The U.S. economy has a positive outlook, with the banking sector expected to profit from the new Trump administration’s business-friendly policies, including deregulation, increased mergers and acquisitions, and lower taxes. Synovus Financial Corp. (SNV), a bank holding company with various commercial and consumer banking products and services, is well-positioned to benefit. The bank has recently recorded strong growth across its core commercial lending, deposits, and key fee-producing businesses, resulting in solid financial results for the fourth quarter and Fiscal 2024.
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Wall Street analysts have raised their price targets for the bank’s stock. The forecasted surge in loan volume in the second half of 2025, driven by strong growth trends in middle market banking and specialty commercial and industrial loans, might appeal to investors interested in bank stocks.
Synovus Is Positioned for Growth
Synovus Financial is a bank holding entity for Synovus Bank, offering a broad range of commercial and consumer banking goods and services. The company’s operations are divided into four main segments: Community Banking, Wholesale Banking, Consumer Banking, and Financial Management Services.
Synovus has adopted several strategic initiatives to achieve long-term growth and increase shareholder value. Chief among them are plans to expand its Relationship Manager hiring program to build its client base and loan portfolio.
Further, the company has concluded a balance sheet optimization process and shifted towards a growth-oriented strategy that involves investing in loans, deposits, and income generation. Deposit trends are performing strongly, particularly in the key southeastern states, such as Georgia and Alabama, providing a solid deposit base for lending activities and contributing to financial stability.
Synovus’s robust geographic footprint, primarily in the economically and demographically growing southeastern United States, provides a significant competitive advantage. The bank’s scale, along with its regional focus, allows it to compete effectively with both larger national banks and smaller local institutions.
Synovus Finishes 2024 with a Strong Q4
Synovus recently reported financial results for the quarter and year ending December 31, 2024, noting strong growth in core commercial lending, deposits, and key fee-producing businesses. The bank maintained strict control over operating expenses, resulting in improvements in loan losses and an increase in the Common Equity Tier 1 ratio to its highest level in over ten years.
In the fourth quarter, the net income was $178.8 million, or $1.25 per diluted share, up 6% sequentially and sharply up from $60.6 million in the fourth quarter of 2023. The net interest income increased by $14.3 million, or 3%, compared to the prior quarter and rose by $17.8 million, or 4%, compared to the fourth quarter of 2023, primarily attributable to lower funding costs. Non-interest revenue of $125.6 million rose 1% from the third quarter and increased by $74.1 million, or 144%, compared to the fourth quarter of 2023.
For 2024, net revenue was $741.6 million, compared to $885.2 million in 2023, and net interest income was $1.75 billion, down from $1.82 billion in the prior year, mainly due to a decline in loan balances. Net income was $439.6 million, or $3.03 per diluted share, compared to $507.8 million, or $3.46 per diluted share, in 2023.
Period-end loans declined by $795.5 million, or 2%, in 2024, while period-end deposits increased by $356.2 million, or 1%, driven mainly by growth in time deposits, money markets, interest-bearing demand deposits, and public funds. Non-interest revenue was $239.6 million, down 41% from 2023, and non-interest expenses were $1.25 billion, down 7%. The provision for credit losses declined to $136.7 million in 2024 compared to $189.1 million in the prior year.
Analysts are Constructive on the Stock
The stock has been on an upward trend, climbing over 47% in the past year. It trades near the upper end of its 52-week price range of $33.44 – $59.92 and shows ongoing positive price momentum as it trades above major moving averages. The stock sports a P/S ratio of 4.25x compared to the Financial sector average of 3.13x, suggesting a premium.
Analysts following the bank have been constructive on SNV stock. For instance, Citi analyst Benjamin Gerlinger, a five-star analyst, recently reiterated a Buy rating and raised the share price target to $62 (from $59), noting balance sheet management, funding mix, and lower cost deposits.
Synovus is rated a Moderate Buy overall, based on the recent recommendations of 15 analysts. Their 12-month average price target for SNV stock is $63.37, representing a potential upside of 16.04% from current levels.
Synovus in Summary
Synovus is in an advantageous position thanks to the promising opportunities the current economic landscape provides. The bank’s diversified range of services, strong geographic presence, strategic growth initiatives, and robust Q4 2024 financial results reinforce its promising upside potential. An anticipated surge in loan volume, driven by growth trends in middle-market banking and specialty commercial and industrial loans, makes it an attractive investment option. It displays strong price momentum, making it a compelling choice for investors interested in exploring bank stocks.
