[LOGO](R) ---------------------------------------------------------------
SYNOVUS(R) NEWS RELEASE
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For Immediate Release
Contact: Patrick A. Reynolds
Director of Investor Relations
(706) 649-4973
Synovus Reports 14% Increase in Net Income for Second Quarter 2002
Net Interest Income, Expense Control, and TSYS Drive Profitability
Columbus, Ga., July 17, 2002 -- Synovus' second-quarter
earnings grew 14% over second quarter 2001 to $85.9 million, or $.29
per share, the highest of any quarter in the Company's history Synovus
Chairman and CEO James H. Blanchard announced today.
"We are very pleased to report excellent second quarter
results," said Blanchard. "Our net interest income increased by 14%
over the second quarter last year, due to outstanding loan growth of
14% over last year, coupled with continued strong credit quality, and
net interest margin of 4.71%, up from 4.61% last year. TSYS increased
net income by 13% over last year. Throughout the Synovus family of
companies, our commitment to controlling our expenses contributed to
our excellent results in the quarter."
Return on assets for the quarter was 2.05% and return on
equity was 19.40%, as compared to 2.00% and 19.96%, respectively, for
the second quarter 2001. Shareholders' equity at June 30, 2002, was
$1.814 billion, which represented a very strong 10.48% of quarter-end
assets. Total assets ended the quarter at $17.3 billion, an increase of
10.6% from the same period last year.
Asset quality remained strong 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
0.57%, the allowance for loan losses was 1.37% of loans, and net
charge-offs were 0.44% of average loans for the second quarter. The
allowance for loan losses provides coverage of 336% of nonperforming
loans and the provision for loan losses covered net charge-offs by
1.38x for the quarter.
Synovus Financial Services' (formerly banking operations) net income
increased 14% over last year. Return on assets for the quarter was
1.52% and return on equity was 18.6%, compared to 1.48% and 18.74%,
respectively, in the second quarter of 2001. Financial Services'
non-interest income was down 7% as compared to the second quarter last
year, due primarily to an $8.4 million impairment loss in a private
equity investment. Without this write-down, Financial Services'
non-interest income increased 7%, with increases in service charges on
deposits of 9%, and credit card fees of 9% over the same period last
year. Financial Management Services and insurance (formerly wealth
management) revenues increased 14% over the second quarter last year,
with trust up 14%, brokerage up 10%, financial planning/asset
management (which includes Creative Financial Group and GLOBALT) up 8%,
and insurance up 42%. Financial Services' non-interest income as a
percentage of Financial Services' revenues -- excluding securities
gains/losses and the impairment loss-- was 27% in the quarter.
Post Office Box 120 / Columbus, GA 31902
www.synovus.com
<page>
Synovus Reports 14% Increase in Net Income for Second Quarter/p. 2
TSYS reported net income of $29.3 million for the second
quarter 2002, a 13.0% increase in net income over the same period last
year. Diluted earnings per share for the quarter increased to $0.15, up
from $0.13 last year. TSYS' second quarter achievements included:
* Deploying TSYS ProphIT, a new workflow management system, for
Charming Shoppes, a leading U.S. women's apparel retailer.
* Executing a Letter of Intent for a three-year, 500,000
account pilot program for U.K.-based Barclaycard, one of
Europe's leading credit card issuers.
With TSYS' contribution, Synovus' total non-interest income --
excluding securities gains/losses and reimbursable items at TSYS -- was
58.5% of revenues for the quarter.
Blanchard concluded, "Our vision is for Synovus to be the
finest financial services company in the world. Although the world's
and our own economic perspective has changed significantly, we were
able to achieve our earnings per share goal in 2001; and our corporate
goal to achieve at least 15% earnings per share growth in 2002, and to
be in the 15-18% range of earnings growth for 2003, remains intact. We
believe that our current strategies, team members, technological
advantages, and our strong balance sheet will position us well to
achieve this level of earnings growth."
Synovus will host an earnings highlights conference call at
4:30 pm ET, on July 17, 2002. The conference call can be accessed at
www.synovus.com. Please log on 5-10 minutes ahead of the call time.
Synovus (NYSE: "SNV") is a diverse financial services holding
company with more than $17.3 billion in assets based in Columbus, Ga.
Synovus provides integrated financial services including banking,
financial management, insurance, mortgage and leasing services through
38 affiliate banks and other Synovus offices in Georgia, Alabama, South
Carolina and Florida; and electronic payment processing through an
81.1-percent stake in TSYS (NYSE: "TSS"), the world's largest
third-party processor of international payments. Synovus is No. 5 on
FORTUNE magazine's list of "The 100 Best Companies To Work For" in
2002. 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 the assumptions underlying
such statements, including, with respect to Synovus' expected increases
in earnings per share; expected increases in banking services' net
income and loan growth; expected annual increases in Financial
Management Services and insurance revenues; expected annual increases
in net income of TSYS; and expected annual increases in Financial
Services' expenses. 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,
Synovus' inability to achieve its net income goals for banking
services; Synovus' inability to increase its revenues derived from
Financial Management Services and insurance; TSYS' inability to achieve
its net income goals for the years 2002 through 2003 (whether arising
out of TSYS' inability to successfully bring new products and services
to market, including, but not limited to, stored value and e-commerce
products; and other processing services, adverse developments with
respect to TSYS' sub-prime clients, TSYS' inability to control
expenses, or otherwise); 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 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; 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
Post Office Box 120 / Columbus, GA 31902
www.synovus.com
<page>
Synovus Reports 14% Increase in Net Income for Second Quarter /p. 3
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.
###
Post Office Box 120 / Columbus, GA 31902
www.synovus.com
<page>
Synovus
INCOME STATEMENT Six Months Ended
(Amounts in thousands, except per share data) June 30,
-----------------------------------------------
2002 2001 Change
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Interest Income (Taxable Equivalent) $ 520,292 584,172 (10.9)%
Interest Expense 168,792 280,346 (39.8)
----------------- ---------------- ----------
Net Interest Income (Taxable Equivalent) 351,500 303,826 15.7
Tax Equivalent Adjustment 3,542 3,525 0.5
----------------- ---------------- ----------
Net Interest Income 347,958 300,301 15.9
Provision for Loan Losses 33,087 24,157 37.0
----------------- ---------------- ----------
Net Interest Income After Provision 314,871 276,144 14.0
----------------- ---------------- ----------
Non-Interest Income:
Data Processing 330,535 308,640 7.1
Service Charges on Deposits 45,231 41,205 9.8
Fees For Trust Services 14,644 12,578 16.4
Brokerage Revenue 9,233 8,485 8.8
Mortgage Banking Income 17,193 18,666 (7.9)
Credit Card Fees 10,599 9,753 8.7
Securities Gains (Losses) 1,889 846 123.3
Other Fee Income 9,538 8,477 12.5
Other Non-Interest Income 41,206 45,969 (10.4)
----------------- ---------------- ----------
Non-Interest Income before Reimbursable Items
and Impairment Loss on Private Equity Investment 480,068 454,619 5.6
Reimbursable Items 117,022 122,122 (4.2)
Impairment Loss on Private Equity Investment (8,355) -- N/A
----------------- ---------------- ----------
Total Non-Interest Income 588,735 576,741 2.1
----------------- ---------------- ----------
Non-Interest Expense:
Personnel Expense 281,630 271,709 3.7
Occupancy & Equipment Expense 119,506 117,815 1.4
Other Non-Interest Expense 112,062 99,556 12.6
----------------- ---------------- ----------
Non-Interest Expense before Reimbursable Items 513,198 489,080 4.9
Reimbursable Items 117,022 122,122 (4.2)
----------------- ---------------- ----------
Total Non-Interest Expense 630,220 611,202 3.1
----------------- ---------------- ----------
Minority Interest in Consolidated Subsidiaries 10,713 9,232 16.0
Income Before Taxes 262,673 232,451 13.0
Income Tax Expense 94,026 84,951 10.7
----------------- ---------------- ----------
Net Income 168,647 147,500 14.3
================= ================ ==========
Basic Earnings Per Share 0.57 0.51 11.9
Diluted Earnings Per Share 0.56 0.50 12.3
Dividends Declared Per Share 0.30 0.26 15.7
Return on Assets 2.04 % 1.98 6 bp
Return on Equity 19.46 20.02 (56)
Average Shares Outstanding - Basic 295,280 289,018 2.2 %
Average Shares Outstanding - Diluted 300,033 294,741 1.8
bp - change is measured as difference in basis points.
On January 1, 2002, Synovus adopted the provisions of the Financial Accounting
Standards Board Staff Announcement Topic D-103, "Income Statement
Characterization of Reimbursements Received for 'Out-of-Pocket' Expenses
Incurred." The Announcement requires that reimbursements received for
out-of-pocket expenses be characterized as revenue. These items are reflected
as "reimbursable items" on the accompanying income statements. All prior
periods presented have been restated to conform with the new presentation.
Synovus
INCOME STATEMENT
(Amounts in thousands, except per share data) 2002 2001 2nd Quarter
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Second First Fourth Third Second '02 vs. '01
Quarter Quarter Quarter Quarter Quarter Change
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Interest Income (Taxable Equivalent) $ 260,448 259,844 271,378 282,587 289,867 (10.1)%
Interest Expense 83,336 85,456 98,716 122,035 134,146 (37.9)
------------- ------------- ---------- ---------- --------- -------------
Net Interest Income (Taxable Equivalent) 177,112 174,388 172,662 160,552 155,721 13.7
Tax Equivalent Adjustment 1,771 1,771 1,890 1,834 1,833 (3.4)
------------- ------------- ---------- ---------- --------- -------------
Net Interest Income 175,341 172,617 170,772 158,718 153,888 13.9
Provision for Loan Losses 19,978 13,109 16,717 10,799 13,170 51.7
------------- ------------- ---------- ---------- --------- -------------
Net Interest Income After Provision 155,363 159,508 154,055 147,919 140,718 10.4
------------- ------------- ---------- ---------- --------- -------------
Non-Interest Income:
Data Processing 170,469 160,066 166,866 161,892 159,299 7.0
Service Charges on Deposits 23,059 22,172 24,182 21,152 21,168 8.9
Fees For Trust Services 7,728 6,916 7,294 6,637 6,788 13.9
Brokerage Revenue 4,589 4,644 4,020 3,858 4,159 10.4
Mortgage Banking Income 8,454 8,739 10,668 8,938 10,197 (17.1)
Credit Card Fees 5,803 4,796 5,878 5,553 5,341 8.7
Securities Gains (Losses) 960 929 539 337 428 124.2
Other Fee Income 4,792 4,746 4,613 4,109 4,140 15.7
Other Non-Interest Income 21,906 19,300 23,491 16,883 20,080 9.1
------------- ------------- ---------- ---------- --------- -------------
Non-Interest Income before Reimbursable Items
and Impairment Loss on Private Equity Investment 247,760 232,308 247,551 229,359 231,600 7.0
Reimbursable Items 60,032 56,990 55,450 54,993 59,560 0.8
Impairment Loss on Private Equity Investment (8,355) -- -- -- -- N/A
------------- ------------- ---------- ---------- --------- -------------
Total Non-Interest Income 299,437 289,298 303,001 284,352 291,160 2.8
------------- ------------- ---------- ---------- --------- -------------
Non-Interest Expense:
Personnel Expense 139,559 142,071 152,920 141,455 137,441 1.5
Occupancy & Equipment Expense 58,437 61,069 59,749 58,088 60,541 (3.5)
Other Non-Interest Expense 57,676 54,386 49,592 48,911 49,923 15.5
------------- ------------- ---------- ---------- --------- -------------
Non-Interest Expense before Reimbursable Items 255,672 257,526 262,261 248,454 247,905 3.1
Reimbursable Items 60,032 56,990 55,450 54,993 59,560 0.8
------------- ------------- ---------- ---------- --------- -------------
Total Non-Interest Expense 315,704 314,516 317,711 303,447 307,465 2.7
------------- ------------- ---------- ---------- --------- -------------
Minority Interest in Consolidated Subsidiaries 5,625 5,088 5,651 4,976 5,027 11.9
Income Before Taxes 133,471 129,202 133,694 123,848 119,386 11.8
Income Tax Expense 47,576 46,450 48,483 44,943 43,771 8.7
------------- ------------- ---------- ---------- --------- -------------
Net Income 85,895 82,752 85,211 78,905 75,615 13.6
============= ============= ========== ========== ========= =============
Basic Earnings Per Share 0.29 0.28 0.29 0.27 0.26 11.6
Diluted Earnings Per Share 0.29 0.28 0.29 0.27 0.26 12.0
Dividends Declared Per Share 0.15 0.15 0.13 0.13 0.13 15.7
Return on Assets 2.05 % 2.03 2.11 2.02 2.00 5 bp
Return on Equity 19.40 19.52 20.51 19.93 19.96 (56)
Average Shares Outstanding - Basic 295,629 294,927 292,271 290,868 290,315 1.8 %
Average Shares Outstanding - Diluted 300,282 300,158 296,556 297,357 296,218 1.4
bp - change is measured as difference in basis points.
On January 1, 2002, Synovus adopted the provisions of the Financial Accounting
Standards Board Staff Announcement Topic D-103, "Income Statement
Characterization of Reimbursements Received for `Out-of-Pocket' Expenses
Incurred." The Announcement requires that reimbursements received for
out-of-pocket expenses be characterized as revenue. These items are reflected
as "reimbursable items" on the accompanying income statements. All prior
periods presented have been restated to conform with the new presentation.
Synovus
SELECTED BALANCE SHEET DATA
(Amounts in thousands, except per share data) 2002 2001 2nd Quarter
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Second First Fourth Third Second '02 vs. '01
Quarter Quarter Quarter Quarter Quarter Change
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Total Assets $17,315,782 16,725,734 16,654,891 15,778,199 15,651,269 10.6 %
Investment Securities 2,094,544 2,076,461 2,088,287 2,087,135 2,065,125 1.4
Loans (net of unearned income) 13,201,121 12,698,763 12,417,917 11,852,572 11,604,690 13.8
Total Deposits 12,941,487 12,451,008 12,146,198 11,525,774 11,561,515 11.9
Demand Deposits 2,067,367 1,918,674 1,984,524 1,750,644 1,822,591 13.4
Certificates of Deposit 5,320,555 5,177,699 5,183,225 5,200,227 5,238,816 1.6
Savings Accounts 454,375 447,737 420,311 422,393 420,520 8.1
NOW Accounts 1,965,599 1,974,827 1,916,259 1,677,840 1,717,637 14.4
Money Market 3,133,591 2,932,071 2,641,879 2,474,670 2,361,951 32.7
Shareholders' Equity 1,814,199 1,728,095 1,694,946 1,618,271 1,550,559 17.0
Book Value Per Share 6.12 5.85 5.75 5.56 5.34 14.6
Equity to Assets 10.48 10.33 10.18 10.26 9.91 57 bp
Loan to Deposit Ratio 102.01 101.99 102.24 102.84 100.37 164
Demand Deposits / Total Deposits 15.97 15.41 16.34 15.19 15.76 21
Common Shares Outstanding 296,396 295,252 294,674 291,057 290,615 2.0 %
CREDIT QUALITY DATA
(Dollars in thousands) 2002 2001 2nd Quarter
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Second First Fourth Third Second '02 vs. '01
Quarter Quarter Quarter Quarter Quarter Change
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Nonperforming Loans $ 53,679 55,791 51,585 49,197 40,168 33.6 %
Other Real Estate 21,615 17,970 15,867 14,720 16,458 31.3
Nonperforming Assets 75,294 73,761 67,452 63,917 56,626 33.0
Allowance for Loan Losses 180,321 174,774 170,769 162,117 159,600 13.0
Net Charge-Offs - Quarter 14,431 9,104 12,023 8,280 7,486 92.8
Net Charge-Offs - YTD 23,535 9,104 34,988 22,965 14,684 60.3
Net Charge-Offs / Average Loans - Quarter 0.44 0.29 0.39 0.28 0.26
Net Charge-Offs / Average Loans - YTD 0.37 0.29 0.30 0.27 0.26
Nonperforming Loans / Loans & ORE 0.41 0.44 0.42 0.42 0.35
Nonperforming Assets / Loans & ORE 0.57 0.58 0.54 0.54 0.49
Allowance / Loans 1.37 1.38 1.38 1.37 1.38
Allowance / Nonperforming Loans 335.92 313.27 331.04 329.52 397.33
Allowance / Nonperforming Assets 239.49 236.95 253.17 253.64 281.85
bp - change is measured as difference in basis points.
Synovus
AVERAGE BALANCES AND YIELDS/RATES
(Amounts in thousands)
2002 2001
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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 $ 2,045,096 2,038,865 2,025,366 2,011,548 2,023,000
Yield 6.08 % 6.08 6.19 6.34 6.38
Loans, Net $ 12,804,139 12,401,910 11,967,899 11,498,072 11,183,502
Yield 7.08 % 7.31 7.79 8.50 9.05
Mortgage Loans Held for Sale $ 164,313 276,682 262,476 181,372 204,998
Yield 6.92 % 6.65 6.78 7.34 7.36
Federal Funds Sold $ 62,129 61,136 40,360 110,100 105,411
Yield 2.49 % 2.40 3.73 3.80 4.61
Time Deposits with Banks $ 3,859 3,328 3,561 4,087 6,234
Yield 1.37 % 1.65 2.29 3.62 5.40
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Total Interest Earning Assets $ 15,079,536 14,781,921 14,299,662 13,805,179 13,523,145
Yield 6.92 % 7.11 7.54 8.13 8.59
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Interest Bearing Liabilities
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Time Deposits Over $100,000 $ 2,833,173 2,569,115 2,596,808 2,583,032 2,651,781
Rate 3.52 % 3.89 4.51 5.28 5.86
Time Deposits Under $100,000 $ 2,394,123 2,439,460 2,526,555 2,602,377 2,653,134
Rate 3.59 % 4.07 4.78 5.48 5.94
Other Interest Bearing Deposits $ 5,389,194 5,215,169 4,777,271 4,459,166 4,310,544
Rate 1.37 % 1.32 1.56 2.44 2.88
Federal Funds Purchased $ 1,019,305 1,290,957 1,334,622 1,207,804 1,084,710
Rate 1.71 % 1.70 2.00 3.48 4.23
Other Short-Term Borrowings $ 5,136 9,428 8,707 20,228 6,530
Rate 1.50 % 1.38 2.16 3.24 3.97
Other Borrowings $ 1,136,670 1,082,675 963,619 923,290 884,027
Rate 5.02 % 5.19 5.38 5.74 6.14
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Total Interest Bearing Liabilities $ 12,777,601 12,606,804 12,207,582 11,795,897 11,590,726
Rate 2.61 % 2.74 3.20 4.10 4.63
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Non-Interest Bearing Demand Deposits $ 1,955,444 1,826,432 1,755,795 1,693,111 1,691,382
Shareholders' Equity $ 1,776,173 1,719,380 1,647,933 1,570,921 1,519,296
Total Assets $ 16,823,662 16,522,858 16,021,119 15,472,034 15,191,121
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Spread 4.31 % 4.37 4.33 4.03 3.96
Net Interest Margin 4.71 % 4.77 4.80 4.62 4.61
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