamentals and growth potential, with a Zacks Rank 2 (Buy) indicating analyst optimism [1] Earnings Growth - SNV's earnings have grown by 9.3% over the last three to five years, with a projected decline of 1.5% for 2024, but an expected rise of 16% in 2025 [2] Mergers & Acquisitions - The company has been actively investing in mergers and acquisitions to enhance operations, including a 60% equity interest acquisition in Qualpay on June 1, 2023, and the acquisition of FCB Financial Holdings in 2019 [3] Balance Sheet Strength - As of June 30, 2024, SNV's total debt was $2.28 billion, while cash and cash equivalents stood at $2.29 billion, supported by long-term issuer credit ratings of BBB- and BBB, allowing access to favorable debt market rates [4] Capital Distributions - SNV has a robust capital deployment plan, including a $300 million share repurchase authorization and a 12% increase in its quarterly dividend to 38 cents per share in March 2023, reflecting strong balance sheet and liquidity [5] Return on Equity - The trailing 12-month return on equity (ROE) for SNV is 12.76%, significantly higher than the industry average of 9.07%, indicating superior utilization of shareholders' funds [6] Other Investment Opportunities - Other top-ranked stocks in the same sector include First Bancorp (FBNC) and First Community Corp (FCCO), both with Zacks Rank 2, showing upward revisions in earnings estimates and notable stock gains over the past six months [7][8]

Synovus Financial Corp.'s (SNV) emphasis on expanding its corporate, investment and middle-market commercial banking verticals is set to support its financials in the upcoming quarters. Balance sheet strength and strong liquidity position are other positives. However, escalating expenses due to investments in technology and a steady decline in mortgage banking income are near-term headwinds. SNV is focused on its organic growth strategy. The company aims to expand its corporate and investment banking and mi ...

Momentum investing is all about the idea of following a stock's recent trend, which can be in either direction. In the 'long' context, investors will essentially be "buying high, but hoping to sell even higher." And for investors following this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving in that direction. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades. Whi ...

Financial Data and Key Metrics - Adjusted expenses for Q2 2024 were $306 million, excluding the FDIC reversal, and are expected to increase to around $310 million in Q3 2024, driven by higher personnel costs and infrastructure project spending [1] - The company expects a 1% increase in expenses from Q2 to Q3 2024, with similar levels holding in Q4 2024 [1] - For full-year 2024, expenses are expected to increase by 2% (midpoint of guidance), driven by merit increases, consolidation of Qualpay, and credit-related expenses [11] - The company's CET1 ratio is slightly above the target range of 10% to 10.5%, and management intends to manage capital at the higher end of this range due to economic uncertainty [12][132] Business Line Data and Key Metrics - Capital markets fee revenue surged 128% in Q2 2024 and is expected to remain elevated in the second half of the year, though there may be some quarter-to-quarter variability [7][18] - Loan production increased by 37% quarter-on-quarter in Q2 2024, reaching $1.3 billion, with pipelines up 8% quarter-on-quarter [62] - Senior housing loans declined by $196 million in Q2 2024, while national accounts and third-party consumer loans decreased by $223 million [101] - The company expects stable to higher total loans in the second half of 2024, driven by growth in key commercial segments [102] Market Data and Key Metrics - The southeastern U.S. economy is outperforming the broader U.S. economy, providing a favorable environment for the company's operations [34] - Deposit costs remained stable in Q2 2024, with a cycle-to-date total deposit cost beta of approximately 49% [104] - Non-interest-bearing deposit balances declined by $387 million in Q2 2024, but the pace of decline is slowing [103] Company Strategy and Industry Competition - The company is focusing on optimizing its balance sheet, reducing non-relationship lending, and prioritizing core client growth [101][122] - Investments in fraud detection, fraud prevention, and pricing analytics are ongoing, with some inflationary impacts expected [1] - The company is well-positioned for growth in its commercial and wealth management lines of business, with a strong value proposition for clients [80] Management Commentary on Operating Environment and Future Outlook - Management expects expenses to normalize in 2025, following efficiency efforts in 2023 that reduced costs and improved efficiency [3] - The company is optimistic about its ability to drive meaningful and sustainable growth, supported by a strong capital position and favorable economic conditions in its footprint [34][178] - Management anticipates net interest margin expansion in the second half of 2024, driven by fixed-rate asset repricing and the full impact of securities repositioning [127] Other Important Information - The company completed $91 million in share repurchases in Q2 2024 and plans to continue opportunistic buybacks to manage capital levels [92][130] - The allowance for credit losses (ACL) remained stable at $538 million, or 1.25% of loans, in Q2 2024 [128] - Net charge-offs declined to 32 basis points in Q2 2024, and management expects charge-offs to be flat to down in the second half of the year [129] Q&A Session Summary Question: Expense Drivers for 2025 - Management expects expenses to normalize in 2025, with 2024 benefiting from efficiency efforts in 2023 [3] Question: Capital Markets Fee Revenue Outlook - Capital markets fee revenue is expected to remain elevated in the second half of 2024, though there may be some quarter-to-quarter variability [7][18] Question: CET1 Ratio Management - The company intends to manage its CET1 ratio at the higher end of the 10% to 10.5% range due to economic uncertainty [12][132] Question: Loan Growth and Payoff Activity - Loan production increased significantly in Q2 2024, but payoffs and paydowns, particularly in senior housing and national accounts, offset this growth [62] Question: Deposit Trends - Non-interest-bearing deposit balances declined in Q2 2024, but the pace of decline is slowing, and deposit costs remain stable [103][104] Question: Credit Quality and Charge-Offs - Net charge-offs declined in Q2 2024, and management expects charge-offs to be flat to down in the second half of the year [129] Question: Fee Income Growth - Fee income growth is expected to be in the mid-single-digit range for 2024, with potential upside from capital markets and loan growth [147][150]

Company Performance - Synovus Financial (SNV) reported quarterly earnings of $1.16 per share, exceeding the Zacks Consensus Estimate of $0.96 per share, and matching the earnings from the previous year [1] - The company has surpassed consensus EPS estimates only once in the last four quarters [2] - Synovus posted revenues of $306.15 million for the quarter ended June 2024, which fell short of the Zacks Consensus Estimate by 38.35%, compared to year-ago revenues of $567.81 million [9] - The current consensus EPS estimate for the upcoming quarter is $1.01 on revenues of $558 million, and for the current fiscal year, it is $3.87 on revenues of $2.16 billion [12] Market Outlook - The estimate revisions trend for Synovus is currently favorable, leading to a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [5] - Synovus shares have increased approximately 20.7% since the beginning of the year, outperforming the S&P 500's gain of 18.8% [10] - The outlook for the industry, specifically the Banks - Southeast sector, is currently in the bottom 26% of over 250 Zacks industries, which may impact Synovus's stock performance [6] Future Expectations - The sustainability of Synovus's stock price movement will largely depend on management's commentary during the earnings call [3] - Investors are encouraged to monitor changes in earnings estimate revisions, as empirical research shows a strong correlation between these revisions and near-term stock movements [11]

| --- | --- | --- | --- | --- | --- | |-----------------------------------------------------------------------------------------------------------------------------|-------|------------------------|----------------------|-------------------------------------|-----------------------------------| | (Dollars in thousands, except per share data) \nInterest income | $ | 2024 1,583,952 | Six Months \n $ | Ended June 30, \n2023 1,476,022 | '24 vs '23 \n% Change 7 % | | Interest expense Net interest income Provisio ...