3 Reasons I'm Still Avoiding Synovus
Synovusis a bank to stay away from, according to Fool.com financial analyst. Here are three major strikes against it:
- Most significant is that Synovus still owes TARP money. Many banks took TARP money during the financial crisis, but to have not paid it back this far along is a huge red flag.
- Synovus' bad loan rate is still around 4%, which is quite high -- and it's not even reserving fully for those bad loans.
- Synovus is trading around book value, both on a regular and tangible basis. That's a reasonable price point, but in this environment, there are plenty of banks trading at the same price -- banks that pay good dividends and aren't saddled with TARP debt and bad loans.
See more in the following video.
Smaller, more regional banks are a far less risky choice and make good alternatives to Synovus. The video will reveal some of Anand's favorites. However, if big is what you're after, there's one standout in this sector that you'll want to look into. In a sea of mismanaged and downright dangerous peers, this one stands out as The Only Big Bank Built To Last. We at The Motley Fool and Warren Buffett alike both love this top pick, which you can uncover today in our premium report. It's free, so click here to access it now.
The article 3 Reasons I'm Still Avoiding Synovus originally appeared on Fool.com.Anand Chokkavelu and The Motley Fool own shares of Bank of Hawaii, Fifth Third Bancorp, Huntington Bancshares, and PNC Financial Services. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.