Synovus has a nose for community banking. The holding company owns flagship subsidiary Synovus Bank and about 30 community banking divisions that offer deposit accounts and consumer and business loans in Alabama, Florida, Georgia, South Carolina, and Tennessee. Through more than 290 locations, the bank provides checking and savings accounts, loans and mortgages, and credit cards. Other divisions offer insurance, private banking, wealth and asset management, and other financial services. Nonbank subsidiaries include Synovus Mortgage, Synovus Trust, investment bank and brokerage Synovus Securities, and GLOBALT, which provides asset management and financial planning services.
Synovus has been looking for ways to cut costs, raise capital, and improve efficiency as it has been plagued by the residential and commercial real estate bust that hit the southeastern US particularly hard. Previously, between 2008 and 2009 the company slashed about 10% of its workforce, and it cut approximately 10% more in 2010 and 2011. The company also announced plans to close nearly 40 branches and is looking into consolidating others.
Meanwhile, Synovus, which has reported hundreds of millions of losses each of the last four fiscal years, has been cleaning up its balance sheet. To that end, Synovus completed the bulk sale of its distressed assets with a carrying value of about $530 million in December 2012. It divested more than $1 billion worth of distressed assets in 2010 and a further $702 million of bad assets the following year. Synovus also has been able to reduce its number of past-due loans and provisions for loan losses. It also managed to reduce the amount of charged-off loans.
However, Synovus continued to struggle to dig itself out of a hole. In 2011 it reported a net loss of about $60 million (which was an improvement from the year before). Revenues fell in 2011 by 9%.
The company is focused on returning to profitability (something it managed to acheive in the last two quarters of 2011 and into 2012). It is deemphasizing commercial real estate lending, and intends to increase its focus on commercial and industrial banking, including specialized services such as asset-based lending, international banking, and treasury management, in an effort to increase revenue. The company is courting large corporate clients in the health care, manufacturing, distribution, financial services, natural resources, and transportation sectors. Among smaller enterprises, it targets professional practices such as physicians, attorneys, and accountants, particularly for its private banking business.
Synovus, which has traditionally maintained separate charters and local boards of directors for its subsidiary banks, consolidated all of its charters into one in 2010 in order to reduce complexity and improve efficiency. The company has been making such changes in order to better position itself and emerge stronger from the economic downturn.
Synovus has also consolidated by merging some of its banks in Georgia and Florida; two of its Florida banking subsidiaries (one de novo and the other formed in the merger of three subsidiaries' banking charters) have taken the Synovus Bank brand, a new strategy for the company. – less