Synovus Financial Corp. said Thursday that it plans to consolidate to a single charter by midyear, punctuating the demise of its one-time signature business model.
The company had long been known for having dozens of separately chartered banks. Its current tally stands at 33, but it had been slowly combining charters during the past five years. Synovus had tightened up elsewhere in recent years, adopting centralized standards and placing credit administration and senior credit officers in its worst-hit regions.
"We have had an aspiration and a strategy for several years to reduce the complexity of our company," Richard Anthony, the company's chairman and CEO, said during a conference call to discuss fourth-quarter results. "This certainly suits the regulators, and it suits us as well."
The company said the move would improve capital management, ease regulatory oversight and enhance risk management efforts.
Anthony said that the change would not eliminate personalized service and that banking offices would keep their current names. "Our local bankers will continue to make local decisions that are best for our customers and communities," he said.
Synovus also reported its sixth straight quarterly loss, $249.9 million. The $33 billion-asset Columbus, Ga., company lost $439.8 million in the third quarter and $634 million a year earlier.
The provision for loan losses fell 22.1% from the third quarter but rose 6.4% from a year earlier, to $387.1 million. Net chargeoffs fell 27.2% from the third quarter but rose 57.8% from a year earlier, to $361.9 million.
Nonperforming assets rose 2.6% from the third quarter and 69.6% from a year earlier, to $1.56 billion. Foreclosed real estate expenses of $34.1 million were one-third of their third-quarter level and half of the level a year earlier.
The company's quarterly results came out a day after Sea Island Co., a resort developer and one of Synovus' biggest credit exposures, announced it would pursue strategic options that could include a sale.
Anthony confirmed during the call that Sea Island had reached a forbearance agreement with its lenders, including Synovus unit Columbus Bank & Trust. Synovus last summer attempted to corral the $220 million credit, reaching an agreement to consolidate the developer's debt into a three-year credit facility.
"I would point out that we have extremely current appraisals," said Anthony, who declined to take Sea Island questions from analysts. "A specific reserve is in place for our portion of the loan, as is required by our policies."
Also on the call, Chief Financial Officer Tommy Prescott said it is "probable" that Synovus will sell its merchant portfolio this quarter.