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SYNOVUS FINANCIAL CORP - Quarter Report: 2023 June (Form 10-Q)


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________
 
FORM 10-Q
 
______________________________
Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended June 30, 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 July 31, 2023, 146,167,089 shares of the registrant's common stock, $1.00 par value, were outstanding.





Table of Contents
Page
Financial Information
Index of Defined Terms
Item 1.Financial Statements (Unaudited)
Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022
Consolidated Statements of Income for the Three and Six Months Ended June 30, 2023 and 2022
Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2023 and 2022
Consolidated Statements of Changes in Shareholders' Equity for the Three and Six Months Ended June 30, 2023 and 2022
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 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)
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)
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
Federal Reserve Bank – One of the 12 banks that are the operating arms of the U.S. central bank. They implement the policies of the Federal Reserve Board, supervise bank holding companies and certain banking institutions, and also conduct economic research
i


Federal Reserve Board – The 7-member Board of Governors that oversees the Federal Reserve System, establishes monetary policy (interest rates, credit, etc.), and monitors the economic health of the country. Its members are appointed by the President subject to Senate confirmation, and serve 14-year terms
Federal Reserve System or Federal Reserve – The Federal Reserve Board plus 12 Federal Reserve Banks, with each one serving member banks in its own district. The Federal Reserve has broad regulatory powers over the money supply and the credit structure of the economy
FFIEC – Federal Financial Institutions Examination Council
FFIEC Retail Credit Classification Policy – FFIEC Uniform Retail Credit Classification and Account Management Policy
FHLB – Federal Home Loan Bank
FICO – Fair Isaac Corporation
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
HTC– Historic tax credit
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
SOFR – Secured Overnight Financing Rate
ii


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)June 30, 2023December 31, 2022
ASSETS
Cash and due from banks$576,148 $624,097 
Interest-bearing funds with Federal Reserve Bank1,391,961 1,280,684 
Interest earning deposits with banks50,254 34,632 
Federal funds sold and securities purchased under resale agreements35,788 38,367 
     Total cash, cash equivalents, and restricted cash2,054,151 1,977,780 
Investment securities available for sale, at fair value9,621,175 9,678,103 
Loans held for sale (includes $62,616 and $51,136 measured at fair value, respectively)
514,450 391,502 
Loans, net of deferred fees and costs44,353,537 43,716,353 
Allowance for loan losses(471,238)(443,424)
Loans, net43,882,299 43,272,929 
Cash surrender value of bank-owned life insurance1,100,114 1,089,280 
Premises, equipment, and software, net365,443 370,632 
Goodwill475,573 452,390 
Other intangible assets, net61,538 27,124 
Other assets2,580,848 2,471,638 
Total assets$60,655,591 $59,731,378 
LIABILITIES AND EQUITY
Liabilities
Deposits:
Non-interest-bearing deposits$13,565,602 $15,639,899 
Interest-bearing deposits36,514,790 33,231,660 
Total deposits50,080,392 48,871,559 
Federal funds purchased and securities sold under repurchase agreements83,384 146,588 
Other short-term borrowings1,461 603,384 
Long-term debt4,021,411 4,109,597 
Other liabilities1,661,175 1,524,449 
Total liabilities55,847,823 55,255,577 
Equity
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 170,808,134 and 170,141,492, respectively; outstanding 146,153,276 and 145,486,634, respectively
170,808 170,141 
Additional paid-in capital3,933,548 3,920,346 
Treasury stock, at cost; 24,654,858 shares
(944,484)(944,484)
Accumulated other comprehensive income (loss), net(1,395,175)(1,442,117)
Retained earnings2,480,686 2,234,770 
Total Synovus Financial Corp. shareholders' equity4,782,528 4,475,801 
Noncontrolling interest in subsidiary25,240 — 
Total equity4,807,768 4,475,801 
Total liabilities and equity$60,655,591 $59,731,378 
See accompanying notes to unaudited interim consolidated financial statements.

1



SYNOVUS FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
Three Months Ended June 30,Six Months Ended June 30,
(in thousands, except per share data)2023202220232022
Interest income:
Loans, including fees
$670,230 $391,307 $1,299,787 $752,399 
Investment securities available for sale
60,421 50,312 121,475 97,562 
Loans held for sale
5,801 8,600 11,378 14,781 
Federal Reserve Bank balances
17,410 1,593 34,228 2,382 
Other earning assets
5,281 1,960 9,154 2,710 
Total interest income
759,143 453,772 1,476,022 869,834 
Interest expense:
Deposits
241,780 18,501 415,715 32,160 
Long-term debt
55,915 8,769 98,444 18,913 
Other borrowings
5,917 1,114 25,580 1,126 
Total interest expense
303,612 28,384 539,739 52,199 
Net interest income
455,531 425,388 936,283 817,635 
Provision for (reversal of) credit losses
38,881 12,688 71,035 24,088 
Net interest income after provision for (reversal of) credit losses
416,650 412,700 865,248 793,547 
Non-interest revenue:
Service charges on deposit accounts
23,477 23,491 46,451 46,030 
Fiduciary and asset management fees
20,027 20,100 39,723 40,377 
Card fees
17,059 16,089 32,884 30,846 
Brokerage revenue
20,908 15,243 43,466 29,898 
Mortgage banking income
4,609 3,904 8,467 9,857 
Capital markets income
6,975 7,393 20,700 12,864 
Income from bank-owned life insurance
6,878 9,165 14,140 15,722 
Investment securities gains (losses), net
 — 1,030 — 
Recovery of NPA — 13,126 — 
Other non-interest revenue
12,343 1,881 25,415 17,006 
Total non-interest revenue
112,276 97,266 245,402 202,600 
Non-interest expense:
Salaries and other personnel expense
183,001 161,063 371,926 325,747 
Net occupancy, equipment, and software expense
42,785 43,199 85,645 86,076 
Third-party processing and other services
21,659 21,952 43,493 42,947 
Professional fees
9,597 10,865 18,560 19,338 
FDIC insurance and other regulatory fees
11,162 6,894 21,429 13,144 
Restructuring charges (reversals)(110)(1,850)(843)(8,274)
Loss on other loans held for sale2,360 — 19,110 — 
Other operating expense
36,727 39,928 69,714 75,523 
Total non-interest expense
307,181 282,051 629,034 554,501 
Income before income taxes
221,745 227,915 481,616 441,646 
Income tax expense
47,801 49,863 105,513 92,558 
Net income
173,944 178,052 376,103 349,088 
Less: Net income (loss) attributable to noncontrolling interest(166)— (166)— 
Net income attributable to Synovus Financial Corp.174,110 178,052 376,269 349,088 
Less: Preferred stock dividends
8,291 8,291 16,581 16,581 
Net income available to common shareholders
$165,819 $169,761 $359,688 $332,507 
Net income per common share, basic
$1.13 $1.17 $2.46 $2.29 
Net income per common share, diluted
1.13 1.16 2.45 2.27 
Weighted average common shares outstanding, basic
146,113 145,328 145,957 145,301 
Weighted average common shares outstanding, diluted
146,550 146,315 146,644 146,489 
See accompanying notes to unaudited interim consolidated financial statements.

2



SYNOVUS FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(unaudited)
Three Months Ended June 30,
20232022
(in thousands)
Before-tax AmountIncome TaxNet of Tax AmountBefore-tax AmountIncome TaxNet of Tax Amount
Net income
$221,745 $(47,801)$173,944 $227,915 $(49,863)$178,052 
Unrealized gains (losses) on investment securities available for sale:
Net unrealized gains (losses) arising during the period
(109,525)26,659 (82,866)(429,408)102,328 (327,080)
Reclassification adjustment for realized (gains) losses included in net income
   — — — 
Net change
(109,525)26,659 (82,866)(429,408)102,328 (327,080)
Unrealized gains (losses) on derivative instruments designated as cash flow hedges:
Net unrealized gains (losses) arising during the period
(73,123)17,798 (55,325)(48,332)11,517 (36,815)
Reclassification adjustment for realized (gains) losses included in net income42,748 (10,405)32,343 (978)233 (745)
Net change(30,375)7,393 (22,982)(49,310)11,750 (37,560)
Total other comprehensive income (loss)
$(139,900)$34,052 $(105,848)$(478,718)$114,078 $(364,640)
Comprehensive income (loss)
68,096 (186,588)
Less: comprehensive income (loss) attributable to noncontrolling interest(166)— 
Comprehensive income (loss) attributable to Synovus Financial Corp.$68,262 $(186,588)
Six Months Ended June 30,
20232022
(in thousands)
Before-tax AmountIncome TaxNet of Tax AmountBefore-tax AmountIncome TaxNet of Tax Amount
Net income
$481,616 $(105,513)$376,103 $441,646 $(92,558)$349,088 
Unrealized gains (losses) on investment securities available for sale:
Net unrealized gains (losses) arising during the period
43,556 (10,601)32,955 (1,050,890)249,351 (801,539)
Reclassification adjustment for realized (gains) losses included in net income
(1,030)251 (779)— — — 
Net change
42,526 (10,350)32,176 (1,050,890)249,351 (801,539)
Unrealized gains (losses) on derivative instruments designated as cash flow hedges:
Net unrealized gains (losses) arising during the period
(63,123)15,364 (47,759)(184,310)43,878 (140,432)
Reclassification adjustment for realized (gains) losses included in net income82,640 (20,115)62,525 (3,167)754 (2,413)
Net change19,517 (4,751)14,766 (187,477)44,632 (142,845)
Total other comprehensive income (loss)
$62,043 $(15,101)$46,942 $(1,238,367)$293,983 $(944,384)
Comprehensive income (loss)423,045 (595,296)
Less: comprehensive income (loss) attributable to noncontrolling interest(166)— 
Comprehensive income (loss) attributable to Synovus Financial Corp.$423,211 $(595,296)
See accompanying notes to unaudited interim consolidated financial statements.

3



SYNOVUS FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(unaudited)
Synovus Financial Corp. Shareholders' Equity
(in thousands, except per share data)Preferred StockCommon
Stock
Additional
Paid-in
Capital
Treasury
Stock
Accumulated
Other
Comprehensive
Income (Loss)
Retained EarningsNoncontrolling InterestTotal
Balance at March 31, 2023$537,145 $170,714 $3,925,449 $(944,484)$(1,289,327)$2,370,633  $4,770,130 
Net income (loss)     174,110 (166)173,944 
Other comprehensive income (loss), net of income taxes    (105,848)  (105,848)
Cash dividends declared on common stock - $0.38 per share
     (55,536) (55,536)
Cash dividends declared on preferred stock(1)
     (8,291) (8,291)
Restricted share unit vesting and taxes paid related to net share settlement 83 48   (230) (99)
Stock options exercised, net 11 216     227 
Share-based compensation expense  7,835     7,835 
Acquisition of non-controlling interest      25,406 25,406 
Balance at June 30, 2023$537,145 $170,808 $3,933,548 $(944,484)$(1,395,175)$2,480,686 $25,240 $4,807,768 
Balance at March 31, 2022$537,145 $169,912 $3,899,269 $(941,168)$(662,065)$1,821,542 $— $4,824,635 
Net income (loss)— — — — — 178,052 — 178,052 
Other comprehensive income (loss), net of income taxes— — — — (364,640)— — (364,640)
Cash dividends declared on common stock - $0.34 per share
— — — — — (49,416)— (49,416)
Cash dividends declared on preferred stock(1)
— — — — — (8,291)— (8,291)
Repurchases of common stock including costs to repurchase— — — (3,316)— — — (3,316)
Restricted share unit vesting and taxes paid related to net share settlement— 48 1,086 — — (1,536)— (402)
Stock options exercised, net— 53 919 — — — — 972 
Share-based compensation expense— — 6,844 — — — — 6,844 
Balance at June 30, 2022$537,145 $170,013 $3,908,118 $(944,484)$(1,026,705)$1,940,351 $— $4,584,438 

4



Synovus Financial Corp. Shareholders' Equity
(in thousands, except per share data)Preferred StockCommon
Stock
Additional
Paid-in
Capital
Treasury
Stock
Accumulated
Other
Comprehensive
Income (Loss)
Retained EarningsNoncontrolling InterestTotal
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 (loss)     376,269 (166)376,103 
Other comprehensive income (loss), net of income taxes    46,942  — 46,942 
Cash dividends declared on common stock - $0.76 per share
     (111,038) (111,038)
Cash dividends declared on preferred stock(2)
     (16,581)— (16,581)
Restricted share unit vesting and taxes paid related to net share settlement 466 (8,231)  (2,437) (10,202)
Stock options exercised, net 201 3,523    — 3,724 
Share-based compensation expense  17,910    — 17,910 
Acquisition of non-controlling interest      25,406 25,406 
Balance at June 30, 2023$537,145 $170,808 $3,933,548 $(944,484)$(1,395,175)$2,480,686 $25,240 $4,807,768 
Balance at December 31, 2021$537,145 $169,384 $3,894,109 $(931,497)$(82,321)$1,709,980 $— $5,296,800 
Net income (loss)— — — — — 349,088 — 349,088 
Other comprehensive income (loss), net of income taxes— — — — (944,384)— — (944,384)
Cash dividends declared on common stock - $0.68 per share
— — — — — (98,858)— (98,858)
Cash dividends declared on preferred stock(2)
— — — — — (16,581)— (16,581)
Repurchases of common stock including costs to repurchase— — — (12,987)— — — (12,987)
Restricted share unit vesting and taxes paid related to net share settlement— 350 (6,063)— — (3,278)— (8,991)
Stock options exercised, net— 279 5,327 — — — — 5,606 
Share-based compensation expense— — 14,745 — — — — 14,745 
Balance at June 30, 2022$537,145 $170,013 $3,908,118 $(944,484)$(1,026,705)$1,940,351 $— $4,584,438 
(1)    For the three months ended June 30, 2023 and 2022, dividends per share were $0.39 and $0.37 for Series D and Series E Preferred Stock, respectively.
(2)    For the six months ended June 30, 2023 and 2022, dividends per share were $0.79 and $0.73 for Series D and Series E Preferred Stock, respectively.

See accompanying notes to unaudited interim consolidated financial statements.

5



SYNOVUS FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Six Months Ended June 30,
(in thousands)20232022
Operating Activities
Net income
$376,103 $349,088 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Provision for (reversal of) credit losses
71,035 24,088 
Depreciation, amortization, and accretion, net
41,854 36,991 
Deferred income tax expense (benefit)
19,194 (3,227)
Originations of loans held for sale
(311,902)(2,095,264)
Proceeds from sales and payments on loans held for sale
603,486 1,926,118 
Gain on sales of loans held for sale, net
(5,739)(7,277)
(Increase) decrease in other assets
(155,005)(107,698)
Increase (decrease) in other liabilities
59,529 72,987 
Investment securities (gains) losses, net
(1,030)— 
Share-based compensation expense
16,951 14,511 
 Other(377)677 
Net cash provided by (used in) operating activities
714,099 210,994 
Investing Activities
Net cash received in business combination, net of cash paid8,009 — 
Proceeds from maturities and principal collections of investment securities available for sale
449,581 1,226,967 
Proceeds from sales of investment securities available for sale
82,595 — 
Purchases of investment securities available for sale
(440,014)(1,269,468)
Proceeds from sales of loans
84,132 47,130 
Purchases of loans(10,623)(361,567)
Net (increase) decrease in loans
(1,183,701)(1,594,366)
Net (purchases) redemptions of Federal Home Loan Bank stock
49,935 (45,700)
Net (purchases) redemptions of Federal Reserve Bank stock
(15,564)(536)
Net proceeds from settlement (purchases) of bank-owned life insurance policies
3,360 3,106 
Net increase in premises, equipment and software
(12,703)(11,260)
Other6,976 33,984 
Net cash provided by (used in) investing activities
(978,017)(1,971,710)
Financing Activities
Net increase (decrease) in deposits
1,217,129 (389,758)
Net increase (decrease) in federal funds purchased and securities sold under repurchase agreements
(63,204)81,109 
Net increase (decrease) in other short-term borrowings(601,923)254,818 
Repayments and redemption of long-term debt
(3,304,600)(400,000)
Proceeds from long-term debt, net3,220,912 1,000,000 
Dividends paid to common shareholders
(104,967)(97,293)
Dividends paid to preferred shareholders
(16,581)(16,581)
Repurchases of common stock
 (12,987)
Issuances, net of taxes paid, under equity compensation plans
(6,477)(3,385)
Net cash provided by (used in) financing activities
340,289 415,923 
Increase (decrease) in cash and cash equivalents including restricted cash
76,371 (1,344,793)
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
$2,054,151 $1,665,060 
Supplemental Disclosures:
Income taxes paid $57,988 $88,090 
Interest paid478,101 52,330 
Non-cash Activities
Loans transferred (from) to other loans held for sale 427,903 (9,386)
Settlement of acquired debt31,109 — 
See accompanying notes to unaudited interim consolidated financial statements.

6



Notes to Unaudited Interim Consolidated Financial Statements
Note 1 - Basis of Presentation and Accounting Policies
General
The accompanying unaudited interim consolidated financial statements of Synovus Financial Corp. include the accounts of the Parent Company and its consolidated subsidiaries. Synovus Financial Corp. is a financial services company based in Columbus, Georgia. Through its wholly-owned subsidiary, Synovus Bank, a Georgia state-chartered bank that is a member of the Federal Reserve System, the Company provides commercial and consumer banking in addition to a full suite of specialized products and services, including private banking, treasury management, wealth management, mortgage services, premium finance, asset-based lending, structured lending, 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 246 branches and 358 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.
Acquisition
On June 1, 2023, Synovus acquired a 60% equity interest in Qualpay, Inc., a provider of a cloud-based platform that combines a payment gateway with merchant processing solutions, allowing merchants and independent software vendors to integrate payments into their software or websites. In addition, Synovus acquired three of the five seats on Qualpay's Board of Directors.
Under the terms of the agreement, Synovus acquired a controlling interest in Qualpay in exchange for the settlement of Qualpay's debt to Synovus of $31.1 million and $7.0 million in cash. Synovus accounted for the transaction as a business combination and recorded the assets acquired, which primarily consisted of intangible assets and goodwill, liabilities assumed, noncontrolling interest, and consideration exchanged at their preliminary estimated fair values on the acquisition date. Refer to Note 4 - Goodwill and Other Intangible Assets for additional information. The balance of the noncontrolling interest at June 30, 2023 was $25.2 million. The transaction was not material to the consolidated statements of income for the three and six months ended June 30, 2023.
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 new market tax credit partnerships pursuant to Section 45D of the Code, certain HTCs pursuant to Section 47 of the Code, and certain solar energy tax credit partnerships pursuant to Section 48 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 and HTC 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 and six months ended June 30, 2023, Synovus recognized LIHTC, HTC, and new market tax credit partnership tax credits of $10.9 million and $21.8 million, respectively, and amortization expense of $10.7 million and $20.8 million, respectively, which were included within income tax expense in the consolidated statements of income. For the three and six months ended June 30, 2022, Synovus recognized LIHTC investment partnerships tax credits of $7.8 million and $15.3 million, respectively, and amortization expense of $8.0 million and $16.0 million, respectively, which were included within income tax expense in the consolidated statements of income.

7



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.
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, 2023The 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.

8



Note 2 - Investment Securities Available for Sale
The amortized cost, gross unrealized gains and losses, and estimated fair values of investment securities available for sale at June 30, 2023 and December 31, 2022 are summarized below.
June 30, 2023
(in thousands)Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value
U.S. Treasury securities$517,626 $ $(43,736)$473,890 
U.S. Government agency securities52,397  (3,794)48,603 
Mortgage-backed securities issued by U.S. Government agencies 928,031  (110,681)817,350 
Mortgage-backed securities issued by U.S. Government sponsored enterprises 7,979,131 508 (1,202,246)6,777,393 
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises 732,938  (116,987)615,951 
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises954,792  (75,442)879,350 
Corporate debt securities and other debt securities8,958  (320)8,638 
Total investment securities available for sale$11,173,873 $508 $(1,553,206)$9,621,175 
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 June 30, 2023 and December 31, 2022, investment securities with a carrying value of $4.56 billion and $4.47 billion, respectively, were pledged to secure certain deposits and other liabilities, as required by law or contractual agreements.            


9



Gross unrealized losses on investment securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at June 30, 2023 and December 31, 2022 are presented below.
June 30, 2023
Less than 12 Months12 Months or LongerTotal
(in thousands)Fair ValueGross Unrealized LossesFair ValueGross Unrealized LossesFair ValueGross Unrealized Losses
U.S. Treasury securities$92,580 $(4,858)$356,275 $(38,878)$448,855 $(43,736)
U.S. Government agency securities258  48,346 (3,794)48,604 (3,794)
Mortgage-backed securities issued by U.S. Government agencies 301,213 (5,938)516,137 (104,743)817,350 (110,681)
Mortgage-backed securities issued by U.S. Government sponsored enterprises 893,627 (45,280)5,832,438 (1,156,966)6,726,065 (1,202,246)
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises 11,090 (489)604,860 (116,498)615,950 (116,987)
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises394,493 (18,190)484,857 (57,252)879,350 (75,442)
Corporate debt securities and other debt securities  8,638 (320)8,638 (320)
Total$1,693,261 $(74,755)$7,851,551 $(1,478,451)$9,544,812 $(1,553,206)
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 June 30, 2023, Synovus had 96 investment securities in a loss position for less than twelve months and 335 investment securities in a loss position for twelve months or longer. Synovus does not intend to sell investment securities in an unrealized loss position prior to the recovery of the unrealized loss, which may not be until maturity, and has the ability and intent to hold those securities for that period of time. Additionally, Synovus is not currently aware of any circumstances which will require it to sell any of the securities that are in an unrealized loss position prior to the respective securities' recovery of all such unrealized losses. As such, no write-downs to the amortized cost basis of the portfolio were recorded at June 30, 2023.

10



At June 30, 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 June 30, 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 June 30, 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$24,834 $442,928 $49,864 $ $517,626 
U.S. Government agency securities258 52,139   52,397 
Mortgage-backed securities issued by U.S. Government agencies 48 324 4 927,655 928,031 
Mortgage-backed securities issued by U.S. Government sponsored enterprises  19,900 82,822 7,876,409 7,979,131 
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises  69 11,416 721,453 732,938 
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises 681,844 208,954 63,994 954,792 
Corporate debt securities and other debt securities 8,958   8,958 
Total amortized cost$25,140 $1,206,162 $353,060 $9,589,511 $11,173,873 
Fair Value
U.S. Treasury securities$24,834 $408,618 $40,438 $ $473,890 
U.S. Government agency securities258 48,345   48,603 
Mortgage-backed securities issued by U.S. Government agencies 47 311 4 816,988 817,350 
Mortgage-backed securities issued by U.S. Government sponsored enterprises  18,789 76,538 6,682,066 6,777,393 
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises  66 10,936 604,949 615,951 
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises 643,973 176,619 58,758 879,350 
Corporate debt securities and other debt securities 8,638   8,638 
Total fair value$25,139 $1,128,740 $304,535 $8,162,761 $9,621,175 
Gross gains and gross losses on sales of securities available for sale for the three and six months ended June 30, 2023 and 2022 are presented below. The specific identification method is used to reclassify gains and losses out of other comprehensive income (loss) at the time of sale.
Three Months Ended June 30,Six Months Ended June 30,
(in thousands)2023202220232022
Gross realized gains on sales$ $— $1,030 $— 
Gross realized losses on sales —  — 
Investment securities gains (losses), net$ $— $1,030 $— 

11



Note 3 - Loans and Allowance for Loan Losses
Aging and Non-Accrual Analysis
The following tables provide a summary of current, accruing past due, and non-accrual loans by portfolio class as of June 30, 2023 and December 31, 2022.
June 30, 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$14,001,859 $19,134 $1,482 $20,616 $119,134 $25,281 $14,166,890 
Owner-occupied8,314,520 27,625  27,625 6,197 16,000 8,364,342 
Total commercial and industrial22,316,379 46,759 1,482 48,241 125,331 41,281 22,531,232 
Investment properties12,236,317 2,596  2,596 29,692 1,661 12,270,266 
1-4 family properties610,704 865  865 3,326 831 615,726 
Land and development406,568 200  200 1,138  407,906 
Total commercial real estate13,253,589 3,661  3,661 34,156 2,492 13,293,898 
Consumer mortgages5,332,966 4,441  4,441 41,877  5,379,284 
Home equity1,757,068 6,983  6,983 9,936  1,773,987 
Credit cards184,145 1,481 2,051 3,532   187,677 
Other consumer loans1,162,938 17,978 110 18,088 6,402 31 1,187,459 
Total consumer8,437,117 30,883 2,161 33,044 58,215 31 8,528,407 
Loans, net of deferred fees and costs$44,007,085 $81,303 $3,643 $84,946 $217,702 $43,804 $44,353,537 
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 $6.6 million and $2.0 million for the three months ended June 30, 2023 and 2022, respectively, and $9.9 million and $5.4 million for the six months ended June 30, 2023 and 2022, respectively. Of the interest income recognized during the three months ended June 30, 2023 and 2022, cash-basis interest income was $7.8 million and $410 thousand, respectively. Cash-basis interest income was $9.4 million and $964 thousand for the six months ended June 30, 2023 and 2022, respectively.

12



Pledged Loans
Loans with carrying values of $23.47 billion and $16.09 billion, respectively, were pledged as collateral for borrowings and capacity at June 30, 2023 and December 31, 2022, respectively, to the FHLB and Federal Reserve Bank.
Portfolio Segment Risk Factors
The risk characteristics and collateral information of each portfolio segment are as follows:
Commercial and Industrial Loans - The C&I loan portfolio is 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.

13



The following table summarizes each loan portfolio class by risk grade and origination year as of June 30, 2023 as required under CECL. In addition, gross charge-offs by loan portfolio class and origination year as of June 30, 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.
June 30, 2023
Term Loans Amortized Cost Basis by Origination YearRevolving Loans
(in thousands)20232022202120202019PriorAmortized Cost BasisConverted to Term LoansTotal
Commercial, financial and agricultural
Pass$583,998 $1,186,752 $1,615,563 $923,404 $676,245 $1,412,658 $7,095,080 $55,621 $13,549,321 
Special Mention1,707 3,273 3,534 1,739 79,760 8,590 128,409  227,012 
Substandard(1)
21,349 15,116 20,897 39,306 37,140 24,995 198,893 9,609 367,305 
Doubtful(2)
      22,103  22,103 
Loss(3)(4)
     363 786  1,149 
Total commercial, financial and agricultural607,054 1,205,141 1,639,994 964,449 793,145 1,446,606 7,445,271 65,230 14,166,890 
Current YTD Period:
Gross charge-offs 1,633 1,804 961 909 604 21,102 203 27,216 
Owner-occupied
Pass564,996 1,575,827 1,586,180 1,082,709 793,757 1,533,957 871,721  8,009,147 
Special Mention930 3,578 18,888 24,065 11,094 58,422 17,782  134,759 
Substandard(1)
606 23,263 13,090 46,545 12,319 95,938 12,249  204,010 
Loss(4)
  245 16,000  181   16,426 
Total owner-occupied566,532 1,602,668 1,618,403 1,169,319 817,170 1,688,498 901,752  8,364,342 
Current YTD Period:
Gross charge-offs  353 2,922 223    3,498 
Total commercial and industrial1,173,586 2,807,809 3,258,397 2,133,768 1,610,315 3,135,104 8,347,023 65,230 22,531,232 
Current YTD Period:
Gross charge-offs$ $1,633 $2,157 $3,883 $1,132 $604 $21,102 $203 $30,714 
Investment properties
Pass319,091 3,004,555 3,469,385 1,445,709 1,198,543 2,091,311 497,661  12,026,255 
Special Mention 2,218 76,076  10,476 61,316   150,086 
Substandard(1)
5,189 856 1,305 173 1,661 37,465 19,576  66,225 
Doubtful     27,635   27,635 
Loss(4)
     65   65 
Total investment properties324,280 3,007,629 3,546,766 1,445,882 1,210,680 2,217,792 517,237  12,270,266 
Current YTD Period:
Gross charge-offs         
1-4 family properties
Pass114,841 178,720 125,043 37,420 32,360 67,586 51,887  607,857 
Special Mention 408  193  311   912 
Substandard(1)
1,643 1,605 1,363 423 714 1,164 45  6,957 
Total 1-4 family properties116,484 180,733 126,406 38,036 33,074 69,061 51,932  615,726 
Current YTD Period:
Gross charge-offs     24   24 

14



June 30, 2023
Term Loans Amortized Cost Basis by Origination YearRevolving Loans
(in thousands)20232022202120202019PriorAmortized Cost BasisConverted to Term LoansTotal
Land and development
Pass72,661 104,219 55,794 18,335 34,027 82,124 6,703  373,863 
Special Mention 507    29,629   30,136 
Substandard(1)
583  36 720 610 1,958   3,907 
Total land and development73,244 104,726 55,830 19,055 34,637 113,711 6,703  407,906 
Current YTD Period:
Gross charge-offs   77     77 
Total commercial real estate514,008 3,293,088 3,729,002 1,502,973 1,278,391 2,400,564 575,872  13,293,898 
Current YTD Period:
Gross charge-offs$ $ $ $77 $ $24 $ $ $101 
Consumer mortgages
Pass431,398 854,063 1,113,312 1,275,929 433,164 1,218,986 34  5,326,886 
Substandard(1)
 1,113 5,090 14,348 7,824 23,326   51,701 
Loss(4)
    4 693   697 
Total consumer mortgages431,398 855,176 1,118,402 1,290,277 440,992 1,243,005 34  5,379,284 
Current YTD Period:
Gross charge-offs22 58 251 320 297 840   1,788 
Home equity
Pass      1,260,275 501,262 1,761,537 
Substandard(1)
      7,860 4,157 12,017 
Loss(4)
      317 116 433 
Total home equity      1,268,452 505,535 1,773,987 
Current YTD Period:
Gross charge-offs      555 49 604 
Credit cards
Pass      185,639  185,639 
Substandard(1)
      765  765 
Loss(3)
      1,273  1,273 
Total credit cards      187,677  187,677 
Current YTD Period:
Gross charge-offs      3,513  3,513 
Other consumer loans
Pass71,649 220,975 275,382 137,128 39,518 136,511 299,159  1,180,322 
Substandard(1)
 678 3,303 1,731 546 717 103  7,078 
Loss(3)
     6 53  59 
Total other consumer loans71,649 221,653 278,685 138,859 40,064 137,234 299,315  1,187,459 
Current YTD Period:
Gross charge-offs(5)
52 2,804 16,591 1,865 1,235 1,052 1,272  24,871 
Total consumer503,047 1,076,829 1,397,087 1,429,136 481,056 1,380,239 1,755,478 505,535 8,528,407 
Current YTD Period:
Gross charge-offs$74 $2,862 $16,841 $2,185 $1,533 $1,892 $5,340 $49 $30,776 
Loans, net of deferred fees and costs$2,190,641 $7,177,726 $8,384,486 $5,065,877 $3,369,762 $6,915,907 $10,678,373 $570,765 $44,353,537 
Current YTD Period:
Gross charge-offs$74 $4,495 $18,999 $6,145 $2,664 $2,520 $26,442 $252 $61,591 
(1)    The majority of loans within Substandard risk grade are accruing loans at June 30, 2023.
(2)     Loans within Doubtful risk grade are on non-accrual status and generally have an ALL equal to 50% of the loan amount.
(3) 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.
(4)    Loans within Loss risk grade are on non-accrual status and have an ALL equal to the full loan amount.
(5)    Includes $7.9 million in gross charge-offs related to the transfer of third-party consumer loans to held for sale.

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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 

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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 and six months ended June 30, 2023.
Rollforward of Allowance for Loan Losses
The following tables detail the changes in the ALL by loan segment for the three and six months ended June 30, 2023 and 2022. During the three and six months ended June 30, 2023 and 2022, Synovus charged-off $1.3 million and $7.9 million in previously established reserves for credit losses associated with the transfer of $3.8 million and $427.9 million, respectively, in certain third-party consumer loans to held for sale as part of our overall balance sheet management strategy. $711 thousand in reserves were added as a result of purchases of $10.6 million of third-party lending loans for the three months ended June 30, 2023. $3.7 million and $7.5 million in reserves were added as a result of purchases of $180.2 million and $361.6 million of third-party lending loans for the three and six months ended June 30, 2022, respectively.


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As Of and For the Three Months Ended June 30, 2023
(in thousands)Commercial & IndustrialCommercial Real EstateConsumerTotal
Allowance for loan losses:
Beginning balance at March 31, 2023$158,688 $160,392 $137,930 $457,010 
Charge-offs(22,841)(5)(13,410)(36,256)
Recoveries6,402 378 3,080 9,860 
Provision for (reversal of) loan losses17,738 8,961 13,925 40,624 
Ending balance at June 30, 2023$159,987 $169,726 $141,525 $471,238 
As Of and For the Three Months Ended June 30, 2022
(in thousands)Commercial & IndustrialCommercial Real EstateConsumerTotal
Allowance for loan losses:
Beginning balance at March 31, 2022$178,722 $94,696 $141,538 $414,956 
Charge-offs(15,512)(252)(7,934)(23,698)
Recoveries3,208 572 3,353 7,133 
Provision for (reversal of) loan losses(6,410)9,202 6,654 9,446 
Ending balance at June 30, 2022$160,008 $104,218 $143,611 $407,837 
As Of and For the Six Months Ended June 30, 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(30,714)(101)(30,776)(61,591)
Recoveries9,878 662 6,105 16,645 
Provision for (reversal of) loan losses19,273 25,590 27,897 72,760 
Ending balance at June 30, 2023$159,987 $169,726 $141,525 $471,238 
As Of and For the Six Months Ended June 30, 2022
(in thousands)Commercial & IndustrialCommercial Real EstateConsumerTotal
Allowance for loan losses:
Beginning balance at December 31, 2021$188,364 $97,760 $141,473 $427,597 
Charge-offs(29,275)(2,708)(16,862)(48,845)
Recoveries5,571 933 7,167 13,671 
Provision for (reversal of) loan losses(4,652)8,233 11,833 15,414 
Ending balance at June 30, 2022$160,008 $104,218 $143,611 $407,837 
The ALL of $471.2 million and the reserve for unfunded commitments of $55.7 million, which is recorded in other liabilities, comprise the total ACL of $527.0 million at June 30, 2023. The ACL increased $26.1 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 of 1.19% at June 30, 2023 was 4 bps higher compared to December 31, 2022. The increase in the ACL from December 31, 2022 resulted primarily from deterioration in economic factors and increased specific reserves.
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 a stagflation scenario, which also assumes adverse economic conditions. At June 30, 2023, the unemployment rate is the input that most significantly impacts our estimate. The multi-scenario forecast used in our estimate

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includes a peak weighted average unemployment rate of 5.7% over the forecasted period at June 30, 2023, compared to 5.1% at December 31, 2022.
Financial Difficulty Modifications
When borrowers are experiencing financial difficulty, Synovus may make certain loan modifications as part of its loss mitigation strategies to maximize expected payment. All loan modifications, renewals, and refinancings 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 ACL because our use of a DCF model captures loan level changes including modified terms as part of the estimation process.
The following table presents the amortized cost of FDM loans by loan portfolio class that were modified during the three and six months ended June 30, 2023.
Three Months Ended June 30, 2023
(in thousands)Interest Rate ReductionTerm ExtensionPrincipal Forgiveness and Term ExtensionsInterest Rate Reduction and Term ExtensionTotalPercentage of Total by Financing Class
Commercial, financial and agricultural$1,972 $7,464 $13,401 $1,187 $24,024 0.2 %
Owner-occupied 388   388  
Total commercial and industrial1,972 7,852 13,401 1,187 24,412 0.1 
Investment properties 660   660  
1-4 family properties 1,680  382 2,062 0.3 
Land and development      
Total commercial real estate 2,340  382 2,722  
Consumer mortgages695    695  
Home equity 339  276 615  
Credit cards      
Other consumer loans2 314  256 572  
Total consumer697 653  532 1,882  
Total FDMs$2,669 $10,845 $13,401 $2,101 $29,016 0.1 %
Six Months Ended June 30, 2023
(in thousands)Interest Rate ReductionTerm ExtensionPrincipal Forgiveness and Term ExtensionsInterest Rate Reduction and Term ExtensionTotalPercentage of Total by Financing Class
Commercial, financial and agricultural$1,972 $22,297 $13,401 $1,428 $39,098 0.3 %
Owner-occupied 1,828  41,259 43,087 0.5 
Total commercial and industrial1,972 24,125 13,401 42,687 82,185 0.4 
Investment properties 660   660  
1-4 family properties 3,006  382 3,388 0.6 
Land and development      
Total commercial real estate 3,666  382 4,048  
Consumer mortgages807    807  
Home equity 426  290 716  
Credit cards      
Other consumer loans2 450  482 934 0.1 
Total consumer809 876  772 2,457  
Total FDMs$2,781 $28,667 $13,401 $43,841 $88,690 0.2 %
During the three and six months ended June 30, 2023, there were no FDMs that subsequently defaulted. Defaults are

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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 June 30, 2023, there were no commitments to lend a material amount of additional funds to any borrower whose loan was classified as a FDM.
The following presents the financial effect of loan modifications made to borrowers experiencing financial difficulty during the three and six months ended June 30, 2023.
Three Months Ended June 30, 2023Six Months Ended June 30, 2023
(Dollars in thousands)Principal Forgiveness and Term ExtensionsWeighted Average Interest Rate ReductionWeighted Average Term Extension
(in months)
Principal Forgiveness and Term ExtensionsWeighted Average Interest Rate ReductionWeighted Average Term Extension
(in months)
Commercial, financial and agricultural$1,200 1.1 %41$1,200 1.2 %28
Owner-occupied  17 1.7 9
Investment properties  30  30
1-4 family properties 0.3 12 0.3 12
Consumer mortgages 1.9 0 1.6 0
Home equity 0.4 250 0.5 262
Other consumer loans 2.7 61 3.1 64
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 June 30, 2023
(in thousands)CurrentAccruing 30-89 Days Past DueAccruing 90 Days or Greater Past Due
Non-accrual (1)
Total
Commercial, financial and agricultural$25,697 $ $ $13,401 $39,098 
Owner-occupied43,087    43,087 
Total commercial and industrial68,784   13,401 82,185 
Investment properties660    660 
1-4 family properties1,708   1,680 3,388 
Land and development     
Total commercial real estate2,368   1,680 4,048 
Consumer mortgages   807 807 
Home equity716    716 
Credit cards     
Other consumer loans386   548 934 
Total consumer1,102   1,355 2,457 
Total FDMs$72,254 $ $ $16,436 $88,690 
(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

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type, the post-modification balance for loans modified or renewed during the three and six months ended June 30, 2022 that were reported as accruing or non-accruing TDRs.
TDRs by Concession Type
Three Months Ended June 30, 2022
(in thousands, except contract data)Number of ContractsBelow Market Interest Rate
Other Concessions(1)
Total
Commercial, financial and agricultural23 $8,534 $266 $8,800 
Owner-occupied22,430 — 22,430 
Total commercial and industrial30 30,964 266 31,230 
Investment properties690 — 690 
1-4 family properties1,984 — 1,984 
Land and development437 — 437 
Total commercial real estate3,111 — 3,111 
Consumer mortgages159 162 321 
Home equity14 2,490 39 2,529 
Other consumer loans— 91 91 
Total consumer21 2,649 292 2,941 
Total TDRs58 $36,724 $558 $37,282 (2)
Six Months Ended June 30, 2022
(in thousands, except contract data)Number of ContractsBelow Market Interest Rate
Other Concessions(1)
Total
Commercial, financial and agricultural56 $26,434 $807 $27,241 
Owner-occupied20 28,534 3,857 32,391 
Total commercial and industrial76 54,968 4,664 59,632 
Investment properties1,279 6,610 7,889 
1-4 family properties11 3,197 — 3,197 
Land and development3,168 — 3,168 
Total commercial real estate20 7,644 6,610 14,254 
Consumer mortgages10 1,176 266 1,442 
Home equity25 3,419 39 3,458 
Other consumer loans— 139 139 
Total consumer41 4,595 444 5,039 
Total TDRs137 $67,207 $11,718 $78,925 (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 and six months ended June 30, 2022.
(2)    No net charge-offs were recorded during the three and six months ended June 30, 2022.
For both the three and six months ended June 30, 2022, there were 3 defaults with a recorded investment of $430 thousand on accruing TDRs restructured during the previous twelve months (defaults are defined as the earlier of the TDR being placed on non-accrual status or reaching 90 days past due with respect to principal and/or interest payments). As of June 30, 2022 and 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 and Other Intangible Assets
Effective April 1, 2023, Synovus changed its internal management reporting structure to transfer Capital Markets activities and related personnel from the Financial Management Services segment to the Wholesale Banking segment. See Note 10 - Segment Reporting for additional information. In connection with the transfer, management reallocated a portion of the Wealth Management goodwill that was attributable to the Financial Management Services segment to Wholesale Banking using a relative fair value approach, and no indicators of impairment were identified.
On June 1, 2023, Synovus acquired a 60% equity interest and a majority of the Board seats in Qualpay, which constituted a business combination. In connection with the acquisition, Synovus recorded $23.2 million of goodwill and $38.7 million of other intangible assets based on preliminary fair value estimates of the assets acquired and liabilities assumed in the transaction. Upon receipt of final fair value estimates during the measurement period, which must be within one year of the acquisition date, Synovus will record any adjustments to the preliminary fair value estimates in the reporting period in which the adjustments are determined. See Note 1 - Basis of Presentation and Accounting Policies for additional information on the Qualpay transaction.
Goodwill allocated to each reporting unit at June 30, 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 
Changes during the period from:
Reallocation4,197   (4,197) 
Acquisition 23,183   23,183 
Balance at June 30, 2023$175,833 $164,805 $114,701 $20,234 $475,573 
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 second quarter of 2023, Synovus assessed the events and circumstances that have generated significant market trading volatility in the banking industry, particularly for regional banks like Synovus. Due to the uncertain environment as well as Synovus' stock price trading below book value during the month of May 2023, Synovus elected to perform a quantitative assessment of goodwill impairment as of May 31, 2023, which included determining the estimated fair value of each reporting unit containing goodwill, utilizing a combination of discounted cash flow and market-based approaches, and comparing that fair value to each reporting unit's carrying amount. The discounted cash flow method included updated internal forecasts, long-term profitability targets, growth rates, and discount rates. The market approach was based on a comparison of certain financial metrics of Synovus' reporting units to guideline public company peers. Based on the quantitative assessment performed, the fair value of each of these reporting units exceeded their respective carrying values; therefore, we concluded goodwill was not impaired as of our May 31, 2023 test date and determined that it was not more likely than not that the fair value had declined below carrying value at the reporting until level as of June 30, 2023.

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The following table shows the gross carrying amount and accumulated amortization of other intangible assets as of June 30, 2023 and December 31, 2022. The CDI is being amortized over its estimated useful life of approximately ten years utilizing an accelerated method. Other intangible assets resulting from the Qualpay acquisition, which primarily include client relationships, partner relationships, and developed technology, are being amortized on a straight-line basis over their estimated useful lives ranging from five to eight years. Aggregate other intangible assets amortization expense is included in other operating expense on the consolidated statements of income, and for the three and six months ended June 30, 2023 was $2.4 million and $4.3 million, respectively. Aggregate other intangible assets amortization expense for the three and six months ended June 30, 2022 was $2.1 million and $4.2 million, respectively.
(in thousands)Gross Carrying AmountAccumulated AmortizationNet Carrying Value
June 30, 2023
CDI$57,400 $(38,615)$18,785 
Client Relationships29,300 (6,854)22,446 
Partner Relationships6,900 (115)6,785 
Developed Technology11,091 (185)10,906 
Other3,900 (1,284)2,616 
Total other intangible assets$108,591 $(47,053)$61,538 
December 31, 2022
CDI57,400 (35,484)$21,916 
Client Relationships10,800 (6,136)4,664 
Other1,700 (1,156)544 
Total other intangible assets$69,900 $(42,776)$27,124 

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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 $300 million in 2023. During the three and six months ended June 30, 2023, Synovus did not complete any share repurchases of its common stock.
Changes in Accumulated Other Comprehensive Income (Loss) by Component (Net of Income Taxes)
The following tables illustrate activity within the balances in accumulated other comprehensive income (loss) by component for the three and six months ended June 30, 2023 and 2022.
Changes in Accumulated Other Comprehensive Income (Loss) by Component (Net of Income Taxes)
(in thousands)
Net unrealized gains (losses) on investment securities available for sale(1)
Net unrealized gains (losses) on cash flow hedges(1)
Total
Balance at March 31, 2023$(1,105,221)$(184,106)$(1,289,327)
Other comprehensive income (loss) before reclassifications(82,866)(55,325)(138,191)
Amounts reclassified from AOCI 32,343 32,343 
Net current period other comprehensive income (loss)(82,866)(22,982)(105,848)
Balance at June 30, 2023$(1,188,087)$(207,088)$(1,395,175)
Balance at March 31, 2022$(542,439)$(119,626)$(662,065)
Other comprehensive income (loss) before reclassifications(327,080)(36,815)(363,895)
Amounts reclassified from AOCI— (745)(745)
Net current period other comprehensive income (loss)(327,080)(37,560)(364,640)
Balance at June 30, 2022$(869,519)$(157,186)$(1,026,705)
Balance, December 31, 2022$(1,220,263)$(221,854)$(1,442,117)
Other comprehensive income (loss) before reclassifications32,955 (47,759)(14,804)
Amounts reclassified from AOCI(779)62,525 61,746 
Net current period other comprehensive income (loss)32,176 14,766 46,942 
Balance at June 30, 2023$(1,188,087)$(207,088)$(1,395,175)
Balance, December 31, 2021$(67,980)$(14,341)$(82,321)
Other comprehensive income (loss) before reclassifications(801,539)(140,432)(941,971)
Amounts reclassified from AOCI— (2,413)(2,413)
Net current period other comprehensive income (loss)(801,539)(142,845)(944,384)
Balance at June 30, 2022$(869,519)$(157,186)$(1,026,705)
(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.
June 30, 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 $ $2,875 $ $2,875 $— $2,991 $— $2,991 
Other mortgage-backed securities 2,685  2,685 — 3,185 — 3,185 
State and municipal securities    — 48 — 48 
Asset-backed securities 15,907  15,907 — 2,071 — 2,071 
Total trading securities$ $21,467 $ $21,467 $— $8,295 $— $8,295 
Investment securities available for sale:
U.S. Treasury securities$473,890 $ $ $473,890 $471,813 $— $— $471,813 
U.S. Government agency securities 48,603  48,603 — 48,798 — 48,798 
Mortgage-backed securities issued by U.S. Government agencies  817,350  817,350 — 792,749 — 792,749 
Mortgage-backed securities issued by U.S. Government sponsored enterprises  6,777,393  6,777,393 — 6,895,070 — 6,895,070 
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises  615,951  615,951 — 655,127 — 655,127 
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises 879,350  879,350 — 805,945 — 805,945 
Corporate debt securities and other debt securities 8,638  8,638 — 8,601 — 8,601 
Total investment securities available for sale$473,890 $9,147,285 $ $9,621,175 $471,813 $9,206,290 $— $9,678,103 
Mortgage loans held for sale$ $62,616 $ $62,616 $— $51,136 $— $51,136 
Other investments  11,770 11,770 — — 11,172 11,172 
Mutual funds and mutual funds held in rabbi trusts51,147   51,147 42,659 — — 42,659 
SBA loans servicing asset  2,234 2,234 — — 2,354 2,354 
Derivative assets 119,659  119,659 — 89,815 — 89,815 
Liabilities
Securities sold short$1,461 $ $ $1,461 $3,370 $— $— $3,370 
Mutual funds held in rabbi trusts36,380   36,380 27,944 — — 27,944 
Derivative liabilities 365,390 3,937 369,327 — 339,227 3,453 342,680 
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.

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The following table summarizes the difference between the fair value and the UPB of mortgage loans held for sale and the changes in fair value of these loans. An immaterial portion of these changes in fair value was attributable to changes in instrument-specific credit risk.
Mortgage Loans Held for Sale
(in thousands)As of June 30, 2023As of December 31, 2022
Fair value$62,616 $51,136 
Unpaid principal balance61,536 50,264 
Fair value less aggregate unpaid principal balance$1,080 $872 
Changes in Fair Value Included in Net IncomeThree Months Ended June 30,Six Months Ended June 30, Location in Consolidated Statements of Income
(in thousands)2023202220232022
Mortgage loans held for sale$(95)$805 $208 $(1,545)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 and six months ended June 30, 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 June 30, 2023
(in thousands)Other InvestmentsSBA Loans Servicing AssetVisa Derivative
Beginning balance$11,655 $2,412 $(1,111)
Total gains (losses) realized/unrealized:
Included in earnings(43)(303)(3,027)
Additions158 125  
Settlements  201 
Ending balance$11,770 $2,234 $(3,937)
Total net gains (losses) for the period included in earnings attributable to the change in unrealized gains/(losses) relating to assets/liabilities still held at June 30, 2023$(43)$(303)$(3,027)
Three Months Ended June 30, 2022
(in thousands)Other InvestmentsSBA Loans Servicing AssetVisa Derivative
Beginning balance$12,093 $3,451 $(1,776)
Total gains (losses) realized/unrealized:
Included in earnings(7,037)(510)(3,500)
Additions6,027 — — 
Settlements— 214 283 
Ending balance$11,083 $3,155 $(4,993)
Total net gains (losses) for the period included in earnings attributable to the change in unrealized gains/(losses) relating to assets/liabilities still held at June 30, 2022$(7,037)$(510)$(3,500)

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Six Months Ended June 30, 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(71)(515)(3,027)
Additions669 395  
Settlements  2,543 
Ending balance$11,770 $2,234 $(3,937)
Total net gains (losses) for the period included in earnings attributable to the change in unrealized gains/(losses) relating to assets/liabilities still held at June 30, 2023$(71)$(515)$(3,027)
Six Months Ended June 30, 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(7,129)(772)(3,500)
Additions6,027 — — 
Settlements— 694 2,042 
Ending balance$11,083 $3,155 $(4,993)
Total net gains (losses) for the period included in earnings attributable to the change in unrealized gains/(losses) relating to assets/liabilities still held at June 30, 2022$(7,129)$(772)$(3,500)
The following table presents assets measured at fair value on a non-recurring basis, as of the dates indicated, for which there was a fair value adjustment.
June 30, 2023Fair Value Adjustments for the Location in Consolidated Statements of Income
(in thousands)Level 1Level 2Level 3
Three Months Ended June 30, 2023
Six Months Ended June 30, 2023
Loans(1)        
$ $ $30,123 $6,413 $6,462 Provision for credit losses
Other loans held for sale  346,897 2,360 19,110 Loss on other loans held for sale
June 30, 2022Fair Value Adjustments for theLocation in Consolidated Statements of Income
Level 1Level 2Level 3
Three Months Ended June 30, 2022
Six Months Ended June 30, 2022
Loans(1)        
$— $— $24,360 $8,900 $9,239 Provision for credit losses
Other assets held for sale— — 2,725 — 492 Other operating expense
(1)    Collateral-dependent loans that were written down to fair value of collateral.

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Fair Value of Financial Instruments
The following tables present the carrying and estimated fair values of financial instruments at June 30, 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.
June 30, 2023
(in thousands)Carrying ValueFair ValueLevel 1Level 2Level 3
Financial assets
Total cash, cash equivalents, and restricted cash$2,054,151 $2,054,151 $2,054,151 $ $ 
Trading securities21,467 21,467  21,467  
Investment securities available for sale9,621,175 9,621,175 473,890 9,147,285  
Loans held for sale514,450 514,450  62,616 451,834 
Other investments11,770 11,770   11,770 
Mutual funds and mutual funds held in rabbi trusts51,147 51,147 51,147   
Loans, net43,882,299 41,977,636   41,977,636 
SBA loans servicing asset2,234 2,234   2,234 
FRB and FHLB stock273,951 273,951  273,951 
Derivative assets119,659 119,659  119,659  
Financial liabilities
Non-interest-bearing deposits$13,565,602 $13,565,602 $— $13,565,602 $ 
Non-time interest-bearing deposits26,929,264 26,929,264  26,929,264  
Time deposits9,585,526 9,596,056  9,596,056  
Total deposits(1)
$50,080,392 $50,090,922 $ $50,090,922 $ 
Federal funds purchased and securities sold under repurchase agreements83,384 83,384 83,384   
Securities sold short1,461 1,461 1,461   
Long-term debt4,021,411 3,949,290  3,949,290  
Mutual funds held in rabbi trusts36,380 36,380 36,380 — — 
Derivative liabilities369,327 369,327  365,390 3,937 
(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 and six months ended June 30, 2023 and 2022 related to terminated cash flow hedges. Synovus recognized a pre-tax loss of $6.1 million and $11.5 million during the three and six months ended June 30, 2023, respectively, and pre-tax income of $1.0 million and $3.2 million for the three and six months ended June 30, 2022, respectively, 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 June 30, 2023, Synovus expects to reclassify into earnings approximately $161 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 $23 million in pre-tax loss related to the amortization of terminated cash flow hedges. As of June 30, 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 fixed-rate term 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 June 30, 2023 and December 31, 2022, Synovus had recorded the right to reclaim cash collateral of $87.5 million and $66.8 million, respectively. As of June 30, 2023 and December 31, 2022, Synovus had recorded the obligation to return cash collateral of $5.7 million and $7.7 million, respectively.
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.
June 30, 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 (1)
$8,900,000 $ $20,469 $5,250,000 $— $8,286 
Total cash flow hedges$ $20,469 $— $8,286 
Derivatives in fair value hedging relationships:
Interest rate contracts$3,510,611 $ $24,047 $2,230,232 $— $8,093 
Total fair value hedges$ $24,047 $— $8,093 
Total derivatives designated as hedging instruments$ $44,516 $— $16,379 
Derivatives not designated
  as hedging instruments:
Interest rate contracts (2)
$16,877,530 $118,256 $320,872 $10,276,754 $89,310 $322,329 
Mortgage derivatives - interest rate lock commitments68,311 912  50,218 350 — 
Mortgage derivatives - forward commitments to sell fixed-rate mortgage loans96,000 405  76,500 155 — 
Risk participation agreements735,282  2 635,891 — 
Foreign exchange contracts32,522 86  20,439 — 516 
Visa derivative  3,937 —  3,453 
Total derivatives not designated as hedging instruments    $119,659 $324,811 $89,815 $326,301 
(1)     Notionals as of June 30, 2023 include $3.40 billion of derivatives with maturities less than three months related to the transition from LIBOR to SOFR.
(2)     Notionals as of June 30, 2023 include $5.47 billion of derivatives with maturities less than three months related to the transition from LIBOR to SOFR.

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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 and six months ended June 30, 2023 and 2022.
Three Months Ended June 30, 2023
Interest IncomeInterest Expense
(in thousands)Loans, including feesDepositsLong-term debt
Total interest income/expense amounts presented in the consolidated statements of income$670,230 $241,780 $55,915 
Gain/(loss) on cash flow hedging relationships:(1)
Interest rate contracts:
Realized gains (losses) reclassified from AOCI, pre-tax, to interest income on loans$(42,748)$ $ 
Pre-tax income (loss) recognized on cash flow hedges$(42,748)$ $ 
Gain/(loss) on fair value hedging relationships:
Amounts related to interest settlements and amortization on derivatives$ $(5,782)$(4,510)
Recognized on derivatives (20,466)(20,823)
Recognized on hedged items 20,466 20,823 
Pre-tax income (loss) recognized on fair value hedges$ $(5,782)$(4,510)
Three Months Ended June 30, 2022
Interest IncomeInterest Expense
(in thousands)Loans, including feesDepositsLong-term debt
Total interest income/expense amounts presented in the consolidated statements of income$391,307 $18,501 $8,769 
Gain/(loss) on cash flow hedging relationships:(1)
Interest rate contracts:
Realized gains (losses) reclassified from AOCI, pre-tax, to interest income on loans$978 $— $— 
Pre-tax income (loss) recognized on cash flow hedges$978 $— $— 
Gain/(loss) on fair value hedging relationships:
Recognized on derivatives$— (2,818)$(1,455)
Recognized on hedged items— 2,818 1,455 
Pre-tax income (loss) recognized on fair value hedges$— — $— 

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Six Months Ended June 30, 2023
Interest IncomeInterest Expense
(in thousands)Loans, including feesDepositsLong-term debt
Total interest income/expense amounts presented in the consolidated statements of income$1,299,787 $415,715 $98,444 
Gain/(loss) on cash flow hedging relationships:(1)
Interest rate contracts:
Realized gains (losses) reclassified from AOCI, pre-tax, to interest income on loans$(82,640)$ $ 
Pre-tax income (loss) recognized on cash flow hedges$(82,640)$ $ 
Gain/(loss) on fair value hedging relationships:
Amounts related to interest settlements and amortization on derivatives$ $(9,153)$(7,231)
Recognized on derivatives (8,296)(5,427)
Recognized on hedged items 8,296 5,427 
Pre-tax income (loss) recognized on fair value hedges$ $(9,153)$(7,231)
Six Months Ended June 30, 2022
Interest IncomeInterest Expense
(in thousands)Loans, including feesDepositsLong-term debt
Total interest income/expense amounts presented in the consolidated statements of income$752,399 $32,160 $18,913 
Gain/(loss) on cash flow hedging relationships:(1)
Interest rate contracts:
Realized gains (losses) reclassified from AOCI, pre-tax, to interest income on loans$3,167 $— $— 
Pre-tax income (loss) recognized on cash flow hedges$3,167 $— $— 
Gain/(loss) on fair value hedging relationships:
Recognized on derivatives$— $(2,818)$(1,455)
Recognized on hedged items— 2,818 1,455 
Pre-tax income (loss) recognized on fair value hedges$— $— $— 
(1)     See "Part I - Item 1. Financial Statements and Supplementary Data - Note 5 - Shareholders' Equity and Other Comprehensive Income (Loss)" for gain (loss) recognized on cash flow hedging relationships in AOCI.
The following table presents the carrying amount and associated cumulative basis adjustment related to the application of hedge accounting that is included in the carrying amount of the hedged assets/(liabilities) in fair value hedging relationships.
June 30, 2023December 31, 2022
Hedged Items Currently DesignatedHedged Items Currently Designated
(in thousands)Carrying Amount of Assets/(Liabilities)Hedge Accounting Basis AdjustmentCarrying Amount of Assets/(Liabilities)Hedge Accounting Basis Adjustment
Interest-bearing deposits$(2,460,611)$8,296 $(1,680,000)$24,227 
Long-term debt(1,042,450)5,427 (545,787)19,348 

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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 and six months ended June 30, 2023 and 2022 is presented below.
Gain (Loss) Recognized in Consolidated Statements of Income
Three Months Ended June 30,Six Months Ended June 30,
(in thousands)
Location in Consolidated Statements of Income
2023202220232022
Derivatives not designated
  as hedging instruments:
Interest rate contracts(1)    
Capital markets income$(690)$736 $(672)$1,409 
Mortgage derivatives - interest rate lock commitmentsMortgage banking income(547)394 562 (924)
Mortgage derivatives - forward commitments to sell fixed-rate mortgage loansMortgage banking income578 (3,210)250 355 
Risk participation agreementsCapital markets income(2)10 1 35 
Foreign exchange contractsCapital markets income73 320 602 385 
Visa derivativeOther non-interest expense(3,027)(3,500)(3,027)(3,500)
Total derivatives not designated as hedging instruments
$(3,615)$(5,250)$(2,284)$(2,240)
(1)    Gain (loss) represents net fair value adjustments (including credit related adjustments) for client swaps.
Note 8 - Net Income Per Common Share
The following table displays a reconciliation of the information used in calculating basic and diluted net income per common share for the three and six months ended June 30, 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 June 30,Six Months Ended June 30,
(in thousands, except per share data)2023202220232022
Basic Net Income Per Common Share:
Net income available to common shareholders$165,819 $169,761 $359,688 $332,507 
Weighted average common shares outstanding146,113 145,328 145,957 145,301 
Net income per common share, basic$1.13 $1.17 $2.46 $2.29 
Diluted Net Income Per Common Share:
Net income available to common shareholders$165,819 $169,761 $359,688 $332,507 
Weighted average common shares outstanding146,113 145,328 145,957 145,301 
Effect of dilutive outstanding equity-based awards437 987 687 1,188 
Weighted average diluted common shares146,550 146,315 146,644 146,489 
Net income per common share, diluted$1.13 $1.16 $2.45 $2.27 
For the three months ended June 30, 2023 and 2022, there were 273 thousand and 21 thousand, respectively, potentially dilutive shares related to stock options to purchase shares of common stock that were outstanding. For the six months ended June 30, 2023 and 2022, there were 273 thousand and 11 thousand, respectively, potentially dilutive shares related to stock options to purchase shares of common stock that were outstanding. These potentially dilutive shares were not included in the computation of diluted net income per common share because the effect would be anti-dilutive.
Note 9 - Commitments and Contingencies
In the normal course of business, Synovus enters into commitments to extend credit such as loan commitments and letters of credit to meet the financing needs of its clients. Synovus uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. Commitments to extend credit are agreements to lend to a client as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration 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.

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The contractual amount of these financial instruments represents Synovus' maximum credit risk should the counterparty draw upon the commitment, and should the counterparty subsequently fail to perform according to the terms of the contract. Since many of the commitments are expected to expire without being drawn upon, total commitment amounts do not necessarily represent future cash requirements. Additionally, certain commitments (primarily consumer) can generally be canceled by providing notice to the borrower.
The ACL associated with unfunded commitments and letters of credit is recorded within other liabilities on the consolidated balance sheets. At June 30, 2023 and December 31, 2022, the ACL for unfunded commitments was $55.7 million and $57.5 million, respectively. Additionally, an immaterial amount of unearned fees relating to letters of credit are recorded within other liabilities on the consolidated balance sheets.
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)June 30, 2023December 31, 2022
Letters of credit(1)
$203,911 $220,622 
Commitments to fund commercial and industrial loans10,143,330 9,970,733 
Commitments to fund commercial real estate, construction, and land development loans3,100,361 3,629,531 
Commitments under home equity lines of credit2,163,660 2,156,641 
Unused credit card lines463,440 461,443 
Other loan commitments698,093 742,976 
Total letters of credit and unfunded lending commitments$16,772,795 $17,181,946 
Tax credits, CRA partnerships, and other investments with a future funding commitment:
Carrying amount included in other assets$525,072 $488,944 
Amount of future funding commitments300,722 283,212 
Permanent and short-term construction loans and letter of credit commitments(2)
208,699 177,998 
Funded portion of permanent and short-term loans and letters of credit(3)
195,748 234,166 
(1)    Represent the contractual amount net of risk participations purchased of approximately $23.4 million and $25.7 million at June 30, 2023 and December 31, 2022, respectively.
(2)    Represent the contractual amount net of risk participations of $10.0 million and $4.7 million at June 30, 2023 and December 31, 2022, respectively.
(3)    Represent the contractual amount net of risk participations of $2.9 million and $6.9 million at June 30, 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 and six months ended June 30, 2023, Synovus and the sponsored entities processed and settled $29.39 billion and $59.50 billion of transactions, respectively. For the three and six months ended June 30, 2022, Synovus and the sponsored entities processed and settled $31.00 billion and $59.60 billion of transactions, respectively.
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. On June 1, 2023, the Qualpay acquisition closed, and the contractual amount due was settled. See Note 1 - Basis of Presentation and Accounting Policies for additional discussion on the Qualpay acquisition.

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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-related litigation could result in additional write-downs or charge-offs of assets, which could adversely affect Synovus' results of operations during the period in which the write-down or charge-off were to occur.
Synovus carefully examines and considers each legal matter, and, in those situations where Synovus determines that a particular legal matter presents loss contingencies that are both probable and reasonably estimable, Synovus establishes an appropriate reserve. An event is considered to be probable if the future event is likely to occur. While the final outcome of any legal proceeding is inherently uncertain, based on the information currently available, advice of counsel and available insurance coverage, management believes that the amounts accrued with respect to legal matters as of June 30, 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. During the second quarter of 2023, Synovus updated its internal management reporting structure to transfer Capital Markets activities and related personnel from the Financial Management Services segment to the Wholesale Banking segment. Accordingly, its operating segment reporting structure was also updated. 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 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, deposit, and capital markets services through specialty teams including middle market,

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CRE, senior housing, national accounts, premium finance, structured lending, healthcare, asset-based lending, public finance, restaurant services, community investment capital, and capital markets.
The Community Banking business segment primarily serves small and medium-sized commercial clients as well as individual private wealth clients using a relationship-based approach. The commercial component of this segment focuses on locally owned and operated businesses. Private wealth services are delivered to the individuals operating the businesses as well as other individuals in the communities in which the Community Bank operates. A comprehensive set of banking products are offered to the client set, including a full suite of lending, payments, and depository products as well as financial planning services.
The Consumer Banking business segment serves individual and small business clients through its branch and ATM network, in addition to digital and telephone channels. This segment provides individuals and small businesses with an array of comprehensive banking products and services, including depository accounts, credit and debit cards, payment solutions, goal-based planning, home equity and other consumer loans, and small business lending solutions.
The Financial Management Services business segment serves its clients by providing mortgage, trust services, professional portfolio management for fixed-income securities, securities underwriting and distribution, the execution of securities transactions as a broker/dealer, asset management, financial planning, and family office services, as well as the provision of individual investment advice on equity and other securities.
Synovus uses a centralized FTP methodology to attribute appropriate net interest income to the business segments. The intent of the FTP methodology is to transfer interest rate risk from the business segments by providing matched duration funding of assets and liabilities. The result is to centralize the financial impact, management, and reporting of interest rate risk in the Treasury and Corporate Other function, where it can be centrally monitored and managed. Treasury and Corporate Other includes certain assets and/or liabilities managed within that function. Additionally, Treasury and Corporate Other also charges (credits) an internal cost of funds for assets held in (or pays for funding provided by) each business segment. The process for determining FTP is based on a number of factors and assumptions, including prevailing market interest rates, the expected lives of various assets and liabilities, and the Company's broader funding profile.
The following tables present certain financial information for each reportable business segment for the three and six months ended June 30, 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 June 30, 2023
(in thousands)Wholesale BankingCommunity BankingConsumer BankingFinancial Management ServicesTreasury and Corporate OtherSynovus Consolidated
Net interest income $194,334 $110,242 $158,113 $17,134 $(24,292)$455,531 
Non-interest revenue13,752 12,584 20,983 49,085 15,872 112,276 
Non-interest expense33,141 33,833 49,103 42,607 148,497 307,181 
Pre-provision net revenue (PPNR)$174,945 $88,993 $129,993 $23,612 $(156,917)$260,626 
Three Months Ended June 30, 2022
(in thousands)Wholesale BankingCommunity BankingConsumer BankingFinancial Management ServicesTreasury and Corporate OtherSynovus Consolidated
Net interest income$169,736 $100,892 $103,727 $17,655 $33,378 $425,388 
Non-interest revenue9,285 12,468 22,095 45,195 8,223 97,266 
Non-interest expense27,062 32,822 47,795 44,297 130,075 282,051 
Pre-provision net revenue (PPNR)$151,959 $80,538 $78,027 $18,553 $(88,474)$240,603 

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Six Months Ended June 30, 2023
(in thousands)Wholesale BankingCommunity BankingConsumer BankingFinancial Management ServicesTreasury and Corporate OtherSynovus Consolidated
Net interest income$393,434 $221,647 $312,744 $33,681 $(25,223)$936,283 
Non-interest revenue29,652 38,124 41,711 102,291 33,624 245,402 
Non-interest expense66,989 67,215 96,737 86,653 311,440 629,034 
Pre-provision net revenue (PPNR)$356,097 $192,556 $257,718 $49,319 $(303,039)$552,651 
Six Months Ended June 30, 2022
(in thousands)Wholesale BankingCommunity BankingConsumer BankingFinancial Management ServicesTreasury and Corporate OtherSynovus Consolidated
Net interest income$325,984 $197,019 $201,132 $35,818 $57,682 $817,635 
Non-interest revenue17,683 26,051 43,739 90,359 24,768 202,600 
Non-interest expense53,742 63,090 92,662 88,404 256,603 554,501 
Pre-provision net revenue (PPNR)$289,925 $159,980 $152,209 $37,773 $(174,153)$465,734 
June 30, 2023
(dollars in thousands)Wholesale BankingCommunity BankingConsumer BankingFinancial Management ServicesTreasury and Corporate OtherSynovus Consolidated
Loans, net of deferred fees and costs$26,923,516 $8,061,533 $2,845,695 $5,330,753 $1,192,040 $44,353,537 
Total deposits$13,094,855 $10,204,029 $18,496,141 $206,107 $8,079,260 $50,080,392 
Total full-time equivalent employees342 599 1,540 752 1,864 5,097 
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 
Note 11 - Subsequent Events
Pending sale of medical office loans
On July 19, 2023, Synovus signed a purchase and sale agreement to sell approximately $1.3 billion of medical office loans; accordingly, a charge-off of the existing ACL of approximately $23 million has been recorded, and the loans have been reclassified to other loans held-for-sale subsequent to the end of the second quarter of 2023. The transaction is expected to result in an after-tax net loss of approximately $25 million that represents the difference between the amortized cost and the estimated value of the loan proceeds.
Voluntary Early Retirement Program
In July 2023, Synovus incurred approximately $19 million in one-time termination benefits, recorded as restructuring charges, associated with a voluntary early retirement program offered to certain qualified employees.
Execution of third-party consumer loans sale
On July 25, 2023, Synovus sold approximately $316 million of third-party consumer loans held for sale, with the remaining $22 million of the portfolio expected to settle in the third quarter of 2023. Synovus previously recognized a $19.1 million year-to-date loss as of June 30, 2023.

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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 and rising interest rates;
(4)changes in the cost and availability of funding due to changes in the deposit market and credit market;
(5)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;
(6)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;
(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;
(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;
(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;

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(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 (including those impacting our vendors and other third parties) 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 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 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

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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 246 branches in Alabama, Florida, Georgia, South Carolina, and Tennessee.
The following financial review summarizes the significant trends, changes in our business, transactions, and other matters affecting Synovus’ results of operations for the three and six months ended June 30, 2023 and financial condition as of June 30, 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 June 30,Six Months Ended June 30,
(dollars in thousands, except per share data)20232022Change20232022Change
Net interest income
$455,531 $425,388 %$936,283 $817,635 15 %
Provision for (reversal of) credit losses
38,881 12,688 206 71,035 24,088 195 
Non-interest revenue
112,276 97,266 15 245,402 202,600 21 
Total revenue
567,807 522,654 1,181,685 1,020,235 16 
Non-interest expense
307,181 282,051 629,034 554,501 13 
Income before income taxes
221,745 227,915 (3)481,616 441,646 
Net income attributable to Synovus Financial Corp.174,110 178,052 (2)376,269 349,088 
Net income available to common shareholders
165,819 169,761 (2)359,688 332,507 
Net income per common share, basic
1.13 1.17 (3)2.46 2.29 
Net income per common share, diluted
1.13 1.16 (3)2.45 2.27 
Net interest margin(1)
3.20 %3.22 %(2)  bps3.32 %3.11 %21   bps
Net charge-off ratio(1)
0.24 0.16 0.20 0.18 
Return on average assets(1)
1.15 1.26 (11)1.26 1.24 
Efficiency ratio-TE
53.99 53.87 12 53.13 54.25 (112)
(1)    Annualized
June 30, 2023March 31, 2023Sequential Quarter ChangeJune 30, 2022Year-Over-Year Change
(dollars in thousands)
Loans, net of deferred fees and costs$44,353,537 $44,044,939 $308,598 $41,204,780 $3,148,757 
Total average loans44,099,115 43,793,441 305,674 40,590,875 3,508,240 
Total deposits50,080,392 49,953,936 126,456 49,034,700 1,045,692 
Core deposits (excludes brokered deposits)
43,550,624 43,705,682 (155,058)45,411,583 (1,860,959)
Total average deposits
49,719,079 49,025,870 693,209 49,015,994 703,085 
Non-performing assets ratio0.59 %0.41 %18   bps0.33 %26 bps
Non-performing loans ratio0.59 0.41 18 0.26 33 
Past due loans over 90 days0.01 0.01 — 0.01 — 
CET1 capital$5,133,546 $5,056,613 $76,933 $4,612,070 $521,476 
Tier 1 capital 5,670,691 5,593,758 76,933 5,149,215 521,476 
Total risk-based capital6,664,033 6,579,216 84,817 6,059,074 604,959 
CET1 capital ratio9.86 %9.77 %  bps9.46 %40 bps
Tier 1 capital ratio10.89 10.81 10.56 33 
Total risk-based capital ratio12.80 12.72 12.43 37 
Total Synovus Financial Corp. shareholders’ equity to total assets ratio
7.88 7.71 17 7.99 (11)
Return on average common equity(1)
15.5 19.2 (370)16.5 (100)
(1)    Quarter annualized
Economic Environment and Recent Events
In an effort to achieve its inflation objectives, the Federal Reserve has aggressively tightened monetary policy by significantly raising market interest rates throughout 2022 and 2023, with estimates calling for a FOMC policy rate in the range of 5.25% to 6.00% by the end of 2023. The extent of interest rate increases and the period of time that these higher rates will remain in effect continues to depend on the level of inflation and strength of the labor market.
Outside of inflation, economic uncertainty and market disruptions remain, including geopolitical tensions from Russia’s prolonged war in Ukraine, the strained relationship between the U.S. and China, and to a lesser extent, the lingering impact of

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the COVID-19 pandemic on global supply chains, tourism, business travel, immigration, and labor participation. Multiple mixed signals make parsing the way ahead difficult as evidenced by the volatility in capital markets and the wide range regarding economic outlook.
U.S. fiscal policy has been expansionary in recent years, leaving a significant federal deficit. 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.
The bank failures in March and May of 2023 and the subsequent response by both the banking industry and the Federal Reserve served to mitigate the risks of the 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. The impact of reactions to the bank failures include a proposed FDIC special assessment, increased regulatory scrutiny, continued pressure on deposits and liquidity, and a generally less sanguine outlook regarding bank profitability going forward.
Despite the headwinds discussed above and our position in strong Southeastern U.S. growth markets, Synovus believes it is well-positioned to execute on our revised 2023 outlook outlined below by capitalizing on our intentional approach to expand our business, diversify our client base, and stay competitive, all while increasing our investments in innovative solutions to further enhance the client experience and sources of revenue and striking a balance between growth and risk management.
Executive Summary
Net income available to common shareholders for the second quarter of 2023 was $165.8 million, or $1.13 per diluted common share, compared to $169.8 million, or $1.16 per diluted common share, for the second quarter of 2022. Net income available to common shareholders for the six months ended June 30, 2023 was $359.7 million, or $2.45 per diluted common share, compared to $332.5 million, or $2.27 per diluted common share, for the six months June 30, 2022. The year-over-year changes were largely impacted by higher net interest income from increased interest rates and strong loan growth and higher non-interest expense primarily resulting from investments in our workforce and new business initiatives. Provision for credit losses was also higher compared to the same periods in 2022, driven by changes in forecasted economic factors within the ACL model and increased net charge-offs.
Net interest income for the six months ended June 30, 2023 was $936.3 million, up $118.6 million, or 15%, compared to the same period in 2022. Net interest margin was up 21 bps over the comparable six-month period to 3.32%, due primarily to the benefits of our asset sensitive balance sheet and substantial average loan growth partially offset by continued increases in funding costs. Net interest margin for the second quarter was 3.20%, down 23 bps sequentially, as the asset side of our balance sheet continued to benefit from higher balances and rates, but higher deposit pricing combined with remixing within our non-interest-bearing deposits resulted in margin compression.
Non-interest revenue for the second quarter of 2023 was $112.3 million, up $15.0 million, or 15%, and year-to-date was $245.4 million, up $42.8 million, or 21%, compared to the same periods in 2022. The primary drivers of the increase in the quarter-to-date comparative periods included higher brokerage revenue and a $7.0 million write-down on a minority fintech investment that impacted earnings on equity method investments in the second quarter of 2022. The primary drivers of the year-to-date increase included higher brokerage revenue, a $13.1 million recovery of a non-performing asset related to Qualpay, higher capital markets income, and the aforementioned $7.0 million write-down on a minority fintech investment. See Note 1 - Basis of Presentation and Accounting Policies and Note 9 - Commitments and Contingencies for further discussion on Qualpay.
Non-interest expense for the second quarter of 2023 was $307.2 million, up $25.1 million, or 9%, and year-to-date was $629.0 million, up $74.5 million, or 13%, compared to the same periods in 2022. The increases were primarily due to investments in and expansion of our workforce and new businesses initiatives, as well as the industry-wide increase in FDIC expense. Year-to-date non-interest expense has also been negatively impacted by a $19.1 million loss associated with third-party consumer loans moved to held for sale, while the comparative period benefited from an $8.3 million reversal of restructuring charges.
At June 30, 2023, loans, net of deferred fees and costs, of $44.35 billion, increased $637.2 million, from December 31, 2022. Growth in C&I loans has been diversified but tempered by slowing utilization and a strategic decline in syndicated loan-only relationships while CRE loan growth was a function of draws related to existing commitments and low levels of pay-offs. The decline in consumer loans was impacted by a $427.9 million move of third-party consumer loans to held for sale.
At June 30, 2023, credit metrics included NPAs and NPLs both at 59 bps and total past dues at 19 bps, as a percentage of total loans. Net charge-offs were $26.4 million, or 24 bps annualized, and $44.9 million, or 20 bps annualized, respectively, for the three and six months ended June 30, 2023. The ACL at June 30, 2023 totaled $527.0 million, an increase of $26.1 million from December 31, 2022, and resulted primarily from deterioration in economic factors and increased specific reserves. The ACL to loans coverage ratio at June 30, 2023 of 1.19% increased 4 bps compared to December 31, 2022.

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Total period-end deposits at June 30, 2023 increased $1.21 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 between these two account types. Brokered deposits also increased as a result of continued proactive management of our balance sheet position. The decrease in non-interest bearing demand deposits was primarily impacted by seasonal cash deployment of excess funds and continued pressures from the rate environment. Average deposit costs of 1.95% for the second quarter of 2023 increased 180 bps from the prior year comparable period primarily due to the impact of the FOMC's rate hikes of 350 bps from June 30, 2022 to June 30, 2023. Deposit costs were impacted by anticipated pricing lags on core interest-bearing deposits as well as the decline in non-interest-bearing demand deposits.
At June 30, 2023, Synovus' CET1 ratio of 9.86% improved 23 bps compared to December 31, 2022, as our organic earnings profile continues to support capital accretion, which along with a somewhat slower pace of loan growth, was more than sufficient to offset marginal headwinds from the Qualpay acquisition. See Note 1 - Basis of Presentation and Accounting Policies for additional discussion on Qualpay.
More detail on Synovus' financial results for the three and six months ended June 30, 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, includes changes in the operating environment that have impacted the banking industry over the past few months:
Loan growth(2) of 0% to 2%
Core deposit(3) growth of 1% to 4%
Adjusted revenue(2)(4)(5) growth of 0% to 3%
Adjusted non-interest expense(4)(5) growth of 4% to 6%
Ending CET1 ratio of greater than 10% at year-end 2023
Effective income tax rate of approximately 22%
(1) Includes the impact of the Qualpay transaction. See Note 1 - Basis of Presentation and Accounting Policies for additional discussion on Qualpay. Outside of loan growth, the ranges provided do not reflect the impact of the proposed FDIC special assessment nor the impact of the planned medical office loan sale. See Note 11 - Subsequent Events for additional information.
(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 planned third-party consumer sale.
(3) Excludes brokered deposits.
(4) See "Table 14 - Reconciliation of Non-GAAP Financial Measures” for applicable reconciliation to the most comparable GAAP measure.
(5) Guidance based on the 2022 baseline: adjusted revenue baseline of $2.21 billion and adjusted non-interest expense of $1.16 billion.

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Changes in Financial Condition
During the six months ended June 30, 2023, total assets increased $924.2 million to $60.66 billion. Total loans increased $637.2 million, with commercial loan growth more than offsetting the $427.9 million move of third-party consumer loans to held for sale. Deposits increased $1.21 billion and resulted from increased time deposits partially offset by a decline in money market accounts as consumers shifted between these two account types. Brokered deposits also increased as a result of continued proactive management of our balance sheet position. The loan to deposit ratio was 88.6% at June 30, 2023 as compared to 89.5% at December 31, 2022. Other short-term borrowings decreased $601.9 million primarily as a result of maturities of short-term FHLB Advances.
Total Synovus Financial Corp. shareholders' equity at June 30, 2023 increased $306.7 million compared to December 31, 2022, driven by growth in retained earnings, which included net income attributable to Synovus Financial Corp. of $376.3 million partially offset by common and preferred stock dividends of $111.0 million and $16.6 million, respectively. The increase was also driven by a decrease in after-tax net unrealized losses on investment securities available for sale and cash flow hedges of $32.2 million and $14.8 million, respectively.
Loans
The following table compares the composition of the loan portfolio at June 30, 2023, December 31, 2022, and June 30, 2022.
Table 2 - Loans by Portfolio Class
June 30, 2023 vs. December 31, 2022 ChangeJune 30, 2023 vs. June 30, 2022 Change
(dollars in thousands)June 30, 2023December 31, 2022June 30, 2022
Commercial, financial and agricultural$14,166,890 31.9 %$13,874,416 31.8 %$292,474 %$13,018,089 31.6 %$1,148,801 %
Owner-occupied8,364,342 18.9 8,192,240 18.7 172,102 7,760,236 18.8 604,106 
Total commercial and industrial22,531,232 50.8 22,066,656 50.5 464,576 20,778,325 50.4 1,752,907 
Investment properties12,270,266 27.7 11,644,047 26.6 626,219 10,408,048 25.3 1,862,218 18 
1-4 family properties615,726 1.4 616,933 1.4 (1,207)— 641,855 1.6 (26,129)(4)
Land and development407,906 0.9 389,333 0.9 18,573 453,514 1.0 (45,608)(10)
Total commercial real estate13,293,898 30.0 12,650,313 28.9 643,585 11,503,417 27.9 1,790,481 16 
Consumer mortgages5,379,284 12.1 5,214,443 11.9 164,841 5,124,523 12.4 254,761 
Home equity1,773,987 4.0 1,757,038 4.0 16,949 1,579,218 3.9 194,769 12 
Credit cards187,677 0.4 203,612 0.5 (15,935)(8)194,290 0.5 (6,613)(3)
Other consumer loans1,187,459 2.7 1,824,291 4.2 (636,832)(35)2,025,007 4.9 (837,548)(41)
Total consumer8,528,407 19.2 8,999,384 20.6 (470,977)(5)8,923,038 21.7 (394,631)(4)
Loans, net of deferred fees and costs$44,353,537 100.0 %$43,716,353 100.0 %$637,184 %$41,204,780 100.0 %$3,148,757 %
At June 30, 2023, loans, net of deferred fees and costs of $44.35 billion, increased $637.2 million from December 31, 2022. Growth in C&I loans has been diversified but tempered by slowing utilization and a strategic decline in syndicated loan-only relationships while CRE loan growth was a function of draws related to existing commitments and low levels of pay-offs. The decline in consumer loans was impacted by a $427.9 million move of third-party consumer loans to held for sale.
C&I loans remain the largest component of our loan portfolio, representing 50.8% of total loans, while CRE and consumer loans represent 30.0% 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 June 30, 2023 were $35.83 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 June 30, 2023, 94.8% 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 June 30, 2023 grew $464.6 million, or 2%, from December 31, 2022, and resulted from diverse growth across business lines and industries, led by the finance and insurance and healthcare and social assistance industries. C&I loan growth was also impacted by a reduction in same-line utilization as well as strategic decline from syndicated loan-only relationships.
Table 3 - Commercial and Industrial Loans by Industry
 June 30, 2023December 31, 2022
(dollars in thousands)NAICS CodeAmount
%(1)
Amount
%(1)
Health care and social assistance62 $4,971,391 22.1 %$4,815,229 21.8 %
Finance and insurance52 3,936,002 17.5 3,726,279 16.9 
Accommodation and food services72 1,446,479 6.4 1,377,738 6.2 
Manufacturing31-331,404,656 6.2 1,465,395 6.6 
Construction23 1,174,654 5.2 1,112,135 5.0 
Real estate and rental and leasing5311 1,162,735 5.2 1,245,513 5.6 
Wholesale trade42 1,142,719 5.1 1,221,046 5.5 
Retail trade44-451,116,511 5.0 1,074,100 4.9 
Professional, scientific, and technical services54 936,573 4.2 944,939 4.3 
Transportation and warehousing48-49926,071 4.1 892,479 4.0 
Other services81 910,461 4.0 929,777 4.2 
Real estate other53 779,812 3.5 788,457 3.6 
Arts, entertainment, and recreation71 542,290 2.4 476,534 2.2 
Public administration92 483,892 2.1 487,583 2.2 
Other industries
(2)
443,222 1.8 353,492 1.7 
Educational services61 407,400 1.8 420,343 1.9 
Administration, support, waste management, and remediation56 289,433 1.3 253,459 1.2 
Agriculture, forestry, fishing, and hunting11 241,762 1.1 250,216 1.1 
Information51 215,169 1.0 231,942 1.1 
Total commercial and industrial loans$22,531,232 100.0 %$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 June 30, 2023, $14.17 billion of C&I loans, or 31.9% 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 June 30, 2023, $8.36 billion of C&I loans, or 18.9% 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 $13.29 billion increased $643.6 million, or 5%, 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. CRE loan balances, specifically investment properties loans, will be impacted by the signing of a purchase and sale agreement in July 2023 to sell approximately $1.3 billion of medical office loans. See Note 11 - Subsequent Events for additional information.

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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 June 30, 2023 were $12.27 billion, or 92.3% of the CRE loan portfolio, and increased $626.2 million, or 5%, from December 31, 2022, primarily due to growth in most sub-categories.
The following table shows the principal categories of the investment properties loan portfolio at June 30, 2023 and December 31, 2022.
Table 4 - Investment Properties Loan Portfolio
June 30, 2023December 31, 2022
(dollars in thousands)Amount
% (1)
Amount
% (1)
Multi-Family$3,597,497 29.3 %$3,134,571 26.9 %
Hotels1,771,381 14.4 1,708,194 14.7 
Medical Office Buildings1,527,195 12.4 1,561,957 13.4 
Non-Medical Office Buildings1,504,611 12.4 1,449,954 12.5 
Shopping Centers1,329,492 10.8 1,403,928 12.0 
Warehouses1,068,734 8.7 1,035,152 8.9 
Other investment property1,471,356 12.0 1,350,291 11.6 
Total investment properties loans$12,270,266 100.0 %$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 June 30, 2023, 1-4 family properties loans totaled $615.7 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 $407.9 million at June 30, 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 June 30, 2023, weighted-average FICO scores within the residential real estate portfolio based on committed balances were 776 for consumer mortgages and 794 for home equity, consistent with year-end 2022 scores.
Consumer loans at June 30, 2023 of $8.53 billion decreased $471.0 million, or 5%, compared to December 31, 2022. Mortgage loans increased $164.8 million from December 31, 2022 largely due to seasonally higher production including our physician product. Other consumer loans decreased $636.8 million from December 31, 2022, primarily due to $427.9 million of third-party consumer loans that moved to held for sale in addition to strategic runoff of the third-party lending portfolio.
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

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and Table 12 - Year-to-Date Net Interest Income and Rate/Volume Analysis in this Report for information on average deposits including average rates.
Table 5 - Composition of Period-end Deposits
(dollars in thousands)June 30, 2023
%(1)
December 31, 2022
%(1)
June 30, 2022
%(1)
Non-interest-bearing demand deposits(2)
$12,945,531 25.9 %$14,574,451 29.8 %$15,781,109 32.2 %
Interest-bearing demand deposits(2)
6,255,319 12.5 5,762,302 11.8 6,327,060 12.9 
Money market accounts(2)
10,803,670 21.6 12,479,762 25.5 13,793,019 28.1 
Savings deposits(2)
1,222,854 2.4 1,396,431 2.9 1,498,727 3.0 
Public funds7,031,410 14.0 6,635,552 13.6 5,863,899 12.0 
Time deposits(2)
5,291,840 10.6 2,724,056 5.6 2,147,769 4.4 
Brokered deposits6,529,768 13.0 5,299,005 10.8 3,623,117 7.4 
Total deposits$50,080,392 100.0 %$48,871,559 100.0 %$49,034,700 100.0 %
Core deposits(3)    
$43,550,624 87.0 %$43,572,554 89.2 %$45,411,583 92.6 %
Brokered time deposits $4,006,156 8.0 %$3,330,946 6.8 %$2,314,488 4.7 %
Public funds time deposits $287,530 0.6 %$240,022 0.5 %$611,070 1.2 %
(1)    Deposits balance in each category expressed as percentage of total deposits.
(2)    Excluding any public funds or brokered deposits.
(3)    Core deposits exclude brokered deposits.
Total period-end deposits at June 30, 2023 increased $1.21 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 between these two account types. Brokered deposits also increased as a result of continued proactive management of our balance sheet position. The decrease in non-interest bearing demand deposits was primarily impacted by seasonal cash deployment of excess funds and continued pressures from the rate environment.
Average deposit costs of 1.95% for the second quarter of 2023, which equate to a cycle-to-date total deposit beta of 37% through the second quarter of 2023, increased 51 bps and 180 bps, from the prior quarter and prior year comparable period, respectively, primarily due to the impact of the FOMC's rate hikes of 25 bps during the second quarter of 2023 and 350 bps from June 30, 2022 to June 30, 2023. Deposit costs and betas were impacted by anticipated pricing lags on core interest-bearing deposits as well as the decline in non-interest-bearing demand deposits. We continue to expect further upward pressure on deposit costs and our expectations for through-the-cycle total deposit betas, which we now believe will end the year in the 46%-48% range.
As of June 30, 2023 and December 31, 2022, $22.75 billion and $23.88 billion, respectively, of our deposit portfolio was uninsured, which represents approximately 45% and 49%, respectively, of total deposits. The uninsured amounts are estimated based on the methodologies and assumptions used for the Bank's regulatory reporting requirements. At June 30, 2023, approximately 87% of our deposits are either insured (55%), collateralized (14%), or could be insured by switching to our insured cash sweep program, which has existing capacity (18%).
Non-interest Revenue
Non-interest revenue for the second quarter of 2023 was $112.3 million, up $15.0 million, or 15%, and year-to-date was $245.4 million, up $42.8 million, or 21%, compared to the same periods in 2022. The primary drivers of the increase in the quarter-to-date comparative periods included higher brokerage revenue and a $7.0 million write-down on a minority fintech investment that impacted earnings on equity method investments in the second quarter of 2022. The primary drivers of the year-to-date increase included higher brokerage revenue, a $13.1 million recovery of a non-performing asset related to Qualpay, higher capital markets income, and the aforementioned $7.0 million write-down on a minority fintech investment. See Note 1 - Basis of Presentation and Accounting Policies and Note 9 - Commitments and Contingencies for further discussion on Qualpay.

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The following table shows the principal components of non-interest revenue.
Table 6 - Non-interest Revenue
Three Months Ended June 30,Six Months Ended June 30,
(dollars in thousands)20232022$ Change% Change20232022$ Change% Change
Service charges on deposit accounts$23,477 $23,491 $(14)— %$46,451 $46,030 $421 %
Fiduciary and asset management fees20,027 20,100 (73)— 39,723 40,377 (654)(2)
Card fees17,059 16,089 970 32,884 30,846 2,038 
Brokerage revenue 20,908 15,243 5,665 37 43,466 29,898 13,568 45 
Mortgage banking income4,609 3,904 705 18 8,467 9,857 (1,390)(14)
Capital markets income6,975 7,393 (418)(6)20,700 12,864 7,836 61 
Income from bank-owned life insurance6,878 9,165 (2,287)(25)14,140 15,722 (1,582)(10)
Insurance revenue 2,002 2,564 (562)(22)4,187 3,983 204 
Investment securities gains (losses), net — — nm1,030 — 1,030 nm
Recovery of NPA — — nm13,126 — 13,126 nm
Other non-interest revenue10,341 (683)11,024 nm21,228 13,023 8,205 63 
Total non-interest revenue$112,276 $97,266 $15,010 15 %$245,402 $202,600 $42,802 21 %
Core banking fees (1)
$46,869 $45,483 $1,386 %$92,930 $90,887 $2,043 %
Wealth revenue (2)
$42,937 $37,907 $5,030 13 %$87,376 $74,258 $13,118 18 %
(1) Core banking fees consist of service charges on deposit accounts, card fees, and several other non-interest revenue components including letter of credit fees, ATM fee income, line of credit non-usage fees, gains (losses) from sales of SBA loans, and miscellaneous other service charges.
(2) Consists of fiduciary and asset management, brokerage, and insurance revenue.
Three and Six Months Ended June 30, 2023 compared to June 30, 2022
Service charges on deposit accounts, consisting of account analysis fees, NSF fees, and all other service charges remained relatively flat. The largest category of service charges, account analysis fees, increased $720 thousand, or 7%, compared to the second quarter of 2022 and increased $1.3 million, or 7%, on a comparable year-to-date basis. NSF/overdraft fees were down $1.4 million, or 18%, and $1.8 million, or 12%, on a quarter-to-date and year-to-date basis, respectively, compared to the prior year. 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 and six months ended June 30, 2023 were up $650 thousand, or 11%, and $920 thousand, or 8%, respectively, compared to the same periods in 2022.
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. Fiduciary and asset management fees remained steady despite volatility in the equity markets.
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 and six months ended June 30, 2023 were up primarily due to increased merchant revenue resulting from higher sales transaction volumes and new merchants being added in addition to higher credit card transaction volumes from elevated commercial/small business spend activity and account growth.
Brokerage revenue consists primarily of brokerage commissions as well as advisory fees earned from the management of client assets. Brokerage revenue for the three and six months ended June 30, 2023 increased significantly over the prior year comparable periods, 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 higher for the three months ended June 30, 2023, compared to the same period in 2022, primarily due to a favorable change in the mark-to-market partially offset by a $84.2 million, or 37%, decline in loan sales. Mortgage banking income declined on a year-to-date basis primarily as a result of a $180.8 million, or 41%, decrease in loan sales compared to the same period in 2022. Secondary market production was $164.1 million for the three months ended June 30, 2023, a decline of $36.0 million, or 18%, compared to the second quarter of 2022 while year-to-date, it was $269.9 million, a $151.2 million, or 36%, decline compared to the prior year.

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Capital markets income primarily includes fee income from client derivative transactions, as well as fee income from debt capital market transactions and foreign exchange. The decline in the second quarter of 2023 compared to the second quarter of 2022 primarily resulted from a $2.4 million decrease in fees on client derivative transactions somewhat offset by a $1.6 million increase in loan syndication arranger fees, while the year-to-date increase was driven by $6.2 million higher loan syndication arranger fees and $777 thousand higher fee income from debt capital market transactions.
Income from BOLI includes increases in the cash surrender value of policies and proceeds from insurance contracts. The decrease for the three and six months ended June 30, 2023 primarily related to $2.5 million in proceeds from insurance benefits in the second quarter of 2022.
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 three and six months ended June 30, 2023 comparative period increase was primarily due to the $7.0 million write-down on a minority fintech investment recorded in the second quarter of 2022 and an increase in the fair value of non-qualified deferred compensation plan assets of $4.8 million and $7.5 million, respectively.
Non-interest Expense
Non-interest expense for the second quarter of 2023 was $307.2 million, up $25.1 million, or 9%, and year-to-date was $629.0 million, up $74.5 million, or 13%, compared to the same periods in 2022. The increases were primarily due to investments in and expansion of our workforce and new businesses initiatives, as well as the industry-wide increase in FDIC expense. Year-to-date non-interest expense has also been negatively impacted by a $19.1 million loss associated with third-party consumer loans moved to held for sale, while the comparative period benefited from an $8.3 million reversal of restructuring charges.
The following table summarizes the components of non-interest expense.
Table 7 - Non-interest Expense
Three Months Ended June 30,Six Months Ended June 30,
(dollars in thousands)20232022$ Change% Change20232022$ Change% Change
Salaries and other personnel expense$183,001 $161,063 $21,938 14 %$371,926 $325,747 $46,179 14 %
Net occupancy, equipment, and software expense42,785 43,199 (414)(1)85,645 86,076 (431)(1)
Third-party processing and other services21,659 21,952 (293)(1)43,493 42,947 546 
Professional fees9,597 10,865 (1,268)(12)18,560 19,338 (778)(4)
FDIC insurance and other regulatory fees11,162 6,894 4,268 62 21,429 13,144 8,285 63 
Amortization of intangibles2,420 2,118 302 14 4,277 4,236 41 
Restructuring charges (reversals)(110)(1,850)1,740 (94)(843)(8,274)7,431 (90)
Valuation adjustment to Visa derivative3,027 3,500 (473)(14)3,027 3,500 (473)(14)
(Gain) loss on early extinguishment of debt(377)— (377)nm(377)677 (1,054)(156)
Loss on other loans held for sale2,360 — 2,360 nm19,110 — 19,110 — 
Other operating expense31,657 34,310 (2,653)(8)62,787 67,110 (4,323)(6)
Total non-interest expense$307,181 $282,051 $25,130 %$629,034 $554,501 $74,533 13 %
Three and Six Months Ended June 30, 2023 compared to June 30, 2022
Salaries and other personnel expense increased for the three and six months ended June 30, 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). Total headcount of 5,179 was up by 88, or 2%, compared to June 30, 2022 primarily as a result of additions in areas associated with revenue growth and certain critical support functions partially offset by strategic reductions in areas primarily impacted by production volume declines.
Professional fees were down for the three months ended June 30, 2023 mostly due to lower consulting fees largely related to strategic and infrastructure investments while for the six months ended June 30, 2023, the decrease was mostly due to lower legal fees from credit-related items compared to the same periods in 2022.

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FDIC insurance and other regulatory fees increased significantly for the three and six months ended June 30, 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 prior year periods. On May 22, 2023, the FDIC published its proposed rule to charge certain banks a special assessment to cover losses incurred by the Deposit Insurance Fund (DIF) due to bank failures in March 2023. The rule proposes a special assessment at an annual rate of 12.5 bps on a bank's uninsured deposits balance, in excess of $5 billion, as of December 31, 2022, payable in eight quarterly installments beginning in the first quarter of 2024. If the rule is finalized as proposed, we expect to record an expense and corresponding liability of approximately $47 million upon the enactment date, which is the date the final rule is published in the Federal Register.
During the three and six months ended June 30, 2023, Synovus recorded restructuring charges (reversals) including $1.9 million and $3.3 million, respectively, in gains on the sale of branches previously closed, partially offset by $1.7 million and $2.1 million, respectively, of severance. During the three months ended June 30, 2022, Synovus recorded $3.0 million in gains on sales of five closed branches partially offset by restructuring charges associated with additional branch closures. During the six months ended June 30, 2022, Synovus recorded $12.1 million in gains largely relating to the sale of real estate facilities in Columbus, Georgia in addition to gains on sales of closed branches, partially offset by restructuring charges associated with additional branch closures.
During the three months ended June 30, 2023 and 2022, Synovus recorded valuation adjustments of $3.0 million and $3.5 million, respectively, to the Visa derivative following Visa's announcement to fund $500 million and $600 million, respectively, to its litigation escrow account.
During the three months ended June 30, 2023, Synovus Bank repurchased $4.6 million of its 5.90% Fixed-to-Floating Rate Subordinated Notes of $300 million par value on the open market and incurred a $377 thousand gain on this early extinguishment of debt. On February 10, 2022, Synovus Bank redeemed all of its 2.289% Fixed-to-Floating Rate Senior Bank Notes of $400 million par value and incurred a $677 thousand loss on early extinguishment of debt.
During the three and six months ended June 30, 2023, Synovus recorded losses of $2.4 million and $19.1 million, respectively, associated with fair value adjustments on other loans held for sale due to the transfer 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 and six months ended June 30, 2023 largely due to decreased loan expense from lower production. Year-to-date other operating expense was also impacted by the reversal of a $2.7 million impairment charge related to Qualpay recorded in the first quarter of 2023.
Income Tax Expense
Income tax expense was $47.8 million for the three months ended June 30, 2023, compared to $49.9 million for the three months ended June 30, 2022, representing effective tax rates of 21.6% and 21.9%, respectively. Income tax expense was $105.5 million for the six months ended June 30, 2023, compared to income tax expense of $92.6 million for the six months ended June 30, 2022, representing effective tax rates of 21.9% and 21.0%, respectively. The effective tax rate was higher for the six months ended June 30, 2023, primarily due to a decrease in net discrete tax benefits, including share-based compensation and changes in other tax reserves, compared to the prior period, partly offset by an increase in benefits from tax credit investments.
CREDIT QUALITY, CAPITAL RESOURCES AND LIQUIDITY
Credit Quality
Synovus diligently monitors the quality of its loan portfolio by industry, property type, and geography through a thorough portfolio review process and our analytical risk management tools. At June 30, 2023, credit metrics included NPAs and NPLs both at 59 bps and total past dues at 19 bps, as a percentage of total loans. Net charge-offs were $26.4 million, or 24 bps annualized, and $44.9 million, or 20 bps annualized, respectively, for the three and six months ended June 30, 2023, and included $1.3 million and $7.9 million, respectively, for the three and six months ended June 30, 2023, related to the third-party consumer loans moved to held for sale. As we look to the second half of 2023, we expect a net charge-off ratio range of 30-40 bps, which would result in a 2023 net charge-off ratio range of 25-30 bps.

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The table below includes selected credit quality metrics.
Table 8 - Credit Quality Metrics
(dollars in thousands)June 30, 2023December 31, 2022June 30, 2022
Non-performing loans
$261,506 $128,061 $109,024 
ORE and other assets
 15,320 26,759 
Non-performing assets
$261,506 $143,381 $135,783 
Total loans
$44,353,537 $43,716,353 $41,204,780 
Non-performing loans as a % of total loans
0.59 %0.29 %0.26 %
Non-performing assets as a % of total loans, ORE, and specific other assets
0.59 0.33 0.33 
Loans 90 days past due and still accruing
$3,643 $3,373 $2,251 
As a % of total loans
0.01 %0.01 %0.01 %
Total past due loans and still accruing
$84,946 $65,568 $56,160 
As a % of total loans
0.19 %0.15 %0.14 %
Net charge-offs, quarter$26,396 13,300 $16,565 
Net charge-offs/average loans, quarter0.24 %0.12 %0.16 %
Net charge-offs, year-to-date$44,946 $53,156 $35,174 
Net charge-offs/average loans, year-to-date0.20 %0.13 %0.18 %
Provision for (reversal of) loan losses, quarter$40,624 $35,366 $9,446 
Provision for (reversal of) unfunded commitments, quarter(1,743)(482)3,242 
Provision for (reversal of) credit losses, quarter$38,881 $34,884 $12,688 
Provision for (reversal of) loan losses, year-to-date72,760 68,983 15,414 
Provision for (reversal of) unfunded commitments, year-to-date(1,725)15,570 8,674 
Provision for (reversal of) credit losses, year-to-date71,035 84,553 24,088 
Allowance for loan losses$471,238 $443,424 $407,837 
Reserve for unfunded commitments55,729 57,455 50,559 
Allowance for credit losses$526,967 $500,879 $458,396 
ACL to loans coverage ratio
1.19 %1.15 %1.11 %
ALL to loans coverage ratio
1.06 1.01 0.99 
ACL/NPLs201.51 391.13 420.45 
ALL/NPLs180.20 346.26 374.08 
Non-performing Assets
Total NPAs were $261.5 million at June 30, 2023, a $118.1 million, or 82%, increase from December 31, 2022 primarily due to the designation of several large commercial relationships as non-performing, which are reserved and collateralized. Our analysis of these new non-performing relationships does not suggest a pattern of systemic risk within specific industries or geographies.
Criticized and Classified Loans
Our loan ratings are aligned to federal banking regulators' definitions of pass and criticized categories, which include special mention, substandard, doubtful, and loss. Substandard accruing and non-accruing loans, doubtful, and loss loans are often collectively referred to as classified. Special mention, substandard, doubtful, and loss loans are often collectively referred to as criticized and classified loans. The following table presents a summary of criticized and classified loans. Criticized and classified loans at June 30, 2023 were 3.0% of total loans, or $1.33 billion, up $390.6 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.

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Table 9 - Criticized and Classified Loans
(dollars in thousands)June 30, 2023December 31, 2022
Special mention$542,905 $312,921 
Substandard 719,965 626,266 
Doubtful49,738 — 
Loss 20,102 2,884 
Criticized and Classified loans$1,332,710 $942,071 
As a % of total loans
3.0 %2.2 %
Provision for (Reversal of) Credit Losses and Allowance for Credit Losses
The provision for credit losses was $38.9 million and $71.0 million, respectively, for the three and six months ended June 30, 2023, compared to a provision of $12.7 million and $24.1 million, respectively, for the three and six months ended June 30, 2022. The increases were predominantly driven by changes in forecasted economic factors within the ACL model and increased net charge-offs. Net charge offs for the three and six months ended June 30, 2023 were $26.4 million and $44.9 million, respectively, as compared to $16.6 million and $35.2 million, respectively, for the three and six months ended June 30, 2022.
The ALL of $471.2 million and the reserve for unfunded commitments of $55.7 million, which is recorded in other liabilities, comprise the total ACL of $527.0 million at June 30, 2023. The ACL increased $26.1 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 1.19% at June 30, 2023 increased 4 bps as compared to December 31, 2022. The increase in the ACL from December 31, 2022 resulted primarily from deterioration in economic factors and increased specific reserves.
Capital Resources
Synovus and Synovus Bank are required to comply with capital adequacy standards established by our primary federal regulator, the Federal Reserve. Synovus and Synovus Bank measure capital adequacy using the standardized approach under Basel III. At June 30, 2023, Synovus and Synovus Bank's capital levels remained strong and exceeded well-capitalized

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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)June 30, 2023December 31, 2022
CET1 capital
Synovus Financial Corp.$5,133,546 $4,926,194 
Synovus Bank5,632,300 5,446,703 
Tier 1 risk-based capital
Synovus Financial Corp.5,670,691 5,463,339 
Synovus Bank5,632,300 5,446,703 
Total risk-based capital
Synovus Financial Corp.6,664,033 6,415,681 
Synovus Bank6,308,581 6,079,152 
CET1 capital ratio
Synovus Financial Corp.9.86 %9.63 %
Synovus Bank10.83 10.66 
Tier 1 risk-based capital ratio
Synovus Financial Corp.10.89 10.68 
Synovus Bank10.83 10.66 
Total risk-based capital to risk-weighted assets ratio
Synovus Financial Corp.12.80 12.54 
Synovus Bank12.13 11.89 
Leverage ratio
Synovus Financial Corp.9.23 9.07 
Synovus Bank9.17 9.06 
At June 30, 2023, Synovus' CET1 ratio of 9.86% improved 23 bps compared to December 31, 2022, as our organic earnings profile continues to support capital accretion, which along with a somewhat slower pace of loan growth, was more than sufficient to offset marginal headwinds from the Qualpay acquisition. See Note 1 - Basis of Presentation and Accounting Policies for additional discussion on Qualpay. As we look ahead, we remain focused on eclipsing the 10% CET1 ratio threshold, at which time we intend to re-assess the broader macro-economic environment and consider what actions, if any, may be prudent as we diligently manage our capital position. For additional information on regulatory capital requirements, see "Part II - Item 8. Financial Statements and Supplementary Data - Note 10 - Regulatory Capital" to the consolidated financial statements of Synovus' 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 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 has not repurchased any shares in the first or second quarters of 2023, and in light of the uncertain economic 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 June 30, 2023 regulatory capital ratios reflect Synovus' election of the five-year transition provision. At June 30, 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.

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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 $111.0 million, or $0.76 per common share, for the six months ended June 30, 2023, compared to $98.9 million, or $0.68 per common share, for the six months ended June 30, 2022. In addition, Synovus declared dividends on its preferred stock of $16.6 million during both the six months ended June 30, 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 has maintained stable core deposit balances as compared to December 31, 2022. Time deposits increased $2.57 billion, partially offset by a $1.68 billion decline in money market accounts as consumers shifted between these two account types. A $1.63 billion decrease in non-interest bearing demand deposits was primarily impacted by seasonal cash deployment of excess funds and continued pressures from the rate environment. Synovus continues to proactively manage its liquidity position, which has included adding brokered deposits, and robust contingent liquidity is maintained 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 strategic 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 June 30, 2023, contingent sources of liquidity totaled approximately $26 billion, and based on currently pledged collateral, Synovus Bank had access to FHLB funding of $5.93 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 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.
During the second quarter of 2023, Synovus Bank repurchased $4.6 million of its 5.90% Fixed-to-Floating Rate Subordinated Notes of $300 million par value on the open market and incurred a $377 thousand gain on early extinguishment of

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debt. The Company may continue to redeem debt as it deems appropriate and as permitted per regulatory approvals if so required and compliance with laws.
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 operations" of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 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, retire, or repurchase its existing debt, redeem its preferred stock, or strengthen its liquidity or capital position.
Earning Assets and Sources of Funds
Average total assets for the six months ended June 30, 2023 increased $3.63 billion, or 6%, as compared to the first six months of 2022. Average earning assets increased $4.01 billion, or 8%, in the first six months of 2023 compared to the same period in 2022. The increase in average earning assets primarily resulted from a $3.97 billion, or 10%, increase in average total loans, net of unearned income, primarily attributable to growth in commercial loans from draws on existing commitments, increased line utilization, and low levels of pay-offs.
Average interest-bearing liabilities increased $5.75 billion, or 17%, for the first six months of 2023 compared to the same period in 2022. The increase in average interest-bearing liabilities largely resulted from a $3.12 billion increase in brokered deposits, a $2.56 billion increase in long-term debt, a $1.32 billion increase in time deposits, and a $818.7 million increase in other short-term borrowings, partially offset by a $1.76 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 decrease in money market accounts were correlated as consumers have shifted between these two account types. Average non-interest-bearing deposits decreased $2.29 billion, or 14%, for the first six months of 2023 compared to the same period in 2022 primarily due to the continued pressures from the rate environment and client deployment of excess funds.
Net interest income for the six months ended June 30, 2023 was $936.3 million, up $118.6 million, or 15%, compared to the same period in 2022. Net interest margin was up 21 bps over the comparable six-month period to 3.32%, due primarily to the benefits of our asset sensitive balance sheet and substantial average loan growth partially offset by continued increases in funding costs.
On a sequential quarter basis, net interest income was down $25.2 million, or 5%, impacted by higher deposit costs. Net interest margin for the second quarter was 3.20%, down 23 bps compared to the first quarter of 2023, as the asset side of our balance sheet continued to benefit from higher balances and rates, but higher deposit pricing combined with remixing within our non-interest-bearing deposits resulted in margin compression. We expect net interest margin in the third quarter of 2023 to continue to contract at a pace similar to or less than that experienced in the second quarter of 2023, followed by some relative stabilization thereafter as deposit pricing lags and non-interest-bearing deposits remixing slows. Against those diminishing headwinds should be the gradual benefit which accrues to the net interest margin from fixed rate repricing, which has a compounding effect and should support the net interest margin through time assuming this higher rate environment remains.

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Net Interest Income and Rate/Volume Analysis
    The following tables set forth the major components of net interest income and the related annualized yields and rates for the three and six months ended June 30, 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 June 30,2023 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)
$35,628,637 $566,823 6.38 %$31,870,387 $308,442 3.88 %$36,355 $222,026 $258,381 
Consumer loans (2)
8,470,478 104,545 4.94 8,720,488 83,826 3.86 (2,406)23,125 20,719 
Less: Allowance for loan losses
(466,700)  (415,372)— — — — — 
Loans, net
43,632,415 671,368 6.17 40,175,503 392,268 3.92 33,949 245,151 279,100 
Investment securities available for sale
11,200,717 60,421 2.16 11,153,091 50,312 1.81 215 9,894 10,109 
Trading account assets
21,328 309 5.80 11,987 73 2.44 57 179 236 
Other earning assets(4)
1,446,425 18,081 4.95 813,028 1,660 0.81 1,263 15,158 16,421 
FHLB and Federal Reserve Bank stock
280,248 4,301 6.14 179,837 1,820 4.05 1,014 1,467 2,481 
Mortgage loans held for sale
54,603 852 6.24 85,299 921 4.32 (331)262 (69)
Other loans held for sale546,224 4,949 3.58 725,762 7,678 4.19 (1,876)(853)(2,729)
Total interest earning assets
57,181,960 $760,281 5.33 %53,144,507 $454,732 3.43 %34,291 271,258 305,549 
Cash and due from banks
646,066 538,647 
Premises and equipment
369,039 385,457 
Other real estate
 11,439 
Cash surrender value of bank-owned life insurance
1,095,866 1,077,231 
Other assets(5)    
1,222,146 1,379,659 
Total assets
$60,515,077 $56,536,940 
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing demand deposits    
$9,891,375 $41,803 1.70 %$9,513,334 $3,598 0.15 %$141 $38,064 $38,205 
Money market accounts
13,468,210 85,397 2.54 15,328,395 6,850 0.18 (835)79,382 78,547 
Savings deposits
1,276,040 281 0.09 1,506,195 72 0.02 (11)220 209 
Time deposits
4,866,221 39,551 3.26 2,829,684 1,688 0.24 1,219 36,644 37,863 
Brokered deposits6,342,751 74,748 4.73 2,878,536 6,293 0.88 7,600 60,855 68,455 
Federal funds purchased and securities sold under repurchase agreements    
88,591 351 1.57 246,737 219 0.35 (138)270 132 
Other short-term borrowings
455,050 5,566 4.84 480,999 896 0.74 (48)4,718 4,670 
Long-term debt
3,821,126 55,915 5.82 878,413 8,768 3.99 29,273 17,874 47,147 
Total interest-bearing liabilities
40,209,364 $303,612 3.03 %33,662,293 $28,384 0.33 %$37,201 $238,027 $275,228 
Non-interest-bearing demand deposits
13,874,482 16,959,850 
Other liabilities
1,556,863 1,245,116 
Total equity
4,874,368 4,669,681 
Total liabilities and shareholders' equity
$60,515,077 $56,536,940 
Net interest income and net interest margin, taxable equivalent (6)
$456,669 3.20 %$426,348 3.22 %$(2,910)$33,231 $30,321 
Less: taxable-equivalent adjustment
1,138 960 
Net interest income
$455,531 $425,388 
(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 - $11.3 million, 2022 - $13.0 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 $(1.46) billion and $(923.1) million for the three months ended June 30, 2023 and 2022, respectively.
(6)    The net interest margin is calculated by dividing annualized net interest income - TE by average total interest earnings assets.

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Table 12 - Year-to-Date Net Interest Income and Rate/Volume Analysis
Six Months Ended June 30,2023 Compared to 2022
20232022
Change due to (1)
(dollars in thousands)
Average BalanceInterest  Yield/
   Rate
Average BalanceInterest  Yield/
   Rate

Volume
 RateIncrease (Decrease)
Assets
Interest earning assets:
Commercial loans (2) (3)
$35,331,375 $1,093,352 6.24 %$31,316,646 $589,029 3.79 %$75,454 $428,869 $504,323 
Consumer loans (2)
8,615,748 208,693 4.87 8,657,598 165,194 3.83 (795)44,294 43,499 
Less: Allowance for loan losses
(456,005)  (419,639)— — — — — 
Loans, net
43,491,118 1,302,045 6.03 39,554,605 754,223 3.84 74,659 473,163 547,822 
Investment securities available for sale
11,247,080 121,475 2.16 11,206,150 97,562 1.74 353 23,560 23,913 
Trading account assets
16,360 434 5.30 10,540 112 2.13 61 261 322 
Other earning assets(4)
1,479,926 35,292 4.74 1,363,223 2,475 0.36 202 32,615 32,817 
FHLB and Federal Reserve Bank stock
293,518 7,656 5.22 170,006 2,505 2.95 1,807 3,344 5,151 
Mortgage loans held for sale
45,600 1,418 6.22 94,542 1,803 3.81 (925)540 (385)
Other loans held for sale495,240 9,960 4.00 661,768 12,978 3.90 (3,221)203 (3,018)
Total interest earning assets
57,068,842 $1,478,280 5.22 %53,060,834 $871,658 3.31 %72,936 533,686 606,622 
Cash and due from banks
644,791 543,638 
Premises and equipment
369,654 392,079 
Other real estate
 11,598 
Cash surrender value of bank-owned life insurance
1,093,486 1,074,076 
Other assets(5)    
1,148,600 1,613,313 
Total assets
$60,325,373 $56,695,538 
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing demand deposits    
$9,493,481 $65,024 1.38 %$9,531,330 $5,970 0.13 %$(24)$59,078 $59,054 
Money market accounts
13,929,069 158,012 2.29 15,685,030 12,199 0.16 (1,393)147,206 145,813 
Savings deposits
1,322,846 491 0.07 1,483,547 139 0.02 (16)368 352 
Time deposits
4,237,249 61,047 2.91 2,919,242 3,826 0.26 1,699 55,522 57,221 
Brokered deposits5,950,539 131,141 4.44 2,833,580 10,026 0.71 10,974 110,141 121,115 
Federal funds purchased and securities sold under repurchase agreements    
110,852 1,021 1.83 220,689 230 0.21 (115)906 791 
Other short-term borrowings
1,062,908 24,559 4.60 244,202 896 0.73 2,964 20,699 23,663 
Long-term debt
3,486,453 98,444 5.63 930,131 18,913 4.07 51,593 27,938 79,531 
Total interest-bearing liabilities
39,593,397 $539,739 2.75 %33,847,751 $52,199 0.31 %$65,682 $421,858 $487,540 
Non-interest-bearing demand deposits
14,441,205 16,727,040 
Other liabilities
1,539,939 1,195,043 
Total equity
4,750,832 4,925,704 
Total liabilities and shareholders' equity
$60,325,373 $56,695,538 
Net interest income and net interest margin, taxable equivalent (6)
$938,541 3.32 %$819,459 3.11 %$7,254 $111,828 $119,082 
Less: taxable-equivalent adjustment
2,258 1,824 
Net interest income
$936,283 $817,635 
(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 - $22.8 million, 2022 - $33.7 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 $(1.49) billion and $(587.1) million for the six months ended June 30, 2023 and 2022, respectively.
(6)    The net interest margin is calculated by dividing annualized net interest income - TE by average total interest earnings assets.

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Market Risk Analysis
Interest rate risk is the primary market risk to which Synovus is potentially exposed. Synovus measures 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 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 5.00% to 5.25% as of June 30, 2023 and the prime rate of 8.25% as of June 30, 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 5.2% and 2.6% if interest rates increased by 200 and 100 bps, respectively. Net interest income is projected to decrease by 2.9% and 6.3% if interest rates decreased by 100 and 200 bps, respectively.
The following table represents the estimated sensitivity of net interest income at June 30, 2023, with comparable information for December 31, 2022.
Table 13 - Twelve Month Net Interest Income Sensitivity
Estimated % Change in Net Interest Income as Compared to Unchanged Rates (for the next twelve months)
Change in Interest Rates (in bps)June 30, 2023December 31, 2022
+2005.2%6.4%
+1002.63.1
-100(2.9)(3.5)
-200(6.3)(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 both the sensitivity and realized level of net interest income. Additionally, should there be differences between realized deposit betas for a given level of rates as compared to the Company's estimates for through-the-cycle betas, this may also have a significant impact on our reported sensitivity and the 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.
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.

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Derivative Instruments for Interest Rate Risk Management
Synovus utilizes derivative instruments to manage its exposure to various types of structural interest rate risks by 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 June 30, 2023 and December 31, 2022, Synovus had $8.90 billion and $5.25 billion, respectively, in notional amounts outstanding of both effective and forward-starting 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 June 30, 2023 and December 31, 2022, Synovus had $3.51 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 fixed-rate 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. Consistent with this guidance and that of various U.S. regulatory bodies, Synovus has made a concerted effort to eliminate LIBOR-based exposures in accordance with the June 30, 2023 deadline. This was a multi-faceted effort that included, but was not limited to, discontinuing the use of LIBOR in new business, which Synovus did as of January 1, 2022, as well as amending LIBOR-based contracts for legacy exposures to transition to other acceptable indexes. Through these efforts, we believe that we have remediated our material exposures where possible and/or received guidance on an appropriate transition for those exposures which were at the discretion of third parties. As of June 30, 2023, there was approximately $2.9 billion of loan exposures which were still accruing on LIBOR but which will transition to SOFR upon their next index reset period. Additionally, there are various other exposures, most notably derivatives, which will transition to SOFR upon the next reset period in a manner that is consistent with industry practice. Synovus does not believe that significant further actions will be required as part of the effort to adhere to the industry LIBOR transition.
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.
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, and tangible common equity ratio, are not measures recognized under GAAP and therefore are considered non-GAAP financial measures. The most comparable GAAP measures to these measures are total non-interest revenue, total non-interest expense, total revenue, efficiency ratio-TE, net income available to common shareholders, net income per common share, diluted, return on average assets, return on average common equity, and the ratio of total shareholders' equity to total assets, respectively.
Management believes that these non-GAAP financial measures provide meaningful additional information about Synovus to assist management and investors in evaluating Synovus’ operating results, financial strength, the performance of its business, and the strength of its capital position. However, these non-GAAP financial measures have inherent limitations as analytical

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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 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. 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.
Table 14 - Reconciliation of Non-GAAP Financial Measures
Three Months EndedSix Months Ended
(in thousands, except per share data)June 30, 2023June 30, 2022June 30, 2023June 30, 2022
Adjusted non-interest revenue
Total non-interest revenue$112,276 $97,266 $245,402 $202,600 
Investment securities (gains) losses, net — (1,030)— 
Recovery of NPA — (13,126)— 
Fair value adjustment on non-qualified deferred compensation(1,598)3,240 (2,969)4,535 
Adjusted non-interest revenue$110,678 $100,506 $228,277 $207,135 
Adjusted non-interest expense
Total non-interest expense$307,181 $282,051 $629,034 $554,501 
(Loss) gain on other loans held for sale(2,360)— (19,110)— 
Restructuring charges (reversals)110 1,850 843 8,274 
Valuation adjustment to Visa derivative(3,027)(3,500)(3,027)(3,500)
Gain (loss) on early extinguishment of debt377 — 377 (677)
Fair value adjustment on non-qualified deferred compensation(1,598)3,240 (2,969)4,535 
Adjusted non-interest expense$300,683 $283,641 $605,148 $563,133 

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Table 14 - Reconciliation of Non-GAAP Financial Measures, continued
Three Months EndedSix Months Ended
(in thousands, except per share data)June 30, 2023June 30, 2022June 30, 2023June 30, 2022
Adjusted revenue and adjusted tangible efficiency ratio
Adjusted non-interest expense$300,683 $283,641 $605,148 $563,133 
Amortization of intangibles(2,420)(2,118)(4,277)(4,236)
Adjusted tangible non-interest expense$298,263 $281,523 $600,871 $558,897 
Net interest income$455,531 $425,388 $936,283 $817,635 
Total non-interest revenue112,276 97,266 245,402 202,600 
Total revenue$567,807 $522,654 $1,181,685 $1,020,235 
Tax equivalent adjustment1,138 960 2,258 1,824 
Total TE revenue568,945 523,614 1,183,943 1,022,059 
Recovery of NPA — (13,126)— 
Investment securities (gains) losses, net — (1,030)— 
Fair value adjustment on non-qualified deferred compensation(1,598)3,240 (2,969)4,535 
Adjusted revenue$567,347 $526,854 $1,166,818 $1,026,594 
Efficiency ratio-TE53.99 %53.87 %53.13 %54.25 %
Adjusted tangible efficiency ratio52.57 53.43 51.50 54.44 
Adjusted net income available to common shareholders and adjusted diluted earnings per share
Net income available to common shareholders$165,819 $169,761 $359,688 $332,507 
Recovery of NPA — (13,126)— 
Loss (gain) on other loans held for sale2,360 — 19,110 — 
Restructuring charges (reversals)(110)(1,850)(843)(8,274)
Valuation adjustment to Visa derivative3,027 3,500 3,027 3,500 
(Gain) loss on early extinguishment of debt(377)— (377)677 
Investment securities (gains) losses, net — (1,030)— 
Tax effect of adjustments (1)
(1,193)(393)(1,646)976 
Adjusted net income available to common shareholders$169,526 $171,018 $364,803 $329,386 
Weighted average common shares outstanding, diluted146,550 146,315 146,644 146,489 
Net income per common share, diluted$1.13 $1.16 $2.45 $2.27 
Adjusted net income per common share, diluted1.16 1.17 2.49 2.25 
Three Months EndedSix Months Ended
(dollars in thousands)June 30, 2023June 30, 2022June 30, 2023June 30, 2022
Adjusted return on average assets (annualized)
Net income$173,944 $178,052 $376,103 $349,088 
Recovery of NPA — (13,126)— 
Loss (gain) on other loans held for sale2,360 — 19,110 — 
Restructuring charges (reversals)(110)(1,850)(843)(8,274)
Add: Valuation adjustment to Visa derivative3,027 3,500 3,027 3,500 
(Gain) loss on early extinguishment of debt(377)— (377)677 
Investment securities (gains) losses, net — (1,030)— 
Tax effect of adjustments (1)
(1,193)(393)(1,646)976 
Adjusted net income$177,651 $179,309 $381,218 $345,967 
Net income annualized$697,687 $714,165 758,440 703,962 
Adjusted net income annualized$712,556 $719,206 768,755 697,668 
Total average assets$60,515,077 $56,536,940 60,325,373 56,695,538 
Return on average assets (annualized)1.15 %1.26 %1.26 1.24 
Adjusted return on average assets (annualized)1.18 1.27 1.27 1.23 

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Table 14 - Reconciliation of Non-GAAP Financial Measures, continued
Three Months Ended
(dollars in thousands)June 30, 2023March 31, 2023June 30, 2022
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$165,819 $193,868 $169,761 
Recovery of NPA (13,126)— 
Loss (gain) on other loans held for sale2,360 16,750 — 
Restructuring charges (reversals)(110)(733)(1,850)
Valuation adjustment to Visa derivative3,027 — 3,500 
(Gain) loss on early extinguishment of debt(377)— — 
Investment securities (gains) losses, net (1,030)— 
Tax effect of adjustments (1)
(1,193)(453)(393)
Adjusted net income available to common shareholders$169,526 $195,276 $171,018 
Adjusted net income available to common shareholders annualized$679,967 $791,953 $685,951 
Amortization of intangibles, annualized net of tax7,344 5,699 6,471 
Adjusted net income available to common shareholders excluding amortization of intangibles annualized$687,311 $797,652 $692,422 
Net income available to common shareholders annualized$665,098 $786,242 $680,910 
Amortization of intangibles, annualized net of tax7,344 5,699 6,471 
Net income available to common shareholders excluding amortization of intangibles$672,442 $791,941 $687,381 
Total average Synovus Financial Corp. shareholders' equity less preferred stock$4,303,722 $4,088,777 $4,132,536 
Average goodwill(460,118)(452,390)(452,390)
Average other intangible assets, net(36,738)(26,245)(32,387)
Total average Synovus Financial Corp. tangible shareholders' equity less preferred stock$3,806,866 $3,610,142 $3,647,759 
Return on average common equity (annualized)15.5 %19.2 %16.5 %
Adjusted return on average common equity (annualized)15.8 19.4 16.6 
Return on average tangible common equity (annualized)17.7 21.9 18.8 
Adjusted return on average tangible common equity (annualized)18.1 22.1 19.0 
(dollars in thousands)June 30, 2023December 31, 2022June 30, 2022
Tangible common equity ratio
Total assets$60,655,591 $59,731,378 $57,382,745 
Goodwill(475,573)(452,390)(452,390)
Other intangible assets, net(61,538)(27,124)(31,360)
Tangible assets$60,118,480 $59,251,864 $56,898,995 
Total Synovus Financial Corp. shareholders' equity$4,782,528 $4,475,801 $4,584,438 
Goodwill(475,573)(452,390)(452,390)
Other intangible assets, net(61,538)(27,124)(31,360)
Preferred stock, no par value(537,145)(537,145)(537,145)
Tangible common equity$3,708,272 $3,459,142 $3,563,543 
Total Synovus Financial Corp. shareholders' equity to total assets ratio7.88 %7.49 %7.99 %
Tangible common equity ratio6.17 5.84 6.26 
(1) An assumed marginal tax rate of 24.3% for 2Q23, 1Q23, and 4Q22 and 23.8% for 2Q22 was applied.


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ITEM 3. – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    The information presented in the Market Risk Analysis section of the Management's Discussion and Analysis of Financial Condition and Results of Operations section of this Report is incorporated herein by reference.
ITEM 4. – CONTROLS AND PROCEDURES
In connection with the preparation of this Quarterly Report on Form 10-Q, an evaluation was carried out by Synovus' management, with the participation of Synovus' Chief Executive Officer and Chief Financial Officer, of the effectiveness of Synovus' disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures. Based on that evaluation, Synovus' Chief Executive Officer and Chief Financial Officer have concluded that, as of June 30, 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 June 30, 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, in evaluating an investment in the Company's securities, investors should consider carefully, among other things, the risk factors previously disclosed in "Part I - Item IA - Risk Factors” of Synovus' 2022 Form 10-K and "Part II - Item 1A - Risk Factors” of Synovus' Form 10-Q for the quarter ended March 31, 2023 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.
There are no material changes during the period covered by this Report to the risk factors previously disclosed in our 2022 Form 10-K or our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023.
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 June 30, 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
Pursuant to Item 408(a) of Regulation S-K, none of the Company's directors or executive officers adopted, terminated or modified a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2023.

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


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

 
SYNOVUS FINANCIAL CORP.
August 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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