Synovus Financial (US:SNV) ZACKS·2025-10-16 17:21Core Insights - Synovus Financial Corp. reported third-quarter 2025 adjusted earnings per share of $1.46, exceeding the Zacks Consensus Estimate of $1.36 and up from $1.23 a year ago, driven by strong growth in net interest income and non-interest revenues, alongside a decrease in provisions for credit losses [1][8] Financial Performance - Total revenues for the quarter were $611.1 million, reflecting an 8.2% increase year-over-year and surpassing the Zacks Consensus Estimate by 1% [3] - Net interest income rose 8% year-over-year to $474.7 million, with the net interest margin expanding by 4 basis points to 3.41% due to lower deposit costs and higher loan yields [3] - Non-interest revenues increased by 13% year-over-year to $140.7 million, attributed to higher core banking fees, wealth management income, and capital markets income [4] - Non-interest expenses were $348.7 million, up 11% year-over-year, primarily due to merger-related expenses of $23.8 million [4] Loan and Deposit Trends - As of September 30, 2025, total loans amounted to $43.8 billion, showing a slight increase from the previous quarter, while total core deposits were $44.9 billion, reflecting a slight decline [5] Credit Quality - Non-performing loans decreased by 33% year-over-year to $209.3 million, and total non-performing assets fell by 26% to $231.7 million [6] - Provisions for credit losses were $21.7 million, down 7% year-over-year, with net charge-offs decreasing by 43.7% to $15.2 million [6] Capital Ratios and Profitability - As of September 30, 2025, the Tier 1 capital ratio was 12.34%, and the total risk-based capital ratio was 14.07%, both improved from the previous year [7] - Adjusted return on average assets increased to 1.42% from 1.26% year-over-year, while adjusted return on average common equity rose to 15.78% from 15.02% [9] Merger Update - Synovus expects its pending merger with Pinnacle Financial Partners to close in the first quarter of 2026, pending regulatory and shareholder approvals [10] - The company anticipates a pro-forma Common Equity Tier 1 capital ratio of 10.1% at the merger close, reflecting a favorable rate environment and strong capital generation in Q3 2025 [11] Overall Assessment - The company demonstrated strong third-quarter performance, exceeding earnings expectations due to robust net interest income and higher non-interest revenues, with improving loan growth and credit quality supporting profitability [12]