Synovus Financial in Columbus, Ga., is stepping up expansion in Florida just months after buying one of the state's biggest community banks.
The $47.3 billion-asset Synovus is focusing on commercial real estate and new branch openings in major cities across the Southeast, where growth in jobs, population and income are outpacing the national average, Kessel Stelling, the company's chairman, president and CEO said on a conference call to discuss quarterly results.
Executives hope the expansion will offset a pinch being felt from recent cuts in interest rates.
“Florida is certainly an opportunity, and we’ll continue to look at markets throughout that state for additional locations,” Stelling said, adding that the company is keen on “smaller, more efficient, more tech-driven” branches.
Overall, Synovus' second-quarter profit rose 30% from a quarter earlier, to $153 million. Comparisons from a year earlier were skewed by its January acquisition of FCB Financial.
There was some skepticism from analysts about Synovus' decision to double down in Florida, a state that stung the bank during the financial crisis. But Stelling said his team has learned from the past and is avoiding speculative deals for land and beachfront high-rise buildings.
“We don’t have any of that,” Stelling said.
Executives said earlier this year that they expected revenue to increase by 5.5% to 7.5% in 2019 from a year earlier. On Tuesday, they guided analysts closer to the low end of the range, warning that competition for deposits has become more intense.
Synovus lowered its deposit growth forecast to a range of 3% to 5% for 2019, down from the 5.5% to 7.5% forecast three months ago.
But the company expects to generate more revenue from loan growth and fees by leaning on their team in Florida. There are plans in place to move some leaders to the state to take advantage of an “outsized opportunity,” Stelling said.
