The bank recorded profits of $0.02 on a diluted per share basis that equaled the $0.02 figure that analysts had predicted. Net interest income for the quarter declined by 7% to $221 million as a result of a fall in average loan balances as well as lower reinvestment yields from earning assets. The net interest margin, however, rose a bit to 3.55% from 3.52% in the year-ago period.
Noninterest income, however, soared 31% to $84.0 million from a year ago, helped by a $20.1 million increase in net investment securities. What also added to the bank's profit was a 53% fall in its provision for credit losses, which pushed up total revenues by 50%.
Improving credit quality
Along with falling provisions for loan losses, Synovus saw its net charge-offs decline 43.2% from the prior-year period. Its nonperforming loans declined by 54.5% from a year ago and its nonperforming assets fell by 17.2% from the year ago period -- indicative of an improvement in the bank's overall loan quality. Synovus' Tier 1 capital ratio rose to 13.2% from 12.9% in the previous quarter -- pointing to the bank's improving capital position.
Synovus left out
One surprising thing we've seen lately is that banks have managed to grow their loan books, which has somewhat helped counteract the pressures of the prevailing low interest rates and at the same time has put them in a better position for the future. US Bancorp
Synovus, on the other hand, fell into the same category as turnarounds such as Regions Financial
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