Synovus Financial in Columbus, Ga., posted double-digit revenue growth in the fourth quarter as its consumer lending surged, but its overall profit declined from a year earlier due largely to one-time charges related to the passage of federal tax reform and the extinguishment of some debt.
The $31.2 billion-asset company said Tuesday that it earned $27 million in the quarter that ended Dec. 31, a decline of 59% from the same period a year earlier. The company attributed the drop primarily to a $46 million writedown on its deferred tax asset and a $23 million loss it took on the redemption of $300 million in senior debt. Higher advertising expenses related to a corporate rebranding also contributed to the decline in quarterly profits.
Earnings per share fell 58% year over year to 23 cents.
Total revenue shot up 12% year over year, to $339 million, as strong growth in consumer loans more than offset more tepid commercial loan demand and a decline in commercial real estate loans.
Consumer loans increased 18% year over year and average yields on those loans increase by 27 basis points, to 4.54%. Those gains helped drive a 15.5% increase in net interest income, to $269.7 million, year over year and 36-basis-point increase in its net interest margin, to 3.65%.
Noninterest income fell 6.9% year over year as revenue gains in brokerage, asset management and mortgage banking were largely offset by declines in bankcard fees and lower fees from service charges on deposit accounts.
Credit quality improved across the board, with the company seeing declines in nonperforming loans in every major category. Nonperforming loans totaled $115.6 million at Dec.31, down nearly 25% from a year earlier.