Synovus Q1 Earnings Beat Estimates on Higher NII, Lower Expenses

Synovus Financial Corp. SNV reported first-quarter 2025 adjusted earnings per share of $1.30, which surpassed the Zacks Consensus Estimate of $1.11 per share. This compares with earnings of 79 cents per share a year ago.

Results benefited from strong year-over-year growth in net interest income (NII) and a fall in expenses and provisions for credit losses. Also, improving loan balances was a tailwind. However, a decline in non-interest revenues was a major headwind.

Net income (GAAP basis) available to common shareholders was $183.7 million, soaring 59.9% from the prior-year quarter.

Synovus Revenues Rise, Expenses Dip Y/Y

Total revenues were $571.7 million, up 6.3% from the prior-year quarter. Also, the top line surpassed the Zacks Consensus Estimate by 0.2%.

NII rose 8.5% year over year to $454.4 million, while the net interest margin expanded 31 basis points to 3.35%. Both increases were a result of effective deposit repricing, a lower cash position, hedge maturities and stable funding costs.

Non-interest revenues were $116.5 million, which fell 2% from the year-ago figure. The decline was primarily due to lower capital markets income.

Non-interest expenses were $308 million, down 5% year over year. The fall was mainly due to lower FDIC special assessment charges and disciplined expense control.

The adjusted tangible efficiency ratio was 53.3%, down from 58.9% in the year-earlier quarter. A decline in the efficiency ratio indicates an increase in profitability.

SNV’s Loan Balance Rises, Deposit Declines

As of March 31, 2025, total loans of $42.6 billion rose marginally from the previous quarter. Total core deposits (excluding brokered deposits) were $50.8 billion, which declined marginally from the previous quarter.

SNV’s Credit Quality Improves

Non-performing loans were $286.6 million, down 18% from the year-ago quarter. Total non-performing assets amounted to $287.1 million, declining 23% year over year.

Provision for credit losses was $10.9 million, which plummeted 80% year over year.

The non-performing assets ratio was 0.67%, down from 0.86% in the year-ago period.

Net charge-offs decreased 51.8% to $21.4 million from the prior-year quarter. The net charge-off ratio was 0.20%, down from 0.41% in the prior-year quarter.

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

As of March 31, 2025, the Tier 1 capital ratio and total risk-based capital ratio were 11.87% and 13.65%, respectively, compared with 11.45% and 13.24% in the year-ago quarter. As of the same date, the Common Equity Tier 1 capital ratio was 10.75%, up from 10.38% in the year-ago quarter.

Adjusted return on average assets was 1.32%, up from 0.85% in the prior-year quarter. Adjusted return on average common equity was 15.48%, up from 10.17% in the year-earlier quarter.

Our Take on Synovus

The company’s solid capital position will aid capital distribution activities in the upcoming period, boosting investors’ confidence in the stock. Also, lower expenses and provisions, along with improving loan balances, will support its financials in the upcoming period. However, a decline in non-interest revenues was concerning.

Synovus Financial Corp. Price, Consensus and EPS Surprise

Synovus Financial Corp. price-consensus-eps-surprise-chart | Synovus Financial Corp. Quote

Currently, Synovus carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings Dates & Expectations of Other Bank Stocks

Wintrust Financial Corporation WTFC is scheduled to release first-quarter 2025 earnings on April 21. The Zacks Consensus Estimate for WTFC’s quarterly earnings has been unchanged at $2.52 per share over the past seven days. (Find the latest earnings estimates and surprises on Zacks Earnings Calendar.)

Bank of Hawaii BOH is scheduled to announce first-quarter 2025 numbers on April 21. Over the past 30 days, the Zacks Consensus Estimate for BOH’s quarterly earnings has been unchanged at 89 cents.

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