m22au's journal

Another day ... another day of regional bank underperformance.

ES -0.2%
XLF -0.4%


$KRX -1.5%

and specifically:

SNV -11%
MI -5%
ASBC -15%
WTNY -3%
PVTB -6%
FCF -4%

SNV released its 10Q after the close last night. I haven't read through the entire thing (yet) but I did notice the following phrase in the document:

"There can be no assurance that Synovus will realize the anticipated benefits of its strategic initiatives, including the Capital Plan, or that its regulators will be satisfied with such initiatives and plan and will not require Synovus to take further action. See Part II - Item 1A - "Risk Factors."

This could be boilerplate text, but if it's not, then it doesn't look good.
 
I spent a few minutes looking at the "Risk factors" section of the SNV 10Q.

Three things look potentially nasty:

Section titled
"We presently are subject to, and in the future may become subject to, additional supervisory actions and/or enhanced regulation that could have a material negative effect on our business, operating flexibility, financial condition and the value of our common stock."

Section titled
"We may be required to raise additional Tier 1 capital to comply with new regulatory standards adopted following the release of the results of the Supervisory Capital Assessment Program."

Section titled
"Our allowance for loan losses may not be adequate to cover actual losses, and we may be required to materially increase our allowance, which may adversely affect our capital, financial condition and results of operations."

Ultimately, all that matters is the stock price. In recent weeks it has hit 52-week lows while the XLF and $SPX have been at or near 52-week highs.

Today it's down 12% when the XLF is down less than 1% and the $KRX is down less than 1.5%.
 
Morgan Keenan downgraded SNV before the market open today.

From Barrons article titled
"Trading Out of Synovus Financial"

http://online.barrons.com/article/SB125789262405342295.html

" WE ARE DOWNGRADING our rating on Synovus Financial (ticker: SNV) to Market Perform [from Outperform], as in our view capital concerns will persist due to ongoing regulatory pressure for banks to build higher capital reserves. We believe these concerns, combined with ongoing credit issues could weigh on the stock over the next few quarters.

"Disclosures made in the bank's 10-Q filed on Monday night make it extremely difficult to handicap the potential risk of increasing regulatory pressure for Synovus. Synovus ranks near the bottom compared to peers on multiple capital screens."

More text in the link above
 
 
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