Synovus Financial Corp. (NYSE: SNV): Q4 Earnings Preview 2010

Synovus Financial Corp. (NYSE: SNV) is scheduled to release its fourth-quarter earnings before the opening bell on Friday, January 28, 2011. Analysts, on average, expect the company to post a loss of 20 cents per share on revenue of $318.57 million. In the year ago period, the company posted a loss of 54 cents cents per share on revenue of $340.78 million.

Synovus Financial Corp., a diversified financial services and bank holding company, provides commercial and retail banking, financial management, insurance, and mortgage services in Georgia, Alabama, South Carolina, Florida, and Tennessee.

In the preceding third quarter, the Columbus, Georgia-based company posted a loss of $195.8 million, or 25 cents per share, compared to a loss of $453.8 million, or $1.32 per share, in the year-ago period. Pre-tax, pre-credit costs income was $123 million for the third quarter of 2010, up from $119 million for the second quarter of 2010. Non-interest income increased by $7.8 million. The net interest margin was 3.33% in the third quarter of 2010, compared to 3.34% in the second quarter of 2010. Analysts, on average, expected the company to post a loss of 22 cents per share on revenue of $322.04 million. 

The company, which has lost more than $2 billion in the past two years, continues to grapple with souring real estate loans, and is expected to post yet another loss when it reports fourth quarter earnings later this month.

Early in January, the bank announced efficiency and growth initiatives intended to streamline operations, boost productivity, reduce expenses and increase revenue. The efficiency initiatives are expected to generate an estimated $100 million in annual expense savings by the end of 2012, with approximately $75 million of these savings to be realized in 2011. Additionally, Synovus expects to recognize in 2011 approximately $28 million in restructuring charges associated with these initiatives, including approximately $24 million during the first quarter of the year. The $100 million in annual expense savings will be achieved primarily through the reduction of approximately 850 positions during 2011 over Synovus five-state footprint. Of these 850 positions, approximately 470 will be eliminated within 30 days and the substantial majority of the remaining positions will be eliminated during the second quarter of 2011. Synovus has already reduced its workforce by more than 300 positions during 2010. The total workforce reduction over the 18-month period ending December 31, 2011 will be approximately 1,150. The Company will also realize expense savings through the expected closing of 39 bank branches across Synovus five-state footprint during the first half of 2011. As of December 31, 2010, total loans outstanding and deposits from the branches to be closed represented 1 percent and less than 4 percent of Synovus total loans and deposits, respectively. Synovus has identified opportunities to consolidate service coverage within the remaining 283 branches, while continuing to provide customers with alternative banking locations within reasonable proximity of their current branch. The total revenue impact associated with the branch closures is expected to be minimal. “While we have already taken many significant steps forward, our leadership team is determined to return Synovus to sustained profitability as soon as possible,” said Kessel D. Stelling, President and CEO of Synovus. 

Regional Banks have begun to post improving credit quality. More thorough and cautious credit checks have led to fewer delinquent loans and greater financial stability. As such, banks are setting aside less money to cover bad loans, and some are seeing loan losses recede.  Improved employment numbers will hopefully, in time, lead to a boost in loan growth across the banking sector.

In terms of stock performance, AK Steel shares have lost nearly 18 percent over the past year.

Full Disclosure: None.

Synovus Financial Corp. (NYSE: SNV): Q1 Earnings Preview 2010

Synovus Financial is scheduled to release its Q12010 earnings after the closing bell on Tuesday, April 20, 2010. Analysts, on average, expect the company to report a loss of $0.49 per share in the first quarter with estimates ranging from a loss of $0.37 per share to a loss of $0.61 per share. Revenues for the quarter are estimated to be $341.03 million. In Q12009, the company reported a loss of $0.46 per share on revenue of $331.99 million.

Synovus Financial Corp., a diversified financial services and bank holding company, provides commercial and retail banking, financial management, insurance, and mortgage services in Georgia, Alabama, South Carolina, Florida, and Tennessee.

The company was hit hard by the subprime mortgage crisis as it struggled to manage its bad real-estate loans. Though southeast regional bank is still trying to recover from the financial crisis that struck two years back, it has certainly survived the recession- disappointing many naysayers. However, Synovus- which has about $35 billion in assets- holds many commercial real estate and construction loans in some of the worst markets in the country, making credit quality a major concern and raising questions about whether the bank will need to raise more capital. It has lost $2.1 billion since September 2008, hasn’t repaid a $968 million bailout from the Troubled Asset Relief Program and is the focus of a Securities and Exchange Commission inquiry. The firm has reported a net loss for the past six consecutive quarters, and is certain to report loss in upcoming quarter as well.

In the preceding Q42009, the New York-based company posted a narrower net loss of $249.9 million or $0.60 per share, compared with a net loss of $634 million, or $1.93 per share, in the year-ago quarter. Analysts, on average, expected the company to report a loss of $0.60 per share.Net charge-offs fell by $135 million from the previous quarter, while nonperforming assets were up by 4.8% quarter-on-quarter.

However, the bank officials are confident of return to profitability in fourth-quarter 2010, helped by improving credit trends. The company's efforts were evident in the most recent quarter as well as it managed to significantly trim its loss. “We expect to come out of this critical period stronger than we’ve ever been, and a leading mid-size Southeastern regional bank that will be able to be a consolidator ourselves." CEO, Richard Anthony stated recently.

The bank is pursuing several capital initiatives and sees potential for recovery of deferred tax asset valuation allowance in 2010. Credit costs already appear to have peaked while new problem loans and chargeoffs have fallen. Meanwhile, the non-performing assets are being written off their books. Moreover, the company's loan loss provision is set to fall as well. The firm has already done a remarkable job in cutting the cost of operations and curbing expenses.

Meanwhile, the bank is poised to benefit from diminished competition as a number of banks in the south-east region are going out of business or being taken over by FDIC. The bank is also poised to benefit from a sustained recovery in housing market.

The bank recently declared a 1 cent per share dividend, a move which is expected to further enhance investor's confidence.

The Columbus, Georgia-based bank is also widely seen as a potential takeover target. However, CEO Richard Anthony says that he’s ready to be a buyer, not a seller.

Among other developments, the bank recently announced that its affiliate, Columbus Bank and Trust Company, has completed the previously announced sale of CB&T's merchant services business to Merchant e-Solutions, Inc. for $70.5 million in cash. The sale also paves the way for the bank to get future revenue through a referral agreement,The latest move will provide it with significant capital to further strengthen our reserves and fund future growth opportunities. The company said that it will continue to look at additional strategic initiatives to bolster its capital position, including possible sale of more assets.

In terms of stock performance, Synovus shares have gained nearly 34 percent since the beginning of the year.

Full Disclosure: None.

Synovus Financial Corp. (NYSE: SNV): Poised to Move Higher

Investors are always hunting for the next hot stock - the dream stock whose price increases multi-fold when the market finally discovers it. It's easy to look back and discover the 10 best stocks of the past decade. However, a successful investor is the one who is able to evaluate and identify tomorrow's greatest companies before it gets too late and risky.

Synovus Financial Corp. (NYSE: SNV) was hit hard by the subprime mortgage crisis as the company struggled to manage its bad real-estate loans. Though southeast regional bank is still trying to recover from the financial crisis that struck two years back, it has certainly survived the recession- disappointing many naysayers. The firm has reported a net loss for the past six consecutive quarters, and may report loss in upcoming quarter as well.

However, that's not the end of the story. The bank officials are confident of return to profitability in fourth-quarter 2010, helped by improving credit trends. The company's efforts were evident in the most recent quarter as well as it managed to significantly trim its loss. Synovus recorded a net loss $249.9 million and a loss per share of 54 cents for the fourth quarter of 2009, compared with a net loss of $634 million and a loss per share of $1.93 in the fourth quarter of 2008. “We expect to come out of this critical period stronger than we’ve ever been, and a leading mid-size Southeastern regional bank that will be able to be a consolidator ourselves." CEO, Richard Anthony stated recently.

The bank is pursuing several capital initiatives and sees potential for recovery of deferred tax asset valuation allowance in 2010. Credit costs already appear to have peaked while new problem loans and chargeoffs have fallen. Meanwhile, the non-performing assets are being written off their books. Moreover, the company's loan loss provision is set to fall as well. The firm has already done a remarkable job in cutting the cost of operations and curbing expenses.

Meanwhile, the bank is poised to benefit from diminished competition as a number of banks in the south-east region are going out of business or being taken over by FDIC. The bank is also poised to benefit from a sustained recovery in housing market.

The bank recently declared a 1 cent per share dividend, a move which is expected to further enhance investor's confidence.

The Columbus, Georgia-based bank is also widely seen as a potential takeover target.

In terms of stock performance, shares of the company have gained nearly 57% this year. Four of the 22 analysts covering the company have it rated as a Strong Buy. Of the remaining eighteen analysts, one is at Moderate Buy, twelve are at Hold, one tags it at Moderate Sell while four rate it at Strong Sell.

Full Disclosure: None.