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SYNOVUS FINANCIAL CORP - Quarter Report: 2022 June (Form 10-Q)


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________
 
FORM 10-Q
 
______________________________
Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended June 30, 2022
Commission file number 1-10312
 
______________________________
syn-20220630_g1.jpg
SYNOVUS FINANCIAL CORP.
(Exact name of registrant as specified in its charter)
______________________________
 
Georgia58-1134883
(State or other jurisdiction of incorporation or organization)
   (I.R.S. Employer Identification No.)
1111 Bay Avenue, Suite 500

Columbus,
Georgia
31901
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (706) 641-6500
 
______________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $1.00 Par ValueSNVNew York Stock Exchange
Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series DSNV - PrDNew York Stock Exchange
Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series ESNV - PrENew York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   No 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes   No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ¨ 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes     No 
As of July 31, 2022, 145,369,831 shares of the registrant's common stock, $1.00 par value, were outstanding.





Table of Contents
Page
Financial Information
Index of Defined Terms
Item 1.Financial Statements (Unaudited)
Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021
Consolidated Statements of Income for the Three and Six Months Ended June 30, 2022 and 2021
Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2022 and 2021
Consolidated Statements of Changes in Shareholders' Equity for the Three and Six Months Ended June 30, 2022 and 2021
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2022 and 2021
Notes to Unaudited Interim Consolidated Financial Statements
Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3.
Item 4.Controls and Procedures
Other Information
Item 1.Legal Proceedings
Item 1A.Risk Factors
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
Item 3.Defaults Upon Senior Securities
Item 4.Mine Safety Disclosures
Item 5.Other Information
Item 6.Exhibits
Signatures






SYNOVUS FINANCIAL CORP.
INDEX OF DEFINED TERMS

Throughout this discussion, references to "Synovus", "we", "our", "us", "the Company" and similar terms refer to the consolidated entity consisting of Synovus Financial Corp. and its subsidiaries unless the context indicates that we refer only to the Parent Company, Synovus Financial Corp. When we refer to the "Bank" or "Synovus Bank" we mean our only bank subsidiary, Synovus Bank.
ACL – Allowance for credit losses (ALL, reserve on unfunded loan commitments, and reserve, if required, on debt securities)
ALCO – Synovus' Asset Liability Management Committee
ALL – Allowance for loan losses
AOCI – Accumulated other comprehensive income (loss)
ARRC – Alternative Reference Rates Committee
ASC – Accounting Standards Codification
ASU – Accounting Standards Update
ATM – Automatic teller machine
Basel III – The third Basel Accord developed by the Basel Committee on Banking Supervision to strengthen existing regulatory capital requirements
BOLI – Bank-owned life insurance
bp(s) – Basis point(s)
BSBY Bloomberg Short-Term Bank Yield Index
C&I – Commercial and industrial
CARES Act – The Coronavirus Aid, Relief, and Economic Security Act
CDI – Core Deposit Intangible
CECL Current expected credit losses
CET1 – Common Equity Tier 1 Capital defined by Basel III capital rules
CMO – Collateralized mortgage obligation
Code – Internal Revenue Code, as amended
Company – Synovus Financial Corp. and its wholly-owned subsidiaries, except where the context requires otherwise
Covered Litigation – Certain Visa litigation for which Visa is indemnified by Visa USA members
COVID-19 – Coronavirus disease 2019
CRA – Community Reinvestment Act
CRE – Commercial real estate
ESG – Environmental, social, and governance
EVE – Economic value of equity
Exchange Act – Securities Exchange Act of 1934, as amended
FASB – Financial Accounting Standards Board
FCA – Financial Conduct Authority, a regulatory authority of the United Kingdom
FDIC – Federal Deposit Insurance Corporation
Federal Reserve Bank – One of the 12 banks that are the operating arms of the U.S. central bank. They implement the policies of the Federal Reserve Board, supervise bank holding companies and certain banking institutions, and also conduct economic research
i


Federal Reserve Board – The 7-member Board of Governors that oversees the Federal Reserve System, establishes monetary policy (interest rates, credit, etc.), and monitors the economic health of the country. Its members are appointed by the President subject to Senate confirmation, and serve 14-year terms
Federal Reserve System or Federal Reserve – The Federal Reserve Board plus 12 Federal Reserve Banks, with each one serving member banks in its own district. The Federal Reserve, has broad regulatory powers over the money supply and the credit structure of the economy
FFIEC – Federal Financial Institutions Examination Council
FFIEC Retail Credit Classification Policy – FFIEC Uniform Retail Credit Classification and Account Management Policy
FHLB – Federal Home Loan Bank
FICO – Fair Isaac Corporation
FTP – Funds transfer pricing
GA DBF – Georgia Department of Banking and Finance
GAAP – Generally Accepted Accounting Principles in the United States of America
GGL – Government guaranteed loans
Global One – Entaire Global Companies, Inc., the parent company of Global One Financial, Inc., as acquired by Synovus in 2016
Interagency Supervisory Guidance – Interagency Supervisory Guidance on Allowance for Loan and Lease Losses Estimation Practices for Loans and Lines of Credit Secured by Junior Liens on 1-4 Family Residential Properties
LIBOR – London Interbank Offered Rate
LIHTC – Low Income Housing Tax Credit
LTV – Loan-to-collateral value ratio
MBS – Mortgage-backed security
MPS – Merchant processing servicer(s)
NAICS – North American Industry Classification System
nm – not meaningful
NPA – Non-performing assets
NPL – Non-performing loans
NSF – Non-sufficient funds
OCI – Other comprehensive income (loss)
ORE – Other real estate
Parent Company – Synovus Financial Corp.
PPP Paycheck Protection Program established as part of the CARES Act and launched on April 3, 2020 by the SBA and Treasury
SAB Staff Accounting Bulletin
SBA – Small Business Administration
SBIC – Small Business Investment Company
SEC – U.S. Securities and Exchange Commission
Securities Act – Securities Act of 1933, as amended
Series D Preferred Stock – Synovus' Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series D, $25 liquidation preference
Series E Preferred Stock – Synovus' Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series E, $25 liquidation preference
ii


SOFR – Secured Overnight Financing Rate
Synovus – Synovus Financial Corp.
Synovus Bank – A Georgia state-chartered bank and wholly-owned subsidiary of Synovus through which Synovus conducts its banking operations
Synovus' 2021 Form 10-K – Synovus' Annual Report on Form 10-K for the year ended December 31, 2021
Synovus Forward – Synovus' revenue growth and expense efficiency initiatives announced in January of 2020
Synovus Securities – Synovus Securities, Inc., a wholly-owned subsidiary of Synovus
Synovus Trust – Synovus Trust Company, N.A., a wholly-owned subsidiary of Synovus Bank
TDR – Troubled debt restructuring (as defined in ASC 310-40)
TE – Taxable equivalent
UPB – Unpaid principal balance
Visa – The Visa U.S.A., Inc. card association or its affiliates, collectively
Visa Class A shares – Class A shares of common stock issued by Visa are publicly traded shares which are not subject to restrictions on sale
Visa Class B shares – Class B shares of common stock issued by Visa which are subject to restrictions with respect to sale until all of the Covered Litigation has been settled. Class B shares will be convertible into Visa Class A shares using a then-current conversion ratio upon the lifting of restrictions with respect to sale of Visa Class B shares
Visa derivative – A derivative contract with the purchaser of Visa Class B shares which provides for settlements between the purchaser and Synovus based upon a change in the ratio for conversion of Visa Class B shares into Visa Class A shares

iii



PART I. FINANCIAL INFORMATION
ITEM 1. - FINANCIAL STATEMENTS
SYNOVUS FINANCIAL CORP.
CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands, except share and per share data)June 30, 2022December 31, 2021
ASSETS
Cash and due from banks$583,323 $432,925 
Interest-bearing funds with Federal Reserve Bank1,023,030 2,479,006 
Interest earning deposits with banks29,139 25,535 
Federal funds sold and securities purchased under resale agreements29,568 72,387 
     Total cash, cash equivalents, and restricted cash1,665,060 3,009,853 
Investment securities available for sale, at fair value9,889,850 10,918,329 
Loans held for sale (includes $76,864 and $108,198 measured at fair value, respectively)
917,679 750,642 
Loans, net of deferred fees and costs41,204,780 39,311,958 
Allowance for loan losses(407,837)(427,597)
Loans, net40,796,943 38,884,361 
Cash surrender value of bank-owned life insurance1,078,703 1,068,616 
Premises, equipment, and software, net383,060 407,241 
Goodwill452,390 452,390 
Other intangible assets, net31,360 35,596 
Other assets2,167,700 1,790,198 
Total assets$57,382,745 $57,317,226 
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits:
Non-interest-bearing deposits$16,876,710 $16,392,653 
Interest-bearing deposits32,157,990 33,034,623 
Total deposits49,034,700 49,427,276 
Federal funds purchased and securities sold under repurchase agreements
345,242 264,133 
Long-term debt1,804,104 1,204,229 
Other liabilities1,614,261 1,124,788 
Total liabilities52,798,307 52,020,426 
Shareholders' Equity
Preferred stock - no par value; authorized 100,000,000 shares; issued 22,000,000
537,145 537,145 
Common stock - $1.00 par value; authorized 342,857,143 shares; issued 170,012,527 and 169,383,758; outstanding 145,357,669 and 145,010,086
170,013 169,384 
Additional paid-in capital3,908,118 3,894,109 
Treasury stock, at cost; 24,654,858 and 24,373,672 shares
(944,484)(931,497)
Accumulated other comprehensive income (loss), net(1,026,705)(82,321)
Retained earnings1,940,351 1,709,980 
Total shareholders' equity4,584,438 5,296,800 
Total liabilities and shareholders' equity$57,382,745 $57,317,226 
See accompanying notes to unaudited interim consolidated financial statements.

1



SYNOVUS FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
Three Months Ended June 30,Six Months Ended June 30,
(in thousands, except per share data)2022202120222021
Interest income:
Loans, including fees
$391,307 $371,288 $752,399 $743,779 
Investment securities available for sale
50,312 33,298 97,562 62,755 
Loans held for sale
8,600 6,609 14,781 13,071 
Federal Reserve Bank balances
1,593 709 2,382 1,383 
Other earning assets
1,960 839 2,710 1,572 
Total interest income
453,772 412,743 869,834 822,560 
Interest expense:
Deposits
18,501 19,371 32,160 44,389 
Long-term debt
8,769 11,478 18,913 22,386 
Other borrowings
1,114 34 1,126 69 
Total interest expense
28,384 30,883 52,199 66,844 
Net interest income
425,388 381,860 817,635 755,716 
Provision for (reversal of) credit losses
12,688 (24,598)24,088 (43,173)
Net interest income after provision for (reversal of) credit losses
412,700 406,458 793,547 798,889 
Non-interest revenue:
Service charges on deposit accounts
23,491 21,414 46,030 41,448 
Fiduciary and asset management fees
20,100 18,805 40,377 36,759 
Card fees
16,089 13,304 30,846 25,300 
Brokerage revenue
15,243 13,926 29,898 26,899 
Mortgage banking income
3,904 13,842 9,857 36,157 
Capital markets income
7,393 3,335 12,864 10,840 
Income from bank-owned life insurance
9,165 7,188 15,722 16,031 
Investment securities gains (losses), net
 —  (1,990)
Other non-interest revenue
1,881 15,273 17,006 26,599 
Total non-interest revenue
97,266 107,087 202,600 218,043 
Non-interest expense:
Salaries and other personnel expense
161,063 160,567 325,747 322,044 
Net occupancy, equipment, and software expense
43,199 41,825 86,076 82,959 
Third-party processing and other services
21,952 24,419 42,947 44,451 
Professional fees
10,865 7,947 19,338 17,031 
FDIC insurance and other regulatory fees
6,894 5,547 13,144 11,127 
Restructuring charges(1,850)415 (8,274)946 
Other operating expense
39,928 29,811 75,523 59,107 
Total non-interest expense
282,051 270,531 554,501 537,665 
Income before income taxes
227,915 243,014 441,646 479,267 
Income tax expense
49,863 56,814 92,558 105,975 
Net income
178,052 186,200 349,088 373,292 
Less: Preferred stock dividends
8,291 8,291 16,581 16,581 
Net income available to common shareholders
$169,761 $177,909 $332,507 $356,711 
Net income per common share, basic
$1.17 $1.20 $2.29 $2.41 
Net income per common share, diluted
1.16 1.19 2.27 2.38 
Weighted average common shares outstanding, basic
145,328 148,113 145,301 148,289 
Weighted average common shares outstanding, diluted
146,315 149,747 146,489 149,764 
See accompanying notes to unaudited interim consolidated financial statements.

2



SYNOVUS FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(unaudited)
Three Months Ended June 30,
20222021
(in thousands)
Before-tax AmountIncome TaxNet of Tax AmountBefore-tax AmountIncome TaxNet of Tax Amount
Net income
$227,915 $(49,863)$178,052 $243,014 $(56,814)$186,200 
Unrealized gains (losses) on investment securities available for sale:
Net unrealized gains (losses) arising during the period
(429,408)102,328 (327,080)46,342 (11,725)34,617 
Reclassification adjustment for realized (gains) losses included in net income
   — — — 
Net change
(429,408)102,328 (327,080)46,342 (11,725)34,617 
Unrealized gains (losses) on derivative instruments designated as cash flow hedges:
Net unrealized gains (losses) arising during the period
(48,332)11,517 (36,815)(1,923)486 (1,437)
Reclassification adjustment for realized (gains) losses included in net income(978)233 (745)(3,657)925 (2,732)
Net change(49,310)11,750 (37,560)(5,580)1,411 (4,169)
Total other comprehensive income (loss)
$(478,718)$114,078 $(364,640)$40,762 $(10,314)$30,448 
Comprehensive income (loss)
$(186,588)$216,648 
Six Months Ended June 30,
20222021
(in thousands)
Before-tax AmountIncome TaxNet of Tax AmountBefore-tax AmountIncome TaxNet of Tax Amount
Net income
$441,646 $(92,558)$349,088 $479,267 $(105,975)$373,292 
Unrealized gains (losses) on investment securities available for sale:
Net unrealized gains (losses) arising during the period
(1,050,890)249,351 (801,539)(118,899)31,056 (87,843)
Reclassification adjustment for realized (gains) losses included in net income
   1,990 (515)1,475 
Net change
(1,050,890)249,351 (801,539)(116,909)30,541 (86,368)
Unrealized gains (losses) on derivative instruments designated as cash flow hedges:
Net unrealized gains (losses) arising during the period
(184,310)43,878 (140,432)(30,980)8,360 (22,620)
Reclassification adjustment for realized (gains) losses included in net income(3,167)754 (2,413)(5,256)1,335 (3,921)
Net change(187,477)44,632 (142,845)(36,236)9,695 (26,541)
Total other comprehensive income (loss)
$(1,238,367)$293,983 $(944,384)$(153,145)$40,236 $(112,909)
Comprehensive income (loss)$(595,296)$260,383 
See accompanying notes to unaudited interim consolidated financial statements.

3



SYNOVUS FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(unaudited)
(in thousands, except per share data)Preferred StockCommon
Stock
Additional
Paid-in
Capital
Treasury
Stock
Accumulated
Other
Comprehensive
Income (Loss)
Retained EarningsTotal
Balance at March 31, 2022$537,145 $169,912 $3,899,269 $(941,168)$(662,065)$1,821,542 $4,824,635 
Net income     178,052 178,052 
Other comprehensive income (loss), net of income taxes    (364,640) (364,640)
Cash dividends declared on common stock - $0.34 per share
     (49,416)(49,416)
Cash dividends declared on preferred stock(1)
     (8,291)(8,291)
Repurchases of common stock including costs to repurchase   (3,316)  (3,316)
Restricted share unit vesting and taxes paid related to net share settlement 48 1,086   (1,536)(402)
Stock options exercised, net 53 919    972 
Share-based compensation expense  6,844    6,844 
Balance at June 30, 2022$537,145 $170,013 $3,908,118 $(944,484)$(1,026,705)$1,940,351 $4,584,438 
Balance at March 31, 2021$537,145 $168,978 $3,864,281 $(731,690)$15,278 $1,307,725 $5,161,717 
Net income— — — — — 186,200 186,200 
Other comprehensive income (loss), net of income taxes— — — — 30,448 — 30,448 
Cash dividends declared on common stock - $0.33 per share
— — — — — (48,651)(48,651)
Cash dividends declared on preferred stock(1)
— — — — — (8,291)(8,291)
Repurchases of common stock including costs to repurchase— — — (92,507)— — (92,507)
Restricted share unit vesting and taxes paid related to net share settlement— 35 (429)— — — (394)
Stock options exercised, net— 95 2,232 — — — 2,327 
Share-based compensation expense— — 6,865 — — — 6,865 
Balance at June 30, 2021$537,145 $169,108 $3,872,949 $(824,197)$45,726 $1,436,983 $5,237,714 

4



(in thousands, except per share data)Preferred StockCommon
Stock
Additional
Paid-in
Capital
Treasury
Stock
Accumulated
Other
Comprehensive
Income (Loss)
Retained EarningsTotal
Balance at December 31, 2021$537,145 $169,384 $3,894,109 $(931,497)$(82,321)$1,709,980 $5,296,800 
Net income     349,088 349,088 
Other comprehensive income (loss), net of income taxes    (944,384) (944,384)
Cash dividends declared on common stock - $0.68 per share
     (98,858)(98,858)
Cash dividends declared on preferred stock(2)
     (16,581)(16,581)
Repurchases of common stock including costs to repurchase   (12,987)  (12,987)
Restricted share unit vesting and taxes paid related to net share settlement 350 (3,196)  (3,278)(6,124)
Stock options exercised, net 279 2,460    2,739 
Share-based compensation expense  14,745    14,745 
Balance at June 30, 2022$537,145 $170,013 $3,908,118 $(944,484)$(1,026,705)$1,940,351 $4,584,438 
Balance at December 31, 2020$537,145 $168,133 $3,851,208 $(731,806)$158,635 $1,178,019 $5,161,334 
Net income— — — — — 373,292 373,292 
Other comprehensive income (loss), net of income taxes— — — — (112,909)— (112,909)
Cash dividends declared on common stock - $0.66 per share
— — — — — (97,744)(97,744)
Cash dividends declared on preferred stock(2)
— — — — — (16,581)(16,581)
Repurchases of common stock including costs to repurchase— — — (92,507)— — (92,507)
Restricted share unit vesting and taxes paid related to net share settlement— 306 (6,885)— — — (6,579)
Stock options exercised, net— 669 14,210 — — — 14,879 
Warrants exercised with net settlement and common stock reissued— — (113)116 — (3)— 
Share-based compensation expense— — 14,529 — — — 14,529 
Balance at June 30, 2021$537,145 $169,108 $3,872,949 $(824,197)$45,726 $1,436,983 $5,237,714 
(1)    For the three months ended June 30, 2022 and 2021, dividends per share were $0.39 and $0.37 for Series D and Series E Preferred Stock, respectively.
(2)    For the six months ended June 30, 2022 and 2021, dividends per share were $0.79 and $0.73 for Series D and Series E Preferred Stock, respectively.
See accompanying notes to unaudited interim consolidated financial statements.

5



SYNOVUS FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Six Months Ended June 30,
(in thousands)20222021
Operating Activities
Net income
$349,088 $373,292 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Provision for (reversal of) credit losses
24,088 (43,173)
Depreciation, amortization, and accretion, net
36,991 66,572 
Deferred income tax expense (benefit)
(3,227)25,111 
Originations of loans held for sale
(2,095,264)(2,042,076)
Proceeds from sales and payments on loans held for sale
1,926,118 2,078,089 
Gain on sales of loans held for sale, net
(7,277)(27,502)
(Increase) decrease in other assets
(107,698)(7,354)
Increase (decrease) in other liabilities
72,987 (1,554)
Investment securities (gains) losses, net
 1,990 
Share-based compensation expense
14,511 13,131 
 Other677 — 
Net cash provided by (used in) operating activities
210,994 436,526 
Investing Activities
Proceeds from maturities and principal collections of investment securities available for sale
1,226,967 1,616,397 
Proceeds from sales of investment securities available for sale
 223,977 
Purchases of investment securities available for sale
(1,269,468)(3,476,929)
Proceeds from sales of loans
47,130 86,650 
Purchases of loans(361,567)(1,041,602)
Net (increase) decrease in loans
(1,594,366)928,084 
Net (purchases) redemptions of Federal Home Loan Bank stock
(45,700)(1,200)
Net (purchases) redemptions of Federal Reserve Bank stock
(536)(954)
Net proceeds from settlement (purchases) of bank-owned life insurance policies
3,106 6,264 
Net increase in premises, equipment and software
(11,260)(12,419)
Other33,984 4,141 
Net cash provided by (used in) investing activities
(1,971,710)(1,667,591)
Financing Activities
Net increase (decrease) in deposits
(389,758)480,391 
Net increase (decrease) in federal funds purchased and securities sold under repurchase agreements
81,109 (33,135)
Net increase (decrease) in other short-term borrowings254,818 (7,717)
Repayments and redemption of long-term debt
(400,000)— 
Proceeds from issuance of long-term debt1,000,000 — 
Dividends paid to common shareholders
(97,293)(97,927)
Dividends paid to preferred shareholders
(16,581)(16,581)
Repurchases of common stock
(12,987)(92,507)
Issuances, net of taxes paid, under equity compensation plans
(3,385)8,300 
Net cash provided by (used in) financing activities
415,923 240,824 
Increase (decrease) in cash and cash equivalents including restricted cash
(1,344,793)(990,241)
Cash, cash equivalents, and restricted cash, at beginning of period
3,009,853 4,252,917 
Cash, cash equivalents, and restricted cash at end of period
$1,665,060 $3,262,676 
Supplemental Disclosures:
Income taxes paid $88,090 $115,282 
Interest paid52,330 78,772 
Non-cash Activities
Securities purchased during the period but settled after period-end 48,795 
Premises and equipment transferred to other assets held for sale13,372 3,864 
Loans foreclosed and transferred to other real estate 801 
Loans transferred (from) to other loans held for sale at fair value(9,386)— 
See accompanying notes to unaudited interim consolidated financial statements.

6



Notes to Unaudited Interim Consolidated Financial Statements
Note 1 - Basis of Presentation and Accounting Policies
General
The accompanying unaudited interim consolidated financial statements of Synovus Financial Corp. include the accounts of the Parent Company and its consolidated subsidiaries. Synovus Financial Corp. is a financial services company based in Columbus, Georgia. Through its wholly-owned subsidiary, Synovus Bank, a Georgia state-chartered bank that is a member of the Federal Reserve System, the Company provides commercial and consumer banking in addition to a full suite of specialized products and services including private banking, treasury management, wealth management, mortgage services, premium finance, asset-based lending, structured lending, and international banking. Synovus also provides financial planning, and investment advisory services through its wholly-owned subsidiaries, Synovus Trust and Synovus Securities, as well as its GLOBALT and Creative Financial Group divisions. Synovus Bank is positioned in markets in the Southeast, with 261 branches and 367 ATMs in Alabama, Florida, Georgia, South Carolina, and Tennessee.
The accompanying unaudited interim consolidated financial statements have been prepared in accordance with the instructions to the SEC Form 10-Q and Article 10 of Regulation S-X; therefore, they do not include all information and footnotes necessary for a fair presentation of financial position, results of operations, comprehensive income (loss), and cash flows in conformity with GAAP. All adjustments consisting of normally recurring accruals that, in the opinion of management, are necessary for a fair presentation of the consolidated financial position and results of operations for the periods covered by this Report have been included. The accompanying unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes appearing in Synovus' 2021 Form 10-K.
Reclassifications
Prior periods' consolidated financial statements are reclassified whenever necessary to conform to the current periods' presentation.
Use of Estimates in the Preparation of Financial Statements
In preparing the consolidated financial statements in accordance with GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the respective consolidated balance sheets and the reported amounts of revenue and expense for the periods presented. Actual results could differ significantly from those estimates.
Material estimates that are particularly susceptible to change relate to the determination of the ACL, estimates of fair value, income taxes, and contingent liabilities.
Recent Accounting Pronouncements
The following table provides a brief description of accounting standards adopted or issued in 2022 and the estimated effect on the Company’s financial statements.

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StandardDescriptionRequired date of adoptionEffect on Company's financial statements or other significant matters
Standards Adopted (or partially adopted )
ASU 2021-01, Reference Rate Reform (Topic 848)
In January 2021, the FASB issued ASU 2021-01 which provides optional expedients and exceptions in Topic 848 for derivative instruments and hedge accounting modifications resulting from the discounting transition of reference rate reform.
This ASU is effective upon issuance and can be applied through December 31, 2022.The Company is in the process of evaluating and applying, as applicable, the optional expedients and exceptions in accounting for eligible contract modifications, eligible existing hedging relationships and new hedging relationships. The application of this guidance has not had and is not expected to have a material impact to the consolidated financial statements.
SAB 121, Accounting for Obligations to Safeguard Crypto-Assets an Entity Holds for its Platform UsersIn March 2022, the SEC released SAB 121 to add interpretive guidance for entities to consider when they have obligations to safeguard crypto-assets held for clients. The new guidance requires reporting entities who allow clients to transact in crypto-assets and act as a custodian to record a liability with a corresponding asset regardless of whether they control the crypto-asset. The crypto-asset will need to be marked at fair value for each reporting period. The new guidance requires disclosures in the footnotes to address the amount of crypto-assets reported, and the safeguarding and recordkeeping of the assets.June 30, 2022, with retrospective application back to the beginning of the fiscal year.The adoption of this standard on June 30, 2022, had no impact to the consolidated financial statements.
StandardDescriptionRequired date of adoptionEffect on Company's financial statements or other significant matters
Standards Issued But Not Yet Adopted
ASU 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosure
In March 2022, the FASB issued ASU 2022-02 to eliminate TDR accounting guidance while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. The ASU also provides guidance for vintage table disclosures and gross write-offs. The ASU requires an entity to disclose current-period gross write-offs by year of origination for financing receivables within the scope of Subtopic 326-20.
January 1, 2023. Early adoption is permitted as of an interim period with retrospective application back to the beginning of the fiscal year.The Company is currently evaluating the potential financial statement impact from the implementation of this standard.


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Note 2 - Investment Securities Available for Sale
The amortized cost, gross unrealized gains and losses, and estimated fair values of investment securities available for sale at June 30, 2022 and December 31, 2021 are summarized below.
June 30, 2022
(in thousands)Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value
U.S. Treasury securities$414,744 $ $(28,160)$386,584 
U.S. Government agency securities52,866 2 (1,973)50,895 
Mortgage-backed securities issued by U.S. Government agencies 713,490 6 (81,525)631,971 
Mortgage-backed securities issued by U.S. Government sponsored enterprises 8,144,078 557 (901,994)7,242,641 
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises 826,579  (73,493)753,086 
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises642,436 121 (37,438)605,119 
Asset-backed securities201,366   201,366 
Corporate debt securities and other debt securities18,358  (170)18,188 
Total investment securities available for sale$11,013,917 $686 $(1,124,753)$9,889,850 
December 31, 2021
(in thousands)Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value
U.S. Treasury securities$120,465 $— $(2,627)$117,838 
U.S. Government agency securities53,214 1,374 (387)54,201 
Mortgage-backed securities issued by U.S. Government agencies 790,329 768 (11,464)779,633 
Mortgage-backed securities issued by U.S. Government sponsored enterprises 8,063,890 50,491 (102,080)8,012,301 
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises 951,691 4,658 (16,726)939,623 
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises479,420 8,644 (6,320)481,744 
Asset-backed securities514,188 — — 514,188 
Corporate debt securities and other debt securities18,309 492 — 18,801 
Total investment securities available for sale$10,991,506 $66,427 $(139,604)$10,918,329 
At June 30, 2022 and December 31, 2021, investment securities with a carrying value of $3.86 billion and $4.03 billion, respectively, were pledged to secure certain deposits and other liabilities, as required by law or contractual agreements.            


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Gross unrealized losses on investment securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at June 30, 2022 and December 31, 2021 are presented below.
June 30, 2022
Less than 12 Months12 Months or LongerTotal
(in thousands)Fair ValueGross Unrealized LossesFair ValueGross Unrealized LossesFair ValueGross Unrealized Losses
U.S. Treasury securities$322,983 $(20,632)$42,319 $(7,528)$365,302 $(28,160)
U.S. Government agency securities50,180 (1,973)  50,180 (1,973)
Mortgage-backed securities issued by U.S. Government agencies 305,938 (36,743)324,431 (44,782)630,369 (81,525)
Mortgage-backed securities issued by U.S. Government sponsored enterprises 5,273,030 (605,258)1,893,054 (296,736)7,166,084 (901,994)
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises 348,932 (26,567)404,154 (46,926)753,086 (73,493)
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises418,331 (14,730)138,644 (22,708)556,975 (37,438)
Corporate debt securities and other debt securities18,188 (170)  18,188 (170)
Total$6,737,582 $(706,073)$2,802,602 $(418,680)$9,540,184 $(1,124,753)
December 31, 2021
Less than 12 Months12 Months or LongerTotal
(in thousands)Fair ValueGross Unrealized LossesFair ValueGross Unrealized LossesFair ValueGross Unrealized Losses
U.S. Treasury securities$49,648 $(379)$47,590 $(2,248)$97,238 $(2,627)
U.S. Government agency securities21,760 (387)— — 21,760 (387)
Mortgage-backed securities issued by U.S. Government agencies 461,078 (5,858)244,264 (5,606)705,342 (11,464)
Mortgage-backed securities issued by U.S. Government sponsored enterprises 5,729,476 (82,671)643,758 (19,409)6,373,234 (102,080)
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises 187,431 (3,981)504,238 (12,745)691,669 (16,726)
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises146,672 (2,951)83,533 (3,369)230,205 (6,320)
Total$6,596,065 $(96,227)$1,523,383 $(43,377)$8,119,448 $(139,604)
As of June 30, 2022, Synovus had 304 investment securities in a loss position for less than twelve months and 79 investment securities in a loss position for twelve months or longer. Synovus does not intend to sell investment securities in an unrealized loss position prior to the recovery of the unrealized loss, which may not be until maturity, and has the ability and intent to hold those securities for that period of time. Additionally, Synovus is not currently aware of any circumstances which will require it to sell any of the securities that are in an unrealized loss position prior to the respective securities' recovery of all such unrealized losses. As such, no write-downs to the amortized cost basis of the portfolio were recorded at June 30, 2022.

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At June 30, 2022, no ACL was established for investment securities. Substantially all of the unrealized losses on the securities portfolio were the result of changes in market interest rates compared to the date the securities were acquired rather than the credit quality of the issuers or underlying loans. U.S. Treasury and agency securities and agency mortgage-backed securities are issued, guaranteed or otherwise supported by the United States government, an agency of the United States government, or a government sponsored enterprise.
The amortized cost and fair value by contractual maturity of investment securities available for sale at June 30, 2022 are shown below. The expected life of MBSs or CMOs may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. For purposes of the maturity table, MBSs and CMOs, which are not due at a single maturity date, have been classified based on the final contractual maturity date.
Distribution of Maturities at June 30, 2022
(in thousands)Within One
 Year
1 to 5
Years
5 to 10
 Years
More Than
 10 Years
Total
Amortized Cost
U.S. Treasury securities$21,282 $343,616 $49,846 $ $414,744 
U.S. Government agency securities456 22,420 29,990  52,866 
Mortgage-backed securities issued by U.S. Government agencies  727 5 712,758 713,490 
Mortgage-backed securities issued by U.S. Government sponsored enterprises   127,499 8,016,579 8,144,078 
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises  114  826,465 826,579 
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises 338,951 234,679 68,806 642,436 
Asset-backed securities201,366    201,366 
Corporate debt securities and other debt securities9,501  8,857  18,358 
Total amortized cost$232,605 $705,828 $450,876 $9,624,608 $11,013,917 
Fair Value
U.S. Treasury securities$21,282 $322,983 $42,319 $ $386,584 
U.S. Government agency securities457 20,581 29,857  50,895 
Mortgage-backed securities issued by U.S. Government agencies  727 5 631,239 631,971 
Mortgage-backed securities issued by U.S. Government sponsored enterprises   124,738 7,117,903 7,242,641 
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises  114  752,972 753,086 
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises 328,630 209,726 66,763 605,119 
Asset-backed securities201,366    201,366 
Corporate debt securities and other debt securities9,446  8,742  18,188 
Total fair value$232,551 $673,035 $415,387 $8,568,877 $9,889,850 
Gross gains and gross losses on sales of securities available for sale for the three and six months ended June 30, 2022 and 2021 are presented below. The specific identification method is used to reclassify gains and losses out of other comprehensive income (loss) at the time of sale.
Three Months Ended June 30,Six Months Ended June 30,
(in thousands)2022202120222021
Gross realized gains on sales$ $— $ $— 
Gross realized losses on sales —  (1,990)
Investment securities gains (losses), net$ $— $ $(1,990)


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Note 3 - Loans and Allowance for Loan Losses
Aging and Non-Accrual Analysis
The following tables provide a summary of current, accruing past due, and non-accrual loans by portfolio class as of June 30, 2022 and December 31, 2021.
June 30, 2022
(in thousands)CurrentAccruing 30-89 Days Past DueAccruing 90 Days or Greater Past DueTotal Accruing Past DueNon-accrual with an ALLNon-accrual without an ALLTotal
Commercial, financial and agricultural$12,954,600 $14,363 $525 $14,888 $12,834 $35,767 $13,018,089 
Owner-occupied7,744,300 4,538  4,538 6,955 4,443 7,760,236 
Total commercial and industrial20,698,900 18,901 525 19,426 19,789 40,210 20,778,325 
Investment properties10,400,407 271  271 5,025 2,345 10,408,048 
1-4 family properties636,701 2,036  2,036 1,821 1,297 641,855 
Land and development451,590    1,924  453,514 
Total commercial real estate11,488,698 2,307  2,307 8,770 3,642 11,503,417 
Consumer mortgages5,092,428 9,238  9,238 22,857  5,124,523 
Home equity1,567,527 3,591  3,591 7,588 512 1,579,218 
Credit cards191,641 1,413 1,236 2,649   194,290 
Other consumer loans2,000,402 18,459 490 18,949 5,656  2,025,007 
Total consumer8,851,998 32,701 1,726 34,427 36,101 512 8,923,038 
Loans, net of deferred fees and costs$41,039,596 $53,909 $2,251 $56,160 $64,660 $44,364 $41,204,780 
December 31, 2021
(in thousands)CurrentAccruing 30-89 Days Past DueAccruing 90 Days or Greater Past DueTotal Accruing Past DueNon-accrual with an ALLNon-accrual without an ALLTotal
Commercial, financial and agricultural$12,068,740 $13,378 $3,953 $17,331 $37,918 $23,869 $12,147,858 
Owner-occupied7,460,184 3,627 59 3,686 7,146 4,050 7,475,066 
Total commercial and industrial19,528,924 17,005 4,012 21,017 45,064 27,919 19,622,924 
Investment properties9,894,924 1,285 717 2,002 3,273 2,577 9,902,776 
1-4 family properties639,631 1,182 93 1,275 4,535 28 645,469 
Land and development463,949 845 154 999 1,918 — 466,866 
Total commercial real estate10,998,504 3,312 964 4,276 9,726 2,605 11,015,111 
Consumer mortgages5,033,537 6,257 126 6,383 29,078 — 5,068,998 
Home equity1,349,027 2,619 — 2,619 9,773 — 1,361,419 
Credit cards201,929 1,233 1,010 2,243 — — 204,172 
Other consumer loans2,011,430 20,369 658 21,027 6,877 — 2,039,334 
Total consumer8,595,923 30,478 1,794 32,272 45,728 — 8,673,923 
Loans, net of deferred fees and costs$39,123,351 $50,795 $6,770 $57,565 $100,518 $30,524 $39,311,958 
Interest income on non-accrual loans outstanding that would have been recorded if the loans had been current and performing in accordance with their original terms was $2.0 million and $2.7 million for the three months ended June 30, 2022 and 2021, respectively and $5.4 million and $6.2 million for the six months ended June 30, 2022 and 2021, respectively. Of the interest income recognized during the three months ended June 30, 2022 and 2021, cash-basis interest income was $410 thousand and $575 thousand, respectively. Cash-basis interest income was $964 thousand and $1.2 million for the six months ended June 30, 2022 and 2021 respectively.


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Pledged Loans
Loans with carrying values of $15.15 billion and $14.19 billion, respectively, were pledged as collateral for borrowings and capacity at June 30, 2022 and December 31, 2021, respectively, to the FHLB and Federal Reserve Bank.
Portfolio Segment Risk Factors
The risk characteristics and collateral information of each portfolio segment are as follows:
Commercial and Industrial Loans - The C&I loan portfolio is primarily comprised of general middle market and commercial banking clients across a diverse set of industries. In accordance with Synovus' lending policy, each loan undergoes a detailed underwriting process which incorporates uniform underwriting standards and oversight in proportion to the size and complexity of the lending relationship. These loans are secured by collateral such as business equipment, inventory, and real estate. Credit decisions on loans in the C&I portfolio are based on cash flow from the operations of the business as the primary source of repayment of the debt, with underlying real estate or other collateral being the secondary source of repayment. PPP loans, which are categorized as C&I loans, were $86.7 million at June 30, 2022 and are guaranteed by the SBA.
Commercial Real Estate Loans - CRE loans primarily consist of income-producing investment properties loans. Additionally, CRE loans include 1-4 family properties loans as well as land and development loans. Investment properties loans consist of construction and mortgage loans for income-producing properties and are primarily made to finance multi-family properties, hotels, office buildings, shopping centers, warehouses and other commercial development properties. 1-4 family properties loans include construction loans to homebuilders and commercial mortgage loans related to 1-4 family rental properties and are almost always secured by the underlying property being financed by such loans. These properties are primarily located in the markets served by Synovus. Land and development loans include commercial and residential development as well as land acquisition loans and are secured by land held for future development, typically in excess of one year. Properties securing these loans are substantially within markets served by Synovus, and loan terms generally include personal guarantees from the principals. Loans in this portfolio are underwritten based on the LTV of the collateral and the capacity of the guarantor(s).
Consumer Loans - The consumer loan portfolio consists of a wide variety of loan products offered through Synovus' banking network including first and second residential mortgages, home equity, and consumer credit card loans, as well as home improvement loans, student, personal, and auto loans from third-party lending ("other consumer loans"). Together, consumer mortgages and home equity comprise the majority of Synovus' consumer loans and are secured by first and second liens on residential real estate primarily located in the markets served by Synovus. The primary source of repayment for all consumer loans is generally the personal income of the borrower(s).
Credit Quality Indicators
The credit quality of the loan portfolio is reviewed and updated no less frequently than annually using the standard asset classification system utilized by the federal banking agencies. These classifications are divided into three groups: Not Criticized (Pass), Special Mention, and Classified or Adverse rating (Substandard, Doubtful, and Loss) and are defined as follows:
Pass - loans which are well protected by the current net worth and paying capacity of the obligor (or guarantors, if any) or by the fair value, less cost to acquire and sell in a timely manner, of any underlying collateral.
Special Mention - loans which have potential weaknesses that deserve management's close attention. These loans are not adversely classified and do not expose an institution to sufficient risk to warrant an adverse classification.
Substandard - loans which are inadequately protected by the current net worth and paying capacity of the obligor or by the collateral pledged, if any. Loans with this classification are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.
Doubtful - loans which have all the weaknesses inherent in loans categorized as Substandard with the added characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable on the basis of currently known facts, conditions, and values.
Loss - loans which are considered by management to be uncollectible and of such little value that their continuance on the institution's books as an asset, without establishment of a specific valuation allowance or charge-off, is not warranted. Synovus fully reserves for any loans rated as Loss.
In the following tables, consumer loans are generally assigned a risk grade similar to the classifications described above; however, upon reaching 90 days and 120 days past due, they are generally downgraded to Substandard and Loss, respectively, in accordance with the FFIEC Retail Credit Classification Policy. Additionally, in accordance with Interagency Supervisory Guidance, the risk grade classifications of consumer loans (consumer mortgages and home equity) secured by junior liens on 1-4 family residential properties also consider available information on the payment status of any associated senior liens with other financial institutions.

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The following tables summarize each loan portfolio class by risk grade and origination year as of June 30, 2022 and December 31, 2021 as required under CECL.
June 30, 2022
Term Loans Amortized Cost Basis by Origination YearRevolving Loans
(in thousands)20222021202020192018PriorAmortized Cost BasisConverted to Term LoansTotal
Commercial, financial and agricultural
Pass$539,814 $2,126,772 $1,183,170 $811,870 $569,801 $1,166,642 $6,202,131 $30,553 $12,630,753 
Special Mention3,136 4,280 9,337 9,435 17,596 3,333 86,555  133,672 
Substandard(1)
6,888 11,081 52,047 45,437 18,756 28,546 86,152 1,082 249,989 
Doubtful(2)
    3,520    3,520 
Loss(3)
      155  155 
Total commercial, financial and agricultural549,838 2,142,133 1,244,554 866,742 609,673 1,198,521 6,374,993 31,635 13,018,089 
Owner-occupied
Pass834,063 1,730,966 1,178,269 1,007,485 720,509 1,388,397 641,261  7,500,950 
Special Mention137 4,545 86,210 8,841 45,656 28,168   173,557 
Substandard(1)
2,400 12,555 2,969 5,738 39,048 22,766   85,476 
Loss(3)
 253       253 
Total owner-occupied836,600 1,748,319 1,267,448 1,022,064 805,213 1,439,331 641,261  7,760,236 
Total commercial and industrial1,386,438 3,890,452 2,512,002 1,888,806 1,414,886 2,637,852 7,016,254 31,635 20,778,325 
Investment properties
Pass1,352,056 2,953,629 1,554,185 1,444,006 901,677 1,749,178 314,751  10,269,482 
Special Mention 6,963  15,295 11,559 4,409 7,997  46,223 
Substandard(1)
358 486 631 3,695 52,785 13,118 21,270  92,343 
Total investment properties1,352,414 2,961,078 1,554,816 1,462,996 966,021 1,766,705 344,018  10,408,048 
1-4 family properties
Pass174,897 203,245 56,607 38,918 33,778 75,587 46,689  629,721 
Special Mention2,688 1,250 970 634  202   5,744 
Substandard(1)
699 1,785 5 435 1,521 1,900 45  6,390 
Total 1-4 family properties178,284 206,280 57,582 39,987 35,299 77,689 46,734  641,855 

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June 30, 2022
Term Loans Amortized Cost Basis by Origination YearRevolving Loans
(in thousands)20222021202020192018PriorAmortized Cost BasisConverted to Term LoansTotal
Land and development
Pass66,081 133,592 30,360 55,259 21,038 84,205 22,182  412,717 
Special Mention29 170 775  31,136 290   32,400 
Substandard(1)
813 2,884 225 643 477 3,355   8,397 
Total land and development66,923 136,646 31,360 55,902 52,651 87,850 22,182  453,514 
Total commercial real estate1,597,621 3,304,004 1,643,758 1,558,885 1,053,971 1,932,244 412,934  11,503,417 
Consumer mortgages
Pass498,240 1,249,155 1,432,760 496,716 187,795 1,205,352 492  5,070,510 
Substandard(1)
45 2,667 4,926 7,134 11,624 26,856   53,252 
Loss(3)
   4  757   761 
Total consumer mortgages498,285 1,251,822 1,437,686 503,854 199,419 1,232,965 492  5,124,523 
Home equity
Pass      1,204,042 363,356 1,567,398 
Substandard(1)
      6,967 4,289 11,256 
Loss(3)
      426 138 564 
Total home equity      1,211,435 367,783 1,579,218 
Credit cards
Pass      193,102  193,102 
Substandard(1)
      430  430 
Loss(4)
      758  758 
Total credit cards      194,290  194,290 
Other consumer loans
Pass155,843 667,787 557,705 86,030 43,321 182,373 323,060  2,016,119 
Substandard(1)
1,942 1,515 1,724 1,326 1,110 1,094 168  8,879 
Loss(4)
     9   9 
Total other consumer loans157,785 669,302 559,429 87,356 44,431 183,476 323,228  2,025,007 
Total consumer656,070 1,921,124 1,997,115 591,210 243,850 1,416,441 1,729,445 367,783 8,923,038 
Loans, net of deferred fees and costs$3,640,129 $9,115,580 $6,152,875 $4,038,901 $2,712,707 $5,986,537 $9,158,633 $399,418 $41,204,780 
(1)    The majority of loans within Substandard risk grade are accruing loans at June 30, 2022.
(2)    Loans within Doubtful risk grade are on non-accrual status and generally have an ALL equal to 50% of the loan amount.
(3)    Loans within Loss risk grade are on non-accrual status and have an ALL equal to the full loan amount.
(4)    Represent amounts that were 120 days past due. These credits are downgraded to the Loss category with an ALL equal to the full loan amount and are generally charged off upon reaching 181 days past due in accordance with the FFIEC Retail Credit Classification Policy.


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December 31, 2021
Term Loans Amortized Cost Basis by Origination YearRevolving Loans
(in thousands)20212020201920182017PriorAmortized Cost BasisConverted to Term LoansTotal
Commercial, financial and agricultural
Pass$2,396,717 $1,332,549 $922,396 $607,918 $433,045 $903,995 $5,151,981 $42,809 $11,791,410 
Special Mention2,731 15,166 17,571 10,433 2,242 2,489 71,996 — 122,628 
Substandard(1)
16,105 50,979 40,125 10,383 16,473 37,565 51,442 33 223,105 
Doubtful(2)
469 — 1,601 8,512 — — 48 — 10,630 
Loss(3)
— — — — — — 85 — 85 
Total commercial, financial and agricultural2,416,022 1,398,694 981,693 637,246 451,760 944,049 5,275,552 42,842 12,147,858 
Owner-occupied
Pass1,776,086 1,276,797 1,117,825 858,721 708,942 1,116,766 437,724 — 7,292,861 
Special Mention702 19,950 4,724 10,202 18,109 36,481 — — 90,168 
Substandard(1)
7,312 1,294 8,386 43,276 6,169 25,329 — — 91,766 
Loss(3)
271 — — — — — — — 271 
Total owner-occupied1,784,371 1,298,041 1,130,935 912,199 733,220 1,178,576 437,724 — 7,475,066 
Total commercial and industrial4,200,393 2,696,735 2,112,628 1,549,445 1,184,980 2,122,625 5,713,276 42,842 19,622,924 
Investment properties
Pass2,823,978 1,463,503 1,905,534 1,019,765 738,036 1,317,634 278,697 — 9,547,147 
Special Mention6,163 — 32,290 63,900 59,194 44,532 33,659 — 239,738 
Substandard(1)
1,465 326 8,550 57,127 3,564 23,505 21,354 — 115,891 
Total investment properties2,831,606 1,463,829 1,946,374 1,140,792 800,794 1,385,671 333,710 — 9,902,776 
1-4 family properties
Pass295,082 82,976 51,939 43,025 49,057 57,025 55,588 — 634,692 
Special Mention192 207 641 — — 239 — — 1,279 
Substandard(1)
1,999 — 566 4,222 489 2,177 45 — 9,498 
Total 1-4 family properties297,273 83,183 53,146 47,247 49,546 59,441 55,633 — 645,469 
Land and development
Pass141,614 42,201 77,868 34,058 37,167 44,989 44,730 — 422,627 
Special Mention— 800 1,900 31,458 — 1,179 — — 35,337 
Substandard(1)
824 1,149 46 3,021 807 3,055 — — 8,902 
Total land and development142,438 44,150 79,814 68,537 37,974 49,223 44,730 — 466,866 
Total commercial real estate3,271,317 1,591,162 2,079,334 1,256,576 888,314 1,494,335 434,073 — 11,015,111 

16



December 31, 2021
Term Loans Amortized Cost Basis by Origination YearRevolving Loans
(in thousands)20212020201920182017PriorAmortized Cost BasisConverted to Term LoansTotal
Consumer mortgages
Pass1,274,999 1,556,733 572,467 216,277 392,492 1,001,771 255 — 5,014,994 
Substandard(1)
1,031 3,680 5,943 12,387 5,717 25,025 — — 53,783 
Loss(3)
— — — — 216 — — 221 
Total consumer mortgages1,276,030 1,560,413 578,415 228,664 398,209 1,027,012 255 — 5,068,998 
Home equity
Pass— — — — — — 1,199,556 146,635 1,346,191 
Substandard(1)
— — — — — — 9,058 5,372 14,430 
Loss(3)
— — — — — — 658 140 798 
Total home equity— — — — — — 1,209,272 152,147 1,361,419 
Credit cards
Pass— — — — — — 203,161 — 203,161 
Substandard(1)
— — — — — — 348 — 348 
Loss(4)
— — — — — — 663 — 663 
Total credit cards— — — — — — 204,172 — 204,172 
Other consumer loans
Pass654,419 708,937 127,131 49,993 86,175 97,765 306,500 — 2,030,920 
Substandard(1)
668 1,550 2,064 1,308 1,892 750 162 — 8,394 
Loss(4)
— — — — — 20 — — 20 
Total other consumer loans655,087 710,487 129,195 51,301 88,067 98,535 306,662 — 2,039,334 
Total consumer1,931,117 2,270,900 707,610 279,965 486,276 1,125,547 1,720,361 152,147 8,673,923 
Loans, net of deferred fees and costs$9,402,827 $6,558,797 $4,899,572 $3,085,986 $2,559,570 $4,742,507 $7,867,710 $194,989 $39,311,958 
(1)    The majority of loans within Substandard risk grade are accruing loans at December 31, 2021.
(2)    Loans within Doubtful risk grade are on non-accrual status and generally have an ALL equal to 50% of the loan amount.
(3)    Loans within Loss risk grade are on non-accrual status and have an ALL equal to the full loan amount.
(4)    Represent amounts that were 120 days past due. These credits are downgraded to the Loss category with an ALL equal to the full loan amount and are generally charged off upon reaching 181 days past due in accordance with the FFIEC Retail Credit Classification Policy.
Collateral-Dependent Loans
We classify a loan as collateral-dependent when our borrower is experiencing financial difficulty, and we expect repayment to be provided substantially through the operation or sale of collateral. Our commercial loans have collateral that is comprised of real estate and business assets. Our consumer loans have collateral that is substantially comprised of residential real estate.
There were no significant changes in the extent to which collateral secures our collateral-dependent loans during the three and six months ended June 30, 2022.

17



Rollforward of Allowance for Loan Losses
The following tables detail the changes in the ALL by loan segment for the three and six months ended June 30, 2022 and 2021.
As Of and For the Three Months Ended June 30, 2022
(in thousands)Commercial & IndustrialCommercial Real EstateConsumerTotal
Allowance for loan losses:
Beginning balance at March 31, 2022$178,722 $94,696 $141,538 $414,956 
Charge-offs(15,512)(252)(7,934)(23,698)
Recoveries3,208 572 3,353 7,133 
Provision for (reversal of) loan losses(6,410)9,202 6,654 9,446 
Ending balance at June 30, 2022$160,008 $104,218 $143,611 $407,837 
As Of and For the Three Months Ended June 30, 2021
(in thousands)Commercial & IndustrialCommercial Real EstateConsumerTotal
Allowance for loan losses:
Beginning balance at March 31, 2021$254,777 $113,812 $194,625 $563,214 
Charge-offs(18,729)(3,839)(8,285)(30,853)
Recoveries1,495 377 2,435 4,307 
Provision for (reversal of) loan losses17,395 (18,237)(19,118)(19,960)
Ending balance at June 30, 2021$254,938 $92,113 $169,657 $516,708 
As Of and For the Six Months Ended June 30, 2022
(in thousands)Commercial & IndustrialCommercial Real EstateConsumerTotal
Allowance for loan losses:
Beginning balance at December 31, 2021$188,364 $97,760 $141,473 $427,597 
Charge-offs(29,275)(2,708)(16,862)(48,845)
Recoveries5,571 933 7,167 13,671 
Provision for (reversal of) loan losses(4,652)8,233 11,833 15,414 
Ending balance at June 30, 2022$160,008 $104,218 $143,611 $407,837 
As Of and For the Six Months Ended June 30, 2021
(in thousands)Commercial & IndustrialCommercial Real EstateConsumerTotal
Allowance for loan losses:
Beginning balance at December 31, 2020$229,555 $130,742 $245,439 $605,736 
Charge-offs(28,146)(14,158)(13,874)(56,178)
Recoveries4,267 1,403 3,758 9,428 
Provision for loan losses49,262 (25,874)(65,666)(42,278)
Ending balance at June 30, 2021$254,938 $92,113 $169,657 $516,708 
The ALL of $407.8 million and the reserve for unfunded commitments of $50.6 million, which is recorded in other liabilities, comprise the total ACL of $458.4 million at June 30, 2022. The ACL decreased $11.1 million compared to the December 31, 2021 ACL of $469.5 million, which consisted of the ALL of $427.6 million and the reserve for unfunded commitments of $41.9 million. The ACL to loans coverage ratio of 1.11% at June 30, 2022 was 8 bps lower compared to December 31, 2021.
The reduction in the ACL resulted primarily from decreased specific reserves, continued positive trends in our credit performance, and the modeled impact from improvement in the current labor market. This was partially offset by loan growth and an increase in the downside weighting of the multiple scenario model which reflects increased economic uncertainty from inflation concerns and geopolitical tensions which slowed the pace of the allowance decline for the first half of the year.

18



The ACL is estimated using a two-year reasonable and supportable forecast period. To the extent the lives of the loans in the portfolio extend beyond the period for which a reasonable and supportable forecast can be made, the Company reverts on a straight-line basis back to the historical rates over a one-year period. Synovus utilizes multiple economic forecast scenarios sourced from a reputable third-party provider that are probability-weighted internally. The scenarios include a consensus baseline forecast, an upside scenario reflecting an accelerated recovery, a downside scenario that reflects adverse economic conditions, and an additional adverse scenario that assumes consistent slow growth that is less optimistic than the baseline. At June 30, 2022, economic scenario weights incorporated a 60% downside bias to the baseline scenario compared to 43% at December 31, 2021. The consensus baseline outlook used in the June 30, 2022 estimate showed stable economic conditions with an unemployment rate of 3.6% over the forecast period, compared to the December 31, 2021 baseline forecast that sloped from above 4.0% to 3.5%. The downside scenario that assumes consistent slow growth is the highest internally-weighted economic scenario and includes an unemployment rate that steadily rises to 5.2% by the end of 2023.
The provision for credit losses of $12.7 million and $24.1 million for the three and six months ended June 30, 2022 included net charge-offs of $16.6 million and $35.2 million, respectively, and represented a slowing of allowance releases due primarily to the increased economic uncertainty noted above. $3.7 million and $7.5 million in reserves, respectively, were also added as a result of purchases of $180.2 million and $361.6 million of third-party lending loans for the three and six months ended June 30, 2022, respectively.


19



TDRs
Information about Synovus' TDRs is presented in the following tables. Synovus began entering into loan modifications with borrowers in response to the COVID-19 pandemic under the CARES Act, some of which had not been classified as TDRs. The CARES Act election period ended on January 1, 2022. See "Part II - Item 8. Financial Statements and Supplementary Data - Note 1 - Summary of Significant Accounting Policies" in Synovus' 2021 Form 10-K for information on Synovus' loan modifications due to COVID-19. The following tables represent, by concession type, the post-modification balance for loans modified or renewed during the three and six months ended June 30, 2022 and 2021 that were reported as accruing or non-accruing TDRs.
TDRs by Concession Type
Three Months Ended June 30, 2022
(in thousands, except contract data)Number of ContractsBelow Market Interest Rate
Other Concessions(1)
Total
Commercial, financial and agricultural23 $8,534 $266 $8,800 
Owner-occupied7 22,430  22,430 
Total commercial and industrial30 30,964 266 31,230 
Investment properties2 690  690 
1-4 family properties4 1,984  1,984 
Land and development1 437  437 
Total commercial real estate7 3,111  3,111 
Consumer mortgages3 159 162 321 
Home equity14 2,490 39 2,529 
Other consumer loans4  91 91 
Total consumer21 2,649 292 2,941 
Total TDRs58 $36,724 $558 $37,282 
(2)
Three Months Ended June 30, 2021
(in thousands, except contract data)Number of ContractsBelow Market Interest Rate
Other Concessions(1)
Total
Commercial, financial and agricultural18 $1,770 $1,174 $2,944 
Owner-occupied1,155 — 1,155 
Total commercial and industrial23 2,925 1,174 4,099 
Investment properties419 — 419 
1-4 family properties158 — 158 
Land and development366 — 366 
Total commercial real estate943 — 943 
Consumer mortgages331 — 331 
Home equity14 900 96 996 
Other consumer loans13 187 245 432 
Total consumer29 1,418 341 1,759 
Total TDRs56 $5,286 $1,515 $6,801 
(3)
(1)    Other concessions generally include term extensions, interest only payments for a period of time, or principal forgiveness, but there was no principal forgiveness for the three months ending June 30, 2022 and 2021.
(2)    No net charge-offs were recorded during the three months ended June 30, 2022.
(3)    No net charge-offs were recorded during the three months ended June 30, 2021.

20



Six Months Ended June 30, 2022
(in thousands, except contract data)Number of ContractsBelow Market Interest Rate
Other Concessions(1)
Total
Commercial, financial and agricultural56 $26,434 $807 $27,241 
Owner-occupied20 28,534 3,857 32,391 
Total commercial and industrial76 54,968 4,664 59,632 
Investment properties5 1,279 6,610 7,889 
1-4 family properties11 3,197  3,197 
Land and development4 3,168  3,168 
Total commercial real estate20 7,644 6,610 14,254 
Consumer mortgages10 1,176 266 1,442 
Home equity25 3,419 39 3,458 
Other consumer loans6  139 139 
Total consumer41 4,595 444 5,039 
Total TDRs137 $67,207 $11,718 $78,925 
(2)
Six Months Ended June 30, 2021
(in thousands, except contract data)Number of ContractsBelow Market Interest Rate
Other Concessions(1)
Total
Commercial, financial and agricultural58 $5,003 $3,737 $8,740 
Owner-occupied10 2,409 399 2,808 
Total commercial and industrial68 7,412 4,136 11,548 
Investment properties2,403 — 2,403 
1-4 family properties621 39 660 
Land and development366 43 409 
Total commercial real estate15 3,390 82 3,472 
Consumer mortgages331 — 331 
Home equity27 1,487 258 1,745 
Other consumer loans86 316 4,864 5,180 
Total consumer115 2,134 5,122 7,256 
Total TDRs198 $12,936 $9,340 $22,276 
(3)
(1)    Other concessions generally include term extensions, interest only payments for a period of time, or principal forgiveness, but there was no principal forgiveness for the six months ending June 30, 2022 and 2021.
(2)    No net charge-offs were recorded during the six months ended June 30, 2022.
(3)    No net charge-offs were recorded during the six months ended June 30, 2021.
    For both the three and six months ended June 30, 2022, there were 3 defaults with a recorded investment of $430 thousand on accruing TDRs restructured during the previous twelve months (defaults are defined as the earlier of the TDR being placed on non-accrual status or reaching 90 days past due with respect to principal and/or interest payments) compared to five defaults with a recorded investment of $172 thousand for both the three and six months ended June 30, 2021. As of June 30, 2022 and December 31, 2021, there were no commitments to lend a material amount of additional funds to any client whose loan was classified as a TDR.


21



Note 4 - Goodwill and Other Intangible Assets
During the first quarter of 2022, Synovus reorganized its internal management reporting structure to add an additional segment for Consumer Banking. The Consumer Banking segment was previously included in the Community Banking segment. In connection with the reorganization, management reallocated a portion of the Community Banking goodwill to Consumer Banking using a relative fair value approach. See "Part I - Item 1. Financial Statements and Supplementary Data - Note 10 - Segment Reporting" in this Report for additional information.
Goodwill allocated to each reporting unit at June 30, 2022 and December 31, 2021 is presented as follows:
(in thousands)Wholesale Banking Reporting UnitCommunity Banking Reporting UnitConsumer Banking Reporting Unit Mortgage Reporting UnitWealth Management Reporting UnitTotal Goodwill
Balance at December 31, 2021$171,636 $256,323 $ $ $24,431 $452,390 
Changes during the period from:
Reallocation (114,701)114,701    
Balance at June 30, 2022$171,636 $141,622 $114,701 $ $24,431 $452,390 
Goodwill is evaluated for impairment on an annual basis or whenever an event occurs or circumstances change to indicate that it is more likely than not that an impairment loss has been incurred (i.e., a triggering event). Synovus performs its annual evaluation of goodwill impairment during the fourth quarter of each year. Due to the Company’s reorganization of its reporting structure during the first quarter of 2022, as described above, the Company thereby performed a qualitative impairment assessment of the impacted reporting units and determined that performing a quantitative impairment test was not necessary.
The following table shows the gross carrying amount and accumulated amortization of other intangible assets as of June 30, 2022 and December 31, 2021, which primarily consist of core deposit intangible assets. The CDI is being amortized over its estimated useful life of approximately ten years utilizing an accelerated method. Aggregate other intangible assets amortization expense for the three and six months ended June 30, 2022, was $2.1 million and $4.2 million, respectively. Aggregate other intangible assets amortization expense for the three and six months ended June 30, 2021, was $2.4 million and $4.8 million, respectively.
(in thousands)Gross Carrying AmountAccumulated AmortizationNet Carrying Value
June 30, 2022
CDI$57,400 $(31,831)$25,569 
Other 12,500 (6,709)5,791 
Total other intangible assets$69,900 $(38,540)$31,360 
December 31, 2021
CDI$57,400 $(28,178)$29,222 
Other12,500 (6,126)6,374 
Total other intangible assets$69,900 $(34,304)$35,596 
Note 5 - Shareholders' Equity and Other Comprehensive Income (Loss)
Repurchases of Common Stock
Synovus announced on January 20, 2022 that its Board of Directors authorized share repurchases of up to $300 million in 2022. During the three months ended June 30, 2022, Synovus repurchased under this program a total of $3.3 million, or 78 thousand shares of its common stock, at an average price of $42.71 per share, and during the six months ended June 30, 2022, Synovus repurchased a total of $13.0 million, or 281 thousand shares of its common stock, at an average price of $46.17 per share.
Changes in Accumulated Other Comprehensive Income (Loss) by Component (Net of Income Taxes)
The following tables illustrate activity within the balances in accumulated other comprehensive income (loss) by component for the three and six months ended June 30, 2022 and 2021.

22



Changes in Accumulated Other Comprehensive Income (Loss) by Component (Net of Income Taxes)
(in thousands)
Net unrealized gains (losses) on investment securities available for sale(1)
Net unrealized gains (losses) on cash flow hedges(1)
Total
Balance at March 31, 2022$(542,439)$(119,626)$(662,065)
Other comprehensive income (loss) before reclassifications(327,080)(36,815)(363,895)
Amounts reclassified from AOCI (745)(745)
Net current period other comprehensive income (loss)(327,080)(37,560)(364,640)
Balance at June 30, 2022$(869,519)$(157,186)$(1,026,705)
Balance at March 31, 2021$(15,316)$30,594 $15,278 
Other comprehensive income (loss) before reclassifications34,617 (1,437)33,180 
Amounts reclassified from AOCI— (2,732)(2,732)
Net current period other comprehensive income (loss)34,617 (4,169)30,448 
Balance at June 30, 2021$19,301 $26,425 $45,726 
Balance, December 31, 2021$(67,980)$(14,341)$(82,321)
Other comprehensive income (loss) before reclassifications(801,539)(140,432)(941,971)
Amounts reclassified from AOCI (2,413)(2,413)
Net current period other comprehensive income (loss)(801,539)(142,845)(944,384)
Balance at June 30, 2022$(869,519)$(157,186)$(1,026,705)
Balance, December 31, 2020$105,669 $52,966 $158,635 
Other comprehensive income (loss) before reclassifications(87,843)(22,620)(110,463)
Amounts reclassified from AOCI1,475 (3,921)(2,446)
Net current period other comprehensive income (loss)(86,368)(26,541)(112,909)
Balance at June 30, 2021$19,301 $26,425 $45,726 
(1)    For all periods presented, the ending balance in net unrealized gains (losses) on investment securities available for sale and cash flow hedges includes unrealized losses of $13.3 million and $12.1 million, respectively, related to residual tax effects remaining in OCI due to previously established deferred tax asset valuation allowances in 2010 and 2011. In accordance with ASC 740-20-45-11(b), under the portfolio approach, these unrealized losses are realized at the time the entire portfolio is sold or disposed.

23



Note 6 - Fair Value Accounting
See "Part II - Item 8. Financial Statements and Supplementary Data - Note 1 - Summary of Significant Accounting Policies" of Synovus' 2021 Form 10-K for a description of valuation methodologies for assets and liabilities measured at fair value on a recurring and non-recurring basis.
The following table presents assets and liabilities measured at estimated fair value on a recurring basis.
June 30, 2022December 31, 2021
(in thousands)Level 1Level 2Level 3Total Estimated Fair ValueLevel 1Level 2Level 3Total Estimated Fair Value
Assets
Trading securities:
Mortgage-backed securities issued by U.S. Government agencies $ $2,795 $ $2,795 $— $197 $— $197 
Collateralized mortgage obligations issued by U.S. Government sponsored enterprises  412  412 — 671 — 671 
Other mortgage-backed securities 3,231  3,231 — — — — 
State and municipal securities 28  28 — 560 — 560 
Asset-backed securities 9,811  9,811 — 6,963 — 6,963 
Total trading securities$ $16,277 $ $16,277 $— $8,391 $— $8,391 
Investment securities available for sale:
U.S. Treasury securities$386,584 $ $ $386,584 $117,838 $— $— $117,838 
U.S. Government agency securities 50,895  50,895 — 54,201 — 54,201 
Mortgage-backed securities issued by U.S. Government agencies  631,971  631,971 — 779,633 — 779,633 
Mortgage-backed securities issued by U.S. Government sponsored enterprises  7,242,641  7,242,641 — 8,012,301 — 8,012,301 
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises  753,086  753,086 — 939,623 — 939,623 
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises 605,119  605,119 — 481,744 — 481,744 
Asset-backed securities 201,366  201,366 — 514,188 — 514,188 
Corporate debt securities and other debt securities 18,188  18,188 — 18,801 — 18,801 
Total investment securities available for sale$386,584 $9,503,266 $ $9,889,850 $117,838 $10,800,491 $— $10,918,329 
Mortgage loans held for sale$ $76,864 $ $76,864 $— $108,198 $— $108,198 
Other investments  11,083 11,083 — — 12,185 12,185 
Mutual funds and mutual funds held in rabbi trusts41,254   41,254 43,657 — — 43,657 
GGL/SBA loans servicing asset  3,155 3,155 — — 3,233 3,233 
Derivative assets 191,377  191,377 — 191,708 — 191,708 
Liabilities
Trading liability for short positions$ $5,018 $ $5,018 $— $200 $— $200 
Mutual funds held in rabbi trusts25,995   25,995 27,205 — — 27,205 
Derivative liabilities 339,722 4,993 344,715 — 95,067 3,535 98,602 




24



Fair Value Option
Synovus has elected the fair value option for mortgage loans held for sale primarily to ease the operational burden required to maintain hedge accounting for these loans. Synovus is still able to achieve effective economic hedges on mortgage loans held for sale without the time and expense needed to manage a hedge accounting program.
The following table summarizes the difference between the fair value and the UPB of mortgage loans held for sale and the changes in fair value of these loans. An immaterial portion of these changes in fair value was attributable to changes in instrument-specific credit risk.
Mortgage Loans Held for Sale
(in thousands)As of June 30, 2022As of December 31, 2021
Fair value$76,864 $108,198 
Unpaid principal balance75,996 105,785 
Fair value less aggregate unpaid principal balance$868 $2,413 
Changes in Fair Value Included in Net IncomeThree Months Ended June 30,Six Months Ended June 30, Location in Consolidated Statements of Income
(in thousands)2022202120222021
Mortgage loans held for sale$805 $4,094 $(1,545)$(538)Mortgage banking income
Activity for Level 3 Assets and Liabilities
See "Part II - Item 8. Financial Statements and Supplementary Data - Note 12 - Fair Value Accounting" of Synovus' 2021 Form 10-K for a description of the valuation techniques and significant inputs for Level 3 assets and liabilities that are measured at fair value on a recurring and non-recurring basis. During the three and six months ended June 30, 2022 and 2021, Synovus did not have any transfers in or out of Level 3 in the fair value hierarchy. The following tables provide rollforwards of Level 3 assets and liabilities measured at fair value on a recurring basis.
Three Months Ended June 30, 2022
(in thousands)Other InvestmentsGGL / SBA
Loans Servicing Asset
Visa Derivative
Beginning balance$12,093 $3,451 $(1,776)
Total gains (losses) realized/unrealized:
Included in earnings(7,037)(510)(3,500)
Additions6,027   
Settlements 214 283 
Ending balance$11,083 $3,155 $(4,993)
Total net gains (losses) for the period included in earnings attributable to the change in unrealized gains/(losses) relating to assets/liabilities still held at June 30, 2022$(7,037)$ $(3,500)
Three Months Ended June 30, 2021
(in thousands)Investment Securities Available for SaleOther InvestmentsGGL / SBA
Loans Servicing Asset
Earnout
Liability
Visa Derivative
Beginning balance$— $1,053 $3,305 $(5,677)$(1,768)
Total gains (losses) realized/unrealized:
Included in earnings— (27)(252)(750)— 
Additions— — 268 — — 
Settlements— — — — 295 
Ending balance$— $1,026 $3,321 $(6,427)$(1,473)
Total net gains (losses) for the period included in earnings attributable to the change in unrealized gains/(losses) relating to assets/liabilities still held at June 30, 2021$— $(27)$— $(750)$— 

25



Six Months Ended June 30, 2022
(in thousands)Other InvestmentsGGL / SBA
Loans Servicing Asset
Visa Derivative
Beginning balance$12,185 $3,233 $(3,535)
Total gains (losses) realized/unrealized:
Included in earnings(7,129)(772)(3,500)
Additions6,027   
Settlements 694 2,042 
Ending balance$11,083 $3,155 $(4,993)
Total net gains (losses) for the period included in earnings attributable to the change in unrealized gains/(losses) relating to assets/liabilities still held at June 30, 2022$(7,129)$ $(3,500)
Six Months Ended June 30, 2021
(in thousands)Investment Securities Available for SaleOther InvestmentsGGL / SBA
Loans Servicing Asset
Earnout
Liability
Visa Derivative
Beginning balance$2,021 $1,021 $3,258 $(5,677)$(2,048)
Total gains (losses) realized/unrealized:
Included in earnings— (430)(750)— 
Sales(2,021)— — — — 
Additions— — 493 — — 
Settlements— — — — 575 
Ending balance$— $1,026 $3,321 $(6,427)$(1,473)
Total net gains (losses) for the period included in earnings attributable to the change in unrealized gains/(losses) relating to assets/liabilities still held at June 30, 2021$— $$— $(750)$— 
The following table presents assets measured at fair value on a non-recurring basis as of the dates indicated for which there was a fair value adjustment.
June 30, 2022Fair Value Adjustments for the Location in Consolidated Statements of Income
(in thousands)Level 1Level 2Level 3
Three Months Ended June 30, 2022
Six Months Ended June 30, 2022
Loans(1)        
$ $ $24,360 $8,900 $9,239 Provision for credit losses
Other assets held for sale  2,725  492 Other operating expense
June 30, 2021Fair Value Adjustments for theLocation in Consolidated Statements of Income
Level 1Level 2Level 3
Three Months Ended June 30, 2021
Six Months Ended June 30, 2021
Loans(1)        
$— $— $29,201 $13,476 $13,504 Provision for credit losses
Other real estate— — 42 Other operating expense
Other assets held for sale— — 1,170 76 76 Other operating expense
(1)    Collateral-dependent loans that were written down to fair value of collateral.
ORE properties are included in other assets on the consolidated balance sheets. The carrying value of ORE at June 30, 2022 and December 31, 2021 was $11.4 million and $11.8 million, respectively.
Fair Value of Financial Instruments

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The following tables present the carrying and estimated fair values of financial instruments at June 30, 2022 and December 31, 2021. The fair values represent management’s best estimates based on a range of methodologies and assumptions. See "Part II - Item 8. Financial Statements and Supplementary Data - Note 1 - Summary of Significant Accounting Policies" to the consolidated financial statements of Synovus' 2021 Form 10-K for a description of how fair value measurements are determined.
June 30, 2022
(in thousands)Carrying ValueFair ValueLevel 1Level 2Level 3
Financial assets
Total cash, cash equivalents, and restricted cash$1,665,060 $1,665,060 $1,665,060 $ $ 
Trading securities16,277 16,277  16,277  
Investment securities available for sale9,889,850 9,889,850 386,584 9,503,266  
Loans held for sale917,679 917,347  76,864 840,483 
Other investments11,083 11,083   11,083 
Mutual funds and mutual funds held in rabbi trusts41,254 41,254 41,254   
Loans, net40,796,943 40,886,790   40,886,790 
GGL/SBA loans servicing asset3,155 3,155   3,155 
FRB and FHLB stock206,177 206,177  206,177 
Derivative assets191,377 191,377  191,377  
Financial liabilities
Non-interest-bearing deposits$16,876,710 $16,876,710 $— $16,876,710 $ 
Non-time interest-bearing deposits27,084,663 27,084,663  27,084,663  
Time deposits5,073,327 5,052,977  5,052,977  
Total deposits$49,034,700 $49,014,350 $ $49,014,350 $ 
Federal funds purchased and securities sold under repurchase agreements345,242 345,242 345,242   
Trading liability for short positions5,018 5,018  5,018  
Short-term borrowings250,000 250,000  250,000  
Long-term debt1,804,104 1,793,812  1,793,812  
Mutual funds held in rabbi trusts25,995 25,995 25,995 — — 
Derivative liabilities344,715 344,715  339,722 4,993 

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December 31, 2021
(in thousands)Carrying ValueFair ValueLevel 1Level 2Level 3
Financial assets
Total cash, cash equivalents, and restricted cash$3,009,853 $3,009,853 $3,009,853 $— $— 
Trading securities8,391 8,391 — 8,391 — 
Investment securities available for sale10,918,329 10,918,329 117,838 10,800,491 — 
Loans held for sale750,642 749,980 — 108,198 641,782 
Other investments12,185 12,185 — — 12,185 
Mutual funds and mutual funds held in rabbi trusts43,657 43,657 43,657 — — 
Loans, net38,884,361 39,118,275 — — 39,118,275 
GGL/SBA loans servicing asset3,233 3,233 — — 3,233 
FRB and FHLB stock159,941 159,941 — 159,941 — 
Derivative assets191,708 191,708 — 191,708 — 
Financial liabilities
Non-interest-bearing deposits$16,392,653 $16,392,653 $— $16,392,653 $— 
Non-time interest-bearing deposits28,917,148 28,917,148 — 28,917,148 — 
Time deposits4,117,475 4,125,673 — 4,125,673 — 
Total deposits$49,427,276 $49,435,474 $— $49,435,474 $— 
Federal funds purchased and securities sold under repurchase agreements264,133 264,133 264,133 — — 
Trading liability for short positions200 200 — 200 — 
Long-term debt1,204,229 1,243,147 — 1,243,147 — 
Mutual funds held in rabbi trusts27,205 27,205 27,205 — — 
Derivative liabilities98,602 98,602 — 95,067 3,535 
Note 7 - Derivative Instruments and Hedging Activities
Synovus utilizes derivative instruments to manage its exposure to various types of interest rate risk, exposures related to liquidity and credit risk, and to facilitate client transactions. The primary types of derivative instruments utilized by Synovus consist of interest rate swaps, interest rate lock commitments made to prospective mortgage loan clients, commitments to sell fixed-rate mortgage loans, and foreign currency exchange forwards. Interest rate lock commitments represent derivative instruments since it is intended that such loans will be sold. Synovus also provides foreign currency exchange services, primarily forward contracts, with counterparties to allow commercial clients to mitigate exchange rate risk. Synovus covers its risk by entering into an offsetting foreign currency exchange forward contract. Synovus is party to master netting arrangements with its dealer counterparties; however, Synovus does not offset assets and liabilities under these arrangements for financial statement presentation purposes. See "Part II - Item 8. Financial Statements and Supplementary Data - Note 1 - Summary of Significant Accounting Policies" to the consolidated financial statements of Synovus' 2021 Form 10-K for additional information regarding accounting policies for derivatives.
Hedging Derivatives
Cash flow hedging relationships mitigate exposure to the variability of future cash flows or other forecasted transactions. Synovus has entered into interest rate swap contracts to manage overall cash flow changes related to interest rate risk exposure on index-based variable rate commercial loans. The contracts effectively modify Synovus' exposure to interest rate risk by utilizing receive fixed/pay index-based variable rate interest rate swaps. During the three and six months ended June 30, 2022, notional amounts of $250.0 million and $1.65 billion, respectively, in either spot starting or forward starting cash flow hedges were added.
For cash flow hedges, the effective portion of the gain or loss on the derivative instrument is reported initially as a component of accumulated other comprehensive income (loss), net of the tax impact, and subsequently reclassified into earnings when the hedged transaction affects earnings with the impacts recorded in the same income statement line item used to present the earnings effect of the hedged item. When a cash flow hedge relationship is discontinued but the hedged cash flows, or forecasted transactions, are still expected to occur, gains or losses that were accumulated in OCI are amortized into earnings over the same periods which the hedged transactions would have affected earnings. If, however, it is probable the forecasted

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transactions will no longer occur, the remaining accumulated amounts in OCI for the impacted cash flow hedges are immediately recognized in earnings.
Synovus recorded no unrealized gains during the three and six months ended June 30, 2022 and $757 thousand, or $565 thousand, after tax, in OCI during the first quarter of 2021 related to terminated cash flow hedges, which are being recognized into earnings in conjunction with the effective terms of the original swaps through the second quarter of 2026. Synovus recognized pre-tax income of $1.0 million and $3.2 million during the three and six months ended June 30, 2022 and $3.7 million and $5.3 million for the three and six months ended June 30, 2021 related to the amortization of terminated cash flow hedges.
As of June 30, 2022, Synovus expects to reclassify into earnings approximately $84 million in pre-tax loss due to the receipt or payment of interest payments on all cash flow hedges within the next twelve months. Included in this amount is approximately $2 million in pre-tax income related to the amortization of terminated cash flow hedges. As of June 30, 2022, the maximum length of time over which Synovus is hedging its exposure to the variability in future cash flows is through the third quarter of 2026.
Fair value hedging relationships mitigate exposure to the change in fair value of an asset or liability. Synovus has entered into receive-fixed, pay-variable interest rate swap contracts to hedge the change in the fair value due to fluctuations in market interest rates for outstanding fixed-rate long-term debt and interest-bearing deposits. The changes in fair value of the fair value hedges are recorded through earnings with an offset against changes in the fair value of the hedged item within interest expense in the consolidated statements of income. All components of each derivative instrument’s gain/(loss) are included in the assessment of hedge effectiveness. During the second quarter of 2022, notional amounts of $819.4 million in fair value hedges were added.
For derivative instruments that are not designated as hedging instruments, changes in the fair value of the derivatives are recognized in earnings immediately.
Counterparty Credit Risk and Collateral
Entering into derivative contracts potentially exposes Synovus to the risk of counterparties’ failure to fulfill their legal obligations, including, but not limited to, potential amounts due or payable under each derivative contract. Notional principal amounts are often used to express the volume of these transactions, but the amounts potentially subject to credit risk are much smaller. Synovus assesses the credit risk of its dealer counterparties by regularly monitoring publicly available credit rating information, evaluating other market indicators, and periodically reviewing detailed financials. Dealer collateral requirements are determined via risk-based policies and procedures and in accordance with existing agreements. Synovus seeks to minimize dealer credit risk by dealing with highly rated counterparties and by obtaining collateral for exposures above certain predetermined limits. Management closely monitors credit conditions within the client swap portfolio, which management deems to be of higher risk than dealer counterparties. Collateral is secured at origination and credit related fair value adjustments are recorded against the asset value of the derivative as deemed necessary based upon an analysis, which includes consideration of the current asset value of the swap, client risk rating, and client standing with regards to its swap contractual obligations and other related matters. Such asset values fluctuate based upon changes in interest rates regardless of changes in notional amounts and changes in client specific risk.
Collateral Requirements
Certain derivative transactions have collateral requirements, both at the inception of the trade and as the value of each derivative position changes. As of June 30, 2022 and December 31, 2021, collateral totaling $31.6 million and $64.5 million, respectively, was pledged to the derivative counterparties to comply with collateral requirements.
For derivatives cleared through central clearing houses, the variation margin payments made are legally characterized as settlements of the derivatives. As a result, these variation margin payments are netted against the fair value of the respective derivative contracts in the consolidated balance sheets and related disclosures. At June 30, 2022 and December 31, 2021, Synovus had a variation margin of $37.0 million and $94.6 million respectively, each reducing the derivative liability.

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The following table reflects the estimated fair value of derivative instruments included in other assets and other liabilities on the consolidated balance sheets along with their respective notional amounts on a gross basis.
June 30, 2022December 31, 2021
Estimated Fair ValueEstimated Fair Value
(in thousands)Notional AmountDerivative Assets Derivative Liabilities Notional AmountDerivative AssetsDerivative Liabilities
Derivatives in cash flow hedging relationships:
Interest rate contracts$5,250,000 $248 $182,949 $3,600,000 $22,004 $20,395 
Total cash flow hedges$248 $182,949 $22,004 $20,395 
Derivatives in fair value hedging relationships:
Interest rate contracts$819,389 $298 $4,571 $— $— $— 
Total fair value hedges$298 $4,571 $— $— 
Total derivatives designated as hedging instruments$546 $187,520 $22,004 $20,395 
Derivatives not designated
  as hedging instruments:
Interest rate contracts(1)
$9,250,136 $188,994 $152,201 $9,653,600 $167,560 $74,514 
Mortgage derivatives - interest rate lock commitments108,135 1,181  99,006 2,105 — 
Mortgage derivatives - forward commitments to sell fixed-rate mortgage loans126,000 233  105,500 — 122 
Risk participation agreements448,186  1 374,214 — 36 
Foreign exchange contracts22,082 423  22,387 39 — 
Visa derivative  4,993 —  3,535 
Total derivatives not designated as hedging instruments    $190,831 $157,195 $169,704 $78,207 
(1)    Includes interest rate contracts for client swaps and offsetting positions, net of variation margin payments.

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The following table presents the effect of hedging derivative instruments on the consolidated statements of income and the total amounts for the respective line item affected for the three and six months ended June 30, 2022 and 2021.
Three Months Ended June 30,Six Months Ended June 30,
(in thousands)2022202120222021
Total interest income/(expense) amounts presented in the consolidated statements of income:
Interest income on loans, including fees$2,986 $7,605 $11,642 $15,947 
Interest expense on deposits1,447 — 1,447 — 
Interest expense on long-term debt584 — 584 — 
 
Gain/(loss) on cash flow hedging relationships:
Interest rate contracts:
Realized gains (losses) reclassified from AOCI, pre-tax, to interest income on loans978 3,657 3,167 5,256 
Pre-tax income recognized on cash flow hedges$978 $3,657 $3,167 $5,256 
Gain/(loss) on fair value hedging relationships:
Interest rate contracts related to interest-bearing deposits:
Recognized on derivatives(2,818)— (2,818)— 
Recognized on hedged items2,818 — 2,818 — 
Pre-tax income recognized on interest-bearing deposits fair value hedges$ $ $ $ 
Interest rate contracts related to long-term debt:
Recognized on derivatives(1,455)— (1,455)— 
Recognized on hedged items1,455 — 1,455 — 
Pre-tax income recognized on long-term debt fair value hedges$ $ $ $ 
Total pre-tax income recognized on fair value hedges$ $ $ $ 
The following table presents the carrying amount and associated cumulative basis adjustment related to the application of hedge accounting that is included in the carrying amount of the hedged liabilities in fair value hedging relationships.
June 30, 2022December 31, 2021
Hedged Items Currently DesignatedHedged Items Currently Designated
(in thousands)Carrying Amount of Assets/(Liabilities)Hedge Accounting Basis AdjustmentCarrying Amount of Assets/(Liabilities)Hedge Accounting Basis Adjustment
Interest-bearing deposits$(619,390)$2,818 $ $ 
Long-term debt(197,760)1,455   

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The pre-tax effect of changes in fair value from derivative instruments not designated as hedging instruments on the consolidated statements of income for the three and six months ended June 30, 2022 and 2021 is presented below.
Gain (Loss) Recognized in Consolidated Statements of Income
Three Months Ended June 30,Six Months Ended June 30,
(in thousands)
Location in Consolidated Statements of Income
2022202120222021
Derivatives not designated
  as hedging instruments:
Interest rate contracts(1)    
Capital markets income$736 $(637)$1,409 $310 
Mortgage derivatives - interest rate lock commitmentsMortgage banking income394 (53)(924)(1,772)
Mortgage derivatives - forward commitments to sell fixed-rate mortgage loansMortgage banking income(3,210)(4,974)355 1,268 
Risk participation agreementsCapital markets income10 (19)35 182 
Foreign exchange contractsCapital markets income320 — 385 — 
Total derivatives not designated as hedging instruments
$(1,750)$(5,683)$1,260 $(12)
(1)    Gain (loss) represents net fair value adjustments (including credit related adjustments) for client swaps and offsetting positions.
Note 8 - Net Income Per Common Share
The following table displays a reconciliation of the information used in calculating basic and diluted net income per common share for the three and six months ended June 30, 2022 and 2021. Diluted net income per common share incorporates the potential impact of contingently issuable shares, including awards which require future service as a condition of delivery of the underlying common stock.
Three Months Ended June 30,Six Months Ended June 30,
(in thousands, except per share data)2022202120222021
Basic Net Income Per Common Share:
Net income available to common shareholders$169,761 $177,909 $332,507 $356,711 
Weighted average common shares outstanding145,328 148,113 145,301 148,289 
Net income per common share, basic$1.17 $1.20 $2.29 $2.41 
Diluted Net Income Per Common Share:
Net income available to common shareholders$169,761 $177,909 $332,507 $356,711 
Weighted average common shares outstanding145,328 148,113 145,301 148,289 
Effect of dilutive outstanding equity-based awards and earnout payments 987 1,634 1,188 1,475 
Weighted average diluted common shares146,315 149,747 146,489 149,764 
Net income per common share, diluted$1.16 $1.19 $2.27 $2.38 
For the three months ended June 30, 2022, there were 21 thousand potentially dilutive shares, and for the three months ended June 30, 2021, there were no potentially dilutive shares related to stock options to purchase shares of common stock that were outstanding. For the six months ended June 30, 2022 and 2021, there were 11 thousand and 21 thousand, respectively, potentially dilutive shares related to stock options to purchase shares of common stock that were outstanding. These potentially dilutive shares were not included in the computation of diluted net income per common share because the effect would be anti-dilutive.
Note 9 - Commitments and Contingencies
In the normal course of business, Synovus enters into commitments to extend credit such as loan commitments and letters of credit to meet the financing needs of its clients. Synovus uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. Commitments to extend credit are agreements to lend to a client as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration

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dates or other termination clauses and may require payment of a fee. Synovus also has commitments to fund certain tax credits, CRA partnerships, and other investments.
The contractual amount of these financial instruments represents Synovus' maximum credit risk should the counterparty draw upon the commitment, and should the counterparty subsequently fail to perform according to the terms of the contract. Since many of the commitments are expected to expire without being drawn upon, total commitment amounts do not necessarily represent future cash requirements. Additionally, certain commitments (primarily consumer) can generally be canceled by providing notice to the borrower.
The ACL associated with unfunded commitments and letters of credit is recorded within other liabilities on the consolidated balance sheets. At June 30, 2022, the ACL for unfunded commitments was $50.6 million, compared to a reserve of $41.9 million at December 31, 2021. Additionally, an immaterial amount of unearned fees relating to letters of credit are recorded within other liabilities on the consolidated balance sheets.
Synovus invests in certain LIHTC partnerships which are engaged in the development and operation of affordable multi-family housing pursuant to Section 42 of the Code. Additionally, Synovus invests in certain solar energy tax credit partnerships pursuant to Section 48 of the Code and certain new market tax credit partnerships pursuant to section 45D of the Code. Synovus typically acts as a limited partner in these investments and does not exert control over the operating or financial policies of the partnerships and as such, is not considered the primary beneficiary of the partnership. For certain of its LIHTC investments, Synovus provides financing during the construction and development of the properties and is at risk for the funded amount of its equity investment plus the outstanding amount of any construction loans in excess of the fair value of the collateral for the loan, but has no obligation to fund the operations or working capital of the partnerships and is not exposed to losses beyond Synovus’ investment. Synovus receives tax credits related to these investments which are subject to recapture by taxing authorities based on compliance provisions required to be met at the project level.
Synovus also invests in CRA partnerships, including SBIC programs, and other investments. The SBIC is a program initiated by the SBA in 1958 to assist in the funding of small business loans.
(in thousands)June 30, 2022December 31, 2021
Letters of credit(1)
$202,904 $183,463 
Commitments to fund commercial and industrial loans9,794,706 9,595,793 
Commitments to fund commercial real estate, construction, and land development loans3,829,403 3,593,171 
Commitments under home equity lines of credit1,951,166 1,805,869 
Unused credit card lines475,843 473,582 
Other loan commitments680,366 604,353 
Total letters of credit and unfunded lending commitments$16,934,388 $16,256,231 
Tax credits, CRA partnerships, and other investments:
Carrying amount included in other assets$471,264 $438,322 
Amount of future funding commitments255,031 250,733 
Permanent and short-term construction loans and letter of credit commitments(2)
164,957 204,391 
Funded portion of permanent and short-term loans and letters of credit(3)
159,721 104,315 
(1)    Represent the contractual amount net of risk participations purchased of $26.1 million and $26.1 million at June 30, 2022 and December 31, 2021, respectively.
(2)    Represent the contractual amount net of risk participations of $3.7 million and $6.0 million at June 30, 2022 and December 31, 2021.
(3)    Represent the contractual amount net of risk participations of $4.1 million and $3.0 million at June 30, 2022 and December 31, 2021.
Merchant Services
In accordance with credit and debit card association rules, Synovus provides merchant processing services for clients with a contractual arrangement under which certain sales and processing support are provided through an outside merchant services provider with Synovus owning the merchant contract relationship. In addition, Synovus sponsors various third-party MPS businesses that process credit and debit card transactions on behalf of merchants. In connection with these services, a liability may arise in the event of a billing dispute between the merchant and a cardholder that is ultimately resolved in the cardholder's favor. If the merchant defaults on its obligations, the cardholder, through its issuing bank, generally has until six months after the date of the transaction to present a chargeback to the MPS, which is primarily liable for any losses on covered transactions. However, if a sponsored MPS fails to meet its obligations, then Synovus, as the sponsor, could be held liable for the disputed amount. Synovus seeks to mitigate this risk through its contractual arrangements with the MPS and the merchants by withholding future settlements, retaining cash reserve accounts and/or obtaining other security. For the three and six months ended June 30, 2022, Synovus and the sponsored entities processed and settled $31.00 billion and $59.60 billion of transactions,

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respectively. For the three and six months ended June 30, 2021, Synovus and the sponsored entities processed and settled $28.89 billion and $55.15 billion of transactions, respectively.
Legal Proceedings
Synovus and its subsidiaries are subject to various legal proceedings, claims and disputes that arise in the ordinary course of its business. Additionally, in the ordinary course of business, Synovus and its subsidiaries are subject to regulatory and governmental examinations, information gathering requests, inquiries and investigations. Synovus, like many other financial institutions, has been the target of legal actions and other proceedings asserting claims for damages and related relief for losses. These actions include mortgage loan and other loan put-back claims, claims and counterclaims asserted by individual borrowers related to their loans, and allegations of violations of state and federal laws and regulations relating to banking practices, including putative class action matters. In addition to actual damages, if Synovus does not prevail in such asserted legal actions, credit-related litigation could result in additional write-downs or charge-offs of assets, which could adversely affect Synovus' results of operations during the period in which the write-down or charge-off were to occur.
Synovus carefully examines and considers each legal matter, and, in those situations where Synovus determines that a particular legal matter presents loss contingencies that are both probable and reasonably estimable, Synovus establishes an appropriate reserve. An event is considered to be probable if the future event is likely to occur. While the final outcome of any legal proceeding is inherently uncertain, based on the information currently available, advice of counsel and available insurance coverage, management believes that the amounts accrued with respect to legal matters as of June 30, 2022 are adequate. The actual costs of resolving legal claims may be higher or lower than the amounts accrued.
In addition, where Synovus determines that there is a reasonable possibility of a loss in respect of legal matters, Synovus considers whether it is able to estimate the total reasonably possible loss or range of loss. An event is “reasonably possible” if “the chance of the future event or events occurring is more than remote but less than likely.” An event is “remote” if “the chance of the future event or events occurring is more than slight but less than reasonably possible." In many situations, Synovus may be unable to estimate reasonably possible losses due to the preliminary nature of the legal matters, as well as a variety of other factors and uncertainties. For those legal matters where Synovus is able to estimate a range of reasonably possible losses, management currently estimates the aggregate range from our outstanding litigation is from zero to $5 million in excess of the amounts accrued, if any, related to those matters. This estimated aggregate range is based upon information currently available to Synovus, and the actual losses could prove to be lower or higher. As there are further developments in these legal matters, Synovus will reassess these matters, and the estimated range of reasonably possible losses may change as a result of this assessment. Based on Synovus' current knowledge and advice of counsel, management presently does not believe that the liabilities arising from these legal matters will have a material adverse effect on Synovus' consolidated financial condition, results of operations or cash flows. However, it is possible that the ultimate resolution of these legal matters could have a material adverse effect on Synovus' results of operations or financial condition for any particular period.
Synovus intends to vigorously pursue all available defenses to these legal matters, but will also consider other alternatives, including settlement, in situations where there is an opportunity to resolve such legal matters on terms that Synovus considers to be favorable, including in light of the continued expense and distraction of defending such legal matters. Synovus maintains insurance coverage, which may be available to cover legal fees, or potential losses that might be incurred in connection with such legal matters. The above-noted estimated range of reasonably possible losses does not take into consideration insurance coverage which may or may not be available for the respective legal matters.
Note 10 - Segment Reporting
Synovus' business segments are based on the products and services provided or the clients served and reflect the manner in which financial information is evaluated by the chief operating decision maker. During the first quarter of 2022, Synovus reorganized its internal management reporting structure to separate the previous Community Banking segment into Consumer Banking and Community Banking segments. Accordingly, its operating segment reporting structure was also updated. Synovus now has four major reportable business segments: Wholesale Banking, Community Banking, Consumer Banking, and Financial Management Services, with functional activities such as treasury, technology, operations, marketing, finance, enterprise risk, legal, human resources, corporate communications, executive management, among others, included in Treasury and Corporate Other.
Business segment results are determined based upon Synovus' management reporting system, which assigns balance sheet and income statement items to each of the business segments. Certain assets, liabilities, revenue, and expense not allocated or attributable to a particular business segment are included in Treasury and Corporate Other. Synovus's third-party lending consumer loans and loans held for sale as well as PPP loans are included in Treasury and Corporate Other. The management accounting policies and processes utilized in compiling segment financial information are highly subjective and, unlike financial accounting, are not based on authoritative guidance similar to GAAP. As a result, reported segment results are not necessarily comparable with similar information reported by other financial institutions.

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The Wholesale Banking business segment serves primarily larger corporate and governmental clients by providing commercial lending, capital markets, and deposit services through specialty teams including middle market, CRE, senior housing, national accounts, premium finance, structured lending, healthcare, asset-based lending, public finance, restaurant services, and community investment capital.
The Community Banking business segment primarily serves small and medium-sized commercial clients as well as individual private wealth clients using a relationship-based approach. The commercial component of this segment focuses on locally owned and operated businesses. Private wealth services are delivered to the individuals operating the businesses as well as other individuals in the communities in which the Community Bank operates. A comprehensive set of banking products are offered to the client set including a full suite of lending, payments, and depository products as well as financial planning services.
The Consumer Banking business segment serves individual and small business clients through its branch and ATM network, in addition to digital and telephone channels. This segment provides individuals and small businesses with an array of comprehensive banking products and services including depository accounts, credit and debit cards, payment solutions, goal-based planning, home equity and other consumer loans, and small business lending solutions.
The Financial Management Services business segment serves its clients by providing mortgage and trust services and also specializing in professional portfolio management for fixed-income securities, investment banking, the execution of securities transactions as a broker/dealer, asset management, financial planning, and family office services, as well as the provision of individual investment advice on equity and other securities.
Synovus uses a centralized FTP methodology to attribute appropriate net interest income to the business segments. The intent of the FTP methodology is to transfer interest rate risk from the business segments by providing matched duration funding of assets and liabilities. The result is to centralize the financial impact, management, and reporting of interest rate risk in the Treasury and Corporate Other function where it can be centrally monitored and managed. Treasury and Corporate Other includes certain assets and/or liabilities managed within that function. Additionally, Treasury and Corporate Other also charges (credits) an internal cost of funds for assets held in (or pays for funding provided by) each business segment. The process for determining FTP is based on a number of factors and assumptions, including prevailing market interest rates, the expected lives of various assets and liabilities, and the Company's broader funding profile.
The following tables present certain financial information for each reportable business segment for the three and six months ended June 30, 2022 and 2021. The application and development of management reporting methodologies is a dynamic process and is subject to periodic enhancements. As these enhancements are made, financial results presented by each reportable business segment may be periodically revised. Loan and deposit transfers occur from time to time between reportable business segments primarily to maintain the migration of clients between segments. Prior period loan and deposit segment balances are not adjusted for these transfers.
Three Months Ended June 30, 2022
(in thousands)Wholesale BankingCommunity BankingConsumer BankingFinancial Management ServicesTreasury and Corporate OtherSynovus Consolidated
Net interest income$168,988 $100,892 $103,727 $18,403 $33,378 $425,388 
Non-interest revenue9,285 12,468 22,095 45,195 8,223 97,266 
Non-interest expense27,026 33,083 47,534 44,333 130,075 282,051 
Pre-provision net revenue$151,247 $80,277 $78,288 $19,265 $(88,474)$240,603 
Three Months Ended June 30, 2021
(in thousands)Wholesale BankingCommunity BankingConsumer BankingFinancial Management ServicesTreasury and Corporate OtherSynovus Consolidated
Net interest income$136,126 $99,200 $103,681 $18,935 $23,918 $381,860 
Non-interest revenue7,000 12,472 19,740 52,345 15,530 107,087 
Non-interest expense21,290 27,543 43,908 46,773 131,017 270,531 
Pre-provision net revenue$121,836 $84,129 $79,513 $24,507 $(91,569)$218,416 






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Six Months Ended June 30, 2022
(in thousands)Wholesale BankingCommunity BankingConsumer BankingFinancial Management ServicesTreasury and Corporate OtherSynovus Consolidated
Net interest income$324,984 $197,018 $201,133 $36,818 $57,682 $817,635 
Non-interest revenue17,683 26,051 43,739 90,359 24,768 202,600 
Non-interest expense53,674 63,503 92,249 88,472 256,603 554,501 
Pre-provision net revenue$288,993 $159,566 $152,623 $38,705 $(174,153)$465,734 
Six Months Ended June 30, 2021
(in thousands)Wholesale BankingCommunity BankingConsumer BankingFinancial Management ServicesTreasury and Corporate OtherSynovus Consolidated
Net interest income$270,200 $198,340 $210,783 $39,930 $36,463 $755,716 
Non-interest revenue14,319 23,092 38,874 110,928 30,830 218,043 
Non-interest expense42,014 54,463 87,464 94,447 259,277 537,665 
Pre-provision net revenue$242,505 $166,969 $162,193 $56,411 $(191,984)$436,094 
June 30, 2022
(dollars in thousands)Wholesale BankingCommunity BankingConsumer BankingFinancial Management ServicesTreasury and Corporate OtherSynovus Consolidated
Loans, net of deferred fees and costs$23,235,771 $8,449,876 $2,782,037 $5,061,990 $1,675,106 $41,204,780 
Total deposits$11,514,037 $12,326,818 $19,829,216 $593,705 $4,770,924 $49,034,700 
Total full-time equivalent employees310 610 1,505 810 1,770 5,005 
December 31, 2021
(dollars in thousands)Wholesale BankingCommunity BankingConsumer BankingFinancial Management ServicesTreasury and Corporate OtherSynovus Consolidated
Loans, net of deferred fees and costs$21,496,050 $8,231,451 $2,559,892 $4,994,494 $2,030,071 $39,311,958 
Total deposits$12,370,554 $12,557,631 $19,668,846 $826,639 $4,003,606 $49,427,276 
Total full-time equivalent employees284 607 1,532 794 1,670 4,887 


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ITEM 2. – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
In this Report, the words “Synovus,” “the Company,” “we,” “us,” and “our” refer to Synovus Financial Corp. together with Synovus Bank and Synovus' other wholly-owned subsidiaries, except where the context requires otherwise.
FORWARD-LOOKING STATEMENTS
Certain statements made or incorporated by reference in this Report which are not statements of historical fact, including those under “Management's Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere in this Report, constitute forward-looking statements within the meaning of, and subject to the protections of, Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements include statements with respect to Synovus' beliefs, plans, objectives, goals, targets, expectations, anticipations, assumptions, estimates, intentions and future performance and involve known and unknown risks, many of which are beyond Synovus' control and which may cause Synovus' actual results, performance or achievements or the financial services industry or economy generally, to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements.
All statements other than statements of historical fact are forward-looking statements. You can identify these forward-looking statements through Synovus' use of words such as “believes,” “anticipates,” “expects,” “may,” “will,” “assumes,” “predicts,” “could,” “should,” “would,” “intends,” “targets,” “estimates,” “projects,” “plans,” “potential” and other similar words and expressions of the future or otherwise regarding the outlook for Synovus' future business and financial performance and/or the performance of the financial services industry and economy in general. Forward-looking statements are based on the current beliefs and expectations of Synovus' management and are subject to significant risks and uncertainties. Actual results may differ materially from those contemplated by such forward-looking statements. A number of factors could cause actual results to differ materially from those contemplated by the forward-looking statements in this document. Many of these factors are beyond Synovus' ability to control or predict. These factors include, but are not limited to:
(1)the risk that competition in the financial services industry, including competition from nontraditional banking institutions such as Fintechs, may adversely affect our future earnings and growth;
(2)the risk that we may not realize the expected benefits from our strategic initiatives or that we may not be able to realize growth and efficiency gains in the time period expected, which could regularly affect our future profitability;
(3)our ability to attract and retain employees and the impact of senior leadership transitions that are key to our strategic initiatives;
(4)the risk that an economic downturn and contraction, including a recession, could have a material adverse effect on our capital, financial condition, credit quality, results of operations and future growth, including the risk that the strength of the current economic environment could be weakened by the continued impact of COVID-19 and by current supply chain challenges and inflation;
(5)risks related to our strategic implementation of new lines of business, new products and services, and new technologies and an expansion of our existing business opportunities with a renewed focus on innovation;
(6)the risk that we may be required to make substantial expenditures to keep pace with regulatory initiatives and the rapid technological changes in the financial services market;
(7)the risk that prolonged periods of inflation could have on our business, profitability and our stock price;
(8)changes in the interest rate environment, including changes to the federal funds rate, and competition in our primary market area may result in increased funding costs or reduced earning assets yields, thus reducing margins and net interest income;
(9)the impact of recent and proposed changes in governmental policy, laws and regulations, proposed and recently enacted changes in monetary policy and in the regulation and taxation of banks and financial institutions, or the interpretation or application thereof and the uncertainty of future implementation and enforcement of these regulations, including the risk of inflationary pressure and interest rate increases;
(10)the risk that our current and future information technology system enhancements and operational initiatives may not be successfully implemented, which could negatively impact our operations;
(11)risks related to our business relationships with, and reliance upon, third parties that have strategic partnerships with us or that provide key components of our business infrastructure, including the costs of services and products provided to us by third parties, and risks related to disruptions in service or financial difficulties with a third-party vendor or business relationship;
(12)the risk that our enterprise risk management framework, our compliance program, or our corporate governance and supervisory oversight functions may not identify or address risks adequately, which may result in unexpected losses;
(13)risks that our asset quality may deteriorate or that our allowance for credit losses may prove to be inadequate or may be negatively affected by credit risk exposures;

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(14)risks related to the ability of our operational framework to identify and manage risks associated with our business such as credit risk, compliance risk, reputational risk, and operational risk, including by virtue of our relationships with third-party business partners, as well as our relationship with third-party vendors and other service providers;
(15)the risk that we may be exposed to potential losses in the event of fraud and/or theft, or in the event that a third-party vendor, obligor, or business partner fails to pay amounts due to us under that relationship or under any arrangement that we enter into with them;
(16)our ability to identify and address cyber-security risks such as data security breaches, malware, "denial of service" attacks, "hacking" and identity theft, a failure of which could disrupt our business and result in the disclosure of and/or misuse or misappropriation of confidential or proprietary information, disruption or damage of our systems, increased costs, significant losses, or adverse effects to our reputation;
(17)the risks and uncertainties related to the impact of the continuing COVID-19 pandemic on our assets, business, capital and liquidity, financial condition, prospects and results of operations;
(18)changes in the cost and availability of funding due to changes in the deposit market and credit market;
(19)the impact on our financial results, reputation, and business if we are unable to comply with all applicable federal and state regulations or other supervisory actions or directives and any necessary capital initiatives;
(20)the risks that if economic conditions worsen further or regulatory capital rules are modified, we may be required to undertake initiatives to improve or conserve our capital position;
(21)restrictions or limitations on access to funds from historical and alternative sources of liquidity could adversely affect our overall liquidity, which could restrict our ability to make payments on our obligations and our ability to support asset growth and sustain our operations and the operations of Synovus Bank;
(22)our ability to receive dividends from our subsidiaries could affect our liquidity, including our ability to pay dividends or take other capital actions;
(23)risks related to our ESG strategies and initiatives, the scope and pace of which could alter our reputation and shareholder, employee, client and third-party relationships;
(24)risks related to the continued use, availability and reliability of LIBOR and the risks related to the transition from LIBOR to any alternate reference rate we may use;
(25)the risk that we may not be able to identify suitable bank and non-bank acquisition opportunities as part of our growth strategy and even if we are able to identify attractive acquisition opportunities, we may not be able to complete such transactions on favorable terms or realize the anticipated benefits from such acquisitions;
(26)the risk that we could realize losses if we sell non-performing assets and the proceeds we receive are lower than the carrying value of such assets;
(27)risks related to regulatory approval to take certain actions, including any dividends on our common stock or preferred stock, any repurchases of common stock or any other issuance or redemption of any other regulatory capital instruments;
(28)the risk that our concentrated operations in the Southeastern U.S. make us vulnerable to local economic conditions, local weather catastrophes, public health issues and other external events;
(29)the costs and effects of litigation, investigations or similar matters, or adverse facts and developments related thereto;
(30)risks related to the fluctuation in our stock price and general volatility in the stock market;
(31)the effects of any damages to our reputation resulting from developments related to any of the items identified above; and
(32)other factors and other information contained in this Report and in other reports and filings that we make with the SEC under the Exchange Act, including, without limitation, those found in "Part II - Item 1A. Risk Factors" of this Report.
For a discussion of these and other risks that may cause actual results to differ from expectations, refer to “Part I - Item 1A. Risk Factors” and other information contained in Synovus' 2021 Form 10-K and our other periodic filings, including quarterly reports on Form 10-Q and current reports on Form 8-K, that we file from time to time with the SEC. All written or oral forward-looking statements that are made by or are attributable to Synovus are expressly qualified by this cautionary notice. You should not place undue reliance on any forward-looking statements since those statements speak only as of the date on which the statements are made. Synovus undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of new information or unanticipated events, except as may otherwise be required by law.
INTRODUCTION AND CORPORATE PROFILE
Synovus Financial Corp. is a financial services company and a registered bank holding company headquartered in Columbus, Georgia. Through its wholly-owned subsidiary, Synovus Bank, a Georgia state-chartered bank that is a member of the Federal Reserve System, the Company provides commercial and consumer banking in addition to a full suite of specialized

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products and services including private banking, treasury management, wealth management, mortgage services, premium finance, asset-based lending, structured lending, and international banking. Synovus also provides financial planning and investment advisory services through its wholly-owned subsidiaries, Synovus Trust and Synovus Securities, as well as its GLOBALT and Creative Financial Group divisions.
Synovus Bank is positioned in some of the highest growth markets in the Southeast, with 261 branches in Alabama, Florida, Georgia, South Carolina, and Tennessee.
The following financial review summarizes the significant trends, changes in our business, transactions, and other matters affecting Synovus’ results of operations for the three and six months ended June 30, 2022 and financial condition as of June 30, 2022 and December 31, 2021. This discussion supplements, and should be read in conjunction with, the unaudited interim consolidated financial statements and notes thereto contained elsewhere in this Report and the consolidated financial statements of Synovus, the notes thereto, and management’s discussion and analysis contained in Synovus' 2021 Form 10-K.
Management's Discussion and Analysis of Financial Condition and Results of Operations consists of:
Discussion of Results of Operations - Reviews Synovus' financial performance, as well as selected balance sheet items, items from the statements of income, significant transactions, and certain key ratios that illustrate Synovus' performance.

Credit Quality, Capital Resources and Liquidity - Discusses credit quality, market risk, capital resources, and liquidity, as well as performance trends. It also includes a discussion of liquidity policies, how Synovus obtains funding, and related performance.

Additional Disclosures - Discusses additional important matters including critical accounting policies and non-GAAP financial measures.
A reading of each section is important to understand fully our financial performance.

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DISCUSSION OF RESULTS OF OPERATIONS
Table 1 - Consolidated Financial Highlights
Three Months Ended June 30,Six Months Ended June 30,
(dollars in thousands, except per share data)20222021Change20222021Change
Net interest income
$425,388 $381,860 11 %$817,635 $755,716 %
Provision for (reversal of) credit losses
12,688 (24,598)nm24,088 (43,173)nm
Non-interest revenue
97,266 107,087 (9)202,600 218,043 (7)
Total TE revenue
523,614 489,738 1,022,059 975,324 
Non-interest expense
282,051 270,531 554,501 537,665 
Income before income taxes
227,915 243,014 (6)441,646 479,267 (8)
Net income
178,052 186,200 (4)349,088 373,292 (6)
Net income available to common shareholders
169,761 177,909 (5)332,507 356,711 (7)
Net income per common share, basic
1.17 1.20 (3)2.29 2.41 (5)
Net income per common share, diluted
1.16 1.19 (3)2.27 2.38 (5)
Net interest margin(1)
3.22 %3.02 %20   bps3.11 %3.03 %  bps
Net charge-off ratio(1)
0.16 0.28 (12)0.18 0.24 (6)
Return on average assets(1)
1.26 1.36 (10)1.24 1.38 (14)
Efficiency ratio-TE
53.87 55.24 (137)54.25 55.13 (88)
(1)    Annualized
June 30, 2022March 31, 2022Sequential Quarter ChangeJune 30, 2021Year-Over-Year Change
(dollars in thousands)
Loans, net of deferred fees and costs$41,204,780 $40,169,150 $1,035,630 $38,236,018 $2,968,762 
Total average loans40,590,875 39,350,761 1,240,114 38,496,477 2,094,398 
Total deposits49,034,700 48,656,244 378,456 47,171,962 1,862,738 
Core deposits (excludes brokered deposits)
45,411,583 46,618,560 (1,206,977)44,203,000 1,208,583 
Core transaction deposits (excludes brokered and public fund deposits)
37,399,915 38,285,649 (885,734)35,506,980 1,892,935 
Total average deposits
49,015,994 49,345,364 (329,370)47,349,646 1,666,348 
Non-performing assets ratio0.33 %0.40 %(7)  bps0.46 %(13)bps
Non-performing loans ratio0.26 0.33 (7)0.42 (16)
Past due loans over 90 days0.01 0.01 — 0.01 — 
CET1 capital$4,612,070 $4,485,661 $126,409 $4,214,720 $397,350 
Tier 1 capital 5,149,215 5,022,806 126,409 4,751,865 397,350 
Total risk-based capital6,059,074 5,936,543 122,531 5,725,176 333,898 
CET1 capital ratio9.46 %9.49 %(3)  bps9.75 %(29)bps
Tier 1 capital ratio10.56 10.63 (7)11.00 (44)
Total risk-based capital ratio12.43 12.56 (13)13.25 (82)
Total shareholders’ equity to total assets ratio
7.99 8.55 (56)9.53 (154)
Return on average common equity(1)
16.48 14.20 228 15.40 108 
(1)    Quarter annualized
Executive Summary
Net income available to common shareholders for the second quarter of 2022 was $169.8 million, or $1.16 per diluted common share, compared to $177.9 million, or $1.19 per diluted common share for the second quarter of 2021. Net income available to common shareholders for the first six months of 2022 was $332.5 million, or $2.27 per diluted common share, compared to $356.7 million, or $2.38 per diluted common share for the first six months of 2021. The year-over-year decreases for all time periods were impacted by a slowing of allowance releases due primarily to the increased economic uncertainty present from inflation concerns and geopolitical tensions, resulting in provision for credit losses of $12.7 million and $24.1 million, respectively, for the three and six months ended June 30, 2022, and reversals of $24.6 million and $43.2 million for the three and six months ended June 30, 2021, respectively.
Net interest income for the six months ended June 30, 2022 was $817.6 million, up $61.9 million, or 8%, compared to the same period in 2021, including $10.5 million in PPP fees during 2022 and $45.2 million in 2021. Net interest margin was up 8

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bps over the comparable six-month period to 3.11% due primarily to positive re-mixing within earning assets and our asset-sensitive rate risk position, partially offset by a $34.7 million decline in PPP fees. Net interest margin for the second quarter was up 22 bps sequentially, aided by higher interest rates, lower cash balances, and managed deposit repricing.
Non-interest revenue for the second quarter of 2022 was $97.3 million, down $9.8 million, or 9%, compared to the second quarter of 2021, and year-to-date was $202.6 million, down $15.4 million, or 7%, from the first half of 2021, primarily due to lower mortgage banking income and a $7.0 million write-down on a minority fintech investment partially offset by higher core banking fees(1) and higher wealth revenue(2).
Non-interest expense for the second quarter of 2022 was $282.1 million, up $11.5 million, or 4%, while year-to-date non-interest expense of $554.5 million was up $16.8 million, or 3%, compared to the same periods in 2021. The increase in non-interest expense during 2022 was primarily due to an increase in expense associated with merit and elevated performance incentives, resumption of normal business activities post COVID-19, and investments in new growth initiatives.
At June 30, 2022, loans, net of deferred fees and costs, of $41.20 billion, increased $1.89 billion, or 5%, from December 31, 2021. Excluding a $312.9 million decline in PPP loans, primarily from forgiveness, loans increased $2.21 billion, or 6%, led by growth in C&I and CRE loans as commercial production and line utilization continue to drive growth.
At June 30, 2022, credit metrics remained stable and near historically low levels with NPAs at 33 bps, NPLs at 26 bps, and total past dues at 14 bps, as a percentage of total loans. Net charge-offs remained low at $16.6 million, or 16 bps annualized, and $35.2 million, or 18 bps annualized, for the three and six months ended June 30, 2022. The ACL at June 30, 2022 totaled $458.4 million, a decrease of $11.1 million from December 31, 2021, and resulted primarily from continued positive trends in our credit performance, including reduction of NPLs, and quality and mix of new loan originations, mostly offset by an uncertain and generally negative economic outlook. The ACL to loans coverage ratio at June 30, 2022 was 1.11%, 8 bps lower compared to December 31, 2021.
Total period-end deposits at June 30, 2022 decreased $392.6 million compared to December 31, 2021 as lower money market, public funds, and time deposits impacted by rate-driven outflows and normal client liquidity deployment were mostly offset by increases in brokered deposits and higher non-interest-bearing demand deposits. Total deposit costs were 15 bps during the second quarter of 2022 and decreased 1 bp from the prior year comparable period, primarily due to an increase in non-interest-bearing deposits. Total deposit costs increased 4 bps compared to the sequential quarter due to deposit repricing associated with recent rate hikes.
At June 30, 2022, Synovus' CET1 ratio of 9.46%, well in excess of regulatory requirements, declined 4 bps compared to December 31, 2021, driven by significant growth in risk-weighted assets, largely from loan growth, and return of capital primarily through common stock shareholder dividends, mostly offset by strong capital generation from earnings. Our commitment remains to allocate internally generated capital toward our strategic priorities of client loan growth and a stable dividend while also maintaining a strong and efficient capital position.
More detail on Synovus' financial results for the three and six months ended June 30, 2022 may be found in subsequent sections of "Item 2. – Management's Discussion and Analysis of Financial Condition and Results of Operations" of this Report. See also "Part 1 – Item 1A. – Risk Factors" of Synovus' 2021 Form 10-K.
(1) Core banking fees consist of service charges on deposit accounts, card fees, and several other non-interest revenue components including letter of credit fees, ATM fee income, line of credit non-usage fees, gains (losses) from sales of SBA loans, and miscellaneous other service charges.
(2) Consists of fiduciary and asset management, brokerage, and insurance revenue.




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Changes in Financial Condition
During the six months ended June 30, 2022, total assets increased $65.5 million to $57.38 billion. We deployed liquidity as cash and cash equivalents decreased $1.34 billion, and total loans increased $1.89 billion, with commercial production and line utilization continuing to drive growth. Investment securities available for sale decreased $1.03 billion, driven by net unrealized losses from increases in market interest rates in the first half of 2022. The loan to deposit ratio was 84.0% at June 30, 2022, higher as compared to 79.5% at December 31, 2021, and 81.1% at June 30, 2021.
Total shareholders' equity at June 30, 2022 decreased $712.4 million compared to December 31, 2021 and included net income of $349.1 million, offset by dividends declared on common and preferred stock of $98.9 million and $16.6 million, respectively, changes in after-tax net unrealized losses on investment securities available for sale and cash flow hedges of $801.5 million and $142.8 million, respectively, and share repurchases of $13.0 million.
Loans
The following table compares the composition of the loan portfolio at June 30, 2022, December 31, 2021, and June 30, 2021.
Table 2 - Loans by Portfolio Class
June 31, 2022 vs. December 31, 2021 ChangeJune 31, 2022 vs. June 31, 2021 Change
(dollars in thousands)June 30, 2022December 31, 2021June 30, 2021
Commercial, financial and agricultural$13,018,089 31.6 %$12,147,858 30.9 %$870,231 %$12,174,835 31.8 %$843,254 %
Owner-occupied7,760,236 18.8 7,475,066 19.0 285,170 7,064,599 18.5 695,637 10 
Total commercial and industrial20,778,325 50.4 19,622,924 49.9 1,155,401 19,239,434 50.3 1,538,891 
Investment properties10,408,048 25.3 9,902,776 25.2 505,272 9,218,013 24.1 1,190,035 13 
1-4 family properties641,855 1.6 645,469 1.6 (3,614)(1)636,344 1.7 5,511 
Land and development453,514 1.0 466,866 1.2 (13,352)(3)506,694 1.3 (53,180)(10)
Total commercial real estate11,503,417 27.9 11,015,111 28.0 488,306 10,361,051 27.1 1,142,366 11 
Consumer mortgages5,124,523 12.4 5,068,998 12.9 55,525 5,200,718 13.6 (76,195)(1)
Home equity1,579,218 3.9 1,361,419 3.5 217,799 16 1,395,717 3.7 183,501 13 
Credit cards194,290 0.5 204,172 0.5 (9,882)(5)196,207 0.5 (1,917)(1)
Other consumer loans2,025,007 4.9 2,039,334 5.2 (14,327)(1)1,842,891 4.8 182,116 10 
Total consumer8,923,038 21.7 8,673,923 22.1 249,115 8,635,533 22.6 287,505 
Loans, net of deferred fees and costs$41,204,780 100.0 %$39,311,958 100.0 %$1,892,822 %$38,236,018 100.0 %$2,968,762 %
At June 30, 2022, loans, net of deferred fees and costs, of $41.20 billion, increased $1.89 billion, or 5%, from December 31, 2021. This included a $312.9 million decline in PPP loans, primarily from forgiveness, and growth primarily in C&I and CRE loans, as commercial production and line utilization continue to drive growth. As a result of our strong year-to-date loan growth of 6% excluding PPP loans, we expect to be at or above the upper end of our previous guidance of 6% to 8% for 2022.
C&I loans remain the largest component of our loan portfolio, representing 50.4% of total loans, while CRE and consumer loans represent 27.9% and 21.7%, respectively. Our portfolio composition is guided by our strategic growth plan, in conjunction with a comprehensive concentration management policy, which sets limits for C&I, CRE, and consumer loan levels as well as for sub-categories therein.
U.S. Small Business Administration Paycheck Protection Program (PPP)
Synovus participated in the PPP, which is a loan program that originated from the CARES Act. The total balance of all PPP loans was $86.7 million as of June 30, 2022, down $312.9 million, or 78%, compared to $399.6 million as of December 31, 2021, primarily due to $316 million in forgiveness. The table below provides additional information on PPP loans.


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Table 3 - PPP loans
June 30, 2022
PPP Loan Balances
(in millions, except count data )Fundings
2Q22 Forgiveness
2022 Forgiveness
Total Life-to-Date Forgiveness
End of Period, Net of Unearned Fees and Costs(1)
Phase 1- 2020 Originations$2,886 $11 $26 $2,750 $14 
Phase 2- 2021 Originations 1,047 108 290 971 73
Total$3,933 $119 $316 $3,721 $87 
(1) Equals fundings less forgiveness, pay-downs/pay-offs, and unearned net fees.
(dollars in millions)Total Net FeesPercent of Fundings
2Q22 Recognized Net Fees
2022 Recognized Net Fees
Total Recognized Net FeesTotal Unrecognized or Remaining Net FeesContractual Maturity
Phase 1- 2020 Originations$94.9 3.3 %$0.1 $0.3 $94.9 $ 2 years
Phase 2- 2021 Originations 43.6 4.2 3.6 10.3 40.9 2.8 5 years
Total$138.5 3.5 %$3.7 $10.5 $135.8 $2.8 
Amounts may not total due to rounding.
Commercial Loans
Total commercial loans (which are comprised of C&I and CRE loans) at June 30, 2022 were $32.28 billion, or 78.3%, of the total loan portfolio, compared to $30.64 billion, or 77.9%, at December 31, 2021.
Commercial and Industrial Loans
The C&I loan portfolio represents the largest category of Synovus' loan portfolio and is primarily comprised of general middle market and commercial banking clients across a wide range of industries. The following table shows the composition of the C&I loan portfolio aggregated by NAICS code. In accordance with Synovus' lending policy, each loan undergoes a detailed underwriting process which incorporates uniform underwriting standards and oversight in proportion to the size and complexity of the lending relationship. As of June 30, 2022, 93.4% (93.8% excluding PPP loans) of Synovus' C&I loans are secured by real estate, business equipment, inventory, and other types of collateral compared to 92.2% (94.1% excluding PPP loans) as of December 31, 2021. C&I loans at June 30, 2022 grew $1.16 billion, or 6%, from December 31, 2021, as diverse growth from many of our Wholesale Banking sub-businesses was partially offset by a $312.9 million decline in PPP loan balances. The growth largely consisted of funded loan production and increased line utilization particularly in the finance and insurance, healthcare and social assistance, wholesale trade, and accommodation and food services industries.

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Table 4 - Commercial and Industrial Loans by Industry
 June 30, 2022December 31, 2021
(dollars in thousands)NAICS CodeAmount
%(1)
Amount
%(1)
Health care and social assistance62 $4,489,914 21.6 %$4,220,579 21.5 %
Finance and insurance52 3,112,695 15.0 2,520,480 12.8 
Manufacturing31-331,377,435 6.6 1,314,212 6.7 
Accommodation and food services72 1,338,556 6.4 1,231,801 6.3 
Wholesale trade42 1,268,075 6.1 1,146,505 5.8 
Retail trade44-451,184,962 5.7 1,195,456 6.1 
Real estate and rental and leasing5311 1,086,787 5.2 1,061,921 5.4 
Construction23 1,063,753 5.1 1,023,540 5.2 
Professional, scientific, and technical services54 951,794 4.6 928,436 4.7 
Other services81 946,549 4.6 1,004,448 5.1 
Transportation and warehousing48-49843,764 4.1 852,969 4.3 
Real estate other53 778,636 3.7 752,997 3.8 
Arts, entertainment, and recreation71 469,665 2.3 534,597 2.7 
Educational services61 422,306 2.0 427,456 2.2 
Public administration92 417,871 2.0 407,451 2.1 
Administration, support, waste management, and remediation56 263,754 1.3 246,638 1.3 
Agriculture, forestry, fishing, and hunting11 261,234 1.3 285,372 1.5 
Information51 211,917 1.0 189,306 1.0 
Other industries
(2)
288,658 1.4 278,760 1.5 
Total commercial and industrial loans$20,778,325 100.0 %$19,622,924 100.0 %
(1) Loan balance in each category expressed as a percentage of total C&I loans.
(2) Comprised of NAICS industries that are less than 2% of total C&I loans.
At June 30, 2022, $13.02 billion of C&I loans, or 31.6% of the total loan portfolio (including PPP loans of $86.7 million net of unearned fees and costs), represented loans originated for the purpose of financing commercial, financial and agricultural business activities. The primary source of repayment on these loans is revenue generated from products or services offered by the business or organization. The secondary source of repayment is the collateral, which consists primarily of equipment, inventory, accounts receivable, time deposits, cash surrender value of life insurance, and other business assets.
At June 30, 2022, $7.76 billion of C&I loans, or 18.8% of the total loan portfolio, represented loans originated for the purpose of financing owner-occupied properties. The financing of owner-occupied facilities is considered a C&I loan even though there is improved real estate as collateral. This treatment is a result of the credit decision process, which focuses on cash flow from operations of the business to repay the debt. The secondary source of repayment on these loans is the underlying real estate. These loans are predominately secured by owner-occupied and other real estate, and to a lesser extent, other types of collateral.
Commercial Real Estate Loans
CRE loans consist primarily of income-producing investment properties loans. Additionally, CRE loans include 1-4 family properties loans as well as land and development loans. Total CRE loans of $11.50 billion increased $488.3 million or 4%, from December 31, 2021 as growth primarily in the multi-family and medical office sectors from funded loan production continued to outpace payoff activity.
Investment properties loans consist of construction and mortgage loans for income-producing properties and are primarily made to finance multi-family properties, hotels, office buildings, shopping centers, warehouses and other commercial development properties. Total investment properties loans as of June 30, 2022 were $10.41 billion, or 90.5% of the CRE loan portfolio, and increased $505.3 million, or 5%, from December 31, 2021 primarily due to growth in all sub-categories with the exception of shopping centers, which were down $196.6 million, or 12%, from December 31, 2021.
1-4 Family Properties Loans
1-4 family properties loans include construction loans to home builders and commercial mortgage loans related to 1-4 family rental properties and are almost always secured by the underlying property being financed by such loans. These

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properties are primarily located in the markets served by Synovus. At June 30, 2022, 1-4 family properties loans totaled $641.9 million, or 5.6% of the CRE loan portfolio, and decreased slightly from December 31, 2021.
Land and Development Loans
Land and development loans include commercial and residential development as well as land acquisition loans and are secured by land held for future development, typically in excess of one year. Properties securing these loans are substantially within markets served by Synovus, and loan terms generally include personal guarantees from the principals. Loans in this portfolio are underwritten based on the LTV of the collateral and the capacity of the guarantor(s). Land and development loans of $453.5 million at June 30, 2022 decreased slightly from December 31, 2021.
Consumer Loans
The consumer loan portfolio consists of a wide variety of loan products offered through Synovus' banking network including first and second residential mortgages, home equity and consumer credit card loans, as well as both secured and unsecured loans from third-party lending. As of June 30, 2022, weighted-average FICO scores within the residential real estate portfolio based on committed balances were 777 for consumer mortgages and 788 for home equity, consistent with year-end 2021 scores.
Consumer loans at June 30, 2022 of $8.92 billion increased $249.1 million, or 3%, compared to December 31, 2021. Home equity grew $217.8 million from December 31, 2021 largely due to increased demand for home equity products as property values have increased, and interest rates for home equity products have remained relatively low. Other consumer loans decreased $14.3 million from December 31, 2021 primarily resulting from $43.0 million lower third-party loan balances as payment activity more than offset purchases of $361.6 million.
Deposits
Deposits provide the most significant funding source for interest earning assets. The following table shows the composition of period-end deposits as of the dates indicated. See Table 12 - Quarter-to-Date Net Interest Income and Rate/Volume Analysis and Table 13 - Year-to-Date Net Interest Income and Rate/Volume Analysis in this Report for information on average deposits including average rates.
Table 5 - Composition of Period-end Deposits
(dollars in thousands)June 30, 2022
%(1)
December 31, 2021
%(1)
June 30, 2021
%(1)
Non-interest-bearing demand deposits(2)
$15,781,109 32.2 %$15,242,839 30.9 %$14,342,601 30.4 %
Interest-bearing demand deposits(2)
6,327,055 12.9 6,346,959 12.9 5,839,814 12.4 
Money market accounts(2)
13,793,024 28.1 14,886,424 30.1 13,983,112 29.7 
Savings deposits(2)
1,498,727 3.0 1,404,428 2.8 1,341,453 2.8 
Public funds5,863,899 12.0 6,284,553 12.7 5,804,905 12.3 
Time deposits(2)
2,147,769 4.4 2,427,073 4.9 2,891,115 6.1 
Brokered deposits3,623,117 7.4 2,835,000 5.7 2,968,962 6.3 
Total deposits$49,034,700 100.0 %$49,427,276 100.0 %$47,171,962 100.0 %
Core deposits(3)    
$45,411,583 92.6 %$46,592,276 94.3 %$44,203,000 93.7 %
Brokered time deposits $2,314,488 4.7 %$1,024,448 2.1 %$1,063,947 2.3 %
Public funds time deposits $611,070 1.2 %$665,954 1.3 %$689,478 1.5 %
(1)    Deposits balance in each category expressed as percentage of total deposits.
(2)    Excluding any public funds or brokered deposits.
(3)    Core deposits exclude brokered deposits.
Total period-end deposits at June 30, 2022 decreased $392.6 million compared to December 31, 2021 as lower money market, public funds, and time deposits, impacted by rate-driven outflows and normal client liquidity deployment, were mostly offset by increases in brokered deposits and higher non-interest-bearing demand deposits. On a year-to-date average basis, the increase in total deposits was $1.57 billion, or 3%, driven by $1.33 billion in growth from non-interest-bearing demand deposits as this meaningful component of our overall funding strategy continues to help manage our total funding costs in the rising rate environment. Total deposit costs of 15 bps for the second quarter of 2022 decreased 1 bp from the prior year comparable period, primarily due to an increase in non-interest-bearing deposits. Total deposit costs increased 4 bps compared to the first quarter of 2022 as the Federal Open Market Committee's recent rate hikes have begun to modestly impact our deposit costs. Given the 75 bps rate hike in June 2022, as well as the recently announced 75 bps hike in July 2022, we have begun to see and

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expect a continuation of upward pressure on deposits costs, as would be reasonably expected for this phase of the tightening cycle.
Non-interest Revenue
Non-interest revenue for the second quarter of 2022 was $97.3 million, down $9.8 million, or 9%, and year-to-date was $202.6 million, down $15.4 million, or 7%, compared to the same periods in 2021. The primary drivers were lower mortgage banking income and a $7.0 million write-down on a minority fintech investment partially offset by higher core banking fees(1) and higher wealth revenue(2).
The following table shows the principal components of non-interest revenue.
Table 6 - Non-interest Revenue
Three Months Ended June 30,Six Months Ended June 30,
(dollars in thousands)20222021$ Change% Change20222021$ Change% Change
Service charges on deposit accounts$23,491 $21,414 $2,077 10 %$46,030 $41,448 $4,582 11 %
Fiduciary and asset management fees20,100 18,805 1,295 40,377 36,759 3,618 10 
Card fees16,089 13,304 2,785 21 30,846 25,300 5,546 22 
Brokerage revenue 15,243 13,926 1,317 29,898 26,899 2,999 11 
Mortgage banking income3,904 13,842 (9,938)(72)9,857 36,157 (26,300)(73)
Capital markets income7,393 3,335 4,058 122 12,864 10,840 2,024 19 
Income from bank-owned life insurance9,165 7,188 1,977 28 15,722 16,031 (309)(2)
Insurance revenue 2,564 3,383 (819)(24)3,983 5,079 (1,096)(22)
Investment securities gains (losses), net — — nm (1,990)1,990 nm
Other non-interest revenue(683)11,890 (12,573)(106)13,023 21,520 (8,497)(39)
Total non-interest revenue$97,266 $107,087 $(9,821)(9)%$202,600 $218,043 $(15,443)(7)%
Core banking fees (1)
$45,483 $41,464 $4,019 10 %$90,887 $79,620 $11,267 14 %
Wealth revenue (2)
$37,907 $36,114 $1,793 %$74,258 $68,737 $5,521 %
(1) Core banking fees consist of service charges on deposit accounts, card fees, and several other non-interest revenue components including letter of credit fees, ATM fee income, line of credit non-usage fees, gains (losses) from sales of SBA loans, and miscellaneous other service charges.
(2) Consists of fiduciary and asset management, brokerage, and insurance revenue.
Three and Six Months Ended June 30, 2022 compared to June 30, 2021
Service charges on deposit accounts, consisting of account analysis fees, NSF fees, and all other service charges, for the three and six months ended June 30, 2022 were up compared to the same periods in 2021. The largest category of service charges, account analysis fees, were flat compared to the second quarter of 2021, and up 3% on a year-to-date comparable basis. NSF fees for the six months ended June 30, 2022 and 2021 comprised 32% and 29%, respectively, of service charges on deposit accounts and 7% and 6%, respectively, of total non-interest revenue. NSF fees for the three and six months ended June 30, 2021 were lower primarily due to fiscal stimulus funds. All other service charges on deposit accounts, which consist primarily of monthly fees on consumer demand deposits and small business accounts, for the three and six months ended June 30, 2022 were up $740 thousand, or 14%, and $1.4 million, or 14%, respectively.
Fiduciary and asset management fees are derived from providing estate administration, personal trust, corporate trust, corporate bond, investment management, financial planning, and family office services. The increase in fiduciary and asset management fees for the three and six months ended June 30, 2022 was driven by strong client acquisition despite headwinds from a decline in the equity markets.
Card fees consist primarily of credit card interchange fees, debit card interchange fees, and merchant discounts. Card fees are reported net of certain associated expense items including client loyalty program expenses and network expenses. Card fees for the three and six months ended June 30, 2022 were up primarily due to higher transaction volumes from both consumer and commercial spend activity and account growth as we continue to invest in our Treasury and Payment solutions business.
Brokerage revenue consists primarily of brokerage commissions as well as advisory fees earned from the management of client assets. Brokerage revenue for the three and six months ended June 30, 2022 increased over the prior year comparable periods, benefiting from client activity in the face of challenging equity markets.
Mortgage banking income was significantly lower for the three and six months ended June 30, 2022, compared to the same periods in 2021, largely due to the economic environment with substantial increases in mortgage rates reducing refinancing and

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new-purchase volumes and compressing secondary margins. On a year-to-date basis, gains on sale declined $18.5 million as a result of a $550.9 million, or 55%, decrease in loan sales and a $574.1 million, or 58%, decline in secondary market mortgage production compared to the prior year.
Capital markets income primarily includes fee income from client derivative transactions. Additionally, capital markets income includes fee income from debt capital market transactions and foreign exchange as well as other miscellaneous income from capital market transactions. The increase for the three months ended June 30, 2022 compared to the same period in 2021 primarily resulted from a higher volume of client derivative transactions and a $1.3 million increase in loan syndication arranger fees. The increase for the six months ended June 30, 2022 was primarily due to higher loan syndication arranger fees.
Income from BOLI includes increases in the cash surrender value of policies and proceeds from insurance contracts. The increase for the three months ended June 30, 2022 primarily related to $2.5 million in proceeds from insurance benefits.
The main components of other non-interest revenue are fees for letters of credit and unused lines of credit, safe deposit box fees, access fees for ATM use, other service charges and loan servicing fees, gains from sales of GGL/SBA loans, and other miscellaneous items. The six months ended June 30, 2022 primarily included a $7.0 million write-down on a minority fintech investment and a reduction in the fair value of non-qualified deferred compensation plan assets of $6.5 million (offset in non-interest expense), partially offset by a gain of $3.5 million related to the sale of a certain real estate partnership, as compared to 2021.
Non-interest Expense
Non-interest expense for the second quarter of 2022 was $282.1 million, up $11.5 million, or 4%, and year-to-date was $554.5 million, up $16.8 million, or 3%, compared to the same periods in 2021. The increase in non-interest expense during 2022 was primarily due to an increase in expense associated with merit and elevated performance incentives, resumption of normal business activities post COVID-19, and investments in new growth initiatives. We expect total investments in new growth initiatives to be in the $30 million to $35 million range in 2022.
The following table summarizes the components of non-interest expense.
Table 7 - Non-interest Expense
Three Months Ended June 30,Six Months Ended June 30,
(dollars in thousands)20222021$ Change% Change20222021$ Change% Change
Salaries and other personnel expense$161,063 $160,567 $496 — %$325,747 $322,044 $3,703 %
Net occupancy, equipment, and software expense43,199 41,825 1,374 86,076 82,959 3,117 
Third-party processing and other services21,952 24,419 (2,467)(10)42,947 44,451 (1,504)(3)
Professional fees10,865 7,947 2,918 37 19,338 17,031 2,307 14 
FDIC insurance and other regulatory fees6,894 5,547 1,347 24 13,144 11,127 2,017 18 
Amortization of intangibles2,118 2,379 (261)(11)4,236 4,758 (522)(11)
Restructuring charges(1,850)415 (2,265)nm(8,274)946 (9,220)nm
Valuation adjustment to Visa derivative3,500 — 3,500 nm3,500 — 3,500 nm
Loss on early extinguishment of debt — — nm677 — 677 nm
Earnout liability adjustments 750 (750)nm 750 (750)nm
Other operating expense34,310 26,682 7,628 29 67,110 53,599 13,511 25 
Total non-interest expense$282,051 $270,531 $11,520 %$554,501 $537,665 $16,836 %
Three and Six Months Ended June 30, 2022 compared to June 30, 2021
Salaries and other personnel expense increased for the three and six months ended June 30, 2022 primarily due to the impacts of elevated performance incentives and merit partially offset by a reduction in the fair value of the non-qualified deferred compensation liability (offset in non-interest revenue) and lower mortgage production-based commissions. Total headcount of 5,091 was flat compared to June 30, 2021 as a result of Synovus Forward initiatives while adding headcount in areas associated with strategic revenue growth.
Net occupancy, equipment, and software expense increased for the three and six months ended June 30, 2022 due primarily to continued investments in technology and initiatives partially offset by savings from branch closures. Synovus Bank operated 261 branches at June 30, 2022 compared to 285 branches at June 30, 2021 with twenty branch closures during the first half of 2022. We expect to close a similar amount in the second half of 2022 to complete our large-scale branch optimization program.

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Third-party processing and other services include all third-party core operating system and processing charges as well as third-party loan servicing charges. Third-party processing expense decreased for the three and six months ended June 30, 2022, largely a result of higher 2021 expense associated with PPP loan forgiveness partially offset by enhancements associated with technology and initiatives.
Professional fees increased for the three and six months ended June 30, 2022 primarily from higher consulting fees largely related to new initiatives, technology, and sustainability strategies and increased legal fees from various matters, including new initiatives and credit-related items.
FDIC insurance and other regulatory fees increased for the three and six months ended June 30, 2022 largely due to a higher assessment rate primarily driven by partial normalization of liquidity levels and redemption of Synovus Bank senior notes.
During the three months ended June 30, 2022, Synovus recorded $3.0 million in gains on sales of five closed branches partially offset by restructuring charges associated with additional branch closures. During the six months ended June 30, 2022, Synovus recorded $12.1 million in gains largely relating to the sale of real estate facilities in Columbus, Georgia in addition to gains on sales of closed branches, partially offset by restructuring charges associated with additional branch closures. During the three and six months ended June 30, 2021, Synovus recorded restructuring charges primarily related to branch closures and restructuring of corporate real estate as part of the Synovus Forward initiative.
During the second quarter of 2022, Synovus recorded a $3.5 million valuation adjustment to the Visa derivative following Visa's announcement to fund $600 million to its litigation escrow account.
On February 10, 2022, Synovus Bank redeemed its 2.289% Fixed-to-Floating Rate Senior Bank Notes of $400 million par value and incurred a $677 thousand loss on early extinguishment of debt.
Earnout liability fair value adjustments associated with the Global One acquisition were the result of higher than projected earnings and higher earnings estimates over the remaining contractual earnout period, reflecting the continued success of the Global One enterprise. The earnout period ended on June 30, 2021, and the final earnout payment occurred during the third quarter of 2021.
Other operating expense includes advertising, travel, insurance, network and communication, other taxes, subscriptions and dues, other loan and ORE expense, postage and freight, training, business development, supplies, donations, and other miscellaneous expense. Other operating expense was up for the three and six months ended June 30, 2022. The increases over prior year were primarily related to an increase in loan expense due to elevated production, managing fraud protection for clients, resumption of normal business activities post COVID-19, and increased 2022 advertising expense resulting from the launch of our newly developed brand positioning and campaign.
Income Tax Expense
Income tax expense was $49.9 million for the three months ended June 30, 2022, representing an effective tax rate of 21.9%, compared to income tax expense of $56.8 million for the three months ended June 30, 2021, representing an effective tax rate of 23.4%. Income tax expense was $92.6 million for the six months ended June 30, 2022, representing an effective tax rate of 21.0%, compared to income tax expense of $106.0 million for the six months ended June 30, 2021, representing an effective tax rate of 22.1%. The effective tax rate is lower for both the three and six month periods ended June 30, 2022, primarily due to an increase in net discrete tax benefits recognized during the current period, including share-based compensation, changes in amounts taxable by jurisdictions, and other accrual adjustments, compared to the respective prior periods.
CREDIT QUALITY, CAPITAL RESOURCES AND LIQUIDITY
Credit Quality
Synovus diligently monitors the quality of its loan portfolio by industry, property type, and geography through a thorough portfolio review process and our analytical risk management tools. At June 30, 2022, credit metrics remained stable and near historical lows with NPAs at 33 bps, NPLs at 26 bps, and total past dues at 14 bps, as a percentage of total loans. Net charge-offs remained low at $16.6 million, or 16 bps annualized, and $35.2 million, or 18 bps annualized, respectively, for the three and six months ended June 30, 2022. We expect net charge-offs to remain relatively stable in the second half of 2022, assuming no material change in the economic environment.

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The table below includes selected credit quality metrics.
Table 8 - Credit Quality Metrics
(dollars in thousands)June 30, 2022December 31, 2021June 30, 2021
Non-performing loans
$109,024 $131,042 $161,028 
ORE and other assets
26,759 27,137 16,806 
Non-performing assets
$135,783 $158,179 $177,834 
Total loans
$41,204,780 $39,311,958 $38,236,018 
Non-performing loans as a % of total loans
0.26 %0.33 %0.42 %
Non-performing assets as a % of total loans, ORE, and specific other assets
0.33 0.40 0.46 
Loans 90 days past due and still accruing
$2,251 $6,770 $4,415 
As a % of total loans
0.01 %0.02 %0.01 %
Total past due loans and still accruing
$56,160 $57,565 $49,321 
As a % of total loans
0.14 %0.15 %0.13 %
Net charge-offs, quarter$16,565 $10.522 $26,546 
Net charge-offs/average loans, quarter0.16 %0.11 %0.28 %
Net charge-offs, year-to-date$35,174 $77,788 $46,750 
Net charge-offs/average loans, year-to-date0.18 %0.20 %0.24 %
Provision for (reversal of) loan losses, quarter$9,446 $(54,124)$(19,960)
Provision for (reversal of) unfunded commitments, quarter3,242 (1,086)(4,638)
Provision for (reversal of) credit losses, quarter$12,688 $(55,210)$(24,598)
Provision for (reversal of) loan losses, year-to-date$15,414 $(100,351)$(42,278)
Provision for (reversal of) unfunded commitments, year-to-date$8,674 $(5,900)$(895)
Provision for (reversal of) credit losses, year-to-date$24,088 $(106,251)$(43.173)
Allowance for loan losses$407,837 $427,597 $516,708 
Reserve for unfunded commitments50,559 41,885 46,890 
Allowance for credit losses$458,396 $469,482 $563,598 
ACL to loans coverage ratio
1.11 %1.19 %1.47 %
ALL to loans coverage ratio
0.99 1.09 1.35 
ACL/NPLs420.45 358.27 350.00 
ALL/NPLs374.08 326.31 320.88 
Criticized and Classified Loans
Our loan ratings are aligned to federal banking regulators' definitions of pass and criticized categories, which include special mention, substandard, doubtful, and loss. Substandard accruing and non-accruing loans, doubtful, and loss loans are often collectively referred to as classified. Special mention, substandard, doubtful, and loss loans are often collectively referred to as criticized and classified loans. The following table presents a summary of criticized and classified loans. Criticized and classified loans at June 30, 2022 were 2.2% of total loans, or $914.0 million, down $113.9 million as compared to 2.6% of total loans, or $1.03 billion, at December 31, 2021.
Table 9 - Criticized and Classified Loans
(dollars in thousands)June 30, 2022December 31, 2021
Special mention$391,596 $489,150 
Substandard 516,412 526,117 
Doubtful3,520 10,630 
Loss 2,500 2,058 
Criticized and Classified loans$914,028 $1,027,955 
As a % of total loans
2.2 %2.6 %

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Provision for (Reversal of) Credit Losses and Allowance for Credit Losses
The provision for credit losses of $12.7 million and $24.1 million for the three and six months ended June 30, 2022 included net charge-offs of $16.6 million and $35.2 million, respectively, and also represented a slower pace of allowance decline for the first half of the year. $3.7 million and $7.5 million in reserves were also added as a result of purchases of $180.2 million and $361.6 million of third-party lending loans for the three and six months ended June 30, 2022.
The ALL of $407.8 million and the reserve for unfunded commitments of $50.6 million, which is recorded in other liabilities, comprise the total ACL of $458.4 million at June 30, 2022. The ACL decreased $11.1 million compared to the December 31, 2021 ACL of $469.5 million, which consisted of an ALL of $427.6 million and the reserve for unfunded commitments of $41.9 million. The ACL to loans coverage ratio of 1.11% at June 30, 2022 was 8 bps lower compared to December 31, 2021. The reduction in the ACL resulted primarily from continued positive trends in our credit performance, including reduction of NPLs, and quality and mix of new loan originations, mostly offset by an uncertain and generally negative economic outlook.
Table 10 - Accruing TDRs by Risk Grade
June 30, 2022December 31, 2021June 30, 2021
(dollars in thousands)Amount%Amount%Amount%
Pass$59,865 36.5 %$56,479 47.1 %$62,686 50.3 %
Special mention31,492 19.2 11,387 9.5 8,600 6.9 
Substandard accruing72,744 44.3 51,938 43.4 53,242 42.8 
Total accruing TDRs$164,101 100.0 %$119,804 100.0 %$124,528 100.0 %
Troubled Debt Restructurings
Accruing TDRs were $164.1 million at June 30, 2022, up $44.3 million compared to December 31, 2021 primarily due to interest rate modifications granted that were previously accounted for under the CARES Act. Non-accruing TDRs were $18.3 million at June 30, 2022, compared to $22.3 million at December 31, 2021.
Accruing TDRs are considered performing because they are performing in accordance with the restructured terms. At both June 30, 2022 and December 31, 2021, approximately 98% of accruing TDRs were current. In addition, subsequent defaults on accruing TDRs (defaults defined as the earlier of the TDR being placed on non-accrual status or reaching 90 days past due with respect to principal and/or interest payments within twelve months of the TDR designation) have continued to remain at low levels.
Capital Resources
Synovus and Synovus Bank are required to comply with capital adequacy standards established by our primary federal regulator, the Federal Reserve. Synovus and Synovus Bank measure capital adequacy using the standardized approach under Basel III. At June 30, 2022, Synovus and Synovus Bank's capital levels remained strong and exceeded well-capitalized requirements currently in effect. The following table presents certain ratios used to measure Synovus and Synovus Bank's capitalization.

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Table 11 - Capital Ratios
(dollars in thousands)June 30, 2022December 31, 2021
CET1 capital
Synovus Financial Corp.$4,612,070 $4,388,618 
Synovus Bank5,158,225 4,998,698 
Tier 1 risk-based capital
Synovus Financial Corp.5,149,215 4,925,763 
Synovus Bank5,158,225 4,998,698 
Total risk-based capital
Synovus Financial Corp.6,059,074 5,827,196 
Synovus Bank5,754,389 5,587,757 
CET1 capital ratio
Synovus Financial Corp.9.46 %9.50 %
Synovus Bank10.59 10.83 
Tier 1 risk-based capital ratio
Synovus Financial Corp.10.56 10.66 
Synovus Bank10.59 10.83 
Total risk-based capital to risk-weighted assets ratio
Synovus Financial Corp.12.43 12.61 
Synovus Bank11.82 12.11 
Leverage ratio
Synovus Financial Corp.9.03 8.72 
Synovus Bank9.06 8.86 
At June 30, 2022, Synovus' CET1 ratio was 9.46%, well in excess of regulatory requirements including the capital conservation buffer of 2.5%. The June 30, 2022 CET1 ratio declined 4 bps compared to December 31, 2021, driven by significant growth in risk-weighted assets, largely from loan growth, and return of capital primarily through common stock shareholder dividends, mostly offset by strong capital generation from earnings. Our commitment remains to allocate internally generated capital toward our strategic priorities of client loan growth and a stable dividend while also maintaining a strong and efficient capital position. For additional information on regulatory capital requirements, see "Part II - Item 8. Financial Statements and Supplementary Data - Note 10 - Regulatory Capital" to the consolidated financial statements of Synovus' 2021 Form 10-K. Management reviews the Company's capital position on an on-going basis and believes, based on internal capital analyses and earnings projections, that Synovus is well positioned to meet relevant regulatory capital standards.
On January 20, 2022, Synovus announced that its Board of Directors authorized share repurchases of up to $300 million in 2022. During the six months ended June 30, 2022, Synovus repurchased a total of $13.0 million, or 281 thousand shares of its common stock, at an average price of $46.17 per share. Based on our current forecast for loan growth and given the uncertain economic environment, we expect to retain the majority of capital generated through earnings to support core balance sheet growth through the remainder of 2022.
On August 26, 2020, the federal banking regulators issued a final rule (following an interim final rule issued on March 27, 2020) that allowed electing banking organizations that adopt CECL during 2020 to mitigate the estimated effects of CECL on regulatory capital for two years, followed by a three-year phase-in transition period. Synovus adopted CECL on January 1, 2020 and the June 30, 2022 regulatory capital ratios reflect Synovus' election of the five-year transition provision. At June 30, 2022, $43.7 million, or a cumulative 9 bps benefit to CET1, was deferred.
Dividends
Synovus has historically paid a quarterly cash dividend to the holders of its common stock. Management and the Board of Directors closely monitor current and projected capital levels, liquidity (including dividends from subsidiaries), financial markets and other economic trends, as well as regulatory requirements regarding the payment of dividends.
Synovus' ability to pay dividends on its common stock and preferred stock is primarily dependent upon dividends and distributions that it receives from its bank and non-banking subsidiaries, which are restricted by various regulations administered by federal and state bank regulatory authorities.

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Synovus declared common stock dividends of $98.9 million, or $0.68 per common share, for the six months ended June 30, 2022, compared to $97.7 million, or $0.66 per common share, for the six months ended June 30, 2021. In addition, Synovus declared dividends on its preferred stock of $16.6 million during both the six months ended June 30, 2022 and 2021.
Liquidity
Liquidity represents the extent to which Synovus has readily available sources of funding to meet the needs of depositors, borrowers and creditors, to support asset growth, and to otherwise sustain operations of Synovus and its subsidiaries, at a reasonable cost, on a timely basis, and without adverse consequences. ALCO monitors Synovus' economic, competitive, and regulatory environment and is responsible for measuring, monitoring, and reporting on liquidity and funding risk as well as market risk.
In accordance with Synovus policies and regulatory guidance, ALCO evaluates contractual and anticipated cash flows under normal and stressed conditions to properly manage the Company’s liquidity profile. Synovus places an emphasis on maintaining numerous sources of current and contingent liquidity to meet its obligations to depositors, borrowers, and creditors on a timely basis. Liquidity is generated through various sources, including, but not limited to, maturities and repayments of loans by clients, maturities and sales of investment securities, and growth in core and wholesale deposits.
Synovus Bank also generates liquidity through the issuance of brokered certificates of deposit and money market accounts. Synovus Bank accesses these funds from a broad geographic base to diversify its sources of funding and liquidity. Synovus Bank also has the capacity to access funding through its membership in the FHLB system and through the Federal Reserve discount window. At June 30, 2022, based on currently pledged collateral, Synovus Bank had access to FHLB funding of $4.73 billion, subject to FHLB credit policies. Management continuously monitors and maintains appropriate levels of liquidity so as to provide adequate funding sources to manage client deposit withdrawals, loan requests, and other funding demands.
In addition to bank level liquidity management, Synovus must manage liquidity at the parent company level for various operating needs including the servicing of debt, the payment of dividends on our common stock and preferred stock, share repurchases, payment of general corporate expense, and potential capital infusions into subsidiaries. The primary source of liquidity for Synovus consists of dividends from Synovus Bank, which is governed by certain rules and regulations of the GA DBF and the Federal Reserve Bank. Synovus' ability to receive dividends from Synovus Bank in future periods will depend on a number of factors, including, without limitation, Synovus Bank's future profits, asset quality, liquidity, and overall condition. In addition, both the GA DBF and Federal Reserve Bank may require approval to pay dividends, based on certain regulatory statutes and limitations.
Synovus presently believes that the sources of liquidity discussed above, including existing liquid funds on hand, are sufficient to meet its anticipated funding needs. However, if economic conditions were to significantly deteriorate, regulatory capital requirements for Synovus or Synovus Bank were to increase as the result of regulatory directives or otherwise, or Synovus believes it is prudent to enhance current liquidity levels, then Synovus may seek additional liquidity from external sources. See "Part I – Item 1A. Risk Factors - Changes in the cost and availability of funding due to changes in the deposit market and credit market may adversely affect our capital resources, liquidity and financial results" of Synovus' 2021 Form 10-K. Furthermore, Synovus may, from time to time, take advantage of attractive market opportunities to refinance its existing debt, redeem its preferred stock, or strengthen its liquidity or capital position.
Earning Assets and Sources of Funds
Average total assets for the six months ended June 30, 2022 increased $2.09 billion, or 4%, as compared to the first six months of 2021. Average earning assets increased $2.66 billion, or 5%, in the first six months of 2022 compared to the same period in 2021. The increase in average earning assets primarily resulted from a $2.39 billion, or 27%, increase in average investment securities available for sale and a $1.62 billion, or 4%, increase in average total loans, net of unearned income, which included a decrease of $1.98 billion in PPP loans. The increase in average loans was primarily attributable to growth in commercial production and line utilization. These increases were partially offset by a $1.36 billion, or 51%, decrease in average interest-bearing funds held at the Federal Reserve Bank.
Average interest-bearing liabilities decreased $24.2 million for the first six months of 2022 compared to the same period in 2021. The decrease in average interest-bearing liabilities largely resulted from a $1.05 billion, or 27%, decrease in average time deposits, as a result of continued focus on remixing the deposit base, mostly offset by a $945.2 million, or 11%, increase in average interest-bearing demand deposits. Average non-interest-bearing deposits also increased $2.28 billion, or 16%, for the first six months of 2022 compared to the same period in 2021 as these deposits continue to be a meaningful component of our funding strategy and will help manage total funding costs in the rising rate environment.
Net interest income for the six months ended June 30, 2022 was $817.6 million, up $61.9 million, or 8% compared to the same period in 2021, including $10.5 million in PPP fees during 2022 and $45.2 million in 2021. Net interest margin was up 8 bps over the comparable six-month period to 3.11% due primarily to positive re-mixing within earning assets and our asset-

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sensitive rate risk position, partially offset by a $34.7 million decline in PPP fees. For the six months ended June 30, 2022, the yield on earning assets was 3.31%, an increase of 2 bps compared to the six months ended June 30, 2021, while the effective cost of funds decreased 6 bps to 0.20%. Compared to the same period in 2021, the yield on loans decreased 13 bps due primarily to the decline in PPP fees, while the yield on investment securities increased 32 bps primarily due to higher reinvestment yield and deceleration in prepayment activity compared to the prior year.
On a sequential quarter basis, net interest income was up $33.1 million, or 8%, driven by loan growth and higher rates. Net interest margin for the second quarter was 3.22%, which was up 22 bps compared to the first quarter of 2022 aided by higher interest rates, lower cash balances, and managed deposit repricing. The second quarter of 2022 included $3.7 million recognized for associated PPP fees versus $6.9 million in the first quarter of 2022 and average PPP loan balances of $147.9 million versus $282.4 million in the first quarter of 2022. For the second quarter of 2022, the yield on earning assets increased 25 bps, while the effective cost of funds increased 3 bps compared to the first quarter of 2022. We continue to expect that net interest income and net interest margin will increase from second quarter 2022 levels as the benefits of higher short-term and long-term market interest rates are realized.


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Net Interest Income and Rate/Volume Analysis
    The following tables set forth the major components of net interest income and the related annualized yields and rates for the three and six months ended June 30, 2022 and 2021, as well as the variances between the periods caused by changes in interest rates versus changes in volume.
Table 12 - Quarter-to-Date Net Interest Income and Rate/Volume Analysis
Three Months Ended June 30,2022 Compared to 2021
Average BalancesInterestAnnualized Yield/RateChange due to Increase (Decrease)
(dollars in thousands)202220212022202120222021VolumeRate
Assets
Interest earning assets:
Investment securities available for sale$11,153,091 $9,184,691 $50,312 $33,298 1.81 %1.45 %$7,116 $9,898 $17,014 
Trading account assets11,987 2,831 73 2.44 1.15 26 39 65 
Commercial loans (1) (2)
31,870,387 29,936,751 308,442 287,677 3.88 3.85 18,560 2,205 20,765 
Consumer loans (1)
8,720,488 8,559,726 83,826 84,402 3.86 3.94 1,579 (2,155)(576)
Allowance for loan losses(415,372)(561,242) —  —    
Loans, net40,175,503 37,935,235 392,268 372,079 3.92 3.93 20,139 50 20,189 
Mortgage loans held for sale85,299 242,940 921 1,859 4.32 3.06 (1,203)265 (938)
Other loans held for sale725,762 615,301 7,678 4,750 4.19 3.05 840 2,088 2,928 
Other earning assets(3)
813,028 2,705,819 1,660 740 0.81 0.11 (472)1,392 920 
Federal Home Loan Bank and Federal Reserve Bank stock179,837 159,340 1,820 800 4.05 2.01 103 917 1,020 
Total interest earning assets53,144,507 50,846,157 $454,732 $413,534 3.43 %3.26 %26,549 14,649 41,198 
Cash and due from banks538,647 571,561 
Premises, equipment, and software, net385,457 452,652 
Other real estate11,439 1,406 
Cash surrender value of bank-owned life insurance1,077,231 1,055,663 
Other assets(4)
1,379,659 2,090,332 
Total assets$56,536,940 $55,017,771 
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing demand deposits$9,513,334 $8,601,262 $3,598 $2,441 0.15 %0.11 %250 907 1,157 
Money market accounts15,328,395 15,476,262 6,850 7,181 0.18 0.19 (70)(261)(331)
Savings deposits1,506,195 1,333,297 72 55 0.02 0.02 17 
Time deposits2,829,684 3,792,382 1,688 4,894 0.24 0.52 (1,248)(1,958)(3,206)
Brokered deposits2,878,536 3,057,607 6,293 4,799 0.88 0.63 (281)1,775 1,494 
Federal funds purchased and securities sold under repurchase agreements246,737 204,053 219 35 0.35 0.07 177 184 
Other short-term borrowings478,469 — 896 — 0.74 — 896 — 896 
Long-term debt878,413 1,203,038 8,768 11,478 3.99 3.82 (3,092)382 (2,710)
Total interest-bearing liabilities33,659,763 33,667,901 $28,384 $30,883 0.33 %0.36 %(3,529)1,030 (2,499)
Non-interest-bearing deposits16,959,850 15,088,836 
Other liabilities1,247,646 1,091,321 
Shareholders' equity4,669,681 5,169,713 
Total liabilities and equity$56,536,940 $55,017,771 
Interest rate spread:3.10 2.90 
Net interest income - TE/margin(5)
$426,348 $382,651 3.22 %3.02 %$30,078 $13,619 $43,697 
Taxable equivalent adjustment960 791 
  Net interest income, actual$425,388 $381,860 
(1)     Average loans are shown net of unearned income. NPLs are included. Interest income includes fees as follows: 2022 - $13.0 million, 2021 - $28.5 million.
(2)    Reflects taxable-equivalent adjustments, using the statutory federal income tax rate of 21%, in adjusting interest on tax-exempt loans to a taxable-equivalent basis.
(3)    Includes interest-bearing funds with Federal Reserve Bank, interest earning deposits with banks, and federal funds sold and securities purchased under resale agreements.
(4)    Includes average net unrealized gains (losses) on investment securities available for sale of $(923.1) million and $37.0 million for the three months ended June 30, 2022 and 2021, respectively.
(5)    The net interest margin is calculated by dividing annualized net interest income - TE by average total interest earnings assets.

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Table 13 - Year-to-Date Net Interest Income and Rate/Volume Analysis
Six Months Ended June 30, 2022 Compared to 2021
Average BalancesInterestAnnualized Yield/RateChange due toIncrease (Decrease)
(dollars in thousands)202220212022202120222021VolumeRate
Assets
Interest earning assets:
Investment securities available for sale$11,206,150 $8,813,191 $97,562 $62,755 1.74 %1.42 %$16,850 $17,957 $34,807 
Trading account assets10,540 2,947 112 30 2.13 2.01 76 82 
Commercial loans (1) (2)
31,316,646 29,930,734 589,029 578,877 3.79 3.90 26,803 (16,651)10,152 
Consumer loans (1)
8,657,598 8,424,423 165,194 166,466 3.83 3.97 4,590 (5,862)(1,272)
Allowance for loan losses(419,639)(580,450)
Loans, net39,554,605 37,774,707 754,223 745,343 3.84 3.97 31,393 (22,513)8,880 
Mortgage loans held for sale94,542 244,940 1,803 3,516 3.81 2.87 (2,140)427 (1,713)
Other loans held for sale661,768 637,901 12,978 9,555 3.90 2.98 353 3,070 3,423 
Other earning assets(3)
1,363,223 2,771,576 2,475 1,458 0.36 0.10 (629)1,646 1,017 
Federal Home Loan Bank and Federal Reserve Bank stock170,006 158,503 2,505 1,468 2.95 1.85 106 931 1,037 
Total interest earning assets53,060,834 50,403,765 871,658 824,125 3.31 3.29 46,009 1,524 47,533 
Cash and due from banks543,638 545,295 
Premises, equipment, and software, net392,079 456,537 
Other real estate11,598 1,613 
Cash surrender value of bank-owned life insurance1,074,076 1,053,603 
Other assets(4)
1,613,313 2,144,615 
Total assets$56,695,538 $54,605,428 
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing demand deposits$9,531,330 $8,586,092 5,970 5,414 0.13 0.13 609 (53)556 
Money market accounts15,685,030 15,412,941 12,199 15,911 0.16 0.21 283 (3,995)(3,712)
Savings deposits1,483,547 1,276,608 139 105 0.02 0.02 20 14 34 
Time deposits2,919,242 3,972,840 3,826 11,936 0.26 0.61 (3,187)(4,923)(8,110)
Brokered deposits2,833,580 3,212,608 10,026 11,023 0.71 0.69 (1,297)300 (997)
Federal funds purchased and securities sold under repurchase agreements220,689 206,735 230 69 0.21 0.07 156 161 
Other short-term borrowings242,870 — 896 — 0.73 — 896 — 896 
Long-term debt930,131 1,202,827 18,913 22,386 4.07 3.73 (5,044)1,571 (3,473)
Total interest-bearing liabilities33,846,419 33,870,651 52,199 66,844 0.31 0.39 (7,715)(6,930)(14,645)
Non-interest-bearing deposits16,727,040 14,443,645 
Other liabilities1,196,375 1,138,073 
Shareholders' equity4,925,704 5,153,059 
Total liabilities and equity$56,695,538 $54,605,428 
Interest rate spread:3.00 %2.90 %
Net interest income - TE/margin(5)
$819,459 $757,281 3.11 %3.03 %$53,724 $8,454 $62,178 
Taxable equivalent adjustment1,824 1,565 
  Net interest income, actual$817,635 $755,716 
(1)     Average loans are shown net of unearned income. NPLs are included. Interest income includes fees as follows: 2022 - $33.7 million, 2021 - $60.4 million.
(2)    Reflects taxable-equivalent adjustments, using the statutory federal income tax rate of 21%, in adjusting interest on tax-exempt loans to a taxable-equivalent basis.
(3)    Includes interest-bearing funds with Federal Reserve Bank, interest earning deposits with banks, and federal funds sold and securities purchased under resale agreements.
(4)    Includes average net unrealized gains (losses) on investment securities available for sale of $(587.1) million and $76.3 million for the six months ended June 30, 2022 and 2021, respectively.
(5)    The net interest margin is calculated by dividing annualized net interest income - TE by average total interest earnings assets.

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Market Risk Analysis
Interest rate risk is the primary market risk to which Synovus is potentially exposed. Synovus measures its sensitivity to changes in market interest rates through the use of a simulation model which incorporates all of Synovus’ earning assets and liabilities. These simulations are used to determine a baseline net interest income projection and the sensitivity of the income profile based on changes in interest rates. These simulations incorporate assumptions and factors, including, but not limited to, changes in market rates, in the size or composition of the balance sheet, and in repricing characteristics as well as client behaviors. This process is reviewed and updated on an on-going basis in a manner consistent with Synovus’ ALCO governance framework.
Synovus has modeled its baseline net interest income forecast assuming a relatively flat interest rate environment with the federal funds rate at the Federal Reserve’s targeted range of 1.50% to 1.75% as of June 30, 2022 and the prime rate of 4.75% as of June 30, 2022. Synovus has modeled the impact of an immediate increase in market interest rates across the yield curve of 100 and 200 bps to determine the sensitivity of net interest income for the next twelve months. Synovus' current rate risk position is considered asset-sensitive and would be expected to benefit net interest income in a rising interest rate environment. The following table represents the estimated sensitivity of net interest income at June 30, 2022, with comparable information for December 31, 2021.
Table 14 - Twelve Month Net Interest Income Sensitivity
Estimated % Change in Net Interest Income as Compared to Unchanged Rates (for the next twelve months)
Change in Interest Rates (in bps)June 30, 2022December 31, 2021
+20011.0%14.5%
+1005.5%6.5%
The net interest income simulation model is the primary tool utilized to evaluate potential interest rate risks over a shorter-term time horizon. Synovus also evaluates potential longer-term interest rate risk through modeling and evaluation of the sensitivity of the Company's EVE. The EVE measurement process estimates the net fair value of assets, liabilities, and off-balance sheet financial instruments under various interest rate scenarios. Management uses EVE sensitivity analyses as an additional means of measuring interest rate risk and incorporates this form of analysis within its governance and limits framework.
LIBOR Transition
On March 5, 2021, the FCA confirmed that all LIBOR settings will either cease to be provided by any administrator or no longer be representative immediately after June 30, 2023, for all remaining US dollar settings.
The ARRC proposed SOFR as its preferred rate as an alternative to LIBOR and proposed a paced market transition plan to SOFR from LIBOR. Organizations are currently working on industry-wide and company-specific transition plans related to derivatives and cash markets exposed to LIBOR. As noted within "Part I - Item 1A. Risk Factors" of Synovus' 2021 Form 10-K, Synovus holds instruments that may be impacted by the discontinuance of LIBOR, which include floating rate obligations, loans, deposits, derivatives and hedges, and other financial instruments. Synovus has established a cross-functional LIBOR transition working group with representation from all business lines, support and control functions, and legal counsel that has 1) assessed the Company's current exposure to LIBOR indexed instruments and the data, systems and processes that were impacted and have been changed as a result; 2) established a detailed implementation plan; 3) formulated communications and learning activities to support clients and colleagues; and 4) developed a formal governance structure for the transition. For the last several years, loan agreement provisions for new and renewed loans included LIBOR fallback language to ensure transition from LIBOR when such transition occurs. All direct exposures resulting from existing financial contracts that mature after 2021 have been inventoried and are monitored on an ongoing basis. The Company discontinued the use of LIBOR as of December 31, 2021, with limited exceptions as permitted by regulatory guidance or internal policies. Synovus has expanded its product offerings and currently offers multiple alternative reference rates including SOFR, BSBY, and Prime indices. As of June 30, 2022, the Company had approximately $13 billion in loans tied to LIBOR that mature after June 30, 2023. Remediation activities are underway to modify or transition existing exposures to alternate index rates or to convert the rate under existing fallback language, including the use of the Adjustable Interest (LIBOR) Act, enacted in March 2022, and other relevant legislation.

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Critical Accounting Policies
The accounting and financial reporting policies of Synovus are in accordance with GAAP and conform to the accounting and reporting guidelines prescribed by bank regulatory authorities. Synovus has identified certain of its accounting policies as “critical accounting policies,” consisting of those related to the allowance for credit losses and income taxes. In determining which accounting policies are critical in nature, Synovus has identified the policies that require significant judgment or involve complex estimates. It is management's practice to discuss critical accounting policies with the Board of Directors' Audit Committee on a periodic basis, including the development, selection, implementation and disclosure of the critical accounting policies. The application of these policies has a significant impact on Synovus’ unaudited interim consolidated financial statements. Synovus’ financial results could differ significantly if different judgments or estimates are used in the application of these policies. All accounting policies described in "Part II - Item 8. Financial Statements and Supplementary Data - Note 1 - Summary of Significant Accounting Policies" in Synovus' 2021 Form 10-K should be reviewed for a greater understanding of how we record and report our financial performance. There have been no significant changes to the accounting policies, estimates and assumptions, or the judgments affecting the application of these estimates and assumptions from those disclosed in Synovus' 2021 Form 10-K.
Non-GAAP Financial Measures
The measures entitled adjusted non-interest revenue; adjusted non-interest expense; adjusted total revenue; adjusted tangible efficiency ratio; adjusted net income available to common shareholders; adjusted net income per common share, diluted; adjusted return on average assets; adjusted return on average common equity; return on average tangible common equity; adjusted return on average tangible common equity; and tangible common equity ratio are not measures recognized under GAAP and therefore are considered non-GAAP financial measures. The most comparable GAAP measures to these measures are total non-interest revenue; total non-interest expense; total TE revenue; efficiency ratio-TE; net income available to common shareholders; net income per common share, diluted; return on average assets; return on average common equity; and the ratio of total shareholders' equity to total assets, respectively.
Management believes that these non-GAAP financial measures provide meaningful additional information about Synovus to assist management and investors in evaluating Synovus’ operating results, financial strength, the performance of its business, and the strength of its capital position. However, these non-GAAP financial measures have inherent limitations as analytical tools and should not be considered in isolation or as a substitute for analyses of operating results or capital position as reported under GAAP. The non-GAAP financial measures should be considered as additional views of the way our financial measures are affected by significant items and other factors, and since they are not required to be uniformly applied, they may not be comparable to other similarly titled measures at other companies. Adjusted total revenue and adjusted non-interest revenue are measures used by management to evaluate total TE revenue and non-interest revenue exclusive of net investment securities gains (losses) and fair value adjustments on non-qualified deferred compensation. Adjusted non-interest expense and the adjusted tangible efficiency ratio are measures utilized by management to measure the success of expense management initiatives focused on reducing recurring controllable operating costs. Adjusted net income available to common shareholders, adjusted net income per common share, diluted, adjusted return on average assets, and adjusted return on average common equity are measurements used by management to evaluate operating results exclusive of items that management believes are not indicative of ongoing operations and impact period-to-period comparisons. Return on average tangible common equity and adjusted return on average tangible common equity is a measure used by management to compare Synovus' performance with other financial institutions because it calculates the return available to common shareholders without the impact of intangible assets and their related amortization, thereby allowing management to evaluate the performance of the business consistently. The tangible common equity ratio is used by management to assess the strength of our capital position. The computations of these measures are set forth in the tables below.


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Table 15 - Reconciliation of Non-GAAP Financial Measures
Three Months EndedSix Months Ended
(in thousands, except per share data)June 30, 2022June 30, 2021June 30, 2022June 30, 2021
Adjusted non-interest revenue
Total non-interest revenue$97,266 $107,087 $202,600 $218,043 
Subtract/add: Investment securities (gains) losses, net —  1,990 
Subtract/add: Fair value adjustment on non-qualified deferred compensation3,240 (1,126)4,535 (1,918)
Adjusted non-interest revenue$100,506 $105,961 $207,135 $218,115 
Adjusted non-interest expense
Total non-interest expense$282,051 $270,531 $554,501 $537,665 
Subtract: Earnout liability adjustments (750) (750)
Subtract/add: Restructuring charges1,850 (415)8,274 (946)
Subtract: Valuation adjustment to Visa derivative(3,500)— (3,500)— 
Subtract: Loss on early extinguishment of debt — (677)— 
Subtract/add: Fair value adjustment on non-qualified deferred compensation3,240 (1,126)4,535 (1,918)
Adjusted non-interest expense$283,641 $268,240 $563,133 $534,051 
Adjusted total revenue and adjusted tangible efficiency ratio
Adjusted non-interest expense$283,641 $268,240 $563,133 $534,051 
Subtract: Amortization of intangibles(2,118)(2,379)(4,236)(4,758)
Adjusted tangible non-interest expense$281,523 $265,861 $558,897 $529,293 
Net interest income$425,388 $381,860 $817,635 $755,716 
Add: Tax equivalent adjustment960 791 1,824 1,565 
Add: Total non-interest revenue97,266 107,087 202,600 218,043 
Total TE revenue$523,614 $489,738 $1,022,059 $975,324 
Subtract/add: Investment securities (gains) losses, net —  1,990 
Subtract/add: Fair value adjustment on non-qualified deferred compensation3,240 (1,126)4,535 (1,918)
Adjusted total revenue$526,854 $488,612 $1,026,594 $975,396 
Efficiency ratio-TE53.87 %55.24 %54.25 %55.13 %
 Adjusted tangible efficiency ratio53.43 54.41 54.44 54.26 
Adjusted net income available to common shareholders and adjusted diluted earnings per share
Net income available to common shareholders$169,761 $177,909 $332,507 $356,711 
Add: Earnout liability adjustments 750  750 
Add/subtract: Restructuring charges(1,850)415 (8,274)946 
Add: Valuation adjustment to Visa derivative3,500 — 3,500 — 
Add: Loss on early extinguishment of debt — 677 — 
Subtract/add: Investment securities (gains) losses, net —  1,990 
Add/subtract: Tax effect of adjustments (1)
(393)(105)976 (743)
Adjusted net income available to common shareholders$171,018 $178,969 $329,386 $359,654 
Weighted average common shares outstanding, diluted146,315 149,747 146,489 149,764 
Net income per common share, diluted$1.16 $1.19 $2.27 $2.38 
Adjusted net income per common share, diluted1.17 1.20 2.25 2.40 

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Table 15 - Reconciliation of Non-GAAP Financial Measures, continued
Three Months EndedSix Months Ended
(dollars in thousands)June 30, 2022June 30, 2021June 30, 2022June 30, 2021
Adjusted return on average assets (annualized)
Net income$178,052 $186,200 $349,088 $373,292 
Add: Earnout liability adjustments 750  750 
Add/subtract: Restructuring charges(1,850)415 (8,274)946 
Add: Valuation adjustment to Visa derivative3,500 — 3,500 — 
Add: Loss on early extinguishment of debt — 677 — 
Subtract/add: Investment securities (gains) losses, net —  1,990 
Add/subtract: Tax effect of adjustments (1)
(393)(105)976 (743)
Adjusted net income$179,309 $187,260 $345,967 $376,235 
Net income annualized714,165 746,846 703,962 752,771 
Adjusted net income annualized719,206 751,098 697,668 758,706 
Total average assets56,536,940 55,017,771 56,695,538 54,605,428 
Return on average assets (annualized)1.26 %1.36 %1.24 %1.38 %
Adjusted return on average assets (annualized)1.27 1.37 1.23 1.39 
Three Months Ended
(dollars in thousands)June 30, 2022March 31, 2022June 30, 2021
Adjusted return on average common equity, return on average tangible common equity, and adjusted return on average tangible common equity (annualized)
Net income available to common shareholders$169,761 $162,746 $177,909 
Add: Earnout liability adjustments— — 750 
Add/subtract: Restructuring charges(1,850)(6,424)415 
Add: Valuation adjustment to Visa derivative3,500 — — 
Add: Loss on early extinguishment of debt 677 — 
Add/subtract: Tax effect of adjustments (1)
(393)1,369 (105)
Adjusted net income available to common shareholders$171,018 $158,368 $178,969 
Adjusted net income available to common shareholders annualized$685,951 $642,270 $717,843 
Add: Amortization of intangibles, annualized net of tax6,471 6,543 7,128 
Adjusted net income available to common shareholders excluding amortization of intangibles annualized$692,422 $648,813 $724,971 
Net income available to common shareholders annualized$680,910 $660,025 $713,591 
Add: Amortization of intangibles, annualized net of tax6,471 6,543 7,128 
Net income available to common shareholders excluding amortization of intangibles$687,381 $666,568 $720,719 
Total average shareholders' equity less preferred stock$4,132,536 $4,647,426 $4,632,568 
Subtract: Goodwill(452,390)(452,390)(452,390)
Subtract: Other intangible assets, net(32,387)(34,576)(41,399)
Total average tangible shareholders' equity less preferred stock$3,647,759 $4,160,460 $4,138,779 
Return on average common equity (annualized)16.48 %14.20 %15.40 %
Adjusted return on average common equity (annualized)16.60 13.82 15.50 
Return on average tangible common equity (annualized)18.84 16.02 17.41 
Adjusted return on average tangible common equity (annualized)18.98 15.59 17.52 

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Table 15 - Reconciliation of Non-GAAP Financial Measures, continued
(dollars in thousands)June 30, 2022March 31, 2022December 31, 2021June 30, 2021
Tangible common equity ratio
Total assets$57,382,745 $56,419,549 $57,317,226 $54,938,659 
Subtract: Goodwill(452,390)(452,390)(452,390)(452,390)
Subtract: Other intangible assets, net(31,360)(33,478)(35,596)(40,354)
Tangible assets$56,898,995 $55,933,681 $56,829,240 $54,445,915 
Total shareholders' equity$4,584,438 $4,824,635 $5,296,800 $5,237,714 
Subtract: Goodwill(452,390)(452,390)(452,390)(452,390)
Subtract: Other intangible assets, net(31,360)(33,478)(35,596)(40,354)
Subtract: Preferred stock, no par value(537,145)(537,145)(537,145)(537,145)
Tangible common equity$3,563,543 $3,801,622 $4,271,669 $4,207,825 
Total shareholders' equity to total assets ratio7.99 %8.55 %9.24 %9.53 %
Tangible common equity ratio6.26 6.80 7.52 7.73 
(1) An assumed marginal tax rate of 23.8% for 2022 and 25.3% for 2021 was applied.

ITEM 3. – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    The information presented in the Market Risk Analysis section of the Management's Discussion and Analysis of Financial Condition and Results of Operations section of this Report is incorporated herein by reference.
ITEM 4. – CONTROLS AND PROCEDURES
In connection with the preparation of this Quarterly Report on Form 10-Q, an evaluation was carried out by Synovus' management, with the participation of Synovus' Chief Executive Officer and Chief Financial Officer, of the effectiveness of Synovus' disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures. Based on that evaluation, Synovus' Chief Executive Officer and Chief Financial Officer have concluded that, as of June 30, 2022, Synovus' disclosure controls and procedures were effective.
There have been no material changes in Synovus' internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the quarter ended June 30, 2022 that have materially affected, or are reasonably likely to materially affect, Synovus' internal control over financial reporting.


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PART II. – OTHER INFORMATION
ITEM 1. – LEGAL PROCEEDINGS
See "Part I - Item 1. Financial Statements and Supplementary Data - Note 9 - Commitments and Contingencies" of this Report.
ITEM 1A. – RISK FACTORS
In addition to the other information set forth in this Report, you should carefully consider the factors discussed in "Part I - Item IA - Risk Factors” of Synovus' 2021 Form 10-K which could materially affect its business, financial position, results of operations, cash flows, or future results. Please be aware that these risks may change over time and other risks may prove to be important in the future. New risks may emerge at any time, and we cannot predict such risks or estimate the extent to which they may affect our business, financial condition or results of operations, or the trading price of our securities.
There are no material changes during the period covered by this Report to the risk factors previously disclosed in Synovus' 2021 Form 10-K.
ITEM 2. – UNREGISTERED SALES OF SECURITIES AND USE OF PROCEEDS
    (a) None.
    (b) None.
    (c) Issuer Purchases of Equity Securities:
The Company announced on January 20, 2022 that its Board of Directors authorized share repurchases of up to $300 million in 2022.
Share Repurchases
(in thousands, except per share data)Total Number of Shares Repurchased
Average Price Paid per Share(1)
Total Number
of Shares Repurchased as
Part of
Publicly Announced
Plans or Programs
Maximum Approximate
Dollar Value
of Shares
that May Yet Be
Purchased Under the
Plans or Programs
April 1 to April 30, 202225 $42.41 25 $289,273 
May 1 to May 31, 202253 42.85 53 287,019 
June 1 to June 30, 2022— — — 287,019 
Total78 $42.71 78 
(1)    The average price paid per share is calculated on a trade date basis for all open market transactions and excludes commissions and other transaction expenses.
The foregoing repurchases during the second quarter of 2022 were purchased through open market transactions, including under plans complying with Rule 10b5-1 under the Exchange Act.

ITEM 3. – DEFAULTS UPON SENIOR SECURITIES
    None.
ITEM 4. – MINE SAFETY DISCLOSURES
    None.
ITEM 5. – OTHER INFORMATION
    None.

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ITEM 6. – EXHIBITS  
Exhibit
Number
Description
3.1 
3.2 
31.1 
31.2 
32 
101 Interactive Data File
104 Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101).


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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

 
SYNOVUS FINANCIAL CORP.
August 2, 2022By:/s/ Andrew J. Gregory, Jr.
DateAndrew J. Gregory, Jr.
Executive Vice President and Chief Financial Officer
(Duly Authorized Officer and Principal Financial Officer)


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