Synovus Financial reported solid revenue and profit growth in the third quarter as double-digit gains in noninterest income more than offset rising expenses and a decline in fee income.
The Columbus, Ga., company said Tuesday that it earned $99.3 million in the quarter that ended Sept. 30, up 4% from the same quarter in 2017. Its earnings per share were 84 cents, though adjusted for costs related to its pending acquisition of FCB Financial Holdings and other one-time events, earnings per share would have been 95 cents, the company said.
Analysts polled by FactSet Research had projected earnings per share to come in at 92 cents.
The $32 billion-asset company said that revenues after one-time adjustments climbed 10% year over year to $363 million.
Net interest income increased 11% to nearly $292 million, driven by higher loan yields and a 4.5% increase in loan balances, to $25.6 billion.
The loan growth was driven by 6.6% increase in commercial loans and a 14.9% jump in consumer loans. Those gains helped offset a 7.1% drop in commercial real estate loans.
Fee income declined 47% year over year to $71.7 million, though last year’s results included a $75 million transaction fee related to the sale of a credit card loan portfolio. Excluding that one-time gain, fee income was up 4.1% year over year, as gains in brokerage and bank-owned life insurance revenue made up for a decline in mortgage banking revenue.
Like many banks, Synovus reported a sharp increase in interest expenses as rising interest rates forced it boost the rates it pays to depositors. Interest expenses climbed 49.2% year over year to $52.3 million.
Noninterest expenses also increased 7.1% to $220.3 million due mostly to higher costs for employee salaries and for expenses related to its pending acquisition.
