Synovus Announces Earnings for the Third Quarter 2020

Rhea-AI Summary

Synovus Financial Corp. (NYSE: SNV) reported a third quarter 2020 diluted EPS of $0.56 and adjusted diluted EPS of $0.89. A non-cash goodwill impairment charge of $44.9 million impacted earnings. Loans decreased by $364.5 million sequentially, while core transaction deposits rose by $1.56 billion, a 5% increase. Net interest income held steady at $377 million, with a net interest margin of 3.10%. The provision for credit losses was $43.4 million, while the total risk-based capital ratio improved to 13.16%, the highest since 2014.

Positive

• Core transaction deposits increased by $1.56 billion (5%) sequentially.
• Adjusted non-interest revenue rose by $20.3 million (21%) sequentially.
• Total risk-based capital ratio of 13.16% achieved, highest since 2014.

Negative

• Non-cash goodwill impairment charge of $44.9 million due to lower rate forecast.
• Total loans decreased by $364.5 million (1%) sequentially.
• Non-interest revenue declined by $59.1 million (34%) sequentially.

COLUMBUS, Ga.--(BUSINESS WIRE)--Synovus Financial Corp. (NYSE: SNV) today reported financial results for the quarter ended September 30, 2020.

Third Quarter 2020 Highlights

• Diluted EPS of $0.56; adjusted diluted EPS of $0.89.
  • Non-cash goodwill impairment charge of $44.9 million, or $0.30 per share, driven by lower rate forecast impact to mortgage reporting unit.
• Period-end loan decline of $364.5 million or 1% sequentially; net increase of approximately $245 million excluding the impact of Paycheck Protection Program (PPP) loan payoffs and asset dispositions.
  • As of September 30, slightly less than 1% of loans were receiving a principal and interest deferral, down from 15% in May.
• Core transaction deposits (non-interest bearing, NOW/savings, and money market deposits excluding public and brokered funds) increased $1.56 billion or 5% sequentially.
• Total deposit costs of 0.39% down 14 bps from the second quarter due to pricing diligence and product remixing.
• Net interest income of $377.0 million was stable with the second quarter; net interest margin of 3.10% vs. 3.13% in 2Q20.
• Non-interest revenue declined $59.1 million sequentially and increased $25.7 million compared to prior year; investment losses of $1.3 million compared to gains of $78.1 million in the second quarter.
  • Adjusted non-interest revenue increased $20.3 million sequentially due primarily to higher net mortgage revenue and core banking fees.
• Non-interest expense increased $32.5 million sequentially and $40.3 million compared to prior year.
  • Adjusted non-interest expense declined $7.7 million sequentially due primarily to lower employment expense.
• Provision for credit losses of $43.4 million; allowance for credit losses coverage ratio (to loans) of 1.68%, or 1.80% excluding PPP loans.
• Credit quality metrics remain relatively stable, with the non-performing loan ratio and net charge-off ratio of 0.43% and 0.29%, respectively.
• Preliminary CET1 and Total Risk Based Capital ratios improved to 9.30% and 13.16%, respectively.

Third Quarter Summary

	Reported												Adjusted
(dollars in thousands)	3Q20				2Q20				3Q19				3Q20				2Q20				3Q19
Net income available to common shareholders	$	83,283			$	84,901			$	127,435			$	131,364			$	34,015			$	149,732
Diluted earnings per share	0.56				0.57				0.83				0.89				0.23				0.97
Total loans	39,549,847				39,914,297				36,417,826				N/A				N/A				N/A
Total deposits	44,665,904				44,194,580				37,433,070				N/A				N/A				N/A
Total revenues	492,357				550,911				491,676				493,647				472,795				494,213
Return on avg assets	0.69		%		0.71		%		1.14		%		1.05		%		0.32		%		1.33		%
Return on avg common equity	7.28				7.48				11.36				11.48				3.00				13.35
Return on avg tangible common equity	8.46				8.69				13.19				13.24				3.60				15.46
Net interest margin	3.10				3.13				3.69				3.08				3.11				3.42
Efficiency ratio	64.31				51.58				56.20				53.91				57.91				51.71
NCO ratio	0.29				0.24				0.22				N/A				N/A				N/A
NPA ratio	0.49				0.44				0.42				N/A				N/A				N/A

“The third quarter reflected strong operating performance, highlighted by growth in core transaction deposits of $1.6 billion and adjusted fee income growth of $20 million, as well as disciplined expense management, all contributing to improved profitability,” said Kessel D. Stelling, Synovus Chairman and CEO. “We continued to strengthen our balance sheet, growing total risk-based capital by 46 basis points to 13.16 percent, the highest level since 2014. The responsiveness of team members and their unwavering support of customers — especially those managing through this challenging credit cycle — demonstrates the effectiveness of our local relationship delivery model and our ability to execute even in the face of uncertainty. These strengths, along with an improving economy, contributed to a solid third quarter and position us well for the fourth quarter and coming year.”

Balance Sheet

Loans*
(dollars in millions)	3Q20				2Q20				Linked Quarter Change				Linked Quarter % Change			3Q19				Year/Year Change				Year/Year % Change
Commercial & industrial	$	20,014.2			$	19,938.3			$	75.9			—	%		$	16,418.3			$	3,595.8			22	%
Commercial real estate	10,965.9				10,827.5				138.3				1			10,313.0				652.9				6
Consumer	8,668.8				9,246.7				(577.9		)		(6	)		9,709.2				(1,040.4		)		(11	)
Unearned income	(99.0		)		(98.2		)		(0.8		)		1			(22.7		)		(76.3		)		337
Total loans	$	39,549.8			$	39,914.3			$	(364.5	)		(1	)%		$	36,417.8			$	3,132.0			9	%
*Amounts may not total due to rounding

• Total loans ended the quarter at $39.55 billion, down $364.5 million or 1% sequentially.
• Commercial and industrial (C&I) loans sequential growth of $75.9 million.
  • PPP loan payoffs of approximately $77 million in the third quarter.
  • C&I line utilization of 40% compared to 41% in the prior quarter.
• Consumer loans decreased by $577.9 million sequentially, primarily as a result of approximately $467 million in strategic dispositions of out-of-footprint mortgages, student loans, and GreenSky loans.

Deposits*
(dollars in millions)	3Q20				2Q20				Linked Quarter Change				Linked Quarter % Change			3Q19				Year/Year Change				Year/Year % Change
Non-interest-bearing DDA	$	12,129.8			$	11,830.7			$	299.1			3	%		$	8,970.2			$	3,159.6			35	%
Interest-bearing DDA	5,291.1				5,057.2				233.9				5			4,714.8				576.3				12
Money market	12,441.3				11,457.2				984.1				9			9,212.1				3,229.2				35
Savings	1,126.0				1,080.1				45.9				4			897.3				228.7				25
Public funds	5,791.9				5,347.4				444.6				8			3,795.3				1,996.6				53
Time deposits	3,976.5				5,131.7				(1,155.2		)		(23	)		6,647.8				(2,671.3		)		(40	)
Brokered deposits	3,909.3				4,290.3				(381.0		)		(9	)		3,195.5				713.8				22
Total deposits	$	44,665.9			$	44,194.6			$	471.3			1	%		$	37,433.1			$	7,232.8			19	%
*Amounts may not total due to rounding

• Total deposits ended the quarter at $44.67 billion, up $471.3 million or 1% sequentially.
• Core transaction deposits increased $1.56 billion or 5% sequentially.
  • Broad-based growth in all categories including MMA, DDA, NOW, and savings deposits offset the $1.16 billion strategic decline in time deposits and $381.0 million decline in brokered deposits.
• 3Q20 total deposit costs of 39 bps declined by 14 bps from 2Q20.

Income Statement Summary**
(in thousands, except per share data)	3Q20				2Q20				Linked Quarter Change					Linked Quarter % Change			3Q19				Year/Year Change				Year/Year % Change
Net interest income	$	376,990			$	376,566			$	424				—	%		$	402,097			$	(25,107	)		(6	)%
Non-interest revenue	114,411				173,484				(59,073		)			(34	)		88,760				25,651				29
Non-interest expense	316,655				284,141				32,514					11			276,310				40,345				15
Provision for credit losses	43,383				141,851				(98,468		)			(69	)		27,562				15,821				57
Income before taxes	$	131,363			$	124,058			$	7,305				6	%		$	186,985			$	(55,622	)		(30	)%
Income tax expense	39,789				30,866				8,923					29			51,259				(11,470		)		(22	)
Preferred stock dividends	8,291				8,291				—					—			8,291				—				—
Net income available to common shareholders	$	83,283			$	84,901			$	(1,618	)			(2	)%		$	127,435			$	(44,152	)		(35	)%
Weighted average common shares outstanding, diluted	147,976				147,733				243					—	%		154,043				(6,067		)		(4	)%
Diluted earnings per share	$	0.56			$	0.57			$	(0.01	)			(2	)		$	0.83			$	(0.26	)		(32	)
Adjusted diluted earnings per share	0.89				0.23				0.66					286			0.97				(0.08		)		(8.7	)
** Amounts may not total due to rounding

Core Performance

• Total revenues were $492.4 million in the third quarter, down $58.6 million sequentially.
• Net interest income of $377.0 million was stable from the second quarter, benefiting from favorable trends in deposit pricing and remixing.
  • PPP fee accretion of $11.9 million, up $2.7 million from the second quarter.
• Net interest margin was 3.10%, down 3 bps from the prior quarter.
• Non-interest revenue decreased $59.1 million, or 34% sequentially, and increased $25.7 million, or 29% year-over-year. The sequential decrease was largely attributable to $69.4 million of securities gains as a result of repositioning the investment portfolio in the second quarter.
• Adjusted non-interest revenue increased $20.3 million, or 21% sequentially, and $24.4 million, or 27% year-over-year. Net mortgage revenue increased $7.7 million and core banking fees increased $4.9 million sequentially.
• Non-interest expense increased $32.5 million, or 11% sequentially. Adjusted non-interest expense decreased $7.7 million, or 3% sequentially.
  • Non-cash goodwill impairment charge of $44.9 million driven by lower rate forecast impact to mortgage reporting unit.
  • Employment expense decreased $4.6 million primarily as a result of lower commissions, lower headcount, and reduced COVID-related staffing expenses.
• Provision for credit losses of $43.4 million; allowance for credit losses coverage ratio (to loans) of 1.68%, or 1.80% excluding PPP loans.
• Tax expense was $39.8 million, an increase of $8.9 million driven by higher taxable pre-tax income.
  • Year-to-date effective tax rate of 24.95% (impacted by non-deductible goodwill impairment).

Capital Ratios
	3Q20			2Q20			3Q19
Common equity Tier 1 capital (CET1) ratio	9.30	%	*	8.90	%		8.96	%
Tier 1 capital ratio	10.58		*	10.15			10.27
Total risk-based capital ratio	13.16		*	12.70			12.30
Tier 1 leverage ratio	8.49		*	8.38			9.02
Tangible common equity ratio	7.67			7.41			8.04
* Ratios are preliminary.

Capital

• CET1 ratio improved 40 bps during the quarter to 9.30% primarily due to earnings and settlement of balance sheet activities completed in the second quarter.
• Total risk-based capital of 13.16% is the highest since 2014.

Third Quarter Earnings Conference Call

Synovus will host an earnings highlights conference call at 8:30 a.m. EDT on October 20, 2020. The earnings call will be accompanied by a slide presentation. Shareholders and other interested parties may listen to this conference call via simultaneous Internet broadcast. For a link to the webcast, go to investor.synovus.com/event. The replay will be archived for 12 months and will be available 30-45 minutes after the call.

Synovus Financial Corp. is a financial services company based in Columbus, Georgia, with approximately $53 billion in assets. Synovus provides commercial and retail banking, investment, and mortgage services through 288 branches in Alabama, Florida, Georgia, South Carolina, and Tennessee. Synovus Bank, a wholly owned subsidiary of Synovus, has been recognized as one of the country's “Most Reputable Banks” by American Banker and the Reputation Institute. Synovus is on the web at synovus.com, and on Twitter, Facebook, LinkedIn, and Instagram.

Forward-Looking Statements

This press release and certain of our other filings with the Securities and Exchange Commission contain statements that constitute “forward-looking statements” within the meaning of, and subject to the protections of, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 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,” “should,” “predicts,” “could,” “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 banking industry and economy in general. These forward-looking statements include, among others, our expectations regarding our future operating and financial performance; our expectations regarding net interest income and net interest margin; expectations on our growth strategy, expense and revenue initiatives, capital management, balance sheet management, and future profitability; expectations on credit quality and performance; and the assumptions underlying our expectations. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve known and unknown risks and uncertainties which may cause the actual results, performance or achievements of Synovus to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are based on the information known to, and 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 press release. Many of these factors are beyond Synovus’ ability to control or predict.

These forward-looking statements are based upon information presently known to Synovus’ management and are inherently subjective, uncertain and subject to change due to any number of risks and uncertainties, including, without limitation, the risks and uncertainties related to the impact of the COVID-19 pandemic on Synovus' assets, business, liquidity, financial condition, prospects and results of operations, and the risks and other factors set forth in Synovus’ filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2019, under the captions “Cautionary Notice Regarding Forward-Looking Statements” and “Risk Factors” and in Synovus’ quarterly reports on Form 10-Q and current reports on Form 8-K. We believe these forward-looking statements are reasonable; however, undue reliance should not be placed on any forward-looking statements, which are based on current expectations and speak only as of the date that they are made. We do not assume any obligation to update any forward-looking statements as a result of new information, future developments or otherwise, except as otherwise may be required by law.

Non-GAAP Financial Measures

The measures entitled adjusted non-interest revenue; adjusted non-interest expense; adjusted total revenues; adjusted tangible efficiency ratio; adjusted net income available to common shareholders; adjusted earnings per diluted share; 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 revenues; efficiency ratio-FTE; net income available to common shareholders; earnings per diluted common share; return on average assets; return on average common equity; and the ratio of total shareholders' equity to total assets, respectively.

Management believes that these non-GAAP financial measures provide meaningful additional information about Synovus to assist management and investors in evaluating Synovus’ operating results, financial strength, the performance of its business, and the strength of its capital position. However, these non-GAAP financial measures have inherent limitations as analytical tools and should not be considered in isolation or as a substitute for analyses of operating results or capital position as reported under GAAP. The non-GAAP financial measures should be considered as additional views of the way our financial measures are affected by significant items and other factors, and since they are not required to be uniformly applied, they may not be comparable to other similarly titled measures at other companies. Adjusted total revenues and adjusted non-interest revenue are measures used by management to evaluate total revenues and non-interest revenue exclusive of net investment securities gains (losses) and gains on sales and changes in the fair value of private equity investments, net. 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 earnings per diluted share, adjusted return on average assets, and adjusted return on average common equity are measures used by management to evaluate operating results exclusive of items that 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 are measures 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.

Reconciliation of Non-GAAP Financial Measures
(dollars in thousands)	3Q20				2Q20				3Q19
Adjusted non-interest revenue
Total non-interest revenue	$	114,411			$	173,484			$	88,760
Add/subtract: Investment securities losses (gains), net	1,550				(69,409		)		3,731
Subtract: Gain on sale and fair value increase of private equity investments	(260		)		(8,707		)		(1,194		)
Adjusted non-interest revenue	$	115,701			$	95,368			$	91,297
Adjusted non-interest expense
Total non-interest expense	$	316,655			$	284,141			$	276,310
Subtract: Earnout liability adjustments	—				(4,908		)		(10,457		)
Subtract: Goodwill impairment	(44,877		)		—				—
Subtract: Merger-related expense	—				—				(353		)
Subtract/add: Restructuring charges, net	(2,882		)		(2,822		)		66
Subtract: Valuation adjustment to Visa derivative	—				—				(2,500		)
Subtract: Loss on early extinguishment of debt, net	(154		)		—				(4,592		)
Adjusted non-interest expense	$	268,742			$	276,411			$	258,474
Reconciliation of Non-GAAP Financial Measures, continued
(dollars in thousands)	3Q20				2Q20				3Q19
Adjusted total revenues and adjusted tangible efficiency ratio
Adjusted non-interest expense	$	268,742			$	276,411			$	258,474
Subtract: Amortization of intangibles	(2,640		)		(2,640		)		(2,901		)
Adjusted tangible non-interest expense	$	266,102			$	273,771			$	255,573
Net interest income	$	376,990			$	376,566			$	402,097
Add: Tax equivalent adjustment	956				861				819
Add: Total non-interest revenue	114,411				173,484				88,760
Total FTE revenues	492,357				550,911				491,676
Add/subtract: Investment securities losses (gains), net	1,550				(69,409		)		3,731
Subtract: Gain on sale and fair value increase of private equity investments	(260		)		(8,707		)		(1,194		)
Adjusted total revenues	$	493,647			$	472,795			$	494,213
Efficiency ratio-FTE	64.31		%		51.58		%		56.20		%
Adjusted tangible efficiency ratio	53.91				57.91				51.71

Adjusted return on average assets
Net income	$	91,574			$	93,192			$	135,726
Add: Income tax expense, net related to State Tax Reform	—				—				4,402
Add: Earnout liability adjustments	—				4,908				10,457
Add: Goodwill impairment	44,877				—				—
Add: Merger-related expense	—				—				353
Add/subtract: Restructuring charges, net	2,882				2,822				(66		)
Add: Valuation adjustment to Visa derivative	—				—				2,500
Add: Loss on early extinguishment of debt, net	154				—				4,592
Add/subtract: Investment securities losses (gains), net	1,550				(69,409		)		3,731
Subtract: Gain on sale and fair value increase of private equity investments	(260		)		(8,707		)		(1,194		)
Subtract/add: Tax effect of adjustments	(1,122		)		19,500				(2,478		)
Adjusted net income	$	139,655			$	42,306			$	158,023
Net income annualized	$	364,305			$	374,816			$	538,478
Adjusted net income annualized	$	555,584			$	170,154			$	626,939
Total average assets	$	53,138,334			$	52,853,685			$	47,211,026
Return on average assets	0.69		%		0.71		%		1.14		%
Adjusted return on average assets	1.05				0.32				1.33
Reconciliation of Non-GAAP Financial Measures, continued
(dollars in thousands)	3Q20				2Q20				3Q19
Adjusted net income available to common shareholders and adjusted net income per common share, diluted
Net income available to common shareholders	$	83,283			$	84,901			$	127,435
Add: Income tax expense, net related to State Tax Reform	—				—				4,402
Add: Earnout liability adjustments	—				4,908				10,457
Add: Goodwill impairment	44,877				—				—
Add: Merger-related expense	—				—				353
Add/subtract: Restructuring charges, net	2,882				2,822				(66		)
Add: Valuation adjustment to Visa derivative	—				—				2,500
Add: Loss on early extinguishment of debt, net	154				—				4,592
Add/subtract: Investment securities losses (gains), net	1,550				(69,409		)		3,731
Subtract: Gain on sale and fair value increase of private equity investments	(260		)		(8,707		)		(1,194		)
Subtract/add: Tax effect of adjustments	(1,122		)		19,500				(2,478		)
Adjusted net income available to common shareholders	$	131,364			$	34,015			$	149,732
Weighted average common shares outstanding, diluted	147,976				147,733				154,043
Net income per common share, diluted	$	0.56			$	0.57			$	0.83
Adjusted net income per common share, diluted	0.89				0.23				0.97

Reconciliation of Non-GAAP Financial Measures, continued
(dollars in thousands)	3Q20				2Q20				3Q19
Adjusted return on average common equity, return on average tangible common equity, and adjusted return on average tangible common equity
Net income available to common shareholders	$	83,283			$	84,901			$	127,435
Add: Income tax expense, net related to State Tax Reform	—				—				4,402
Add: Earnout liability adjustments	—				4,908				10,457
Add: Goodwill impairment	44,877				—				—
Add: Merger-related expense	—				—				353
Add/subtract: Restructuring charges, net	2,882				2,822				(66		)
Add: Valuation adjustment to Visa derivative	—				—				2,500
Add: Loss on early extinguishment of debt, net	154				—				4,592
Add/subtract: Investment securities losses (gains), net	1,550				(69,409		)		3,731
Subtract: Gain on sale and fair value increase of private equity investments	(260		)		(8,707		)		(1,194		)
Subtract/add: Tax effect of adjustments	(1,122		)		19,500				(2,478		)
Adjusted net income available to common shareholders	$	131,364			$	34,015			$	149,732
Adjusted net income available to common shareholders annualized	$	522,600			$	136,808			$	594,045
Add: Amortization of intangibles	7,782				7,868				8,632
Adjusted net income available to common shareholders excluding amortization of intangibles annualized	$	530,382			$	144,676			$	602,677
Net income available to common shareholders annualized	$	331,322			$	341,470			$	505,585
Add: Amortization of intangibles	7,782				7,868				8,632
Net income available to common shareholders excluding amortization of intangibles annualized	$	339,104			$	349,338			$	514,217
Total average shareholders' equity less preferred stock	$	4,553,159			$	4,567,254			$	4,450,301
Subtract: Goodwill	(497,267		)		(497,267		)		(492,320		)
Subtract: Other intangible assets, net	(49,075		)		(51,667		)		(60,278		)
Total average tangible shareholders' equity less preferred stock	$	4,006,817			$	4,018,320			$	3,897,703
Return on average common equity	7.28		%		7.48		%		11.36		%
Adjusted return on average common equity	11.48				3.00				13.35
Return on average tangible common equity	8.46				8.69				13.19
Adjusted return on average tangible common equity	13.24				3.60				15.46

Reconciliation of Non-GAAP Financial Measures, continued
(dollars in thousands)	September 30, 2020				June 30, 2020				September 30, 2019
Tangible common equity ratio
Total assets	$	53,040,538			$	54,121,989			$	47,661,182
Subtract: Goodwill	(452,390		)		(497,267		)		(487,865		)
Subtract: Other intangible assets, net	(47,752		)		(50,392		)		(58,572		)
Tangible assets	$	52,540,396			$	53,574,330			$	47,114,745
Total shareholders’ equity	$	5,064,542			$	5,052,968			$	4,868,838
Subtract: Goodwill	(452,390		)		(497,267		)		(487,865		)
Subtract: Other intangible assets, net	(47,752		)		(50,392		)		(58,572		)
Subtract: Preferred Stock, no par value	(537,145		)		(537,145		)		(536,550		)
Tangible common equity	$	4,027,255			$	3,968,164			$	3,785,851
Total shareholders’ equity to total assets ratio	9.55		%		9.34		%		10.22		%
Tangible common equity ratio	7.67				7.41				8.04

INCOME STATEMENT DATA
(Unaudited)
(Dollars in thousands, except per share data)									Third Quarter
									20 vs '19
	2020				2019				% Change
Interest income	$	1,371,016			$	1,544,385			(11	)%
Interest expense	244,200				347,850				(30	)
Net interest income	1,126,816				1,196,535				(6	)
Provision for credit losses	343,956				63,250				444
Net interest income after provision for credit losses	782,860				1,133,285				(31	)
Non-interest revenue:
Service charges on deposit accounts	54,069				65,805				(18	)
Fiduciary and asset management fees	46,009				42,743				8
Card fees	30,959				34,334				(10	)
Brokerage revenue	32,987				30,502				8
Mortgage banking income	66,987				23,313				187
Capital markets income	22,984				21,557				7
Income from bank-owned life insurance	21,572				15,605				38
Investment securities gains/(losses), net	76,594				(5,502		)		nm
Gain on sale and fair value increase, net, on private equity investments	4,712				3,507				nm
Other non-interest revenue	34,879				26,081				34
Total non-interest revenue	391,752				257,945				52
Non-interest expense:
Salaries and other personnel expense	464,268				424,952				9
Net occupancy, equipment, and software expense	125,475				119,262				5
Third-party processing and other services	63,466				55,403				15
Professional fees	39,358				25,379				55
FDIC insurance and other regulatory fees	18,922				21,872				(13	)
Amortization of intangibles	7,920				8,702				(9	)
Goodwill impairment	44,877				—				nm
Merger-related expense	—				57,493				nm
Earnout liability adjustments	4,908				10,457				nm
Loss on early extinguishment of debt, net	2,057				4,592				nm
Valuation adjustment to Visa derivative	—				2,500				nm
Restructuring charges	8,924				(29		)		nm
Other operating expenses	96,901				102,264				(5	)
Total non-interest expense	877,076				832,847				5
Income before income taxes	297,536				558,383				(47	)
Income tax expense	74,250				146,287				(49	)
Net income	223,286				412,096				(46	)
Less: Preferred stock dividends	24,872				14,591				70
Net income available to common shareholders	$	198,414			$	397,505			(50	)%
Net income per common share, basic	$	1.35			$	2.53			(47	)%
Net income per common share, diluted	1.34				2.51				(47	)
Cash dividends declared per common share	0.99				0.90				10
Return on average assets *	0.58		%		1.18		%		(60)	bps
Return on average common equity *	5.87				12.09				(622	)
Weighted average common shares outstanding, basic	147,304				156,819				(6	)%
Weighted average common shares outstanding, diluted	148,037				158,595				(7	)
nm - not meaningful
bps - basis points
* - ratios are annualized

Synovus
	INCOME STATEMENT DATA
	(Unaudited)
	(Dollars in thousands, except per share data)	2020									2019						Third Quarter
		Third Quarter				Second Quarter		First Quarter			Fourth Quarter			Third Quarter			20 vs '19
																	% Change
	Interest income	$	435,550			451,569		483,897			506,253			523,415			(17	)%
	Interest expense	58,560				75,003		110,637			106,985			121,318			(52	)
	Net interest income	376,990				376,566		373,260			399,268			402,097			(6	)
	Provision for credit losses	43,383				141,851		158,722			24,470			27,562			57
	Net interest income after provision for credit losses	333,607				234,715		214,538			374,798			374,535			(11	)
	Non-interest revenue:
	Service charges on deposit accounts	17,813				15,567		20,689			22,385			22,952			(22	)
	Fiduciary and asset management fees	15,885				14,950		15,174			15,645			14,686			8
	Card fees	10,823				9,186		10,950			11,325			12,297			(12	)
	Brokerage revenue	10,604				9,984		12,398			11,106			11,071			(4	)
	Mortgage banking income	31,229				23,530		12,227			9,287			10,351			202
	Capital markets income	5,690				6,050		11,243			8,972			7,396			(23	)
	Income from bank-owned life insurance	7,778				7,756		6,038			5,620			5,139			51
	Investment securities (losses)/gains, net	(1,550		)		69,409		8,734			(2,157	)		(3,731	)		nm
	Gain on sale and fair value increase/(decrease) on private equity investments	260				8,707		(4,255	)		8,100			1,194			nm
	Other non-interest revenue	15,879				8,345		10,659			7,672			7,405			114
	Total non-interest revenue	114,411				173,484		103,857			97,955			88,760			29
	Non-interest expense:
	Salaries and other personnel expense	154,994				159,597		149,678			145,084			142,516			9
	Net occupancy, equipment, and software expense	41,554				41,727		42,194			42,644			41,017			1
	Third-party processing and other services	20,620				21,366		21,480			20,293			18,528			11
	Professional fees	13,377				15,305		10,675			9,921			9,719			38
	FDIC insurance and other regulatory fees	6,793				6,851		5,278			9,825			7,242			(6	)
	Amortization of intangibles	2,640				2,640		2,640			2,901			2,901			(9	)
	Goodwill impairment	44,877				—		—			—			—			nm
	Merger-related expense	—				—		—			(913	)		353			nm
	Earnout liability adjustments	—				4,908		—			—			10,457			nm
	Loss on early extinguishment of debt, net	154				—		1,904			—			4,592			nm
	Valuation adjustment to Visa derivative	—				—		—			1,111			2,500			nm
	Restructuring charges	2,882				2,822		3,220			1,259			(66	)		nm
	Other operating expenses	28,764				28,925		39,210			33,996			36,551			(21	)
	Total non-interest expense	316,655				284,141		276,279			266,121			276,310			15
	Income before income taxes	131,363				124,058		42,116			206,632			186,985			(30	)
	Income tax expense	39,789				30,866		3,595			54,948			51,259			(22	)
	Net income	91,574				93,192		38,521			151,684			135,726			(33	)
	Less: Preferred stock dividends	8,291				8,291		8,291			8,291			8,291			—
	Net income available to common shareholders	$	83,283			84,901		30,230			143,393			127,435			(35	)%
	Net income per common share, basic	$	0.57			0.58		0.21			0.98			0.84			(32	)%
	Net income per common share, diluted	0.56				0.57		0.20			0.97			0.83			(32	)
	Cash dividends declared per common share	0.33				0.33		0.33			0.30			0.30			10
	Return on average assets *	0.69		%		0.71		0.32			1.27			1.14			(45)	bps
	Return on average common equity *	7.28				7.48		2.75			13.08			11.36			(408	)
	Weighted average common shares outstanding, basic	147,314				147,288		147,311			146,948			152,238			(3	)%
	Weighted average common shares outstanding, diluted	147,976				147,733		148,401			148,529			154,043			(4	)
	nm - not meaningful
	bps - basis points
	* - ratios are annualized

Synovus
	BALANCE SHEET DATA		September 30, 2020				December 31, 2019				September 30, 2019
	(Unaudited)
	(In thousands, except share data)
	ASSETS
	Cash and due from banks		$	578,026			$	535,846			$	611,496
	Interest-bearing funds with Federal Reserve Bank		1,266,313				553,390				480,913
	Interest earning deposits with banks		20,929				20,635				20,086
	Federal funds sold and securities purchased under resale agreements		120,095				77,047				69,975
	Cash and cash equivalents		1,985,363				1,186,918				1,182,470
	Investment securities available for sale, at fair value		7,566,525				6,778,670				6,892,162
	Loans held for sale ($285,899, $115,173, and $129,415 measured at fair value, respectively)		745,160				115,173				129,415
	Loans, net of deferred fees and costs		39,549,847				37,162,450				36,417,826
	Allowance for loan losses		(603,800		)		(281,402		)		(265,013		)
	Loans, net		38,946,047				36,881,048				36,152,813
	Cash surrender value of bank-owned life insurance		1,044,046				775,665				771,458
	Premises and equipment, net		471,208				493,940				487,053
	Goodwill		452,390				497,267				487,865
	Other intangible assets, net		47,752				55,671				58,572
	Other assets		1,782,047				1,418,930				1,499,374
	Total assets		$	53,040,538			$	48,203,282			$	47,661,182
	LIABILITIES AND SHAREHOLDERS' EQUITY
	Liabilities:
	Deposits:
	Non-interest-bearing deposits		$	13,075,081			$	9,439,485			$	9,586,148
	Interest-bearing deposits		31,590,823				28,966,019				27,846,922
	Total deposits		44,665,904				38,405,504				37,433,070
	Federal funds purchased and securities sold under repurchase agreements		202,344				165,690				197,419
	Other short-term borrowings		400,000				1,753,560				2,233,593
	Long-term debt		1,628,385				2,153,897				2,153,600
	Other liabilities		1,079,363				782,941				774,662
	Total liabilities		47,975,996				43,261,592				42,792,344
	Shareholders' equity:
	Preferred stock - no par value. Authorized 100,000,000 shares; issued 22,000,000		537,145				537,145				536,550
	Common stock - $1.00 par value. Authorized 342,857,143 shares; issued 167,410,950, 166,800,623, and 166,201,048; outstanding 147,317,923, 147,157,596, and 147,594,000		167,411				166,801				166,201
	Additional paid-in capital		3,832,142				3,819,336				3,801,158
	Treasury stock, at cost – 20,093,027, 19,643,027, and 18,607,048 shares		(731,806		)		(715,560		)		(680,081		)
	Accumulated other comprehensive income, net		174,914				65,641				75,933
	Retained earnings		1,084,736				1,068,327				969,077
	Total shareholders’ equity		5,064,542				4,941,690				4,868,838
	Total liabilities and shareholders' equity		$	53,040,538			$	48,203,282			$	47,661,182

Synovus
	AVERAGE BALANCES AND YIELDS/RATES (1)
	(Unaudited)		2020										2019
	(Dollars in thousands)
			Third			Second			First				Fourth			Third
			Quarter			Quarter			Quarter				Quarter			Quarter
	Interest Earning Assets
	Investment securities (2) (4)		$	7,227,400		6,618,533			6,680,047				6,696,768			6,831,036
	Yield		2.39		%	2.72			3.09				3.12			3.14
	Trading account assets (5)		$	5,391		6,173			6,306				7,986			5,519
	Yield		1.69		%	2.19			2.70				2.69			4.01
	Commercial loans (3) (4)		$	30,730,135		30,236,919			27,607,343				26,698,202			26,567,719
	Yield		3.80		%	3.95			4.57				4.82			5.09
	Consumer loans (3)		$	9,032,437		9,899,172			9,985,702				9,809,832			9,633,603
	Yield		4.08		%	4.34			4.60				5.07			5.08
	Allowance for loan losses		$	(591,098	)	(498,545	)		(368,033	)			(269,052	)		(258,024	)
	Loans, net (3)		$	39,171,474		39,637,546			37,225,012				36,238,982			35,943,298
	Yield		3.92		%	4.08			4.62				4.93			5.13
	Mortgage loans held for sale		$	244,952		221,157			86,415				117,909			99,556
	Yield		2.92		%	3.09			3.67				3.77			3.93
	Other loans held for sale		$	493,940		19,246			—				—			475
	Yield		3.61		%	4.19			—				—			—
	Federal funds sold, due from Federal Reserve Bank, and other short-term investments		$	1,265,880		1,709,086			652,130				514,635			513,160
	Yield		0.11		%	0.11			1.02				1.71			2.08
	Federal Home Loan Bank and Federal Reserve Bank Stock (5)		$	200,923		247,801			284,082				278,586			254,994
	Yield		2.73		%	3.60			3.38				2.85			3.85
	Total interest earning assets		$	48,609,960		48,459,542			44,933,992				43,854,866			43,648,038
	Yield		3.58		%	3.75			4.33				4.60			4.78
	Interest-Bearing Liabilities
	Interest-bearing demand deposits		$	7,789,095		7,260,940			6,445,986				6,381,282			6,138,810
	Rate		0.19		%	0.21			0.51				0.60			0.69
	Money Market accounts		$	13,272,972		12,238,479			11,548,014				10,526,296			10,138,783
	Rate		0.36		%	0.46			1.00				1.13			1.26
	Savings deposits		$	1,114,956		1,036,024			926,822				915,640			900,366
	Rate		0.02		%	0.02			0.05				0.05			0.05
	Time deposits under $100,000		$	1,379,923		1,621,943			1,761,741				1,873,350			2,100,492
	Rate		1.03		%	1.43			1.64				1.27			1.39
	Time deposits over $100,000		$	3,863,821		4,772,555			5,051,705				5,198,266			5,957,691
	Rate		1.44		%	1.80			2.04				1.51			1.69
	Other brokered deposits		$	1,912,114		1,998,571			1,376,669				1,156,131			993,078
	Rate		0.23		%	0.25			1.42				1.84			2.47
	Brokered time deposits		$	2,232,940		2,244,429			2,166,496				2,121,069			2,119,149
	Rate		1.59		%	1.86			2.11				2.16			2.27
	Total interest-bearing deposits		$	31,565,821		31,172,941			29,277,433				28,172,034			28,348,369
	Rate		0.54		%	0.73			1.18				1.16			1.32
	Federal funds purchased and securities sold under repurchase agreements		$	180,342		250,232			167,324				192,731			221,045
	Rate		0.09		%	0.12			0.30				0.24			0.22
	Other short-term borrowings		$	46,739		550,000			1,384,362				1,565,507			1,307,370
	Rate		1.12		%	1.23			1.66				1.87			2.31
	Long-term debt		$	2,234,665		2,834,188			2,678,651				2,153,983			2,286,221
	Rate		2.71		%	2.36			2.78				3.07			3.32
	Total interest-bearing liabilities		$	34,027,567		34,807,361			33,507,770				32,084,255			32,163,005
	Rate		0.68		%	0.86			1.30				1.30			1.47
	Non-interest-bearing demand deposits		$	12,773,676		11,923,534			9,409,774				9,706,784			9,365,776
	Cost of funds		0.50		%	0.65			1.04				1.02			1.16
	Net interest margin		3.10		%	3.13			3.37				3.65			3.69
	Taxable equivalent adjustment (4)		$	956		861			786				769			819
	(1) Yields and rates are annualized.
	(2) Excludes net unrealized gains and losses.
	(3) Average loans are shown net of unearned income. Non-performing loans are included.
	(4) Reflects taxable-equivalent adjustments, using the statutory federal income tax rate of 21%, in adjusting interest on tax-exempt loans and investment securities to a taxable-equivalent basis.
	(5) Included as a component of other assets on the consolidated balance sheet.

Synovus
LOANS OUTSTANDING BY TYPE
(Unaudited)
(Dollars in thousands)
		Total Loans				Total Loans					Linked Quarter			Total Loans					Year/Year
Loan Type		September 30, 2020				June 30, 2020					% Change			September 30, 2019					% Change
Commercial, Financial, and Agricultural		$	13,120,038			$	13,136,696				—	%		$	9,846,830				33	%
Owner-Occupied		6,894,113				6,801,580					1			6,571,485					5
Total Commercial & Industrial		20,014,151				19,938,276					—			16,418,315					22
Multi-Family		2,365,118				2,252,820					5			2,063,808					15
Hotels		1,409,424				1,364,511					3			1,267,790					11
Office Buildings		2,313,346				2,297,721					1			2,161,258					7
Shopping Centers		1,698,993				1,738,504					(2	)		1,699,656					—
Warehouses		730,253				781,252					(7	)		673,780					8
Other Investment Property		1,145,313				1,012,392					13			977,253					17
Total Investment Properties		9,662,447				9,447,200					2			8,843,545					9
1-4 Family Construction		180,406				229,999					(22	)		288,897					(38	)
1-4 Family Investment Mortgage		474,632				466,809					2			516,859					(8	)
Total 1-4 Family Properties		655,038				696,808					(6	)		805,756					(19	)
Commercial Development		111,493				112,539					(1	)		124,213					(10	)
Residential Development		260,313				270,952					(4	)		218,991					19
Land Acquisition		276,584				300,036					(8	)		320,485					(14	)
Land and Development		648,390				683,527					(5	)		663,689					(2	)
Total Commercial Real Estate		10,965,875				10,827,535					1			10,312,990					6
Consumer Mortgages		5,658,525				5,811,376					(3	)		5,470,730					3
Home Equity Lines		1,615,207				1,710,264					(6	)		1,675,092					(4	)
Credit Cards		264,829				250,448					6			267,874					(1	)
Other Consumer Loans		1,130,237				1,474,583					(23	)		2,295,486					(51	)
Total Consumer		8,668,798				9,246,671					(6	)		9,709,182					(11	)
Unearned Income		(98,977		)		(98,185		)			1			(22,661		)			337
Total		$	39,549,847			$	39,914,297				(1	)%		$	36,417,826				9	%
NON-PERFORMING LOANS COMPOSITION
(Unaudited)		Total Non-performing Loans				Total Non-performing Loans					Linked Quarter			Total Non-performing Loans					Year/Year
(Dollars in thousands)
Loan Type		September 30, 2020				June 30, 2020					% Change			September 30, 2019					% Change
Commercial, Financial, and Agricultural		$	95,365			$	83,000				15	%		$	73,672				29	%
Owner-Occupied		20,261				19,605					3			9,222					120
Total Commercial & Industrial		115,626				102,605					13			82,894					39
Multi-Family		157				—					nm			—					nm
Office Buildings		27,608				836					nm			290					nm
Shopping Centers		257				409					(37	)		140					84
Other Investment Property		238				393					(39	)		—					nm
Total Investment Properties		28,260				1,638					nm			430					nm
1-4 Family Construction		1,556				2,593					(40	)		698					123
1-4 Family Investment Mortgage		1,815				1,844					(2	)		1,520					19
Total 1-4 Family Properties		3,371				4,437					(24	)		2,218					52
Commercial Development		833				840					(1	)		87					nm
Residential Development		648				685					(5	)		1,526					(58	)
Land Acquisition		910				1,042					(13	)		1,419					(36	)
Land and Development		2,391				2,567					(7	)		3,032					(21	)
Total Commercial Real Estate		34,022				8,642					294			5,680					499
Consumer Mortgages		7,433				17,438					(57	)		10,015					(26	)
Home Equity Lines		10,297				14,200					(27	)		12,590					(18	)
Other Consumer Loans		1,459				4,552					(68	)		4,736					(69	)
Total Consumer		19,189				36,190					(47	)		27,341					(30	)
Total		$	168,837			$	147,437				15	%		$	115,915				46	%

Synovus
	CREDIT QUALITY DATA
	(Unaudited)
	(Dollars in thousands)		2020								2019				Third Quarter
			Third				Second		First		Fourth		Third		20 vs '19
			Quarter				Quarter		Quarter		Quarter		Quarter		% Change
	Non-performing Loans (NPLs)		$	168,837			147,437		156,287		101,636		115,915		46	%
	Other Real Estate and Other Assets		23,280				30,242		33,679		35,810		35,400		(34	)
	Non-performing Assets (NPAs)		192,117				177,679		189,966		137,446		151,315		27
	Allowance for Loan Losses (ALL)		603,800				588,648		493,452		281,402		265,013		128
	Reserve for Unfunded Commitments		60,794				61,029		38,420		1,375		1,496		nm
	Allowance for Credit Losses (ACL)		664,594				649,677		531,872		282,777		266,509		149
	Net Charge-Offs - Quarter		28,466				24,046		20,061		8,821		19,925
	Net Charge-Offs - YTD		72,573				44,107		20,061		57,612		48,792
	Net Charge-Offs / Average Loans - Quarter (1)		0.29		%		0.24		0.21		0.10		0.22
	Net Charge-Offs / Average Loans - YTD (1)		0.25				0.23		0.21		0.16		0.18
	NPLs / Loans		0.43				0.37		0.41		0.27		0.32
	NPAs / Loans, ORE and specific other assets		0.49				0.44		0.50		0.37		0.42
	ACL/Loans		1.68				1.63		1.39		0.76		0.73
	ALL/Loans		1.53				1.47		1.29		0.76		0.73
	ACL/NPLs		393.63				440.65		340.32		278.23		229.92
	ALL/NPLs		357.62				399.25		315.74		276.87		228.63
	Past Due Loans over 90 days and Still Accruing		$	5,157			8,391		6,398		15,943		15,660		(67	)
	As a Percentage of Loans Outstanding		0.01		%		0.02		0.02		0.04		0.04
	Total Past Due Loans and Still Accruing		$	53,177			46,390		83,235		123,793		88,219		(40	)
	As a Percentage of Loans Outstanding		0.13		%		0.12		0.22		0.33		0.24
	Accruing Troubled Debt Restructurings (TDRs)		$	163,511			166,461		160,128		133,145		130,019		26
	(1) Ratio is annualized.
	SELECTED CAPITAL INFORMATION (1)
	(Unaudited)
	(Dollars in thousands)
			September 30, 2020				December 31, 2019		September 30, 2019
	Tier 1 Capital		$	4,454,365			4,280,604		4,196,628
	Total Risk-Based Capital		5,541,385				5,123,381		5,023,138
	Common Equity Tier 1 Capital Ratio		9.30		%		8.95		8.96
	Tier 1 Capital Ratio		10.58				10.23		10.27
	Total Risk-Based Capital Ratio		13.16				12.25		12.30
	Tier 1 Leverage Ratio		8.49				9.16		9.02
	Common Equity as a Percentage of Total Assets (2)		8.54				9.14		9.09
	Tangible Common Equity Ratio (3) (5)		7.67				8.08		8.04
	Book Value Per Common Share (4)		$	30.73			29.93		29.35
	Tangible Book Value Per Common Share (3)		27.34				26.17		25.65
	(1) Current quarter regulatory capital information is preliminary.
	(2) Common equity consists of Total Shareholders' Equity less Preferred Stock.
	(3) Excludes the carrying value of goodwill and other intangible assets from common equity and total assets.
	(4) Book Value Per Common Share consists of Total Shareholders' Equity less Preferred Stock divided by total common shares outstanding.
	(5) See "Non-GAAP Financial Measures" of this report for applicable reconciliation.