Academic journal article ABA Banking Journal

Evolution on the Chattahoochee: Synovus Financial Continues to Bend, Stretch, and Splice the Cables of Its Unusual Multibank Model to Keep Churning out Megawatt Profits

Academic journal article ABA Banking Journal

Evolution on the Chattahoochee: Synovus Financial Continues to Bend, Stretch, and Splice the Cables of Its Unusual Multibank Model to Keep Churning out Megawatt Profits

Article excerpt

It's mid-morning, and the view of the Chattahoochee River from the boardroom of Synovus Financial Corp. gives the impression there's a drought. Much of the riverbed is visible, and fishermen have walked far out into it to reach something wet to cast into.

But this picture deceives. Only a few hours later, the view from the same room is of a raging, deep and frothy river, with rapids that a kayaker is struggling to maneuver through. You can see the sheer, raw force that drives the Georgia Power hydroelectric plants that rule the ebb and flow of the mighty Chattahoochee.

The nearest dam is out of sight. But to see power of a different sort, all you need do is look at Synovus itself. It, and the nearby campus of TSYS, its mammoth payments processing subsidiary, together represent the other powerhouse on the river, one whose banking operations reach five southeastern states from its Columbus, Ga., headquarters, and whose card-related payments processing covers a good portion of the globe.

Mid-sized Columbus seems a calm corner from which to direct a bustling $26 billion-assets bank holding company, but not so much so when one considers the historical parallels. During the Civil War, Columbus served as a key arsenal of the Confederacy, bested only by Richmond, Va., for supplying the armies of the South with cannons and swords.

But President and CEO Richard Anthony, 59, isn't one to dwell on the past, neither the South's nor that of Synovus. Anthony stepped up to command of the company in July, from president and CO0, after the 35-year reign of James Blanchard, now chairman. Blanchard was the chief architect of the multi-billion corporation that began with one bank in downtown Columbus.

Anthony is a respecter of tradition, but also perfectly open to change if it makes sense. When Blanchard handed off to Anthony, his advice was simple: "You be you."

A strategy defying definition

Anthony--a stickler for detail who demands to know how theoretical strategy will be turned into reality--is actively exploring strategic change for Synovus as part of the transition. While Synovus has maintained a record that many bankers envy--2004 ROE was 17.63% and ROA was 1.88%--Anthony has no intention of becoming complacent.

Some may think that the Synovus pattern of acquiring community banks over the years is a turn-the-crank proposition. Far from it. The company has actually always been evolving, and is in the midst of an evolution that will carry the best of the present forward into a somewhat different future.

The Synovus strategy has sometimes been oversimplified, and it does defy easy categorization. The company combines elements of big bank product and services development with local banking and branching. But to solely consider Synovus a central product factory with 39 distributorships doesn't capture the whole picture. It's not a banking McDonalds.

Local banks in the Synovus system enjoy considerable autonomy. While overall strategy and direction come from the top, specific strategies and tactics come from inter-affiliate teams and task forces that work over challenges to find the best solutions. There is much two-way communication.

Autonomy as a corporate mantra

Local banks are expected to meet the standards for service quality, credit quality, credit and business diversification, and overall performance that headquarters establishes.

Yet there is a delicate balance here. A point of Synovus pride is that local CEOs enjoy considerable autonomy.

"All of our CEOs are pretty entrepreneurial," says Fred L. Green, III, vice-chairman in charge of banking and mortgage banking. "They don't wake up everyday wanting to be told what to do." Indeed, this is expected.

"I think, 'Bank first, Synovus second'," says J. Hunter Atkins, president and CEO of The Bank of Nashville, Tenn., $717.6 million-assets. Atkins says a good 80% of his business direction is locally driven. …

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