[LOGO] SNOVUS FINANCIAL CORP.
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NEWS RELEASE
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For Immediate Release
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Contact: Patrick A. Reynolds
Director of Investor Relations
(706) 649-4973
Synovus Financial Corp.(R)Reports 22% Increase in Net Income for Second Quarter
Net Income up 20% for First Half of 2001
Core Loan Growth, Fee Income Growth, and Expense Control Drive Profitability
Columbus, Ga., July 18, 2001 -- Synovus Financial Corp. (NYSE: "SNV"), the
Columbus, Ga.-based multi-financial services company, today announced net income
was $75.6 million for the second quarter 2001, up 22%, and $147.5 million for
the first six months of 2001, up 20%, compared to $61.8 million and $123.1
million, for the same periods in 2000. Diluted earnings per share were $0.26 for
the quarter, up 18% over last year's $0.22. For the first six months of 2001,
diluted earnings per share were $0.50, an increase of 16% over $0.43 per share
for the same period in 2000. Major contributors to the growth in net income
include strong growth in loans and fee income. Expense control management also
positively impacted the growth in net income.
"We are very pleased to report excellent second quarter results," said
James H. Blanchard, Synovus Financial Corp. Chairman and Chief Executive
Officer. "Our outstanding loan growth of 15% over last year, coupled with
continued strong credit quality, added substantially to our excellent results.
Bank fee income increased by 29%, with mortgage revenue leading the way with an
83% increase over last year. Our commitment to controlling our expenses
contributed significantly to our excellent results in the quarter."
Blanchard continued, "Our vision is for Synovus to be the finest financial
services company in the world. We believe that our current strategies, team
members, technological advantages, and our strong balance sheet position us well
for future earnings growth. We reiterate our expectations of at least 15% growth
in earnings per share in 2001 and to be at the top of the 15-18% range of
earnings growth by 2003."
Return on assets for the quarter was 2.00% and return on equity was 19.96%,
as compared to 1.88% and 19.40%, respectively, for the second quarter 2000. For
the first six months, return on assets was 1.98% and return on equity was 20.02%
as compared to 1.91% and 19.58%, respectively, in the same period last year.
Total assets ended the quarter at $15.7 billion, an increase of 14.4% from the
same period last year. Shareholders' equity at June 30, 2001, was $1.551
billion, which represented 9.91% of quarter-end assets.
Strong asset quality trends continued during the second quarter. Reflecting
the emphasis on high credit quality and credit management, the ratio of
nonperforming assets to loans and other real estate was 0.49%, the allowance for
loan losses was 1.38% of loans, and net charge-offs were 0.26% of average
Synovus Financial Corp.(R) Reports 22% Increase in Net Income for Second
Quarter/p.2
loans for the second quarter, all unchanged from the previous quarter. The
allowance for loan losses provides coverage of 397% of nonperforming loans. The
provision for loan losses covered net charge-offs by 1.76x for the quarter.
Synovus banking operations' revenues increased 14% over the same period
last year, while net income increased 29% over last year. Return on assets for
the quarter was 1.48% and return on equity was 18.74%, compared to 1.31% and
17.14%, respectively, in second quarter of 2000. Net interest income increased
by 9% versus the second quarter last year, due to net loan growth of 15% and a
net interest margin of 4.61%, up from 4.55% in the previous quarter. Banking
operations' non-interest income grew 29%, with increases in mortgage banking of
83%, service charges on deposits of 14%, trust revenues of 29%, credit card fees
of 22%, and brokerage revenues of 7% over the same period last year. Creative
Financial Group, acquired in the first quarter, added $1.2 million in revenue to
Synovus Wealth Management in the second quarter. Total banking operations'
non-interest income as a percentage of banking revenues -- excluding securities
gains/losses -- was 28.1% in the quarter. G&A expenses for the quarter were up
6.2% over last year. The efficiency ratio for the quarter was 54.4% versus 58.4%
for the second quarter 2000.
TSYS reported net income of $26.0 million for the second quarter 2001, a
6.7% increase in net income over the same period last year. Revenues for the
second quarter were $162.5 million, an increase of 8.0% compared to $150.5
million for the second quarter last year. Excluding revenues attributable to the
Citigroup Universal Card Services' (UCS) consumer card portfolio for the second
quarter of 2000, pro forma revenues for the second quarter of 2001 increased
15.3% compared to last year.
TSYS expects an increase of net income for 2001 over 2000 of approximately
20%, with the third and fourth quarters' net income growing 30% over the same
periods in 2000. With TSYS' contribution, Synovus' total non-interest income --
excluding securities gains/losses -- was 60.2% of revenues for the quarter
versus 59.2% in the same period last year.
Synovus will host an earnings highlights conference call at 4:15 ET, on
July 18, 2001. The conference call can be accessed at www.synovus.com. Please
log on 5-10 minutes ahead of the call time.
Synovus Financial Corp. (NYSE: "SNV") is a multi-financial services company
with more than $15.7 billion in assets based in Columbus, Ga. Synovus is
composed of 39 banks in Georgia, Alabama, South Carolina and Florida; including
pointpathbank.com (www.pointpathbank.com); an 80.8-percent stake in Total System
Services, Inc. (NYSE: "TSS") (www.tsys.com), one of the world's leading payment
services providers; DotsConnect (www.dotsconnect.com), which provides the
e-payments link between buyers and sellers on the Web; Synovus Wealth
Management, a marketing unit for securities, trust, insurance and private
banking services; Synovus Mortgage Corp.; and Synovus Leasing Services. Synovus
is No. 8 on FORTUNE magazine's list of "The 100 Best Companies To Work For" in
2001. See Synovus on the Web at www.synovus.com.
This press release contains statements that constitute "forward-looking
statements" within the meaning of the Securities Act of 1933 and the Securities
Exchange Act of 1934 as amended by the Private Securities Litigation Reform Act
of 1995. These forward-looking statements include, among others, statements
regarding Synovus' expected growth in earnings per share and TSYS' expected
growth in net income. Prospective investors are cautioned that any such
forward-looking statements are not guarantees of future performance and involve
risks and uncertainties, and that actual results may differ materially from
those contemplated by such forward-looking statements. A number of important
factors could cause actual results to differ materially from those contemplated
by the forward-looking statements in this press release. Many of these factors
are beyond Synovus' ability to control or predict. These factors include, but
are not limited to, competitive pressures arising from aggressive competition
from other lenders; factors that affect the delinquency rate on Synovus' loans
and the rate at which Synovus' loans are charged off; changes in the cost and
availability of funding due to changes in the deposit market and
Synovus Financial Corp.(R)Reports 22% Increase in Net Income for
Second Quarter /p. 3
credit market, or the way in which Synovus is perceived in such
markets; changes in prevailing interest rates; the timely development
of competitive new products and services and the acceptance of such by
customers; the growth and profitability of Synovus' non interest or fee
income, including changes in income derived from TSYS, being less than
expected; Synovus' inability to control expenses; a deterioration in
credit quality or a reduced demand for credit; and the effects of
changes in government policy and regulations, including restrictions
and/or limitations arising from banking laws, regulations and
examinations. Additional factors that could cause actual results to
differ materially from those contemplated in this press release can be
found in Synovus' filings with the Securities and Exchange Commission,
including its Annual Report on Form 10-K, quarterly reports on Form
10-Q and current reports on Form 8-K. We believe these forward-looking
statements are reasonable; however, undue reliance should not be placed
on any forward-looking statements, which are based on current
expectations.
Synovus Financial Corp.
INCOME STATEMENT Six Months Ended
(Amounts in thousands, except per share data) June 30,
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2001 2000 Change
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Interest Income (Taxable equivalent) .............$ 584,172 522,290 11.8 %
Interest Expense ................................. 280,346 240,720 16.5
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Net Interest Income (Taxable equivalent) ......... 303,826 281,570 7.9
Tax equivalent adjustment 3,525 3,021 16.7
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Net Interest Income .............................. 300,301 278,549 7.8
Provision for Loan Losses ........................ 24,157 23,623 2.3
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Net Interest Income After Provision .............. 276,144 254,926 8.3
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Non-Interest Income:
Data Processing .............................. 310,739 284,692 9.1
Service Charges on Deposits................... 41,205 36,382 13.3
Fees For Trust Services ...................... 12,578 11,009 14.3
Brokerage Revenue ............................ 8,485 8,380 1.3
Mortgage Banking Income ...................... 18,666 9,708 92.3
Credit Card Fees ............................. 9,753 8,280 17.8
Securities Gains (Losses) .................... 846 (28) N/A
Other Fee Income.............................. 8,477 6,961 21.8
Other Non-Interest Income .................... 45,969 40,795 12.7
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Total Non-Interest Income ........................ 456,718 406,179 12.4
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Non-Interest Expense:
Personnel Expense ............................. 271,709 248,702 9.3
Occupancy & Equipment Expense ................. 117,815 110,336 6.8
Other Non-Interest Expense .................... 101,655 100,276 1.4
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Total Non-Interest Expense ....................... 491,179 459,314 6.9
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Minority Interest in Consolidated Subsidiaries.... 9,232 8,625 7.0
Income Before Taxes .............................. 232,451 193,166 20.3
Income Tax Expense ............................... 84,951 70,022 21.3
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Net Income ....................................... 147,500 123,144 19.8
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Basic Earnings per Share ......................... 0.51 0.44 17.2
Diluted Earnings per Share ....................... 0.50 0.43 16.1
Dividends Declared per Share ..................... 0.26 0.22 15.9
Return on Assets ................................. 1.98 1.91 7 bp
Return on Equity ................................. 20.02 19.58 44
Average Shares Outstanding - Basic ............... 289,018 282,810 2.2 %
Average Shares Outstanding - Diluted ............. 294,741 285,776 3.1
bp - change is measured as difference in basis points.
Synovus Financial Corp.
INCOME STATEMENT 2001 2000 2nd Quarter
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(Amounts in thousands, except per share data) Second First Fourth Third Second '01 vs. '00
Quarter Quarter Quarter Quarter Quarter Change
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Interest Income (Taxable equivalent) ..............$ 289,867 294,305 296,527 285,035 270,531 7.1 %
Interest Expense .................................. 134,146 146,200 151,430 143,323 127,420 5.3
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Net Interest Income (Taxable equivalent) .......... 155,721 148,105 145,097 141,712 143,111 8.8
Tax equivalent adjustment.......................... 1,833 1,692 1,555 1,471 1,531 19.7
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Net Interest Income ............................... 153,888 146,413 143,542 140,241 141,580 8.7
Provision for Loan Losses ......................... 13,170 10,987 11,096 9,622 12,712 3.6
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Net Interest Income After Provision ............... 140,718 135,426 132,446 130,619 128,868 9.2
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Non-Interest Income:
Data Processing ............................... 160,437 150,302 149,611 146,665 145,676 10.1
Service Charges on Deposits.................... 21,168 20,037 20,288 19,331 18,579 13.9
Fees For Trust Services ....................... 6,788 5,790 5,649 5,546 5,250 29.3
Brokerage Revenue ............................. 4,159 4,326 4,242 3,441 3,883 7.1
Mortgage Banking Income ....................... 10,197 8,469 6,146 5,887 5,562 83.3
Credit Card Fees .............................. 5,341 4,412 5,971 4,878 4,362 22.4
Securities Gains (Losses) ..................... 428 418 711 98 (27) N/A
Other Fee Income............................... 4,140 4,337 4,335 3,813 3,485 18.8
Other Non-Interest Income ..................... 20,080 25,889 26,082 14,640 18,793 6.8
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Total Non-Interest Income ......................... 232,738 223,980 223,035 204,299 205,563 13.2
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Non-Interest Expense:
Personnel Expense .............................. 137,441 134,268 121,658 125,117 124,817 10.1
Occupancy & Equipment Expense .................. 60,541 57,274 60,945 54,394 56,537 7.1
Other Non-Interest Expense ..................... 51,061 50,594 51,598 50,248 51,084 (0.0)
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Total Non-Interest Expense ........................ 249,043 242,136 234,201 229,759 232,438 7.1
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Minority Interest in Consolidated Subsidiaries..... 5,027 4,205 4,178 3,692 4,664 7.8
Income Before Taxes ............................... 119,386 113,065 117,102 101,467 97,329 22.7
Income Tax Expense ................................ 43,771 41,180 42,420 36,736 35,577 23.0
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Net Income ........................................ 75,615 71,885 74,682 64,731 61,752 22.4
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Basic Earnings per Share .......................... 0.26 0.25 0.26 0.23 0.22 19.6
Diluted Earnings per Share ........................ 0.26 0.25 0.26 0.23 0.22 18.5
Dividends Declared per Share ...................... 0.13 0.13 0.11 0.11 0.11 15.9
Return on Assets .................................. 2.00 % 1.97 % 2.09 % 1.87 % 1.88 % 12 bp
Return on Equity .................................. 19.96 20.08 21.75 19.54 19.40 56
Average Shares Outstanding - Basic ................ 290,315 287,707 284,423 284,149 283,457 2.4 %
Average Shares Outstanding - Diluted .............. 296,218 293,248 288,559 287,392 286,605 3.4
bp - change is measured as difference in basis points.
Synovus Financial Corp.
SELECTED BALANCE SHEET DATA 2001 2000 2nd Quarter
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(Amounts in thousands, except per share data) Second First Fourth Third Second '01 vs. '00
Quarter Quarter Quarter Quarter Quarter Change
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Total Assets....................................$ 15,654,130 15,181,807 14,908,092 14,105,157 13,685,928 14.4 %
Investment Securities........................... 2,065,125 2,063,315 2,077,928 2,044,152 2,029,580 1.8
Loans (net of unearned income).................. 11,604,690 11,155,864 10,751,887 10,454,999 10,071,234 15.2
Total Deposits.................................. 11,561,515 11,487,328 11,161,710 10,423,641 10,132,131 14.1
Demand Deposits............................. 1,822,591 1,725,783 1,726,817 1,592,184 1,678,714 8.6
Certificates of Deposit..................... 5,238,816 5,368,835 5,132,065 4,980,595 4,685,702 11.8
Savings Accounts............................ 420,520 423,292 404,806 430,961 441,288 (4.7)
NOW Accounts................................ 1,717,637 1,638,446 1,749,971 1,431,054 1,424,644 20.6
Money Market................................ 2,361,951 2,330,972 2,148,051 1,988,847 1,901,783 24.2
Shareholders' Equity........................... 1,550,559 1,501,444 1,417,171 1,343,540 1,294,165 19.8
Book Value Per Share............................ 5.34 5.18 4.98 4.73 4.56 17.1
Equity to Assets................................ 9.91 9.89 9.51 9.53 9.46 45 bp
Loan to Deposit Ratio........................... 100.37 97.11 96.33 100.30 99.40 97
Demand Deposits / Total Deposits................ 15.76 15.02 15.47 15.27 16.57 (81)
Common Shares Outstanding ...................... 290,615 289,766 284,643 284,179 284,086 2.3 %
CREDIT QUALITY DATA 2001 2000 2nd Quarter
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(Dollars in thousands) Second First Fourth Third Second '01 vs. '00
Quarter Quarter Quarter Quarter Quarter Change
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Nonperforming Loans............................$ 40,168 42,221 41,709 45,974 39,632 1.4 %
Other Real Estate............................... 16,458 12,309 13,898 9,408 7,839 110.0
Nonperforming Assets........................... 56,626 54,530 55,607 55,382 47,471 19.3
Allowance for Loan Losses....................... 159,600 153,916 147,867 143,974 140,539 13.6
Net Charge-Offs - Quarter..................... 7,486 7,198 7,203 6,187 6,208 20.6
Net Charge-Offs - YTD......................... 14,684 7,198 24,032 16,829 10,642 38.0
Net Charge-Offs / Average Loans - Quarter..... 0.26 0.26 0.27 0.24 0.25 1 bp
Net Charge-Offs / Average Loans - YTD......... 0.26 0.26 0.24 0.23 0.22 4
Nonperforming Loans / Loans & ORE............... 0.35 0.38 0.39 0.44 0.39 (4)
Nonperforming Assets / Loans & ORE.............. 0.49 0.49 0.52 0.53 0.47 2
Allowance / Loans............................... 1.38 1.38 1.38 1.38 1.40 (2)
Allowance / Nonperforming Loans................. 397.33 364.55 354.52 313.17 354.61 4,272
Allowance / Nonperforming Assets................ 281.85 282.26 265.91 259.97 296.05 (1,420)
bp - change is measured as difference in basis points.
Synovus Financial Corp.
AVERAGE BALANCES AND YIELDS/RATES
(Amounts in thousands)
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2001 2000
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Second First Fourth Third Second
Quarter Quarter Quarter Quarter Quarter
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Interest Earning Assets
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Investment Securities............................ $ 2,023,000 2,019,418 2,066,747 2,076,443 2,079,584
Yield......................................... 6.38 % 6.49 6.44 6.39 6.33
Loans, Net....................................... $ 11,183,502 10,875,712 10,481,789 10,077,078 9,630,646
Yield......................................... 9.05 % 9.58 9.84 9.79 9.78
Mortgage Loans Held for Sale..................... $ 204,998 143,613 107,266 119,377 100,498
Yield......................................... 7.36 % 7.43 7.93 8.12 8.04
Federal Funds Sold............................... $ 105,411 116,245 100,231 88,095 75,888
Yield......................................... 4.61 % 5.90 6.73 6.89 6.42
Time Deposits with Banks ........................ $ 6,234 5,598 3,315 2,437 1,004
Yield......................................... 5.40 % 5.05 6.88 9.80 8.85
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Total Interest Earning Assets.................... $ 13,523,145 13,160,586 12,759,348 12,363,430 11,887,620
Yield......................................... 8.59 % 9.05 9.25 9.18 9.14
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Interest Bearing Liabilities
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Time Deposits Over $100,000...................... $ 2,651,781 2,655,281 2,541,805 2,409,826 2,052,892
Rate.......................................... 5.86 % 6.45 6.62 6.47 6.08
Time Deposits Under $100,000..................... $ 2,653,134 2,653,402 2,553,801 2,498,105 2,462,291
Rate.......................................... 5.94 % 6.19 6.15 5.92 5.60
Other Interest Bearing Deposits.................. $ 4,310,544 4,159,123 3,942,170 3,767,410 3,716,475
Rate.......................................... 2.88 % 3.55 3.90 3.82 3.60
Federal Funds Purchased.......................... $ 1,084,710 939,064 1,163,725 1,188,934 1,311,583
Rate.......................................... 4.23 % 5.59 6.48 6.42 6.18
Other Short-Term Borrowings...................... $ 6,530 8,687 6,935 8,991 10,614
Rate.......................................... 3.97 % 5.14 6.43 5.48 6.11
Other Borrowings................................. $ 884,027 867,715 719,639 660,351 532,531
Rate.......................................... 6.14 % 6.38 6.33 6.60 6.09
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Total Interest Bearing Liabilities............... $ 11,590,726 11,283,272 10,928,075 10,533,617 10,086,386
Rate.......................................... 4.63 % 5.24 5.49 5.39 5.06
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Non-Interest Bearing Demand Deposits............. $ 1,691,382 1,634,027 1,562,935 1,569,023 1,588,252
Shareholders' Equity............................. $ 1,519,296 1,451,560 1,365,732 1,317,936 1,280,135
Total Assets..................................... $ 15,194,239 14,792,026 14,224,874 13,736,068 13,220,498
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Spread 3.96 % 3.81 3.76 3.79 4.08
Net Interest Margin 4.61 % 4.55 4.53 4.57 4.83
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