Investors were not happy with a recent move this company made, but it should pay off in the long run.
A Larger Area
Synovus Financial Corporation (SNV), which operates Synovus Bank locations in Georgia, Alabama, South Carolina and Tennessee, announced last year that it was buying Florida Community Bank, a 51-branch bank created after the 2008 financial crisis. Synovus, which has been in business since 1888, said it expected cost savings and operating synergies from the acquisition, but such purchases were not viewed favorably by investors in 2018, and some had concerns about possible credit issues at Florida Community. The result was negative investor response to the deal and pressure on Synovus stock.
The acquisition should be good for Synovus over time. It makes Florida the company’s second-biggest market after Georgia and gives Synovus a total of about 300 branches and an even stronger regional foothold.
Earnings growth should accelerate as revenue continues rising. Revenue was $1.3 billion in 2017 and likely will be reported as $1.4 billion for 2018 and $1.9 billion this year. And the dividend of $1.20/share/yr., recently yielding 3.3%, appears secure.
Fiscal year: December. Earnings per share: 2019 est./$4.03…2018 est./$3.62…2017/$2.53.
Lisa A. Welch is senior portfolio manager at Manulife Asset Management, Boston, and portfolio manager of the $2.2 billion John Hancock Regional Bank Fund (FRBAX). JHFunds.com