Synovus Financial, which owed more than any other banking company as part of a 2008 bailout program, repaid the federal government nearly $1 billion to exit the program.
The $968 million payout means the Columbus bank will have more freedom to dictate its own business decisions, and puts the company back on offense, said Kessel Stelling, Synovus’ chairman and CEO.
“It’s a big day,” he said. “We never doubted how this would turn out, but others did.”
With the payout, Stelling said, Synovus will have an easier time attracting talent and luring new customers.
“The stronger we are, the greater the opportunities are down the road,” he said. “It arms our bankers with a little more ammunition.”
Synovus paid $222.7 million in dividends to the U.S. Treasury as part of the troubled asset relief program, for a total payout of $1.2 billion. At the end of June, nine Georgia banks still owed money through TARP. Last month, Fidelity Southern Corp., an Atlanta banking company, announced its plans to repay the $48.2 million it owes.
Synovus’ move was expected, said bank analyst Chris Marinac, managing principal at FIG Partners. The company announced last week its intention to raise money to pay back the loan.
“The company is moving on to bigger and better things,” he said. “It’s definitely a feel-good moment for all parties involved.”
As part of the payback, Synovus successfully completed two capital offerings. It was also upgraded by three ratings agencies.
Calling TARP “a really good program,” Stelling said the loan, given during the height of the financial crisis, was instrumental for both Synovus — which was harder hit than many of its peers — and the banking industry as a whole. Synovus was beset by bad loans for residential development and the ill-fated redevelopment of Sea Island. It shed more than 2,500 employees through the recession.
TARP “brought stability to the industry when the industry was in a crisis,” Stelling said. “It restored calm to the markets.”
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