Synovus Financial Corp. SNV reported third-quarter 2024 adjusted earnings per share of $1.23, which surpassed the Zacks Consensus Estimate of $1.09 per share. This compares to earnings of 84 cents a year ago.

Find the latest earnings estimates and surprises on the Zacks Earnings Calendar.

Synovus shares increased 2.2% on a better-than-expected performance.

Results benefited from strong growth in non-interest revenues (NIR), a fall in expenses and provisions for credit losses. Also, improving loans and deposit balances were tailwinds. However, a decline in net interest income (NII) and a rise in non-performing loans were major headwinds.

Net income (GAAP basis) available to common shareholders was $169.6 million, surging 94% from the net income available to common shareholders of $87.4 million in the prior-year quarter.

Synovus’ Revenues Rise, Expenses Dip Y/Y

Total revenues in the third quarter were $564.7 million, up 2.6% from the prior-year quarter. Also, the top line surpassed the Zacks Consensus Estimate by 1.34%.

NII fell 1% year over year to $440.7 million, while the net interest margin (NIM) expanded 2 basis points to 3.22%.

Non-interest revenues were $123.9 million, up 16% year over year. The rise resulted from increased treasury and payment solutions and capital markets fees, and greater commercial sponsorship income.

Non-interest expenses were $313.7 million, down 11% year over year. The fall was mainly due to the company’s disciplined expense control and a 4% reduction in total headcount.

The adjusted tangible efficiency ratio was 53%, down from the 55% reported in the year-earlier quarter. A decline in the efficiency ratio indicates an increase in profitability.

SNV’s Loans & Deposit Balance Increases Sequentially

As of Sept. 30, 2024, total loans of $43.12 billion increased marginally from the previous quarter. Total core deposits (excluding brokered deposits) were $50.2 billion, which increased nearly 1% from the previous quarter.

SNV’s Credit Quality: Mixed Bag

Non-performing loans were $312.9 million, up 12% from the year-ago quarter.  Total non-performing assets amounted to $313.4 million, also increasing 12% year over year.

Provision for credit losses was $23.4 million, which decreased 68% year over year.

The non-performing assets ratio was 0.73%, up from 0.64% in the year-ago period.

Net charge-offs decreased 59.5% to $27.1 million from the prior-year quarter. The net charge-off ratio was 0.25%, down from 0.61% in the prior-year quarter.

SNV’s Capital Ratios & Profitability Ratios Improve Y/Y

As of Sept. 30, 2024, the Tier 1 capital ratio and total risk-based capital ratio were 11.77% and 13.62%, respectively, compared with 11.18% and 13.12% in the year-ago quarter. As of the same date, the Common Equity Tier 1 capital ratio was 10.65%, up from 10.13% in the year-ago quarter.