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A month has gone by since the last earnings report for Synovus Financial (SNV). Shares have added about 4.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Synovus due for a pullback? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for Synovus Financial Corp. before we dive into how investors and analysts have reacted as of late.
Synovus's third-quarter 2025 adjusted earnings per share of $1.46 surpassed the Zacks Consensus Estimate of $1.36 per share. This compares favorably with earnings of $1.23 per share a year ago.
Results benefited from strong year-over-year growth in net interest income and non-interest revenues, along with a fall in provisions for credit losses. Also, improving loan balances was a tailwind. However, an increase in expenses was a major headwind.
Results of the reported quarter excluded a merger-related expense of $23.8 million, net investment securities loss of $1.7 million, and other non-core items. After considering these, the net income (GAAP basis) available to common shareholders was $185.6 million, up 9% from the prior-year quarter level.
Total revenues were $611.1 million, up 8.2% from the prior-year quarter. Also, the top line surpassed the Zacks Consensus Estimate by 1%.
NII rose 8% year over year to $474.7 million, while the net interest margin expanded 4 basis points to 3.41%. Both increases were a result of a decline in deposit costs, higher loan yields and hedge maturities.
Non-interest revenues were $140.7 million, up 13% from the prior-year quarter. The rise was due to higher core banking fees, wealth management income and capital markets income.
Non-interest expenses were $348.7 million, up 11% year over year. The rise was mainly due to higher merger-related expenses of $23.8 million during the quarter.
The adjusted tangible efficiency ratio was 51.8%, down from 53% in the year-earlier quarter. A decline in the efficiency ratio indicates an increase in profitability.
As of Sept. 30, 2025, total loans of $43.8 billion rose marginally from the previous quarter. Total core deposits (excluding brokered deposits) were $44.9 billion, which declined slightly from the previous quarter.
Non-performing loans were $209.3 million, down 33% from the year-ago quarter. Total non-performing assets amounted to $231.7 million, down 26% year over year.
Provision for credit losses was $21.7 million, which plummeted 7% year over year.
The non-performing assets ratio was 0.53%, down from 0.73% in the year-ago period.
Net charge-offs decreased 43.7% to $15.2 million from the prior-year quarter.
The net charge-off ratio was 0.14%, down from 0.25% in the prior-year quarter.
As of Sept. 30, 2025, the Tier 1 capital ratio and total risk-based capital ratio were 12.34% and 14.07%, respectively, compared with 11.76% and 13.60% in the year-ago quarter. As of the same date, the Common Equity Tier 1 capital ratio was 11.24%, up from 10.64% in the year-ago quarter.
Adjusted return on average assets was 1.42%, up from 1.26% in the prior-year quarter. Adjusted return on average common equity was 15.78%, up from 15.02% in the year-earlier quarter.
Fourth-Quarter
Management expects net charge-offs (NCOs) to be relatively stable.
It anticipates adjusted non-interest expenses of $320-$325 million.
The company projects adjusted non-interest revenues of $130-$135 million.
It expects strong fourth-quarter core deposit growth, supported by seasonal tailwinds.
2025
Management expects loan growth of 4.5% from the 2024 reported figure.
Core deposit (excluding brokered accounts) is anticipated to rise 0.5% from the 2024 actual.
Adjusted revenues are expected to rise 6.5% from the 2024 reported figure.
Adjusted non-interest expenses are expected to increase 2.5% from those reported in 2024.
The CET 1 ratio is expected to be 11.35%.
The effective income tax rate is anticipated to be 21%.
It turns out, estimates revision have trended upward during the past month.
At this time, Synovus has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Synovus has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Synovus is part of the Zacks Banks - Southeast industry. Over the past month, Hancock Whitney (HWC), a stock from the same industry, has gained 7.9%. The company reported its results for the quarter ended September 2025 more than a month ago.
Hancock Whitney reported revenues of $385.74 million in the last reported quarter, representing a year-over-year change of +4.9%. EPS of $1.49 for the same period compares with $1.33 a year ago.
Hancock Whitney is expected to post earnings of $1.46 per share for the current quarter, representing a year-over-year change of +4.3%. Over the last 30 days, the Zacks Consensus Estimate has changed +1.5%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Hancock Whitney. Also, the stock has a VGM Score of D.
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This article originally published on Zacks Investment Research (zacks.com).
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