Synovus Financial Corp. SNV is benefiting from its focus on strategic initiatives, better credit quality and higher interest income. However, escalating expenses due to investments in technology, high debt level and lack of diversification in the loan portfolio are SNV’s major near-term headwinds.The Zacks Consensus Estimate for Synovus’s current-year earnings has been revised marginally upward over the past 60 days.The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Shares of Synovus have appreciated 7.1% in the past six months compared with the industry’s growth of 7.3%.Image Source: Zacks Investment ResearchSynovus recorded continued organic growth in the last few years. Its loans witnessed a CAGR of 12.5% over the last five years through 2020. Additionally, net interest income (NII) saw a CAGR of 13.9% during the same time, partially boosted by the acquisitions completed during that period. Both loans and NII improved in the nine months ended Sep 30, 2021. Thus, with commercial loan pipelines returning to pre-COVID levels and the U.S economy on the mend, the lending scenario is expected to improve in the upcoming period. We expect Synovus to remain well-poised to enhance its NII in the quarters ahead, driven by this tailwind.Synovus is making significant progress on its "Synovus Forward" initiative, which was announced in March 2020. As of the third-quarter 2021 end, SNV had achieved a pre-tax run rate benefit of approximately $100 million on the back of organizational efficiency, cost savings, branch consolidations and balance-sheet management initiatives. This comprises approximately $50 million expense reduction and $50 million worth revenue benefits.Synovus is also rationalizing its branch network and expects to close four branches in the fourth quarter, bringing the total consolidations to 20 locations since the beginning of 2020. Through these initiatives, SNV expects to achieve pre-tax run rate benefits of an additional $75 million, comprising $20-$30 million of expense savings and $45-$55 million of revenue benefits by 2022 end.Recuperating from the unfavorable impact of the COVID-led financial crisis, Synovus is extensively scaling down the percentage of loans in the residential construction and development, and land acquisition portfolios. Also, credit quality trends are expected to continue to show broad-based improvement, with allowance release in the first nine months of 2021 on the back of a more favorable economic outlook.However, rising costs despite certain cost-saving efforts can be a near-term concern. Though costs declined in the first nine months of 2021, Synovus’ expenses saw a CAGR of 11.8% over the last five years (2016-2020). As the bank intends to invest in technology refinements and talent to improve user experience, such costs might weigh on its bottom-line expansion.The loan portfolio of Synovus comprises majorly the commercial and industrial as well as commercial real-estate loans (nearly 77% as of Sep 30, 2021). Such high exposure can be risky for SNV, especially if the same and the overall real estate sector weaken.Long-term debt of $1.2 billion as of Sep 30, 2021, increased slightly sequentially and has remained at high levels. Also, cash and due from banks of $483 million witnessed a downtrend from the prior-year level. Hence, given such a high-debt burden and limited liquidity, Synovus might not meet debt obligations in the near term if the economic situation worsens.Stocks to ConsiderSome better-ranked stocks in the banking space are Shore Bancshares, Inc. SHBI, Southern First Bancshares, Inc. SFST and Bank OZK OZK. At present, SHBI and SFST sport a Zacks Rank #1 (Strong Buy) each, while OZK carries a Zacks Rank #2 (Buy).Over the past year, the stock of Shore Bancshares has gained 42.1%, whereas shares of Southern First and Bank OZK have jumped 77.7% and 48.2%, respectively.Over the past 60 days, the Zacks Consensus Estimate for Shore Bancshares’ current-year earnings has been revised 26.7% upward, while that of Southern First has moved 9.1% north. Current-year earnings estimates for Bank OZK have moved marginally upward over the past two months. Zacks Top 10 Stocks for 2022 In addition to the investment ideas discussed above, would you like to know about our 10 top picks for the entirety of 2022? From inception in 2012 through November, the Zacks Top 10 Stocks gained an impressive +962.5% versus the S&P 500’s +329.4%. Now our Director of Research is combing through 4,000 companies covered by the Zacks Rank to handpick the best 10 tickers to buy and hold. Don’t miss your chance to get in on these stocks when they’re released on January 3.Be First To New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Synovus Financial Corp. (SNV): Free Stock Analysis Report Shore Bancshares Inc (SHBI): Free Stock Analysis Report Southern First Bancshares, Inc. (SFST): Free Stock Analysis Report Bank OZK (OZK): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research