SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
July 13, 1998
(Earliest Event Reported)
Synovus Financial Corp.
(Exact Name of Registrant as
Specified in its Charter)
Georgia 1-10312 58-1134883
(State of (Commission File (IRS Employer
Incorporation) Number) Identification
Number)
901 Front Avenue, Suite 301, Columbus, Georgia
31901 (Address of principal executive
offices)
(706) 649-2267
(Registrant's Telephone Number)
(Former name or former address, if changed since last report)
Item 5. Other Events.
On July 13, 1998, Synovus Financial Corp.("Registrant") announced
its earnings for the second quarter of 1998.
A copy of Registrant's press release regarding the announcement
referenced above is attached hereto as Exhibit 99.1, and by this reference made
a part hereof.
Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits.
(a) Financial Statements - None.
(b) Pro Forma Financial Information - None.
(c) Exhibits
99.1 - Registrant's press release dated July 13, 1998
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, Registrant has caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SYNOVUS FINANCIAL CORP.
("Registrant")
Dated: July 15, 1998 By:/s/ Kathleen Moates
Kathleen Moates
Senior Vice President
3
<PAGE>
Exhibit Index
Exhibit Number Description
99.1 Synovus Financial Corp.'s
press release
dated July 13, 1998
4
[Logo] NEWS RELEASE
SYNOVUS
FINANCIAL CORP.
For Immediate Release
Contact: Patrick A. Reynolds
Director of Investor Relations
(706) 649-4973
Synovus Financial Corp.(R) Reports
Record Second Quarter 1998 Earnings
Columbus, Ga., July 13, 1998 -- Synovus Financial Corp. (NYSE - "SNV"), the
Columbus, Georgia-based multi-financial services company, today announced record
net income for the second quarter of 1998. Net income for the quarter was
$44,212,000, up 12.4 percent over second quarter 1997 net income of $39,322,000.
On a per share basis, diluted earnings were $0.17, up 11.5 percent over second
quarter 1997 earnings of $0.15, and basic earnings were $0.17 compared to $0.15
for the same period last year. Annualized return on assets for the quarter was
1.90 percent and return on equity was 18.93 percent, as compared to 1.80 percent
and 19.52 percent, respectively, in the second quarter of 1997. Total assets
were $9.4 billion, an increase of 4.5 percent from the end of the second quarter
of 1997. Shareholders' equity at the end of the quarter was $954 million, which
represented 10.18 percent of quarter-end assets.
For the first six months of 1998, net income was $85,425,000, up 13.7
percent from net income of $75,129,000 earned in the same period last year.
Year-to-date diluted earnings per share increased 13.1 percent to $0.32 from the
$0.28 earned per share in 1997. Return on assets and return on equity for the
first six months of 1998 were 1.86 percent and 18.55 percent, respectively, up
from 1.75 percent and 18.89 percent in the same period last year. Asset quality
remained strong in the second quarter as the ratio of nonperforming assets to
loans and other real estate decreased to .43 percent from .56 percent at June
30, 1997. Net charge-offs for the year-to-date were .33 percent of average
loans, reflecting the continuing emphasis on high credit quality and credit
management. The loan loss reserve was 1.59 percent of loans, which provides
coverage of 524 percent of nonperforming loans, up significantly from 1997. All
per share data has been restated to reflect the three-for-two stock split that
was issued on May 21, 1998.
Synovus began the conversion of its bank data processing to the Marshall &
Illsley Data Services' system in the first quarter of 1998. This conversion,
which is expected to be substantially completed in 1998, will greatly enhance
our team members' capabilities to market the "New Bank's" products and services,
by providing more customer data at the point of
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Post Office Box 120 / Columbus, GA 31902
www.synovus.com
Synovus Financial Corp. Reports Record Second Quarter 1998 Earnings / p.2
service. Additionally, the Marshall & Illsley data processing platform is
expected to be Year 2000 compliant, which will allow resources to be allocated
to the conversion and to other data processing areas that had originally been
allocated for Year 2000 compliance. In the first six months of 1998, Synovus
expensed $2,886,000 pre-tax to begin this conversion, and expects total
non-recurring expenses of this conversion to be approximately $12,000,000 in
1998. During the second quarter, nonrecurring pre-tax conversion expenses
amounted to $1,854,000. Without these conversion expenses in the second quarter,
net income and diluted earnings per share would have been up 15.4% and 14.5%,
respectively.
Profits from both Synovus' banking operations and Total System Services,
Inc.(R) (TSYS(R)) (NYSE - "TSS"), Synovus' 80.7 percent owned credit card
processing unit, were excellent for the second quarter. Banking operations' net
income increased 11.2 percent over the second quarter of 1997. Return on assets
for the quarter was 1.54 percent and return on equity was 18.68 percent,
compared to 1.47 percent and 19.21 percent, respectively, in the second quarter
of 1997. Net interest income increased by 4.9 percent versus the same quarter
last year, due to net loan growth of 5.2 percent and a net interest margin of
5.19 percent in the quarter. Banking operations' non-interest income grew 21.6
percent, with increases in mortgage revenues of 105 percent, brokerage revenues
of 59 percent, trust service fees of 17 percent, credit card fees of 17 percent
and service charges of 10 percent over the second quarter of 1997.
Total System Services, Inc.'s record net income for the second quarter of
$11,650,000, up 17.2 percent from $9,941,000 last year, contributed
significantly to Synovus' results. In order to accommodate the conversion of 78
million new accounts, which include Canadian Tire, Royal Bank of Canada and
Sears, representing an 80% growth in accounts on file of year-end 1999, TSYS is
focusing on building the necessary infrastructure of property, equipment and
people to provide the quality of service its customers expect.
Commenting on the company's consolidated results, Synovus Chairman and
Chief Executive Officer, James H. Blanchard said, "We are very pleased with our
performance through the first six months of the year. In our banking operations,
fee income continued to grow through our sales efforts, with significant
increases in mortgage revenues, trust service fees and brokerage revenues. TSYS
had another great six months, increasing net income of 18.6 percent over the
same period last year."
Synovus Financial Corp. (Syn o' vus) is a $9.4 billion asset,
multi-financial services company composed of 34 banks serving communities
throughout Georgia, Alabama, Florida and South Carolina; an 80.7% ownership of
Total System Services, Inc. (www.totalsystem.com), one of the world's largest
credit, debit, commercial and private-label card processing companies; Synovus
Trust Company, one of the Southeast's largest providers of trust services;
Synovus Securities, Inc., a full-service brokerage firm; and Synovus Mortgage
Corp., which offers mortgage services throughout the Southeast. The name
"Synovus" was created of the
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Post Office Box 120 / Columbus, GA 31902
www.synovus.com
Synovus Financial Corp. Reports Record Second Quarter 1998 Earnings / p.3
combination of synergy and novus - synergy, meaning the interaction of separate
components such that the total effect is greater than the sum of its parts and
novus (Latin for "new"), meaning usually of superior quality and different from
the others listed in the same category. Synovus' Internet address is
www.synovus.com.
Certain matters set forth in this news release contain forward-looking
statements that involve certain risks and uncertainties including the capability
of Synovus and Marshall & Illsley Data Services to complete the planned
conversion of the back office data processing system within the time specified,
within the expense estimates provided, and the Year 2000 compliance of the data
processing system.
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Post Office Box 120 / Columbus, GA 31902
www.synovus.com
Synovus Financial Corp.
<TABLE>
<CAPTION>
INCOME STATEMENT 1998 1997 2nd Quarter
- -------------------------------------------------------------------------------------------------------------------
(In thousands, except per share Second First Fourth Third Second '98 - '97
data) Quarter Quarter Quarter Quarter Quarter % Change
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Interest Income................. $ 189,067 186,955 187,803 185,047 180,409 4.8
Interest Expense................ 81,127 80,893 81,020 80,204 77,801 4.3
- -------------------------------------------------------------------------------------------------------------------
Net Interest Income............. 107,940 106,062 106,783 104,843 102,608 5.2
Provision for Loan Losses....... 7,004 7,594 9,412 7,604 8,279 (15.4)
- -------------------------------------------------------------------------------------------------------------------
Net Interest Income After
Provision ...................... 100,936 98,468 97,371 97,239 94,329 7.0
- -------------------------------------------------------------------------------------------------------------------
Non-Interest Income:
Fees For Trust Services..... 3,547 3,810 3,219 3,137 3,058 16.0
Service Charges............. 17,091 16,311 17,146 15,868 15,605 9.5
Data Processing............. 86,312 91,329 91,928 87,839 85,227 1.3
Net Mortgage Revenue........ 4,906 4,334 3,240 2,918 2,395 104.8
Brokerage Revenue........... 2,712 2,918 2,172 2,070 1,701 59.4
Securities Gains (Losses)... 181 145 (3) (18) 30 503.3
Other....................... 14,702 13,471 14,060 12,506 12,917 13.8
- -------------------------------------------------------------------------------------------------------------------
Total Non-Interest Income....... 129,451 132,318 131,762 124,320 120,933 7.0
- -------------------------------------------------------------------------------------------------------------------
Non-Interest Expense:
Personnel Expense............ 89,394 94,691 83,878 84,577 84,627 5.6
Occupancy & Equipment Expense 37,099 35,916 33,068 35,097 35,206 5.4
Other Non-Interest Expense... 33,030 34,032 35,851 32,209 31,288 5.6
Minority Interest............ 2,243 1,974 3,044 2,546 1,914 17.2
- -------------------------------------------------------------------------------------------------------------------
Total Non-Interest Expense...... 161,766 166,613 155,841 154,429 153,035 5.7
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Income Before Taxes............. 68,621 64,173 73,292 67,130 62,227 10.3
Income Tax Expense.............. 24,409 22,960 26,286 24,029 22,905 6.6
- -------------------------------------------------------------------------------------------------------------------
Net Income...................... $ 44,212 41,213 47,006 43,101 39,322 12.4
===================================================================================================================
Basic Earnings per Share ....... $ 0.17 0.16 0.18 0.16 0.15 12.0
Diluted Earnings per Share ...... 0.17 0.15 0.18 0.16 0.15 11.5
Dividends Declared per Share..... 0.07 0.07 0.06 0.06 0.06 16.7
Return on Assets ................. 1.90 % 1.81 2.06 1.92 1.80
Return on Equity ................. 18.93 18.16 21.20 20.03 19.52
Average Common Shares Outstanding 263,073 262,924 262,638 262,395 262,001
Average Common Shares
Outstanding - Diluted......... 267,790 267,479 266,241 265,926 265,612
</TABLE>
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Post Office Box 120 / Columbus, GA 31902
www.synovus.com
Synovus Financial Corp.
<TABLE>
<CAPTION>
INCOME STATEMENT
(In thousands, except per share Six Months Ended
data) June 30,
- --------------------------------------------------------------------------------
1998 1997 % Change
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Interest Income..................$ 376,022 352,823 6.6
`Interest Expense................. 162,020 152,060 6.6
- --------------------------------------------------------------------------------
Net Interest Income.............. 214,002 200,763 6.6
Provision for Loan Losses........ 14,598 15,280 (4.5)
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Net Interest Income After
Provision ...................... 199,404 185,483 7.5
- --------------------------------------------------------------------------------
Non-Interest Income:
Fees For Trust Services...... 7,357 6,289 17.0
Service Charges.............. 33,402 30,529 9.4
Data Processing.............. 177,641 164,179 8.2
Net Mortgage Revenue......... 9,240 4,505 105.1
Brokerage Revenue............ 5,630 3,546 58.8
Securities Gains (Losses).... 326 (2) N/A
Other........................ 28,173 24,118 16.8
- --------------------------------------------------------------------------------
Total Non-Interest Income........ 261,769 233,164 12.3
- --------------------------------------------------------------------------------
Non-Interest Expense:
Personnel Expense............. 184,085 167,964 9.6
Occupancy & Equipment Expense. 73,015 68,207 7.0
Other Non-Interest Expense.... 67,062 60,442 11.0
Minority Interest............. 4,217 3,553 18.7
- --------------------------------------------------------------------------------
Total Non-Interest Expense....... 328,379 300,166 9.4
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Income Before Taxes.............. 132,794 118,481 12.1
Income Tax Expense............... 47,369 43,352 9.3
- --------------------------------------------------------------------------------
Net Income.......................$ 85,425 75,129 13.7
================================================================================
Basic Earnings per Share ........$ 0.32 0.29 13.2
Diluted Earnings per Share ...... 0.32 0.28 13.1
Dividends Declared per Share..... 0.15 0.12 25.0
Return on Assets ................ 1.86 % 1.75
Return on Equity ................ 18.55 18.89
Average Common Shares Outstanding 262,999 261,921
Average Common Shares
Outstanding - Diluted........ 266,876 265,380
</TABLE>
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Post Office Box 120 / Columbus, GA 31902
www.synovus.com
Synovus Financial Corp.
<TABLE>
<CAPTION>
BALANCE SHEET 1998 1997 2nd Quarter
- -------------------------------------------------------------------------------------------------------------------
(In thousands, except per share Second First Fourth Third Second '98 - '97
data) Quarter Quarter Quarter Quarter Quarter % Change
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Total Assets.................... $ 9,370,271 9,376,677 9,260,331 8,997,052 8,970,672 4.5
Investment Securities........... 1,665,267 1,679,594 1,655,173 1,643,135 1,664,840 0.0
Net Loans....................... 6,621,584 6,600,581 6,506,822 6,369,269 6,292,671 5.2
Total Deposits.................. 7,823,454 7,889,802 7,707,927 7,399,381 7,422,266 5.4
Demand Deposits............. 1,315,261 1,244,560 1,256,639 1,151,869 1,186,675 10.8
Certificates of Deposit..... 3,536,246 3,669,943 3,598,364 3,517,850 3,442,456 2.7
Savings Accounts............ 448,650 464,947 446,497 451,040 462,344 (3.0)
NOW Accounts................ 1,153,702 1,146,430 1,128,407 1,055,102 1,043,682 10.5
Money Market................ 1,369,596 1,363,922 1,278,020 1,223,520 1,287,110 6.4
Shareholders' Equity........... 954,350 927,329 903,656 863,562 831,159 14.8
Book Value Per Share............ 3.63 3.53 3.44 3.29 3.17 14.5
Equity to Assets................ 10.18 % 9.89 9.76 9.60 9.27
Loan to Deposit Ratio........... 86.00 85.00 85.75 87.45 86.14
Demand Deposits/Total Deposits.. 16.81 15.77 16.30 15.57 15.99
Average Total Assets............ $ 9,326,320 9,227,000 9,058,853 8,913,564 8,751,181 6.6
Average Interest Earning Assets. 8,476,773 8,384,905 8,240,582 8,114,307 7,968,268 6.4
Average Loans................... 6,708,656 6,665,935 6,533,859 6,419,511 6,292,915 6.6
Average Deposits................ 7,785,568 7,721,905 7,567,211 7,383,966 7,248,045 7.4
Average Shareholders' Equity.... 937,006 920,505 879,667 853,764 807,936 16.0
</TABLE>
<TABLE>
<CAPTION>
ASSET QUALITY 1998 1997 2nd Quarter
- -------------------------------------------------------------------------------------------------------------------
(In thousands, except per share Second First Fourth Third Second '98 - '97
data) Quarter Quarter Quarter Quarter Quarter % Change
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Nonperforming Loans............$ 20,372 17,805 18,472 21,113 24,726 (17.6)
Other Real Estate............... 8,504 8,793 10,335 11,237 10,996 (22.7)
Nonperforming Assets........... 28,876 26,598 28,807 32,350 35,722 (19.2)
Reserve for Loan Losses......... 106,704 105,716 103,050 101,675 100,619 6.0
Net Charge-Offs................. 6,016 4,928 8,037 6,549 5,496 9.5
Net Charge-Offs /Average Loans.. 0.36 % 0.30 0.49 0.41 0.35
Nonperforming Loans/Loans & ORE. 0.30 0.27 0.28 0.33 0.39
Nonperforming Assets/Loans & ORE 0.43 0.40 0.44 0.50 0.56
Loan Loss Reserve/Loans......... 1.59 1.58 1.56 1.57 1.57
Reserve/Nonperforming Loans..... 523.78 593.73 557.87 481.56 406.93
Reserve/Nonperforming Assets.... 369.53 397.45 357.72 314.29 281.67
</TABLE>
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Post Office Box 120 / Columbus, GA 31902
www.synovus.com
Synovus Financial Corp.
<TABLE>
<CAPTION>
AVERAGE BALANCES AND YIELDS
(In thousands, except per share data) 1998 1997
- --------------------------------------------------------------------------------------------------------------------
Second First Fourth Third Second
Interest Earning Assets Quarter Quarter Quarter Quarter Quarter
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment Securities.................... $ 1,687,178 1,663,691 1,647,857 1,663,922 1,645,557
Yield................................. 6.52 % 6.61 6.58 6.60 6.61
Loans.................................... $ 6,708,656 6,665,935 6,533,859 6,419,511 6,292,915
Yield................................. 9.81 % 9.86 9.94 9.94 9.93
Other Earning Assets..................... $ 80,939 55,279 58,866 30,874 29,796
Yield................................. 5.40 % 5.65 5.30 6.36 7.42
- --------------------------------------------------------------------------------------------------------------------
Total Earning Assets $ 8,476,773 8,384,905 8,240,582 8,114,307 7,968,268
Yield 9.11 % 9.19 9.23 9.23 9.23
- --------------------------------------------------------------------------------------------------------------------
Interest Bearing Liabilities
Time Deposits More Than $100,000......... $ 1,283,939 1,356,917 1,289,078 1,196,980 1,140,773
Yield................................. 5.81 % 5.85 5.81 5.77 5.72
Time Deposits Less Than $100,000......... $ 2,285,438 2,290,857 2,283,764 2,273,839 2,239,701
Yield................................. 5.62 % 5.63 5.63 5.59 5.56
Interest Bearing Deposit Accounts........ $ 2,959,546 2,891,683 2,806,569 2,772,529 2,734,933
Yield................................. 3.43 % 3.44 3.42 3.43 3.41
Short-Term Borrowings.................... $ 266,983 252,889 271,905 360,365 395,558
Yield................................. 5.03 % 4.92 5.32 5.25 5.43
Other Borrowings......................... $ 125,423 123,490 126,575 126,648 131,440
Yield................................. 5.85 % 6.16 5.93 6.05 5.70
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Total Interest Bearing Liabilities $ 6,921,329 6,915,836 6,777,891 6,730,361 6,642,405
Yield 4.70 % 4.74 4.74 4.72 4.70
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Demand Deposits.......................... $ 1,256,645 1,182,449 1,187,800 1,140,618 1,132,638
Shareholders' Equity..................... $ 937,006 920,505 879,667 853,764 807,936
Total Assets............................. $ 9,326,320 9,227,000 9,058,853 8,913,564 8,751,181
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Spread 4.41 % 4.44 4.49 4.51 4.53
Net Interest Margin 5.22 % 5.22 5.28 5.26 5.27
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</TABLE>
ENDIT
