Synovus Financial (SNV) - 2023 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS (UNAUDITED) Synovus Financial Corp.'s unaudited interim consolidated financial statements and detailed accounting notes are presented for the periods ended June 30, 2023, and December 31, 2022 Consolidated Balance Sheets Total assets increased due to loan and deposit growth, with non-interest-bearing deposits declining, while shareholders' equity rose from retained earnings and reduced unrealized losses | Metric (in thousands) | June 30, 2023 | December 31, 2022 | Change | % Change | | :-------------------- | :------------ | :---------------- | :----- | :------- | | Total assets | $60,655,591 | $59,731,378 | $924,213 | 1.55% | | Loans, net | $43,882,299 | $43,272,929 | $609,370 | 1.41% | | Total deposits | $50,080,392 | $48,871,559 | $1,208,833 | 2.47% | | Non-interest-bearing deposits | $13,565,602 | $15,639,899 | $(2,074,297) | -13.26% | | Interest-bearing deposits | $36,514,790 | $33,231,660 | $3,283,130 | 9.88% | | Total liabilities | $55,847,823 | $55,255,577 | $592,246 | 1.07% | | Total equity | $4,807,768 | $4,475,801 | $331,967 | 7.42% | Consolidated Statements of Income Net interest income increased year-over-year, driven by higher interest income despite rising interest expense, with net income showing mixed results due to credit loss provisions and non-interest expenses | Metric (in thousands) | 3 Months Ended June 30, 2023 | 3 Months Ended June 30, 2022 | YoY Change | % YoY Change | | :-------------------- | :--------------------------- | :--------------------------- | :--------- | :----------- | | Total interest income | $759,143 | $453,772 | $305,371 | 67.29% | | Total interest expense | $303,612 | $28,384 | $275,228 | 969.65% | | Net interest income | $455,531 | $425,388 | $30,143 | 7.08% | | Provision for credit losses | $38,881 | $12,688 | $26,193 | 206.43% | | Total non-interest revenue | $112,276 | $97,266 | $15,010 | 15.43% | | Total non-interest expense | $307,181 | $282,051 | $25,130 | 8.91% | | Net income available to common shareholders | $165,819 | $169,761 | $(3,942) | -2.32% | | Net income per common share, diluted | $1.13 | $1.16 | $(0.03) | -2.59% | | Metric (in thousands) | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | YoY Change | % YoY Change | | :-------------------- | :--------------------------- | :--------------------------- | :--------- | :----------- | | Total interest income | $1,476,022 | $869,834 | $606,188 | 69.69% | | Total interest expense | $539,739 | $52,199 | $487,540 | 934.08% | | Net interest income | $936,283 | $817,635 | $118,648 | 14.51% | | Provision for credit losses | $71,035 | $24,088 | $46,947 | 195.07% | | Total non-interest revenue | $245,402 | $202,600 | $42,802 | 21.13% | | Total non-interest expense | $629,034 | $554,501 | $74,533 | 13.44% | | Net income available to common shareholders | $359,688 | $332,507 | $27,181 | 8.17% | | Net income per common share, diluted | $2.45 | $2.27 | $0.18 | 7.93% | Consolidated Statements of Comprehensive Income (Loss) The company reported comprehensive income for both periods, a significant improvement from prior year losses, primarily due to reduced net unrealized losses on investment securities and derivative instruments | Metric (in thousands) | 3 Months Ended June 30, 2023 | 3 Months Ended June 30, 2022 | YoY Change | | :-------------------- | :--------------------------- | :--------------------------- | :--------- | | Net income | $173,944 | $178,052 | $(4,108) | | Total other comprehensive income (loss) | $(105,848) | $(364,640) | $258,792 | | Comprehensive income (loss) | $68,096 | $(186,588) | $254,684 | | Metric (in thousands) | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | YoY Change | | :-------------------- | :--------------------------- | :--------------------------- | :--------- | | Net income | $376,103 | $349,088 | $27,015 | | Total other comprehensive income (loss) | $46,942 | $(944,384) | $991,326 | | Comprehensive income (loss) | $423,045 | $(595,296) | $1,018,341 | Consolidated Statements of Changes in Shareholders' Equity Shareholders' equity increased due to net income and positive other comprehensive income, partially offset by dividends and an acquisition of noncontrolling interest | Metric (in thousands) | June 30, 2023 | December 31, 2022 | Change | | :-------------------- | :------------ | :---------------- | :----- | | Total Synovus Financial Corp. shareholders' equity | $4,782,528 | $4,475,801 | $306,727 | | Net income (loss) | $376,269 | $376,269 | $0 | | Other comprehensive income (loss), net of income taxes | $46,942 | $46,942 | $0 | | Cash dividends declared on common stock | $(111,038) | $(111,038) | $0 | | Cash dividends declared on preferred stock | $(16,581) | $(16,581) | $0 | | Acquisition of noncontrolling interest | $25,406 | $25,406 | $0 | Consolidated Statements of Cash Flows Operating activities generated significant net cash inflow, while investing activities resulted in a net cash outflow, and financing activities provided net cash, driven by deposit increases and debt repayments | Metric (in thousands) | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | YoY Change | | :-------------------- | :--------------------------- | :--------------------------- | :--------- | | Net cash provided by (used in) operating activities | $714,099 | $210,994 | $503,105 | | Net cash provided by (used in) investing activities | $(978,017) | $(1,971,710) | $993,693 | | Net cash provided by (used in) financing activities | $340,289 | $415,923 | $(75,634) | | Increase (decrease) in cash and cash equivalents | $76,371 | $(1,344,793) | $1,421,164 | Notes to Unaudited Interim Consolidated Financial Statements These notes provide detailed disclosures on Synovus' financial statements, covering accounting policies, asset and liability valuations, equity changes, and various commitments and contingencies Note 1 - Basis of Presentation and Accounting Policies Synovus' interim financial statements are prepared under SEC Form 10-Q and GAAP, with key updates including the Qualpay acquisition and early adoption of ASU 2023-02 for tax credit investments - Synovus acquired a **60% equity