Synovus’ Q3 Earnings Top Estimates; Shares Gain

Synovus Financial Corp. (SNV) has reported better-than-expected third-quarter earnings on the back of top-line growth, cost management and rise in deposits. Following the results, shares of the bank rose 3.6% to close at $48 on Tuesday.

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The bank reported third-quarter adjusted earnings of $1.20 per share, beating analysts’ expectations of $1.08 per share. The company had posted earnings of $0.89 per share in the same quarter last year.

Additionally, total adjusted revenues increased 1.4% year-over-year to $499.7 million. Net interest income came in at $384.9 million, up 2% on a year-over-year basis, while non-interest income remained flat at $115 million.

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For the third quarter, the company reported a reversal of provision for credit losses of $7.9 million, compared to a provision of $43.4 million in the same quarter last year.

As of September 30, 2021, the annualized return on average assets came in at 1.34%, the annualized return on average equity was 14.96% and the adjusted efficiency ratio stood at 52.96%, compared with 0.69%, 7.28% and 53.83%, respectively, in the same quarter last year. (See Synovus stock charts on TipRanks)

Additionally, Synovus recorded total loans of $38.3 billion, down 3% year-over-year, while total deposits jumped 6.7% to $47.7 billion.

In response to third-quarter results, Synovus CEO Kevin Blair said, “Our ongoing Synovus Forward initiatives reached a pre-tax run rate benefit of $100 million by quarter end and we are executing on an additional $75 million of benefits to be delivered by the end of 2022. Synovus Forward represents our ongoing innovation and profitable growth mindset, guiding our efforts to deliver sustainable, top quartile financial performance and enabling us to invest in areas with long-term benefit.”

Recently, Jefferies analyst Ken Usdin maintained a Buy rating on the stock and increased the price target to $52 from $50 (8.33% downside potential).

Synovus shares have exploded 94% over the past year, while the stock still scores a Strong Buy consensus rating based on 7 unanimous Buys. That’s alongside the average Synovus price target of $52, which implies 8.3% upside potential from current levels.

Investors should always be aware of the risks involved in any stock. According to the new TipRanks’ Risk Factors tool, the Synovus stock is at risk mainly from three factors: Finance and Corporate, Ability to Sell, and Macro & Political, which contribute 44%, 15% and 15%, respectively, to the total 34 risks identified for the stock. Under the Finance and Corporate risk category, SNV has 15 risks, details of which can be found on the TipRanks website.