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Shrinkage was the name of the game during the fourth quarter at Synovus Financial Corp. — and it wasn't all bad.
January 28 -
With mergers heating up, Kessel D. Stelling says "every bank has to earn their independence every day." His company, Synovus Financial, paid a steep price toward that end Monday.
January 10
Synovus Financial Corp. is reportedly entertaining the idea of a sale.
The Columbus, Ga., bank has sought the advice of investment bankers on its strategic options, including a possible sale, The Financial Times reported Wednesday, citing unnamed sources familiar with the matter.
The story said that a decision was not imminent and that the bank had not formally engaged JPMorgan Chase & Co., a longtime adviser.
Both Synovus and JPMorgan Chase declined to comment.
Jennifer Demba, a managing director at SunTrust Robinson Humphrey who follows Synovus, said she was caught off guard by the report.
"For now, my sense is that management believes that the company is seeing fundamental credit improvement," she said. "And they've implemented a large cost reduction program and they're going to let those fall to the bottom line and become profitable. So I would be surprised if the company were to put itself on the market today."
That said: "If someone approaches them and offers an attractive price I'm sure they would consider it," she added. "The franchise is scarce."
Synovus has been aggressive in trying to improve its credit metrics. The $30 billion-asset banking company said it disposed of $573 million of distressed assets during the fourth quarter, the most ever for the bank in one reporting period. And it drove nonperforming assets down to their lowest level in two years.
Synovus is one of the few remaining regional banks to still have government funds from the Troubled Asset Relief Program, or Tarp, on its books, which could be a factor in a potential deal.
"It's difficult for investors and analysts to estimate a price range for this company because the credit mark would seemingly need to be large and obviously the acquirer would have to assume the Tarp," Demba said.