In another sign of improvement among banks that help grease the economy, Georgia’s second biggest bank last year notched its first annual profit since 2007.
Synovus Financial, based in Columbus, has been digging out of a real estate hole that battered many banks. In fact, the bank still owes the federal government and taxpayers nearly $1 billion in crisis era aid, the biggest bailout debt still outstanding of any bank in the nation.
On Monday, Synovus officials exercised an accounting maneuver that will help it make good on its IOU: essentially taking a big tax credit that it built up for past losses. Money saved in taxes will likely be used to help pay back aid it received under the Troubled Asset Relief Program.
Kessel Stelling, Synovus Chairman and CEO, said the company should repay TARP this year. The bank has paid nearly $180 million in interest under TARP.
Once a high-flyer among regional banks, the wicked housing collapse and famous stumbles like soured loans it made for the posh Sea Island resort redevelopment have vexed the company. Synovus shed nearly 2,500 employees over the past five years as it sorted itself out.
The company’s level of non-performing assets – including foreclosed real estate and loans no longer earning interest – have fallen by 37 percent since since fourth quarter 2011.
Synovus said its full year 2012 profit was $775 million, compared to a loss of $118.7 million in 2011.
Synovus said it earned $712.8 million in the final quarter of the year, compared to $12.8 million in fourth quarter 2011. The latest figure was aided by the recapture of $800 million in deferred tax assets.
The company also recorded a $157 million charge related to selling about $545 million in assets during the quarter.
Chris Marinac, a bank analyst with FIG Partners, said Synovus “got the boogeyman behind them” in obtaining the tax credit that will enable TARP payback. It still must improve its loan book and is in a cutthroat competitive environment, Marinac added.
