Synovus Financial (SNV) 8-K Results of Operations and Financial Condition

Exhibit 99.2

Synovus

INCOME STATEMENT DATA
(Unaudited)
(Dollars in thousands, except per share data)
	Nine Months Ended September 30,
	2014			2013			Change
Interest income	$	693,989			695,755			(0.3	)%
Interest expense		82,160			89,894			(8.6	)
Net interest income		611,829			605,861			1.0
Provision for loan losses		25,638			55,534			(53.8	)
Net interest income after provision for loan losses		586,191			550,327			6.5
Non-interest income:
Service charges on deposit accounts		58,610			58,142			0.8
Fiduciary and asset management fees		33,536			32,471			3.3
Brokerage revenue		20,201			21,231			(4.9	)
Mortgage banking income		13,459			19,569			(31.2	)
Bankcard fees		24,394			22,662			7.6
Investment securities gains, net		1,331			2,571			(48.2	)
Other fee income		14,495			16,461			(11.9	)
Decrease in fair value of private equity investments, net		(513	)		(856	)		40.1
Gain on sale of Memphis branches, net (1)		5,789			—			nm
Other non-interest income		26,253			21,139			24.2
Total non-interest income		197,555			193,390			2.2
Non-interest expense:
Salaries and other personnel expense		279,855			276,190			1.3
Net occupancy and equipment expense		79,436			77,025			3.1
Third-party services		29,604			30,446			(2.8	)
FDIC insurance and other regulatory fees		25,781			24,059			7.2
Professional fees		18,427			28,922			(36.3	)
Advertising expense		15,935			6,513			144.7
Foreclosed real estate expense, net		18,818			28,800			(34.7	)
Losses on other loans held for sale, net		2,050			487			320.9
Visa indemnification charges		2,731			801			240.9
Litigation settlement expenses(2)		12,349			—			nm
Restructuring charges		17,101			7,295			134.4
Other operating expenses		58,028			70,261			(17.4	)
Total non-interest expense		560,115			550,799			1.7
Income before income taxes		223,631			192,918			15.9
Income tax expense		81,554			72,114			13.1
Net income		142,077			120,804			17.6
Dividends and accretion of discount on preferred stock		7,678			38,100			(79.8	)
Net income available to common shareholders	$	134,399			82,704			62.5
Net income per common share, basic (3)		0.97			0.67			44.6
Net income per common share, diluted (3)		0.96			0.62			54.2
Cash dividends declared per common share(3)		0.21			0.21			—
Return on average assets		0.72	%		0.61			18.0
Return on average common equity		6.21			4.16			49.3
Weighted average common shares outstanding, basic(3)		138,989			123,652			12.4	%
Weighted average common shares outstanding, diluted (3)		139,600			132,476			5.4

nm - not meaningful

(1) Consists of gain, net of associated costs, from the sale of certain loans, premises, deposits, and other assets and liabilities of the Memphis, Tennessee branches of Trust One Bank, a division of Synovus Bank.

(2) 3Q14 and 4Q13 amounts consist of litigation settlement expenses, including loss contingency accruals, with respect to certain legal matters. Amounts for other periods presented herein are not reported separately as amounts are not material. 

(3) Share and per share data for prior periods has been restated to reflect the 1-for-7 reverse stock split which was effective on May 16, 2014.

Synovus

INCOME STATEMENT DATA
(Unaudited)
(In thousands, except per share data)
	2014						2013								3rd Quarter
	Third Quarter			Second Quarter			First Quarter			Fourth Quarter			Third Quarter		‘14 vs. ‘13 Change
Interest income	$	233,394			232,213			228,382			233,258			233,852		(0.2	)%
Interest expense		27,131			27,162			27,868			28,927			29,882		(9.2	)
Net interest income		206,263			205,051			200,514			204,331			203,970		1.1
Provision for loan losses		3,843			12,284			9,511			14,064			6,761		(43.2	)
Net interest income after provision for loan losses		202,420			192,767			191,003			190,267			197,209		2.6
Non-interest income:
Service charges on deposit accounts		20,159			19,238			19,214			19,647			19,426		3.8
Fiduciary and asset management fees		11,207			11,296			11,033			10,978			10,389		7.9
Brokerage revenue		7,281			6,707			6,213			6,307			6,636		9.7
Mortgage banking income		4,665			5,283			3,511			2,913			5,314		(12.2	)
Bankcard fees		8,182			8,695			7,518			7,979			7,760		5.4
Investment securities gains, net		—			—			1,331			373			1,124		nm
Other fee income		4,704			4,928			4,863			6,106			5,199		(9.5	)
(Decrease) increase in fair value of private equity investments, net		(144	)		(119	)		(250	)		(2,108	)		284		nm
Gain on sale of Memphis branches, net(1)		—			—			5,789			—			—		nm
Other non-interest income		7,931			7,360			10,960			7,986			7,446		6.5
Total non-interest income		63,985			63,388			70,182			60,181			63,578		0.6
Non-interest expense:
Salaries and other personnel expense		93,870			92,540			93,445			91,962			92,794		1.2
Net occupancy and equipment expense		26,956			26,425			26,056			26,314			26,475		1.8
Third-party services		10,044			9,464			10,097			9,689			10,151		(1.1	)
FDIC insurance and other regulatory fees		8,013			8,049			9,719			8,699			7,639		4.9
Professional fees		2,526			8,224			7,677			9,855			11,410		(77.9	)
Advertising expense		7,177			6,281			2,477			2,458			3,114		130.5
Foreclosed real estate expense, net		9,074			4,063			5,681			5,064			10,359		(12.4	)
(Gains) losses on other loans held for sale, net		(176	)		(40	)		2,266			(159	)		408		nm
Visa indemnification charges		1,979			356			396			799			—		nm
Litigation settlement expenses(2)		12,349			—			—			10,000			—		nm
Restructuring charges		809			7,716			8,577			3,770			687		17.8
Other operating expenses		21,128			19,127			17,770			22,287			24,291		(13.0	)
Total non-interest expense		193,749			182,205			184,161			190,738			187,328		3.4
Income before income taxes		72,656			73,950			77,024			59,710			73,459		(1.1	)
Income tax expense		25,868			27,078			28,608			21,130			27,765		(6.8	)
Net income		46,788			46,872			48,416			38,580			45,694		2.4
Dividends and accretion of discount on preferred stock		2,559			2,559			2,559			2,730			8,506		(69.9	)
Net income available to common shareholders	$	44,229			44,313			45,857			35,850			37,188		18.9	%
Net income per common share, basic (3)	$	0.32			0.32			0.33			0.26			0.27		16.9	%
Net income per common share, diluted(3)		0.32			0.32			0.33			0.26			0.27		16.7
Cash dividends declared per common share(3)		0.07			0.07			0.07			0.07			0.07		—
Return on average assets		0.70	%		0.71			0.75			0.58			0.69		1.4
Return on average common equity		5.97			6.14			6.52			5.04			5.40		10.6
Weighted average common shares outstanding, basic(3)		139,043			138,991			138,932			138,897			136,671		1.7
Weighted average common shares outstanding, diluted(3)		139,726			139,567			139,504			139,419			137,097		1.9

nm - not meaningful

* - ratios are annualized

(1) Consists of gain, net of associated costs, from the sale of certain loans, premises, deposits, and other assets and liabilities of the Memphis, Tennessee branches of Trust One Bank, a division of Synovus Bank.

(2) 3Q14 and 4Q13 amounts consist of litigation settlement expenses, including loss contingency accruals, with respect to certain legal matters. Amounts for other periods presented herein are not reported separately as amounts are not material.

(3) Share and per share data for prior periods has been restated to reflect the 1-for-7 reverse stock split which was effective on May 16, 2014.

Synovus

BALANCE SHEET DATA

(Unaudited)

(In thousands, except share data)

	September 30, 2014			December 31, 2013			September 30, 2013
ASSETS
Cash and cash equivalents	$	386,402			469,630			514,694
Interest bearing funds with Federal Reserve Bank		750,446			644,528			966,435
Interest earning deposits with banks		13,612			24,325			14,060
Federal funds sold and securities purchased under resale agreements		70,918			80,975			80,177
Trading account assets, at fair value		12,705			6,113			17,363
Mortgage loans held for sale, at fair value		72,333			45,384			61,232
Other loans held for sale		338			10,685			9,351
Investment securities available for sale, at fair value		3,050,257			3,199,358			3,151,344
Loans, net of deferred fees and costs		20,588,566			20,057,798			19,711,610
Allowance for loan losses		(269,376	)		(307,560	)		(318,612	)
Loans, net		20,319,190			19,750,238			19,392,998
Premises and equipment, net		456,633			468,871			476,088
Goodwill		24,431			24,431			24,431
Other intangible assets, net		1,471			3,415			3,783
Other real estate		81,636			112,629			126,640
Deferred tax asset, net		656,151			744,646			763,050
Other assets		622,587			616,376			616,714
Total assets	$	26,519,110			26,201,604			26,218,360
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Deposits:
Non-interest bearing deposits	$	5,813,809			5,642,751			5,358,659
Interest bearing deposits, excluding brokered deposits		13,609,038			14,140,037			14,339,997
Brokered deposits		1,566,934			1,094,002			1,275,200
Total deposits		20,989,781			20,876,790			20,973,856
Federal funds purchased and securities sold under repurchase agreements		107,160			148,132			194,613
Long-term debt		2,130,934			2,033,141			1,885,057
Other liabilities		214,690			194,556			232,974
Total liabilities		23,442,565			23,252,619			23,286,500
Shareholders’ equity:
Series C Preferred Stock - no par value, 5,200,000 shares outstanding at September 30, 2014, December 31, 2013, and September 30, 2013		125,980			125,862			125,400
Common stock - $1.00 par value. 139,064,621 shares outstanding at September 30, 2014, 138,907,351 shares outstanding at December 31, 2013, and 138,890,034 shares outstanding at September 30, 2013 (1)		139,878			139,721			139,704
Additional paid-in capital		2,974,319			2,976,348			2,976,813
Treasury stock, at cost - 813,350 shares(1)		(114,176	)		(114,176	)		(114,176	)
Accumulated other comprehensive loss, net		(24,827	)		(41,258	)		(29,514	)
Accumulated deficit		(24,629	)		(137,512	)		(166,367	)
Total shareholders’ equity		3,076,545			2,948,985			2,931,860
Total liabilities and shareholders’ equity	$	26,519,110			26,201,604			26,218,360

(1) Share and per share data for prior periods has been restated to reflect the 1-for-7 reverse stock split which was effective on May 16, 2014.

Synovus

AVERAGE BALANCES AND YIELDS/RATES (1)

(Unaudited)

(Dollars in thousands)

	2014						2013
	Third Quarter			Second Quarter			First Quarter			Fourth Quarter			Third Quarter
Interest Earning Assets
Taxable investment securities(2)	$	3,035,940			3,091,537			3,181,678			3,196,561			3,062,976
Yield		1.84	%		1.87			1.91			1.90			1.76
Tax-exempt investment securities(2) (4)	$	5,168			5,781			6,421			7,758			9,835
Yield (taxable equivalent)		6.21	%		6.23			6.24			6.14			6.26
Trading account assets	$	16,818			16,011			20,346			10,021			13,806
Yield		2.52	%		2.25			3.16			4.60			4.50
Commercial loans(3) (4)	$	16,603,287			16,673,930			16,451,594			16,217,373			16,067,424
Yield		4.17	%		4.19			4.21			4.28			4.37
Consumer loans(3)	$	3,814,160			3,695,010			3,628,347			3,615,836			3,528,057
Yield		4.44	%		4.51			4.53			4.50			4.61
Allowance for loan losses	$	(274,698	)		(293,320	)		(307,078	)		(316,001	)		(328,084	)
Loans, net(3)	$	20,142,749			20,075,620			19,772,863			19,517,208			19,267,397
Yield		4.29	%		4.32			4.34			4.40			4.50
Mortgage loans held for sale	$	70,766			59,678			38,699			46,036			85,493
Yield		3.96	%		4.13			4.15			3.94			4.07
Federal funds sold, due from Federal Reserve Bank, and other short-term investments	$	974,363			843,018			935,300			1,235,144			1,375,921
Yield		0.23	%		0.23			0.23			0.24			0.24
Federal Home Loan Bank and Federal Reserve Bank stock (5)	$	78,131			76,172			82,585			70,815			70,741
Yield		3.57	%		4.15			3.21			2.85			2.30
Total interest earning assets	$	24,323,935			24,167,817			24,037,892			24,083,543			23,886,169
Yield		3.81	%		3.86			3.86			3.85			3.89
Interest Bearing Liabilities
Interest bearing demand deposits	$	3,722,599			3,830,956			3,878,590			4,102,398			3,933,902
Rate		0.19	%		0.19			0.19			0.19			0.23
Money market accounts	$	6,044,138			6,033,523			6,077,357			6,161,893			6,148,289
Rate		0.29	%		0.31			0.32			0.33			0.33
Savings deposits	$	645,654			644,103			616,962			605,054			607,144
Rate		0.07	%		0.09			0.10			0.10			0.11
Time deposits under $100,000	$	1,335,848			1,364,322			1,423,487			1,491,673			1,526,974
Rate		0.56	%		0.57			0.59			0.61			0.62
Time deposits over $100,000	$	1,871,136			1,824,349			1,956,925			2,049,094			2,022,719
Rate		0.75	%		0.74			0.76			0.80			0.84
Brokered money market accounts	$	174,538			184,233			207,681			210,380			202,802
Rate		0.27	%		0.27			0.26			0.27			0.27
Brokered time deposits	$	1,320,082			1,216,934			1,027,167			984,047			1,130,491
Rate		0.52	%		0.51			0.62			0.65			0.70
Total interest bearing deposits	$	15,113,995			15,098,420			15,188,169			15,604,539			15,572,321
Rate		0.35	%		0.36			0.38			0.39			0.42
Federal funds purchased and securities sold under repurchase agreements	$	171,429			219,490			215,027			216,757			195,717
Rate		0.08	%		0.13			0.14			0.15			0.14
Long-term debt	$	2,142,705			2,099,578			2,156,836			1,886,223			1,885,385
Rate		2.54	%		2.58			2.52			2.85			2.85
Total interest bearing liabilities	$	17,428,129			17,417,488			17,560,032			17,707,519			17,653,423
Rate		0.62	%		0.62			0.64			0.65			0.67
Non-interest bearing demand deposits	$	5,824,592			5,765,287			5,537,090			5,545,529			5,306,447
Effective cost of funds		0.44	%		0.45			0.47			0.47			0.49
Net interest margin		3.37	%		3.41			3.39			3.38			3.40
Taxable equivalent adjustment	$	408			443			455			481			529

(1) Yields and rates are annualized.

(2) Excludes net unrealized gains and losses.

(3) Average loans are shown net of unearned income. Non-performing loans are included.

(4) Reflects taxable-equivalent adjustments, using the statutory federal income tax rate of 35%, in adjusting interest on tax-exempt loans and investment securities to a taxable-equivalent basis.

(5) Included as a component of Other Assets on the consolidated balance sheet

Synovus

LOANS OUTSTANDING AND NON-PERFORMING LOANS COMPOSITION

(Unaudited)

(Dollars in thousands)

	September 30, 2014
Loan Type	Total Loans			Loans as a % of Total Loans Outstanding			Total Non-performing Loans		Non-performing Loans as a % of Total Nonperforming Loans
Multi-Family	$	1,152,728			5.6	%	$	223		0.1	%
Hotels		668,603			3.2			431		0.2
Office Buildings		1,107,012			5.4			2,759		1.0
Shopping Centers		856,399			4.2			10,414		4.3
Commercial Development		131,011			0.6			20,759		8.6
Warehouses		565,011			2.7			790		0.3
Other Investment Property		538,282			2.6			3,603		1.5
Total Investment Properties		5,019,046			24.4			38,979		16.0
1-4 Family Construction		143,888			0.7			324		0.1
1-4 Family Investment Mortgage		813,867			4.0			14,432		6.0
Residential Development		179,799			0.9			14,362		5.9
Total 1-4 Family Properties		1,137,554			5.5			29,118		12.0
Land Acquisition		588,779			2.9			40,128		16.6
Total Commercial Real Estate		6,745,379			32.8			108,225		44.6
Commercial, Financial, and Agricultural		6,003,409			29.2			53,360		22.0
Owner-Occupied		4,013,666			19.5			26,810		11.1
Total Commercial & Industrial		10,017,075			48.7			80,170		33.1
Home Equity Lines		1,685,972			8.2			16,875		7.0
Consumer Mortgages		1,621,904			7.9			34,759		14.4
Credit Cards		253,853			1.3			—		—
Other Retail Loans		293,232			1.4			2,353		1.0
Total Retail		3,854,961			18.7			53,987		22.3
Unearned Income		(28,849	)		(0.1	)		—		nm
Total	$	20,588,566			100.0	%	$	242,382		100.0	%

LOANS OUTSTANDING BY TYPE COMPARISON

(Unaudited)

(Dollars in thousands)

Loan Type	Total Loans September 30, 2014			June 30, 2014			3Q14 vs. 2Q14 % change(1)			September 30, 2013			3Q14 vs. 3Q13 % change
Multi-Family	$	1,152,728			1,109,340			15.5	%		960,136			20.1	%
Hotels		668,603			724,659			(30.7	)		656,514			1.8
Office Buildings		1,107,012			988,382			47.6			822,131			34.7
Shopping Centers		856,399			837,799			8.8			868,007			(1.3	)
Commercial Development		131,011			139,966			(25.4	)		168,402			(22.2	)
Warehouses		565,011			566,890			(1.3	)		557,409			1.4
Other Investment Property		538,282			498,153			32.0			508,646			5.8
Total Investment Properties		5,019,046			4,865,189			12.5			4,541,245			10.5
1-4 Family Construction		143,888			135,596			24.3			138,719			3.7
1-4 Family Investment Mortgage		813,867			837,648			(11.3	)		850,024			(4.3	)
Residential Development		179,799			178,793			2.2			199,435			(9.8	)
Total 1-4 Family Properties		1,137,554			1,152,037			(5.0	)		1,188,178			(4.3	)
Land Acquisition		588,779			599,117			(6.8	)		729,095			(19.2	)
Total Commercial Real Estate		6,745,379			6,616,343			7.7			6,458,518			4.4
Commercial, Financial, and Agricultural		6,003,409			6,085,948			(5.4	)		5,728,357			4.8
Owner-Occupied		4,013,666			4,013,492			0.0			3,977,068			0.9
Total Commercial & Industrial		10,017,075			10,099,440			(3.2	)		9,705,425			3.2
Home Equity Lines		1,685,972			1,664,520			5.1			1,549,582			8.8
Consumer Mortgages		1,621,904			1,561,111			15.4			1,482,861			9.4
Credit Cards		253,853			255,369			(2.4	)		253,805			0.0
Other Retail Loans		293,232			287,935			7.3			286,421			2.4
Total Retail		3,854,961			3,768,935			9.1			3,572,669			7.9
Unearned Income		(28,849	)		(28,955	)		(1.5	)		(25,002	)		15.4
Total	$	20,588,566			20,455,763			2.6	%		19,711,610			4.4	%

(1) Percentage change is annualized.

Synovus

CREDIT QUALITY DATA

(Unaudited)

(Dollars in thousands)

	2014							2013				3rd Quarter
	Third Quarter			Second Quarter		First Quarter		Fourth Quarter		Third Quarter		‘14 vs. ‘13 Change
Non-performing Loans	$	242,382			259,547		384,324		416,300		450,879		(46.2	)%
Other Loans Held for Sale(1)		338			2,045		3,120		10,685		9,351		(96.4	)
Other Real Estate		81,636			101,533		110,757		112,629		126,640		(35.5	)
Non-performing Assets		324,356			363,125		498,201		539,614		586,870		(44.7	)
Allowance for Loan Losses		269,376			277,783		300,871		307,560		318,612		(15.5	)
Net Charge-Offs - Quarter		12,250			35,371		15,181		25,116		23,030		(46.8	)
Net Charge-Offs - YTD		62,802			50,552		15,181		135,443		110,327		(43.1	)
Net Charge-Offs / Average Loans - Quarter(2)		0.24	%		0.69		0.30		0.51		0.47
Non-performing Loans / Loans		1.18			1.27		1.91		2.08		2.29
Non-performing Assets / Loans, Other Loans Held for Sale & ORE		1.57			1.77		2.46		2.67		2.96
Allowance / Loans		1.31			1.36		1.49		1.53		1.62
Allowance / Non-performing Loans		111.14			107.03		78.29		73.88		70.66
Allowance / Non-performing Loans(3)		176.47			177.62		100.16		95.43		91.84
Past Due Loans over 90 days and Still Accruing	$	4,067			4,798		6,563		4,489		4,738		(14.2	)%
As a Percentage of Loans Outstanding		0.02	%		0.02		0.03		0.02		0.02
Total Past Dues Loans and Still Accruing	$	72,712			60,428		75,038		72,600		78,906		(7.8	)
As a Percentage of Loans Outstanding		0.35	%		0.30		0.37		0.36		0.40
Accruing Troubled Debt Restructurings (TDRs)	$	408,737			444,108		495,390		556,410		574,236		(28.8	)

(1) Represent impaired loans that are intended to be sold. Held for sale loans are carried at the lower of cost or fair value, less costs to sell.

(2) Ratio is annualized.

(3) Excludes non-performing loans for which the expected loss has been charged off.

SELECTED CAPITAL INFORMATION ⁽¹⁾

(Unaudited)

(Dollars in thousands)

	September 30, 2014			December 31, 2013		September 30, 2013
Tier 1 Capital	$	2,553,765			2,351,493		2,292,758
Total Risk-Based Capital		3,005,346			2,900,865		2,835,108
Tier 1 Capital Ratio		11.19	%		10.54		10.55
Tier 1 Common Equity Ratio		10.60			9.93		9.93
Total Risk-Based Capital Ratio		13.17			13.00		13.04
Tier 1 Leverage Ratio		9.85			9.13		8.96
Common Equity as a Percentage of Total Assets (2)		11.13			10.77		10.70
Tangible Common Equity as a Percentage of Tangible Assets(3)		11.04			10.68		10.61
Tangible Common Equity as a Percentage of Risk Weighted Assets(3)		12.82			12.53		12.78
Book Value Per Common Share(4)(5)		21.22			20.32		20.21
Tangible Book Value Per Common Share (3)(5)		21.03			20.12		20.00

(1) Current quarter regulatory capital information is preliminary.

(2) Common equity consists of Total Shareholders’ Equity less Preferred Stock.

(3) Excludes the carrying value of goodwill and other intangible assets from common equity and total assets.

(4) Book Value Per Common Share consists of Total Shareholders’ Equity less Preferred Stock divided by total common shares outstanding.

(5) Per share data for prior periods has been restated to reflect the 1-for-7 reverse stock split which was effective on May 16, 2014. impact of unexercised tangible equity units (tMEDs).