Regional Banks seem to be the leaders in bank failures today.  Their regionalization can sometimes be the reason they fail at a higher rate than other banks.  Today’s blog subject is no different:  Synovus Financial, Inc. (SNV).

I am not a bank analyst….I am a chart guy. The only reason I am bringing up SNV is because they have a chart that looks interesting to me.

SNV describes itself as a financial services holding company with approximately $34 billion in assets based in Columbus, Georgia. SNV provides commercial and retail banking, as well as investment services, to customers through 30 banks, 332 offices, and 466 ATMs in Georgia, Alabama, South Carolina, Florida and Tennessee.”  O.K. it is clearly a regional bank!

Much of my analysis is anecdotal in nature because there is NO way I am going to read the latest 10-Q or 10-K all the way through.  I used to be a bank auditor and would probably break out in hives if I did.  What I see is the following:

• The recent exchange offer for their long term notes was a middling success.  Over 12% of their holders accepted SNV’s offer for the exchange of shares for their debt.  Both good  and bad news can be inferred from this exchange: SNV shed $30MM in debt and only gave up stock (good), the current debt holders didn’t want to own shares in SNV and rejected the offer (bad….they may want the superior recovery provisions of debt holders rather than shareholders)
• $983,000,000 in TARP funds - my conversations with the company lead me to believe that those funds will not be repaid in the near term.  So, Obama will continue to run SNV.
• Liquidity provisions -  One of the questions that I put to the company was whether they were in default on any of their notes.  The answer was an emphatic “NO”, but upon reviewing their balance sheet I would say that are only in “fair” shape.  A new wave of writeoffs could change that opinion in a big hurry.
• Return to profitability - Assuming no more massive write-downs or mark-to-market fiascos, SNV expects to return to profitability in 2010.

To the Chart:

SNV looks like it might have bottomed and could be a good bounce play. It is a “BDC”, as I like to call it, (Big Dang Company) that has traded as high at $9.83 in the last 52 weeks.  It is just coming off of its 52-week low of $1.86 set in October.  Do your own due diligence and see if you don’t agree.

The last reason to trade SNV is that Jim Cramer DOESN’T like SNV.  That is enough reason for me to invest….Jim is usually wrong!

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