Synovus Q2 Earnings Beat Estimates on Strong NII & Loan Growth

Core Insights - Synovus Financial Corp. reported second-quarter 2025 adjusted earnings per share of $1.48, exceeding the Zacks Consensus Estimate of $1.25 and up from $1.16 a year ago [1][10] - The results were driven by significant year-over-year growth in net interest income and non-interest revenue, alongside a reduction in provisions for credit losses [1][10] Financial Performance - Net income available to common shareholders was $206.3 million, a recovery from a loss of $23.7 million in the prior-year quarter [2] - Total revenues reached $593.7 million, a 93.9% increase from the prior-year quarter, surpassing the Zacks Consensus Estimate by 1.7% [3][10] - Net interest income rose 5.6% year over year to $459.6 million, with the net interest margin expanding by 17 basis points to 3.37% [3] - Non-interest revenues were $134.1 million, compared to a negative $128.8 million in the prior-year quarter, driven by higher core banking fees, wealth management income, and capital markets income [4] Expenses and Efficiency - Non-interest expenses increased by 4.6% year over year to $315.7 million, primarily due to higher employment expenses [4] - The adjusted tangible efficiency ratio improved to 52.3%, down from 53.1% in the year-earlier quarter, indicating increased profitability [5] Loan and Deposit Trends - Total loans amounted to $43.5 billion, reflecting a 2.1% increase from the previous quarter [6] - Total core deposits were $49.9 billion, a decline of 1.8% from the previous quarter [6] Credit Quality - Non-performing loans were $257.4 million, a slight increase from the year-ago quarter, while total non-performing assets rose to $258.6 million [7] - Provisions for credit losses significantly decreased by 87.7% year over year to $3.2 million [7] - Net charge-offs fell by 46.9% to $18.3 million, with the net charge-off ratio decreasing to 0.17% from 0.32% in the prior-year quarter [8] Capital Ratios and Profitability - As of June 30, 2025, the Tier 1 capital ratio was 12.01%, and the total risk-based capital ratio was 13.74%, both improved from the previous year [11] - Adjusted return on average assets increased to 1.46% from 1.21%, and adjusted return on average common equity rose to 16.71% from 15.31% [11]