Columbus-based Synovus Financial Corp., which has an office at 2841 Akers Mill Road SE in the Cumberland area, reported financial results for the quarter ending March 31.

First quarter highlights

Net income available to common shareholders for Q1 2018 was $100.6 million or 84-cents per diluted share as compared to $27 million or 23-cents per diluted share for Q4 2017 and $69.3 million or 56-cents per diluted share for Q1 2017. The Q4 2017 results included a $23.2 million loss on early extinguishment of debt and a $47.2 million charge related to Federal tax reform.

Adjusted earnings per diluted share for the first quarter 2018 were 86-cents, a 19.8-percent increase from Q4 2017 and a 50.9-percent increase from Q1 2017.

As a result of Federal tax reform and other one-time and seasonal items, the effective tax rate for the first quarter was 22.6-percent compared to 32-percent in Q1 2017.

Return on average assets for Q1 2018 was 1.34-percent, compared to 0.37-percent the previous quarter and 0.96-percent in Q1 2017.

Adjusted return on average assets was 1.36-percent, up 24 basis points from the previous quarter and up 39 basis points from Q1 2017.

Return on average common equity was 14.62-percent, an increase of 465 basis points from Q1 2017.

Adjusted return on average common equity was 14.86-percent, an improvement of 480 basis points from Q1 2017.

Adjusted return on average tangible common equity was 15.23-percent, an increase of 490 basis points from Q1 2017.

Total average loans grew $240.8 million or 4-percent annualized from the previous quarter and $816.4 million or 3.4-percent as compared to Q1 2017.

Total average deposits decreased $497.9 million or 7.7-percent annualized from Q4 2017 and increased $869.2 million or 3.5-percent as compared to Q1 2017.

Total ending deposits increased $105.6 million or 1.6-percent from Q4 2017 and increased $1.15 billion or 4.6-percent as compared to Q1 2017.

Total revenues were $341.3 million, up $37.2 million or 12.2-percent from Q1 2017.

Net interest margin was 3.78-percent, up 13 basis points from the previous quarter and up 36 basis points from Q1 2017.

Efficiency ratio was 57.16-percent, compared to 66.77-percent the previous quarter and 64.84-percent in Q1 2017.

Adjusted efficiency ratio was 57.42-percent, an improvement of 483 basis points from Q1 2017.

Credit quality metrics remained favorable, with a net charge-off ratio of seven basis points, down eight basis points from the previous quarter and down five basis points from Q1 2017. The non-performing asset ratio was 0.53-percent, unchanged from the previous quarter and down 24 basis points from Q1 2017.

“2018 is off to a good start, with 12-percent growth in revenues and a 50-percent increase in earnings per share year-over-year,” said Kessel D. Stelling, Synovus chairman and CEO. “We delivered another quarter of strong operating leverage through disciplined execution of our growth strategies, including talent acquisition and expansion of our presence in high-potential markets. As we approach completion of the transition to a unified Synovus brand, we are already seeing the benefits of greater name recognition across our footprint. Our team is deeply committed to building on our reputation, improving the customer experience, and executing on core growth strategies to meet and exceed long-term targets.”

Balance sheet

Total average loans for the quarter were $24.85 billion, up $240.8 million or 4-percent annualized from the previous quarter and up $816.4 million or 3.4-percent as compared to Q1 2017.

Total loans ended the quarter at $24.88 billion, up $95.6 million or 1.6-percent annualized from the previous quarter and up $624.6 million or 2.6-percent as compared to Q1 2017.

Commercial and industrial loans grew by $78.3 million or 2.6-percent annualized from the previous quarter and $369.2 million or 3.1-percent as compared to Q1 2017.

Consumer loans grew by $115.5 million or 8-percent annualized from the previous quarter and $885.2 million or 17.4-percent as compared to Q1 2017.

Commercial real estate loans declined by $99.6 million or 5.8-percent annualized from the previous quarter and declined $631.6 million or 8.5-percent as compared to Q1 2017.

Total average deposits for the quarter were $25.79 billion, down $497.9 million or 7.7-percent annualized from the previous quarter and up $869.2 million or 3.5-percent as compared to Q1 2017.

Average non-time core deposits decreased $120.4 million or 2.3-percent annualized from the previous quarter and increased $504.1 million or 2.5-percent as compared to Q1 2017.

Total deposits ended the quarter at $26.25 billion, up $105.6 million or 1.6-percent annualized from Q4 2017 and up $1.15 billion or 4.6-percent as compared to Q1 2017.

The loan to deposit ratio remained stable at 95-percent.

Core performance

Total revenues1 were $341.3 million in the first quarter, up from $339.1 million in the previous quarter, and up $37.2 million or 12.2-percent from $304.1 million in Q1 2017.

Net interest income was $274.3 million, up $4.6 million or 1.7-percent from the previous quarter and up $34.4 million or 14.3-percent from Q1 2017.

Net interest margin was 3.78-percent, up 13 basis points from the previous quarter. Yield on earning assets was 4.31-percent, up 16 basis points from the previous quarter, and the effective cost of funds was 0.53-percent, up three basis points from the previous quarter.

Total non-interest income was $67 million, down $2.3 million from the previous quarter and down $4.8 million or 6.7-percent from Q1 2017.

The first quarters of 2018 and 2017 include net decreases in fair value of private equity investments of $3.1 million and $1.8 million, respectively. First quarter 2017 also included net investment securities gains of $7.7 million.

Adjusted non-interest income was $70.1 million, up $849,000 from the previous quarter and up $4.1 million or 6.2-percent as compared to Q1 2017.

Core banking fees were $35.6 million, up $303,000 or 0.9-percent from the previous quarter and up $900,000 or 2.6-percent from Q1 2017.

Fiduciary and asset management fees, brokerage revenue, and insurance revenues were $23.3 million, up $1.6 million or 7.2-percent from the previous quarter and up $2.7 million or 12.9-percent from Q1 2017.

Total non-interest expense was $195.2 million, down $31.4 million or 13.8-percent from the previous quarter and down 1.1-percent from Q1 2017.

The Q1 2018 includes a $2.6 million reduction in litigation contingency accruals. The Q4 2017 included a $23.2 million loss on early extinguishment of debt, and Q1 2017 included $6.5 million in restructuring charges.

Adjusted non-interest expense was $197.8 million, down $3.3 million or 1.6-percent from the previous quarter and up $7.2 million or 3.8-percent from Q1 2017.

Employment expense of $113.7 million increased $2.5 million or 2.2-percent from the previous quarter and 6.1-percent from Q1 2017.

Occupancy and equipment expense of $31.5 million increased $1.4 million or 4.5-percent from the previous quarter and 7.3-percent from Q1 2018.

Other expenses were $52.6 million in the quarter, down $7.1 million or 11.9-percent from the previous quarter and down $1.5 million or 2.7-percent from Q1 2017.

Efficiency ratio for the first quarter was 57.16-percent as compared to 66.77-percent in the previous quarter and 64.84-percent in Q1 2017.

Adjusted efficiency ratio for the first quarter was 57.42-percent as compared to 59.29-percent in the previous quarter and 62.25-percent in Q1 2017.

Conference call

Synovus hosted a conference call on April 24. The earnings call was accompanied by a slide presentation. Shareholders and other interested parties can listen to a webcast at investor.synovus.com/event. The replay will be archived for 12 months.

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