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SYNOVUS FINANCIAL CORP - Quarter Report: 2023 March (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 March 31, 2023
Commission file number 1-10312
 
______________________________
financialappendix930a89.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 Section 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 April 30, 2023, 146,117,154 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 March 31, 2023 and December 31, 2022
Consolidated Statements of Income for the Three Months Ended March 31, 2023 and 2022
Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended March 31, 2023 and 2022
Consolidated Statements of Changes in Shareholders' Equity for the Three Months Ended March 31, 2023 and 2022
Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2023 and 2022
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
CECL Current expected credit losses
CET1 – Common Equity Tier 1 Capital defined by Basel III capital rules
CIB Corporate and Investment Banking
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
DCF – Discounted cash flow
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
FDM – Financial Difficulty Modification
i


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
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
FOMC Federal Open Market Committee
FTP – Funds transfer pricing
GA DBF – Georgia Department of Banking and Finance
GAAP – Generally Accepted Accounting Principles in the United States of America
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
Qualpay Qualpay, Inc.
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' 2022 Form 10-K – Synovus' Annual Report on Form 10-K for the year ended December 31, 2022
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)March 31, 2023December 31, 2022
ASSETS
Cash and due from banks$638,150 $624,097 
Interest-bearing funds with Federal Reserve Bank2,656,953 1,280,684 
Interest earning deposits with banks34,779 34,632 
Federal funds sold and securities purchased under resale agreements35,518 38,367 
     Total cash, cash equivalents, and restricted cash3,365,400 1,977,780 
Investment securities available for sale, at fair value9,732,618 9,678,103 
Loans held for sale (includes $44,400 and $51,136 measured at fair value, respectively)
669,447 391,502 
Loans, net of deferred fees and costs44,044,939 43,716,353 
Allowance for loan losses(457,010)(443,424)
Loans, net43,587,929 43,272,929 
Cash surrender value of bank-owned life insurance1,094,072 1,089,280 
Premises, equipment, and software, net367,089 370,632 
Goodwill452,390 452,390 
Other intangible assets, net25,267 27,124 
Other assets2,545,813 2,471,638 
Total assets$61,840,025 $59,731,378 
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits:
Non-interest-bearing deposits$14,642,677 $15,639,899 
Interest-bearing deposits35,311,259 33,231,660 
Total deposits49,953,936 48,871,559 
Federal funds purchased and securities sold under repurchase agreements195,695 146,588 
Other short-term borrowings253,152 603,384 
Long-term debt5,146,252 4,109,597 
Other liabilities1,520,860 1,524,449 
Total liabilities57,069,895 55,255,577 
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 170,713,864 and 170,141,492, respectively; outstanding 146,059,006 and 145,486,634, respectively
170,714 170,141 
Additional paid-in capital3,925,449 3,920,346 
Treasury stock, at cost; 24,654,858 and 24,654,858 shares, respectively
(944,484)(944,484)
Accumulated other comprehensive income (loss), net(1,289,327)(1,442,117)
Retained earnings2,370,633 2,234,770 
Total shareholders' equity4,770,130 4,475,801 
Total liabilities and shareholders' equity$61,840,025 $59,731,378 
See accompanying notes to unaudited interim consolidated financial statements.

1



SYNOVUS FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
Three Months Ended March 31,
(in thousands, except per share data)20232022
Interest income:
Loans, including fees
$629,557 $361,091 
Investment securities available for sale
61,054 47,249 
Loans held for sale
5,577 6,182 
Federal Reserve Bank balances
16,818 788 
Other earning assets
3,873 752 
Total interest income
716,879 416,062 
Interest expense:
Deposits
173,935 13,659 
Long-term debt
42,529 10,144 
Other borrowings
19,664 11 
Total interest expense
236,128 23,814 
Net interest income
480,751 392,248 
Provision for (reversal of) credit losses
32,154 11,400 
Net interest income after provision for (reversal of) credit losses
448,597 380,848 
Non-interest revenue:
Service charges on deposit accounts
22,974 22,539 
Fiduciary and asset management fees
19,696 20,277 
Card fees
15,824 14,756 
Brokerage revenue
22,558 14,655 
Mortgage banking income
3,858 5,953 
Capital markets income
13,725 5,472 
Income from bank-owned life insurance
7,262 6,556 
Investment securities gains (losses), net
1,030 — 
Recovery of NPA13,126 — 
Other non-interest revenue
13,073 15,126 
Total non-interest revenue
133,126 105,334 
Non-interest expense:
Salaries and other personnel expense
188,924 164,684 
Net occupancy, equipment, and software expense
42,860 42,877 
Third-party processing and other services
21,833 20,996 
Professional fees
8,963 8,474 
FDIC insurance and other regulatory fees
10,268 6,250 
Restructuring charges (reversals)(733)(6,424)
Loss on other loans held for sale16,750 — 
Other operating expense
32,987 35,593 
Total non-interest expense
321,852 272,450 
Income before income taxes
259,871 213,732 
Income tax expense
57,712 42,695 
Net income
202,159 171,037 
Less: Preferred stock dividends
8,291 8,291 
Net income available to common shareholders
$193,868 $162,746 
Net income per common share, basic
$1.33 $1.12 
Net income per common share, diluted
1.32 1.11 
Weighted average common shares outstanding, basic
145,799 145,273 
Weighted average common shares outstanding, diluted
146,727 146,665 
See accompanying notes to unaudited interim consolidated financial statements.

2



SYNOVUS FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(unaudited)
Three Months Ended March 31,
20232022
(in thousands)
Before-tax AmountIncome TaxNet of Tax AmountBefore-tax AmountIncome TaxNet of Tax Amount
Net income
$259,871 $(57,712)$202,159 $213,732 $(42,695)$171,037 
Unrealized gains (losses) on investment securities available for sale:
Net unrealized gains (losses) arising during the period
153,081 (37,260)115,821 (621,482)147,023 (474,459)
Reclassification adjustment for realized (gains) losses included in net income
(1,030)251 (779)— — — 
Net change
152,051 (37,009)115,042 (621,482)147,023 (474,459)
Unrealized gains (losses) on derivative instruments designated as cash flow hedges:
Net unrealized gains (losses) arising during the period
10,000 (2,434)7,566 (135,978)32,361 (103,617)
Reclassification adjustment for realized (gains) losses included in net income39,892 (9,710)30,182 (2,189)521 (1,668)
Net change49,892 (12,144)37,748 (138,167)32,882 (105,285)
Total other comprehensive income (loss)
$201,943 $(49,153)$152,790 $(759,649)$179,905 $(579,744)
Comprehensive income (loss)
$354,949 $(408,707)
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 December 31, 2022$537,145 $170,141 $3,920,346 $(944,484)$(1,442,117)$2,234,770 $4,475,801 
Cumulative-effect of change in accounting principle for ASU 2023-02     (297)(297)
Net income     202,159 202,159 
Other comprehensive income (loss), net of income taxes    152,790  152,790 
Cash dividends declared on common stock - $0.38 per share
     (55,502)(55,502)
Cash dividends declared on preferred stock(1)
     (8,291)(8,291)
Restricted share unit vesting and taxes paid related to net share settlement 383 (8,280)  (2,206)(10,103)
Stock options exercised, net 190 3,307    3,497 
Share-based compensation expense  10,076    10,076 
Balance at March 31, 2023$537,145 $170,714 $3,925,449 $(944,484)$(1,289,327)$2,370,633 $4,770,130 
Balance at December 31, 2021$537,145 $169,384 $3,894,109 $(931,497)$(82,321)$1,709,980 $5,296,800 
Net income— — — — — 171,037 171,037 
Other comprehensive income (loss), net of income taxes— — — — (579,744)— (579,744)
Cash dividends declared on common stock - $0.34 per share
— — — — — (49,442)(49,442)
Cash dividends declared on preferred stock(1)
— — — — — (8,291)(8,291)
Repurchases of common stock including costs to repurchase— — — (9,671)— — (9,671)
Restricted share unit vesting and taxes paid related to net share settlement— 302 (7,149)— — (1,742)(8,589)
Stock options exercised, net— 226 4,408 — — — 4,634 
Share-based compensation expense— — 7,901 — — — 7,901 
Balance at March 31, 2022$537,145 $169,912 $3,899,269 $(941,168)$(662,065)$1,821,542 $4,824,635 
(1)    For the three months ended March 31, 2023 and 2022, dividends per share were $0.39 and $0.37 for Series D and Series E Preferred Stock, respectively.

See accompanying notes to unaudited interim consolidated financial statements.

4



SYNOVUS FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Three Months Ended March 31,
(in thousands)20232022
Operating Activities
Net income
$202,159 $171,037 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Provision for (reversal of) credit losses
32,154 11,400 
Depreciation, amortization, and accretion, net
20,088 18,425 
Deferred income tax expense (benefit)
706 1,250 
Originations of loans held for sale
(143,149)(915,873)
Proceeds from sales and payments on loans held for sale
275,274 946,187 
Gain on sales of loans held for sale, net
(2,716)(4,647)
(Increase) decrease in other assets
(63,174)(50,025)
Increase (decrease) in other liabilities
25,417 (5,433)
Investment securities (gains) losses, net
(1,030)— 
Share-based compensation expense
8,711 8,334 
 Other 677 
Net cash provided by (used in) operating activities
354,440 181,332 
Investing Activities
Proceeds from maturities and principal collections of investment securities available for sale
205,098 642,957 
Proceeds from sales of investment securities available for sale
82,595 — 
Purchases of investment securities available for sale
(193,009)(820,120)
Proceeds from sales of loans
1,505 39,568 
Purchases of loans (181,335)
Net (increase) decrease in loans
(773,103)(726,686)
Net (purchases) redemptions of Federal Home Loan Bank stock
(7,439)(13,827)
Net (purchases) redemptions of Federal Reserve Bank stock
(7,108)(424)
Net proceeds from settlement (purchases) of bank-owned life insurance policies
2,514 — 
Net increase in premises, equipment and software
(6,519)(2,662)
Other3,015 28,464 
Net cash provided by (used in) investing activities
(692,451)(1,034,065)
Financing Activities
Net increase (decrease) in deposits
1,070,206 (771,032)
Net increase (decrease) in federal funds purchased and securities sold under repurchase agreements
49,107 236,991 
Net increase (decrease) in other short-term borrowings(350,232)400,192 
Repayments and redemption of long-term debt
 (400,000)
Proceeds from long-term debt, net1,020,912 — 
Dividends paid to common shareholders
(49,465)(47,851)
Dividends paid to preferred shareholders
(8,291)(8,291)
Repurchases of common stock
 (9,671)
Issuances, net of taxes paid, under equity compensation plans
(6,606)(3,955)
Net cash provided by (used in) financing activities
1,725,631 (603,617)
Increase (decrease) in cash and cash equivalents including restricted cash
1,387,620 (1,456,350)
Cash, cash equivalents, and restricted cash, at beginning of period
1,977,780 3,009,853 
Cash, cash equivalents, and restricted cash at end of period
$3,365,400 $1,553,503 
Supplemental Disclosures:
Income taxes paid $52,157 $46,493 
Interest paid206,624 27,278 
Non-cash Activities
Loans transferred (from) to other loans held for sale 424,104 (1,055)
See accompanying notes to unaudited interim consolidated financial statements.

5



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, capital markets, 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 245 branches and 363 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' 2022 Form 10-K.
Investments in Tax Credit Structures
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 partnership 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 applies the proportional amortization method of accounting for its LIHTC partnerships. Effective January 1, 2023, upon the adoption of ASU 2023-02, Synovus also began applying the proportional amortization method of accounting to its qualifying new market tax credit partnership. The proportional amortization method recognizes the amortized cost of the investment as a component of income tax expense. Prior to the adoption of ASU 2023-02, Synovus applied the equity method of accounting to its new market tax credit partnership. For the three months ended March 31, 2023, Synovus recognized LIHTC and new market tax credit partnership tax credits of $10.8 million and amortization expense of $10.2 million, which were included within income tax expense in the consolidated statements of income. For the three months ended March 31, 2022 Synovus recognized LIHTC investment partnerships tax credits of $7.5 million and amortization expense of $8.0 million, which were included within income tax expense in the consolidated statements of income.
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 significant change relate to the determination of the ACL, estimates of fair value, income taxes, and contingent liabilities.

6



Recent Accounting Pronouncements
The following table provides a brief description of accounting standards adopted or issued in 2023 and the estimated effect on the Company’s financial statements.
StandardDescriptionRequired date of adoptionEffect on Company's financial statements or other significant matters
Standards 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 adopted this standard on January 1, 2023 on a prospective basis. The adoption of this standard did not have a material impact to the consolidated financial statements. See Note 3, Loans and Allowance for Loan Losses, for the required disclosures in accordance with this ASU.
ASU 2023-02, Accounting for Investments in Tax Credit Structures Using the Proportional Amortization MethodIn March 2023, the FASB issued ASU 2023-02, which expands the population of investments for which an investor may elect to apply the proportional amortization method. Under the ASU, an investor in a tax equity investment may elect the proportional amortization method for qualifying investments on a tax credit program-by-program basis. To qualify for the proportional amortization method, an investment must meet the criteria previously applicable to LIHTC investments, as clarified by the ASU.January 1, 2024. Early adoption is permitted as of an interim period with retrospective application back to the beginning of the fiscal year.
The Company early adopted this standard on January 1, 2023, on a modified retrospective basis. The adoption of this standard did not have a material impact to the consolidated financial statements. The Company recognized a cumulative effect adjustment of $297 thousand at adoption to decrease the beginning balance of retained earnings as of January 1, 2023, for the difference between the previous method used to account for the tax equity investment and the application of the proportional amortization method since the investment was entered into.

7



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 March 31, 2023 and December 31, 2022 are summarized below.
March 31, 2023
(in thousands)Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value
U.S. Treasury securities$516,782 $ $(36,502)$480,280 
U.S. Government agency securities52,397 1 (3,453)48,945 
Mortgage-backed securities issued by U.S. Government agencies 810,042 202 (101,699)708,545 
Mortgage-backed securities issued by U.S. Government sponsored enterprises 8,159,830 2,791 (1,137,121)7,025,500 
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises 753,877  (105,318)648,559 
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises873,930  (61,907)812,023 
Corporate debt securities and other debt securities8,933  (167)8,766 
Total investment securities available for sale$11,175,791 $2,994 $(1,446,167)$9,732,618 
December 31, 2022
(in thousands)Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value
U.S. Treasury securities$515,953 $— $(44,140)$471,813 
U.S. Government agency securities52,411 — (3,613)48,798 
Mortgage-backed securities issued by U.S. Government agencies 904,593 1,624 (113,468)792,749 
Mortgage-backed securities issued by U.S. Government sponsored enterprises 8,144,374 936 (1,250,240)6,895,070 
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises 769,498 — (114,371)655,127 
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises877,590 — (71,645)805,945 
Corporate debt securities and other debt securities8,908 — (307)8,601 
Total investment securities available for sale$11,273,327 $2,560 $(1,597,784)$9,678,103 
At March 31, 2023 and December 31, 2022, investment securities with a carrying value of $4.85 billion and $4.47 billion, respectively, were pledged to secure certain deposits and other liabilities, as required by law or contractual agreements.            


8



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 March 31, 2023 and December 31, 2022 are presented below.
March 31, 2023
Less than 12 Months12 Months or LongerTotal
(in thousands)Fair ValueGross Unrealized LossesFair ValueGross Unrealized LossesFair ValueGross Unrealized Losses
U.S. Treasury securities$94,424 $(2,869)$361,097 $(33,633)$455,521 $(36,502)
U.S. Government agency securities28,845 (1,146)19,841 (2,307)48,686 (3,453)
Mortgage-backed securities issued by U.S. Government agencies 119,866 (1,730)538,765 (99,969)658,631 (101,699)
Mortgage-backed securities issued by U.S. Government sponsored enterprises 699,851 (31,589)6,038,186 (1,105,532)6,738,037 (1,137,121)
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises 11,850 (335)636,709 (104,983)648,559 (105,318)
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises380,458 (12,586)431,565 (49,321)812,023 (61,907)
Corporate debt securities and other debt securities8,766 (167)  8,766 (167)
Total$1,344,060 $(50,422)$8,026,163 $(1,395,745)$9,370,223 $(1,446,167)
December 31, 2022
Less than 12 Months12 Months or LongerTotal
(in thousands)Fair ValueGross Unrealized LossesFair ValueGross Unrealized LossesFair ValueGross Unrealized Losses
U.S. Treasury securities$139,737 $(6,789)$307,582 $(37,351)$447,319 $(44,140)
U.S. Government agency securities28,938 (1,053)19,603 (2,560)48,541 (3,613)
Mortgage-backed securities issued by U.S. Government agencies 187,655 (5,952)521,395 (107,516)709,050 (113,468)
Mortgage-backed securities issued by U.S. Government sponsored enterprises 1,473,348 (120,135)5,365,233 (1,130,105)6,838,581 (1,250,240)
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises 119,649 (10,311)535,478 (104,060)655,127 (114,371)
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises565,382 (29,383)240,564 (42,262)805,946 (71,645)
Corporate debt securities and other debt securities8,601 (307)— — 8,601 (307)
Total$2,523,310 $(173,930)$6,989,855 $(1,423,854)$9,513,165 $(1,597,784)
As of March 31, 2023, Synovus had 89 investment securities in a loss position for less than twelve months and 329 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 March 31, 2023.

9



At March 31, 2023, 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 March 31, 2023 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 March 31, 2023
(in thousands)Within One
 Year
1 to 5
Years
5 to 10
 Years
More Than
 10 Years
Total
Amortized Cost
U.S. Treasury securities$24,560 $442,362 $49,860 $ $516,782 
U.S. Government agency securities258 22,148 29,991  52,397 
Mortgage-backed securities issued by U.S. Government agencies  454 4 809,584 810,042 
Mortgage-backed securities issued by U.S. Government sponsored enterprises  20,872 87,576 8,051,382 8,159,830 
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises  80 11,932 741,865 753,877 
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises 585,636 222,838 65,456 873,930 
Corporate debt securities and other debt securities 8,933   8,933 
Total amortized cost$24,818 $1,080,485 $402,201 $9,668,287 $11,175,791 
Fair Value
U.S. Treasury securities$24,560 $414,370 $41,350 $ $480,280 
U.S. Government agency securities259 19,841 28,845  48,945 
Mortgage-backed securities issued by U.S. Government agencies  441 4 708,100 708,545 
Mortgage-backed securities issued by U.S. Government sponsored enterprises  19,951 82,013 6,923,536 7,025,500 
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises  77 11,605 636,877 648,559 
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises 558,026 192,614 61,383 812,023 
Corporate debt securities and other debt securities 8,766   8,766 
Total fair value$24,819 $1,021,472 $356,431 $8,329,896 $9,732,618 
Gross gains and gross losses on sales of securities available for sale for the three months ended March 31, 2023 and 2022 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 March 31,
(in thousands)20232022
Gross realized gains on sales$1,030 $— 
Gross realized losses on sales — 
Investment securities gains (losses), net$1,030 $— 

10



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 March 31, 2023 and December 31, 2022.
March 31, 2023
(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$14,095,704 $9,723 $1,775 $11,498 $78,792 $15,404 $14,201,398 
Owner-occupied8,369,684 3,455 48 3,503 25,591  8,398,778 
Total commercial and industrial22,465,388 13,178 1,823 15,001 104,383 15,404 22,600,176 
Investment properties11,971,387 1,830  1,830 1,935 1,678 11,976,830 
1-4 family properties592,680 455  455 2,621 894 596,650 
Land and development422,055 67  67 1,153  423,275 
Total commercial real estate12,986,122 2,352  2,352 5,709 2,572 12,996,755 
Consumer mortgages5,194,675 12,429  12,429 39,536  5,246,640 
Home equity1,742,419 6,863 1 6,864 7,967  1,757,250 
Credit cards181,091 1,799 1,705 3,504   184,595 
Other consumer loans1,237,731 14,903  14,903 6,857 32 1,259,523 
Total consumer8,355,916 35,994 1,706 37,700 54,360 32 8,448,008 
Loans, net of deferred fees and costs$43,807,426 $51,524 $3,529 $55,053 $164,452 $18,008 $44,044,939 
December 31, 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$13,798,639 $15,033 $1,437 $16,470 $48,008 $11,299 $13,874,416 
Owner-occupied8,181,649 487 — 487 9,499 605 8,192,240 
Total commercial and industrial21,980,288 15,520 1,437 16,957 57,507 11,904 22,066,656 
Investment properties11,639,614 960 — 960 1,785 1,688 11,644,047 
1-4 family properties613,049 762 — 762 2,172 950 616,933 
Land and development388,098 77 — 77 1,158 — 389,333 
Total commercial real estate12,640,761 1,799 — 1,799 5,115 2,638 12,650,313 
Consumer mortgages5,163,417 13,969 210 14,179 36,847 — 5,214,443 
Home equity1,742,412 7,795 7,796 6,830 — 1,757,038 
Credit cards200,047 1,843 1,722 3,565 — — 203,612 
Other consumer loans1,795,799 21,269 21,272 7,220 — 1,824,291 
Total consumer8,901,675 44,876 1,936 46,812 50,897 — 8,999,384 
Loans, net of deferred fees and costs$43,522,724 $62,195 $3,373 $65,568 $113,519 $14,542 $43,716,353 
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 $3.3 million and $3.4 million for the three months ended March 31, 2023 and 2022, respectively. Of the interest income recognized during the three months ended March 31, 2023 and 2022, cash-basis interest income was $1.7 million and $554 thousand, respectively.
Pledged Loans
Loans with carrying values of $18.61 billion and $16.09 billion, respectively, were pledged as collateral for borrowings and capacity at March 31, 2023 and December 31, 2022, respectively, to the FHLB and Federal Reserve Bank.

11



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 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.
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 (medical and non-medical), 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 our preference is to obtain some level of recourse from project sponsors. 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.

12



The following table summarizes each loan portfolio class by risk grade and origination year as of March 31, 2023 as required under CECL. In addition, gross charge-offs by loan portfolio class and origination year as of March 31, 2023 are included below as a result of the adoption of ASU 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosure.
March 31, 2023
Term Loans Amortized Cost Basis by Origination YearRevolving Loans
(in thousands)20232022202120202019PriorAmortized Cost BasisConverted to Term LoansTotal
Commercial, financial and agricultural
Pass$209,699 $1,263,951 $1,752,589 $973,723 $780,905 $1,480,991 $7,182,461 $53,212 $13,697,531 
Special Mention1,135 1,174 2,453 1,705 4,580 17,890 137,617  166,554 
Substandard(1)
16,893 18,271 22,900 40,625 39,241 26,678 170,153 1,976 336,737 
Loss(2)(3)
 41 34   355 146  576 
Total commercial, financial and agricultural227,727 1,283,437 1,777,976 1,016,053 824,726 1,525,914 7,490,377 55,188 14,201,398 
Current YTD Period:
Gross charge-offs 595 1,525 600 137 308 4,152 203 7,520 
Owner-occupied
Pass290,480 1,574,203 1,674,386 1,117,073 876,567 1,673,967 870,423  8,077,099 
Special Mention637 1,740 1,002 24,249 7,196 69,869 17,766  122,459 
Substandard(1)
148 23,273 15,989 62,754 15,325 67,223 14,082  198,794 
Loss(3)
  245   181   426 
Total owner-occupied291,265 1,599,216 1,691,622 1,204,076 899,088 1,811,240 902,271  8,398,778 
Current YTD Period:
Gross charge-offs  353      353 
Total commercial and industrial518,992 2,882,653 3,469,598 2,220,129 1,723,814 3,337,154 8,392,648 55,188 22,600,176 
Current YTD Period:
Gross charge-offs$ $595 $1,878 $600 $137 $308 $4,152 $203 $7,873 
Investment properties
Pass197,011 2,796,377 3,401,131 1,487,377 1,207,607 2,205,565 539,903  11,834,971 
Special Mention551 1,198 1,514  14,446 30,961   48,670 
Substandard(1)
3,219 2,711 1,447 174 1,678 62,924 20,929  93,082 
Loss(3)
     107   107 
Total investment properties200,781 2,800,286 3,404,092 1,487,551 1,223,731 2,299,557 560,832  11,976,830 
Current YTD Period:
Gross charge-offs         
1-4 family properties
Pass40,898 219,509 141,305 40,833 33,065 73,898 40,670  590,178 
Special Mention   195  192   387 
Substandard(1)
1,301 1,289 985 316 685 1,464 45  6,085 
Total 1-4 family properties42,199 220,798 142,290 41,344 33,750 75,554 40,715  596,650 
Current YTD Period:
Gross charge-offs     19   19 

13



March 31, 2023
Term Loans Amortized Cost Basis by Origination YearRevolving Loans
(in thousands)20232022202120202019PriorAmortized Cost BasisConverted to Term LoansTotal
Land and development
Pass52,110 107,318 78,137 21,631 34,780 85,463 8,314  387,753 
Special Mention     30,688   30,688 
Substandard(1)
169 688 302 953 619 2,103   4,834 
Total land and development52,279 108,006 78,439 22,584 35,399 118,254 8,314  423,275 
Current YTD Period:
Gross charge-offs   77     77 
Total commercial real estate295,259 3,129,090 3,624,821 1,551,479 1,292,880 2,493,365 609,861  12,996,755 
Current YTD Period:
Gross charge-offs$ $ $ $77 $ $19 $ $ $96 
Consumer mortgages
Pass164,007 854,860 1,142,028 1,314,831 447,533 1,269,573 33  5,192,865 
Substandard(1)
 813 7,136 11,174 8,851 25,067   53,041 
Loss(3)
    4 730   734 
Total consumer mortgages164,007 855,673 1,149,164 1,326,005 456,388 1,295,370 33  5,246,640 
Current YTD Period:
Gross charge-offs 55 9 8 71 271   414 
Home equity
Pass      1,232,884 511,633 1,744,517 
Substandard(1)
      7,611 4,684 12,295 
Loss(3)
      322 116 438 
Total home equity      1,240,817 516,433 1,757,250 
Current YTD Period:
Gross charge-offs      106  106 
Credit cards
Pass      182,926  182,926 
Substandard(1)
      567  567 
Loss(2)
      1,102  1,102 
Total credit cards      184,595  184,595 
Current YTD Period:
Gross charge-offs      1,816  1,816 
Other consumer loans
Pass32,096 246,407 319,745 151,022 42,022 153,316 306,552  1,251,160 
Substandard(1)
 1,499 3,623 1,505 697 829 138  8,291 
Loss(2)
     28 44  72 
Total other consumer loans32,096 247,906 323,368 152,527 42,719 154,173 306,734  1,259,523 
Current YTD Period:
Gross charge-offs(4)
31 1,250 10,898 1,194 496 600 561  15,030 
Total consumer196,103 1,103,579 1,472,532 1,478,532 499,107 1,449,543 1,732,179 516,433 8,448,008 
Current YTD Period:
Gross charge-offs$31 $1,305 $10,907 $1,202 $567 $871 $2,483 $ $17,366 
Loans, net of deferred fees and costs$1,010,354 $7,115,322 $8,566,951 $5,250,140 $3,515,801 $7,280,062 $10,734,688 $571,621 $44,044,939 
Current YTD Period:
Gross charge-offs$31 $1,900 $12,785 $1,879 $704 $1,198 $6,635 $203 $25,335 
(1)    The majority of loans within Substandard risk grade are accruing loans at March 31, 2023.
(2)    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.
(3)    Loans within Loss risk grade are on non-accrual status and have an ALL equal to the full loan amount.
(4)    Includes $6.6 million in gross charge-offs related to the transfer of third-party consumer loans to held for sale.

14



The following table summarizes each loan portfolio class by risk grade and origination year as of December 31, 2022 as required under CECL.
December 31, 2022
Term Loans Amortized Cost Basis by Origination YearRevolving Loans
(in thousands)20222021202020192018PriorAmortized Cost BasisConverted to Term LoansTotal
Commercial, financial and agricultural
Pass$1,276,814 $1,911,353 $1,009,230 $782,100 $536,001 $1,037,488 $6,862,070 $43,748 $13,458,804 
Special Mention4,131 14,289 12,691 6,637 5,716 2,777 81,889 1,710 129,840 
Substandard(1)
13,751 17,780 38,943 42,773 18,405 21,418 131,422 1,003 285,495 
Loss(2)
— — — — — — 277 — 277 
Total commercial, financial and agricultural1,294,696 1,943,422 1,060,864 831,510 560,122 1,061,683 7,075,658 46,461 13,874,416 
Owner-occupied
Pass1,537,016 1,675,524 1,137,889 909,525 664,734 1,103,500 866,920 — 7,895,108 
Special Mention4,238 6,760 24,175 13,913 5,024 69,500 — — 123,610 
Substandard(1)
19,437 13,381 63,925 7,415 51,364 17,755 — — 173,277 
Loss(3)
— 245 — — — — — — 245 
Total owner-occupied1,560,691 1,695,910 1,225,989 930,853 721,122 1,190,755 866,920 — 8,192,240 
Total commercial and industrial2,855,387 3,639,332 2,286,853 1,762,363 1,281,244 2,252,438 7,942,578 46,461 22,066,656 
Investment properties
Pass2,671,660 3,245,669 1,532,230 1,220,974 775,747 1,543,724 541,118 — 11,531,122 
Special Mention2,379 1,550 — 14,570 5,908 2,388 146 — 26,941 
Substandard(1)
5,973 1,455 176 1,688 51,767 3,931 20,994 — 85,984 
Total investment properties2,680,012 3,248,674 1,532,406 1,237,232 833,422 1,550,043 562,258 — 11,644,047 
1-4 family properties
Pass248,418 154,181 44,032 33,246 27,053 55,543 47,732 — 610,205 
Special Mention— 752 — — 297 — — 1,050 
Substandard(1)
1,309 1,429 75 741 836 1,243 45 — 5,678 
Total 1-4 family properties249,728 155,610 44,859 33,987 27,889 57,083 47,777 — 616,933 
Land and development
Pass119,801 84,055 21,984 39,484 18,600 64,854 5,078 — 353,856 
Special Mention— — 744 — 29,618 1,118 — — 31,480 
Substandard(1)
699 325 220 627 472 1,654 — — 3,997 
Total land and development120,500 84,380 22,948 40,111 48,690 67,626 5,078 — 389,333 
Total commercial real estate3,050,240 3,488,664 1,600,213 1,311,330 910,001 1,674,752 615,113 — 12,650,313 

15



December 31, 2022
Term Loans Amortized Cost Basis by Origination YearRevolving Loans
(in thousands)20222021202020192018PriorAmortized Cost BasisConverted to Term LoansTotal
Consumer mortgages
Pass$857,489 $1,188,652 $1,356,065 $458,441 $182,834 $1,118,686 $143 $— $5,162,310 
Substandard(1)
1,153 6,452 8,519 9,442 6,167 19,662 — — 51,395 
Loss(3)
— — — — 734 — — 738 
Total consumer mortgages858,642 1,195,104 1,364,584 467,887 189,001 1,139,082 143 — 5,214,443 
Home equity
Pass— — — — — — 1,241,201 504,272 1,745,473 
Substandard(1)
— — — — — — 6,534 4,512 11,046 
Loss(3)
— — — — — — 402 117 519 
Total home equity— — — — — — 1,248,137 508,901 1,757,038 
Credit cards
Pass— — — — — — 201,898 — 201,898 
Substandard(1)
— — — — — — 617 — 617 
Loss(2)
— — — — — — 1,097 — 1,097 
Total credit cards— — — — — — 203,612 — 203,612 
Other consumer loans
Pass284,045 524,601 457,684 61,760 31,662 142,189 313,565 — 1,815,506 
Substandard(1)
1,417 3,810 1,648 712 163 888 139 — 8,777 
Loss(2)
— — — — — — — 
Total other consumer loans285,462 528,411 459,332 62,472 31,825 143,085 313,704 — 1,824,291 
Total consumer1,144,104 1,723,515 1,823,916 530,359 220,826 1,282,167 1,765,596 508,901 8,999,384 
Loans, net of deferred fees and costs$7,049,731 $8,851,511 $5,710,982 $3,604,052 $2,412,071 $5,209,357 $10,323,287 $555,362 $43,716,353 
(1)    The majority of loans within Substandard risk grade are accruing loans at December 31, 2022.
(2)    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.
(3) Loans within Loss risk grade are on non-accrual status and have an ALL equal to the full loan amount.

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 months ended March 31, 2023.

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Rollforward of Allowance for Loan Losses
The following tables detail the changes in the ALL by loan segment for the three months ended March 31, 2023 and 2022. During the three months ended March 31, 2023, Synovus charged-off $6.6 million in previously established reserves for credit losses associated with the transfer of $424.1 million in certain third-party consumer loans to held for sale as part of our overall balance sheet management strategy.
As Of and For the Three Months Ended March 31, 2023
(in thousands)Commercial & IndustrialCommercial Real EstateConsumerTotal
Allowance for loan losses:
Beginning balance at December 31, 2022$161,550 $143,575 $138,299 $443,424 
Charge-offs(7,873)(96)(17,366)(25,335)
Recoveries3,476 284 3,025 6,785 
Provision for (reversal of) loan losses1,535 16,629 13,972 32,136 
Ending balance at March 31, 2023$158,688 $160,392 $137,930 $457,010 
As Of and For the Three Months Ended March 31, 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(13,763)(2,456)(8,928)(25,147)
Recoveries2,363 361 3,814 6,538 
Provision for (reversal of) loan losses1,758 (969)5,179 5,968 
Ending balance at March 31, 2022$178,722 $94,696 $141,538 $414,956 
The ALL of $457.0 million and the reserve for unfunded commitments of $57.5 million, which is recorded in other liabilities, comprise the total ACL of $514.5 million at March 31, 2023. The ACL increased $13.6 million compared to the December 31, 2022 ACL of $500.9 million, which consisted of the ALL of $443.4 million and the reserve for unfunded commitments of $57.5 million. The ACL to loans coverage ratio was 1.17% at March 31, 2023, compared to 1.15% at December 31, 2022. The increase in the ACL from December 31, 2022 resulted primarily from a deterioration in economic factors, including an increase in the downside weighting of the multiple scenario model.
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 current 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 March 31, 2023, the unemployment rate is the input that most significantly impacts our estimate. The multi-scenario forecast used in our estimate includes a peak weighted average unemployment rate of 5.3% over the forecasted period at March 31, 2023, compared to 5.1% at December 31, 2022.
Financial Difficulty Modifications (FDMs)
When borrowers are experiencing financial difficulty, Synovus may make certain loan modifications as part of loss mitigation strategies to maximize expected payment. All loan modifications, renewals, and refinances to loans where borrowers are experiencing financial difficulty are evaluated for FDM classification. To be classified as an FDM, the modifications must be in the form of providing an interest rate reduction relative to the current interest rate, principal forgiveness, or an other-than-insignificant payment delay or extension of the maturity of the loan. An FDM is tracked for 12 months following the modification(s) granted. The effect of these modifications is already included in the allowance for credit losses because our use of a DCF model captures loan level changes including modified terms as part of the estimation process.

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The following table presents the amortized cost of FDM loans by loan portfolio class that were modified during the three months ended March 31, 2023.
Three Months Ended March 31, 2023
(in thousands)Interest Rate ReductionTerm ExtensionInterest Rate Reduction and Term ExtensionTotalPercentage of Total by Financing Class
Commercial, financial and agricultural$49 $16,321 $247 $16,617 0.1 %
Owner-occupied 1,468 41,263 42,731 0.5 
Total commercial and industrial49 17,789 41,510 59,348 0.3 
Investment properties     
1-4 family properties 1,339  1,339 0.2 
Land and development     
Total commercial real estate 1,339  1,339  
Consumer mortgages113   113  
Home equity 88 15 103  
Credit cards     
Other consumer loans64 141 231 436  
Total consumer177 229 246 652  
Total FDMs$226 $19,357 $41,756 $61,339 0.1 %
During the three months ended March 31, 2023, there were no FDMs that subsequently defaulted. Defaults are defined as the earlier of the FDM being placed on non-accrual status or reaching 90 days past due with respect to principal and/or interest payments. As of March 31, 2023, there were no commitments to lend a material amount of additional funds to any borrower whose loan was classified as an FDM.
The following presents the financial effect of loan modifications made to borrowers experiencing financial difficulty during the three months ended March 31, 2023.
Three Months Ended March 31, 2023
Weighted Average Interest Rate ReductionWeighted Average Term Extension (in months)
Commercial, financial and agricultural3.3 %8
Owner-occupied1.7 9
1-4 family properties 12
Consumer mortgages2.2 0
Home equity1.1 334
Other consumer loans3.5 68

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Synovus monitors the performance of FDMs to understand the effectiveness of its modification efforts. The following table provides a summary of current, accruing past due, and non-accrual loans on an amortized cost basis by loan portfolio class that have been modified since January 1, 2023.
As of March 31, 2023
(in thousands)CurrentAccruing 30-89 Days Past DueAccruing 90 Days or Greater Past Due
Non-accrual (1)
Total
Commercial, financial and agricultural$16,028 $ $ $589 $16,617 
Owner-occupied42,731    42,731 
Total commercial and industrial58,759   589 59,348 
Investment properties     
1-4 family properties1,339    1,339 
Land and development     
Total commercial real estate1,339    1,339 
Consumer mortgages   113 113 
Home equity103    103 
Credit cards     
Other consumer loans22   414 436 
Total consumer125   527 652 
Total FDMs$60,223 $ $ $1,116 $61,339 
(1)    Loans were on non-accrual when modified and subsequently classified as FDMs.
TDR Disclosures Prior to Adoption of ASU 2022-02
Prior to the adoption of ASU 2022-02, Synovus accounted for a modification to the contractual terms of a loan that resulted in granting concessions to a borrower experiencing financial difficulties as a TDR. The following tables present, by concession type, the post-modification balance for loans modified or renewed during the three months ended March 31, 2022 that were reported as accruing or non-accruing TDRs.
TDRs by Concession Type
Three Months Ended March 31, 2022
(in thousands, except contract data)Number of ContractsBelow Market Interest Rate
Other Concessions(1)
Total
Commercial, financial and agricultural33 $17,900 $541 $18,441 
Owner-occupied13 6,104 3,857 9,961 
Total commercial and industrial46 24,004 4,398 28,402 
Investment properties589 6,610 7,199 
1-4 family properties1,213 — 1,213 
Land and development2,731 — 2,731 
Total commercial real estate13 4,533 6,610 11,143 
Consumer mortgages1,017 104 1,121 
Home equity11 929 — 929 
Other consumer loans— 48 48 
Total consumer20 1,946 152 2,098 
Total TDRs79 $30,483 $11,160 $41,643 (2)
(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 ended March 31, 2022.
(2)    No net charge-offs were recorded during the three months ended March 31, 2022.
For the three months ended March 31, 2022, there were no defaults 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). As of December 31, 2022, there were no commitments to lend a material amount of additional funds to any borrower whose loan was classified as a TDR.

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Note 4 - Goodwill
Goodwill allocated to each reporting unit at March 31, 2023 and December 31, 2022 is presented as follows:
(in thousands)Wholesale Banking Reporting UnitCommunity Banking Reporting UnitConsumer Banking Reporting UnitWealth Management Reporting UnitTotal Goodwill
Balance at December 31, 2022$171,636 $141,622 $114,701 $24,431 $452,390 
Change in goodwill     
Balance at March 31, 2023$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.
During the first quarter of 2023, Synovus assessed the events and circumstances surrounding recent bank failures that generated significant market trading volatility in the banking industry, particularly regional banks like Synovus. Our assessment of the impact of these events included company-specific factors such as recent operating performance and financial projections, changes in market capitalization, changes in business climate, as well as trends in the banking industry. After assessing the indicators above, Synovus determined that it was not more likely than not that the fair value had declined below carrying value at the reporting unit level as of March 31, 2023, and a test of goodwill impairment was not required.
Note 5 - Shareholders' Equity and Other Comprehensive Income (Loss)
Repurchases of Common Stock
Synovus announced on January 18, 2023 that its Board of Directors authorized share repurchases of up to $300 million in 2023. During the three months ended March 31, 2023, Synovus did not complete any share repurchases of its common stock.
Changes in Accumulated Other Comprehensive Income (Loss) by Component (Net of Income Taxes)
The following tables illustrate activity within the balances in accumulated other comprehensive income (loss) by component for the three months ended March 31, 2023 and 2022.
Changes in Accumulated Other Comprehensive Income (Loss) by Component (Net of Income Taxes)
(in thousands)
Net unrealized gains (losses) on investment securities available for sale(1)
Net unrealized gains (losses) on cash flow hedges(1)
Total
Balance at December 31, 2022$(1,220,263)$(221,854)$(1,442,117)
Other comprehensive income (loss) before reclassifications115,821 7,566 123,387 
Amounts reclassified from AOCI(779)30,182 29,403 
Net current period other comprehensive income (loss)115,042 37,748 152,790 
Balance at March 31, 2023$(1,105,221)$(184,106)$(1,289,327)
Balance at December 31, 2021$(67,980)$(14,341)$(82,321)
Other comprehensive income (loss) before reclassifications(474,459)(103,617)(578,076)
Amounts reclassified from AOCI— (1,668)(1,668)
Net current period other comprehensive income (loss)(474,459)(105,285)(579,744)
Balance at March 31, 2022$(542,439)$(119,626)$(662,065)
(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.

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Note 6 - Fair Value Accounting
See "Part II - Item 8. Financial Statements and Supplementary Data - Note 1 - Summary of Significant Accounting Policies" of Synovus' 2022 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.
March 31, 2023December 31, 2022
(in thousands)Level 1Level 2Level 3Total Estimated Fair ValueLevel 1Level 2Level 3Total Estimated Fair Value
Assets
Trading securities:
Collateralized mortgage obligations issued by U.S. Government sponsored enterprises $ $2,954 $ $2,954 $— $2,991 $— $2,991 
Other mortgage-backed securities 2,909  2,909 — 3,185 — 3,185 
State and municipal securities 69  69 — 48 — 48 
Asset-backed securities 19,185  19,185 — 2,071 — 2,071 
Other investments 798  798 — — — — 
Total trading securities$ $25,915 $ $25,915 $— $8,295 $— $8,295 
Investment securities available for sale:
U.S. Treasury securities$480,280 $ $ $480,280 $471,813 $— $— $471,813 
U.S. Government agency securities 48,945  48,945 — 48,798 — 48,798 
Mortgage-backed securities issued by U.S. Government agencies  708,545  708,545 — 792,749 — 792,749 
Mortgage-backed securities issued by U.S. Government sponsored enterprises  7,025,500  7,025,500 — 6,895,070 — 6,895,070 
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises  648,559  648,559 — 655,127 — 655,127 
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises 812,023  812,023 — 805,945 — 805,945 
Corporate debt securities and other debt securities 8,766  8,766 — 8,601 — 8,601 
Total investment securities available for sale$480,280 $9,252,338 $ $9,732,618 $471,813 $9,206,290 $— $9,678,103 
Mortgage loans held for sale$ $44,400 $ $44,400 $— $51,136 $— $51,136 
Other investments  11,655 11,655 — — 11,172 11,172 
Mutual funds and mutual funds held in rabbi trusts48,428   48,428 42,659 — — 42,659 
SBA loans servicing asset  2,412 2,412 — — 2,354 2,354 
Derivative assets 88,257  88,257 — 89,815 — 89,815 
Liabilities
Securities sold short$3,152 $ $ $3,152 $3,370 $— $— $3,370 
Mutual funds held in rabbi trusts33,470   33,470 27,944 — — 27,944 
Derivative liabilities 318,999 1,111 320,110 — 339,227 3,453 342,680 

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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 March 31, 2023As of December 31, 2022
Fair value$44,400 $51,136 
Unpaid principal balance43,225 50,264 
Fair value less aggregate unpaid principal balance$1,175 $872 
Changes in Fair Value Included in Net IncomeThree Months Ended March 31,Location in Consolidated Statements of Income
(in thousands)20232022
Mortgage loans held for sale$303 $(2,350)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' 2022 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 months ended March 31, 2023 and 2022, 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 March 31, 2023
(in thousands)Other InvestmentsSBA Loans Servicing AssetVisa Derivative
Beginning balance$11,172 $2,354 $(3,453)
Total gains (losses) realized/unrealized:
Included in earnings(28)(212) 
Additions511 270  
Settlements  2,342 
Ending balance$11,655 $2,412 $(1,111)
Total net gains (losses) for the period included in earnings attributable to the change in unrealized gains/(losses) relating to assets/liabilities still held at March 31, 2023$(28)$(212)$ 
Three Months Ended March 31, 2022
(in thousands)Other InvestmentsSBA Loans Servicing AssetVisa Derivative
Beginning balance$12,185 $3,233 $(3,535)
Total gains (losses) realized/unrealized:
Included in earnings(92)(262)— 
Additions— 480 — 
Settlements— — 1,759 
Ending balance$12,093 $3,451 $(1,776)
Total net gains (losses) for the period included in earnings attributable to the change in unrealized gains/(losses) relating to assets/liabilities still held at March 31, 2022$(92)$(262)$— 

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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.
March 31, 2023Fair Value Adjustments for the Location in Consolidated Statements of Income
(in thousands)Level 1Level 2Level 3
Three Months Ended March 31, 2023
Loans(1)        
$ $ $49 $50 Provision for credit losses
Other loans held for sale  391,157 16,750 Loss on other loans held for sale
Qualpay receivable  31,109 15,789 
Recovery of NPA; Other operating expense(2)
Other assets held for sale  450 50 Other operating expense
March 31, 2022Fair Value Adjustments for theLocation in Consolidated Statements of Income
Level 1Level 2Level 3
Three Months Ended March 31, 2022
Loans(1)        
$— $— $7,483 $339 Provision for credit losses
Other assets held for sale— — 2,725 492 Other operating expense
(1)    Collateral-dependent loans that were written down to fair value of collateral.
(2)     Recovery of NPA amount was $13.1 million in non-interest revenue while other operating expense amount was a reversal of $2.7 million. See Note 9 - Commitments and Contingencies for further discussion.

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Fair Value of Financial Instruments
The following tables present the carrying and estimated fair values of financial instruments at March 31, 2023 and December 31, 2022. 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' 2022 Form 10-K for a description of how fair value measurements are determined.
March 31, 2023
(in thousands)Carrying ValueFair ValueLevel 1Level 2Level 3
Financial assets
Total cash, cash equivalents, and restricted cash$3,365,400 $3,365,400 $3,365,400 $ $ 
Trading securities25,915 25,915  25,915  
Investment securities available for sale9,732,618 9,732,618 480,280 9,252,338  
Loans held for sale669,447 669,042  44,400 624,642 
Other investments11,655 11,655   11,655 
Mutual funds and mutual funds held in rabbi trusts48,428 48,428 48,428   
Loans, net43,587,929 41,958,157   41,958,157 
SBA loans servicing asset2,412 2,412   2,412 
FRB and FHLB stock322,869 322,869  322,869 
Derivative assets88,257 88,257  88,257  
Financial liabilities
Non-interest-bearing deposits$14,642,677 $14,642,677 $— $14,642,677 $ 
Non-time interest-bearing deposits27,173,132 27,173,132  27,173,132  
Time deposits8,138,127 8,154,023  8,154,023  
Total deposits(1)
$49,953,936 $49,969,832 $ $49,969,832 $ 
Federal funds purchased and securities sold under repurchase agreements195,695 195,695 195,695   
Securities sold short3,152 3,152 3,152   
Short-term FHLB advances250,000 250,000  250,000  
Long-term debt5,146,252 5,019,616  5,019,616  
Mutual funds held in rabbi trusts33,470 33,470 33,470 — — 
Derivative liabilities320,110 320,110  318,999 1,111 
(1)    The fair value of deposits with no stated maturity, such as non-interest-bearing demand, interest bearing demand, money market, and savings accounts reflects the carrying amount which is payable on demand, as of the respective date, and may not align with other valuation methods or processes. The fair value of time deposits is based on the discounted value of contractual cash flows. The discount rate is estimated using the rates currently offered for deposits of similar remaining maturities.

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December 31, 2022
(in thousands)Carrying ValueFair ValueLevel 1Level 2Level 3
Financial assets
Total cash, cash equivalents, and restricted cash$1,977,780 $1,977,780 $1,977,780 $— $— 
Trading securities8,295 8,295 — 8,295 — 
Investment securities available for sale9,678,103 9,678,103 471,813 9,206,290 — 
Loans held for sale391,502 391,085 — 51,136 339,949 
Other investments11,172 11,172 — — 11,172 
Mutual funds and mutual funds held in rabbi trusts42,659 42,659 42,659 — — 
Loans, net43,272,929 42,192,295 — — 42,192,295 
SBA loans servicing asset2,354 2,354 — — 2,354 
FRB and FHLB stock308,321 308,321 — 308,321 — 
Derivative assets89,815 89,815 — 89,815 — 
Financial liabilities
Non-interest-bearing deposits$15,639,899 $15,639,899 $— $15,639,899 $— 
Non-time interest-bearing deposits26,936,635 26,936,635 — 26,936,635 — 
Time deposits6,295,025 6,260,315 — 6,260,315 — 
Total deposits(1)
$48,871,559 $48,836,849 $— $48,836,849 $— 
Federal funds purchased and securities sold under repurchase agreements146,588 146,588 146,588 — — 
Securities sold short3,370 3,370 3,370 — — 
Short-term FHLB advances600,014 600,014 — 600,014 — 
Long-term debt4,109,597 4,120,113 — 4,120,113 — 
Mutual funds held in rabbi trusts27,944 27,944 27,944 — — 
Derivative liabilities342,680 342,680 — 339,227 3,453 
(1)    The fair value of deposits with no stated maturity, such as non-interest-bearing demand, interest bearing demand, money market, and savings accounts reflects the carrying amount which is payable on demand, as of the respective date, and may not align with other valuation methods or processes. The fair value of time deposits is based on the discounted value of contractual cash flows. The discount rate is estimated using the rates currently offered for deposits of similar remaining maturities.
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 enters into risk participation agreements with financial institution counterparties where we are either a participant or a lead bank so that the risk of default on the interest rate swaps is shared. Synovus either pays or receives a fee depending on the participation type. 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' 2022 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.
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

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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 in which the hedged transactions are still expected to affect earnings. If, however, it is probable the forecasted 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 (losses) during the three months ended March 31, 2023 and 2022 related to terminated cash flow hedges. Synovus recognized a pre-tax loss of $5.4 million during the three months ended March 31, 2023 and pre-tax income of $2.2 million for the three months ended March 31, 2022 related to the amortization of terminated cash flow hedges. Amounts related to the amortization of terminated cash flow hedges are being recognized into earnings in conjunction with the effective terms of the original swaps through the third quarter of 2026.
As of March 31, 2023, Synovus expects to reclassify into earnings approximately $149 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 $24 million in pre-tax loss related to the amortization of terminated cash flow hedges. As of March 31, 2023, the maximum length of time over which Synovus is hedging its exposure to the variability in future cash flows is through the fourth quarter of 2027.
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.
Derivatives Not Designated as Hedges
Derivatives not designated as hedges include those that are entered into as either economic hedges to facilitate client needs or as part of Synovus' overall risk management strategy. Economic hedges are those that do not qualify to be treated as a fair value hedge or cash flow hedge for accounting purposes but are necessary to economically manage the risk exposure associated with the assets and liabilities of Synovus. 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, collateral value, 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 March 31, 2023 and December 31, 2022, Synovus had recorded the right to reclaim cash collateral of $86.5 million and $66.8 million, respectively. As of both March 31, 2023 and December 31, 2022, Synovus had recorded the obligation to return cash collateral of $7.7 million.
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.

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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.
March 31, 2023December 31, 2022
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$6,000,000 $995 $30,044 $5,250,000 $— $8,286 
Total cash flow hedges$995 $30,044 $— $8,286 
Derivatives in fair value hedging relationships:
Interest rate contracts$3,338,229 $ $16,017 $2,230,232 $— $8,093 
Total fair value hedges$ $16,017 $— $8,093 
Total derivatives designated as hedging instruments$995 $46,061 $— $16,379 
Derivatives not designated
  as hedging instruments:
Interest rate contracts$11,037,624 $85,790 $272,765 $10,276,754 $89,310 $322,329 
Mortgage derivatives - interest rate lock commitments82,380 1,459  50,218 350 — 
Mortgage derivatives - forward commitments to sell fixed-rate mortgage loans89,000  173 76,500 155 — 
Risk participation agreements679,924   635,891 — 
Foreign exchange contracts21,177 13  20,439 — 516 
Visa derivative  1,111 —  3,453 
Total derivatives not designated as hedging instruments    $87,262 $274,049 $89,815 $326,301 
The following table presents the effect of hedging derivative instruments in the consolidated statements of income and the total amounts for the respective line item affected for the three months ended March 31, 2023 and 2022.
Three Months Ended March 31, 2023
Interest IncomeInterest Expense
(in thousands)Loans, including feesDepositsLong-term debt
Total interest income/expense amounts presented in the consolidated statements of income$629,557 $173,935 $42,529 
Gain/(loss) on cash flow hedging relationships: (1)
Interest rate contracts:
Realized gains (losses) reclassified from AOCI, pre-tax, to interest income on loans$(39,892)$ $ 
Pre-tax income (loss) recognized on cash flow hedges$(39,892)$ $ 
Gain/(loss) on fair value hedging relationships:
Amounts related to interest settlements and amortization on derivatives$ $(3,371)$(2,721)
Recognized on derivatives (12,057)(3,952)
Recognized on hedged items 12,057 3,952 
Pre-tax income (loss) recognized on fair value hedges$ $(3,371)$(2,721)

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Three Months Ended March 31, 2022
Interest Income
(in thousands)Loans, including fees
Total interest income/expense amounts presented in the consolidated statements of income$361,091 
Gain/(loss) on cash flow hedging relationships: (1)
Interest rate contracts:
Realized gains (losses) reclassified from AOCI, pre-tax, to interest income on loans$2,189 
Pre-tax income (loss) recognized on cash flow hedges$2,189 
(1)     See "Part I - Item 1. Financial Statements and Supplementary Data - Note 5 - Accumulated Other Comprehensive Income (Loss)" for gain (loss) recognized on cash flow hedging relationships in AOCI.
The following table presents the carrying amount and associated cumulative basis adjustment related to the application of hedge accounting that is included in the carrying amount of the hedged assets/(liabilities) in fair value hedging relationships.
March 31, 2023December 31, 2022
Hedged Items Currently DesignatedHedged Items Currently Designated
(in thousands)Carrying Amount of Assets/(Liabilities)Hedge Accounting Basis AdjustmentCarrying Amount of Assets/(Liabilities)Hedge Accounting Basis Adjustment
Interest-bearing deposits$(2,288,000)$(12,170)$(1,680,000)$24,227 
Long-term debt(1,041,971)(15,396)(545,787)19,348 
The pre-tax effect of changes in fair value from derivative instruments not designated as hedging instruments in the consolidated statements of income for the three months ended March 31, 2023 and 2022 is presented below.
Gain (Loss) Recognized in Consolidated Statements of Income
Three Months Ended March 31,
(in thousands)
Location in Consolidated Statements of Income
20232022
Derivatives not designated
  as hedging instruments:
Interest rate contracts(1)    
Capital markets income$18 $673 
Mortgage derivatives - interest rate lock commitmentsMortgage banking income1,109 (1,318)
Mortgage derivatives - forward commitments to sell fixed-rate mortgage loansMortgage banking income(328)3,565 
Risk participation agreementsCapital markets income3 25 
Foreign exchange contractsCapital markets income529 65 
Total derivatives not designated as hedging instruments
$1,331 $3,010 
(1)    Gain (loss) represents net fair value adjustments (including credit related adjustments) for client swaps.

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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 months ended March 31, 2023 and 2022. 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 March 31,
(in thousands, except per share data)20232022
Basic Net Income Per Common Share:
Net income available to common shareholders$193,868 $162,746 
Weighted average common shares outstanding145,799 145,273 
Net income per common share, basic$1.33 $1.12 
Diluted Net Income Per Common Share:
Net income available to common shareholders$193,868 $162,746 
Weighted average common shares outstanding145,799 145,273 
Effect of dilutive outstanding equity-based awards and earnout payments 928 1,392 
Weighted average diluted common shares146,727 146,665 
Net income per common share, diluted$1.32 $1.11 
For the three months ended March 31, 2023 and 2022, there were 21 thousand and zero, 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 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 both March 31, 2023 and December 31, 2022, the ACL for unfunded commitments was $57.5 million. Additionally, an immaterial amount of unearned fees relating to letters of credit are recorded within other liabilities on the consolidated balance sheets.

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Synovus also invests in tax credit partnerships, 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)March 31, 2023December 31, 2022
Letters of credit(1)
$232,955 $220,622 
Commitments to fund commercial and industrial loans9,504,608 9,970,733 
Commitments to fund commercial real estate, construction, and land development loans3,543,525 3,629,531 
Commitments under home equity lines of credit2,190,048 2,156,641 
Unused credit card lines467,520 461,443 
Other loan commitments711,288 742,976 
Total letters of credit and unfunded lending commitments$16,649,944 $17,181,946 
Tax credits, CRA partnerships, and other investments with a future funding commitment:
Carrying amount included in other assets$508,575 $488,944 
Amount of future funding commitments303,388 283,212 
Permanent and short-term construction loans and letter of credit commitments(2)
207,249 177,998 
Funded portion of permanent and short-term loans and letters of credit(3)
242,676 234,166 
(1)    Represent the contractual amount net of risk participations purchased of approximately $25.7 million at both March 31, 2023 and December 31, 2022.
(2)    Represent the contractual amount net of risk participations of $4.0 million and $4.7 million at March 31, 2023 and December 31, 2022, respectively.
(3)    Represent the contractual amount net of risk participations of $5.1 million and $6.9 million at March 31, 2023 and December 31, 2022, respectively.
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 months ended March 31, 2023 and 2022, Synovus and the sponsored entities processed and settled $30.12 billion and $28.61 billion of transactions, respectively.
On April 21, 2022, Synovus Bank announced that it signed a definitive agreement to strategically invest in Qualpay, a provider of a cloud-based platform that combines a payment gateway with robust merchant processing solutions, which allows merchants and independent software vendors (ISVs) to easily integrate payments into their software or websites. Synovus previously covered chargebacks for Qualpay when their cash reserve account was unavailable to support them. The remaining amount, net of reserves, included in other assets and classified in NPAs, was $15.3 million as of December 31, 2022. During the first quarter of 2023, Synovus received regulatory approval for the previously announced proposed strategic investment in Qualpay. Upon regulatory approval, Synovus wrote up the balance to the contractual amount due of $31.1 million by reversing a prior impairment charge of $2.7 million through non-interest expense and recognizing a recovery of $13.1 million in non-interest revenue.
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, 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-

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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 March 31, 2023 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. Under GAAP, an event is “reasonably possible” if “the chance of the future event or events occurring is more than remote but less than likely,” and an event is “remote” if the “chance of the future event or events occurring is slight." 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. Synovus 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 consumer loans and loans held for sale, PPP loans, as well as CIB 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.
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

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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, trust services, 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 months ended March 31, 2023 and 2022. 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 and relationship managers between segments. Prior periods have been adjusted accordingly.
Three Months Ended March 31, 2023
(in thousands)Wholesale BankingCommunity BankingConsumer BankingFinancial Management ServicesTreasury and Corporate OtherSynovus Consolidated
Net interest income $199,100 $111,405 $154,631 $16,547 $(932)$480,751 
Non-interest revenue15,900 25,540 20,728 53,206 17,752 133,126 
Non-interest expense33,848 33,382 47,633 44,046 162,943 321,852 
Pre-provision net revenue (PPNR)$181,152 $103,563 $127,726 $25,707 $(146,123)$292,025 
Three Months Ended March 31, 2022
(in thousands)Wholesale BankingCommunity BankingConsumer BankingFinancial Management ServicesTreasury and Corporate OtherSynovus Consolidated
Net interest income$156,248 $96,127 $97,405 $18,163 $24,305 $392,248 
Non-interest revenue8,398 13,583 21,644 45,164 16,545 105,334 
Non-interest expense26,680 30,268 44,867 44,107 126,528 272,450 
Pre-provision net revenue (PPNR)$137,966 $79,442 $74,182 $19,220 $(85,678)$225,132 


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March 31, 2023
(dollars in thousands)Wholesale BankingCommunity BankingConsumer BankingFinancial Management ServicesTreasury and Corporate OtherSynovus Consolidated
Loans, net of deferred fees and costs$26,845,222 $8,068,917 $2,879,893 $5,194,815 $1,056,092 $44,044,939 
Total deposits$12,758,895 $10,619,143 $18,651,057 $177,409 $7,747,432 $49,953,936 
Total full-time equivalent employees334 590 1,543 763 1,842 5,072 
December 31, 2022
(dollars in thousands)Wholesale BankingCommunity BankingConsumer BankingFinancial Management ServicesTreasury and Corporate OtherSynovus Consolidated
Loans, net of deferred fees and costs$25,865,667 $8,138,606 $2,933,504 $5,157,014 $1,621,562 $43,716,353 
Total deposits$12,942,732 $10,798,409 $18,561,521 $102,496 $6,466,401 $48,871,559 
Total full-time equivalent employees337 598 1,529 768 1,795 5,027 

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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)competition in the financial services industry, including competition from nontraditional banking institutions such as Fintechs;
(2)our ability to realize the expected benefits from our strategic initiatives or other operational and execution goals in the time period expected, which could negatively affect our future profitability;
(3)an economic downturn and contraction, including a recession, and the resulting effects on our capital, financial condition, credit quality, results of operations and future growth, including that the strength of the current economic environment could be further weakened by prolonged periods of inflation;
(4)potential impacts of the recent adverse developments in the banking industry highlighted by high-profile bank failures, including impacts on client confidence, deposit outflows, liquidity, and the regulatory response thereto;
(5)changes in the cost and availability of funding due to changes in the deposit market and credit market;
(6)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;
(7)our ability to attract and retain employees and the impact of senior leadership transitions that are key to our strategic initiatives;
(8)our strategic implementation of new lines of business, new products and services, and new technologies and the expansion of our existing business opportunities with a renewed focus on innovation;
(9)prolonged periods of high inflation and their effects on our business, profitability, and our stock price;
(10)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;
(11)the impact of recent, proposed, and potential changes in governmental policy, laws and regulations, potential, 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 rising inflationary pressures and interest rate increases and the possibility that the U.S. could default on its debt obligations;
(12)we may be required to make substantial expenditures to keep pace with regulatory initiatives and the rapid technological changes in the financial services industry;
(13)our current and future information technology system enhancements and operational initiatives may not be successfully implemented, which could negatively impact our operations;

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(14)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 disruptions in service or financial difficulties with a third-party vendor or business relationship;
(15)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;
(16)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;
(17)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 relationships with third-party vendors and other service providers;
(18)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;
(19)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;
(20)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;
(21)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;
(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)our ESG strategies and initiatives, the scope and pace of which could alter our reputation and shareholder, employee, client, and third-party relationships;
(24)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)we could realize losses if we sell assets and the proceeds we receive are lower than the carrying value of such assets and such losses could negatively impact market perceptions of us and could lead to deposit withdrawals;
(26)our ability to obtain 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, as well as any applications in respect to strategic initiatives;
(27)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;
(28)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)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' 2022 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

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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, capital markets, 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 245 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 months ended March 31, 2023 and financial condition as of March 31, 2023 and December 31, 2022. 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' 2022 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 fully understand our financial performance.

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DISCUSSION OF RESULTS OF OPERATIONS
Table 1 - Consolidated Financial Highlights
Three Months Ended March 31,
(dollars in thousands, except per share data)20232022Change
Net interest income
$480,751 $392,248 23 %
Provision for (reversal of) credit losses
32,154 11,400 182 
Non-interest revenue
133,126 105,334 26 
Total TE revenue
614,996 498,447 23 
Non-interest expense
321,852 272,450 18 
Income before income taxes
259,871 213,732 22 
Net income
202,159 171,037 18 
Net income available to common shareholders
193,868 162,746 19 
Net income per common share, basic
1.33 1.12 19 
Net income per common share, diluted
1.32 1.11 19 
Net interest margin(1)
3.43 %3.01 %42   bps
Net charge-off ratio(1)
0.17 0.19 (2)
Return on average assets(1)
1.36 1.22 14 
Efficiency ratio-TE
52.33 54.66 (233)
(1)    Annualized
March 31, 2023December 31, 2022Sequential Quarter ChangeMarch 31, 2022Year-Over-Year Change
(dollars in thousands)
Loans, net of deferred fees and costs$44,044,939 $43,716,353 $328,586 $40,169,150 $3,875,789 
Total average loans43,793,440 43,144,904 648,536 39,350,761 4,442,679 
Total deposits49,953,936 48,871,559 1,082,377 48,656,244 1,297,692 
Core deposits (excludes brokered deposits)
43,705,682 43,572,554 133,128 46,618,560 (2,912,878)
Total average deposits
49,025,871 48,972,643 53,228 49,345,364 (319,493)
Non-performing assets ratio0.41 %0.33 %  bps0.40 %bps
Non-performing loans ratio0.41 0.29 12 0.33 
Past due loans over 90 days0.01 0.01 — 0.01 — 
CET1 capital$5,056,613 $4,926,194 $130,419 $4,485,661 $570,952 
Tier 1 capital 5,593,758 5,463,339 130,419 5,022,806 570,952 
Total risk-based capital6,579,216 6,415,681 163,535 5,936,543 642,673 
CET1 capital ratio9.77 %9.63 %14   bps9.49 %28 bps
Tier 1 capital ratio10.81 10.68 13 10.63 18 
Total risk-based capital ratio12.72 12.54 18 12.56 16 
Total shareholders’ equity to total assets ratio
7.71 7.49 22 8.55 (84)
Return on average common equity(1)
19.23 20.93 (170)14.20 503 
(1)    Quarter annualized
Economic Environment and Recent Events
In an effort to achieve their inflation objectives, the Federal Reserve aggressively tightened monetary policy with the FOMC raising market interest rates 425 bps during 2022, and rates have increased another 50 bps through the end of the first quarter of 2023. The extent of interest rate increases and the period of time that higher rates will remain in effect depends greatly on the level of inflation and strength of the labor market.
Economic uncertainty and market disruptions outside of inflation remain, including geopolitical tensions primarily from Russia’s prolonged war in Ukraine, the relationship between the U.S. and China, and to a lesser extent, the lingering impact of the COVID-19 pandemic on global supply chains, tourism, business travel, immigration, and labor participation.
U.S. fiscal policy has been expansionary since 2020 due to the COVID-19 pandemic, leaving a significant federal deficit and a looming Congressional debt ceiling debate in 2023. The Inflation Reduction Act (IRA), signed into law in August 2022, raises federal revenue by imposing an alternative corporate minimum tax if certain thresholds are met and a non-deductible excise tax on corporate share repurchases. The IRA does not have a significant immediate impact on Synovus.

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On March 8, 2023, Silicon Valley Bank announced its intent to issue common equity as part of a strategic balance sheet repositioning effort aimed primarily at improving its financial performance. This announcement sparked concerns among certain segments of deposits, including technology, venture capital, and cryptocurrency, which ultimately led to closures of Silicon Valley Bank and Signature Bank, both of which had exceedingly high levels of uninsured deposits. The subsequent response to these events by both the banking industry and the Federal Reserve served to mitigate the risks of these failures becoming more systemic. However, the residual impacts on the broader economic environment remain uncertain and have generally presented a more challenging outlook for the banking industry as was reflected in recently updated earnings guidance for many banks, including Synovus, for the remainder of 2023.
Despite the headwinds discussed above, with an asset-sensitive balance sheet and our position in Southeast U.S. markets, Synovus believes it is well-positioned to execute on our revised 2023 outlook outlined below by focusing on productivity gains within our core businesses, continuing to benefit from contributions generated through our new growth initiatives and key talent additions, while maintaining a resilient and conservative liquidity profile, a strong capital position, diverse deposit generation across all business lines, and overall credit vigilance.
Executive Summary
Net income available to common shareholders for the first quarter of 2023 was $193.9 million, or $1.32 per diluted common share, compared to $162.7 million, or $1.11 per diluted common share, for the first quarter of 2022. The year-over-year change resulted in an improved efficiency ratio-TE and was largely impacted by higher net interest income from increased interest rates and strong loan growth as well as higher non-interest expense primarily resulting from investments in our workforce and new business initiatives.
Net interest income for the three months ended March 31, 2023 was $480.8 million, up $88.5 million, or 23%, compared to the same period in 2022. Net interest margin was up 42 bps over the comparable three-month period to 3.43%, due primarily to the benefits of our asset sensitive balance sheet and substantial loan growth partially offset by continued increases in deposit costs. Net interest margin for the first quarter was 3.43%, down 13 bps sequentially, as the asset side of our balance sheet continued to benefit from higher balances and rates, but cyclical lags in deposit pricing combined with re-mixing within our non-interest bearing deposits served as a notable headwind for the current quarter. In addition, we proactively added FHLB advances and brokered deposits amid the uncertain economic environment and issued $500.0 million par value 2028 Synovus Bank Senior Notes in February 2023.
Non-interest revenue for the first quarter of 2023 was $133.1 million, up $27.8 million, or 26%, compared to the first quarter of 2022 and was favorably impacted by a $13.1 million one-time benefit from the recovery of a non-performing asset related to the regulatory approval of our Qualpay investment. See Note 9 - Commitments and Contingencies for further discussion. The primary drivers of the increase, excluding the recovery of the NPA, were strong growth in capital markets income and brokerage revenue.
Non-interest expense for the first quarter of 2023 was $321.9 million, up $49.4 million, or 18%, compared to the same period in 2022 and was negatively impacted by a $16.8 million loss associated with $424.1 million of third-party consumer loans moved to held for sale, while the comparative period benefited from a $6.4 million reversal of restructuring charges. The remaining increase in non-interest expense during 2023 was primarily due to investments in and expansion of our workforce, investments in new businesses initiatives, and an industry-wide increase in the FDIC base assessment rate.
At March 31, 2023, loans, net of deferred fees and costs, of $44.04 billion, increased $328.6 million, from December 31, 2022. Loan growth excluding the impact of the aforementioned $424.1 million move of third-party consumer loans to held for sale was $752.7 million, or 2%, sequentially. Growth in C&I loans was diversified and supported by low levels of pay-offs while CRE loan growth was a function of draws related to existing commitments and low levels of pay-offs.
At March 31, 2023, credit metrics continue to remain at strong levels with NPAs and NPLs both at 41 bps and total past dues at 12 bps, as a percentage of total loans. Net charge-offs remained low at $18.6 million, or 17 bps annualized, for the three months ended March 31, 2023, and included $6.6 million related to third-party consumer loans moved to held for sale. The ACL at March 31, 2023 totaled $514.5 million, an increase of $13.6 million from December 31, 2022, and resulted primarily from a deterioration in economic factors, including an increase in the downside weighting of the multiple scenario model. The ACL to loans coverage ratio at March 31, 2023 of 1.17% modestly increased 2 bps compared to December 31, 2022.
Total period-end deposits at March 31, 2023 increased $1.08 billion, or 2%, compared to December 31, 2022 and resulted from increased time deposits partially offset by a decline in money market accounts as consumers shifted excess liquidity between these two account types. Brokered deposits also increased as a result of proactive management of our liquidity position. The decrease in non-interest bearing demand deposits was primarily impacted by commercial seasonality, normal cash deployment, and to a lesser extent, continued pressures from the FOMC's efforts to tighten monetary policy. Average deposit costs of 1.44% increased 133 bps from the prior year comparable period primarily due to the impact of the FOMC's rate hikes

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of 450 bps from March 31, 2022 to March 31, 2023. Deposit costs were impacted by the decline in non-interest bearing demand deposits in addition to anticipated pricing lags on core interest-bearing deposit costs.
At March 31, 2023, Synovus' CET1 ratio of 9.77% improved 14 bps compared to December 31, 2022, driven by robust organic capital generation from earnings, which was more than sufficient to meet what continued to be solid, core balance sheet growth.
More detail on Synovus' financial results for the three months ended March 31, 2023 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' 2022 Form 10-K.
2023 Updated Guidance
Updated guidance(1) for the full year 2023, compared to 2022, utilizes wider ranges and incorporates the ongoing volatility in the economic environment, includes:
Loan growth(2) of 4%-8%
Adjusted revenue(2)(3) growth of 4% to 7%
Adjusted non-interest expense(3) growth of 4% to 6%
Adjusted PPNR(2)(3) growth of 4% to 8%
Ending CET1 ratio of ~10%
Effective income tax rate of 21% to 23%
(1) Excludes the impact of Qualpay investment which is expected to have an immaterial impact to adjusted PPNR(3) for 2023, nor does it reflect potential incremental costs associated with FDIC assessments resulting from recent bank failures. It also assumes a federal funds rate of 5.25% in the second quarter of 2023 and holding at that rate throughout the remainder of 2023.
(2) Not adjusting for PPP loans or revenue given relatively immaterial impact to 2022 and 2023 forecasted results; assumes no incremental material loan sales outside of the current planned third-party consumer sale.
(3) See "Table 13 - Reconciliation of Non-GAAP Financial Measures” in this Report for applicable reconciliation to the most comparable GAAP measure.

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Changes in Financial Condition
During the three months ended March 31, 2023, total assets increased $2.11 billion to $61.84 billion. Cash and cash equivalents increased $1.39 billion primarily through the use of brokered deposits and long-term FHLB advances to proactively manage our liquidity position, and total loans increased $328.6 million, with commercial loan growth more than offsetting the $424.1 million move of third-party consumer loans to held for sale. Deposits increased $1.08 billion and resulted from both increased brokered deposits and higher core deposit balances as relationship-based deposit production contributed to the growth. The loan to deposit ratio was 88.2% at March 31, 2023 as compared to 89.5% at December 31, 2022. Long-term debt increased $1.04 billion from December 31, 2022, largely due to $525.0 million higher long-term FHLB advances and $500.0 million par value 2028 Synovus Bank Senior Notes issued in February 2023.
Total shareholders' equity at March 31, 2023 increased $294.3 million compared to December 31, 2022, driven by a decrease in after-tax net unrealized losses on investment securities available for sale and cash flow hedges of $115.0 million and $37.7 million, respectively. The increase was also driven by growth in retained earnings, which included net income of $202.2 million partially offset by common and preferred stock dividends of $55.5 million and $8.3 million, respectively.
Loans
The following table compares the composition of the loan portfolio at March 31, 2023, December 31, 2022, and March 31, 2022.
Table 2 - Loans by Portfolio Class
March 31, 2023 vs. December 31, 2022 ChangeMarch 31, 2023 vs. March 31, 2022 Change
(dollars in thousands)March 31, 2023December 31, 2022March 31, 2022
Commercial, financial and agricultural$14,201,398 32.2 %$13,874,416 31.8 %$326,982 %$12,659,611 31.5 %$1,541,787 12 %
Owner-occupied8,398,778 19.1 8,192,240 18.7 206,538 7,692,714 19.2 706,064 
Total commercial and industrial22,600,176 51.3 22,066,656 50.5 533,520 20,352,325 50.7 2,247,851 11 
Investment properties11,976,830 27.2 11,644,047 26.6 332,783 10,047,145 25.0 1,929,685 19 
1-4 family properties596,650 1.3 616,933 1.4 (20,283)(3)620,674 1.5 (24,024)(4)
Land and development423,275 1.0 389,333 0.9 33,942 477,499 1.2 (54,224)(11)
Total commercial real estate12,996,755 29.5 12,650,313 28.9 346,442 11,145,318 27.7 1,851,437 17 
Consumer mortgages5,246,640 11.9 5,214,443 11.9 32,197 5,052,003 12.6 194,637 
Home equity1,757,250 4.0 1,757,038 4.0 212 — 1,416,341 3.5 340,909 24 
Credit cards184,595 0.4 203,612 0.5 (19,017)(9)188,247 0.5 (3,652)(2)
Other consumer loans1,259,523 2.9 1,824,291 4.2 (564,768)(31)2,014,916 5.0 (755,393)(37)
Total consumer8,448,008 19.2 8,999,384 20.6 (551,376)(6)8,671,507 21.6 (223,499)(3)
Loans, net of deferred fees and costs$44,044,939 100.0 %$43,716,353 100.0 %$328,586 %$40,169,150 100.0 %$3,875,789 10 %
At March 31, 2023, loans, net of deferred fees and costs of $44.04 billion, increased $328.6 million from December 31, 2022. Loan growth excluding the impact of a $424.1 million move of third-party consumer loans to held for sale was $752.7 million, or 2%, sequentially. Growth in C&I loans was diversified and supported by low levels of pay-offs while CRE loan growth was a function of draws related to existing commitments and low levels of pay-offs.
C&I loans remain the largest component of our loan portfolio, representing 51.3% of total loans, while CRE and consumer loans represent 29.5% and 19.2%, 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 sub-categories therein.
Commercial Loans
Total commercial loans (which are comprised of C&I and CRE loans) at March 31, 2023 were $35.60 billion, or 80.8% of the total loan portfolio, compared to $34.72 billion, or 79.4%, at December 31, 2022.
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 diverse set of industries as well as certain specialized lending verticals. 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

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oversight in proportion to the size and complexity of the lending relationship. As of March 31, 2023, 94.5% of Synovus' C&I loans are secured by real estate, business equipment, inventory, and other types of collateral compared to 94.4% as of December 31, 2022. C&I loans at March 31, 2023 grew $533.5 million, or 2%, from December 31, 2022 and resulted from diverse growth across business lines and industries, led by the finance and insurance, healthcare and social assistance, and construction industries. C&I utilization also increased and was a function of higher utilization associated with new origination as our lending mix has shifted to larger clients.
Table 3 - Commercial and Industrial Loans by Industry
 March 31, 2023December 31, 2022
(dollars in thousands)NAICS CodeAmount
%(1)
Amount
%(1)
Health care and social assistance62 $4,940,076 21.9 %$4,815,229 21.8 %
Finance and insurance52 3,965,115 17.5 3,726,279 16.9 
Manufacturing31-331,531,442 6.8 1,465,395 6.6 
Accommodation and food services72 1,419,831 6.3 1,377,738 6.2 
Wholesale trade42 1,210,835 5.4 1,221,046 5.5 
Construction23 1,204,359 5.3 1,112,135 5.0 
Real estate and rental and leasing5311 1,180,864 5.2 1,245,513 5.6 
Retail trade44-451,097,092 4.9 1,074,100 4.9 
Professional, scientific, and technical services54 982,842 4.3 944,939 4.3 
Other services81 914,113 4.0 929,777 4.2 
Transportation and warehousing48-49912,467 4.0 892,479 4.0 
Real estate other53 761,339 3.4 788,457 3.6 
Arts, entertainment, and recreation71 526,562 2.3 476,534 2.2 
Public administration92 463,979 2.1 487,583 2.2 
Educational services61 435,914 1.9 420,343 1.9 
Other industries
(2)
304,820 1.4 353,492 1.7 
Administration, support, waste management, and remediation56 263,430 1.2 253,459 1.2 
Agriculture, forestry, fishing, and hunting11 253,921 1.1 250,216 1.1 
Information51 231,175 1.0 231,942 1.1 
Total commercial and industrial loans$22,600,176 100.0 %$22,066,656 100.0 %
(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 March 31, 2023, $14.20 billion of C&I loans, or 32.2% of the total loan portfolio, 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 March 31, 2023, $8.40 billion of C&I loans, or 19.1% 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 predominantly 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 $13.00 billion increased $346.4 million, or 3%, from December 31, 2022, particularly in the multi-family category, with growth arising from draws related to existing commitments and low levels of pay-off activity.

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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 (medical and non-medical), shopping centers, warehouses and other commercial development properties. Total investment properties loans as of March 31, 2023 were $11.98 billion, or 92.2% of the CRE loan portfolio, and increased $332.8 million, or 3%, from December 31, 2022, primarily due to growth in most sub-categories, with the exception of shopping centers and warehouses, which were down $71.9 million, or 5%, and $14.2 million, or 1%, respectively, from December 31, 2022.
The following table shows the principal categories of the investment properties loan portfolio at March 31, 2023 and December 31, 2022.
Table 4 - Investment Properties Loan Portfolio
March 31, 2023December 31, 2022
(dollars in thousands)Amount
% (1)
Amount
% (1)
Multi-Family$3,374,129 28.2 %$3,134,571 26.9 %
Hotels1,737,163 14.5 1,708,194 14.7 
Medical Office Buildings1,569,986 13.1 1,561,957 13.4 
Non-Medical Office Buildings1,501,250 12.6 1,449,954 12.5 
Shopping Centers1,332,078 11.1 1,403,928 12.0 
Warehouses1,020,921 8.5 1,035,152 8.9 
Other investment property1,441,303 12.0 1,350,291 11.6 
Total investment properties loans$11,976,830 100.0 %$11,644,047 100.0 %
(1)    Loan balance in each category expressed as a percentage of total investment properties loans.
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 properties are primarily located in the markets served by Synovus. At March 31, 2023, 1-4 family properties loans totaled $596.7 million, or 4.6% of the CRE loan portfolio, and decreased slightly from December 31, 2022.
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 $423.3 million at March 31, 2023 increased marginally from December 31, 2022.
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 March 31, 2023, weighted-average FICO scores within the residential real estate portfolio based on committed balances were 778 for consumer mortgages and 792 for home equity, consistent with year-end 2022 scores.
Consumer loans at March 31, 2023 of $8.45 billion decreased $551.4 million, or 6%, compared to December 31, 2022. Mortgage loans increased $32.2 million from December 31, 2022, largely due to slower prepayments and refinances as a result of continued increases in mortgage rates. Other consumer loans decreased $564.8 million from December 31, 2022, primarily due to $424.1 million of third-party consumer loans that moved to held for sale in addition to runoff.

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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 11 - Quarter-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)March 31, 2023
%(1)
December 31, 2022
%(1)
March 31, 2022
%(1)
Non-interest-bearing demand deposits(2)
$13,827,552 27.7 %$14,574,451 29.8 %$15,526,686 31.9 %
Interest-bearing demand deposits(2)
5,837,023 11.7 5,761,355 11.8 6,685,366 13.7 
Money market accounts(2)
11,779,951 23.6 12,480,709 25.5 14,596,877 30.0 
Savings deposits(2)
1,312,671 2.6 1,396,431 2.9 1,476,720 3.0 
Public funds6,888,182 13.8 6,635,552 13.6 6,048,704 12.5 
Time deposits(2)
4,060,303 8.1 2,724,056 5.6 2,284,207 4.7 
Brokered deposits6,248,254 12.5 5,299,005 10.8 2,037,684 4.2 
Total deposits$49,953,936 100.0 %$48,871,559 100.0 %$48,656,244 100.0 %
Core deposits(3)    
$43,705,682 87.5 %$43,572,554 89.2 %$46,618,560 95.8 %
Brokered time deposits $3,807,038 7.6 %$3,330,946 6.8 %$1,248,571 2.6 %
Public funds time deposits $270,786 0.5 %$240,022 0.5 %$635,801 1.3 %
(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 March 31, 2023 increased $1.08 billion, or 2%, compared to December 31, 2022 and resulted from increased time deposits partially offset by a decline in money market accounts as consumers shifted excess liquidity between these two account types. Brokered deposits also increased as a result of proactive management of our liquidity position. The decrease in non-interest bearing demand deposits was primarily impacted by commercial seasonality, normal cash deployment, and to a lesser extent, continued pressures from the FOMC's efforts to tighten monetary policy.
Average deposit costs of 1.44%, which equates to a cycle-to-date total deposit beta of ~30% through the first quarter of 2023, increased 56 bps and 133 bps, from the prior quarter and prior year comparable period, respectively, primarily due to the impact of the FOMC's rate hikes of 50 bps during the first quarter of 2023 and 450 bps from March 31, 2022 to March 31, 2023. Deposit costs were impacted by the decline in non-interest bearing demand deposits in addition to anticipated pricing lags on core interest-bearing deposit costs. We continue to expect some upward pressure on deposit costs given recent remixing trends along with an FOMC that appears it will hold the federal funds rate at or above 5%, and therefore, we expect cumulative deposit betas to trend upwards and end in the low 40's range.
As of March 31, 2023 and December 31, 2022, $24.48 billion and $25.08 billion, respectively, of our deposit portfolio was uninsured, which represents approximately 48% and 51%, respectively, of total deposits. The uninsured amounts are estimated based on the methodologies and assumptions used for the Bank's regulatory reporting requirements. At March 31, 2023, over 70% of our deposits are either insured (52%), collateralized (13%), or could be insured by switching to our insured cash sweep program, which has existing capacity (8%).
Non-interest Revenue
Non-interest revenue for the first quarter of 2023 was $133.1 million, up $27.8 million, or 26%, compared to the same period in 2022, and was favorably impacted by a $13.1 million one-time benefit from the recovery of a non-performing asset related to the regulatory approval of our Qualpay investment. See Note 9 - Commitments and Contingencies for further discussion. The primary drivers of the increase, excluding the recovery of the NPA, were strong growth in capital markets income and brokerage revenue.

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The following table shows the principal components of non-interest revenue.
Table 6 - Non-interest Revenue
Three Months Ended March 31,
(dollars in thousands)20232022$ Change% Change
Service charges on deposit accounts$22,974 $22,539 $435 %
Fiduciary and asset management fees19,696 20,277 (581)(3)
Card fees15,824 14,756 1,068 
Brokerage revenue 22,558 14,655 7,903 54 
Mortgage banking income3,858 5,953 (2,095)(35)
Capital markets income13,725 5,472 8,253 151 
Income from bank-owned life insurance7,262 6,556 706 11 
Insurance revenue 2,185 1,419 766 54 
Investment securities gains (losses), net1,030 — 1,030 nm
Recovery of NPA13,126 — 13,126 nm
Other non-interest revenue10,888 13,707 (2,819)(21)
Total non-interest revenue$133,126 $105,334 $27,792 26 %
Core banking fees (1)
$46,060 $45,404 $656 %
Wealth revenue (2)
$44,439 $36,351 $8,088 22 %
(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 Months Ended March 31, 2023 compared to March 31, 2022
Service charges on deposit accounts, consisting of account analysis fees, NSF fees, and all other service charges, for the three months ended March 31, 2023 were up slightly compared to the same period in 2022. The largest category of service charges, account analysis fees, was up $609 thousand, or 6%, compared to the first quarter of 2022. NSF/overdraft fees for the three months ended March 31, 2023 were down $443 thousand and comprised 29% and 32% of service charges on deposit accounts at March 31, 2023 and 2022, respectively. We expect this downward trend in NSF/overdraft fees to continue. All other service charges on deposit accounts, which consist primarily of monthly fees on consumer demand deposits and small business accounts, for the three months ended March 31, 2023 were up $268 thousand, or 5%.
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 decline compared to the three months ended March 31, 2022 primarily resulted from volatility in the equity markets which also resulted in lower assets under management.
Card fees consist primarily of credit card interchange fees, debit card interchange fees, and merchant revenue. Card fees are reported net of certain associated expense items, including client loyalty program expenses and network expenses. Merchant revenue relates to the fees that are charged to merchant clients based on a percentage of their credit or debit card transaction volume amounts. Card fees for the three months ended March 31, 2023 were up primarily due to higher credit card transaction volumes from elevated commercial and consumer spend activity and commercial account growth in addition to increased merchant revenue resulting from higher transaction volumes and new merchants being added.
Brokerage revenue consists primarily of brokerage commissions as well as advisory fees earned from the management of client assets. Brokerage revenue for the three months ended March 31, 2023 increased significantly over the prior year comparable period, benefiting largely from client activity, including movement into short-term liquidity products such as repurchase agreements due to the rate environment.
Mortgage banking income, consisting of net gains on loan origination/sales activities, was lower for the three months ended March 31, 2023, compared to the same period in 2022, due to the continued depressed residential mortgage environment, with increases in mortgage rates reducing refinancing and new-purchase volumes. Mortgage banking income declined $2.1 million primarily as a result of a $96.6 million, or 45%, decrease in loan sales and a $115.2 million, or 52%, 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 substantial increase for the three months ended March 31, 2023 compared to the same

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period in 2022 primarily resulted from a $4.6 million increase in loan syndication arranger fees and a $2.6 million increase in fees on client derivative transactions.
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 (losses) from sales of SBA loans, and other miscellaneous items. The comparative period decline is primarily due to a gain of $3.5 million recognized on the sale of a certain real estate partnership recorded during the first quarter of 2022.
Non-interest Expense
Non-interest expense for the first quarter of 2023 was $321.9 million, up $49.4 million, or 18%, compared to the same period in 2022 and was negatively impacted by a $16.8 million loss associated with $424.1 million of third-party consumer loans moved to held for sale, while the comparative period benefited from a $6.4 million reversal of restructuring charges. The remaining increase in non-interest expense during 2023 was primarily due to investments in and expansion of our workforce, investments in new businesses initiatives, and an industry-wide increase in the FDIC base assessment rate.
The following table summarizes the components of non-interest expense.
Table 7 - Non-interest Expense
Three Months Ended March 31,
(dollars in thousands)20232022$ Change% Change
Salaries and other personnel expense$188,924 $164,684 $24,240 15 %
Net occupancy, equipment, and software expense42,860 42,877 (17)— 
Third-party processing and other services21,833 20,996 837 
Professional fees8,963 8,474 489 
FDIC insurance and other regulatory fees10,268 6,250 4,018 64 
Amortization of intangibles1,857 2,118 (261)(12)
Restructuring charges (reversals)(733)(6,424)5,691 (89)
Loss on early extinguishment of debt 677 (677)nm
Loss on other loans held for sale16,750 — 16,750 nm
Other operating expense31,130 32,798 (1,668)(5)
Total non-interest expense$321,852 $272,450 $49,402 18 %
Three Months Ended March 31, 2023 compared to March 31, 2022
Salaries and other personnel expense increased for the three months ended March 31, 2023 primarily due to the impacts of merit and inflationary wage increases, headcount additions, employee healthcare costs, and an increase in the fair value of the non-qualified deferred compensation liability (offset in non-interest revenue), partially offset by lower mortgage production-based commissions. Total headcount of 5,161 was up by 159, or 3%, compared to March 31, 2022 as a result of additions in areas associated with strategic revenue growth and certain critical support functions.
Third-party processing and other services include all third-party core operating system and processing charges as well as third-party consumer loan servicing charges. Third-party processing expense increased for the three months ended March 31, 2023, largely resulting from enhancements associated with technology and operations infrastructure investments and new business initiatives somewhat offset by lower servicing fees associated with third-party consumer loans.
Professional fees were up modestly for the three months ended March 31, 2023 primarily from higher consulting fees largely related to strategic and infrastructure investments partially offset by lower legal fees from credit-related items.
FDIC insurance and other regulatory fees increased for the three months ended March 31, 2023, largely due to the industry-wide 2 bps increase in the deposit insurance initial base assessment rate that began in the first quarter of 2023. In addition, asset growth contributed to a higher assessment base compared to the first quarter of 2022.
During the three months ended March 31, 2023, Synovus recorded restructuring charges (reversals) including $1.4 million in gains on the sale of three branches previously closed partially offset by $354 thousand of severance and $282 thousand in common area maintenance and asset impairment/lease termination charges related to branches. During the three months ended March 31, 2022, Synovus recorded restructuring charges (reversals) that included $9.1 million in gains largely relating to the sale of real estate facilities in Columbus, Georgia, which were partially offset by restructuring charges related to branch closures.

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During the three months ended March 31, 2023, Synovus recorded a $16.8 million loss associated with a fair value adjustment on other loans held for sale due to the transfer of $424.1 million of third-party consumer loans to held for sale. See Note 3 - Loans and Allowance for Loan Losses for further discussion.
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 down for the three months ended March 31, 2023 largely due to the reversal of a $2.7 million impairment charge related to the recovery of a non-performing asset upon the regulatory approval of our Qualpay investment. See Note 9 - Commitments and Contingencies for further discussion.
Income Tax Expense
Income tax expense was $57.7 million for the three months ended March 31, 2023, representing an effective tax rate of 22.2%, compared to income tax expense of $42.7 million for the three months ended March 31, 2022, representing an effective tax rate of 20.0%. The effective tax rate was higher for three months ended March 31, 2023, primarily due to a decrease in net discrete tax benefits recognized during the current period, including share-based compensation and changes in amounts taxable by jurisdictions, compared to the prior period.
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 March 31, 2023, credit metrics continue to remain at strong levels with NPAs and NPLs both at 41 bps and total past dues at 12 bps, as a percentage of total loans. Net charge-offs were $18.6 million, or 17 bps annualized, for the three months ended March 31, 2023, and included $6.6 million related to the third-party consumer loans moved to held for sale. While we do expect additional pressure on credit metrics due to the economic environment, we continue to have confidence in the strength and quality of our portfolio. We continue to be vigilant while monitoring the more recession-sensitive components of our loan portfolio, and we utilize rigorous underwriting standards and market and portfolio analysis for the entirety of the loan portfolio.

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The table below includes selected credit quality metrics.
Table 8 - Credit Quality Metrics
(dollars in thousands)March 31, 2023December 31, 2022March 31, 2022
Non-performing loans
$182,460 $128,061 $132,131 
ORE and other assets
 15,320 26,759 
Non-performing assets
$182,460 $143,381 $158,890 
Total loans
$44,044,939 $43,716,353 $40,169,150 
Non-performing loans as a % of total loans
0.41 %0.29 %0.33 %
Non-performing assets as a % of total loans, ORE, and specific other assets
0.41 0.33 0.40 
Loans 90 days past due and still accruing
$3,529 $3,373 $3,067 
As a % of total loans
0.01 %0.01 %0.01 %
Total past due loans and still accruing
$55,053 $65,568 $45,385 
As a % of total loans
0.12 %0.15 %0.11 %
Net charge-offs, quarter$18,550 $13,300 $18,609 
Net charge-offs/average loans, quarter0.17 %0.12 %0.19 %
Provision for (reversal of) loan losses, quarter$32,136 $35,366 $5,968 
Provision for (reversal of) unfunded commitments, quarter18 (482)5,432 
Provision for (reversal of) credit losses, quarter$32,154 $34,884 $11,400 
Allowance for loan losses$457,010 $443,424 $414,956 
Reserve for unfunded commitments57,473 57,455 47,317 
Allowance for credit losses$514,483 $500,879 $462,273 
ACL to loans coverage ratio
1.17 %1.15 %1.15 %
ALL to loans coverage ratio
1.04 1.01 1.03 
ACL/NPLs281.97 391.13 349.86 
ALL/NPLs250.47 346.26 314.05 
Non-performing Assets
Total NPAs were $182.5 million at March 31, 2023, a $39.1 million, or 27%, increase from December 31, 2022 primarily due to the designation of a few large commercial relationships as non-performing, which are reserved and collateralized, partially offset by the recovery of a non-performing asset related to the regulatory approval of our Qualpay investment. See Note 9 - Commitments and Contingencies for further discussion.
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 March 31, 2023 were 2.5% of total loans, or $1.09 billion, up $143.9 million as compared to 2.2% of total loans, or $942.1 million, at December 31, 2022, primarily due to the migration of several commercial credits.
Table 9 - Criticized and Classified Loans
(dollars in thousands)March 31, 2023December 31, 2022
Special mention$368,758 $312,921 
Substandard 713,726 626,266 
Doubtful — 
Loss 3,455 2,884 
Criticized and Classified loans$1,085,939 $942,071 
As a % of total loans
2.5 %2.2 %

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Provision for (Reversal of) Credit Losses and Allowance for Credit Losses
The provision for credit losses was $32.2 million for the three months ended March 31, 2023, compared to a provision of $11.4 million for the three months ended March 31, 2022, with both periods including net charge-offs of $18.6 million. The increase was predominantly driven by changes in forecasted economic factors, with the first quarter of 2023 showing indicators of a more recessionary environment and the first quarter of 2022 showing improving economics post-pandemic. These economic factors drove an increase in the ACL ratio of 2 bps during the first quarter of 2023, compared with a declining ratio of 4 bps during the first quarter of 2022.
The ALL of $457.0 million and the reserve for unfunded commitments of $57.5 million, which is recorded in other liabilities, comprise the total ACL of $514.5 million at March 31, 2023. The ACL increased $13.6 million compared to the December 31, 2022 ACL of $500.9 million, which consisted of an ALL of $443.4 million and the reserve for unfunded commitments of $57.5 million. The ACL to loans coverage ratio of 1.17% at March 31, 2023 had a modest sequential increase of 2 bps. The increase in the ACL from December 31, 2022 resulted primarily from a deterioration in economic factors, including an increase in the downside weighting of the multiple scenario model.
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 March 31, 2023, 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.
Table 10 - Capital Ratios
(dollars in thousands)March 31, 2023December 31, 2022
CET1 capital
Synovus Financial Corp.$5,056,613 $4,926,194 
Synovus Bank5,564,496 5,446,703 
Tier 1 risk-based capital
Synovus Financial Corp.5,593,758 5,463,339 
Synovus Bank5,564,496 5,446,703 
Total risk-based capital
Synovus Financial Corp.6,579,216 6,415,681 
Synovus Bank6,231,923 6,079,152 
CET1 capital ratio
Synovus Financial Corp.9.77 %9.63 %
Synovus Bank10.77 10.66 
Tier 1 risk-based capital ratio
Synovus Financial Corp.10.81 10.68 
Synovus Bank10.77 10.66 
Total risk-based capital to risk-weighted assets ratio
Synovus Financial Corp.12.72 12.54 
Synovus Bank12.06 11.89 
Leverage ratio
Synovus Financial Corp.9.14 9.07 
Synovus Bank9.11 9.06 
At March 31, 2023, Synovus' CET1 ratio of 9.77% improved 14 bps compared to December 31, 2022, driven by robust organic capital generation from earnings, which was more than sufficient to meet what continued to be solid, core balance sheet growth. 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' 2022 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 18, 2023, Synovus announced that its Board of Directors approved a capital plan that included a $0.04 increase

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in the quarterly common stock dividend to $0.38 per share, beginning with the quarterly dividend payable in April 2023, and authorized share repurchases of up to $300 million in 2023. Synovus did not repurchase any shares in the first quarter of 2023, and in light of the uncertain economic and regulatory environment, in the near-term, we will continue to focus on retaining and growing capital.
On August 26, 2020, the federal banking regulators issued a final rule that allowed electing banking organizations that adopted 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 March 31, 2023 regulatory capital ratios reflect Synovus' election of the five-year transition provision. At March 31, 2023, $29.2 million, or a cumulative 6 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.
Synovus declared common stock dividends of $55.5 million, or $0.38 per common share, for the three months ended March 31, 2023, compared to $49.4 million, or $0.34 per common share, for the three months ended March 31, 2022. In addition, Synovus declared dividends on its preferred stock of $8.3 million during both the three months ended March 31, 2023 and 2022.
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 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. 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.
Synovus maintained stable core deposit balances, growing by $133.1 million, during the first quarter of 2023. Time deposits increased $1.34 billion, partially offset by a $700.8 million decline in money market accounts as consumers shifted excess liquidity between these two account types. A $746.9 million decrease in non-interest bearing demand deposits was primarily impacted by commercial seasonality, normal cash deployment, and to a lesser extent, continued pressures from the FOMC's efforts to tighten monetary policy. Based on certain recent bank failures and negative media narrative around deposit outflows at regional banks, Synovus proactively added FHLB advances and brokered deposits as precautionary measures amid the uncertain environment. Synovus continues to proactively pledge additional collateral to the FHLB and Federal Reserve and maintains contingent liquidity across a diverse set of sources which include immediately available funds as well as funds we expect to be available within short notice. Contingent liquidity sources include primary sources such as FHLB borrowing capacity, FRB cash reserves, and third-party consumer loans, which includes our decision to sell loans from this portfolio and runoff, while secondary sources consist of the Federal Reserve discount window, Fed Funds lines, and other sources like the FRB's Bank Term Funding Program. At March 31, 2023, based on currently pledged collateral, Synovus Bank had access to FHLB funding of $3.62 billion, subject to FHLB credit policies.
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, payment of general corporate expense, and potential capital infusions into subsidiaries. The primary source of liquidity for Synovus

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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.
On February 15, 2023, Synovus Bank issued $500 million aggregate principal amount of 5.625% Senior Bank Notes due 2028, and the Notes will mature on February 15, 2028. The Notes will bear interest at 5.625% per annum, payable semiannually in arrears on each February 15 and August 15, beginning on August 15, 2023. Synovus Bank may not redeem the Notes prior to August 15, 2023. The redemption price for any redemption in whole or in part, at our option, on or after August 15, 2023, and prior to January 15, 2028, is equal to the greater of: (1) (a) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the redemption date (assuming the Notes matured on January 15, 2028) on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 30 basis points less (b) interest accrued to the date of redemption, and (2) 100% of the principal amount of the Notes to be redeemed, plus, in either case, accrued and unpaid interest thereon to the redemption date. The redemption price for any redemption after January 15, 2028 is 100% of the principal amount of the Notes, plus accrued and unpaid interest thereon to the redemption date. The Notes are not redeemable at the option or election of holders.
Synovus presently believes that the sources of liquidity discussed above, including existing liquid funds on hand, are sufficient to meet its anticipated funding needs. See "Part II – Item 1A. Risk Factors - Recent negative developments in the banking industry could adversely affect our current and projected business operations and our financial condition and results of operation" of this Report and "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' 2022 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 three months ended March 31, 2023 increased $3.28 billion, or 6%, as compared to the first three months of 2022. Average earning assets increased $3.98 billion, or 8%, in the first three months of 2023 compared to the same period in 2022. The increase in average earning assets primarily resulted from a $4.44 billion, or 11%, increase in average total loans, net of unearned income, primarily attributable to growth in commercial loans from increased production and line utilization.
Average interest-bearing liabilities increased $4.9 billion, or 15%, for the first three months of 2023 compared to the same period in 2022. The increase in average interest-bearing liabilities largely resulted from a $2.77 billion increase in brokered deposits, a $2.17 billion increase in long-term debt, a $1.67 billion increase in other short-term borrowings, and a $591.5 million increase in time deposits, partially offset by a $1.65 billion decrease in money market accounts. The increase in brokered deposits, long-term debt and other short-term borrowings, from FHLB advances, was largely due to the ongoing management of our liquidity position which also included the February 2023 issuance of $500.0 million par value 2028 Synovus Bank Senior Notes. The increase in time deposits and decreased money market accounts were correlated as consumers have shifted excess liquidity between these two account types. Average non-interest-bearing deposits decreased $1.48 billion, or 9%, for the first three months of 2023 compared to the same period in 2022 primarily due to the continued pressures from the FOMC's efforts to tighten monetary policy and normal client liquidity deployment.
Net interest income for the three months ended March 31, 2023 was $480.8 million, up $88.5 million, or 23%, compared to the same period in 2022. Net interest margin was up 42 bps over the comparable three-month period to 3.43%, due primarily to the benefits of our asset sensitive balance sheet and substantial loan growth partially offset by continued increases in deposit costs.
On a sequential quarter basis, net interest income was down $20.6 million, or 4%, impacted by a lower day count and higher deposit costs. Net interest margin for the first quarter was 3.43%, down 13 bps compared to the fourth quarter of 2022, as the asset side of our balance sheet continued to benefit from higher balances and rates, but cyclical lags in deposit pricing combined with re-mixing within our non-interest bearing deposits served as a notable headwind for the current quarter. In addition, we proactively added FHLB advances and brokered deposits amid the uncertain economic environment and issued the aforementioned $500 million Bank Senior Notes. We expect net interest income to be pressured in the near term; specifically, we will see a full quarter impact of the deposit mix-shift that occurred during the first quarter of 2023 as well as the continued headwind resulting from deposit price lags. The combination of these headwinds is expected to lead to net interest income declines in the second quarter of 2023 followed by relative stability for the remainder of the year consistent with our full year 2023 guidance.

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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 months ended March 31, 2023 and 2022, as well as the variances between the periods caused by changes in interest rates versus changes in volume.
Table 11 - Quarter-to-Date Net Interest Income and Rate/Volume Analysis
Three Months Ended March 31,2023 Compared to 2022
20232022
Change due to (1)
(dollars in thousands)
Average BalanceInterest  Yield/
   Rate
Average BalanceInterest  Yield/
   Rate

Volume
 Yield/ RateIncrease (Decrease)
Assets
Interest earning assets:
Commercial loans (2) (3)
$35,030,809 $526,529 6.10 %$30,756,752 $280,588 3.70 %$38,993 $206,948 $245,941 
Consumer loans (2)
8,762,631 104,147 4.78 8,594,009 81,368 3.81 1,584 21,195 22,779 
Less: Allowance for loan losses
(445,192)  (423,953)— — — — — 
Loans, net
43,348,248 630,676 5.89 38,926,808 361,956 3.76 40,577 228,143 268,720 
Investment securities available for sale
11,293,958 61,054 2.16 11,259,800 47,250 1.68 142 13,662 13,804 
Trading account assets
11,338 124 4.39 9,078 39 1.73 10 75 85 
Other earning assets(4)
1,513,800 17,212 4.55 1,919,531 815 0.17 (160)16,557 16,397 
FHLB and Federal Reserve Bank stock
306,935 3,355 4.37 160,065 685 1.71 619 2,051 2,670 
Mortgage loans held for sale
36,497 566 6.20 103,887 882 3.40 (565)249 (316)
Other loans held for sale443,690 5,011 4.52 597,062 5,300 3.55 (1,343)1,054 (289)
Total interest earning assets
56,954,466 $717,998 5.11 %52,976,231 $416,927 3.19 %39,280 261,791 301,071 
Cash and due from banks
643,502 548,684 
Premises and equipment
370,275 398,774 
Other real estate
 11,759 
Cash surrender value of bank-owned life insurance
1,091,080 1,070,886 
Other assets(5)    
1,074,238 1,849,564 
Total assets
$60,133,561 $56,855,898 
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing demand deposits    
$9,088,533 $23,218 1.04 %$9,549,527 $2,372 0.10 %$(114)$20,960 $20,846 
Money market accounts
14,397,683 72,618 2.05 16,045,627 5,349 0.14 (569)67,838 67,269 
Savings deposits
1,370,173 211 0.06 1,460,648 67 0.02 (4)148 144 
Time deposits
3,601,288 21,496 2.42 3,009,795 2,138 0.29 423 18,935 19,358 
Brokered deposits5,553,970 56,392 4.12 2,788,124 3,733 0.54 3,683 48,976 52,659 
Federal funds purchased and securities sold under repurchase agreements    
133,360 670 2.01 194,352 11 0.02 (3)662 659 
Other short-term borrowings
1,677,519 18,994 4.53 4,773 — — — 18,994 18,994 
Long-term debt
3,148,062 42,529 5.41 982,423 10,144 4.13 22,054 10,331 32,385 
Total interest-bearing liabilities
38,970,588 $236,128 2.46 %34,035,269 $23,814 0.28 %$25,470 $186,844 $212,314 
Non-interest-bearing demand deposits
15,014,224 16,491,643 
Other liabilities
1,522,827 1,144,415 
Shareholders' equity
4,625,922 5,184,571 
Total liabilities and shareholders' equity
$60,133,561 $56,855,898 
Net interest income and net interest margin, taxable equivalent (6)(7)
$481,870 3.43 %$393,113 3.01 %
Less: taxable-equivalent adjustment
1,119 865 
Net interest income
$480,751 $392,248 
$13,810 $74,947 $88,757 
(1)     Changes in rate/volume will equal the increase/ (decrease) in interest income/expense.
(2)    Average loans are shown net of unearned income. NPLs are included. Interest income includes fees as follows: 2023 - $11.5 million, 2022 - $20.7 million.
(3)    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.
(4)    Includes interest-bearing funds with Federal Reserve Bank, interest earning deposits with banks, and federal funds sold and securities purchased under resale agreements.
(5)    Includes average net unrealized gains (losses) on investment securities available for sale of $(1.52) billion and $(247.4) million for the three months ended March 31, 2023 and 2022, respectively.
(6)    The net interest margin is calculated by dividing annualized net interest income - TE by average total interest earnings assets.
(7)    Net interest margin reflects Actual/Actual day count and includes other immaterial adjustments versus NIM previously reported.

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Market Risk Analysis
Interest rate risk is the primary market risk to which Synovus is potentially exposed. Synovus measures the sensitivity of net interest income to changes in market interest rates through the use of simulation modeling, 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 includes estimates for deposit repricing characteristics which, for purposes of the sensitivity estimates provided below, relies upon a constant, through-the-cycle total deposit cost beta of approximately 35%-40% as of the most recently reported period. 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 4.75% to 5.00% as of March 31, 2023 and the prime rate of 8.00% as of March 31, 2023. Synovus has modeled the impact of an immediate change 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. As illustrated in the table below, the net interest income sensitivity derived from this simulation suggests that net interest income is projected to increase by 6.5% and 3.3% if interest rates increased by 200 and 100 bps, respectively. Net interest income is projected to decrease by 3.6% and 7.8% if interest rates decreased by 100 and 200 bps, respectively.
The following table represents the estimated sensitivity of net interest income at March 31, 2023, with comparable information for December 31, 2022.
Table 12 - 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)March 31, 2023December 31, 2022
+2006.5%6.4%
+1003.3%3.1%
-100(3.6)%(3.5)%
-200(7.8)%(7.5)%
While all of the above estimates are reflective of the general interest rate sensitivity of Synovus, local market conditions, the realized growth and remixing of the balance sheet, as well as the broader macroeconomic environment could all have a significant impact on the both the sensitivity and realized level of net interest income.
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. The results of these analyses were consistent with the impact of the interest rate sensitivity analysis as shown in Table 12 - Twelve Month Net Interest Income Sensitivity above.
Synovus is also subject to market risk in certain of its fee income business lines. Financial management services revenue, which include trust, brokerage, and asset management fees, can be affected by risk in the securities markets, primarily the equity securities market. A significant portion of the fees in this unit are determined based upon a percentage of asset values. Weaker securities markets and lower equity values have an adverse impact on the fees generated by these operations. Trading account assets, maintained to facilitate brokerage client activity, are also subject to market risk; however, trading activities are limited and subject to risk policy limits. Additionally, Synovus utilizes various tools to measure and manage price risk in its trading portfolio.
Mortgage banking income is also subject to market risk. Mortgage loan originations are sensitive to levels of mortgage interest rates and therefore, mortgage banking income can be negatively impacted during a period of rising interest rates as we have experienced in the past year. The extension of commitments to clients to fund mortgage loans also subjects Synovus to market risk. This risk is primarily created by the time periods between making the commitment, closing, and delivering the loan. Synovus seeks to minimize its exposure by utilizing various risk management tools, including forward sales commitments and other hedges.
Derivative Instruments for Interest Rate Risk Management
Synovus utilizes derivative instruments to manage its exposure to various types of structural interest rate risks by

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executing end-user derivative transactions designated as hedges. Hedging relationships may be designated as either a cash flow hedge, which mitigates risk exposure to the variability of future cash flows or other forecasted transactions, or a fair value hedge, which mitigates risk exposure to adverse changes in the fair market value of a fixed rate asset or liability due to changes in market interest rates.
As of March 31, 2023 and December 31, 2022, Synovus had $6.00 billion and $5.25 billion, respectively, in notional amounts outstanding of interest rate swaps designated as cash flow hedging instruments to hedge its exposure to contractually specified interest rate risk associated with floating rate loans.
As of March 31, 2023 and December 31, 2022, Synovus had $3.34 billion and $2.23 billion, respectively, in notional amounts outstanding of receive-fixed, pay-variable interest rate swaps designated as fair value hedging instruments to hedge its exposure to the change in the fair value due to fluctuations in market interest rates for outstanding fixed-rate long-term debt and interest-bearing deposits.
LIBOR Transition
On March 5, 2021, the FCA confirmed that all LIBOR settings would either cease to be provided by any administrator or would no longer be representative immediately after June 30, 2023, for all remaining US dollar settings.
The ARRC proposed SOFR as its preferred rate 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' 2022 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 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 2022 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 to clients including SOFR, BSBY, and Prime indices. As of March 31, 2023, the Company had approximately $6 billion in loans tied to LIBOR that mature after June 30, 2023. Remediation activities are underway to modify or transition existing exposures to the applicable Federal Reserve Board selected replacement rate 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.
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' 2022 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' 2022 Form 10-K.

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Non-GAAP Financial Measures
The measures entitled adjusted non-interest revenue, adjusted non-interest expense, adjusted 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, tangible common equity ratio, and adjusted PPNR 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, the ratio of total shareholders' equity to total assets, and PPNR, 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 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, and other items not indicative of ongoing operations that could impact period-to-period comparisons. 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. Adjusted PPNR is used by management to evaluate PPNR exclusive of items that management believes are not indicative of ongoing operations and impact period-to-period comparisons. The computations of these measures are set forth in the tables below.
Management does not provide a reconciliation for forward-looking non-GAAP financial measures where it is unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the occurrence and the financial impact of various items that have not yet occurred, are out of Synovus’ control, or cannot be reasonably predicted. For the same reasons, Synovus’ management is unable to address the probable significance of the unavailable information. Forward-looking non-GAAP financial measures provided without the most directly comparable GAAP financial measures may vary materially from the corresponding GAAP financial measures.

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Table 13 - Reconciliation of Non-GAAP Financial Measures
Three Months Ended
(in thousands, except per share data)March 31, 2023March 31, 2022
Adjusted non-interest revenue
Total non-interest revenue$133,126 $105,334 
Investment securities (gains) losses, net(1,030)— 
Recovery of NPA(13,126)— 
Fair value adjustment on non-qualified deferred compensation(1,371)1,295 
Adjusted non-interest revenue$117,599 $106,629 
Adjusted non-interest expense
Total non-interest expense$321,852 $272,450 
Loss on other loans held for sale(16,750)— 
Restructuring charges (reversals)733 6,424 
Loss on early extinguishment of debt (677)
Fair value adjustment on non-qualified deferred compensation(1,371)1,295 
Adjusted non-interest expense$304,464 $279,492 
Adjusted revenue and adjusted tangible efficiency ratio
Adjusted non-interest expense$304,464 $279,492 
Amortization of intangibles(1,857)(2,118)
Adjusted tangible non-interest expense$302,607 $277,374 
Net interest income$480,751 $392,248 
Tax equivalent adjustment1,119 865 
Total non-interest revenue133,126 105,334 
Total TE revenue$614,996 $498,447 
Recovery of NPA(13,126)— 
Investment securities (gains) losses, net(1,030)— 
Fair value adjustment on non-qualified deferred compensation(1,371)1,295 
Adjusted revenue$599,469 $499,742 
Efficiency ratio-TE52.33 %54.66 %
Adjusted tangible efficiency ratio50.48 55.50 
Adjusted net income available to common shareholders and adjusted diluted earnings per share
Net income available to common shareholders$193,868 $162,746 
Recovery of NPA(13,126)— 
Loss on other loans held for sale16,750 — 
Restructuring charges (reversals)(733)(6,424)
Loss on early extinguishment of debt 677 
Investment securities (gains) losses, net(1,030)— 
Tax effect of adjustments (1)
(453)1,369 
Adjusted net income available to common shareholders$195,276 $158,368 
Weighted average common shares outstanding, diluted146,727 146,665 
Net income per common share, diluted$1.32 $1.11 
Adjusted net income per common share, diluted1.33 1.08 

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Table 13 - Reconciliation of Non-GAAP Financial Measures, continued
Three Months Ended
(dollars in thousands)March 31, 2023March 31, 2022
Adjusted return on average assets (annualized)
Net income$202,159 $171,037 
Recovery of NPA(13,126)— 
Loss on other loans held for sale16,750 — 
Restructuring charges (reversals)(733)(6,424)
Loss on early extinguishment of debt 677 
Investment securities (gains) losses, net(1,030)— 
Tax effect of adjustments (1)
(453)1,369 
Adjusted net income$203,567 $166,659 
Net income annualized$819,867 $693,650 
Adjusted net income annualized$825,577 $675,895 
Total average assets$60,133,561 $56,855,898 
Return on average assets (annualized)1.36 %1.22 %
Adjusted return on average assets (annualized)1.37 1.19 
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$193,868 $162,746 
Recovery of NPA(13,126)— 
Loss on other loans held for sale16,750 — 
Restructuring charges (reversals)(733)(6,424)
Loss on early extinguishment of debt 677 
Investment securities (gains) losses, net(1,030)— 
Tax effect of adjustments (1)
(453)1,369 
Adjusted net income available to common shareholders$195,276 $158,368 
Adjusted net income available to common shareholders annualized$791,953 $642,270 
Amortization of intangibles, annualized net of tax5,699 6,543 
Adjusted net income available to common shareholders excluding amortization of intangibles annualized$797,652 $648,813 
Net income available to common shareholders annualized$786,242 $660,025 
Amortization of intangibles, annualized net of tax5,699 6,543 
Net income available to common shareholders excluding amortization of intangibles$791,941 $666,568 
Total average shareholders' equity less preferred stock$4,088,777 $4,647,426 
Average goodwill(452,390)(452,390)
Average other intangible assets, net(26,245)(34,576)
Total average tangible shareholders' equity less preferred stock$3,610,142 $4,160,460 
Return on average common equity (annualized)19.23 %14.20 %
Adjusted return on average common equity (annualized)19.37 13.82 
Return on average tangible common equity (annualized)21.94 16.02 
Adjusted return on average tangible common equity (annualized)22.09 15.59 

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Table 13 - Reconciliation of Non-GAAP Financial Measures, continued
(dollars in thousands)March 31, 2023December 31, 2022March 31, 2022
Tangible common equity ratio
Total assets$61,840,025 $59,731,378 $56,419,549 
Goodwill(452,390)(452,390)(452,390)
Other intangible assets, net(25,267)(27,124)(33,478)
Tangible assets$61,362,368 $59,251,864 $55,933,681 
Total shareholders' equity$4,770,130 $4,475,801 $4,824,635 
Goodwill(452,390)(452,390)(452,390)
Other intangible assets, net(25,267)(27,124)(33,478)
Preferred stock, no par value(537,145)(537,145)(537,145)
Tangible common equity$3,755,328 $3,459,142 $3,801,622 
Total shareholders' equity to total assets ratio7.71 %7.49 %8.55 %
Tangible common equity ratio6.12 5.84 6.80 
(1) An assumed marginal tax rate of 24.3% for 1Q23 and 4Q22 and 23.8% for 1Q22 was applied.
Three Months Ended
(dollars in thousands)March 31, 2023March 31, 2022
Adjusted PPNR
Net interest income$480,751 $392,248 
Total non-interest revenue133,126 105,334 
Total non-interest expense(321,852)(272,450)
PPNR$292,025 $225,132 
Net interest income$480,751 $392,248 
Tax equivalent adjustment1,119 865 
Total non-interest revenue133,126 105,334 
Total TE revenue$614,996 $498,447 
Recovery of NPA(13,126)— 
Investment securities (gains) losses, net(1,030)— 
Fair value adjustment on non-qualified deferred compensation(1,371)1,295 
Adjusted revenue$599,469 $499,742 
Adjusted non-interest expense
Total non-interest expense$321,852 $272,450 
Loss on other loans held for sale(16,750)— 
Restructuring charges (reversals)733 6,424 
Loss on early extinguishment of debt (677)
Fair value adjustment on non-qualified deferred compensation(1,371)1,295 
Adjusted non-interest expense$304,464 $279,492 
Adjusted revenue$599,469 $499,742 
Adjusted non-interest expense(304,464)(279,492)
Adjusted PPNR$295,005 $220,250 
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.

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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 March 31, 2023, 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 March 31, 2023 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' 2022 Form 10-K which could materially affect the Company's 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.
Other than the risk factor set forth below, there are no material changes during the period covered by this Report to the risk factors previously disclosed in Synovus' 2022 Form 10-K.
Recent negative developments in the banking industry could adversely affect our current and projected business operations and our financial condition and results of operations.
The recent bank failures and related negative media attention have generated significant market trading volatility among publicly traded bank holding companies and, in particular, regional banks like Synovus. These developments have negatively impacted client confidence in regional banks, which could prompt clients to maintain their deposits with larger financial institutions. Further, competition for deposits has increased in recent periods, and the cost of funding has similarly increased, putting pressure on our net interest margin. If we were required to sell a portion of our securities or loan portfolios to address liquidity needs, we may incur losses as a result of the negative impact of rising interest rates on the value of our securities portfolio, which could negatively affect our earnings and our capital. If we were required to raise additional capital in the current environment, any such capital raise may be on unfavorable terms, thereby negatively impacting book value and profitability. While we have taken actions to improve our funding, there is no guarantee that such actions will be successful or sufficient in the event of sudden liquidity needs.
We also anticipate increased regulatory scrutiny – in the course of routine examinations and otherwise – and new regulations directed towards banks of similar size to Synovus Bank, designed to address the recent negative developments in the banking industry, all of which may increase our costs of doing business and reduce our profitability. Among other things, there may be an increased focus by both regulators and investors on deposit composition, the level of uninsured deposits, the level of unrealized losses in either available-for-sale or held-to-maturity securities portfolios, contingent liquidity, CRE loan composition and concentration, capital position and general oversight and internal control structures regarding the foregoing. This could impact our ability to achieve our strategic objectives and may result in changes to our balance sheet position which could, in turn, negatively impact our profitability.
ITEM 2. – UNREGISTERED SALES OF SECURITIES AND USE OF PROCEEDS
    (a) None.
    (b) None.
    (c) Issuer Purchases of Equity Securities: Synovus did not complete any share repurchases during the three months ended March 31, 2023. The Company announced on January 18, 2023 that its Board of Directors authorized share repurchases of up to $300 million in 2023.

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.
May 4, 2023By:/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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