Sep. 18--Regional banking firm Synovus Financial Corp. has set a $4 per share price on the common stock it plans to sell by Tuesday to raise much-needed capital.

The Columbus-based company, which employs 1,534 people locally and 6,401 companywide, also has increased its expected take from the sale to $600 million.

Investors appeared cool to the news Thursday, with Synovus shares tumbling from the start and dropping 53 cents, nearly 12 percent, to $3.90 in extremely heavy trading on the New York Stock Exchange. That followed a 15 percent gain on Tuesday.

Synovus officials declined to comment Thursday on the pending stock sale.

The company earlier this week said it would bring in $350 million from the stock offering and $150 million more from balance-sheet moves and swapping stock shares for debt notes purchased by investors and scheduled to mature in 2013.

The sale of 150 million shares of common stock is expected to close by Tuesday, the company said in a release Wednesday night, although underwriters will have a 30-day option to buy 22.5 million more shares.

Institutional investors, such as those who operate mutual funds, are expected to be the primary purchasers.

In a filing Tuesday with the U.S. Securities and Exchange Commission this week, the company said as of Aug. 31 it had just over 330 million shares of common stock outstanding and has issued nearly 968,000 shares of preferred stock.

Last December, Synovus received about $968 million from selling preferred stock to the U.S. government as part of the Troubled Asset Relief Program. That's an effort aimed at shoring up the nation's banking sector in the middle of a severe financial and credit crisis fueled by a subprime mortgage meltdown.

Synovus, which oversees assets of $34 billion at its 30 banks in the Southeast, has shed hundreds of millions of dollars in non-performing loans in recent quarters and expects to continue to do so into 2010. The Atlanta and west coast Florida markets have hurt the firm the most.

This week's attempt to raise money through a stock offering appears to have its supporters and skeptics.

Fitch Ratings on Wednesday reaffirmed its outlook of "negative" on Synovus and its 30 banks, which includes Columbus Bank & Trust.

Fitch called the stock sale "prudent and necessary" considering the funding challenges facing Synovus and the expectation that non-performing assets will remain at high levels in the near term.

"As such, Fitch believes prolonged credit stress will continue to weigh heavily on the company's financial condition, which may erode the full benefit of the potential capital augmentations," the ratings and research group said in a release.

On the other hand, Michael Rose, a research analyst with Raymond James, maintains his "outperform" rating on Synovus stock, giving shares a $5 target price. He improved his earnings estimate for the company this year to a loss of $2.95 per share, rather than the $3.20 previously forecast. For 2010, Rose foresees a loss of 42 cents per share, improved from 60 cents.

"Indeed, the road map provided by management is transparent and lays out the case for a return to profitability by year-end 2010," Rose wrote in a report issued Tuesday. "The company has made notable strides in dealing with its rather severe credit issues, which we believe will pay dividends as the credit cycle plays out. Moreover, should non-performing asset inflows reaccelerate and credit losses exceed our forecasts, the new capital provides ample support to shoulder losses."

FIG Partners, an Atlanta-based research and brokerage firm, has set a target for Synovus shares to trade in the $6 range.

-----

To see more of the Columbus Ledger-Enquirer, or to subscribe to the newspaper, go to http://www.ledger-enquirer.com.

Copyright (c) 2009, Columbus Ledger-Enquirer, Ga.

Distributed by McClatchy-Tribune Information Services.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

NYSE:SNV,

A service of YellowBrix, Inc.