Synovus Financial Corp.'s first-quarter loss widened as the financial-services company's loan-loss provision increased and credit quality fell from a year earlier.
Shares were down 6% at $3.59 in after-hours trading. The stock had been flat on the year, underperforming the broader market.
The Georgia-based bank has been hit hard by declining housing markets, particularly in the Southeast, and received $967.9 million under the U.S. government's Troubled Asset Relief Program. Although Tuesday's results were weak compared to the year-earlier period, charge-offs improved sequentially, as did its provision for credit losses.
Nonperforming assets, or loans in danger of going bad, rose to 6.32% from 6.13% in the fourth quarter and 5.1% a year earlier. Net charge-offs, loans the bank doesn't expect to collect, fell to 5.05% from 5.58% the fourth quarter but rose from 3.53% a year earlier. Credit-loss provisions were $340.9 million, down 12% from the prior quarter but up 17% from a year earlier.
Synovus posted a loss of $215.7 million, or 47 cents a share, compared with a year earlier loss of $136.7 million, or 46 cents a share. The latest results included a $43 million gain from selling its merchant services business. The company also had 48% more shares outstanding.
A survey of analysts by Thomson Reuters predicted a 49-cent loss.