Senior Analyst Kevin Barker of Compass Point Research & Trading says Synovus Financial Corp. (SNV) is one of the best-positioned midcap regional banks due to a large deferred tax asset that he believes will open doors for the company.
“It has a large deferred tax asset that will reduce the cash taxes paid in the near term and increase the regulatory capital ratios faster than book value growth,” Barker said.
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Barker says this will in turn create opportunities for Synovus to do tuck-in acquisitions and grow the balance sheet.
“You’re going to see the company continue to increase the amount of capital that it is going to return to shareholders via buybacks, dividends and tuck-in acquisitions primarily as it eats up DTA. Also, it is well-positioned in Georgia and Florida, where we are seeing the most growth,” Barker added.
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