Synovus Financial, the second-largest banking company based in Georgia, swung to a second quarter profit, but company officials said Tuesday it is not likely to repay its nearly $1 billion crisis-era aid before 2013.
Synovus has the largest amount still outstanding of any bank under the federal government's Troubled Asset Relief Program, though the company has paid $152.7 million in dividends.
The Columbus-based parent of community banks across five Southern states, including Bank of North Georgia, has struggled to move past the real estate collapse. The second quarter marked the banking company's fourth straight quarterly profit after about three years in the red.
Synovus said its profit available to common shareholders was $24.8 million, or 3 cents per share. That compares with a loss of $53.5 million, or 7 cents per share, in second quarter 2011.
Kessel Stelling, Synovus chairman and CEO, repeated his stance that repaying TARP likely is tied to the company's recovery of deferred tax assets. It's something Synovus had hoped for in 2012, but he said that recovery is now "likely a 2013 event."
Deferred tax assets, or DTAs, are a sort of tax credit that companies can accrue for periods of losses that they can use later to reduce their tax burdens once consistently profitable. Synovus holds a DTA of more than $800 million. Auditors are likely to consider not just profit but also factors like loan quality in allowing its recovery.
Nonperforming assets, including loans no longer earning interest and likely to be foreclosed, are down 21 percent compared with a year ago, but remain high by historical levels.
Stelling said Synovus is building its case with its accountants for DTA recovery, but the company is being conservative.
As the company sheds bad loans and cuts costs, it also has grown traditional small business and corporate banking.
Credit trends are improving, Stelling said in an interview, "and now we need to stay equally focused on the revenue side."
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