Synovus Financial Corp. swung to a profit in the fourth quarter after sharply reduced funds held for risky loans helped the regional lender report its second straight quarter in the black.
The Georgia lender has been working to improve its business after taking a hit from a deep housing downturn in the Southeast. Still, like many other lenders, it also continues to benefit from improving the credit quality in its loan portfolio that has helped it reduce funds set aside to cover bad loans.
"Our performance during the quarter was driven primarily by the continued improving trends in credit metrics and the resulting reduction of credit costs," said Chief Executive Kessel D. Stelling, adding the company is also seeing momentum in its loan pipeline.
Synovus Financial reported a profit of $27.4 million, compared with a year-earlier loss of $165.6 million. On a per-share basis, which reflects the payment of preferred dividends, the company reported a penny profit versus a year-earlier loss of 23 cents.
Revenue, measured as the sum of net interest income and noninterest income, declined 6.6% to $300.6 million. Analysts polled by Thomson Reuters expected Synovus to break even for the quarter and post $296 million in revenue.
Loan-loss provisions tumbled to $54.6 million, down sharply from $252.4 million a year earlier. Net charge-offs, or loans the bank doesn't expect to collect, fell to $113.5 million in the fourth quarter, down from $385.2 million a year earlier.
Shares were inactive premarket. Through the close, the stock is down 44% over the past 12 months.
