As a result of improving credit trends, today Synovus Financial (NYSE: SNV ) reported its net income more than tripled to $45.9 million in the first quarter of 2014 from the $14.8 million seen in the first quarter of 2013. It also rose 28% relative to the $35.8 million in the fourth quarter of last year.
The driving factor behind this increased income at Synovus Financial was the significant deduction in its provision for loan losses -- what it expects to lose on loans -- which fell by almost 75% year over year, from $35.6 million to $9.5 million in the most recent quarter.
"Our steady progress over the past several quarters is a direct result of investments in additional talent in high-opportunity markets, effective partnerships between our core and specialty line bankers, and our team's unwavering commitment to delivering exceptional customer service," noted Synovus Chairman and CEO Kessel Stelling in the press release announcing the earnings. "The quarter also included continued reductions in credit costs, a slight increase in the net interest margin, and the implementation of new expense reduction initiatives."
In September, IBERIABANK acquired the branches of Synovus in the Memphis area. When excluding for this transaction, Synovus saw its commercial and industrial loans grow by $131 million quarter over quarter, an annualized rate of 5.3%, and its commercial real estate loans rose by 2.2% annualized, or $35.6 million.
In total, Synovus's profitability rebounded significantly as its return on average common equity stood at 2.3% in the first quarter of last year and 5% in the fourth quarter, to now 6.5% in the first quarter of 2014. In addition, its return on average assets stands at 0.75%, up from 0.46% and 0.58% in the first quarter and fourth of 2013, respectively.
"During the remainder of 2014, we expect continued loan growth, further improvement in credit quality, and a continued push on expense reductions," concluded Stelling in the press release. He highlighted investments in customer experience and marketing will be made throughout the year. As a result of these and other initiatives, he said, "[a]ll of these activities, along with our strong capital position, provide a solid foundation for long-term growth and success."