Synovus Reports Strong 4Q Profit on Deferred Tax Asset

Synovus Financial (SNV) posted stronger fourth-quarter earnings after it recaptured substantially all of the value of its deferred tax asset.

The Columbus, Ga., company reported a profit of $712.8 million for the fourth quarter, up from $12.8 million a year earlier. This included roughly $800 million from its deferred tax asset, which drove an 89 cent increase in tangible book value per share during the quarter to $2.96.

During the quarter the $27 billion-asset company also completed distressed asset sales of roughly $545 million, including a bulk sale in December. That resulted in a pre-tax charge of roughly $157 million.

Synovus' fourth-quarter net interest income was $207.5 million, down roughly 2% from the third quarter. Its noninterest income rose about 9%, to $80.1 million, from the third quarter.

Net interest margin fell six basis points, to 3.45%, from the third quarter because of a decline in the yield on earning assets of 10 basis points. This was partially offset by the decline in the effective cost of funds of four basis points.

For 2012, the company earned $775 million, compared with a loss of $118.7 million for 2011.