Breaking a recent winning streak which had seen the stock
gain more than 18% since the holidays, shares of Georgia-based bank Synovus
(SNV 33.89, -1.05) trade 3.01% lower as resistance in the 50-day simple moving
average (34.96) held the stock lower for a fourth-straight session.
Specifically, the stock is lower in part due to the company’s worse than expected fourth quarter report issued this morning. In short, SNV announced fourth quarter adjusted earnings per share of $0.92 with adjusted total revenues up about 7.9% to $368.2 mln.
Both of these marks were worse than market expectations. The company attributed the shortfall in part due to lower provisions for loan losses in the fourth quarter, which fell to $12.15 mln from $14.98 mln in the third quarter. Additionally, core banking fees increased 3.1% to $36.8 mln from the previous quarter, up $1.2 mln, or 3.5%, from the fourth quarter of last year.
Furthermore, net interest margin was 3.92%, up 3 basis points from the previous quarter. Yield on earning assets was 4.69%, up 11 basis points from the previous quarter, and the cost of funds was 0.81%, up 8 basis points from the previous quarter.
Synovus also announced two capital return measures.
- The Board of Directors authorized a new share repurchase program of up to $400 mln of the company’s common stock. The program will be executed during 2019. The company currently expects to repurchase $300-350 mln under this authorization in 2019.
- The Board approved a 20% increase in the company’s quarterly common stock dividend from $0.25 to $0.30 per share, effective with the quarterly dividend payable in April 2019.
These capital return moves, according to the company, should
allow Synovus to return about $500 mln to common stockholders this year.
Technically speaking, Synovus’ stock has been on a bearish move for the better part of the last four months. In the second week of September 2018, SNV formed a death cross – which occurs when the shorter term moving average crosses below the longer-term average – and has since shed more than 30%. As mentioned, though, the stock has followed the broader market higher during the last three weeks, but today’s losses return the stock to its 2018 losses.