Saturday, December 19, 2009

The Bull and Bear Case for Synovus Financial (SNV)

In response to a piece penned by Tom Brown of about Synovus Financial, I carefully go through his bullish arguments and point out areas in which we do not share the same outlook. Tom Brown is an experienced analyst who has far more experience than I have. Accordingly, this is absolutely not an attempt to undermine his work. However, after digging into the credit trends I came to different conclusions about the near term prospects for SNV. Despite this fact, I actually do agree with Brown that that over the next few years there is the potential for the shares to appreciate meaningfully. But, in trying to assess the potential risks, the questions I try to answer are as follows: (1) Will SNV have enough capital to make it through the cycle without further diluting shareholders and (2) What is the probability that SNV does not survive this credit cycle?

(Picture courtesy of

Research Report on Synovus Financial (SNV)