Columbus, Georgia-based Synovus Financial Corp. (SNV) announced on Tuesday that it has completed the charter consolidation of 28 of its 30 bank charters operating in Georgia, Alabama, Florida, Tennessee and South Carolina, under one Georgia charter named Synovus Bank.
The directors and officers of Synovus affiliated banks will maintain their positions, and the banks will continue to use their names and brands.
Synovus also expects to consolidate two separately chartered Tennessee banks in Nashville and Memphis by June 30.
According to Synovus, relationship banking is the core part of the banking business. The charter consolidation will help Synovus to better manage its capital and cash flow under a single legal operating structure. Further, the consolidation will simplify regulatory complexity, minimize banking practices risk, improve capital efficiency and increase opportunities for efficiency. All these will better position Synovus to emerge from the current economic downturn.
Synovus has been affected severely over the last two years by loan losses related to the housing downturn. The company recorded net loss of $215.7 million, down 60.0% year over year in the first quarter of 2010.
In January 2010, Synovus intended to transition from 30 subsidiary banks with 30 individual charters to a single subsidiary bank with a single charter, pending receipt of all required regulatory approvals. The consolidation is expected to reduce the number of bank charters held by the company from thirty-to-one by mid-2010.
Though certain economic indicators have begun to reflect improvement in the U.S. economy, there still remains uncertainty relating to the sustainability of these developments. The first three months of 2010 continued to reflect higher credit costs and non-performing assets. However, the rate has begun to alleviate.
Synovus has always emphasized on maintaining a solid capital base, and continues to satisfy applicable regulatory capital requirements. The company has always focused on retail banking initiative, and acceleration of commercial and industrial customer growth, but still has an unfavorable credit environment and deterioration in credit quality.
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