Synovus Finl Corp (NYSE:SNV)

Tarp will be paid in 3rd quarter, housing recovery is underway and delinquent loans are decreasing. Interest rates will start to rise within two years and the spreads will allow profitability to increase

Three 90+% ers are the last three pitches. I'll take a bite of that.

nice inverse head & Shoulder pattern, keep an eye on support at the neckline

It is really cheap and it will eventually recover just like the other banks have.

Question: When is owing the government a ton of money a good thing?

Answer: When you pay it off.

Bank aren't usually my thing in investing, unless we're talking about a special situation like a mutual conversion, but Synovus Financial (SNV) is an interesting situation with several near-term catalysts that could cause its stock to continue to outperform.

According to a recent Wall Street Transcript interview with Matthew Schultheis from an investment bank called Boenning & Scattergood, a month or so ago SNV sold off a huge chunk of underperforming loans. Why does this matter? Unloading these bad loans will theoretically enable SNV to unlock some of its large loan loss reserves, or at least keep them from having to add as much to them going forward.

Furthermore, Synovus is likely going to pay off its TARP loans in the near future...it currently owes the government more than any other bank in the country.

Unloading these bad loans and paying off the government would in theory make it likely that SNV will be able to reverse the "deferred tax allocation" that it has on the books. This is all accounting stuff (probably why I stay away from banks), but according to what I've learned on this subject this is a very good thing. It is a sign of a healthy bank and bank stocks usually increase significantly when it happens. The Company's CEO believes that this reversal will happen some time in the first half of 2013.

Schultheis believes that these events would lead to an additional BILLION dollars in additional after-tax income for the bank. This naturally would lead to a significant increase in SNV's tangible book value...which might increase from its current $1.6 billion to as much as $2.3 to $2.6 billion by June. That's a big increase, we're looking at $2.88 per share versus a current share price of $2.44. A move like that would likely drive SNV's stock higher.

Add to this the fact that the economy and housing are improving and good things should be in store for the bank.

As a potential takeover target, any acquisition would be made at a premium to this already increasing book value.

I am only adding Synovus as a CAPS pick for now because I am not personally familiar enough yet with the bank accounting nuances to say that this is exactly how things are going to play out here, but this situation certainly looks very interesting. I plan on looking into it more closely when I have time.

Deej

This one could work out spectacularly well - or implode badly. However, with the economy reviving, and the south-east being one of the more densely populated regions of the country - any uptick in home building/buying/small business activity will have a giant positive impact to this small bank in terms of mortgage and small business loans. With the economy almost certainly looking to heat up, this is a calculated risk I am willing to take.

I believe over the long term this bank will outperform the stock market. This is because the fundamentals of this bank are improving for the better and this will result in the stock price reflecting this change.

will be acquired

Synovus has underperformed for a while but now is ready to overperform over the next year (and longer). I am stocking up on SNV shares.

Synovus seems to be in bad shape. So far I am not impressed with it.

Repaid TARP preferred.

A strong company with good management can overcome obstacles.

They are beginning to rid themselves of foreclosed properties. After that's all done. Look out!

Something could be good here. More than one director paid up to $2.80 per share on the open market in February. Pure speculation

I think it gets bought. The southeast is growing and will come back strong, eventually. They recently consolidated their multiple charters which could be for the cost savings as stated, but it also is something they would need to do before being acquired. They've always used the multiple charters as a big selling point that gives customers multiple protections for multiple pots of money. However, multiple charters makes the financials hard to understand. I immediately thought they may be prepping to be acquired when I heard they were consolidating the charters. I could be wrong because they did need every bit of cost cutting they could get, and consolidating the charters did yield that result. Either way, I think this bank is through the worst of it.

Cleaning up bad loans

Following JakilaTheHun and believe it's a good bang for the buck

Positively mentioned by Tom Brown in presentation I attended today. Maybe his most positive.

selloff in banks overdone