-=Synovus (SNV) reported earnings on Tue 24 July 2018 (b/o)

Synovus beats by $0.04, reports revs in-line 

• Reports Q2 (Jun) earnings of $0.92 per share, excluding non-recurring items, $0.04 better than the Capital IQ Consensus of $0.88; revenues rose 12.4% year/year to $359.3 mln vs the $356.6 mln Capital IQ Consensus.
  • Net interest margin was 3.86%, up 8 basis points from the previous quarter and up 35 basis points from the second quarter 2017.
  • Total average loans were $24.95 billion, up $93.9 million or 1.5% annualized from the previous quarter and $596.3 million or 2.4% as compared to the second quarter 2017.
  • Efficiency ratio was 56.78%, down 38 basis points from the previous quarter and down 312 basis points from the prior-year quarter.
  • Tier 1 Capital ratio was 11.25% at June 30, 2018, compared to 10.53% at March 31, 2018.

Synovus (SNV) is acquiring FCB Financial (FCB) for $2.9 billion in stock, or $58.15/share (1.055 shares of Synovus common stock) 

Synovus will acquire FCB Financial Holdings, Inc., owner of Florida Community Bank (FCB), Florida's largest community bank. With the addition of FCB, Synovus will become a top five regional bank by deposits in the Southeast region with pro forma $36 billion in deposits and $44 billion in assets. The transaction is expected to close by the first quarter of 2019. The combination of FCB with Synovus will create the largest mid-cap bank in the Southeast by deposits, and will elevate the company's growth profile through a deepened presence in high-growth Florida markets.

FCB shareholders will receive a fixed ratio of 1.055 shares of Synovus common stock for each common share of FCB in an all-stock transaction. Based on Synovus' closing share price on July 23, 2018, the transaction is valued at $58.15 per FCB share or $2.9 billion in aggregate. Following completion of the merger, former FCB shareholders will own ~30% of the combined company.

Synovus expects ~$40 million in pretax synergies to be fully realized by 2020. Excluding one-time charges, Synovus expects the acquisition to be ~6.5% accretive to earnings per common share in 2020 and to deliver strong returns on capital. The transaction is expected to produce tangible book value per share dilution of 3.3% with an earnback period of less than two years.

FCB Financial beats by $0.03; merging with Synovus Financial (SNV) 

• Reports Q2 (Jun) earnings of $0.94 per share, excluding non-recurring items, $0.03 better than the Capital IQ Consensus of $0.91.
• The net interest margin for the second quarter of 2018 was 3.25%, an increase of 7 basis points from the first quarter of 2018 and an increase of 9 basis points from the second quarter of 2017. The increase from the first quarter of 2018 was due primarily to the 18 basis point increase in yield on interest-earning assets partially offset by the 15 basis point increase in cost of interest-bearing liabilities.
• In light of today's merger announcement with Synovus (SNV), the Company will not be hosting a conference call today to discuss earnings as previously scheduled.
  • Under the terms of the merger agreement, FCB shareholders will receive a fixed ratio of 1.055 shares of Synovus common stock for each common share of FCB in an all-stock transaction. Based on Synovus' closing share price on July 23, 2018, the transaction is valued at $58.15 per FCB share or $2.9 billion in aggregate. Following completion of the merger, former FCB shareholders will own approximately 30% of the combined company. In addition, based on the exchange ratio, Synovus' most recent quarterly dividend translates to a pro forma annualized dividend of $1.06 per FCB share. The transaction is expected to be tax free to FCB shareholders.