Synovus Financial Corporation (NYSE:SNV.PRC) Q3 2016 Earnings Conference Call Transcript

Oct 18, 2016 • 08:30 am ET

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Synovus Financial Corporation (NYSE:SNV.PRC) Q3 2016 Earnings Conference Call Transcript

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Presentation
Operator
operator

Good morning, ladies and gentlemen, and welcome to the Synovus Third Quarter 2016 Earnings Conference Call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for your questions and comments following the presentation.

Now, I'd like to turn the floor over to your host, Bob May. Sir, the floor is yours.

Executive
Bob May

Thank you and good morning everyone. During the call, we will be referencing the slides and press release that are available within the Investor Relations section of our website, synovus.com. Kessel Stelling, Chairman and CEO, will be our primary presenter today, with our executive management team available to answer your questions.

(Forward-Looking Cautionary Statements)

During the call, we will reference non-GAAP financial measures related to the company's performance. You may see the reconciliation of these measures in the appendix of our presentation.

Thank you, and now I'll turn it over to Kessel Stelling.

Executive
Kessel Stelling

Thank you, Bob, and good morning everyone, and welcome to our third quarter earnings highlights call. As usual I will walk us through the deck and then we'll open up the floor to questions to our team, which today includes Kevin Blair, our new CFO, and the usual team members to address any and all of your questions.

So let's just right in the deck on page three, profitability continued to improve during the quarter, we reported net income available to common shareholders of $62.7 million, which represents a 13.2% increase versus a year ago. Diluted EPS was $0.51, up 10.1% versus the second quarter of '16, and 21.3% versus the third quarter '15. Adjusted diluted EPS was $0.52, that excludes $1.2 million restructuring charges, $550,000 in merger-related expenses, and $189,000 for a litigation net recovery. So that's up 5.2% versus $0.49 in the second quarter '16, and up 23% versus $0.42 in the third quarter of '15.

Our return on assets was 88 basis points, improving 5 basis points sequentially, and 7 basis points versus a year ago. Adjusted ROA increased to 90 basis points, up 2 basis points sequentially, and up 8 basis points versus a year ago. Total revenue of $294.1 million, up $4.8 million or 1.6% sequentially, and up 7% versus a year ago, and the adjusted efficiency ratio improved to 60.55% for the quarter, a 99 basis point sequential quarter improvement, and 128 basis point improvement versus year-ago.

Moving to the balance sheet, total loans increased $202 million or 3.5% annualized on a sequential quarter basis, and grew $1.4 billion or 6.4% versus a year ago. We'll give a little more color about that loan growth later in the call. Total average deposits grew $422.3 million or 7.1% annualized versus second quarter '16, and 5.1% versus the third quarter of '15.

A couple of highlights from credit quality and capital management, our NPL ratio, 64 basis points, improved 8 basis points from the third quarter of '15. Our return on average tangible common equity improved 126 basis points versus the third quarter '15,