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Cabelas : Synovus profit jumps to $95.4 million thanks to Bass Pro Shops-Cabela's deal

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10/17/2017 | 10:03pm CEST

Oct. 17--Thanks to its role in the merger between Bass Pro Shops and Cabela's, Synovus Financial Corp. on Tuesday reported a profit of $95.4 million, or 78 cents per share, in the third quarter of this year.

The bankholding company, headquartered in Columbus, pocketed a $75 million fee for its major-league assist in the merger, with the cash coming from Cabela's and Capital One Bank, which helped the two outdoor retailers pull off the $4 billion deal.

Taking out that one-time fee and other balance sheet restructuring moves, Synovus, the parent company of Columbus Bank and Trust, posted adjusted diluted earnings per share of 65 cents. That was up from 52 cents per share, or 25 percent, from the same July-September quarter a year ago.

"Our third quarter results reflect solid execution and steady progress toward achieving our strategic priorities," Synovus Chairman and Chief Executive Officer Kessel Stelling said in a statement.

Stelling noted the bank's adjusted earnings per share increase from a year ago, along with improvements in return on assets and the firm's efficiency ratio. He also pointed to his company's loan growth, core deposit growth and improved non-performing loan ratio.

"We were also pleased to close the Cabela's transaction, which provided additional liquidity to fund organic growth and enabled the acceleration of additional balance sheet restructuring actions with longer term financial benefit," the CEO said. "Our team is highly energized as we prepare to finish strong in 2017 and fully transition to a unified Synovus brand in 2018, with all of our efforts aimed at improving the customer experience in the communities we serve throughout our footprint."

The company, which dates to 1888, plans to eliminate the local brands of its banks early next year, which includes no longer using the Columbus Bank and Trust moniker that customers have known for decades.

On the stock front, Synovus shares have been performing well this year along with the overall surging stock market. Its shares closed Monday up a penny at $46.65, which is not far off the stock's 52-week high of $47.32. The low for the past year is $31.87, an indication of the ground shares have gained through 2017.

The merger between Bass Pro Shops and Cabela's, the nation's top outdoors retailers, not only served to put Synovus in the national spotlight, but it also had tangible benefits. On top of the $75 million fee, the Columbus financial institution acted as a middleman, purchasing the assets and some liabilities from the Cabela's-owned World's Foremost Bank on Sept. 25. It quickly turned around and sold much of that to Capital One Bank. However, Synovus gets to keep $1.1 billion in deposits from World's Foremost Bank.

The profit realized by Synovus in the third quarter came on net interest income of $297.6 million, which was 16 percent higher than the $256.5 million reported in the same quarter a year ago. Subtracting a provision for loan losses, however, lowered net interest income to $222.8 million in the quarter, which was up just over 1 percent from a year ago.

Non-interest income for the three-month period was $135.4 million, nearly 99 percent higher than the $68.1 million posted a year ago. Again, that reflects the one-time $75 million fee from the merger participation.

Synovus did see overall expenses climb nearly 11 percent from the third quarter of 2016, with the total in the latest reported quarter at $205.6 million. Slightly more than half of that, or just under $110 million, was for salaries and other personnel expenses.

Through the first nine months of this year, the bank has racked up net-interest income (after a loan loss provision) of nearly $695 million, an increase of nearly 8 percent year over year. Non-interest income is up more than 38 percent to $275.9 million.

The profit, or net income, on all of that business in the January-September period comes to $238.1 million, or diluted earnings per share of $1.94. That's nearly 44 percent higher than the $1.36 per share from the same nine months a year ago.


(c)2017 the Columbus Ledger-Enquirer (Columbus, Ga.)

Visit the Columbus Ledger-Enquirer (Columbus, Ga.) at www.ledger-enquirer.com

Distributed by Tribune Content Agency, LLC.

© Tribune Content Agency, source Regional News

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Thomas L. Millner Chief Executive Officer & Director
Scott K. Williams President
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