Synovus Financial Corp. of Columbus, Ga., posted a third-quarter net loss of $26.9 million, or 8 cents a share, citing substantially higher credit costs compared with prior quarters.
On average, analysts were expecting a net gain of 7 cents, according to Thomson Reuters. The $34.4 billion-asset Synovus earned $12.1 million in the second quarter and $134.9 million in last year’s third quarter.
The loan-loss provision rose 61.8% from the second quarter and 157.5% from a year earlier, to $151.4 million. Expenses from foreclosures more than tripled from the second quarter and grew 25-fold from a year earlier, to $43.2 million.
Net chargeoffs rose 48.9% from the second quarter and 219.1% from a year earlier, to $105.3 million. Nonperforming assets rose 20.2% from the second quarter and 232% from a year earlier, to $998.6 million.
Richard Anthony, Synovus’ chairman and chief executive, said in a press release that credit issues and a weakening economy "created the need for aggressive actions to appropriately value, write down, and dispose of problem credits." Chargeoffs and provision expense likely peaked in the third quarter, Mr. Anthony said.
He said Synovus intends to sell preferred stock to the government, which could bring in $300 million to $900 million of capital.