Synovus Financial, the second-largest banking company based in Georgia, has sought counsel from investment bankers about business strategies, including a possible sale of the company, according to a report in the Financial Times.
Officials with Columbus-based Synovus declined to comment about market speculation. But the parent company of Bank of North Georgia and Columbus Bank & Trust has been the subject of persistent merger speculation following more than two years of losses and a recent announcement of job cuts and branch closings.
The Financial Times, citing unnamed sources, said Synovus could sell additional stock, put itself up for sale or not make any moves at all. The Financial Times said the banking company had not formally hired its longtime adviser JPMorgan Chase & Co., and said no decisions are imminent.
In the past, bank President and CEO Kessel Stelling has adamantly denied any assertion the company was preparing to sell and has said its efforts to right its balance sheet are with the intent to return the company to profitability.
The bank, still grappling with losses in its Georgia and Florida real estate portfolio, has recently pushed more heavily into business lending.
Synovus, with operations in five Sun Belt states and more than $30 billion in total assets, would give a buyer a significant foothold in the Southeast. Canadian banks, among the most active players in recent U.S. bank merger and acquisition action, have long been rumored as potential buyers of Southeastern banks.
Synovus lost $180 million in the fourth quarter, though credit metrics have improved. Nonperforming assets dipped to $1.28 billion, the lowest level in two years.
But analysts largely do not expect a return to profitability until year end or early 2012.
Synovus has lost more than $2 billion since January 2009. The company has not repaid the federal government’s $973 million in aid provided during the financial crisis.
Last year, Synovus raised $1.1 billion in fresh investor cash and has been aggressively clearing its balance sheet of soured loans. It sold $573 million in problem loans in the fourth quarter alone.
In a note to investors, FIG Partners in Atlanta said Wednesday “the only real alternative is a sale,” and that such an occurrence could happen this year.
“We highly doubt the equity market is interested in additional share issuance by [Synovus],” the FIG report said.
Last month, Synovus announced it would close 39 branches and eliminate 850 positions in an effort to save $100 million annually.
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