Synovus Financial (SNV) - 2024 Q4 - Annual Report

Financial Overview - As of December 31, 2024, Synovus Financial Corp. had total consolidated assets of $60.23 billion and total consolidated deposits of$ 51.10 billion[25]. - The company had $1.73 billion of long-term debt outstanding as of December 31, 2024, impacting its ability to service debt and fund capital expenditures[168]. - The primary source of liquidity for the company consists of dividends from Synovus Bank, which are subject to regulatory restrictions[160]. - The company is currently exceeding all minimum regulatory capital requirements and is considered well-capitalized, but there is no guarantee that it will not need to increase capital levels in the future[178]. Employee and Workforce Insights - Approximately 32% of Synovus employees were in Consumer Banking, with a total workforce of 4,775 employees[37]. - The voluntary turnover rate for Synovus was only 11%, with an average employee tenure of nine years[39]. - In 2024, 45% of the 1,118 open positions filled were by internal hires, and 14% of the workforce received promotions[39]. - As of December 31, 2024, 64% of Synovus employees were women, and 31% were people of color, with 39% of senior leadership being women[43]. Regulatory Compliance and Capital Requirements - Synovus Bank is required to maintain certain minimum capital levels based on ratios of capital to total assets and capital to risk-weighted assets[67]. - The required minimum leverage ratio for all banks and bank holding companies is 4%[69]. - A capital conservation buffer of 2.5% above each of the minimum risk-based capital ratio requirements is required to absorb losses during periods of economic stress[70]. - The Federal Reserve requires bank holding companies to maintain a Tier 1 risk-based capital ratio of 6.0% or greater to be considered well-capitalized[73]. - As of December 31, 2024, Synovus Bank's CET1 capital ratio was 11.81%, exceeding the required 6.5% for being well-capitalized[75]. - The total risk-based capital ratio for Synovus Bank was 13.31%, above the minimum requirement of 10.0%[75]. - Synovus Bank's leverage ratio stood at 9.44%, surpassing the required 5.0%[75]. Strategic Initiatives and Growth Plans - Synovus' strategic plan for 2025 focuses on accelerated growth investments in middle market banking, specialty lending, and wealth services[30]. - The company is continuously implementing strategic initiatives to achieve growth, reduce expenses, and unlock efficiencies, including expanding middle market commercial banking and investing in technology such as automation and artificial intelligence[121]. - The company may pursue bank and non-bank acquisition opportunities, but competition for attractive acquisitions could limit its ability to complete them on favorable terms[126]. Cybersecurity and Risk Management - The bank's cybersecurity protocols are designed to comply with enhanced SEC disclosure requirements effective December 2023[102]. - Cybersecurity risks, including e-fraud and loss of sensitive client data, remain significant, with potential reputational and legal costs[135]. - The company has established anti-fraud actions, including preventative and responsive measures, but acknowledges inherent limitations in its risk management strategies[140]. - The company employs a formal risk management process for cybersecurity, aligning with industry standards to mitigate risks and enhance preparedness[199]. - Synovus has a comprehensive cybersecurity program that includes regular updates and testing of its Business Continuity/Disaster Recovery program[200]. Economic and Market Conditions - Inflationary pressures have significantly impacted profitability, with inflation rates rising to levels not seen in over 40 years, although a decline was noted in the second half of 2023[180]. - The company faces risks from unstable economic conditions, including increased charge-offs and a potential decrease in demand for loans and services due to economic downturns[181]. - Recent bank failures have diminished public confidence in regional banks, potentially leading clients to maintain deposits with larger institutions, which could adversely affect the company's liquidity and net interest margin[184]. Shareholder Actions and Stock Performance - The Board of Directors approved share repurchases of up to$ 300 million of common stock and $50 million of preferred stock in 2024[219]. - In the fourth quarter of 2024, Synovus repurchased a total of 940 thousand shares at an average price of$ 52.40 per share[220]. - The Board approved additional share repurchases of up to $400 million of common stock and$ 50 million of preferred stock in 2025[221]. Regulatory Environment and Compliance Costs - The Dodd-Frank Act mandates that incentive compensation arrangements should not encourage inappropriate risks by the institution[64]. - The FDIC approved a final rule requiring banks with at least $50 billion in total assets to submit "informational" resolution plans every three years[65]. - Regulatory changes and compliance costs could significantly impact the company's business operations and financial condition[172]. - The company may become subject to supervisory actions that could adversely affect its business, reputation, and financial condition[174].