Synovus Financial closed out 2011 with its second straight quarterly profit after about three years of losses. It cited improving credit trends and growth in traditional corporate banking.
The Columbus-based parent of dozens of Southeastern community banks, including Bank of North Georgia, said Tuesday its credit costs -- largely related to loan losses and foreclosed real estate -- were $90.5 million, down 36.5 percent from the September quarter and 67.9 percent compared to fourth quarter 2010.
Synovus also wrote off fewer bad loans, and said new problem loans declined as well.
Synovus reported net earnings to common shareholders of $12.8 million in fourth quarter 2011, or 1 cent per share, vs. a net loss of $179.9 million, or 23 cents per share, in fourth quarter of 2010.
Interest income declined 12.8 percent to $273.3 million, compared to fourth quarter 2010, and non-interest income, mainly fees, was off 8 percent. Recent regulations have curtailed what banks can charge in certain fees.
For all of 2011, Synovus posted a loss of $118.7 million, or 15 cents per share, down from a loss of $848.2 million or $1.24 per share, in 2010.
Synvous returned to profitability in third quarter 2011 for the first time since 2008, when the bank sustained heavy losses attributed largely to real estate loans. The bank took $1 billion in federal aid and twice sold new shares to help fix loan issues.
Synovus continues to make steady progress dealing with problem loans and trying to find growth where it is able, said Chris Marinac, a bank analyst with FIG Partners in Atlanta.
After about three years of shedding loans, loan balance was essentially flat at $20.08 billion in the fourth quarter. Commercial and industrial loans grew by $128.7 million, or 5.8 percent on an annualized basis.
“It’s an ongoing workout that’s going to take several more quarters,” Marinac said of Synovus' return to strength.
The fourth quarter profit included a $10.3 million gain in investment securities, and a $5.9 million charge related to its membership in the Visa network.
Net charge offs, or write offs of bad loans, were down 70.5 percent from fourth quarter 2010. Nonperforming assets were $1.12 billion in fourth quarter 2011, down nearly 13 percent from the year earlier.
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