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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

_______________________
 
FORM 10-K
_______________________

☒ Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 20182021
Commission file number 1-10312
_______________________

syn-20211231_g1.jpg

SYNOVUS FINANCIAL CORP.
(Exact name of registrant as specified in its charter)

_______________________
 
Georgia58-1134883
(State or other jurisdiction ofincorporation or organization)
   (I.R.S. EmployerIdentification No.)
1111 Bay Avenue
Suite 500, Columbus, Georgia
31901
Suite 500,Columbus,Georgia31901
(Address of principal executive offices)(Zip Code)

Registrant’s telephone number, including area code: (706) 649-2311641-6500
_______________________
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 Value
Series B Participating Cumulative Preferred
SNVNew York Stock Purchase Rights
Exchange
Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series D
SNV - PrD
New York Stock Exchange
Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series ESNV - PrENew York Stock Exchange
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: NONE


_______________________
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    YES Yes x  NO    No  ¨
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.    YES  Yes  ¨    NO      No  x
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  Yes  x NO   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  Yes  x   NO     No  ¨
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  x
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check One):
Large accelerated filer☒Accelerated filer☐
Large accelerated filerxAccelerated filer¨
Non-accelerated filer
¨
☐		Smaller 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 has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.   ☑
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES  ¨    NO Yes  ☐    No x
As of June 30, 2018,2021, the aggregate market value of the registrant’s Common Stock held by non-affiliates of the registrant was approximately $5,797,502,812$6,104,918,737 based on the closing sale price of $52.83$43.88 reported on the New York Stock Exchange on June 30, 2018.
2021.
As of February 26, 2019,23, 2022, there were 159,145,739145,463,669 shares of the registrant’s Common Stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Incorporated DocumentsForm 10-K Reference Locations
Portions of the Proxy Statement for the Annual Meeting of Shareholders to be held April 24, 201927, 2022 (“Proxy Statement”)Part III




Table of Contents
 
Page
i
1
3
16
2927
2927
2927
Item 4. Mine Safety Disclosures
29125
3028
3229
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
3330
6660
6861
130125
130125
130125
125
131126
131126
131126
131126
132127
133128






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 (applies to debt securities, loans, and unfunded loan commitments)
ALCO – Synovus' Asset Liability Management Committee
ALL – Allowance for loan losses
AOCI – Accumulated other comprehensive income (loss)
ARRC – Alternative Reference Rates Committee
ASC – Accounting Standards Codification
ASRASC 310-30 loans – Accelerated share repurchaseLoans accounted for in accordance with ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality
ASU – Accounting Standards Update
ATM – Automatic teller machine
Azalea Merger Sub – Azalea Merger Sub Corp., a wholly-owned subsidiary of Synovus which was formed for the express and limited purpose of the Merger
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 policies
BHC Act – Bank Holding Company Act of 1956, as amended
BSA/AMLBOLI – Bank Secrecy Act/Anti-Money LaunderingBank-owned life insurance policies
bp(s) – Basis point(s)
BOV – Broker’s opinion of value
BSBY – Bloomberg Short-Term Bank Yield Index
C&I – Commercial and industrial
CARES Act – The Coronavirus Aid, Relief, and Economic Security Act
CDI – Core Deposit Intangible
CECL – Current expected credit losses
CET1 – Common Equity Tier 1 Capital defined by Basel III capital rules
CFPB – Consumer Finance Protection Bureau
CMO – Collateralized Mortgage Obligation
Cabela’s Transaction – The transaction completed on September 25, 2017 whereby Synovus Bank acquired certain assets and assumed certain liabilities of World's Foremost Bank ("WFB") and then immediately thereafter sold WFB’s credit card assets and certain related liabilities to Capital One Bank (USA), National Association.  As a part of this transaction, Synovus Bank retained WFB’s $1.10 billion brokered time deposit portfolio and received a $75.0 million fee from Cabela’s Incorporated and Capital One.  Throughout this Report, we refer to this transaction as the “Cabela’s Transaction” and the associated $75.0 million fee received from Cabela’s and Capital One as the “Cabela’s Transaction Fee”
Code – Internal Revenue Code
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
DEI – Diversity, equity and inclusion
DIF – Deposit Insurance Fund
Dodd-Frank Act – The Dodd-Frank Wall Street Reform and Consumer Protection Act
i

DRR – Dual Risk Rating
EL – Expected loss
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
FCB – FCB Financial Holdings, Inc. and its wholly-owned subsidiaries, except where the context requires otherwise

FCB Merger – The January 1, 2019 merger of FCB into Synovus, with Synovus as the surviving entity
i


FDIC – Federal Deposit Insurance Corporation
FDICIA –Federal Deposit Insurance Corporation Improvement Act of 1991
Federal Reserve Bank – TheOne of the 12 banks that are the operating arms of the U.S. central bank. They implement the policies of the Federal Reserve Board, supervise bank holding companies and certain banking institutions, and also conduct economic research
Federal Reserve Board – The 7-member Board of Governors that oversees the Federal Reserve System, establishes monetary policy (interest rates, credit, etc.), and monitors the economic health of the country. Its members are appointed by the President subject to Senate confirmation, and serve 14-year terms
Federal Reserve System or Federal Reserve – The Federal Reserve Board, plus the 12 Federal Reserve Banks, with each one serving member banks in its own district. This system, supervised by theThe Federal Reserve Board, has broad regulatory powers over the money supply and the credit structure
Federal Tax Reform – Enactment of H.R. 1, formerly known as the Tax Cuts and Jobs Act, on December 22, 2017, legislation in which a number of changes were made under the Internal Revenue Code, including a reduction of the corporate income tax rate, significant limitations on the deductibility of interest, allowance of the expensing of capital expenditures, limitation on deductibility of FDIC insurance premiums, and limitation of the deductibility of certain performance-based compensation, among otherseconomy
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
FinCEN – The Treasury's financial crimes enforcement network
FINRA – Financial Industry Regulatory Authority
FMS – Financial Management Services, a division of Synovus Bank
FOMC – Federal Open Market Committee
FRB – Federal Reserve Bank
FTP – Funds transfer pricing
GA DBF – Georgia Department of Banking and Finance
GAAP – Generally Accepted Accounting Principles in the United States of America
GGL – Government guaranteed loans
GLB –Gramm-Leach-Biley Act
Global One – Entaire Global Companies, Inc., the parent company of Global One Financial, Inc., as acquired by Synovus on October 1, 2016. Throughout this Report, we refer to this acquisition as "Global One"in 2016
GSE – Government sponsored enterprise
HELOC – Home equity line of 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
IPRE – Income-producing real estate
IRS – Internal Revenue Service
ii

ISO – Independent sales organization
LGD – Loss given default
LIBOR – London Interbank Offered Rate
LIHTC – Low Income Housing Tax Credit
LTV – Loan-to-collateral value ratio
Merger AgreementMaast – Agreement and PlanOur digital banking as a service solution, expected to launch in the second quarter of Merger by and among Synovus, FCB and Azalea Merger Sub dated as of July 23, 20182022
Merger – The January 1, 2019 merger of Azalea Merger Sub with and into FCB and immediately thereafter, the merger of FCB with and into Synovus, with Synovus as the surviving entity pursuant to the terms and conditions of the Merger Agreement.
MBS – Mortgage-backed securities
MPS – Merchant processing servicer(s)
nm – Not meaningful
NAICS – North American Industry Classification System
nm – Not meaningful
NOL – Net operating loss

ii


NPA – Non-performing assets
NPL – Non-performing loans
NSF – Non-sufficient funds
NYSE – New York Stock Exchange
OCI – Other comprehensive income
OCC – Office of the Comptroller of the Currency
OFAC – Office of Foreign Assets Control
ORE – Other real estate
OTTIP&I – Other-than-temporary impairmentPrincipal and interest
Parent Company – Synovus Financial Corp.
ROA PCAOB – Public Company Accounting Oversight Board
PCD – Purchased credit deteriorated
PCI – Purchased credit impaired
PD – Probability of default
PPP –Paycheck Protection Program established as part of the CARES Act and launched on April 3, 2020 by the SBA and Treasury
ROAA – Return on average assets
Rights Plan – Synovus' Shareholder Rights Plan dated April 26, 2010, as amended
ROTCE ROATCE – Return on average tangible common equity
ROU – Right-of-use
RSU – Restricted share unit
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 C Preferred Stock – Synovus' Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series C, $25 liquidation preference
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
iii

SRR – Single Risk Rating
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' 2018 Form 10-KSynovus Forward – Synovus' Annual Report on Form 10-K for the year ended December 31, 2018revenue growth and expense efficiency initiatives announced in January of 2020
Synovus Mortgage – Synovus Mortgage Corp., a wholly-owned subsidiary of Synovus Bank
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
Treasury – United States Department of the Treasury
UDAAPTSR – Unfair, deceptive or abusive acts or practicesTotal shareholder return
UPB – Unpaid principal balance
VIE – Variable interest entity (as defined in ASC 810-10)
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
Warrant – A warrant issued to Treasury by Synovus to purchase up to 2,215,819 shares of Synovus common stock at a per share exercise price of $65.52, as was issued by Synovus to Treasury in 2008 in connection with the Capital Purchase Program, promulgated under the Emergency Economic Stabilization Act of 2008. The Warrant expired on December 19, 2018.

iii


WFB – World's Foremost Bank, a wholly-owned subsidiary of Cabela's Incorporated

iv



Part I
In this Report, the words “Synovus,” “the Company,” “we,” “us,” and “our” refer to Synovus Financial Corp. together with Synovus Bank and Synovus' other wholly-owned subsidiaries, except where the context requires otherwise.
FORWARD-LOOKING STATEMENTS
Certain statements made or incorporated by reference in this Report which are not statements of historical fact, including those under “Management's Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere in this Report, constitute forward-looking statements within the meaning of, and subject to the protections of, Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements include statements with respect to Synovus' beliefs, plans, objectives, goals, targets, expectations, anticipations, assumptions, estimates, intentions and future performance and involve known and unknown risks, many of which are beyond Synovus' control and which may cause Synovus' actual results, performance or achievements or the financial services industry or economy generally, to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements.
All statements other than statements of historical fact are forward-looking statements. You can identify these forward-looking statements through Synovus' use of words such as “believes,” “anticipates,” “expects,” “may,” “will,” “assumes,” “predicts,” “could,” “should,” “would,” “intends,” “targets,” “estimates,” “projects,” “plans,” “potential” and other similar words and expressions of the future or otherwise regarding the outlook for Synovus' future business and financial performance and/or the performance of the financial services industry and economy in general. Forward-looking statements are based on the current beliefs and expectations of Synovus' management and are subject to significant risks and uncertainties. Actual results may differ materially from those contemplated by such forward-looking statements. A number of factors could cause actual results to differ materially from those contemplated by the forward-looking statements in this document. Many of these factors are beyond Synovus' ability to control or predict. These factors include, but are not limited to:
(1)the risk that competition in the financial services industry may adversely affect our future earnings and growth;
(2)the risk that we may not realize the expected benefits from our efficiency and growth initiatives, which could negatively affect our future profitability;
(3)the risk that we may fail to realize all of the anticipated benefits of the Merger, or those benefits may take longer to realize than expected, and that we may encounter significant difficulties in integrating FCB;
(4)the risk that our current and future information technology system enhancements and operational initiatives may not be successfully implemented, which could negatively impact our operations;
(5)the risk that our enterprise risk management framework, our compliance program, or our corporate governance and supervisory oversight functions may not identify or address risks adequately, which may result in unexpected losses;
(6)the risk that our asset quality may deteriorate, our allowance for loan losses may prove to be inadequate or may be negatively affected by credit risk exposures, and the risk that we may be unable to obtain full payment in respect of any trade or other receivables;
(7)the risk that any future economic downturn could have a material adverse effect on our capital, financial condition, results of operations and future growth;
(8)our ability to attract and retain key employees;
(9)the risk that we may be required to make substantial expenditures to keep pace with regulatory initiatives and the rapid technological changes in the financial services market;
(10)risks related to our business relationships with, and reliance upon, third parties that have strategic partnerships with us or that provide key components of our business infrastructure, including the costs of services and products provided to us by third parties, and risks related to disruptions in service or financial difficulties with a third-party vendor or business relationship;
(11)risks related to the ability of our operational framework to identify and manage risks associated with our business such as credit risk, compliance risk, reputational risk, and operational risk, including by virtue of our relationships with third-party business partners, as well as our relationship with third-party vendors and other service providers;
(12)our ability to identify and address cyber-security risks such as data security breaches, malware, "denial of service" attacks, "hacking" and identity theft, a failure of which could disrupt our business and result in the disclosure of and/or misuse or misappropriation of confidential or proprietary information, disruption or damage of our systems, increased costs, significant losses, or adverse effects to our reputation;
(13)the risk related to our implementation of new lines of business or new products and services;
(14)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;
(15)the impact of recent and proposed changes in governmental policy, laws and regulations, including proposed and recently enacted changes 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;

(1)the risk that competition in the financial services industry, including competition from nontraditional banking institutions such as Fintechs, may adversely affect our future earnings and growth;

(2)the risk that we may not realize the expected benefits from our strategic initiatives or that we may not be able to realize growth and efficiency gains in the time period expected, which could negatively affect our future profitability;

(3)our ability to attract and retain employees and the impact of senior leadership transitions that are key to our strategic initiatives;
(16)the risk that we may be exposed to potential losses in the event of fraud and/or theft, or in the event that a third-party vendor, obligor, or business partner fails to pay amounts due to us under that relationship or under any arrangement that we enter into with them;
(17)the risk that we may not be able to identify suitable bank and non-bank acquisition opportunities as part of our growth strategy and even if we are able to identify attractive acquisition opportunities, we may not be able to complete such transactions on favorable terms or realize the anticipated benefits from such acquisitions;
(18)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;
(19)changes in the cost and availability of funding due to changes in the deposit market and credit market;
(20)the risks that if economic conditions worsen or regulatory capital rules are modified, we may be required to undertake initiatives to improve our capital position;
(21)restrictions or limitations on access to funds from historical and alternative sources of liquidity could adversely affect our overall liquidity, which could restrict our ability to make payments on our obligations and our ability to support asset growth and sustain our operations and the operations of Synovus Bank;
(22)the risk that we could realize losses if we sell non-performing assets and the proceeds we receive are lower than the carrying value of such assets;
(23)our ability to receive dividends from our subsidiaries could affect our liquidity, including our ability to pay dividends or take other capital actions;
(24)risks related to regulatory approval to take certain actions, including any dividends on our common stock or Series D Preferred Stock, any repurchases of common stock or any other issuance or redemption of any other regulatory capital instruments;
(25)risks relation to the continued use, availability and reliability of LIBOR and other “benchmark” rates;
(26)the risk that Federal Tax Reform could have an adverse impact on our business or our customers, including with respect to demand and pricing for our loan products;
(27)the costs and effects of litigation, investigations, inquiries or similar matters, or adverse facts and developments related thereto;
(28)risks related to the fluctuation in our stock price;
(29)the effects of any damages to our reputation resulting from developments related to any of the items identified above; and
(30)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 I - Item 1A. Risk Factors" of this Report.

(4)risks related to our strategic implementation of new lines of business, new products and services, and new technologies and an expansion of our existing business opportunities with a renewed focus on innovation;
(5)the risk that we may be required to make substantial expenditures to keep pace with regulatory initiatives and the rapid technological changes in the financial services market;
(6)the risks and uncertainties related to the impact of the continuing COVID-19 pandemic on our assets, business, capital and liquidity, financial condition, prospects and results of operations;
(7)the impact of recent and proposed changes in governmental policy, laws and regulations, proposed and recently enacted changes in monetary policy and in the regulation and taxation of banks and financial institutions, or the interpretation or application thereof and the uncertainty of future implementation and enforcement of these regulations, including the risk of inflationary pressure and interest rate increases;
(8)changes in the interest rate environment, including changes to the federal funds rate, and competition in our primary market area may result in increased funding costs or reduced earning assets yields, thus reducing margins and net interest income;
(9)the risk that prolonged periods of inflation could have on our business, profitability and our stock price;
(10)the risk that a future economic downturn and contraction could have a material adverse effect on our capital, financial condition, credit quality, results of operations and future growth, including the risk that the strength of the current economic recovery could be weakened by the continued impact of COVID-19 and by current supply chain challenges;
(11)the risk that our current and future information technology system enhancements and operational initiatives may not be successfully implemented, which could negatively impact our operations;
(12)risks related to our business relationships with, and reliance upon, third parties that have strategic partnerships with us or that provide key components of our business infrastructure, including the costs of services and products provided to us by third parties, and risks related to disruptions in service or financial difficulties with a third-party vendor or business relationship;
(13)the risk that our enterprise risk management framework, our compliance program, or our corporate governance and supervisory oversight functions may not identify or address risks adequately, which may result in unexpected losses;

1

(14)risks that our asset quality may deteriorate or that our allowance for credit losses may prove to be inadequate or may be negatively affected by credit risk exposures;
(15)risks related to the ability of our operational framework to identify and manage risks associated with our business such as credit risk, compliance risk, reputational risk, and operational risk, including by virtue of our relationships with third-party business partners, as well as our relationship with third-party vendors and other service providers;
(16)the risk that we may be exposed to potential losses in the event of fraud and/or theft, or in the event that a third-party vendor, obligor, or business partner fails to pay amounts due to us under that relationship or under any arrangement that we enter into with them;
(17)our ability to identify and address cyber-security risks such as data security breaches, malware, "denial of service" attacks, "hacking" and identity theft, a failure of which could disrupt our business and result in the disclosure of and/or misuse or misappropriation of confidential or proprietary information, disruption or damage of our systems, increased costs, significant losses, or adverse effects to our reputation;
(18)changes in the cost and availability of funding due to changes in the deposit market and credit market;
(19)risks related to the continued use, availability and reliability of LIBOR and the risks related to the transition from LIBOR to any alternate reference rate we may use;
(20)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;
(21)the risks that if economic conditions worsen further or regulatory capital rules are modified, we may be required to undertake initiatives to improve or conserve our capital position;
(22)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;
(23)our ability to receive dividends from our subsidiaries could affect our liquidity, including our ability to pay dividends or take other capital actions;
(24)risks related to our ESG strategies and initiatives, the scope and pace of which could alter our reputation and shareholder, employee, client and third-party relationships;
(25)the risk that we may not be able to identify suitable bank and non-bank acquisition opportunities as part of our growth strategy and even if we are able to identify attractive acquisition opportunities, we may not be able to complete such transactions on favorable terms or realize the anticipated benefits from such acquisitions;
(26)the risk that we could realize losses if we sell non-performing assets and the proceeds we receive are lower than the carrying value of such assets;
(27)risks related to regulatory approval to take certain actions, including any dividends on our common stock or preferred stock, any repurchases of common stock or any other issuance or redemption of any other regulatory capital instruments;
(28)the risk that our concentrated operations in the Southeastern U.S. make us vulnerable to local economic conditions, local weather catastrophes, public health issues and other external events;
(29)the costs and effects of litigation, investigations or similar matters, or adverse facts and developments related thereto;
(30)risks related to the fluctuation in our stock price and general volatility in the stock market;
(31)the effects of any damages to our reputation resulting from developments related to any of the items identified above; and
(32)other factors and other information contained in this Report and in other reports and filings that we make with the SEC under the Exchange Act, including, without limitation, those found in "Part I - 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 this Report 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.

2



ITEM 1. BUSINESS
Overview
General
Synovus Financial Corp. is a financial services company and a registered bank holding company headquartered in Columbus, Georgia. We provide commercial and retailconsumer banking in addition to a full suite of specialized products and services including private banking, treasury management, wealth management, mortgage services, premium finance, asset-based lending, structured lending, and international banking to our customersclients through our wholly-owned subsidiary bank, Synovus Bank, and other offices in Alabama, Florida, Georgia, Alabama, South Carolina Florida and Tennessee.
We were incorporated under the laws of the State of Georgia in 1972. Our principal executive offices are located at 1111 Bay Avenue, Suite 500, Columbus, Georgia 31901 and our telephone number at that address is (706) 649-2311.641-6500. Our common stock is traded on the New York Stock ExchangeNYSE under the symbol “SNV.” At December 31, 2018,2021, we had total consolidated assets of $32.67$57.32 billion and total consolidated deposits of $26.72$49.43 billion.
Additional information relating to our business and our subsidiaries, including a detailed description of our operatingfinancial results for 2021 and financial condition for 2018, 2017 and 2016,2020 is contained in "Part II - Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Report.
Banking Operations
Synovus conducts its banking operations through Synovus Bank. Synovus Bank is a Georgia state-chartered bank and operates primarily throughout Alabama, Florida, Georgia, South Carolina and Tennessee. Synovus Bank offers commercial banking services and retail bankingconsumer services. Our commercial banking services include treasury management, asset management, capital markets services, institutional trust services and commercial, financial and real estate loans. Our retailconsumer banking services include accepting customary types of demand and savings deposits accounts; mortgage, installment and other consumer loans; investment and brokerage services; safe deposit services; automated banking services; automated fund transfers; Internet-based banking services; and bank credit and debit card services, including Visa and MasterCard services. At December 31, 2018,2021, Synovus Bank operated 249281 branches and 335370 ATMs across our footprint.
Major Non-bank Subsidiaries
In addition to our banking operations, we also provide various other financial services to our customersclients through the following direct and indirect wholly-owned non-bank subsidiaries:
•Synovus Securities, headquartered in Columbus, Georgia, which specializes in professional portfolio management for fixed-income securities, investment banking, the execution of securities transactions as a broker/dealer, asset management and financial planning services, and the provision of individual investment advice on equity and other securities; and
•Synovus Trust, headquartered in Columbus, Georgia, which provides trust, services;asset management, and
Synovus Mortgage, headquartered in Birmingham, Alabama, which offers mortgage financial planning services.
Business Developments
Throughout 2021, Synovus' strategic focus includesremained on expanding and diversifying ourthe franchise in terms of revenues,revenue, profitability and asset size while maintaining a community banking, relationship-based approach to banking. This strategy has encompassed both organic growthIn addition, the Company navigated through a CEO transition beginning in April 2021 with Kevin S. Blair succeeding Kessel Stelling as well as acquisitionsPresident and Chief Executive Officer and Mr. Stelling stepping into the role of complementary banks and financial services businesses. InExecutive Chairman of the Board, all while remaining focused on execution of key strategic priorities, including Synovus Forward. As previously announced in the first quarter of 2019, we acquired FCB ,2020 and executed throughout 2021, the parent companycost savings and revenue-generating initiatives underpinning Synovus Forward include expense reductions around Synovus’ third party spend program, branch optimization, back-office staff optimization, an early retirement program, market-based repricing of Florida Community Bank. At the closing date, FCBcertain product offerings, deposit repricing, commercial analytics and digital enhancements. As of December 31, 2021, Synovus had total loans of $9.42 billion, total deposits of $10.89 billionrealized approximately $110 million in pre-tax benefits from Synovus Forward and operated 51 full service banking centers through its wholly-owned banking subsidiary, Florida Community Bank.
Enterprise Risk Management
As a financial services organization, Synovus accepts a certain degree of risk with each business decision it makes. Risk management does not eliminate risk, but seeksremains on track to achieve an appropriate balance between riska cumulative pre-tax run rate benefit of $175 million by the end of 2022.
In December 2021, Synovus introduced a streamlined strategic plan focused on growth and return, whichperformance through four core pillars. The four core pillars are reposition for advantage, simplify and streamline, adopt high-tech meets high touch, and enhance talent and culture. Each of these pillars is criticalsupported by various strategic initiatives designed to optimizing shareholder value. Understanding our risks and managing them appropriately can enhance our ability to make better decisions, deliver on objectives,drive growth and improve performance. The enterprise risk framework has been established within Synovus, which beginsperformance, with a prioritization on such matters as investing in commercial growth, fortifying consumer banking, optimizing wealth, refreshing the Board of Directors, working primarily withbrand, re-imagining the Risk Committee of the Board. The Risk Committee fulfills the overarching oversight role for the risk management process, including approving risk appetiteclient journey, automating systems and tolerance levels, risk policiesprocesses, using advanced analytics, enhancing modern core enabled banking products, developing diverse leaders and limits, monitoring key and emerging risks, and reviewing risk assessment results. In addition, oversight of certain risk is allocated to all other committees of the Board that meet regularly and report to the Board.
The Chief Risk Officer reports to the Chief Executive Officer and provides overall vision, direction and leadership regarding the enterprise risk management framework. The framework includes an Executive Risk Committee, chaired by the Chief Risk


Officer, and various management risk committees. Executive Risk Committee membership includes all Synovus executive officers, the Chief Information Security Officer, and the Group Executive of Enterprise Risk. The committee provides management oversight of the Enterprise Risk Program and primary oversight of strategic risk, reputation risk, and litigation risk. Management risk committees are responsible for effective risk measurement, management and reporting of their respective risk categories. The Chief Risk Officer is an active member of each of the management risk committees which include:
ALCO - Interest Rate/Market Risk and Liquidity Risk
Credit Risk Committee - Credit Risk
Regulatory Compliance Risk Committee - Compliance Risk
Operational Risk Committee - Operational Risk
Management believes that Synovus' primary risk exposures are operational, regulatory compliance, credit, liquidity, and strategic risk. Operational risk arises from the potential that inadequate information systems, operational problems, inadequate or failed internal controls, human error, fraud, security breaches such as cyber-attacks, or external events will result in unexpected losses. Compliance risk arises from nonconformance with laws, rules, and regulations that apply to the financial services industry and exposes the Company to monetary penalties, enforcement actions, or other sanctions. Credit risk is risk of loss arising from our borrowers' or counterparties' inability to meet the financial terms of any contract with the Company, or other failure to perform as agreed. Liquidity risk arises from an inability of the Company to meet current or future obligations when they come due without incurring unacceptable losses. Strategic risk arises from threats to long-termestablishing a growth and strategic direction such as the ability to meet competitive challenges, attract and retain customers and team members, keep pace with technological changes, and develop new products and services.
ALCO
ALCO monitors Synovus' economic, competitive, and regulatory environment and is responsible for measuring, monitoring, and reporting on liquidity and funding risk, interest rate risk, and market risk and has the authority to create policies relative to these risks. ALCO, operating under liquidity and funding policies approved by the Board of Directors, actively analyzes contractual and anticipated cash flows to properly manage Synovus' liquidity position. Operating under interest rate risk policies approved by the Board of Directors, ALCO analyzes the interest rate sensitivity of Synovus and develops and implements strategies to improve balance sheet structure and interest rate risk positioning. See “Part II - Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity” and “Item 7A. Qualitative and Quantitative Disclosures about Market Risk” in this Report for further information. The model risk management function reviews liquidity and interest rate risk models on an annual basis and prioritizes implementation of the model changes.
Credit Risk
The Company has established a credit risk management process with policies, controls and regular Board and management oversight. Credit risk management is guided by centralized credit policies that provide for a consistent and prudent approach to underwriting and approval of credits. The Credit Risk Committee, chaired by the Chief Credit Officer, monitors credit management reports, establishes lending policies, limits, and guidance to better manage the loan function, and provides strategies to manage the level of credit risk in the loan portfolio. The Credit Risk Committee oversees risk grade accuracy, credit servicing requirements, and loan concentration levels and manages risk in thebased culture. We believe disciplined execution of loan growth strategies.these core pillars will position us for long-term top quartile performance.
The Regional Credit function reports to the Chief Credit Officer, providing independence from the lines of business. Regional Credit manages credit activities within each region, underwriting borrowing relationships over certain dollar thresholds, jointly approving loans for amounts greater than the local market's lending authority, and evaluating loan administration processes.
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Synovus maintains a centralized Retail Lending Center and Small Business Lending Center where consumer and small business loans are centrally processed, scored, and analyzed. This structure enhances the control environment, drives efficiencies, and provides a more consistent overall customer experience.

Synovus has established the ALL Oversight Council to review and approve the adequacy of the allowance for loan losses and the ALL methodology. The Council includes the Chief Risk Officer, Chief Credit Officer, Chief Financial Officer, and other senior management. The Council meets at least quarterly and considers enhancements and refinements to the ALL process and models in light of new and other relevant information. The allowance adequacy and the ALL methodology are reviewed by the Audit Committee of the Board of Directors at least quarterly. The Model Risk Management function reviews the ALL models on an annual basis and prior to implementation of any significant model changes.
Regulatory Compliance Risk
Compliance laws, rules and standards generally cover matters such as observing proper standards of market conduct, managing conflicts of interest, treating customers fairly, and ensuring the suitability of customer advice. They also include basic prudential banking requirements and specific areas such as the prevention of money laundering and terrorist financing.


The Regulatory Compliance Risk Committee was created to assist the Board and management in overseeing the administration of overall compliance risk at the Bank and Financial Management Services, developing and implementing policy, and ensuring that compliance issues are resolved effectively and expeditiously. The Committee is made up of senior management from the business lines, risk management, legal, human resources, and compliance functions and specifically provides oversight for the Corporate Compliance Policy and Programs, including, but not limited to UDAAP, Fair Lending, Volcker Rule, BSA/AML/OFAC, and customer complaint management throughout the Company. Written policies contain the principles to be followed by management and staff of Synovus Bank and its subsidiaries and explain and direct the processes by which risks are identified and managed. The individual policies guide the Company's compliance functions and provide for monitoring, training, and risk assessments.
Operational Risk
Synovus aims to minimize and mitigate unexpected loss through a proactive and structured approach to operational risk management. The Operational Risk Committee provides oversight of the operational risk function, maintaining effective processes to assess, monitor and mitigate operational risk. Specific responsibilities include providing a forum for addressing operational issues that require collaboration of multiple operational groups, reviewing significant operational risk exposures and remediation strategies, and reviewing risk metrics for ongoing pertinence to the risk management framework.
Business units are responsible for identifying and reporting operational risks that require resolution, participating in risk assessments, responding to changes in risk metrics and implementing corrective actions and new risk solutions. The Operational Risk Committee also oversees the various cybersecurity risks facing Synovus, including e-fraud, loss of sensitive information or service interruptions due to cyber-attacks or other disruptions or failures in Synovus' computer systems or network infrastructure.
Executive Risk Committee
The Executive Risk Committee oversees the enterprise risk program, policies and framework, monitors key and emerging risks, and evaluates the effectiveness of action plans to address key risks and issues. The Committee establishes and recommends to the Board for approval the risk appetite and risk tolerance levels. In addition, the Committee recommends capital actions, evaluates and vets stress testing results, including stress scenarios, and reviews new and modified products.
Competition
The financial services industry is highly competitive and could become more competitive as a result of recent and ongoing legislative, regulatory and technological changes, and continued consolidation within the financial services industry. Synovus Bank and our wholly-owned non-bank subsidiaries compete actively with national and state banks, savings and loan associations and credit unions and other nonbank financial intermediaries, including securities brokers and dealers, investment advisory firms, mortgage companies, insurance companies, trust companies, finance companies, leasing companies and certain governmental agencies, all of which actively engage in marketing various types of loans, deposit accounts and other financial services. In addition, competition from nontraditional banking institutions, often known as FinTech, continues to increase, with consumers having the opportunity to select from a growing variety of traditional and nontraditional alternatives. The ability of such non-banking financial institutions to provide services previously limited to commercial banks has intensified competition. Because non-banking financial institutions are not subject to many of the same regulatory restrictions as banks and bank holding companies, they can often operate with greater flexibility and lower cost structures. These competitors have been successful in developing products that are in direct competition with or are alternatives to the banking services offered by traditional banking institutions. Our ability to deliver strong financial performance will depend in part on our ability to expand the scope of, and effectively deliver, products and services, which will allow us to meet the changing needs of our customers.clients. However, we often compete with much larger national and regional banks that have more resources than we do to deliver new products and services and introduce new technology to enhance the customerclient experience. See "Part I - Item 1A. Risk Factors - Strategic Risk -Competition in the financial services industry may adversely affect our future earnings and growth."
As of December 31, 2018,2021, we were the second largest bank holding company headquartered in Georgia based on assets. Financial services customersclients are generally influenced by convenience, quality of service, personal contacts, price of services and availability of products. We continue to gain traction in most of our key markets, as well as overall markets, as shown in the most recent market share deposit data for FDIC-insured institutions as of June 30, 2018.2021. Additionally, over the last year, we have continued to rationalize our branch network and focused on improving the mix of our deposits, while maintaining and growing market share throughout our footprint.
EmployeesHuman Capital Resources
Synovus’ financial performance and strategy rely heavily on our value proposition of relationship-banking delivered through experts committed to delivering an exceptional client experience and to providing value-added advice and financial solutions. As such, Synovus’ ability to identify, attract, develop and retain a qualified and skilled workforce across our segments in multiple banking specialties and other areas is central to our growth and delivering long-term shareholder value. In managing our business, management focuses on a number of human capital measures and objectives, including: workforce demographics; compensation and benefits; talent acquisition, development and retention; diversity, equity and inclusion; and employee health and safety. Synovus’ Chief Human Resources Officer, reporting to the President and Chief Executive Officer, manages all aspects of the employee experience, including talent acquisition and management, learning and development, and compensation and benefits. From a Board oversight perspective, the Compensation and Human Capital Committee has primary oversight responsibility for Synovus’ talent development and human capital management strategies.
In 2021, the Company’s human capital strategy continued to focus on the response to the COVID-19 pandemic and the unique circumstances of our employees. In addition to the various initiatives described below, Synovus focused on responding to our workforce’s changing needs, including increased demand for workplace flexibility, and accelerating the transformation of our technology for the management of our workforce through investments in upgraded systems and processes.The Company also responded to a changing labor market in 2021, including increased competition for talent, labor shortages, and increased labor costs.
Workforce Demographics
As of December 31, 2018,2021, Synovus had 4,6514,988 employees, including both full-time and part-time employees, all predominately located in our core markets of Georgia, Florida, Alabama, South Carolina and Tennessee, compared to 4,5415,247 employees at December 31, 2017.2020. By segment, Community Banking employed 2,224 employees, Wholesale Banking employed 287 employees, Financial Management Services employed 797 employees and Treasury and Corporate Other employed 1,680 employees as of December 31, 2021.

Compensation and Benefits

Synovus strives to provide competitive compensation and benefits that meet the varying needs of employees, including market-competitive pay, healthcare benefits, short and long term incentive packages, a 401(k) plan with a dollar for dollar company match on employee contributions up to 5% of pay, an employee stock purchase plan, tuition assistance, and wellness and employee assistance programs. The Company’s short and long term incentive programs are aligned with our strategy and key business objectives and are intended to motivate strong performance. Synovus engages in nationally recognized outside compensation salary surveys and utilizes the expertise of a nationally recognized outside executive compensation firm to
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objectively evaluate our compensation and benefits and benchmark them against industry peers and similarly situated organizations. For the year ended December 31, 2021, total salaries and other personnel expense, which includes all compensation and benefits to our employees, totaled $649.4 million. See "Part II - Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Non-interest Expense" of this Report for further discussion of salaries and other personnel expense.
Talent Acquisition, Development and Retention
Synovus is committed to attracting and retaining the brightest and best talent. Of the approximately 1,560 open positions filled in 2021, 42% were filled by internal hires. Approximately 15% of our workforce received a promotion in 2021, consisting of 66% women and 31% people of color. Our commitment to our employees has resulted in a long-term workforce, with an average tenure of over 8 years of service. We attribute our ability to attract and retain talent to several factors, including impactful work that affects the communities in which our employees live, strong leadership, availability of career advancement opportunities and competitive and equitable total rewards.
Synovus has created internal programs to support the development and retention of our employees, including development programs designed to train our leaders. In 2021, over 875 courses were offered to employees on such topics as leadership, compliance and professional development and an average of approximately 20 hours of training per employee was completed. In addition, over 600 front-line leaders participated in our new leadership development program, Ignite, which included unconscious bias training and content. Development of our senior leaders likewise continues to be a priority. Over 300 senior leaders participated in unconscious bias training. We also developed Catalyst, a new leadership program for our senior leaders focused on business strategy and executive leadership readiness, which we expect to launch in the first quarter of 2022.Synovus also supports our employees’ involvement in external development programs, such as specialty banking schools and other technical training. In support of learning and development for employees, Synovus offers a tuition assistance program for employees seeking undergraduate and graduate degrees and other continuing educational programs.
In addition, we regularly conduct employee engagement surveys and touchpoints to gauge employee satisfaction. In 2021, our “Voice of the Team Member” survey returned an 84% engagement rate, which represents top quartile scoring compared to financial service benchmarks.
We continue to create an environment where employees can succeed and reach their full potential. In 2021, we achieved a Great Place to Work designation by the Great Place to Work Institute and were recognized again among Atlanta's Top Workplaces by the Atlanta Journal Constitution and as a Forbes 2021 Best Bank in America. Our executive leaders again received national recognition for The Most Powerful Women in Banking from American Banker and the Gonzo award for tech and innovation advancements.
Diversity, Equity and Inclusion
Synovus is committed to continued improvement in employee diversity, equity and inclusion at the company. Since 2018 with the launch of a CEO sponsored DEI initiative, we have continued to make progress toward our DEI objectives. As of December 31, 2021, 66% of our employees were women and 29% of our employees were people of color, and we continue to work on improving representation of women and people of color in senior leadership roles. As a result of this continuous effort and focus, as outlined below, representation of women and people of color in senior leadership roles has steadily improved over the last five years with women representing 38% and people of color representing 15% of senior leadership by the end of 2021. Moreover, we expect to continue these improvements by establishing targets of 40% female and 18% people of color representation in senior leadership by the end of 2024.
To build and attract a diverse workforce, in 2021, Synovus continued to identify key organizations and partnerships to strengthen our recruiting efforts. We continued to expand our campus recruiting and scholarship programs, executing a comprehensive campus recruitment strategy with a focus on diversity, deepening our relationships with historically black colleges and universities in our markets, hosting a Diversity Symposium as a part of our recruitment efforts, and increasing our focus on military recruitment. To expand our pipeline of candidates, we continued to partner with diverse external professional organizations such as the Latin American Association Unidos in Finance program and leveraged our numerous and varied employee resource groups for internal referrals. We continued our efforts to increase the diversity of our candidate pool and revitalize our internship and accelerated banker recruiting and selection process in 2021, having an intern class that was 43% people of color and 35% women and an accelerated banker class that was 30% people of color and 60% women.
As to the existing workforce, in 2021, Synovus continued to focus on foundational progress toward increasing DEI, engaging employee resource groups to assist with talent acquisition, development and community outreach, increasing our internal dialogue through forums, fireside chats and listen and learn events, enhancing unconscious bias training across the organization and developing robust DEI strategies across each business unit. Synovus also conducted pipeline analysis by demographic and job grade in 2021 to ensure a robust talent pipeline that can help diversify candidate slates for future job openings.
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In 2021, Synovus conducted an ethnicity pay analysis which resulted in nominal pay adjustments for less than 1% of the employee base and reviewed our gender pay analysis to augment the pay equity work of the prior year. Results of the analyses were shared with the Compensation and Human Capital Committee.
Employee Health and Safety
Synovus is committed to operating in a safe, secure and responsible manner for the benefit of our employees, clients and communities. Synovus provides a range of programs to improve the physical, financial and emotional well-being of our employees, including a range of health and wellness benefits, and strives to create a safe and healthy workplace for all employees.
Synovus responded to the COVID-19 pandemic by taking measures beginning in March 2020 and continuing throughout 2021 to improve and support the health and safety of our employees including remote work capabilities, expanded medical benefits and additional time paid-off for those employees who were sick, quarantining or contending with childcare or other COVID-19 related hardships. Synovus continued to implement aggressive cleaning, sanitizing and hygiene protocols at all company facilities and provided personal protective equipment, masks and related supplies to employees across the footprint.In addition, the Company implemented Centers for Disease Control and Prevention safety guidelines and office design enhancements, including plexiglass barriers, directional signage, mask requirements and social distancing protocols as Synovus’ employees re-entered the work place in a phased-in approach throughout 2021. The re-entry was carefully designed by employees themselves and carefully monitored through re-entry surveys and touchpoints. We remain committed to employee safety and well-being as we continue to manage through the ongoing pandemic.
Supervision, Regulation and Other Factors
We are extensively regulated under federal and state law. The following is a brief summary that does not purport to be a complete description of all regulations that affect us or all aspects of those regulations. This discussion is qualified in its entirety by reference to the particular statutory and regulatory provisions described below and is not intended to be an exhaustive description of the statutes or regulations applicable to the Company’s and Synovus Bank’s business. In addition, proposals to change the laws and regulations governing the banking industry are frequently raised at both the state and federal levels. The likelihood and timing of any changes in these laws and regulations, and the impact such changes may have on us and Synovus Bank, are difficult to predict. In addition, bank regulatoryRegulatory agencies may issue enforcement actions, policy statements, interpretive letters and similar written guidance applicable to us or to Synovus Bank. Changes in applicable laws, regulations or regulatory guidance, or their interpretation by regulatory agencies or courts may have a material adverse effect on our and Synovus Bank’s business, operations, and earnings.
Synovus Bank, Synovus Trust, and in some cases, we and our nonbank affiliates, must undergo regular on-site examinations by the appropriate regulatory agency, which will examine for adherence to a range of legal and regulatory compliance responsibilities. A bank regulator conducting an examination has complete access to the books and records of the examined institution. The results of the examination are confidential. Supervision and regulation of banks, their holding companies and affiliates is intended primarily for the protection of depositors and customers,clients, the DIF of the FDIC, and the U.S. banking and financial system rather than holders of our capital stock.securities.
Regulation of the Company
We are registered as a bank holding company with the Federal Reserve under the BHC Act and have elected to be treated as a financial holding company. As such, we are subject to comprehensive supervision and regulation by the Federal Reserve and are subject to its regulatory reporting requirements. Federal law subjects bank holding companies, such as the Company, to particular restrictions on the types of activities in which they may engage, and to a range of supervisory requirements and activities, including regulatory enforcement actions for violations of laws and regulations.requirements. In addition, the GA DBF regulates bank holding companies that own Georgia-chartered banks, such as us, under the bank holding company laws of the State of Georgia. Various federal and state bodies regulate and supervise our non-bank subsidiariesactivities including our brokerage, investment advisory, and insurance agency and processing operations.agency. These include, but are not limited to, the SEC, the Financial Industry Regulatory Authority, federal and state banking regulators and various state regulators of insurance and brokerage activities.
Violations of laws and regulations, or other unsafe and unsound practices, may result in regulatory agencies imposing fines or penalties, cease and desist orders, or taking other enforcement actions. Under certain circumstances, these agencies may enforce these remedies directly against officers, directors, employees and other parties participating in the affairs of a bank or bank holding company. Like all bank holding companies, we are regulated extensively under federal and state law. Under federal and state laws and regulations pertaining to the safety and soundness of insured depository institutions, state banking regulators, the Federal Reserve, Board, and separately the FDIC as the insurer of bank deposits, have the authority to compel or restrict certain actions on our part if they determine that we have insufficient capital or other resources, or are otherwise operating in a manner that may be deemed to be inconsistent with safe and sound banking practices. Under this authority, our bank regulators can require us or our subsidiaries to enter into informal or formal supervisory agreements, including board resolutions, memoranda of
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understanding, written agreements and consent or cease and desist orders, pursuant to which we would be required to take identified corrective actions to address cited concerns and to refrain from taking certain actions.
If we become subject to and are unable to comply with the terms of any future regulatory actions or directives, supervisory agreements, or orders, then we could become subject to additional, heightened supervisory actions and orders, possibly including consent orders, prompt corrective action restrictions and/or other regulatory actions, including prohibitions on the payment of dividends on our common stock and preferred stock. If our regulators were to take such additional supervisory actions, then we could, among other things, become subject to significant restrictions on our ability to develop any new business, as well as restrictions on our existing business, and we could be required to raise additional capital, dispose of certain assets and liabilities within a prescribed period of time, or both. The terms of any such supervisory action could have a material negative effect on our business, reputation, operating flexibility, financial condition, and the value of our common stock and preferred stock. See “Part I - Item 1A. Risk Factors - Compliance and Regulatory Risk -We may become subject to supervisory actions and enhanced regulation that could have a material adverse effect on our business, reputation, operating flexibility, financial condition and the value of our common stock and preferred stock” of this Report.
Activity Limitations
As a financial holding company, we are permitted to engage directly or indirectly in a broader range of activities than those permitted for a bank holding company that has not elected to be a financial holding company.Bank holding companies are generally restricted to engaging in the business of banking, managing or controlling banks and certain other activities determined by the Federal Reserve to be closely related to banking. Financial holding companies may also engage in activities that are considered to be financial in nature, as well as those incidental


or, if determined by the Federal Reserve, complementary to financial activities. We and Synovus Bank must each remain “well-capitalized” and “well-managed” and Synovus Bank must receive a CRA rating of at least “Satisfactory” at its most recent examination in order for us to maintain our status as a financial holding company. If Synovus Bank ceases to be “well capitalized” or “well managed” under applicable regulatory standards, or if Synovus Bank receives a rating of less than satisfactory under the CRA, the Federal Reserve Board may, among other things, place limitations on our ability to conduct these broader financial activities or, if the deficiencies persist, require us to divest the banking subsidiary or the businesses engaged in activities permissible only for financial holding companies.
In addition, the Federal Reserve has the power to order a bank holding company or its subsidiaries to terminate any nonbanking activity or terminate its ownership or control of any nonbank subsidiary, when it has reasonable cause to believe that continuation of such activity or such ownership or control constitutes a serious risk to the financial safety, soundness, or stability of any bank subsidiary of that bank holding company. As further described below, each of the Company and Synovus Bank is well-capitalized under applicable regulatory standards as of December 31, 2018,2021, and Synovus Bank has an overall rating of “Satisfactory” in its most recent CRA evaluation.
Source of Strength Obligations
A financialbank holding company, such as us, is required to act as a source of financial and managerial strength to its subsidiary bank and to maintain resources adequate to support its bank. The term “source of financial strength” means the ability of a company, such as us, that directly or indirectly owns or controls an insured depository institution, such as Synovus Bank, to provide financial assistance to such insured depository institution in the event of financial distress. The appropriate federal banking agency for the depository institution (in the case of Synovus Bank, this agency is the Federal Reserve) may require reports from us to assess our ability to serve as a source of strength and to enforce compliance with the source of strength requirements by requiring us to provide financial assistance to Synovus Bank in the event of financial distress. If we were to enter bankruptcy or become subject to the orderly liquidation process established by the Dodd-Frank Act, any commitment by us to a federal bank regulatory agency to maintain the capital of Synovus Bank would be assumed by the bankruptcy trustee or the FDIC, as appropriate, and entitled to a priority of payment. In addition, the FDIC provides that any insured depository institution generally will be liable for any loss incurred by the FDIC in connection with the default of, or any assistance provided by the FDIC to, a commonly controlled insured depository institution. Synovus Bank is an FDIC-insured depository institution and thus subject to these requirements.
Acquisitions
The BHC Act permits acquisitions of banks by bank holding companies, such that we and any other bank holding company, whether located in Georgia or elsewhere, may acquire a bank located in any other state, subject to certain deposit-percentage, age of bank charter requirements, and other restrictions. The BHC Act requires that a bank holding company obtain the prior approval of the Federal Reserve before (i) acquiring direct or indirect ownership or control of more than 5% of the voting shares of any additional bank or bank holding company, (ii) taking any action that causes an additional bank or bank holding company to become a subsidiary of the bank holding company, or (iii) merging or consolidating with any other bank holding company.The Federal Reserve may not approve any such transaction that would result in a monopoly or would be in furtherance of any combination or conspiracy to monopolize or attempt to monopolize the business of banking in any section of the United States, or the effect of which may be substantially to lessen competition or to tend to create a monopoly in any section of the country, or that in any other manner would be in restraint of trade, unless the anticompetitive effects of the proposed transaction are clearly outweighed byin the public interest by the probable effect of the transaction in meeting the convenience and needs of the
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community to be served. The Federal Reserve is also required to consider: (1) the financial and managerial resources of the companies involved, including pro forma capital ratios; (2) the risk to the stability of the United States banking or financial system; (3) the convenience and needs of the communities to be served, including performance under the CRA; and (4) the effectiveness of the companiescompany in combatting money laundering.
Change in Control
Federal law restricts the amount of voting stock of a bank holding company or a bank that a person may acquire without the prior approval of banking regulators. Under the federal Change in Bank Control Act and the regulations thereunder, a person or group must give advance notice to the Federal Reserve before acquiring control of any bank holding company, such as the Company, and the Federal Reserveor before acquiring control of any state memberFDIC-insured bank, such as Synovus Bank. Upon receipt of such notice, the Federal Reserve may approve or disapprove the acquisition. The Change in Bank Control Act creates a rebuttable presumption of control if a memberperson or group acquires a certain percentage or more of a bank holding company’s or bank’s voting stock, or if one or more other control factors are present. As a result, a person or entity generally must provide prior notice to the Federal Reserve before acquiring the power to vote 10% or more of our outstanding common stock. The overall effect of such laws is to make it more difficult to acquire a bank holding company and a bank by tender offer or similar means than it might be to acquire control of another type of corporation. Consequently, shareholders of the Company may be less likely to benefit from the rapid increases in stock prices that may result from tender offers or similar efforts to acquire control of other companies. Investors should be aware of these requirements when acquiring shares of our stock.



Governance and Financial Reporting Obligations
We are required to comply with various corporate governance and financial reporting requirements under the Sarbanes-Oxley Act of 2002, as well as rules and regulations adopted by the SEC, the Public Company Accounting Oversight Board,PCAOB, and the NYSE. In particular, we are required to include management and independent registered public accounting firm reports on internal controls as part of our Annual Report on Form 10-K in order to comply with Section 404 of the Sarbanes-Oxley Act. We have evaluated our controls, including compliance with the SEC rules on internal controls, and have and expect to continue to spend significant amounts of time and money on compliance with these rules. Our failure to comply with these internal control rules may materially adversely affect our reputation, ability to obtain the necessary certifications to financial statements, and the values of our securities. The assessments of our financial reporting controls as of December 31, 20182021 are included in this report under “Item 9A. Controls and Procedures.”
The Federal Reserve also requires bank holding companies meeting certain asset size thresholds, such as us, to establish and maintain a risk committee of its board of directors and appoint a chief risk officer, each meeting certain requirements.
Volcker Rule
In December 2013, the Federal Reserve and other regulators jointly issued final rules implementing requirements of a new Section 13 toof the BHC Act, commonly referred to as the “Volcker Rule.Rule,” The Volcker Rule generally prohibits us and our subsidiaries from (i) engaging in certain proprietary trading, for our own account, and (ii) acquiring or retaining an ownership interest in or sponsoring a “covered fund,” all subject to certain exceptions. The Volcker Rule also specifies certain limited activities in which we and our subsidiaries may continue to engage and requiredrequires us to implementmaintain a compliance program. The regulators provided for a Volcker Rule conformance date of July 21, 2015. The Federal Reserve extended the conformance deadline twice (first to July 21, 2016, and again to July 21, 2017) for certain legacy “covered funds” activities and investments in place before December 31, 2013. Further, the Federal Reserve Board permits limited exemptions, upon application, for divestiture of certain “illiquid” covered funds, for an additional period of up to 5 years beyond that date. In the first quarter of 2017, we obtained a five-year extension from the Federal Reserve to the divestiture requirement of certain "illiquid" funds held by us and covered by this rule. On June 5, 2018,In 2020, amendments to the proprietary trading and covered funds regulations issued by the federal banking agencies, issued proposed changes to the Volcker Rule, along with a request for public comment. The proposed changes are intended to simplifySEC, and the Commodity Futures Trading Commission took effect, simplifying compliance with the Rule’s “proprietary trading” restrictions.
Corporate Governance
  The Dodd-Frank Act addresses many investor protections, corporate governance, and executive compensation matters that will affect most U.S. publicly traded companies. The Dodd-Frank Act (1) grants shareholders of U.S. publicly traded companies an advisory vote on executive compensation; (2) enhances independence requirements for Compensation Committee members;providing additional exclusions and (3) requires companies listed on national securities exchanges to adopt incentive-based compensation claw-back policies for executive officers.exemptions.
Incentive Compensation
The Dodd-Frank Act required the federal banking agencies and the SEC to establish joint rules or guidelines for financial institutions with more than $1 billion in assets, such as us and Synovus Bank, which prohibit incentive compensation arrangements that the agencies determine to encourage inappropriate risks by the institution. The federal banking agencies issued proposed rules in 2011 and previously issued guidance on sound incentive compensation policies. In 2016, the federal banking agencies alsoand the SEC proposed rules that would, depending upon the assets of the institution, directly regulate incentive compensation arrangements and would require enhanced oversight and recordkeeping. As of December 31, 2018,2021, these rules have not been implemented by the banking agencies.implemented. We and Synovus Bank have undertaken efforts to ensure that our incentive compensation plans do not encourage inappropriate risks, consistent with three key principles-thatprinciples - that incentive compensation arrangements should appropriately balance risk and financial rewards, be compatible with effective controls and risk management, and be supported by strong corporate governance.
Shareholder Say-On-Pay Votes
The Dodd-Frank Act requires public companies to take shareholders’ votes on proposals addressing compensation (known as say-on-pay), the frequency of a say-on-pay vote, and the golden parachutes available to executives in connection with change-in-control transactions. Public companies must give shareholders the opportunity to vote on the compensation at least every three years and the opportunity to vote on frequency at least every six years, indicating whether the say-on-pay vote should be held annually, biennially, or triennially. The last frequency on say-on-pay vote occurred at our 2014 annual shareholders meeting. The say-on-pay, the say-on-parachute and the say-on-frequency votes are explicitly nonbinding and cannot override a decision of our Board of Directors.
Other Regulatory Matters
We and our subsidiaries are subject to oversight by the SEC, the FINRA, the PCAOB, the NYSE and various state securities and insurance regulators. We and our subsidiaries have from time to time received requests for information from regulatory authorities in various states, including state attorneys general, securities regulators and other regulatory authorities, concerning our business practices. Such requests are considered incidental to the normal conduct of business.

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Capital Requirements
We and Synovus Bank are required under federal law to maintain certain minimum capital levels based on ratios of capital to total assets and capital to risk-weighted assets. The required capital ratios are minimums, and the Federal Reserve may determine that a banking organization, based on its size, complexity or risk profile, must maintain a higher level of capital in order to operate in a safe and sound manner. Risks such as concentration of credit risks and the risk arising from non-traditional activities, as well as the institution’s exposure to a decline in the economic value of its capital due to changes in interest rates, and an institution’s ability to manage those risks, are important factors that are to be taken into account by the federal banking agencies in assessing an institution’s overall capital adequacy. The following is a brief description of the relevant provisions of these capital rules and their potential impact on our capital levels.
The CompanyWe and Synovus Bank are subject to the following risk-based capital ratios: a CET1 risk-based capital ratio, a Tier 1 risk-based capital ratio, which includes CET1 and additional Tier 1 capital, and a total risk-based capital ratio, which includes Tier 1 and Tier 2 capital.CET1 is primarily comprised of the sum of common stock instruments and related surplus net of treasury stock andplus retained earnings less certain adjustments and deductions, including with respect to goodwill, intangible assets, mortgage servicing assets and deferred tax assets subject to temporary timing differences. Additional Tier 1 capital is primarily comprised of noncumulative perpetual preferred stock. Tier 2 capital consists of instruments disqualified from Tier 1 capital, including qualifying subordinated debt and a limited amount of loan loss reserves up to a maximum of 1.25% of risk-weighted assets, subject to certain eligibility criteria. The capital rules also define the risk-weights assigned to assets and off-balance sheet items to determine the risk-weighted asset components of the risk-based capital rules, including, for example, certain “high volatility” commercial real estate, past due assets, structured securities and equity holdings.
The leverage capital ratio, which serves as a minimum capital standard, is the ratio of Tier 1 capital to quarterly average total consolidated assets net of goodwill, certain other intangible assets, and certain required deduction items. The required minimum leverage ratio for all banks and bank holding companies is 4%.
In addition, effective January 1, 2019, the capital rules requirerequired a capital conservation buffer of up to 2.5%, comprised of CET1, above each of the minimum risk-based capital ratio requirements (CET1, Tier 1, and total risk-based capital), which is designed to absorb losses during periods of economic stress.These buffer requirements must be met for a bank or bank holding company to be able to pay dividends, engage in share buybacks or make discretionary bonus payments to executive management without restriction. This capital conservation buffer is being phased in, and was 1.875% as of January 1, 2018 and is 2.5% effective January 1, 2019.
Failure to be well-capitalized or to meet minimum capital requirements could result in certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have an adverse material effect on our operations or financial condition. For example, only a well-capitalized depository institution may accept brokered deposits without prior regulatory approval. Failure to be well-capitalized or to meet minimum capital requirements could also result in restrictions on the Company’s or Synovus Bank’s ability to pay dividends or otherwise distribute capital or to receive regulatory approval of applications or other restrictions on its growth.
The Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”),FDICIA, among other things, requires the federal bank regulatory agencies to take “prompt corrective action” regarding depository institutions that do not meet minimum capital requirements. FDICIA establishes five regulatory capital tiers: “well capitalized”, “adequately capitalized”, “undercapitalized”, “significantly undercapitalized”, and “critically undercapitalized”. A depository institution’s capital tier will depend upon how its capital levels compare to various relevant capital measures and certain other factors, as established by regulation. FDICIA generally prohibits a depository institution from making any capital distribution (including payment of a dividend) or paying any management fee to its holding company if the depository institution would thereafter be undercapitalized. The FDICIA imposes progressively more restrictive restraints on operations, management and capital distributions, depending on the category in which an institution is classified. Undercapitalized depository institutions are subject to restrictions on borrowing from the Federal Reserve System. In addition, undercapitalized depository institutions may not accept brokered deposits absent a waiver from the FDIC, are subject to growth limitations and are required to submit capital restoration plans for regulatory approval. A depository institution's holding company must guarantee any required capital restoration plan, up to an amount equal to the lesser of 5% of the depository institution's assets at the time it becomes undercapitalized or the amount of the capital deficiency when the institution fails to comply with the plan. Federal banking agencies may not accept a capital plan without determining, among other things, that the plan is based on realistic assumptions and is likely to succeed in restoring the depository institution's capital. If a depository institution fails to submit an acceptable plan, it is treated as if it is significantly undercapitalized. All of the federal bank regulatory agencies have adopted regulations establishing relevant capital measures and relevant capital levels for federally insured depository institutions.
To be well-capitalized, Synovus Bank must maintain at least the following capital ratios:
•6.5% CET1 to risk-weighted assets;
•8.0% Tier 1 capital to risk-weighted assets;
•10.0% Total capital to risk-weighted assets; and


•5.0% leverage ratio.
The Federal Reserve has not yet revised the well-capitalized standard for bank holding companies to reflect the higher capital requirements imposed under the current capital rules applicable to banks. For purposes of the Federal Reserve’s Regulation Y, including determining whether a bank holding company meets the requirements to be a financial holding company, bank holding companies, such as the Company, must maintain a Tier 1 risk-based capital ratio of 6.0% or greater and a total risk-based capital ratio of 10.0% or greater to be well-capitalized. If the Federal Reserve were to apply the same or a very similar well-capitalized standard to bank holding companies as that applicable to Synovus Bank, the Company’s capital ratios as of December 31, 2018 would exceed such revised well-capitalized standard. Also, the Federal Reserve may require bank holding companies, including the Company, to maintain capital ratios substantially in excess of mandated minimum levels, depending upon general economic conditions and a bank holding company’s particular condition, risk profile and growth plans.
The
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Failure to be well-capitalized or to meet minimum capital requirements could result in certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have an adverse material effect on our operations or financial condition.Failure to meet minimum capital requirements could also result in restrictions on the Company’s or Synovus Bank’s ability to pay dividends or otherwise distribute capital or to receive regulatory approval of applications or other restrictions on its growth.
In 2021, the Company’s and Synovus Bank’s regulatory capital ratios were above the applicable well-capitalized standards and met the then-applicable capital conservation buffer. Based on current estimates, we believe that the Company and Synovus Bank will continue to exceed all applicable well-capitalized regulatory capital requirements and the capital conservation buffer.buffer in 2022. As of December 31, 2018,2021, the consolidated capital ratios of Synovus and Synovus Bank were as follows:
Table 1 – Capital Ratios as of December 31, 2021
SynovusSynovus Bank
CET1 capital ratio9.50 %10.83 %
Tier 1 risk-based capital ratio10.66 10.83 
Total risk-based capital ratio12.61 12.11 
Leverage ratio8.72 8.86 
Table 1 – Capital Ratios as of December 31, 2018
(dollars in thousands) Synovus Synovus Bank
CET1 ratio 9.95% 11.62%
Tier 1 risk-based capital ratio 10.61
 11.62
Total risk-based capital ratio 12.37
 12.49
Leverage ratio 9.60
 10.51
     
"PartSee "Part II - Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Capital Resources" and "Part II - Item 8. Financial Statements and Supplementary Data - Note 1110 - Regulatory CapitalCapital" of this reportReport for further information.
In May 2018, the Economic Growth, Regulatory Relief and Consumer Protection Act was enacted, which provided banking organizations having less than $50 billion in consolidated assets, such as us and Synovus Bank, with relief from the annual company-run stress testing previously required by the Dodd-Frank Act.
On December 21, 2018, federal banking agencies issued a joint final rule to revise their regulatory capital rules to (i) address the upcoming implementation of the CECL accounting standard under GAAP; (ii) provide an optional three-year phase-in period for the day-one adverse regulatory capital effects that banking organizations are expected to experience upon adopting CECL; and (iii) require the use of CECL in stress tests beginning with the 2020 capital planning and stress testing cycle for certain banking organizations. In June 2016, the FASB issued ASU 2016-13, which introduced CECL as the methodology to replace the current “incurred loss” methodology for financial assets measured at amortized cost, and changed the approaches for recognizing and recording credit losses on available-for-sale debt securities and purchased credit impaired financial assets. Under the incurred loss methodology, credit losses are recognized only when the losses are probable or have been incurred; under CECL, companies are required to recognize the full amount of expected credit losses for the lifetime of the financial assets, based on historical experience, current conditions and reasonable and supportable forecasts. This change will resultresults in earlier recognition of credit losses that the Company deems expected but not yet probable. For SEC reporting companies with December 31 fiscal-year ends, such as theThe Company CECL will become effectivebegan its compliance beginning with the first fiscal quarter of 2020. On August 26, 2020, the federal banking regulators issued a final rule (following an interim final rule issued on March 27, 2020) that allowed electing banking organizations that 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' December 31, 2021 regulatory capital ratios reflect Synovus' election of the five-year transition provision. See "Part II - Item 8. Financial Statements and Supplementary Data - Note 1 - Summary of Significant Accounting Policies" of this Report for additional information on Synovus' adoption of CECL.
PaymentofDividends
We are a legal entity separate and distinct from Synovus Bank and our other subsidiaries. Our primary source of cash, other than securities offerings, is dividends from Synovus Bank. Under the laws of the State of Georgia, we, as a business corporation, may declare and pay dividends in cash or property unless the payment or declaration would be contrary to restrictions contained in our Articles of Incorporation, or unless, after payment of the dividend, we would not be able to pay our debts when they become due in the usual course of our business or our total assets would be less than the sum of our total liabilities. In addition, we are also subject to federal regulatory capital requirements that effectively limit the amount of cash dividends that we may pay.
The primary sources of funds for our payment of dividends to our shareholders are cash on hand and dividends from Synovus Bank and our non-bank subsidiaries. Various federal and state statutory provisions and regulations limit the amount of dividends that Synovus Bank and our non-bank subsidiaries may pay. Synovus Bank is a Georgia bank. Under the regulations of the GA DBF, a Georgia bank must have approval of the GA DBF to pay cash dividends if, at the time of such payment:
•the ratio of Tier 1 capital to adjustedaverage total assets is less than 6%;


•the aggregate amount of dividends to be declared or anticipated to be declared during the current calendar year exceeds 50% of its net after-tax profits before dividendsincome for the previous calendar year; or
•its total adversely classified assets in its most recent regulatory examination exceeded 80% of its Tier 1 capital plus its allowance for loan and lease losses.
The Georgia Financial Institutions Code also contains restrictions on the ability of a Georgia bank to pay dividends other than from retained earnings without the approval of the GA DBF. As a result of the foregoing restrictions, Synovus Bank may be required to seek approval from the GA DBF to pay dividends.
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In addition, we and Synovus Bank are subject to various general regulatory policies and requirements relating to the payment of dividends, including requirements to maintain adequate capital above regulatory minimums. The appropriate federal bank regulatory authority may prohibit the payment of dividends where it has determined that the payment of dividends would be an unsafe or unsound practice and to prohibit payment thereof. The Federal Reserve has indicated that paying dividends that deplete a bank’s capital base to an inadequate level would be an unsoundunsafe and unsafeunsound banking practice. The Federal Reserve has indicated that depository institutions and their holding companies should generally pay dividends only out of current operating earnings.
Under a Federal Reserve policy adopted in 2009, the board of directors of a bank holding company must consider different factors to ensure that its dividend level is prudent relative to maintaining a strong financial position, and is not based on overly optimistic earnings scenarios, such as potential events that could affect its ability to pay, while still maintaining a strong financial position. As a general matter, the Federal Reserve has indicated that the board of directors of a bank holding company should consult with the Federal Reserve and eliminate, defer or significantly reduce the bank holding company’s dividends if:
•its net income available to shareholders for the past four quarters, net of dividends previously paid during that period, is not sufficient to fully fund the dividends;
•its prospective rate of earnings retention is not consistent with its capital needs and overall current and prospective financial condition; or
•it will not meet, or is in danger of not meeting, its minimum regulatory capital adequacy ratios.
Regulation of the Bank
Synovus Bank, which is a member of the Federal Reserve System, is subject to comprehensive supervision and regulation by the Federal Reserve, Board, and is subject to its regulatory reporting requirements, as well as supervision and regulation by the GA DBF.As a member bank of the Federal Reserve System, Synovus Bank is required to hold stock in its district Federal Reserve Bank in an amount equal to 6% of theirits capital stock and surplus (half paid to acquire stock with the remainder held as a cash reserve). Member banks do not have any control over the Federal Reserve System as a result of owning the stock and the stock cannot be sold or traded. The annual dividend rate for member banks with total assets in excess of $10 billion, including Synovus Bank, is based on a floating dividend rate tied to10-year U.S. Treasuries with the maximum dividend rate capped at 6%.
The deposits of Synovus Bank are insured by the FDIC up to applicable limits, and, accordingly, Synovus Bank is also subject to certain FDIC regulations and the FDIC has backup examination authority and some enforcement powers over Synovus Bank.Synovus Trust, a subsidiary of Synovus Bank that provides trust services, is organized as a national trust bank and thus is subject to supervision and regulation by the Office of the Comptroller of the Currency.
In addition, as discussed in more detail below, Synovus Bank and any other of our subsidiaries that offer consumer financial products and services are subject to regulation and potential supervision by the CFPB. The CFPB also may examine our other direct or indirect subsidiaries that offer consumer financial products or services. In addition, the Dodd-Frank Act permits states to adopt consumer protection laws and regulations that are stricter than those regulations promulgated by the CFPB, and state attorneys general are permitted to enforce certain federal consumer financial protection rules adopted by the CFPB.law.
Broadly, regulations applicable to Synovus Bank include limitations on loans to a single borrower and to its directors, officers and employees; restrictions on the opening and closing of branch offices; the maintenance of required capital and liquidity ratios; the granting of credit under equal and fair conditions; the disclosure of the costs and terms of such credit; requirements to maintain reserves against deposits and loans; limitations on the types of investment that may be made by Synovus Bank; and requirements governing risk management practices. Subject to Federal Reserve approval and certain state filing requirements, Synovus Bank is permitted under federal law to branch on a de novo basis across state lines wherewherever the laws of that state would permit a bank chartered by that state to openestablish a de novo branch.
Transactions with Affiliates and Insiders
Synovus Bank is subject to restrictions on extensions of credit and certain other transactions between Synovus Bank and the Company or any nonbank affiliate. Generally, these covered transactions with either the Company or any affiliate are limited to 10% of Synovus Bank’s capital and surplus, and all such transactions between Synovus Bank and the Company and all of its nonbank affiliates combined are limited to 20% of Synovus Bank’s capital and surplus. Loans and other extensions of credit from Synovus Bank to the Company or any affiliate generally are required to be secured by eligible collateral in specified amounts. In


addition, any transaction between Synovus Bank and the Company or any affiliate are required to be on an arm’s length basis. Federal banking laws also place similar restrictions on certain extensions of credit by insured banks, such as Synovus Bank, to their directors, executive officers and principal shareholders.
Reserves
Federal Reserve rules require depository institutions, such as Synovus Bank, to maintain reserves against their transaction accounts, primarily NOW and regular checking accounts. For 2019, the first $16.3 million of covered balances are exempt from these reserve requirements, aggregate balances between $16.3 million and $124.2 million are subject to a 3% reserve requirement, and aggregate balances above $124.2 million are subject to a reserve requirement of $3,237,000 plus 10% of the amount over $124.2 million. These reserve requirements are subject to annual adjustment by the Federal Reserve.
FDIC Insurance Assessments and Depositor Preference
Synovus Bank’s deposits are insured by the FDIC’s DIF up to the limits under applicable law, which currently are set at $250,000 per depositor, per insured bank, for each account ownership category. Synovus Bank is subject to FDIC assessments for its deposit insurance. The FDIC calculates quarterly deposit insurance assessments based on an institution’s average total consolidated assets less its average tangible equity, and applies one of four risk categories determined by reference to its capital
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levels, supervisory ratings, and certain other factors. The assessment rate schedule can change from time to time, at the discretion of the FDIC, subject to certain limits. On September 30, 2018, the FDIC announced that the designated reserve ratio of the DIF reached 1.36%, exceeding the required 1.35%, two years ahead of the deadline imposed by the Dodd-Frank Act, and therefore the FDIC has eliminated a surcharge on larger banks, such as Synovus Bank. In addition, in 2018 Synovus Bank was subject to quarterly assessments by the FDIC to pay interest on Financing Corporation bonds. For 2018, Synovus Bank's FDIC insurance expense totaled $22.3 million including its Financing Corporation assessments and the DIF surcharge that was in place until September 30, 2018.
Insurance of deposits may be terminated by the FDIC upon a finding that the institution has engaged in unsafe and unsound practices, is in an unsafe or unsound condition to continue operations, or has violated any applicable law, regulation, rule, order or condition imposed by a bank’s federal regulatory agency. In addition, the Federal Deposit Insurance Act provides that, in the event of the liquidation or other resolution of an insured depository institution, the claims of depositors of the institution, including the claims of the FDIC as subrogee of insured depositors, and certain claims for administrative expenses of the FDIC as a receiver, will have priority over other general unsecured claims against the institution, including those of the parent bank holding company.See “Part"Part II - Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Deposits”Deposits" of this Report for further information.
Standards for Safety and Soundness
The Federal Deposit Insurance Act requires the federal bank regulatory agencies to prescribe, by regulation or guideline, operational and managerial standards for all insured depository institutions relating to: (1) internal controls; (2) information systems and audit systems; (3) loan documentation; (4) credit underwriting; (5) interest rate risk exposure; and (6) asset quality. The federal banking agencies have adopted regulations and Interagency Guidelines Establishing Standards for Safety and Soundness to implement these required standards. These guidelines set forth the safety and soundness standards used to identify and address problems at insured depository institutions before capital becomes impaired. Under the regulations, if a regulator determines that a bank fails to meet any standards prescribed by the guidelines, the regulator may require the bank to submit an acceptable plan to achieve compliance, consistent with deadlines for the submission and review of such safety and soundness compliance plans.
Anti-Money Laundering
A continued focus of governmental policy relating to financial institutions in recent years has been combating money laundering and terrorist financing. The International Money Laundering AbatementUSA PATRIOT Act broadened the application of anti-money laundering regulations to apply to additional types of financial institutions such as broker-dealers, investment advisors and Anti-Terrorism Fundinginsurance companies, and strengthened the ability of the U.S. Government to help prevent, detect and prosecute international money laundering and the financing of terrorism. The principal provisions of Title III of the USA PATRIOT Act require that regulated financial institutions, including state member banks: (i) establish an anti-money laundering program that includes training and audit components; (ii) comply with regulations regarding the verification of 2001 specifies “know your customer”the identity of any person seeking to open an account; (iii) take additional required precautions with non-U.S. owned accounts; and (iv) perform certain verification and certification of money laundering risk for their foreign correspondent banking relationships. Failure of a financial institution to comply with the USA PATRIOT Act’s requirements could have serious legal and reputational consequences for the institution. Synovus Bank has augmented its systems and procedures to meet the requirements of these regulations and will continue to revise and update its policies, procedures and controls to reflect changes required by law.
FinCEN has adopted rules that obligaterequire financial institutions to take actionsobtain beneficial ownership information with respect to verify the identity of the account holders in connectionlegal entities with opening an account at any U.S. financial institution. which such institutions conduct business, subject to certain exclusions and exemptions. Bank regulators are focusing their examinations on anti-money laundering compliance, and we continue to monitor and augment, where necessary, our anti-money laundering compliance programs.Banking regulators will consider compliance with the Act’s money laundering provisions in acting upon acquisitionmerger and mergeracquisition proposals. Bank regulators routinely examine institutions for compliance with these obligations and have been active in imposing cease and desist and other regulatory orders and money penalty sanctions against institutions found to be violating these obligations. Sanctions for violations of the Act can be imposed in an amount equal to twice the sum involved in the violating transaction, up to $1 million. Under the Uniting and Strengthening America by Providing Appropriate Tools RequiredOn January 1, 2021, Congress passed federal legislation that made sweeping changes to Intercept and Obstruct Terrorism (“USA PATRIOT”) Act of 2001, financial institutions are subject to prohibitions against specified financial transactions and account relationships as well as enhanced due diligence and “know your customer” standards in their dealings with foreign financial institutions and foreign customers. The USA PATRIOT Act, and its implementing regulations adopted by the FinCen, a bureau of the U.S. Department of the Treasury, requires financial institutions to establishfederal anti-money laundering programs with minimum standardslaws, including changes that include:
•the development of internal policies, procedures, and controls;
•the designation of a compliance officer;


•an ongoing employee training program; and
•an independent audit function to test the programs.
Bank regulators routinely examine institutions for compliance with these anti-money laundering obligations and recently have been activewill be implemented in imposing “cease and desist” and other regulatory orders and money penalty sanctions against institutions found to be in violation of these requirements. In addition, FinCEN issued rules that became effective on May 11, 2018, that require, subject to certain exclusions and exemptions, covered financial institutions to identify and verify the identity of beneficial owners of legal entity customers.subsequent years.
Economic Sanctions
The OFAC is responsible for helping to ensure that U.S. entities do not engage in transactions with certain prohibited parties, as defined by various Executive Orders and acts of Congress. OFAC publishes, and routinely updates, lists of names of persons and organizations suspected of aiding, harboring or engaging in terrorist acts, including the Specially Designated Nationals and Blocked Persons List. If we find a name on any transaction, account or wire transfer that is on an OFAC list, we must undertake certain specified activities, which could include blocking or freezing the account or transaction requested, and we must notify the appropriate authorities.
Concentrations in Lending
During 2006, the federal bank regulatory agencies released guidance on “Concentrations in Commercial Real Estate Lending” (the “Guidance”) and advised financial institutions of the risks posed by CRE lending concentrations. The Guidance
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requires that appropriate processes be in place to identify, monitor and control risks associated with real estate lending concentrations. Higher allowances for loan losses and capital levels may also be required. The Guidance is triggered when CRE loan concentrations exceed either:
•Total reported loans for construction, land development, and other land of 100% or more of a bank’s total risk-based capital; or
•Total reported loans secured by multifamily and nonfarm nonresidential properties and loans for construction, land development, and other land of 300% or more of a bank’s total risk-based capital.
The Guidance also applies when a bank has a sharp increase in CRE loans or has significant concentrations of CRE secured by a particular property type. We have always had exposures to loans secured by CRE due to the nature of our markets and the loan needs of both retailconsumer and commercial customers.clients. We believe our long termlong-term experience in CRE lending, underwriting policies, internal controls, and other policies currently in place, as well as our loan and credit monitoring and administration procedures, are generally appropriate to managing our concentrations as required under the Guidance.
Debit Interchange Fees
Interchange fees, or "swipe" fees, are fees that merchants pay to credit card companies and card-issuing banks such as Synovus Bank for processing electronic payment transactions on their behalf. The maximum permissible interchange fee that a non-exempt issuer such as Synovus Bank may receive for an electronic debit transaction is the sum of 21 cents per transaction and 5 basis pointsbps multiplied by the value of the transaction, subject to an upward adjustment of 1 cent if an issuer certifies that it has implemented policies and procedures reasonably designed to achieve the fraud-prevention standards set forth by the Federal Reserve. In addition, card issuers and networks are prohibited from entering into arrangements requiring that debit card transactions be processed on a single network or only two affiliated networks, and allows merchants to determine transaction routing.
Community Reinvestment Act
Synovus Bank is subject to the provisions of the CRA, which imposes a continuing and affirmative obligation, consistent with their safe and sound operation, to help meet the credit needs of entire communities where the bank accepts deposits, including low- and moderate-income neighborhoods. The Federal Reserve’s assessment of Synovus Bank’s CRA record is made available to the public. Further, a less than satisfactory CRA rating will slow, if not preclude, expansion of banking activities and prevent a company from becoming or remaining a financial holding company. Following the enactment of the Gramm-Leach-Bliley Act (“GLB”), CRA agreements with private parties must be disclosed and annual CRA reports must be made to a bank’s primary federal regulator.the Federal Reserve. A bank holding company will not be permitted to become or remain a financial holding company and no new activities authorized under GLB may be commenced by a holding company or by a bank financial subsidiary if any of its bank subsidiaries received less than a “satisfactory” CRA rating in its latest CRA examination. Federal CRA regulations require, among other things, that evidence of discrimination against applicants on a prohibited basis, and illegal or abusive lending practices be considered in the CRA evaluation. On April 3, 2018, the Department of the Treasury published recommendations for amending the regulations implementing the CRA; on August 28, 2018, the OCC issued an advanced notice of proposed rulemaking seeking industry comment on how the CRA might be modernized. Synovus Bank has a rating of “Satisfactory” in its most recent CRA evaluation.


On September 21, 2020, the Federal Reserve issued an advanced notice of proposed rulemaking that would modernize and substantially revise the regulations implementing the CRA.
Privacy, Credit Reporting, and Data Security
The GLB generally prohibits disclosure of non-public consumer information to non-affiliated third parties unless the consumer has been given the opportunity to object and has not objected to such disclosure. Financial institutions are further required to disclose their privacy policies to customersclients annually. Financial institutions, however, will be required to comply with state law if it is more protective of consumer privacy than the GLB. The GLB also directed federal regulators to prescribe standards for the security of consumer information. Synovus Bank is subject to such standards, as well as standards for notifying customersclients in the event of a security breach. Under federal law, Synovus Bank must disclose its privacy policy to consumers, permit customers to opt out of having nonpublic customer information disclosed to third parties in certain circumstances, and allow customers to opt out of receiving marketing solicitations based on information about the customer received from another subsidiary. States may adopt more extensive privacy protections. Synovus Bank utilizes credit bureau data in underwriting activities. Use of such data is regulated under the Fair Credit Reporting Act and Regulation V on a uniform, nationwide basis, including credit reporting, prescreening, and sharing of information between affiliates and the use of credit data. The Fair and Accurate Credit Transactions Act, which amended the Fair Credit Reporting Act, permits states to enact identity theft laws that are not inconsistent with the conduct required by the provisions of that Act. We are also required to have an information security program to safeguard the confidentiality and security of customer information and to ensure proper disposal. CustomersClients must be notified when unauthorized disclosure involves sensitive customerclient information that may be misused. On November 18, 2021, the federal banking agencies issued a new rule effective in 2022 that requires banks to notify their primary federal regulator within 36 hours of a “computer-security incident” that rises to the level of a “notification incident.”
The federal banking regulators regularly issue guidance regarding cybersecurity intended to enhance cyber risk management standards among financial institutions. As a result, financial institutions, like Synovus and Synovus Bank, are expected to establish multiple lines of defense and to ensure their risk management processes address the risk posed by potential threats to the institution. A financial institution’s management is expected to maintain sufficient processes to effectively respond and recover the institution’s operations after a cyber-attack. A financial institution is also expected to develop appropriate processes
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to enable recovery of data and business operations if a critical service provider of the institution falls victim to this type of cyber-attack. Our information security protocols are designed in part to adhere to the requirements of this guidance.
State regulators have also been increasingly active in implementing privacy and cybersecurity standards and regulations. Recently, several states have adopted regulations requiring certain financial institutions to implement cybersecurity programs and providing detailed requirements with respect to these programs, including data encryption requirements. Many states have also recently implemented or modified their data breach notification and data privacy requirements. We expect this trend of state-level activity in those areas to continue and are continually monitoring developments in the states in which our clients are located.
Anti-Tying Restrictions
In general, a bank may not extend credit, lease, sell property, or furnish any services or fix or vary the consideration for them on the condition that (1) the customerclient obtain or provide some additional credit, property, or services from or to the bank or bank holding company or their subsidiaries or (2) the customerclient not obtain some other credit, property, or services from a competitor, except to the extent reasonable conditions are imposed to assure the soundness of the credit extended. A bank may, however, offer combined-balance products and may otherwise offer more favorable terms if a customerclient obtains two or more traditional bank products. The law also expressly permits banks to engage in other forms of tying and authorizes the Federal Reserve Board to grant additional exceptions by regulation or order. Also, certain foreign transactions are exempt from the general rule.
Consumer Regulation
Activities of Synovus Bank are subject to a variety of statutes and regulations designed to protect consumers. These laws and regulations include, among numerous other things, provisions that:
•limit the interest and other charges collected or contracted for by Synovus Bank, including rules respecting the terms of credit cards and of debit card overdrafts;
•govern Synovus Bank’s disclosures of credit terms to consumer borrowers;
•require Synovus Bank to provide information to enable the public and public officials to determine whether it is fulfilling its obligation to help meet the housing needs of the communitycommunities it serves;
•prohibit Synovus Bank from discriminating on the basis of race, creed or other prohibited factors when it makes decisions to extend credit;
•govern the manner in which Synovus Bank may collect consumer debts; and
•prohibit unfair, deceptive or abusive acts or practices in the provision of consumer financial products and services.
Mortgage Regulation
The CFPB adopted a rule that implements the ability-to-repay and qualified mortgage provisions of the Dodd-Frank Act (the “ATR/QM rule”), which requires lenders to consider, among other things, income, employment status, assets, payment amounts, and credit history before approving a mortgage, and provides a compliance “safe harbor” for lenders that issue certain “qualified mortgages.” The ATR/QM rule defines a “qualified mortgage” to have certain specified characteristics, and generally prohibitprohibits loans with negative amortization, interest-only payments, balloon payments, or terms exceeding 30 years from being qualified mortgages. The rule also establishes general underwriting criteria for qualified mortgages, including that monthly payments be calculated based on the highest payment that will apply in the first five years of the loan and that the borrower have a total debt-to-income ratio that is less than or equal to 43%. While “qualified mortgages” will generally be afforded safe harbor status, a rebuttable presumption of compliance with the ability-to-repay requirements will attach to “qualified mortgages” that are “higher priced mortgages” (which are generally subprime loans). In addition, the securitizer of asset-backed securities must retain not less than 5% of the credit risk of the assets collateralizing the asset-backed securities, unless subject to an exemption for asset-backed securities that are collateralized exclusively by residential mortgages that qualify as “qualified residential mortgages.”
The CFPB has also issued rules to implement requirements of the Dodd-Frank Act pertaining to mortgage loan origination (including with respect to loan originator compensation and loan originator qualifications) as well as integrated mortgage disclosure rules. In addition, the CFPB has issued rules that require servicers to comply with newcertain standards and practices with regard to: error correction; information disclosure; force-placement of insurance; information management policies and procedures; requiring


information about mortgage loss mitigation options be provided to delinquent borrowers; providing delinquent borrowers access to servicer personnel with continuity of contact about the borrower’s mortgage loan account; and evaluating borrowers’ applications for available loss mitigation options. These rules also address initial rate adjustment notices for adjustable-rate mortgages, (ARMs), periodic statements for residential mortgage loans, and prompt crediting of mortgage payments and response to requests for payoff amounts.
The CARES Act granted certain forbearance rights and protection against foreclosure to borrowers with a “federally backed mortgage loan,” including certain first or subordinate lien loans designed principally for the occupancy of one to four families. These consumer protections continue during the COVID-19 pandemic emergency.
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Non-Discrimination Policies
Synovus Bank is also subject to, among other things, the provisions of the Equal Credit Opportunity Act (the “ECOA”) and the Fair Housing Act, (the “FHA”), both of which prohibit discrimination based on race or color, religion, national origin, sex, and familial status in any aspect of a consumer or commercial credit or residential real estate transaction. The Department of Justice, (the “DOJ”), and the federal bank regulatory agencies have issued an Interagency Policy Statement on Discrimination in Lending that provides guidance to financial institutions in determining whether discrimination exists, how the agencies will respond to lending discrimination, and what steps lenders might take to prevent discriminatory lending practices. The DOJ has increased its efforts to prosecute what it regards as violations of the ECOA and FHA.
Available Information
Our website address is www.synovus.com. We file with or furnish to the SEC Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements and annual reports to shareholders, and, from time to time, amendments to these documents and other documents called for by the SEC. The reports and other documents filed with or furnished to the SEC are available to investors on or through our website at investor.synovus.comunder the heading “Financial Information” and then under “SEC Filings.” These reports are available on our website free of charge as soon as reasonably practicable after we electronically file them with the SEC.
In addition, the SEC maintains an Internet website that contains reports, proxy and information statements and other information regarding issuers, such as Synovus, that file electronically with the SEC. The address of that website is www.sec.gov.
We have adopted a Code of Business Conduct and Ethics for our directors, officers and employees and have also adopted Corporate Governance Guidelines. Our Code of Business Conduct and Ethics, Corporate Governance Guidelines and the charters of our boardBoard committees, as well as information on how to contact our Board of Directors, are available in the Corporate Governance Section of our website at investor.synovus.com/govdocsgovernance. We will post any waivers of our Code of Business Conduct and Ethics granted to our directors or executive officers on our website at investor.synovus.com.
We include our website addresses throughout this filing only as textual references. The information contained on our website is not incorporated in this document by reference.

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ITEM 1A. RISK FACTORS

This section highlights the material risks that we currently face. 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.

Strategic Risk

Competition in the financial services industry may adversely affect our future earnings and growth.

We operate in a highly competitive environment and our profitability and our future growth depends on our ability to compete successfully.successfully based on such factors as pricing, convenience, product offerings, technology, accessibility, quality of service, and client relationships. We face pricing competition for loans and deposits and, in order for us to compete for borrowers and depositors, we may be required to offer loans and deposits on terms less favorable to us, including lower rates on our loans and higher rates on our deposits. We also compete for customers based on such factors as convenience, product lines, accessibility of service and service capabilities. Certain of our competitors are larger and have more resources than we do, enabling them to be more aggressive than us in competing for loans and depositsacross the financial services landscape and investing in new products, technology and services. In addition, the ability of non-bank competitors to provide services previously limited to commercial banks has intensified the competition we face. These non-bank competitors are not subject to the same extensive regulations that govern us and, therefore, may be able to operate with greater flexibility and lower cost structures. Non-bank competitors can also operate in areas or offer certain products that may be considered speculative or risky. This significant competition in making loans and attracting and retaining deposits as well as in providing other financial services may impact our future earnings and growth.

Furthermore, the financial services industry could become even more competitive as a result of legislative, regulatory and technological changes and continued consolidation.
•While we cannot predict the actions of state or federal legislatures or regulators, there is increasing likelihood that the bank regulatory landscape could shift due to legislation or regulatory action. Any material change to federal or state banking laws, regulations or enforcement position could result in increased competition or make it more difficult for banks of our size to compete, either broadly or in specific segments of our business.
•Technology has lowered barriers to entry and made it possible for non-banks and smaller banks to offer products and services traditionally provided by larger banks. Additionally, dueCompetitors adopting new technologies or changes to theirconsumer behaviors or expectations could require us to make significant expenditures to modify or make additions to our current products and services.
•There has also been increasing consolidation among regional banks similar in size or larger than us resulting in even larger banks. The resulting larger banks, as well as many competitorsother banks that are larger than us, may be able to achieve economies of scale due to their size and, as a result, may be able to operate more efficiently than us and also offer a broader range of products and services than we do, as well as better pricing for those products and services.

We may not realize the expected benefits from our efficiency and growthstrategic initiatives, either in whole or in part, which could negatively impact our future profitability.

In the current competitive banking environment, overall revenue growth must outpace operating costs, must reduce or grow much slower than overall revenue growth.which requires the successful execution of both growth and efficiency initiatives. In addition, we must continue to implement strategies to grow our loan portfolioproduct and increase non-interest incomeservice offerings and keep pace with changing technologies and client expectations in order to realize continued earnings growth and to remain competitive with the other banks and non-bank financial services providers in the markets we serve. We are continuously implementing strategic efficiencyinitiatives to achieve growth, reduce expense, and growthunlock efficiencies. Our current initiatives for expense reduction, increased efficienciesinclude, but are not limited to, building out our Maast digital banking as a service solution, growing our new corporate and long-term growth.investment banking division, developing certain digital asset capabilities and products, and modernizing our core technology infrastructure. While we have realized cost-savingsgrowth and growthefficiency gains as a result of thesecurrent and past initiatives, including the on-going Synovus Forward initiative, there is no guarantee that these initiatives will be successful in controlling expensessupporting growth or achieving the expected level of future savings and growing revenuesrevenue enhancements that we anticipate. Additionally, any new service and product offerings, particularly digital offerings, will compete directly with other Synovus Bank product and service offerings, so any realized revenue from such growth initiatives may correspond to decreased revenue experienced by other Synovus Bank product and service offerings.
Furthermore, our strategic initiatives may result in the future.an increase in expense, divert management attention, take away from other opportunities that may have proved more successful, negatively impact operational effectiveness or impact employee morale. In addition, while expense control continues to be a major focus for us, management also expects to continue to make strategic investments in technology and talent that are expected to improve our customerclient experience and support future growth which will require an increase in our expenditures. There can be no assurance that we will ultimately realize the anticipated benefits of these strategic initiatives, or that these strategic initiatives
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will not negatively impact our expense reduction and growth strategies, which may impair our earnings growth.

Weorganization. These initiatives may fail to meet our own or our client’s expectations and may fail to keep pace with bank and non-bank competition and we may realize all ofsignificant losses as a result.
Finally, changes to the anticipated benefits ofbank regulatory landscape generally, but particularly with respect to digital product offerings and third-party service providers could negatively impact and undermine the Merger, or those benefits may take longer to realize than expected. We may also encounter significant difficulties in integrating FCB.

Our ability to realize the anticipated benefits of the Merger will depend, to a large extent, on our ability to successfully integrate the acquired businesses. The integration and combination of the acquired businesses is a complex, costly and time-consuming process. As a result, we will be required to devote significant management attention and resources to integrating their business practices and operations with ours. The integration process may disrupt our business and the business of FCB and, if implemented ineffectively, could limit the full realization of the anticipated benefits of the acquisition. The failure to meet the challenges involved in integrating the acquired businesses and to realize the anticipated benefits of the Merger could cause an interruption of, or a loss of momentum in, our business activities or those of FCB and could adversely impact our business, financial condition and results of operations. In addition, the overall integration of the businesses may result in material unanticipated problems, expenses, liabilities, loss of customers and diversionrationale behind several of our management’s and employees’ attention. The challenges of combining the operations of the companies include, among others:

difficulties in achieving anticipated cost savings, synergies, business opportunities and growth prospects from the acquisition;
difficulties in the integration of operations and systems;
difficulties in the assimilation of employees;


difficulties in managing the expanded operations of a larger and more complex company;
challenges in keeping existing customers and obtaining new customers;
challenges in attracting and retaining key personnel, including personnel that are considered key to the future success of FCB’s businesses;
challenges related to FCB's credit quality and credit risk; and
challenges in keeping key business relationships in place.

Many of these factors will be outside of our control and any one of them could result in increased costs and liabilities, decreases in the amount of expected income and diversion of management’s time and energy, which could have a material adverse effect on our business, financial condition and results of operations.

In addition, even if the operations of FCB are integrated successfully with our business, the full benefits of the transaction may not be realized, including the synergies, cost savings, growth opportunities or earnings accretion that are expected. These benefits may not be achieved within the anticipated time frame, or at all, and additional unanticipated costs may be incurred in the integration of the businesses. Furthermore, FCB may have unknown or contingent liabilities that we would assume in the acquisition and that were not discovered during the course of our due diligence. These liabilities could include exposure to unexpected asset quality problems, compliance and regulatory violations, key employee and client retention problems and other problems that could result in significant costs to us.

All of these factors could cause dilution to our earnings per share, decrease or delay the expected accretive effect of the transaction, negatively impact the price of our common stock, or have a material adverse effect on our business, financial condition and results of operations.

initiatives.
The implementation of other new lines of business, or new products and services and new technologies may subject us to additional risk.

We continuously evaluate our service offerings and may implement newhave launched or enhanced a number of lines of business, or offer new products and services, within existing linesand technologies, including, among others, those related to our recent Maast and corporate and investment banking initiatives and our treasury and payments solutions business and asset-based and structured lending capabilities. An important part of our business strategy is to continue these efforts to implement new products, services and technologies designed to better serve our clients and respond to digitization trends in the future.banking. There are substantial risks and uncertainties associated with these efforts.  In developing and marketing new lines of business and/or new products and services, we undergo a new product process to assess the risks of the initiative, and invest significant time and resources to build internal controls, policies and procedures to mitigate those risks, including hiring experienced management to oversee the implementation of the initiative. Initial timetables for the introduction and development of new lines of business, and/or new products or services and/or new technologies may not be achieved and price and profitability targets may not prove feasible. Additionally, such new products, services, and technologies often increase our reliance on third-party service providers. External factors, such as compliance with regulations, competitive alternatives, and shifting market preferences, may also impact the successful implementation of a new line of business, and/or a new product or service.service and/or new technologies. Furthermore, any new line of business, and/or new product or service and/or new technology could require the establishment of new key controls and other controls and have a significant impact on our existing system of internal controls. Failure to successfully manage these risks in the development and implementation of new lines of business and/or new products or services could have a material adverse effect on our business and, in turn, our financial condition and results of operations.

We may pursue attractive bank and non-bank acquisition opportunities as they arise. However, even if we identify attractive acquisition opportunities, we may not be able to complete such acquisitions on favorable terms or realize the anticipated benefits from such acquisitions.

While we continue to focus on organic growth opportunities, and the integration of FCB, we anticipate continuing to evaluate bothmay pursue attractive bank andor non-bank acquisition and consolidation opportunities that arise in our core markets and beyond. The number of financial institutions headquartered in Georgia, Florida, the Southeastern United States, and across the country continues to decline through merger and other consolidation activity. We expectIn the event that attractive acquisition opportunities arise, we would likely face competition for such acquisitions from other banking and financial companies, many of which have significantly greater resources will compete with us to acquire financial services businesses.and may have more attractive valuations. This competition as the number of appropriate merger targets decreases, could either prevent us from being able to complete attractive acquisition opportunities or increase prices for potential acquisitions which could reduce our potential returns, and reduce the attractiveness of these opportunities to us. As a result, we may be unable to identify additional bank and non-bank acquisition opportunities that meet our acquisition criteria. Furthermore, even if we doare able to identify and complete acquisitions, the terms of such acquisition opportunities,acquisitions may not be favorable to us or we may be unablefail to complete such acquisitions on favorable terms, if at all, or realize the anticipated benefits from such acquisitions. Also all acquisitions are subject to various regulatory approvals and if we were unable (or there was a perception that we would be unable) to obtain such approvals for any reason, including due to any actual or perceived capital, liquidity, profitability or regulatory compliance issues, it would impair our ability to consummate acquisitions. In addition, any acquisition could be dilutive to our earnings and shareholders’ equity per share of our common stock.

Operational Risk
Also, acquisitionsFailure to attract and retain employees and the impact of senior leadership transitions may adversely impact our ability to successfully execute our growth and efficiency strategies.
Our financial success depends upon our ability to attract and retain diverse, highly motivated, and well-qualified personnel that we rely on to execute all aspects of our business. We face increasingly significant competition in the recruitment of qualified employees at all levels from financial institutions and others. Moreover, the banking industry continues to transform due to technological innovation, increased demand for workplace flexibility, and competition for talent from non-bank financial services providers, and our ability to recruit and retain qualified individuals that bring a diversity of perspective and innovative thinking to our teams is both more difficult and more necessary than ever before.These trends, combined with labor shortages, have resulted in generally increasing labor costs. Such trends may continue in the near term, which may result in further challenges in hiring and retaining employees throughout the organization. We must continually assess and manage how our talent needs change over time and failure to meet such needs may have a negative impact on our ability to compete.
In addition, our future growth and the continued diversification of our loan portfolio depends, in part, on our ability to attract and retain the right mix of well-qualified employees. If we are subjectunable to various regulatory approvals, includingattract and retain qualified employees, our ability to execute our business strategies may suffer and we may be required to substantially increase our overall compensation or benefits to attract and retain such employees. Furthermore, we generally do not have employment agreements in place with our frontline employees, management team or other key employees and cannot guarantee that our employees will remain with us. The unexpected loss of services of one or more of our key personnel, especially members of our senior management team, could have a material adverse impact on the approvalbusiness because we would lose their skills, knowledge of the FRBmarket, years of industry experience and may have difficulty promptly finding qualified replacement personnel. In addition, the GA DBF. Ifunexpected loss
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or inability to hire or retain branch-level employees could have a material adverse impact on our ability to increase deposits, generate frontline revenue and properly service our clients.
Furthermore, we fail to receive the appropriate regulatory approvals, we will not be able to consummate an acquisition that we believe is inhave had recent leadership changes and transitions involving our best interests. Among other things, our regulators consider our capital, liquidity, profitability, regulatory compliance, including with respect to AML obligations, consumer protection laws and CRA obligations and levels of goodwill and intangibles when considering acquisition and expansion proposals. We cannot be certain when or if, or on what terms and conditions, any required regulatory approvals would be granted, if at all.



Operational Risk

If our enterprise risk management framework is not effective at mitigatingsenior leadership team, as previously announced. Any significant leadership changes involve inherent risk and lossany failure to us, weensure the effective transfer of knowledge and a smooth transition could suffer unexpected losseshinder our strategic planning, execution and our results of operations could be materially adversely affected.

Our enterprise risk management framework seeks to achieve an appropriate balance between risk and return, which is critical to optimizing shareholder value. We have established processes and procedures intended to identify, measure, monitor, report and analyze the types of risk to which we are subject, including strategic, market, credit, liquidity, operational, regulatory compliance, litigation and reputational. However, as with any risk management framework, there are inherent limitations to our risk management strategies as there may exist, or develop in the future risks that we have not appropriately anticipated or identified. For example, the financial and credit crisis and resulting regulatory reform highlighted both the importance and some of the limitations of managing unanticipated risks. If our risk management framework proves ineffective, we could suffer unexpected losses and our business and results of operations could be materially adversely affected.

performance.
The financial services market is undergoing rapid technological changes, and if we are unable to stay current with those changes, we will not be able to effectively compete.

The financial services market, including banking services, is undergoing rapid changes with frequent introductions of new technology-driven products and services.services, primarily related to increased digitization of banking services and capabilities. These trends were accelerated by the COVID-19 pandemic, increasing demand for mobile banking solutions. Our future success will depend, in part, on our ability to keep pace with these technological changes and to use technology to satisfy and grow customerclient demand for our products and services and to create additional efficiencies in our operations. We expect that we will need to makeOur substantial investments in ourdigital banking solutions, technology and information systems to compete effectivelywill increase our dependency on third-party service providers and to stay current with technological changes.such investments may underperform expectations and could result in unexpected losses. Some of our competitors have substantially greater resources to invest in technological improvements and have invested more heavily than us, and will continue to be able to invest more heavilydo so, in developing and adopting new technologies, which may put us at a competitive disadvantage. Furthermore, companies may increasingly utilize artificial intelligenceSome of these competitors consist of financial technology providers, who are beginning to deliveroffer more traditional banking products and services, which could become more competitive and efficient than traditional products and services.may either acquire a bank charter or obtain a bank-like charter, such as the fintech charter provided by the OCC. We may not be able to effectively implement new technology-driven products and services, or be successful in marketing these products and services to our customers.clients or keep pace with our competitors in this arena. As a result, our ability to effectively compete to retain or acquire new business may be impaired, and our business, financial condition or results of operations may be adversely affected.

We may not be able to successfully implement current or future information technology system enhancements and operational initiatives, which could adversely affect our business operations and profitability.

We continue to invest significant resources in our core information technology system enhancementssystems, including by deepening and operational initiativesexpanding our use of cloud-based applications, in order to provide functionality and security at an appropriate level, and to improve our operating efficiency and to streamline our customerclient experience. These initiatives significantly increase the complexity of our relationships with third-party service providers and such relationships may be difficult to unwind. We may not be able to successfully implement and integrate such system enhancements and initiatives, which could adversely impact the ability to comply with a number of legal and regulatory requirements, which could result in sanctions from regulatory authorities. In addition, these projects could have higher than expected costs and/or result in operating inefficiencies, which could increase the costs associated with the implementation as well as ongoing operations. Failure to properly utilize system enhancements that are implemented in the future could result in impairment charges that adversely impact our financial condition and results of operations, could result in significant costs to remediate or replace the defective components and could impact our ability to compete. In addition, we may incur significant training, licensing, maintenance, consulting and amortization expensesexpense during and after implementation, and any such costs may continue for an extended period of time. As such, we cannot guarantee that the anticipated long-term benefits of these system enhancements and operational initiatives will be realized.

We may not be able to attract and retain key employees, which may adversely impact our ability to successfully execute our growth strategies.

Our financial success depends upon our ability to attract and retain highly motivated, well-qualified personnel that we rely on to execute on our strategy and initiatives, including our senior management team. We face significant competition in the recruitment of qualified employees from financial institutions and others. Moreover, as the banking industry transforms due to technological innovation, we must continually assess and manage how our talent needs change over time. In addition, our future growth and the continued diversification of our loan portfolio depends, in part, on our ability to attract and retain the right mix of well-qualified employees. If we are unable to attract and retain qualified employees, our ability to execute our business strategies may suffer and we may be required to substantially increase our overall compensation or benefits to attract and retain such employees. Furthermore, we generally do not have employment agreements in place with our management team and key team members and cannot guarantee that our management team and other key team members will remain with us. The unexpected loss of services of one or more of our key personnel, especially members of our senior management team, could have a material adverse


impact on the business because we would lose their skills, knowledge of the market, years of industry experience and may have difficulty promptly finding qualified replacement personnel.

In 2016 federal agencies proposed regulations which might significantly change the regulation of incentive compensation programs at financial institutions. The proposal would create four tiers of institutions based on asset size. Institutions in the top two tiers (over $50 billion in assets) would be subject to rules much more detailed and proscriptive than are currently in effect. While our total assets are currently below $50 billion, they could exceed this amount in future periods. As of December 31, 2018, these rules have not been implemented nor withdrawn. These regulations may significantly restrict the amount, form, and context in which we pay incentive compensation and may put us at a competitive disadvantage compared to non-financial institutions in terms of attracting and retaining key employees.

We rely extensively on information technology systems to operate our business and an interruption or security breach may disrupt our business operations, result in reputational harm and have an adverse effect on our operations.

As a large financial institution, we rely extensively on our information technology systems to operate our business, including to process, record and monitor a large number of customerclient transactions on a continuous basis. As customer,client, public and regulatory expectations regarding operational and information security have increased, our operational systems and infrastructure must continue to be safeguarded and monitored for potential failures, disruptions and breakdowns. Our business, financial, accounting, data processing systems or other operating systems and facilities may stop operating properly or become disabled or damaged as a result of a number of factors including events that are wholly or partially beyond our control. For example, there could be sudden increases in customerclient transaction volume; electrical or telecommunications outages; natural disasters such as earthquakes, tornadoes, and hurricanes; disease pandemics; events arising from local or larger scale political or social matters, including terrorist acts; and, as described below, cyber-attacks.

We While we have policies, procedures and systems designed to prevent or limit the effect of possible failures, interruptions or breaches in security of information systems and business continuity programs designed to provide services in the case of an event resulting in material disruptions of our operating systems. We regularly seek to test the effectiveness of and enhance these policies, procedures and systems. However,such events, there is no guarantee that these safeguards or programs will address all of the threats that continue to evolve.

Disruptions or failures in the physical infrastructure or operating systems that support our businesses and customers, or cyber-attacks or security breaches of the networks, systems, or devices that our customers use to access our products and services, could result in customer attrition, regulatory and other fines, penalties or intervention, reputational damage, reimbursement or other compensation costs and/or additional compliance costs, any of which could materially adversely affect our business, results of operations or financial condition.

We face significant cyber and data security risk that could result in the disclosure of confidential information, adversely affect our business or reputation and expose us to significant liabilities.

As a large financial institution, we are under continuous threat of loss due to the velocity and sophistication of cyber-attacks. This risk continues to increase and attack methods continue to evolve in sophistication, velocity, and frequency and can
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occur from a variety of sources, such as foreign governments, hacktivists, or other well-financed entities, and may originate from less regulated and remote areas of the world. Furthermore, increasingly common remote working environments for both Synovus and many of our clients has heightened these risks. We continually review the security of our IT systems and make the necessary investments to improve the resiliency of our systems and their security from attack. Nonetheless, there remains the risk that we may be materially harmed by a cyber-attack or information security breach. Further, there is no guarantee that our response to any cyber-attack or system interruption, breach or failure will be effective to mitigate and remediate the issues resulting from such an event, including the costs, reputational harm and litigation challenges that we may face as a result.

Data privacy laws also continue to evolve, with states increasingly proposing or enacting legislation that relates to data privacy and data protection. We may be required to incur additional expense to comply with these evolving regulations and could face penalties for violating any of these regulations.
Two of the most significant cyber-attack risks that we face are e-fraud and loss of sensitive customerclient data. Loss from e-fraud occurs when cybercriminals breach and extract funds directly from customerclient or our accounts. Any loss of sensitive customerclient data that results from attempts to breach our systems, such as account numbers and social security numbers, would present significant reputational, legal and/or regulatory costs to us. Our risk and exposure to these matters remains heightened because of the evolving nature and complexity of these threats from cybercriminals and hackers, our plans to continue to provide internet banking and mobile banking channels, and our plans to develop additional remote connectivity solutions to serve our customers.clients. While we have not experienced any material losses relating to cyber-attacks or other information security breaches to date, we have been the subject of attempted hacking and cyber-attacks and there can be no assurance that we will not suffer such significant losses in the future.

The occurrence of any cyber-attack or information security breach could result in material adverse consequences to us including damage to our reputation, and the loss of customers.clients and violations of applicable data privacy laws. We also could face litigation or additionaland regulatory scrutiny.action. Litigation or regulatory actions in turn could lead to significant liability or other sanctions, including fines and penalties or reimbursement to


customers clients adversely affected by a security breach. Even if we do not suffer any material adverse consequences as a result of events affecting us directly, successful attacks or systems failures at other large financial institutions could lead to a general loss of customerclient confidence in financial institutions including us.

If our enterprise risk management framework is not effective at mitigating risk and loss to us, we could suffer unexpected losses and our results of operations could be materially adversely affected.
Our enterprise risk management framework seeks to achieve an appropriate balance between risk and return, which is critical to optimizing shareholder value. We have established processes and procedures intended to identify, measure, monitor, report and analyze the types of risk to which we are subject, including strategic, market, credit, liquidity, capital, operational, regulatory compliance, litigation and reputational. However, as with any risk management framework, there are inherent limitations to our risk management strategies as there may exist, or develop in the future, risks that we have not appropriately anticipated or identified. For example, the financial and credit crisis and resulting regulatory reform highlighted both the importance and some of the limitations of managing unanticipated risks. If our risk management framework proves ineffective, we could suffer unexpected losses and our business and results of operations could be materially adversely affected.
Our ability to maintain our reputation is critical to the success of our business, and the failure to do so may materially adversely affect our performance.

Our reputation is one of the most valuable components of our business. As such, we strive to conduct our business in a manner that enhances our reputation. This is done, in part, by recruiting, hiring, and retaining and providing growth opportunities for employees who share our core values of being an integral part of the communities we serve, delivering superior service to our customers,clients, caring about our customersclients and team membersemployees and investing in our information technology and other systems. If our reputation is negatively affected by the actions of our employees or otherwise, including as a result of operational errors, clerical or record-keeping errors or those resulting from faulty or disabled computer or telecommunications systems or a successful cyberattack against us or other unauthorized release or loss of customerclient information, our reputation, business and our operating results may be materially adversely affected.

Damage to our reputation could also negatively impact our credit ratings and impede our access to the capital markets.
We rely on other companies to provide key components of our business infrastructure.

Third parties provide key components of our business operations such as our core technology infrastructure, cloud-based operations, data processing, recording and monitoring transactions, online banking interfaces and services, Internet connections and network access. We have selected these third-party vendors carefully and have conducted the due diligence consistent with regulatory guidance and best practices. While we have ongoing programs to review third party vendors and assess risk, we do not control their actions. Any problems caused by these third parties, including those resulting from disruptions in communication services provided by a vendor, issues at a third-party vendor of a vendor, failure of a vendor to handle current or higher volumes, cyber-attacks and security breaches at a vendor, failure of a vendor to provide services for any reason or poor performance of services, could adversely affect our ability to deliver products and services to our customersclients and otherwise
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conduct our business. Financial or operational difficulties of a third-party vendor could also hurt our operations if those difficulties interfere with the vendor's ability to serve us. Furthermore, our vendors could also be sources of operational and information security risk to us, including from breakdowns or failures of their own systems or capacity constraints. Replacing these third-party vendors could also create significant delay and expense. Accordingly, use of such third parties creates an unavoidable inherent risk to our business operations. Our digital services growth initiatives, core technology upgrades, and digital asset initiatives constitute specific increases in third-party risk as such initiatives are distinctly dependent on the performance of our third-party partners.

As an issuer of credit and debit cards we are exposed to losses in the event that holders of our cards experience fraud on their card accounts.

Our customersclients regularly use Synovus-issued credit and debit cards to pay for transactions with retailers and other businesses. There is the risk of data security breaches at these retailers and other businesses that could result in the misappropriation of our customers’clients’ credit and debit card information. When our customers use Synovus-issued cards to make purchases from those businesses, card account information is provided to the business. If the business’s systems that process or store card account information are subject to a data security breach, holders of our cards who have made purchases from that business may experience fraud on their card accounts. While we expect that the transition to EMV-enabled credit and debit cards will reduce the likelihood of fraudulent transactions and the associated costs, weWe also may nonetheless suffer losses associated with reimbursing our customersclients for fraudulent transactions on customers’clients’ card accounts, as well as for other costs related to data security compromise events, such as replacing cards associated with compromised card accounts. In addition, we provide card transaction processing services to some merchant customersclients under agreements we have with payment networks such as Visa and MasterCard. Under these agreements, we may be responsible for certain losses and penalties if one of our merchant customersclients suffers a data security breach.

In the last several years, a number of large retailers suffered substantial data security breaches compromising millions of credit and debit card accounts. To date, our losses and costs related to these breaches have not been material, but other similar events in the future could be more significant to us.

Our independent sales organization relationships are complex and may expose us to losses.

We maintain relationships with a number of ISOs, which are organizations that are not Visa or MasterCard member banks, but which are associated with us as a member bank. These ISOs generally act as intermediaries for third party companies that want to develop the capacity to accept payment cards, andcards. ISO activities include, among other things, acquiring and issuing functions, soliciting merchants and other customers,clients, soliciting cardholders, underwriting and monitoring, arranging for terminal leases or purchases, account and transaction processing, and customerclient service. Our ISO relationships include (but are not limited to) our relationships with MPS where we process credit and debit card transactions on behalf of various merchants.



Because our ISO program entails a host of complex business relationships with third parties, weWe face risks related to our oversight and supervision of the ISO program (including compliance, risk and reputational monitoring), as well as to the reputation and financial viability of the ISOs with which we do business. Our oversight and supervision responsibilities include, but are not limited to, monitoring of the ISO program and relationships, compliance, portfolio awareness, reputational monitoring, and risk monitoring. Any failure by us to appropriately oversee and supervise our ISO program could damage our reputation, result in regulatory or compliance issues, result in third party litigation, and cause financial losses to us. Further, our ISO program is highly dependent upon the activities and financial viability of our ISO counter-parties, and any negative developments at the ISOs - reputational, compliance-related, financial, or otherwise - may present financial losses and other risk to us.

The costs and effects of litigation, investigations or similar matters involving us or other financial institutions or counterparties, or adverse facts and developments related thereto, could materially affect our business, operating results and financial condition.

We may be involved from time to time in a variety of litigation, investigations, inquiries or similar matters arising out of our business, including those described in “Part I - Item 3. Legal Proceedings” and "Part II - Item 8. Financial Statements and Supplementary Data - Note 1514 - Commitments and Contingencies" of this Report. Furthermore, litigation against banks tend to increase during economic downturns and periods of credit deterioration which may occur or worsen as a result of the continued COVID-19 pandemic. The industry's transition away from LIBOR may also increase our litigation risk.
We manage thosethese risks through internal controls, personnel training, insurance, litigation management, our compliance and ethics processes, and other means. However, the commencement, outcome, and magnitude of litigation cannot be predicted or controlled with any certainty. We establish reserves for legal claims when payments associated with the claims become probable and the losses can be reasonably estimated. We may still incur legal costs for a matter even if we have not established a reserve. In addition, the actual cost of resolving a legal claim may be substantially higher than any amounts reserved for that matter. For those legal matters where the amounts associated with the claims are not probable and the costs cannot be reasonably estimated, Synovus estimates a range of reasonably possible losses. As of December 31, 2018,2021, Synovus' management currently estimates the aggregate range of reasonably possible losses resulting from our outstanding litigation, including, without limitation, the matters described in this Report, 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 us, and the actual losses could prove to be higher. As there are further developments in these legal matters, we will reassess these matters and the estimated range of reasonably possible losses may change as a result of this assessment. In addition, in the future, we may need to record additional litigation reserves with respect to these matters. Further, regardless of how these matters proceed, it could significantly harm our reputation and divert our management's attention and other resources away from our business.

Our insurance may not cover all claims that may be asserted against it and indemnification rights to which we are entitled may not be honored, and any claims asserted against us, regardless of merit or eventual outcome, may harm our reputation. Should the ultimate judgments or settlements in any litigation or investigation significantly exceed our insurance coverage, they could have a material adverse effect on our business, financial condition and results of operations. In addition, premiums for insurance covering the financial and banking sectors are rising. We may not be able to obtain appropriate types or levels of insurance in the future, nor may we be able to obtain adequate replacement policies with acceptable terms or at historic rates, if at all.

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Credit and Liquidity Risk

Changes in interest rates may have an adverse effect on our net interest income.
Net interest income, which is the difference between the interest income that we earn on interest-earning assets and the interest expense that we pay on interest-bearing liabilities, is a major component of our income and our primary source of revenue from our operations. Narrowing of interest rate spreads could adversely affect our earnings and financial condition. We cannot control or predict with certainty changes in interest rates. Regional and local economic conditions, competitive pressures and the policies of regulatory authorities, including monetary policies of the FRB, affect interest income and interest expense.
While rates remain historically low, we expect interest rates to rise, which can have a negative impact on our business by reducing the amount of money our clients borrow or by adversely affecting their ability to repay outstanding loan balances that may increase due to adjustments in their variable rates. In addition, in a rising interest rate environment we may have to offer more attractive interest rates to depositors to compete for deposits, or pursue other sources of liquidity, such as wholesale funds.
Decreasing interest rates reduce our yield on our variable rate loans and on our new loans, which reduces our net interest income. In addition, lower interest rates may reduce our realized yields on investment securities which would reduce our net interest income and cause downward pressure on net interest margin in future periods. A significant reduction in our net interest income could have a material adverse impact on our capital, financial condition and results of operations.
We have ongoing policies and procedures designed to manage the risks associated with changes in market interest rates and actively manage these risks through hedging and other risk mitigation strategies. However, if our assumptions are wrong or overall economic conditions are significantly different than anticipated, our risk mitigation techniques may be ineffective or costly.
Our allowance for loancredit losses may not cover actual losses, and we may be required to materially increase our allowance, which may adversely affect our capital, financial condition and results of operations.

We derive the most significant portion of our revenuesrevenue from our lending activities. When we lend money, commit to lend money or enter into a letter of credit or other contract with a counterparty, we incur credit risk, which is the risk of losses if our borrowers do not repay their loans or our counterparties fail to perform according to the terms of their contracts. We estimate and maintain an allowance for loancredit losses, which is a reserve established through a provision for loan losses charged to expenses,expense, representing management's best estimate of probablelife of loan credit losses that have been incurred within the existing portfolio of loans and related unfunded commitments, as described under "Part II - Item 8. Financial Statements and Supplementary Data - Note 1 - Summary of Significant Accounting Policies" and “Part"Part II - Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies - Allowance for Loan Losses."Credit Losses" in this Report. The allowance, in the judgment of management, is established to reserve for estimated loancredit losses and risks inherent in the loan portfolio. The determination of the appropriate level of the allowance for loancredit losses inherently involves a high degree of subjectivity and requires us to make significant estimatesthe use of current credit risks using existingboth qualitative and quantitative information, including estimates, assumptions, and quantitative modeling techniques, all of which may undergo material changes. Changes in economic conditions affecting borrowers, new information regarding existing loans, identification of additional problem loans, changes in assumptions regarding a borrower's ability to pay, changes in collateral values risk ratings, and other factors, both within and outside of our control, may cause the allowance for loancredit losses to become inadequate and require an increase in the provision for loan losses. In addition, the FASB has adopted new accounting standards for the recognition and measurement of credit losses for loans and certain other instruments. The new standards will be effective beginning January 1, 2020. While we are still evaluating the impact of these new accounting standards, we
We expect that the allowance for loancredit losses will be higher under the new CECL standard adopted in 2020 will be more volatile and as such


could have an impact on our results of operations. For a discussion of changes in these accounting standards and regulatory capital implications, see “Part 1I - Item 1. Business - Supervision, Regulation, and Other Factors - Capital Requirements.”

Because the risk rating of the loans is dependent on certain subjective information and is subject to changes in the borrower's credit risk profile, evolving local market conditions and other factors, it can be difficult for us to predict the effects that those factors will have on the classifications assigned to the loan portfolio, and thus difficult to anticipate the velocity or volume of the migration of loans through the classification process and effect on the level of the allowance for loan losses. Accordingly, we monitor our credit quality and our reserve requirements and use that as a basis for capital planning and other purposes. See "Part II - Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity" and "Part II - Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Capital Resources" of this Report for further information.

Various regulatory agencies, as an integral part of their examination procedures, periodically review the allowance.allowance as well as the supporting methods and processes. Based on their judgments about information available to them at the time of their examination, such agencies may require us to recognize additions to the allowance or additional loan charge offs. An increase in the allowance for loancredit losses would result in a decrease in net income and capital, and could have a material adverse effect on our capital, financial condition and results of operations.

Changes in interest rates may have an adverse effect on our net interest income.

Net interest income, which is the difference between the interest income that we earn on interest-earning assets and the interest expense that we pay on interest-bearing liabilities, is a major component of our income and our primary source of revenue from our operations. A narrowing of interest rate spreads could adversely affect our earnings and financial condition. We cannot control or predict with certainty changes in interest rates. Regional and local economic conditions, competitive pressures and the policies of regulatory authorities, including monetary policies of the FRB, affect interest income and interest expense.

If interest rates were to increase it could have a negative impact on our business by reducing the amount of money our customers borrow or by adversely affecting their ability to repay outstanding loan balances that may increase due to adjustments in their variable rates. In addition, if interest rates were to increase, in order to compete for deposits in our primary market areas, we may have to offer more attractive interest rates to depositors, or pursue other sources of liquidity, such as wholesale funds. If interest rates were to decrease, our yield on our variable rate loans and on our new loans would decrease, reducing our net interest income. In addition, lower interest rates may reduce our realized yields on investment securities which would reduce our net interest income and cause downward pressure on net interest margin in future periods. A significant reduction in our net interest income could have a material adverse impact on our capital, financial condition and results of operations.

We have ongoing policies and procedures designed to manage the risks associated with changes in market interest rates and actively manage these risks through hedging and other risk mitigation strategies. However, if our assumptions are wrong or overall economic conditions are significantly different than anticipated, our risk mitigation techniques may be ineffective or costly.

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.

We may be unable to access historical and alternative sources of liquidity, including the capital markets, brokered deposits, and borrowings from the FHLB, which could adversely affect our overall liquidity. Liquidity represents the extent to which we have readily available sources of funding to meet the needs of our depositors, borrowers and creditors, to support asset growth, and to otherwise sustain our operations and the operations of our subsidiary bank. In managing our consolidated balance sheet,sheets, we depend on access to a variety of sources of funding to provide us with sufficient capital resources and liquidity to meet our commitments and business needs, and to accommodate the transaction and cash management needs of our customers. Sourcesclients. In addition to core deposits, sources of funding available to us, and upon which we rely as regular components of our liquidity and funding management strategy, include borrowings from the FHLB and brokered deposits. See "Part II - Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity" and "Part II - Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Capital Resources" of this Report for further information. We also have historically enjoyed a solid reputation in the capital markets and have been able to raise funds in the form of either short- or long-term borrowings or equity or debt issuances. If, due to market disruptions, perceptions about our credit ratings or other factors, we are unable to access the capital markets in the future, our capital resources and liquidity may be adversely affected.

In general, the amount, type and cost of our funding, including from other financial institutions, the capital markets and deposits, directly impacts our costs of operating our business and growing our assets and can therefore positively or negatively affect our financial results. A number of factors could make funding more difficult, more expensive or unavailable
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on any terms, including, but not limited to, a downgrade in our credit ratings, financial results, changes within our organization, specific events


that adversely impact our reputation, disruptions in the capital markets, specific events that adversely impact the financial services industry, counterparty availability, changes affecting our assets, the corporate and regulatory structure, interest rate fluctuations, general economic conditions and the legal, regulatory, accounting and tax environments governing our funding transactions. Also, we compete for funding with other banks and similar companies, many of which are substantially larger, and have more capital and other resources than we do. In addition, as some of these competitors consolidate with other financial institutions, these advantages may increase. Competition from these institutions may increase the cost of funds.

In addition to bank level liquidity management, we must manage liquidity at the Parent Company for various needs including potential capital infusions into subsidiaries, the servicing of debt, the payment of dividends on our common stock and preferred stock and share repurchases. The primary source of liquidity for us consists of dividends from Synovus Bank which are governed by certain rules and regulations of our supervising agencies. During 2016, Synovus Bank made upstream cash dividends to the Parent Company totaling $325.0 million. During 2017, Synovus Bank and non-bank subsidiaries made cash distributions to the Parent Company totaling $451.0 million including cash dividends of $283.2 million. During 2018, Synovus Bank and non-bank subsidiaries made upstream cash distributions to the Parent Company totaling $260.0 million including cash dividends of 250.0 million. 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, GA DBF rules and related statutes contain additional restrictions on payments of dividends by Synovus Bank. In particular, the Georgia Financial Institutions Code contains restrictions on the ability of a Georgia bank to pay dividends other than from retained earnings and under other circumstances without the approval of the GA DBF. As a result of these restrictions, Synovus Bank may be required to seek approval from the GA DBF to pay dividends. See “Part I - Item 1A. Risk Factors - We may not be able to generate sufficient cash to service all of our debt and repay maturing debt obligations” and "Part 1 - Item 1. Business - Supervision, Regulation, and Other Factors - Dividends" of this Report for further information. Synovus expects that it will receive additional dividends from Synovus Bank in 2019. If Synovus does not receive additional dividends from Synovus Bank in 2019 at the levels anticipated,as needed, its liquidity could be adversely affected, and it may not be able to continue to execute its current capital plan to return capital to its shareholders. In addition to dividends from Synovus Bank, we have historically had access to a number of alternative sources of liquidity, including the capital markets, but there is no assurance that we will be able to obtain such liquidity on terms that are favorable to us, or at all. If our access to these traditional and alternative sources of liquidity is diminished or only available on unfavorable terms, then our overall liquidity and financial condition will be adversely affected.

Changes in our asset quality could adversely affect our results of operations and financial condition.

Asset quality measures the performance of a borrower in repaying a loan, with interest, on time. While we believe we have benefited from relatively stable asset quality, there are elements of our loan portfolio that inherently present greater credit risk. While we believe that we manage asset quality through prudent underwriting practices and collection operations, it is possible that our asset quality could deteriorate, depending upon economic conditions and other factors.

Despite the economic disruption caused by the COVID-19 pandemic, our asset quality generally remains strong, but further economic disruption could negatively impact asset quality in future periods, particularly as to those borrowers in certain adversely and disproportionately impacted industries including restaurants, hotels, and commercial retail.
If Synovus Bank loses or is unable to grow its deposits, it may be subject to payingliquidity risk and higher funding costs.

The total amount that we pay for funding costs is dependent, in part, on Synovus Bank’s ability to grow and retain its deposits. If Synovus Bank is unable to sufficiently grow and retain its deposits at competitive rates to meet liquidity needs, it may be subject to paying higher funding costs to meet these liquidity needs.
Synovus Bank competes with banks and other financial services companies for deposits. If competitorsAs a result of monetary policy and the broader market for interest rates and funding, we expect that we may be required to raise the rates they pay on our deposits to keep pace with our competition. As a result, we expect that Synovus Bank’s funding costs may increase either becausein the near term. Furthermore, if Synovus Bank raises rateswere to avoid losinglose deposits, or because Synovus Bank loses deposits andit must rely on more expensive sources of funding. HigherThis could result in a failure to maintain adequate liquidity and higher funding costs, reducereducing our net interest margin and net interest income. Synovus Bank’s customersIn addition, our access to deposits may be affected by the liquidity needs of our depositors. In particular, a substantial majority of our liabilities in 2021 were checking accounts and other liquid deposits, which are payable on demand or upon several days' notice, while by comparison, a substantial majority of our assets were loans, which cannot be called or sold in the same time frame. Moreover, our clients could withdraw their deposits in favor of alternative investments, causing Synovus Bankinvestments. While we have historically been able to losereplace maturing deposits and advances as necessary, we may not be able to replace such funds in the future, especially if a lower cost sourcelarge number of funding. Checking and savings account balances and other formsour depositors seek to withdraw their accounts, regardless of customer deposits may decrease when customers perceive alternative investments, such as the stock market, as providing a better risk/return tradeoff.

reason.
We could realize losses if we determine to sell non-performing assets and the proceeds we receive are lower than the carrying value of such assets.

Distressed asset sales have been a component of our strategy to further strengthen the consolidated balance sheet,sheets, improve asset quality, and enhance earnings. We could realize future losses if the proceeds we receive upon dispositions of non-performing assets are lower than the recorded carrying value of such assets, which could adversely affect our results of operations in future periods. Accordingly, we could realize an increased level of credit costs in any period during which we determine to dispose of an increased level of distressed assets. Further, although market conditions have improved significantly over the past decade, if market conditions experience another downturn,deteriorate, this could negatively impact our ability to dispose of distressed assets and may result in higher credit losses on sales of distressed assets.



We may not be able to generate sufficient cash to service all of our debt and repay maturing debt obligations.

As of December 31, 2018,2021, we and our consolidated subsidiaries had $1.66$1.20 billion of long-term debt outstanding. Our ability to make scheduled payments of principal and interest or to satisfy our obligations in respect of our debt, to refinance our
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debt or to fund capital expenditures will depend on our future financial and operating performance and our ability to maintain adequate liquidity. Prevailing economic conditions (including interest rates), and regulatory constraints, including, among other things, on distributions to us from our subsidiaries and required capital levels with respect to our subsidiary bank and financial subsidiaries, business and other factors, many of which are beyond our control, may also affect our ability to meet these needs. We may not be able to generate sufficient cash flows from operations, or obtain future borrowings in an amount sufficient to enable us to pay our debt, or to fund our other liquidity needs. We may need to refinance all or a portion of our debt on maturity, and we may not be able to refinance any of our debt when needed on commercially reasonable terms or at all. If our cash flow and capital resources are insufficient to fund our debt obligations, we may be forced to reduce or delay investments in our business, sell assets, seek to obtain additional equity or debt financing or restructure our debt on terms that may not be favorable to us.

We may be unable to pay dividends on our common stock and Series D Preferred Stockpreferred stock.

Holders of our common stock and Series D Preferred Stockpreferred stock are only entitled to receive such dividends as our Board of Directors may declare out of funds legally available for such payments. Although we have historically paid a quarterly cash dividend to the holders of our common stock and Series D Preferred Stock,preferred stock, we are not legally required to do so. Further, the Federal Reserve could decide at any time that paying any dividends on our common stock or preferred stock could be an unsafe or unsound banking practice. The reduction or elimination of dividends paid on our common stock or preferred stock could adversely affect the market price of our common stock or preferred stock, as applicable. In addition, if we fail to pay dividends on our Series D Preferred Stockpreferred stock for six quarters, whether or not consecutive, the holders of the Series D Preferred Stocksuch preferred stock shall be entitled to certain rights to elect two directors to our Board of Directors.

For a discussion of current regulatory limits on our ability to pay dividends, see "Part 1I - Item 1. Business - Supervision, Regulation, and Other Factors - Payment of Dividends" and “Part I - Item 1A - Risk Factors - Compliance and Regulatory Risk - We may become subject to supervisory actions and enhanced regulation that could have a material adverse effect on our business, reputation, operating flexibility, financial condition and the value of our common stock and preferred stock” in this Report for further information.

Compliance and Regulatory Risk

The banking industry is highly regulated, and the regulatory framework, together with any future legislative or regulatory changes, may have a significant adverse effect on our business, financial condition or results of operations.

The banking industry is extensively regulated and supervised under both federal and state laws and regulations that are intended primarily for the protection of depositors, customers, federal deposit insurance funds and the banking system as a whole, not for the protection of our stockholders and creditors. We and Synovus Bank are subject to regulation and supervision by the Federal Reserve, the GA DBF, and the CFPB. The laws and regulations applicable to us govern a variety of matters, including permissible types, amounts and terms of loans and investments we may make, the maximum interest rate that may be charged, the amount of reserves Synovus Bank must hold against deposits it takes, the types of deposits Synovus Bank may accept and the rates it may pay on such deposits, maintenance of adequate capital and liquidity, changes in the control of the company and Synovus Bank, restrictions on dividends and establishment of new offices by Synovus Bank. We must obtain approval from our regulators before engaging in certain activities, and there can be no assurance that any regulatory approvals we may require will be obtained, either in a timely manner or at all. Our regulators also have the ability to compel us to, or restrict us from, taking certain actions entirely, such as actions that our regulators deem to constitute an unsafe or unsound banking practice. Our failure to comply with any applicable laws or regulations, or regulatory policies and interpretations of such laws and regulations, could result in sanctions by regulatory agencies, civil money penalties or damage to our reputation, all of which could have a material adverse effect on our business, financial condition or results of operations.

We cannot predict whether new legislation will be enacted and, if enacted, the effect that it, or any regulations, would have on our business, financial condition, or results of operations. See “Part I - Item 1. Business - Supervision, Regulation and Other Factors” of this Report for further information. These changes may result in increased costs of doing business, decreased revenues and net income, may reduce our ability to effectively compete to attract and retain customers, or make it less attractive for us to continue providing certain products and services. Any future changes in federal and state law and regulations, as well as the interpretations and implementations of such laws and regulations, could affect us in substantial and unpredictable ways, including those listed above, impact the regulatory structure under which we operate, significantly increase our costs, impede the efficiency of our internal business processes, require us to increase our regulatory capital and modify our business strategy, limit our ability


to pursue business opportunities in an efficient manner, or other ways that could have a material adverse effect on our business, financial condition or results of operations.

The current presidential administration has also introduced further uncertainty into future implementation and enforcement of the Dodd-Frank Act and other regulatory requirements applicable to the banking sector. In addition, various proposals for regulatory simplification or relief were approved by Congress and signed into law by the President of the United States in 2018. See “Part I - Item 1. Business - Supervision, Regulation and Other Factors” of this Report for further information. While these developments have contributed to increased market valuations of some companies in the banking and financial services industry, there is no assurance that any regulatory changes will be implemented, that benefits to our future financial performance will continue to be realized or that any such regulatory changes will not be reversed by future administrations.

The fiscal and monetary policies of the federal government and its agencies could have a material adverse effect on our earnings.

The Federal Reserve Board regulates the supply of money and credit in the U.S. Its policies determine in large part the cost of funds for lending and investing and the return earned on those loans and investments, both of which affect our net interest margin. They can also materially decrease the value of financial assets we hold. Federal Reserve policies may also adversely affect borrowers, potentially increasing the risk that they may fail to repay their loans, or could adversely create asset bubbles which result from prolonged periods of accommodative policy. This, in turn, may result in volatile markets and rapidly declining collateral values. The monetary policies of the Federal Reserve and other governmental policies have had a significant effect on the operating results of commercial banks in the past and are expected to continue to do so in the future. Because of changing conditions in the national and international economies and in the money markets, as well as the result of actions by monetary and fiscal authorities, all of which are beyond our control, it is not possible to predict with certainty future changes in interest rates, deposit levels, loan demand, or the business and results of operations of Synovus and Synovus Bank, or whether changing economic conditions will have a positive or negative effect on operations and earnings. Also, potential new taxes or increased taxes on corporations generally, or on financial institutions specifically, could adversely affect our net income.

The banking industry is highly regulated, and the regulatory framework, together with any future legislative or regulatory changes, may have a significant adverse effect on our business, financial condition or results of operations.
The banking industry is extensively regulated and supervised under both federal and state laws and regulations that are intended primarily for the protection of depositors, clients, federal deposit insurance funds and the banking system as a whole, not for the protection of our shareholders and creditors. We and Synovus Bank are subject to regulation and supervision by the Federal Reserve, the GA DBF, and the CFPB. The laws and regulations applicable to us govern a variety of matters, including permissible types, amounts and terms of loans and investments we may make, the maximum interest rate that may be charged, the amount of reserves Synovus Bank must hold against deposits it takes, the types of deposits Synovus Bank may accept and the rates it may pay on such deposits, maintenance of adequate capital and liquidity, changes in the control of the company and Synovus Bank, restrictions on dividends and establishment of new offices by Synovus Bank. We incur significant, recurring costs to comply with all applicable regulations and there is no guarantee that our compliance programs will ensure compliance with all applicable regulations. We must obtain approval from our regulators before engaging in certain activities, and there can be no assurance that any regulatory approvals we may require will be obtained, either in a timely manner or at all. In addition, new technologies could make regulatory compliance more challenging. Remaining compliant and receiving regulatory approvals is dependent on our ability to improve and develop our technological capabilities. Our regulators also have the ability to compel us to, or restrict us from, taking certain actions entirely, such as actions that our regulators deem to constitute an
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unsafe or unsound banking practice. Our failure to comply with any applicable laws or regulations, or regulatory policies and interpretations of such laws and regulations, could result in sanctions by regulatory agencies, civil money penalties or damage to our reputation, all of which could have a material adverse effect on our business, financial condition or results of operations.
We cannot predict whether new legislation will be enacted and, if enacted, the effect that it, or any regulations, would have on our business, financial condition or results of operations. These changes may result in increased costs of doing business and decreased revenue and net income, may reduce our ability to effectively compete to attract and retain clients, or make it less attractive for us to continue providing certain products and services. In particular, we expect that the Biden administration will continue to seek to implement a reform agenda. We also expect regulatory bodies such as the CFPB and FDIC to take a more aggressive enforcement stance and increase their focus and scrutiny on all consumer facing financial institutions. Any future changes in federal and state law and regulations, as well as the interpretations and implementations of such laws and regulations and enforcement practices, could affect us in substantial and unpredictable ways, including those listed above, impact the regulatory structure under which we operate, significantly increase our costs, impede the efficiency of our internal business processes, require us to increase our regulatory capital and modify our business strategy, limit our ability to pursue business opportunities in an efficient manner, or other ways that could have a material adverse effect on our business, financial condition or results of operations.
We may become subject to supervisory actions and enhanced regulation that could have a material adverse effect on our business, reputation, operating flexibility, financial condition and the value of our common stock and preferred stock.

Under federal and state laws and regulations pertaining to the safety and soundness of insured depository institutions, state banking regulators, the Federal Reserve, and separately the FDIC as the insurer of bank deposits, each has the authority to compel or restrict certain actions on our part if any of them determine that we have insufficient capital or are otherwise operating in a manner that may be deemed to be inconsistent with safe and sound banking practices. In addition to examinations for safety and soundness, we and our subsidiaries also are subject to continuous examination by state and federal banking regulators, including the CFPB, for compliance with various laws and regulations, as well as consumer compliance initiatives. As a result of this regulatory oversight and examination process, our regulators may require us to enter into informal or formal supervisory agreements, including board resolutions, memoranda of understanding, written agreements and consent or cease and desist orders, pursuant to which we could be required to take identified corrective actions to address cited concerns, or to refrain from taking certain actions.

If we become subject to and are unable to comply with the terms of any future regulatory actions or directives, supervisory agreements, or orders, then we could become subject to additional, heightened supervisory actions and orders, possibly including consent orders, prompt corrective action restrictions and/or other regulatory actions, including prohibitions on the payment of dividends on our common stock and Series D Preferred Stock.our preferred stock. If our regulators were to take such additional supervisory actions, then we could, among other things, become subject to significant restrictions on our ability to develop any new business, as well as restrictions on our existing business, and we could be required to raise additional capital, discontinue our share repurchase program, dispose of certain assets and liabilities within a prescribed period of time, or all of the above. The terms of any such supervisory action could have a material negative effect on our business, reputation, operating flexibility, financial condition and the value of our common stock. See "Part 1 - Item 1. Business - Supervision, Regulation, and Other Factors" in this Report for further information.

We may be required to conserve capital or undertake additional strategic initiatives to improve our capital position due to changes in economic conditions or changes in regulatory capital rules.

We and Synovus Bank are required under federal law to maintain certain minimum capital levels based on ratios of capital to total assets and capital to risk-weighted assets. The required capital ratios are minimums, and the Federal Reserve may determine that a banking organization, based on its size, complexity or risk profile, must maintain a higher level of capital in order to operate in a safe and sound manner. Moreover, federal bank regulators have issued a series of guidance and rulemakings applicable to large banks. While many of these do not currently apply to us due to our asset size, these issuances could impact industry capital standards and practices in many potentially unforeseeable ways. See “Part 1 - Item 1. Business - Supervision, Regulation, and


Other Factors-Capital Requirements” in this Report for further information onWhile we currently exceed all minimum regulatory capital requirements. At January 1, 2018,requirements, are considered well-capitalized under applicable rules, and believe that we maintain an appropriate capital plan, there is no guarantee that we will not need to increase our capital levels in the buffer was increased to 1.875%. In addition, we repurchased $175 million of capital stock under our previously announced share repurchase program. As a result and as of December 31, 2018, our CET1 ratio was 9.92% on a fully phased-in basis, which is in excess of the minimum common equity and additional conservation buffer stipulated by the Revised Rules. See "Part II - Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Capital Resources" and "Part II - Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Non-GAAP Financial Measures" of this Report for applicable reconciliation to GAAP measure.
future.
We continue to actively monitor economic conditions, evolving industry capital standards, and changes in regulatory standards and requirements, and engage in regular discussions with our regulators regarding capital at both Synovus and Synovus Bank. As part of our ongoing management of capital, we will continue to identify, consider, and pursue additional strategic initiatives to bolster our capital position as deemed necessary, including strategies that may be required to meet regulatory capital requirements, and will continue to evaluate ourrequirements. This includes the evaluation of share repurchase programprograms and increased dividends. The need to maintain more capital and greater liquidity than hasmay have previously been required historicallywarranted or intended could limit our business activities, including lending, and our ability to expand, either organically or through future acquisitions.acquisitions, and invest in technology and other growth strategies. It could also result in our taking steps to increase our capital that may be dilutive to shareholders or limit our ability to pay dividends or otherwise return capital to shareholders.

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Market and Other General Risk

Inflation could negatively impact our business, our profitability and our stock price.
Prolonged periods of inflation may impact our profitability by negatively impacting our fixed costs and expenses, including increasing funding costs and expense related to talent acquisition and retention, and negatively impacting the demand for our products and services. Additionally, inflation may lead to a decrease in consumer and clients purchasing power and negatively affect the need or demand for our products and services. If significant inflation continues, our business could be negatively affected by, among other things, increased default rates leading to credit losses which could decrease our appetite for new credit extensions. These inflationary pressures could result in missed earnings and budgetary projections causing our stock price to suffer.
The COVID-19 pandemic has adversely impacted, and will likely continue to adversely impact, Synovus’ business, financial condition, liquidity, capital and results of operations.
The extent and duration to which the continuing COVID-19 pandemic will impact our business in the future is unknown and will depend on future developments, which are highly uncertain and outside our control. These developments include the duration and severity of the pandemic (including the possibility of further surges of COVID-19 variants of concern), supply chain disruptions, decreased demand for our products and services or those of our borrowers, which could increase our credit risk, rising inflation, our ability to maintain sufficient qualified personnel due to labor shortages, talent attrition, employee illness, quarantine, willingness to return to work, face-coverings and other safety requirements, or travel and other restrictions, and the actions taken by governments, businesses and individuals to contain the impact of COVID-19, as well as further actions taken by governmental authorities to limit the resulting economic impact. It is also possible that the pandemic and its aftermath will lead to a prolonged economic slowdown in sectors disproportionately affected by the pandemic or recession in the U.S. economy or the world economy in general.
ESG risks could adversely affect our reputation and shareholder, employee, client and third party relationships and may negatively affect our stock price.
Our business faces increasing public scrutiny related to ESG activities. We risk damage to our brand and reputation if we fail to act responsibly in a number of areas, such as DEI, environmental stewardship, human capital management, support for our local communities, corporate governance and transparency, or fail to consider ESG factors in our business operations.
Furthermore, as a result of our diverse base of clients and business partners, we may face potential negative publicity based on the identity of our clients or business partners and the public’s (or certain segments of the public’s) view of those entities. Such publicity may arise from traditional media sources or from social media and may increase rapidly in size and scope. If our client or business partner relationships were to become intertwined in such negative publicity, our ability to attract and retain clients, business partners, and employees may be negatively impacted, and our stock price may also be negatively impacted. Additionally, we may face pressure to not do business in certain industries that are viewed as harmful to the environment or are otherwise negatively perceived, which could impact our growth.
Additionally, investors and shareholder advocates are placing ever increasing emphasis on how corporations address ESG issues in their business strategy when making investment decisions and when developing their investment theses and proxy recommendations. We may incur meaningful costs with respect to our ESG efforts and if such efforts are negatively perceived, our reputation and stock price may suffer.
Any future economic downturn could have a material adverse effect on our capital, financial condition, results of operations, and future growth.

Management continually monitors market conditions and economic factors throughout our footprint. If conditions were to worsen nationally, regionally or locally, then we could see a sharp increase in our total net charge-offs and also be required to significantly increase our allowance for loancredit losses. Furthermore, the demand for loans and our other products and services could decline. An increase in our non-performing assets and related increases in our provision for loan losses, coupled with a potential decrease in the demand for loans and our other products and services, could negatively affect our business and could have a material adverse effect on our capital, financial condition, results of operations and future growth. Our customersclients may also be adversely impacted by changes in regulatory, trade (including tariffs) and tax policies and laws, all of which could reduce demand for loans and adversely impact our borrowers’ ability to repay our loans. In addition, international economic and geopolitical uncertainty could also impact the U.S. financial markets by potentially suppressing stock prices, including ours, and adding to overall market volatility, which could adversely affect our business.

The effects of any economic downturn could continue for many years after the downturn is considered to have ended.
Interest rates on our outstanding financial instruments might be subject to change based on regulatory developments related to LIBOR, which could adversely affect our revenue, expenses,expense, and the value of thoseour financial instruments.

LIBOR and certain other “benchmarks” are the subject of recent national, international, and other regulatory guidance and proposals for reform. These reforms may cause such benchmarks to perform differently than in the past or have other consequences which cannot be predicted. On July 27, 2017, the United Kingdom’s Financial Conduct Authority,FCA, which regulates LIBOR, publicly announced that it intends to stop persuading or compelling banks to submit LIBOR rates after 2021. On November 30, 2020, a joint announcement by the Board of Governors of the
25

Federal Reserve, the FDIC, and the OCC was released and included a statement that the administrator of LIBOR has announced it will consult on its intention to cease the publication of the one week and two month USD LIBOR settings immediately following the LIBOR publication on December 31, 2021, and the remaining USD LIBOR settings immediately following the LIBOR publications on June 30, 2023. In the U.S., the Alternative Reference Rates Committee has proposed SOFR as the preferred alternative to LIBOR. SOFR is a broad measure of the cost of borrowing cash in the overnight U.S. regulatory authorities have voiced similar support for phasing out LIBOR.treasury repurchase market. At this time, various iterations of the SOFR index are being used within the market, as are other indices such as the Bloomberg Short-Term Bank Yield index and the American Financial Exchange's Ameribor index. It is unclear whether, at that time,as to the degree to which the market will adopt such non-LIBOR indices or how the industry may transition various products to an accepted alternative to LIBOR.
The uncertainty regarding the future of LIBOR will ceaseas well as the transition from LIBOR to existanother benchmark rate or if new methodsrates is complex and could have a range of calculating LIBOR will be established. If LIBOR ceases to exist or ifadverse effects on our business, financial condition and results of operations. In particular, any such transition could:
•adversely affect the methods of calculating LIBOR change from current methods for any reason, interest rates paid or received on, ourand the revenue and expense associated with, and the value of Synovus’ floating rate obligations, loans, deposits, derivatives and other financial instruments tied to LIBOR rates, as well asor other securities or financial arrangements given LIBOR’s role in determining market interest rates globally;
•prompt inquiries or other actions from regulators in respect of our preparation and readiness for the revenue and expenses associatedreplacement of LIBOR with those financial instruments, may be adversely affected. Any uncertaintyan alternative reference rate;
•result in disputes, litigation or other actions with counterparties regarding the continued useinterpretation and reliabilityenforceability of LIBOR as a benchmark interest rate could adversely affectcertain fallback language, or the trading market and valueabsence of our floating rate obligations, loans, deposits,such language, in LIBOR-based instruments, including securities, derivatives, and other financial instruments tied to LIBOR rates.loans;

A significant portion of our variable rate loans are tied to LIBOR. While many of these loans contain “fallback” provisions providing for alternative rate calculations in the event LIBOR is unavailable, not all of our loans contain these “fallback” provisions and existing “fallback” provisions may not adequately address the actual changes to LIBOR or successor rates. We may not be able to successfully amend these loans to provide for alternative rate calculations and such amendments could prove costly. Even with “fallback” provisions, changes to or the discontinuance of LIBOR could •result in customerclient uncertainty and disputes around how variable rates should be calculated. Allcalculated in light of this could result in damage tothe foregoing, thereby damaging our reputation and resulting in a loss of customersclients and additional costs to us, allus; and
•require the transition to or development of which could be material.

appropriate systems and analytics to effectively transition Synovus’ risk management processes from LIBOR-based products to those based on an applicable alternative pricing benchmark.
The soundnessmanner and impact of other financial institutions could adversely affect us.

this transition, as well as the effect of these developments on Synovus’ funding costs, loan, and investment and trading securities portfolios, asset liability management and business are uncertain.
Our abilityconcentrated operations in the Southeastern U.S. make us vulnerable to engage in routine fundinglocal economic conditions, local weather catastrophes, public health issues and other transactions could be adversely affected by the actions and commercial soundness of other financial institutions. Financial services institutions are interrelated as a result of trading, clearing, counterparty


or other relationships. Defaults by, or even rumors or questions about, one or more financial services institutions, or the financial services industry generally, have led to market-wide liquidity problems and losses of depositor, creditor and counterparty confidence and could lead to losses or defaults by us or by other institutions. We could experience increases in deposits and assets as a result of other banks’ difficulties or failure, which would increase the capital we need to support our growth.

The recent Federal Tax Reform and future tax reform may impact our customers' future demand for credit and our future results.

While we expect Federal Tax Reform to have a positive impact on our business, that impact remains somewhat uncertain.  Some customers may elect to use their additional cash flow from lower taxes to fund their existing levels of activity, decreasing borrowing needs. Furthermore, the elimination of the federal income tax deductibility of business interest expenses for a significant number of customers effectively increases the cost of borrowing and could make equity or hybrid funding relatively more attractive. Furthermore, our ability to deduct FDIC premiums is restricted under Federal Tax Reform, and if later we exceed $50 billion in asset size, we will not be able to deduct FDIC premiums at all, thereby effectively increasing our costs. Moreover, tax exempt borrowing may be less attractive in the future due to the decrease in tax rates generally. This could have long-term negative impact on business customer borrowing. The differing effects of Federal Tax Reform for taxable corporations as compared to pass through entities owned by individuals also creates the potential for differing economic strategies by our customers that are presently uncertain and may continue to be for some time.

We experienced an increase in our after-tax net income available in 2018 as a result of the decrease in our effective tax rate and expect Federal Tax Reform to continue to positively impact our after-tax net income in future years. However, some or all of this benefit could be lost to the extent that our competitors elect to lower interest rates and fees and we are forced to respond in order to remain competitive. Furthermore, we incurred a significant one-time, non-cash provisional charge resulting from the remeasurement of our deferred tax assets in the fourth quarter of 2017. The estimated impact of Federal Tax Reform is based on management's current knowledge and assumptions, but there is no assurance that the presently anticipated benefits of Federal Tax Reform on us will be realized or that we will not incur further charges with respect to the revaluation of our deferred tax assets.     

Our current tax position, including the realization of our net deferred tax assets in the future, could be subject to potential legislative, administrative or judicial changes or interpretations,external events, which could adversely affect our operating results.

The lower federal corporate income tax rate resulting from Federal Tax Reform caused us to revalue our deferred tax assets, resulting in a reduction of our deferred tax asset balance and a corresponding one-time, non-cash income tax charge of $47.2 million in the fourth quarter of 2017. We may be required to further remeasure our deferred tax assets in the future in response to future enactment of State Tax Reform, which could result in additional increases to income tax expense. Because Synovus had $141.1 million in net deferred tax assets as of December 31, 2018, $65.8 million of which is disallowed when calculating regulatory capital, a further reduction in our deferred tax asset balance and a corresponding increase in our income tax expense could have a material impact on our results of operations.        

Further tax reform could materially impact our tax obligations and operating results in a number of other ways. In addition, in the absence of guidance on various uncertainties and ambiguities in the application of certain provisions of Federal Tax Reform, we will use what we believe are reasonable interpretations and assumptions in applying Federal Tax Reform, but it is possible that the IRS could issue subsequent guidance or take positions that differ from our prior interpretations and assumptions, which could have a material adverse effect on our results of operations and financial condition.
Our operations are concentrated in the Southeastern U.S. in the states of Alabama, Florida, Georgia, South Carolina and Tennessee. As a result, local economic conditions significantly affect the demand for loans and other products we offer to our clients (including real estate, commercial and construction loans), the ability of borrowers to repay these loans and the value of the collateral securing these loans. Economic downturns in these regions could adversely affect our currently performing loans, leading to future delinquencies or defaults and increases in our provision for credit losses.
In addition, localthe occurrence of events such as hurricanes, tropical storms, tornados, winter storms, flooding and other large-scale weather catastrophes in and along the Gulf and the Atlantic coasts, as well as other parts of the Southeastern U.S., and further public health issues, such as pandemics or state authorities may interpret tax laws, including Federal Tax Reform,other widespread health emergencies, could adversely affect the condition of collateral associated with our loan portfolio, our general financial condition or the results of our operations. Such areas could be adversely impacted by such events in those regions, the nature and regulations differently than us or may reform their own tax lawsseverity of which are difficult to predict. Furthermore, climate change could increase the frequency and regulations, resulting in differences in the treatment of revenues, deductions or credits and/or differences in the timingseverity of these items. The differencesrisks. These and other unpredictable external events could have an adverse effect on us in treatment may resultthat such events could materially disrupt our operations or the ability or willingness of its clients to access the financial services offered by Synovus. These events could reduce our earnings and cause volatility in payment of additional taxes, interestour financial results for any fiscal quarter or penalties that couldyear and have a material adverse effect on our financial results.  See "Part II - Item 7. Management's Discussion and Analysiscondition and/or results of Financial Condition and Results of Operations - Income Tax Expense" and "Part II - Item 8. Financial Statements and Supplementary Data - Note 17 - Income Taxes" in this Report for further information.operations.

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Our stock price is subject to fluctuations, and the value of your investment may decline.


The trading price of our common stock is subject to wide fluctuations. The stock market in general, and the market for the stocks of commercial banks and other financial services companies in particular, has experienced significant price and volume fluctuations that sometimes have been unrelated or disproportionate to the operating performance of those companies. These broad market and industry factors may seriously harm the market price of our common stock, regardless of our operating performance, and the value of your investment may decline.



Certain shares of our common stock are entitled to ten votes per share on each matter submitted to a vote at a meeting of shareholders.

Although we only have one class of common stock, certain shares of our common stock are entitled to ten votes per share on each matter submitted to a vote at a meeting of shareholders, including common stock that has been beneficially owned continuously by the same shareholder for a period of forty-eight consecutive months before the record date of any meeting of shareholders at which the share is eligible to be voted. Therefore, while a holder of common stock may have an economic interest in us that is identical to or even greater than another shareholder, that other shareholder may be entitled to ten times as many votes per share. As a result, some groups of shareholders will be able to approve strategic transactions or increases in authorized capital stock, among other matters submitted to the shareholders, even over the objections of shareholders, who hold equivalent or greater economic stakes in our company.

Our articles of incorporation, our Rights Plan and certain banking laws and regulations may have an anti-takeover effect.

Provisions of our articles of incorporation, our Rights Plan and certain banking laws and regulations, including regulatory approval requirements, could make it more difficult for a third party to acquire us, even if doing so would be perceived to be beneficial to our shareholders. The combination of these provisions may inhibit a non-negotiated merger or other business combination, which, in turn, could adversely affect the market price of our common stock.


ITEM 1B. UNRESOLVED STAFF COMMENTS
NONE.
ITEM 2. PROPERTIES
We and our subsidiaries own or lease all of the real property and/or buildings in which we operate our business. We believe that our properties are suitable for the purposes of our operations.
As of December 31, 2018,2021, we and our subsidiaries owned 198180 facilities encompassing 1,864,8721,841,802 square feet and leased from third parties 95126 facilities encompassing 974,6001,157,177 square feet. The owned and leased facilities are primarily comprised of office space from which we conduct our business in our headquarters in Columbus, Georgia and throughout our footprint. The following table provides additional information with respect to our leased facilities:
Table 2 - Properties
Square FootageNumber of Locations Average Square Footage
Under 3,00018
 1,489
3,000 – 9,99959
 4,811
10,000 – 18,9996
 13,709
19,000 – 30,0006
 24,269
Over 30,0006
 72,682
    
See "Part II - Item 8. Financial Statements and Supplementary Data - Note 54 - Premises, Equipment and Equipment"Software" of this Report for further information.
ITEM 3. LEGAL PROCEEDINGS
Synovus and its subsidiaries are subject to various legal proceedings and claims that arise in the ordinary course of its business. Additionally, in the ordinary course of business, Synovus and its subsidiaries are subject to regulatory examinations, information gathering requests, tax matters, inquiries and investigations. Synovus, like many other financial institutions, has been the target of numerous legal actions and other proceedings asserting claims for damages and related relief for losses. These actions include claims and counterclaims asserted by individuals related to loans and allegations of violations of state and federal laws and regulations relating to banking practices, including putative class action matters, and also claims asserted by shareholders or purported shareholders against Synovus, members of Synovus' Board of Directors, and members of Synovus' management team. In addition to actual damages if Synovus does not prevail in asserted legal actions, credit-related litigation could result in additional write-downs or charge-offs of loans, which could adversely affect Synovus' results of operations during the period in which the write-down or charge-off were to occur.
In addition, on February 15, 2019, a shareholder derivative action, LeMay v. Synovus Financial Corp., Civil Action No. 19-A-01389-9, was filed in the Superior Court of Gwinnett County, Georgia against the Company and certain of its directors and officers alleging breach of fiduciary duties, unjust enrichment, gross mismanagement, corporate waste, disgorgement of compensation, injunctive relief, attorney’s fees and expenses, and punitive damages.  Synovus believes that the allegations are without merit and intends to defend against this matter vigorously. 
Based on our 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 for any particular period. For additional information, seeSee "Part II - Item 8. Financial Statements and Supplementary Data - Note 1514 - Commitments and Contingencies" of this Report, which Note is incorporated in this Item 3 by this reference.Report.
27

Part II

ITEM 4. MINE SAFETY DISCLOSURES
NOT APPLICABLE.


Part II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER REPURCHASES OF EQUITY SECURITIES
Shares of our common stock are traded on the NYSE under the symbol “SNV.”
As of February 26, 2019,23, 2022, there were 159,145,739145,463,669 shares of Synovus common stock issued and outstanding and 12,37610,144 shareholders of record of Synovus common stock, some of which are holders in nominee name for the benefit of a number of different shareholders.
Subject to the approval of the Board of Directors and applicable regulatory requirements, Synovus expects to continue its policy of paying regular cash dividends on a quarterly basis. A discussion of certain limitations on the ability of Synovus Bank to pay dividends to Synovus and the ability of Synovus to pay dividends on its common stock is set forth in "Part I - Item 1. Business - Supervision, Regulation, and Other Factors - Payment of Dividends" of this Report.
Stock Performance Graph
The following graph compares the yearly percentage change in cumulative shareholder return on Synovus stock with the cumulative total return of the Standard & Poor's 500 Index and the KBW Regional Bank Index for the last five fiscal years (assuming a $100 investment on December 31, 20132016 and reinvestment of all dividends).
chart-dbedfcd588bb5c969ae.jpgsyn-20211231_g2.jpg
Table 2 - Stock Performance
201620172018201920202021
Synovus$100 $118.28 $80.74 $102.24 $90.10 $137.16 
Standard & Poor's 500 Index100 121.82 116.47 153.13 181.29 233.28 
KBW Regional Bank Index100 101.81 84.00 104.05 95.02 129.84 







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Table 3 - Stock Performance
  2013 2014 2015 2016 2017 2018
Synovus $100
 $108.60
 $131.65
 $169.46
 $200.47
 $136.83
Standard & Poor's 500 Index 100
 111.39
 110.58
 121.13
 144.65
 135.63
KBW Regional Bank Index 100
 100.20
 103.67
 140.65
 140.22
 113.06
             





Issuer Purchases of Equity Securities
On January 23, 2018, Synovus announced
Table 3 - Share Repurchases
(in thousands, except per share data)Total Number of Shares Repurchased
Average Price Paid per Share(1)
Total Number
of Shares Repurchased as
Part of
Publicly Announced
Plans or Programs		Maximum Approximate
Dollar Value
of Shares
that May Yet Be
Purchased Under the
Plans or Programs
October 202124 $47.49 24 $31,786 
November 2021373 48.70 373 13,628 
December 2021290 46.51 290 137 
Total687 $47.73 687 
(1)    The average price paid per share is calculated on a $150 million share repurchase program to be executed during 2018,trade date basis for all open market transactions and on December 3, 2018, Synovus announced an additional $25 million share repurchase program to be executed during December 2018. The table below sets forth information regarding repurchases of our common stock during the fourth quarter of 2018, all of which were made under the share repurchase programs announced in Januaryexcludes commissions and December 2018.
 Table 4 - Share Repurchases        
 (in thousands, except per share data) Total Number of Shares Repurchased 
Average Price Paid per Share(1)
 
Total Number
of Shares Repurchased as
Part of
Publicly Announced
Plans or Programs
 
Maximum Approximate
Dollar Value
of Shares
that May Yet Be
Purchased Under the
Plans or Programs
 
 October 2018 345
 $44.19
 345
 $—
 November 2018 —
 —
 —
 —
 December 2018 711
 35.16
 711
 —
 Total 1,056
 $38.11
 1,056
 —
          
(1)
The average price paid per share is calculated on a trade date basis for all open market transactions and excludes commissions and other transaction expenses.

other transaction expenses.
The foregoing repurchases during the fourth quarter of 20182021 were purchased through open market transactions, including under plans complying with Rule 10b5-1 under the Exchange Act.
Following the December 31, 2018 completion and expiration of both the $150 million share repurchase program and the additional $25 million share repurchase program, theThe Company announced on January 20, 2022 that its Board of Directors authorized a new share repurchase programrepurchases of up to $400$300 million of which $300-$325 million is currently expected to be repurchased during 2019. This new program was announced on January 15, 2019.

in 2022.

ITEM 6. SELECTED FINANCIAL DATAReserved



29
Table 5 - Selected Financial Data         
 As Of and For The Years Ended December 31,
(in thousands, except per share data)2018 2017 2016 2015 2014
Income Statement         
Total revenues    $1,428,506
 $1,368,636
 $1,172,374
 $1,095,238
 $1,081,388
Net interest income1,148,413
 1,023,309
 899,180
 827,318
 819,284
Provision for loan losses51,697
 67,185
 28,000
 19,010
 33,831
Non-interest income280,093
 345,327
 273,194
 267,920
 262,104
Non-interest expense829,455
 821,313
 755,923
 717,655
 744,998
Net income428,476
 275,474
 246,784
 226,082
 195,249
Preferred stock dividends and redemption charge17,998
 10,238
 10,238
 10,238
 10,238
Net income available to common shareholders410,478
 265,236
 236,546
 215,844
 185,011
Per share data         
Net income per common share, basic3.49
 2.19
 1.90
 1.63
 1.34
Net income per common share, diluted3.47
 2.17
 1.89
 1.62
 1.33
Cash dividends declared per common share1.00
 0.60
 0.48
 0.42
 0.31
Book value per common share25.36
 23.85
 22.92
 22.19
 21.42
Balance Sheet         
Investment securities available for sale3,991,632
 3,987,069
 3,718,195
 3,587,818
 3,041,406
Loans, net of deferred fees and costs25,946,573
 24,787,464
 23,856,391
 22,429,565
 21,097,699
Total assets32,669,192
 31,221,837
 30,104,002
 28,792,653
 27,050,237
Deposits26,720,322
 26,147,900
 24,648,060
 23,242,661
 21,531,700
Long-term debt1,657,157
 1,606,138
 2,160,881
 2,136,893
 1,949,324
Total shareholders’ equity3,133,602
 2,961,566
 2,927,924
 3,000,196
 3,041,270
Performance ratios and other data         
Return on average assets1.35% 0.89% 0.84% 0.80% 0.74%
Return on average equity14.29
 9.27
 8.40
 7.49
 6.45
Net interest margin3.86
 3.55
 3.27
 3.19
 3.38
Dividend payout ratio(1)    
28.84
 27.60
 25.38
 25.93
 23.13
Total shareholders' equity to total assets ratio9.59
 9.49
 9.73
 10.42
 11.24
Tangible common equity to tangible assets ratio(2)    
8.81
 8.88
 9.09
 9.90
 10.69
Weighted average common shares outstanding, basic117,644
 121,162
 124,389
 132,423
 138,495
Weighted average common shares outstanding, diluted118,378
 122,012
 125,078
 133,201
 139,154
          
(1)

Determined by dividing cash dividends declared per common share by diluted net income per share.
(2)
See "Part II - Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Non-GAAP Financial Measures” of this Report for applicable reconciliation to GAAP measure.


ITEM 7.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Executive Summary
The following financial review provides a discussion of Synovus' financial condition, changes in financial condition, and results of operations as well as a summary of Synovus' critical accounting policies. This section should be read in conjunction with the audited consolidated financial statements and accompanying notes included in "Part II - Item 8. Financial Statements and Supplementary Data" of this Report.
Economic Environment and Recent Events
The U.S. economy contracted in the first half of 2020, ending the longest expansionary period in U.S. history, due to the COVID-19 pandemic. During March 2020, in an effort to lessen the impact of COVID-19 on consumers and businesses, the Federal Reserve reduced the federal funds rate 1.5 percentage points to 0.00 to 0.25 percent and the U.S. government enacted the CARES Act, the largest economic stimulus package in the nation’s history. Synovus responded to the pandemic, beginning in March 2020, by supporting our clients, employees, and communities with such measures as remote work capabilities and branch service enhancements, loan payment deferrals, and accelerated investments in several technology initiatives that provided more convenience and a better digital experience as clients adapted to this highly virtual environment. Synovus participated in the PPP and funded approximately 28,000 loans totaling nearly $3.9 billion under the programs available in both 2020 and 2021.
Additional government spending measures and the availability of vaccines improved consumer confidence and demand, and the economy largely reopened in 2021, leading to a reduction in the unemployment rate and accelerated GDP growth. While 2021 has seen a recovery in the U.S. economy compared to 2020, uncertainty and market disruptions such as additional coronavirus variants, pandemic-related supply chain issues and labor shortages persist. The economic expansion has been met with inflationary pressures that are expected to result in FOMC policy-tightening in 2022, likely including multiple interest rate hikes. With a strong asset-sensitive balance sheet and our position in Southeast markets that have generally avoided prolonged lockdowns, Synovus expects increases in loan demand and interest rates will improve returns going forward.
Overview of 20182021 Financial Results
Net income available to common shareholders for 20182021 was $410.5$727.3 million, or $3.47$4.90 per diluted common share ($4.95 on an increase of 54.8% and 59.5%adjusted basis(1)), respectively, compared to $265.2$340.5 million, or $2.17$2.30 per diluted common share for 2017. Results for 2018 were generally($2.41 adjusted(1)), in line with our 2018 guidance and on track to achieve our long-term targets for EPS growth, ROA, ROTCE, and tangible efficiency ratio that were announced2020. The year-over-year increase in January 2019.
For 2018:
▪
EPS grew 59.5%; Adjusted EPS grew 43.8%(1) / (long-term target CAGR 10%+)
▪
ROA improved to 1.35%; Adjusted ROA improved to 1.41%(1) / (long-term target >1.45%)
▪
ROE improved to 14.55%; ROTCE improved to 14.94%(1); Adjusted ROTCE improved to 15.66%(1) /(long-term target >17%)
▪
Efficiency ratio improved to 57.99%; Adjusted tangible efficiency ratio improved to 56.33%(1) / (long-term target adjusted tangible efficiency ratio <50%)
Total revenues for 2018 were $1.43 billion, up 4.4%,adjusted net income per common share was driven by a significant improvement in the economic outlook impacting expected credit losses compared to 2017. Adjusted total revenues(1),which exclude the Cabela's Transaction Fee and other items, were $1.44 billion, up 10.6%, compared to 2017.2020.
Net interest income for 20182021 was $1.15$1.53 billion, up $125.1$20.2 million, or 12.2%1%, from 2017. During 2018, average earning assets increased $966.3$1.51 billion in 2020, including $79.2 million or 3.3%, primarily as a result of an increase in net loans of $807.4PPP fees during 2021 and $46.0 million or 3.3%, and an increase of $224.0 million, or 5.8%, in investment securities balances. 2020. The net interest margin was 3.86%3.01% for 2018, an increase2021, a decrease of 31 basis points17 bps from 2017. The yield on earning assets increased 48 basis points3.18% in 2020, due primarily to 4.51% driven by a 51 basis points increasethe decline in loan yields and a 23 basis points increasemarket interest rates in taxableaddition to average growth in investment securities yields. The increase in loan yields was primarily driven by federalavailable for sale and interest-bearing funds rate increases. The increase in taxable investment securities yields was primarily due to higher reinvestment rates. Offsetting these favorable impacts to net interest margin was an increase of $56.7 million, or 40.7%, of interest-bearing liabilities and an increase in cost of funds of 19 basis points to 0.69% (the cost of funds includes non-interest-bearing demand deposits).held at the Federal Reserve Bank.
Non-interest incomerevenue for the year ended December 31, 20182021 was $280.1$450.1 million, down $65.2$56.4 million, or 18.9%11%, compared to the year ended December 31, 2017. The decrease was driven by2020. Gains on sales of investment securities of $78.9 million impacted the $75 million Cabela's Transaction Fee recorded in 2017.year ended December 31, 2020. Adjusted non-interest incomerevenue(1), which excludes the Cabela's Transaction Fee and other items, was $448.0 million, up $12.4$27.6 million, or 4.5%7%, compared to 2017. The2020, due primarily to strong growth in 2018 was driven primarily by an increase of $12.2 million, or 14.5%, in combinedcore banking fees, fiduciary and asset management fees, and brokerage and insurance revenues.revenue, partially offset by the normalization of mortgage banking income.
Non-interest expense for the year ended December 31, 20182021 was $829.5 million, an increase$1.10 billion, a decrease of $8.1$79.7 million, or 1.0%7%, compared to the year ended December 31, 2017.2020. Goodwill impairment expense of $44.9 million impacted 2020. Adjusted non-interest expense(1) for 2018 increased $31.12021 decreased $2.4 million, or 4.0%, compared to 2017, driven primarily by an increase of $20.1 million, or 4.6%,2020, as higher expense related to Synovus Forward in salaries2020 allowed us to make strategic and other personnel expense,impactful investments in most areas while managing overall expense. The efficiency ratio-TE for 2021 was 55.38% compared to 58.32% in 2020, and an increase of $10.5 million, or 8.8%,the adjusted tangible efficiency ratio(1) was 54.29% compared to 55.69% in net occupancy and equipment expense.2020.
Income tax expense was $118.9 million for the year endedAt December 31, 2018, a decrease2021, total loans, net of $85.8 million,deferred fees and costs of $39.31 billion, increased $1.06 billion, or 41.9%3%, compared to the year endedfrom December 31, 2017, representing an effective tax rate of 21.7% for 2018 2020. C&I loans grew slightlyand 42.6% for 2017. The lower effective tax rate for 2018were impacted by a $1.79 billion decline in PPP loans primarily from forgiveness. CRE and consumer loans increased $655.8 million and $362.2 million, respectively. CRE loans grew as higher funded production outpaced elevated pay-off activity. Consumer growth was primarily due to purchases of third-party lending loans and was mostly offset by declines in consumer mortgages and HELOCs, a reduction in the federal corporate statutory tax rate from 35% to 21%result of excess consumer liquidity and non-recurring income tax expenseaccelerated prepayment activity.
30

At December 31, 2021, credit quality metrics remained stable and near historical lows with NPA and NPL ratios of $47.2 million recorded in 2017 for the remeasurement0.40% and 0.33%, respectively, and total past dues of deferred tax assets and liabilities resulting from Federal Tax Reform.
Credit quality remained strong in 2018 with the non-performing asset ratio improving to 0.44%, a 9 basis points decline from a year ago. Loans 30 or more days past due were 0.22% and 0.21%0.15%. The ACL at December 31, 2018 and 2017, respectively. Net charge-offs for 2018 were 20 basis points, down2021 totaled $469.5 million, a decrease of $184.0 million compared to December 31, 2020, resulting from 29 basis points during 2017.an improving overall economic outlook. The allowance for loan lossesACL to loans coverage ratio was 1.19% at December 31, 2018 was $250.6 million, or 0.97% of total loans, compared to $249.3 million, or 1.01% of total loans, at2021, a 52 bps decline from December 31, 2017.2020.
Total loans ended the year at $25.95 billion, a $1.16 billion or 4.7% increase from a year ago. Loan growth was driven by a $757.6 million, or 6.3%, increase in C&I loans and a $771.2 million, or 13.2%, increase in consumer loans, with our lending


partnerships portfolio growing$429.8 millionand consumer mortgages increasing by $300.7 million.This growth was partially offset by a decline in CRE loans of $370.8 million, or 5.3%. Total average loans increased by $808.8 million, or 3.3%, to $25.19 billion from $24.38 billion in 2017.
Totalperiod-end deposits were $26.72$49.43 billion at December 31, 2018, an increase of $572.4 million,2021, up $2.74 billion, or 2.2%6%, compared to year-end 2017. Total average2020. Core transaction deposits increased $969.7 million,$5.13 billion, or 3.8%16%, to $26.34 billion in 2018 from $25.37 billion in 2017. Average core deposits(1) were up $777.0 million, or 3.3%, from 2017 and average non-interest-bearing demand deposits as a percentage of total average deposits were 29.1% for 2018 compared to 29.0%year-end 2020, largely due to various fiscal stimulus efforts including deposits associated with PPP loans. Total deposit costs for 2017.2021 were 16 bps, down 35 bps from 2020, due to repricing and intentional, strategic remixing to reduce higher cost deposits.
On June 21, 2018, Synovus completed a public offeringOur CET1 ratio of $200 million9.50% at December 31, 2021 is well in excess of Series D Preferred Stock.regulatory requirements. The offering generated net proceeds of $195.1 million, which were largely usedBoard recently approved an increase in the current common shareholder dividend by $0.01 to fund the redemption of all of the outstanding shares of Series C Preferred Stock on August 1, 2018 for an aggregate redemption price of $130.0 million. Concurrent with the redemption of the Series C Preferred Stock, Synovus recognized a one-time, non-cash redemption charge of $4.0 million.
During 2018, Synovus repurchased $175.0 million, or 3.7 million shares, of common stock through open market transactions under its$0.34 per quarter, effective April 2022, and authorized share repurchase programs. Additionally, Synovus increasedrepurchases of up to $300 million for 2022. Our capital priorities are focused on supporting core client growth and managing the quarterly common stock dividend by 67%CET1 ratio around our target range of 9.25% to $0.25 per share effective with the quarterly dividend payable in April 2018.9.75%.
More detail on Synovus' financial results for 20182021 and 2020 can be found in subsequent sections of "Item 2.this Report and detailed information on Synovus' financial results for 2019 can be found in "Part II Item 7. – Management's Discussion and Analysis of Financial Condition and Results of Operations" of this Report.Synovus' 2019 Form 10-K.
2019 Capital Actions
During the fourth quarter of 2018, the Board of Directors authorized a new share repurchase program of up to $400 million, of which $300-$325 million is currently expected to be repurchased during 2019. Additionally, the Board of Directors approved a 20% increase in the quarterly common stock dividend to $0.30 per share, effective with the quarterly dividend payable in April 2019. On February 7, 2019, Synovus completed a public offering of $300.0 million aggregate principal amount of 5.900% fixed-to-fixed rate subordinated notes due in 2029. Proceeds from these notes are expected to be used primarily to repurchase common stock under the 2019 authorization.
FCB Acquisition
Effective January 1, 2019, Synovus completed its acquisition of all of the outstanding stock of FCB, a bank holding company based in Weston, Florida. The fair value of the consideration transferred totaled approximately $1.60 billion. Effective January 1, 2019, Florida Community Bank, National Association, FCB's wholly-owned banking subsidiary, merged into Synovus Bank. At the closing date, FCB had total loans of $9.42 billion, total deposits of $10.89 billion and operated 51 full service banking centers through its wholly-owned banking subsidiary, Florida Community Bank. The addition of FCB is expected to elevate Synovus' growth profile through a deepened presence in high-growth Florida markets.  Conversion of FCB operating systems and brand are expected to be completed during the second quarter of 2019.
20192022 Outlook
ForAn overview of our outlook for the full year 2019,2022, compared to 2018 results2021, which incorporates our strategic objectives, and is based on a combined basis for Synovusour current view of economic stability and FCB, we currently expect:growth in our footprint, includes:
Loan•Period-end loan growth (excluding PPP) of 5.5%4% to 7.5%7%
Deposit growth•Adjusted total revenue(1) increase of 5.5%4% to 7.5%7%(2)
Revenue Growth of 5.5% to 7.5%
•Adjusted non-interest expense growth(1) increase of 2% to 4%5%
•Effective income tax rate of 23%22% to 24%(3)
Net charge-off•CET1 ratio target range of 159.25% to 20 b.p.s
(1)
See "Part II - Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Non-GAAP Financial Measures" of this Report for applicable reconciliation to GAAP measure.

9.75%

(1)    See "Part II - Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Non-GAAP Financial Measures" of this Report for applicable reconciliation to GAAP measure.
Consolidated Financial Highlights(2)    Assumes three FOMC rate hikes and excludes the impact of PPP-related revenue
(3)    Assuming no significant changes to the current tax environment
31

A summary of Synovus’ financial performance for the years ended December 31, 20182021 and 20172020 is set forth in the table below.
Table 4 - Consolidated Financial Highlights
Years Ended December 31,
(dollars in thousands, except per share data)20212020Change
Net interest income$1,532,947 $1,512,748 1 %
Provision for (reversal of) credit losses(106,251)355,022 nm
Non-interest revenue450,066 506,513 (11)
Adjusted non-interest revenue(1)
448,049 420,497 7 
Total TE revenue1,986,198 2,022,685 (2)
Adjusted total revenue(1)
1,984,181 1,936,669 2 
Non-interest expense1,099,904 1,179,574 (7)
Adjusted non-interest expense(1)
1,086,702 1,089,132 — 
Income before income taxes989,360 484,665 104 
Net income760,467 373,695 103 
Net income available to common shareholders727,304 340,532 114 
Net income per common share, basic4.95 2.31 114 
Net income per common share, diluted4.90 2.30 113 
Adjusted net income per common share, diluted(1)
4.95 2.41 105 
Return on average common equity15.56 %7.51 %805 bps
Adjusted return on average common equity(1)
15.74 7.87 787 
Adjusted return on average tangible common equity(1)
17.76 9.12 864 
Return on average assets1.37 0.72 65 
Adjusted return on average assets(1)
1.39 0.75 64 
Efficiency ratio-TE55.38 58.32 (294)
Adjusted tangible efficiency ratio(1)
54.29 55.69 (140)
As of and For The Years Ended December 31,
20212020Change
Loans, net of deferred fees and costs$39,311,958 $38,252,984 3 %
Total deposits49,427,276 46,691,571 6 
 Core transaction deposits (excludes CDs, brokered and public fund deposits)37,880,650 32,754,609 16 
Net interest margin3.01 %3.18 %(17)bps
 Dividend payout ratio(2)
26.95 57.45 (3,050)
Non-performing assets ratio0.40 0.50 (10)
Non-performing loans ratio0.33 0.39 (6)
Past due loans over 90 days0.02 0.01 1 
Net charge-off ratio0.20 0.24 (4)
CET1 capital$4,388,618 $4,034,865 9 %
Tier 1 risk-based capital4,925,763 4,572,010 8 
Total risk-based capital5,827,196 5,604,230 4 
CET1 capital ratio9.50 %9.66 %(16)bps
Tier 1 risk-based capital ratio10.66 10.95 (29)
Total risk-based capital ratio12.61 13.42 (81)
Total shareholders’ equity to total assets ratio    9.24 9.49 (25)
Tangible common equity to tangible assets ratio(1)    
7.52 7.66 (14)
(1)    See "Part II - Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Non-GAAP Financial Measures" of this Report for applicable reconciliation to GAAP measures.
(2)    Determined by dividing cash dividends declared per common share by diluted net income per share.
32
Table 6 - Consolidated Financial Highlights   
  Years Ended December 31,
(dollars in thousands, except per share data) 2018 2017 Change 
Net interest income $1,148,413
 $1,023,309
 12.2
%
Provision for loan losses 51,697
 67,185
 (23.1) 
Non-interest income 280,093
 345,327
 (18.9) 
Adjusted non-interest income(1)
 286,132
 273,709
 4.5
 
Total revenues 1,428,506
 1,368,636
 4.4
 
Adjusted total revenues(1)
 1,435,098
 1,298,142
 10.6
 
Non-interest expense 829,455
 821,313
 1.0
 
Adjusted non-interest expense(1)
 808,320
 777,260
 4.0
 
Income before income taxes 547,354
 480,138
 14.0
 
Net income 428,476
 275,474
 55.5
 
Net income available to common shareholders 410,478
 265,236
 54.8
 
Net income per common share, basic 3.49
 2.19
 59.4
 
Net income per common share, diluted 3.47
 2.17
 59.5
 
Adjusted net income per common share, diluted(1)
 3.64
 2.53
 43.8
 
Return on average common equity 14.55% 9.32% 523
bps
Adjusted return on average common equity(1)
 15.29
 10.86
 443
 
Adjusted return on average tangible common equity(1)
 15.66
 11.14
 452
 
Return on average assets 1.35
 0.89
 46
 
Adjusted return on average assets(1)
 1.41
 1.04
 37
 
Efficiency ratio 57.99
 59.95
 (196) 
Adjusted tangible efficiency ratio(1)
 56.33
 59.87
 (354) 
        
  As Of and For The Years Ended December 31,
  2018 2017 Change 
Loans, net of deferred fees and costs $25,946,573
 $24,787,464
 4.7
%
Total deposits 26,720,322
 26,147,900
 2.2
 
Total average deposits 26,344,118
 25,374,388
 3.8
 
Average core deposits(1)    
 24,526,998
 23,750,007
 3.3
 
Net interest margin 3.86% 3.55% 31
bps
Non-performing assets ratio 0.44
 0.53
 (9) 
Non-performing loans ratio 0.41
 0.47
 (6) 
Past due loans over 90 days 0.01
 0.02
 (1) 
Net charge-off ratio 0.20
 0.29
 (9) 
        
CET1 capital (transitional)     $2,897,997
 $2,763,168
 4.9
%
Tier 1 risk-based capital 3,090,416
 2,872,001
 7.6
 
Total risk-based capital 3,601,376
 3,383,081
 6.5
 
CET1 capital ratio (transitional) 9.95% 9.99% (4)bps
Tier 1 risk-based capital ratio 10.61
 10.38
 23
 
Total risk-based capital ratio 12.37
 12.23
 14
 
Total shareholders’ equity to total assets ratio     9.59
 9.49
 10
 
Tangible common equity to tangible assets ratio(1)    
 8.81
 8.88
 (7) 
        
(1)

See "Part II - Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Non-GAAP Financial Measures" of this Report for applicable reconciliation to GAAP measures.



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 accounting for the allowance for loancredit losses fair value measurements, 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’ consolidated financial statements. Synovus’ financial results could differ significantly if different judgments or estimates are applied in the application of these policies.
Allowance for LoanCredit Losses
The allowance for loan lossesACL is a significantcritical accounting estimate that represents management's best estimaterequires significant judgments and assumptions, which are inherently subjective. The use of probabledifferent estimates or assumptions could have a significant impact on the provision for credit losses, inherent in the funded loan portfolio.ACL, financial condition, and results of operations. The economic and business climate in any given industry or market is difficult to gauge and can change rapidly, and the effects of those changes can vary by borrower. Significant judgments and estimates are necessary in
In accordance with CECL, the determination of the allowance for loan losses. Significant judgments include, among others, loan risk ratings and classifications, the determination and measurement of impaired loans, the timing of loan charge-offs, the probability of loan defaults, the net loss exposure in the event of loan defaults, the loss emergence period, qualitative loss factors, as well as other qualitative considerations. In determiningACL, which includes both the allowance for loan losses management makes numerous assumptions, estimates, and assessments, which are inherently subjective. The use of different estimates or assumptions could have a significant impact on the provision for loan losses, allowance for credit losses on unfunded loan commitments, represents management's best estimate of expected losses non-performingover the life of loans adjusted for prepayments, and over the life of loan charge-offs, financial condition,commitments expected to fund. Synovus' loans and results of operations. A detailed discussionunfunded loan commitments are grouped based upon the nature of the methodology usedloan type and the forecasted PD, adjusted for relevant forecasted macroeconomic factors comprising multiple weighted scenarios representing different plausible outcomes, and LGD, to determine the allowance for the majority of our portfolio. Expected credit losses are estimated over the contractual term of the loan, adjusted for expected prepayments and curtailments when appropriate. To the extent the lives of the loans in determining the ALL as well as information regarding recently issued accounting standards relatedportfolio extend beyond the period for which a reasonable and supportable forecast can be made (which is two years for Synovus), the Company reverts, on a straight-line basis back to the ALLhistorical rates over a one- year period. Life-of-loan loss percentages may also be adjusted, as necessary, for certain quantitative and qualitative factors that in management's judgment are included in "Part II - Item 8. Financial Statements and Supplementary Data - Note 1 - Summary of Significant Accounting Policies" of this Report.
Fair Value Measurements
Synovus evaluates assets, liabilities, and other financial instruments that are either required or electednecessary to be recorded, reported, or disclosed at fair value, and determines the fair value of these instruments as the exchange price that would be received for an asset or paid to transfer a liabilityreflect losses expected in the principal or most advantageous market forportfolio. These adjustments address inherent limitations in the asset or liability in an orderly transaction between market participants on the measurement date. Synovus updates the fair value measurements of each instrumentquantitative model including uncertainty and limitations, among others. Loans that do not share risk characteristics are individually evaluated on a periodicloan- by- loan basis but no less than quarterly.
Synovus selectswith specific reserves, if any, recorded as appropriate. Given the most appropriate technique for determining the fair value of the asset or liability. The degree of management judgment involved in determining fair valuedynamic relationship between macroeconomic variables within an economic forecast, it is dependent upon the availability of quoted prices or observable market data. There is minimal subjectivity involved in measuring the fair value of financial instruments based on quoted market prices; however, when quoted prices and observable market data are not available, Synovus uses a valuation technique requiring significant judgmentdifficult to estimate the appropriate fair value. impact of a change in any one individual variable on the ACL. As a result, when formulating the quantitative estimate management uses a probability-weighted approach that incorporates a baseline forecast, an upside scenario reflecting an accelerated recovery, a downside scenario that reflects adverse economic conditions, and a scenario that assumes consistent slow growth that is less optimistic than the baseline.
To illustrate a hypothetical sensitivity analysis, management calculated a quantitative allowance using only the downside scenario. This downside scenario includes a severe deterioration in economic conditions compared to our baseline forecast. The downside forecast assumes an increase in unemployment starting in the first quarter of 2022, a decline in consumer confidence, and a rise in bankruptcies as forbearance ends. Consumer spending drops significantly in the first quarter of 2022, and the economy falls into recession with the unemployment rate peaking at 9% compared to the baseline forecast that assumes full employment by the end of 2022. Excluding the impact of qualitative considerations, this sensitivity analysis would result in a hypothetical increase over our reported ACL of approximately $225 million at December 31, 2021.
The sensitivity analysis result does not represent management’s view of expected credit losses nor is it intended to estimate future changes in allowance levels for reasons including, but not limited to, the following:
•Management uses a weighted approach applied to multiple economic scenarios for its allowance estimation process;
•The impact of changes in economic variables are interrelated and nonlinear, therefore the results of the analysis cannot be extrapolated to additional changes in economic variables;
•Subsequent changes in the mix of portfolio characteristics could materially impact results;
•Potential future government or regulatory intervention could cause results to differ materially from historical relationships between the economic variables and related credit metrics; and
•The sensitivity analysis does not account for any quantitative or qualitative adjustments incorporated by management as part of its overall allowance framework to reflect losses expected in the portfolio.
See "Part II - Item 8. Financial Statements and Supplementary Data - Note 1 - Summary of Significant Accounting Policies" and "Part II - Item 8. Financial Statements and Supplementary Data - Note 133 - Fair Value Accounting" ofLoans and Allowance for Loan Losses" in this Report for further discussion of fair value measurements and Synovus' use of the various fair value methodologies and the types of assets and liabilities in which fair value accounting is applied.additional details.
Synovus accounts for acquired assets and liabilities at their respective fair values using the acquisition method of accounting. Determination of the fair value often involves estimates based on third party valuations or internal valuations based on discounted cash flow analyses or other valuation techniques, which are inherently subjective. Additionally, the amortization of identified intangible assets is based upon the estimated economic benefits to be received, which is also subjective. Typically, acquisitions result in the recognition of goodwill, which is subject to ongoing periodic impairment tests of each reporting unit. Synovus applies ASC 350-20-35-3A, Goodwill Subsequent Measurement - Qualitative Assessment, for its determination of impairment. Refer to "Part II - Item 8. Financial Statements and Supplementary Data - Note 1 - Summary of Significant Accounting Policies" and "Part II - Item 8. Financial Statements and Supplementary Data - Note 6 - Goodwill and Other Intangible Assets" for a description of the impairment testing process and key assumptions management utilizes to perform its qualitative assessment.
33

Income taxes
The calculation of Synovus’ income tax provision is complex and requires the use of estimates and judgments in its determination. As part of Synovus’ overall business strategy, management must consider tax laws and regulations that apply to the specific facts and circumstances under consideration. As such, the Company is often required to exercise significant judgment regarding the interpretation of these tax laws and regulations, in which Synovus' anticipated and actual liability could significantly vary based upon the taxing authority’s interpretation. Specifically, significant estimates in accounting for income taxes relate to the valuation allowance for deferred tax assets, estimates of the realizability of income tax credits, utilization of net operating losses,NOLs, the determination of taxable income, and the determination of uncertain tax positions and temporary differences between


book and tax bases. Adjustments to these items may occur due to modifications in tax rates, newly enacted laws, issuance of tax regulations,resolution of items with taxing authorities, alterations to interpretative statutory, judicial, and regulatory guidance that affects the Company’s tax positions, methods or electionselections changes, or other facts and circumstances. Management closely monitors tax developments and the potential timing of these changes in order to evaluate the effect they may have on the Company’s overall tax position and the estimates and judgments used in determining the income tax provision and records adjustments as necessary. See "Part II - Item 8. Financial Statements and Supplementary Data - Note 1 - Summary of Significant Accounting Policies" and "Part II - Item 8. Financial Statements and Supplementary Data - Note 1716 - Income Taxes" in this Report for additional details.
DISCUSSION OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Investment Securities Available for Sale
The investment securities portfolio consists principallyprimarily of high-quality liquid debt securities classified as available for sale. InvestmentThe on-going investment philosophy for the securities available for sale provide Synovus withportfolio focuses on maintaining a readily accessible source of liquidity and a relatively stable source of income. The investment securities portfoliowhile also provides management with a tool to balancesupporting the income and interest rate risk of its loan and deposit portfolios. See Table 8 for maturity and average yield informationmanagement objectives of the Company. See "Part II - Item 8. Financial Statements and Supplementary Data - Note 2 - Investment Securities Available for Sale" in this Report for additional information.
The average balance of investment securities available for sale portfolio.
increased to $9.60 billion in 2021 from $7.01 billion in 2020, representing 18.8% and 14.6%, respectively, of average interest earning assets. The investment strategy focuses on the useportfolio earned a taxable-equivalent yield of the investment securities portfolio to generate interest income1.46% and to assist in the management of interest rate risk. Synovus increased the portfolio's duration slightly during 2018 while the average balance of the portfolio increased from the prior year. The weighted average duration of the investment securities portfolio was 4.1 years at December 31, 2018 compared to 3.8 years at December 31, 2017.
Synovus also utilizes a significant portion of its investment portfolio to secure certain deposits2.55% for 2021 and other liabilities requiring collateralization. At December 31, 2018, $1.56 billion of these investment securities were pledged to secure certain deposits and securities sold under repurchase agreements as required by law and contractual agreements. The investment securities are primarily mortgage-backed securities issued by U.S. government agencies and GSEs, both of which have a high degree of liquidity and limited credit risk. A mortgage-backed security depends on the underlying pool of mortgage loans to provide a cash flow pass-through of principal and interest. At December 31, 2018, all of the collateralized mortgage obligations and mortgage-backed pass-through securities held by Synovus were issued or backed by federal agencies or GSEs.
2020, respectively. As of December 31, 20182021 and 2017,2020, the estimated fair value of investment securities available for sale as a percentage of their amortized cost was 97.7%99.3% and 98.7%102.1%, respectively, with net unrealized losses of $73.2 million and net unrealized gains of $160.6 million, respectively. The investment securities available for sale portfolio had gross unrealized gainsa weighted average duration of $6.3 million and gross unrealized losses of $100.6 million, for a net unrealized loss of $94.3 million as of3.7 years at December 31, 2018. The investment securities available for sale portfolio had gross unrealized gains of $6.1 million and gross unrealized losses of $57.3 million, for a net unrealized loss of $51.2 million as of2021, compared to 2.5 years at December 31, 2017. Shareholders’ equity included net unrealized losses of $83.2 million and $43.5 million on the available for sale portfolio as of December 31, 2018 and 2017, respectively.
The average balance of investment securities available for sale increased to $4.08 billion in 2018 from $3.85 billion in 2017. The portfolio earned a taxable-equivalent rate of 2.38% and 2.15% for 2018 and 2017, respectively. For the years ended December 31, 2018 and 2017, average investment securities available for sale represented 13.66% and 13.34%, respectively, of average interest earning assets.
The following table shows investment securities available for sale by type as of December 31, 2018 and 2017.
 Table 7 - Investment Securities Available for SaleDecember 31,
 
 (in thousands)2018 2017
 U.S. Treasury securities$122,077
 $82,674
 U.S. Government agency securities38,382
 10,862
 Mortgage-backed securities issued by U.S. Government agencies97,205
 120,440
 Mortgage-backed securities issued by U.S. Government sponsored enterprises2,398,650
 2,595,626
 Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises1,188,518
 1,111,999
 Commercial mortgage-backed securities issued by U.S. Government sponsored agencies129,865
 44,897
 State and municipal securities—
 180
 Corporate debt and other securities16,935
 20,391
 Investment securities available for sale$3,991,632
 $3,987,069
     


2020.
The calculation of weighted average yields for investment securities available for sale displayed below is based on the amortized cost and effective yields of each security. Maturity information is presented based upon contractual maturity. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.
34

Table 8 - Maturities and Weighted Average Yields of Investment Securities Available for Sale as of December 31, 2018
(dollars in thousands)
Within One
Year
 
1 to 5
Years
 
5 to 10
Years
 
More Than
10 Years
 Total
Fair Value         
U.S. Treasury securities$19,476
 $102,601
 $—
 $—
 $122,077
U.S. Government agency securities1,922
 6,161
 30,299
 —
 38,382
Mortgage-backed securities issued by U.S. Government agencies—
 —
 23,698
 73,507
 97,205
Mortgage-backed securities issued by U.S. Government sponsored enterprises—
 52,316
 404,554
 1,941,780
 2,398,650
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises—
 —
 26,291
 1,162,227
 1,188,518
Commercial mortgage-backed securities issued by U.S. Government sponsored agencies—
 —
 129,865
 —
 129,865
Corporate debt and other securities—
 —
 15,150
 1,785
 16,935
Total$21,398
 $161,078
 $629,857
 $3,179,299
 $3,991,632
          
Weighted Average Yield         
U.S. Treasury securities1.97% 1.84% —% —% 1.86%
U.S. Government agency securities5.61
 5.54
 3.66
 —
 4.06
Mortgage-backed securities issued by U.S. Government agencies—
 —
 2.14
 2.50
 2.41
Mortgage-backed securities issued by U.S. Government sponsored enterprises—
 2.03
 1.90
 2.59
 2.46
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises—
 —
 1.72
 2.57
 2.55
Commercial mortgage-backed securities issued by U.S. Government sponsored agencies—
 —
 2.86
 —
 2.86
Corporate debt and other securities—
 —
 5.50
 6.50
 5.62
Total2.30% 2.04% 2.26% 2.58% 2.51%
          

Table 5 - Maturities and Weighted Average Yields of Investment Securities Available for Sale
December 31, 2021
(dollars in thousands)Within One Year1 to 5
Years		5 to 10
Years		More Than
10 Years		Total
Fair Value
U.S. Treasury securities$20,600 $— $97,238 $— $117,838 
U.S. Government agency securities760 322 53,119 — 54,201 
Mortgage-backed securities issued by U.S. Government agencies— 870 136 778,627 779,633 
Mortgage-backed securities issued by U.S. Government sponsored enterprises28 — 83,271 7,929,002 8,012,301 
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises— — 150 939,473 939,623 
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises— 182,821 209,311 89,612 481,744 
Asset-backed securities514,188 — — — 514,188 
Corporate debt securities and other debt securities9,730 — 9,071 — 18,801 
Total$545,306 $184,013 $452,296 $9,736,714 $10,918,329 
Weighted Average Yield
U.S. Treasury securities0.04 %— %1.01 %— %0.85 %
U.S. Government agency securities5.12 4.86 2.70 — 2.75 
Mortgage-backed securities issued by U.S. Government agencies— 2.96 2.99 2.20 2.20 
Mortgage-backed securities issued by U.S. Government sponsored enterprises4.35 — 2.32 1.92 1.93 
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises— — 1.03 1.25 1.25 
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises— 1.62 1.46 2.67 1.74 
Asset-backed securities1.34 — — — 1.34 
Corporate debt securities and other debt securities4.72 — 2.77 — 3.78 
Total1.35 %1.64 %1.68 %1.89 %1.85 %

35

Loans
The following table shows loans by portfolio class and as a percentage of total loans, net of deferred fees and costs, as of December 31, 20182021 and 2017.    2020.
Table 6 - Loans by Portfolio Class
December 31,December 31, 2021 vs. December 31, 2020 Change
20212020
(dollars in thousands)Total Loans%Total Loans%
Commercial, financial, and agricultural$12,052,475 30.6 %$12,410,152 32.4 %$(357,677)(3)%
Owner-occupied7,508,686 19.1 7,110,016 18.6 398,670 6 
Total commercial and industrial19,561,161 49.7 19,520,168 51.0 40,993 — 
Investment properties9,869,155 25.1 9,103,379 23.8 765,776 8 
1-4 family properties645,469 1.6 628,695 1.6 16,774 3 
Land and development466,866 1.2 593,633 1.6 (126,767)(21)
Total commercial real estate10,981,490 27.9 10,325,707 27.0 655,783 6 
Consumer mortgages5,069,039 12.9 5,513,491 14.4 (444,452)(8)
Home equity lines1,281,989 3.3 1,537,726 4.0 (255,737)(17)
Credit cards299,556 0.8 281,018 0.7 18,538 7 
Other consumer loans2,118,723 5.4 1,074,874 2.9 1,043,849 97 
Total consumer8,769,307 22.4 8,407,109 22.0 362,198 4 
Loans, net of deferred fees and costs$39,311,958 100.0 %$38,252,984 100.0 %$1,058,974 3 %
Table 9 - Loans by Portfolio Class
  December 31,
  2018 2017
(dollars in thousands) Total Loans      %*     Total Loans      %*    
Commercial, financial, and agricultural $7,449,698
 28.7% $7,179,487
 29.0%
Owner-occupied 5,331,508
 20.5
 4,844,163
 19.5
Total commercial and industrial 12,781,206
 49.2
 12,023,650
 48.5
Investment properties 5,560,951
 21.4
 5,670,065
 22.9
1-4 family properties 679,870
 2.7
 781,619
 3.1
Land and development 323,670
 1.2
 483,604
 2.0
Total commercial real estate 6,564,491
 25.3
 6,935,288
 28.0
Consumer mortgages 2,934,235
 11.3
 2,633,503
 10.6
Home equity lines 1,515,796
 5.8
 1,514,227
 6.1
Credit cards 258,245
 1.0
 232,676
 0.9
Other consumer loans 1,916,743
 7.4
 1,473,451
 5.9
Total consumer 6,625,019
 25.5
 5,853,857
 23.5
   Total loans 25,970,716
 100.0
 24,812,795
 100.0
   Deferred fees and costs, net (24,143) nm
 (25,331) nm
Total loans, net of deferred fees and costs $25,946,573
 100.0% $24,787,464
 100.0%
         
*Loan balance in each category is before net deferred fees and costs and is expressed as a percentage ofAt December 31, 2021, total loans, net of deferred fees and costs.
nm - not meaningful
Total loans, ended the year at $25.95net of deferred fees and costs, of $39.31 billion, a $1.16increased $1.06 billion, or 4.7%3%, increase from December 31, 2020. C&I loans grew slightlybut were impacted by a year ago. Loan$1.79 billion decline in PPP loans primarily from loan forgiveness. CRE loans grew as higher funded production outpaced elevated pay-off activity. Consumer growth was drivenlargely due to purchases of third-party lending loans and was mostly offset by a $757.6 million, or 6.3%declines in consumer mortgages and HELOCs, which were impacted by accelerated prepayment activity due to excess consumer liquidity. We expect loan growth in 2022 to be 4% to 7%, increase in which excludes PPP loans.
C&I loans remain the largest component of our loan portfolio, representing 49.7% of total loans, while CRE and a $771.2 million, or 13.2%, increase in consumer loans with our lending partnershipsrepresent 27.9% and 22.4%, respectively. Our portfolio growing$429.8 millioncomposition is established through a comprehensive concentration management policy which sets limits for C&I, CRE, and consumer mortgages increasingloan levels as well as sub-categories therein.
U.S. Small Business Administration Paycheck Protection Program (PPP)
Synovus participated in the PPP, which is a loan program that originated from the CARES Act and was subsequently expanded by $300.7the Paycheck Protection Program and Health Care Enhancement Act, which was signed into law on April 24, 2020. The total balance of all PPP loans, net of unearned fees and costs, was $399.6 million as of December 31, 2021 compared to $2.19 billion as of December 31, 2020. The decline of $1.79 billion, or 11.4%.This growth82%, from 2020 was largely the result of 2021 activity including $2.87 billion of forgiveness partially offset by a decline in CRE loans$1.05 billion of $370.8 million, or 5.3%. Investment properties loans declined by $109.1 million, or 1.9%, while 1-4 family propertiesPhase 2 fundings. The table below provides additional information on PPP loans.
Table 7 - PPP Loans
December 31, 2021
ApplicationsLoan Balances
(in millions, except count data )Approximate CountBalanceFundings2021 ForgivenessTotal Life-to-Date Forgiveness
End of Period, Net of Unearned Fees and Costs(1)
Phase 1- 2020 Originations19,000 $2,958 $2,886 $2,184 $2,724 $47 
Phase 2- 2021 Originations11,000 1,135 1,047 681 681 353
Total30,000 $4,093 $3,933 $2,865 $3,405 $400 
(1) Equals fundings less forgiveness, pay-downs/pay-offs, and land and development loans declined by $101.7 million, or 13.0%, and $159.9 million, or 33.1%, respectively.unearned net fees.
36

(dollars in millions)Total Net FeesPercent of Fundings2021 Recognized Net FeesTotal Recognized Net FeesTotal Unrecognized or Remaining Net FeesContractual Maturity
Phase 1- 2020 Originations$94.9 3.3 %$48.6 $94.6 $0.3 2 years
Phase 2- 2021 Originations43.6 4.2 30.6 30.6 13.0 5 years
Total$138.5 3.5 %$79.2 $125.2 $13.3 
Commercial Loans
TheTotal commercial loan portfolio consistsloans (which are comprised of C&I loans and CRE loans. Total commercial loansloans) at December 31, 20182021 were $19.35$30.54 billion, or 74.5%77.6%, of the total loan portfolio, and grew $386.8 million,compared to $29.85 billion, or 2.0%, from78.0% at December 31, 2017.
At December 31, 2018 and 2017, Synovus had 30 and 25 commercial loan relationships, respectively, with total commitments of $50 million or more (including amounts funded). The average funded balance of these relationships at both December 31, 2018 and 2017 was approximately $35 million.2020.
Commercial and Industrial Loans
The C&I loan portfolio represents the largest category of Synovus' total loan portfolio.portfolio and is primarily comprised of general middle market and commercial banking clients across a diverse set of industries. The following table shows the composition of the C&I loan portfolio aggregated by NAICS industry name and code. In accordance with Synovus' lending policy, each loan undergoes a detailed underwriting process which incorporates uniform underwriting standards and oversight in proportion to the size and complexity of the lending relationship.


Table 10 - Commercial and Industrial Loans by Industry
 December 31, 2018 December 31, 2017
(dollars in thousands)Amount %* Amount %*
Health care and social assistance$3,021,001
 23.6% $2,783,113
 23.1%
Manufacturing1,073,590
 8.4
 943,694
 7.9
Finance and insurance901,377
 7.1
 784,643
 6.5
Retail trade888,850
 7.0
 870,410
 7.2
Professional, scientific, and technical services829,830
 6.5
 799,066
 6.6
Other services789,744
 6.2
 765,219
 6.4
Real estate, rental and leasing758,011
 5.9
 783,758
 6.5
Wholesale trade686,884
 5.4
 679,036
 5.7
Accommodation and food services647,318
 5.1
 567,262
 4.7
Construction605,730
 4.7
 520,281
 4.3
Real estate other476,918
 3.7
 510,693
 4.2
Transportation and warehousing476,827
 3.7
 427,608
 3.6
Other industries465,994
 3.6
 441,815
 3.7
Agriculture, forestry, fishing, and hunting342,691
 2.7
 353,628
 2.9
Educational services284,840
 2.2
 259,367
 2.2
Administration, support, waste management, and remediation281,130
 2.2
 283,333
 2.4
Information250,471
 2.0
 250,724
 2.1
Total C&I loans$12,781,206
 100.0% $12,023,650
 100.0%
        
*Loan balance in each category expressed as a percentage of total C&I loans.
As of December 31, 2018, 92% 2021, 92.7% (94.6% excluding PPP loans)of Synovus' C&I loans are secured by real estate, business equipment, inventory, and other types of collateral. Totalcollateral compared to 83.2% (93.8% excluding PPP loans) as of December 31, 2020. C&I loans atgrew $41.0 million from December 31, 2018 were $12.782020, as growth from funded loan production, particularly in the finance and insurance and health care and social assistance industries, was mostly offset by a decline in PPP loans.
Table 8 - Commercial and Industrial Loans by Industry
December 31, 2021December 31, 2020
(dollars in thousands)NAICS CodeAmount
%(1)
Amount
%(1)
Health care and social assistance62$4,220,579 21.6 %$3,878,450 19.9 %
Finance and insurance522,520,480 12.9 1,680,094 8.6 
Manufacturing31-331,314,212 6.7 1,243,290 6.4 
Accommodation and food services721,231,801 6.3 1,213,524 6.2 
Retail trade44-451,229,076 6.3 1,279,813 6.6 
Wholesale trade421,146,505 5.9 1,236,137 6.3 
Real estate and rental and leasing53111,061,921 5.4 1,134,023 5.8 
Construction231,023,540 5.2 1,065,633 5.5 
Other services811,004,448 5.1 1,144,023 5.9 
Professional, scientific, and technical services54928,436 4.7 1,144,939 5.9 
Transportation and warehousing48-49852,969 4.4 843,294 4.3 
Real estate other53752,997 3.8 723,241 3.7 
Arts, entertainment and recreation71534,597 2.7 779,282 4.0 
Educational services61427,456 2.2 398,949 2.0 
Public administration92407,451 2.1 432,519 2.2 
Agriculture, forestry, fishing, and hunting11285,372 1.5 385,337 2.0 
Administration, support, waste management, and remediation56246,638 1.3 352,812 1.8 
Information51189,306 1.0 288,321 1.5 
Other industries(2)183,377 0.9 296,487 1.4 
Total C&I loans$19,561,161 100.0 %$19,520,168 100.0 %
(1)Loan balance in each category expressed as a percentage of total C&I loans.
(2) Comprised of NAICS industries that are less than 1% of total C&I loans.

37

At December 31, 2021, $12.05 billion of C&I loans, or 49.2%30.6% of the total loan portfolio compared to $12.02 billion, or 48.5%(including PPP loans of the total loan portfolio, at December 31, 2017, an increase$399.6 million net of $757.6 million, or 6.3%, from 2017. Global One, our life insurance premium finance lender acquired in 2016, contributed $219.1 million of the total growth in 2018. Additionally, the industries that primarily contributed to the growth during 2018 included health careunearned fees and social assistance, manufacturing, and finance and insurance.At December 31, 2018, $7.45 billion, or 58.3%costs), of total C&I loans represented loans for the purpose of financing commercial, financial, and agricultural business activities compared to $7.18 billion, or 59.7%, of total C&I loans at December 31, 2017.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 December 31, 2018, $5.332021, $7.51 billion or 41.7%, of total C&I loans, or 19.1% of the total loan portfolio, represented loans originatedfor the purpose of financing owner-occupied properties compared to $4.84 billion, or 40.3%, of total C&I loans at December 31, 2017.properties. The financing of owner-occupied facilities is considered a C&I loan even though there is improved real estate as collateral. This treatment is a result of the credit decision process, which focuses on cash flow from operations of the business to repay the debt. The secondary source of repayment on these loans is the underlying real estate. These loans are predominately secured by owner-occupied and other real estate, and to a lesser extent, other types of collateral.
Commercial Real Estate Loans
CRE loans primarily consist of income-producing investment properties loans. Additionally, CRE loans include 1-4 family properties andloans as well as land and development loans. Total CRE loans were $6.56of $10.98 billion or 25.3% of the total loan portfolio, at December 31, 2018, a decrease of $370.8increased $655.8 million, or 5.3%6%, from December 31, 2017. The decline in CRE loans has largely been a result of our strategic, selective approach to these types of loans2020 as we continue to closely monitor our markets andhigher funded loan categories while maintaining discipline around pricing and structure.production was partially offset by elevated pay-off activity.
Investment Properties Loans
Investment properties loans consist of construction and mortgage loans for income producingincome-producing properties and are primarily made to finance multi-family properties, hotels, office buildings, shopping centers, warehouses and other commercial development properties. Total investment properties loans as of December 31, 20182021 were $5.56$9.87 billion, or 84.7%89.9% of the total CRE loan portfolio, and 21.4%25.1% of the total loan portfolio, up $765.8 million, or 8%, compared to $5.67$9.10 billion, or 81.8%88.2% of the total CRE loan portfolio, and 22.9%23.8% of the total loan portfolio at December 31, 2017. Total investment properties decreased $109.12020. All sub-categories experienced growth with the exception of multi-family, which was down by $61.1 million, or 1.9%3%, during 2018 primarily due to a decline in multi-family properties partially offset by an increase in other investment property.


from December 31, 2020.
The following table shows the principal categories of the investment properties loan portfolio at December 31, 20182021 and 2017.2020.
Table 11 - Investment Properties Loan Portfolio
Table 9 - Investment Properties Loan PortfolioTable 9 - Investment Properties Loan Portfolio
December 31,December 31,
2018 201720212020
(dollars in thousands)Amount % Amount %(dollars in thousands)Amount%Amount%
Office buildings$1,451,048
 26.1% $1,499,834
 26.5%Office buildings$2,511,058 25.4 %$2,207,744 24.2 %
Multi-family1,208,033
 21.7
 1,492,159
 26.3
Multi-family2,129,424 21.6 2,190,534 24.1 
Shopping centers808,540
 14.5
 791,311
 14.0
Shopping centers1,655,465 16.8 1,644,519 18.1 
Hotels704,319
 12.7
 741,703
 13.1
Hotels1,537,060 15.6 1,442,242 15.8 
Warehouses627,353
 11.3
 581,410
 10.2
Warehouses801,639 8.1 700,050 7.7 
Other investment property761,658
 13.7
 563,648
 9.9
Other investment property1,234,509 12.5 918,290 10.1 
Total investment properties loans$5,560,951
 100.0% $5,670,065
 100.0%Total investment properties loans$9,869,155 100.0 %$9,103,379 100.0 %
       
*    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 homebuildershome builders and commercial mortgage loans related to real estate investors,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 December 31, 2018,2021, 1-4 family properties loans declined to $679.9totaled $645.5 million, or 10.4%5.9% of the total CRE loan portfolio, and 2.7% of the total loan portfolio, compared to $781.6 million, or 11.3% of the total CRE loan portfolio, and 3.1% of the total loan portfolio at increased slightly fromDecember 31, 2017.2020.
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 were $323.7of $466.9 million at December 31, 2018, or 4.9% of the total CRE loan portfolio and 1.2% of the total loan portfolio compared2021 continued to $483.6 million at December 31, 2017, or 6.9% of the CRE loan portfolio and 2.0% of the total loan portfolio. Land and development loans declined $159.9 milliondecline from December 31, 2017 as Synovus continues to strategically reduce its exposure to these types of loans.2020.
38

Consumer Loans
The consumer loan portfolio consists of a wide variety of loan products offered through Synovus' banking network as well as third-party lending partnerships, including first and second residential mortgages, home equity lines,HELOCs, and credit card loans, home improvement loans, student loans, and other consumer loans. The majority of Synovus' consumer loans are consumer mortgages and home equity lines secured by first and second liens on residential real estate primarily located in the markets served by Synovus. Total consumer loans as of December 31, 2018 were $6.63 billion, or 25.5% of the total loan portfolio compared to $5.85 billion, or 23.5% of the total loan portfolio at December 31, 2017. Total consumer loans increased by $771.2 million, or 13.2%, from December 31, 2017. Consumer mortgages grew $300.7 million or 11.4% from 2017 to $2.93 billion primarily due to continued recruiting of mortgage loan originators in strategic markets throughout the footprint as well as enhanced origination efforts, which also create additional cross-selling opportunities for other products. Credit cardboth secured and unsecured loans totaled $258.2 million at December 31, 2018 compared to $232.7 million at December 31, 2017.
Other consumer loans increased $443.3 million, or 30.1%, to $1.92 billion at December 31, 2018, primarily due to consumer-based lending partnerships.from third-party lending. As of December 31, 2018, these partnerships had combined balances of $1.57 billion, up from $1.14 billion at December 31, 2017.
Consumer loans are subject to uniform lending policies 2021and consist primarily of loans with strong borrower credit scores. Synovus makes consumer lending decisions based upon a number of key credit risk determinants including FICO scores as well as loan-to-value and debt-to-income ratios. Risk levels 1-6 (descending) are assigned to consumer loans based upon a risk score matrix. At least annually, the consumer loan portfolio is sent to a consumer credit reporting agency for a refresh of customers' credit scores so that management can evaluate ongoing consistency or negative migration in the quality of the portfolio, which impacts the allowance for loan losses. Revolving lines of credit are reviewed for a material change in financial circumstances, and when appropriate, the line of credit may be suspended for further advances. FICO scores within the residential real estate portfolio have generally remained stable over the last several years. As of the most recent FICO score refresh as of December 31, 2018,2020, weighted average FICO scores within the residential real estate portfolio based on committed balances were 772792 and 791 for HELOCSHELOCs and 786777 and 776 for consumer mortgages, respectively.
Consumer Mortgages as compared to 772 for HELOCS and 774 for Consumer Mortgagesloans at December 31, 2017.2021 increased $362.2 million,or 4%, compared to December 31, 2020. Consumer mortgages and HELOCs both decreased from December 31, 2020 primarily as a result of accelerated prepayment activity and excess consumer liquidity.


Higher-riskOther consumer loans, as definedwhich primarily includes third-party lending, increased $1.04 billion from December 31, 2020, led by the FDIC are consumerpurchases of $1.62 billion of third-party lending loans (excluding consumer loans defined as nontraditional mortgage loans) where, as of the origination date or, if the loan has been refinanced, as of the refinance date, the probability of default within two years is greater than 20%, as determined using a defined historical stress period. These loans are not a part of Synovus' consumer lending strategy, and Synovus does not currently develop or offer specific sub-prime, alt-A, no documentation or stated income residential real estate loan products. Synovus estimates that, aspartially offset by payment activity. As of December 31, 2018, it2021, third-party lending loans had $78.3combined balances of $1.64 billion, or 4.2%, of the total loan portfolio, compared to $678.3 million, of higher-risk consumer loans.
The following table shows the compositionor 1.8%, of the total loan portfolio, at December 31, 2018, 2017, 2016, 2015,2020. Growth in this portfolio is predicated on overall balance sheet dynamics including capital, liquidity, and 2014.client growth.
39
Table 12 - Composition of Loan Portfolio
 December 31,
 2018 2017 2016 2015 2014
(dollars in thousands)Amount  %* Amount  %* Amount  %* Amount  %* Amount  %*
Commercial                   
Commercial, financial, and agricultural$7,449,698
 28.7% $7,179,487
 29.0% $6,909,036
 29.0% $6,453,180
 28.8% $6,182,312
 29.3%
Owner-occupied5,331,508
 20.5
 4,844,163
 19.5
 4,634,770
 19.4
 4,318,950
 19.2
 4,085,407
 19.4
Real estate — construction1,418,157
 5.5
 1,604,803
 6.5
 1,724,518
 7.1
 2,181,174
 9.7
 1,714,942
 8.1
Real estate — mortgage5,146,334
 19.8
 5,330,485
 21.5
 5,649,594
 23.7
 5,213,594
 23.2
 5,211,660
 24.7
Total commercial19,345,697
 74.5
 18,958,938
 76.5
 18,917,918
 79.2
 18,166,898
 80.9
 17,194,321
 81.5
Consumer                   
Real estate — mortgage4,450,031
 17.1
 4,147,730
 16.7
 3,913,869
 16.4
 3,628,597
 16.1
 3,378,059
 15.9
Consumer loans — credit cards258,245
 1.0
 232,676
 0.9
 232,413
 1.0
 240,851
 1.1
 253,649
 1.2
Consumer loans — other1,916,743
 7.4
 1,473,451
 5.9
 818,182
 3.4
 423,318
 1.9
 302,460
 1.4
Total consumer6,625,019
 25.5
 5,853,857
 23.5
 4,964,464
 20.8
 4,292,766
 19.1
 3,934,168
 18.5
Total loans25,970,716
   24,812,795
   23,882,382
   22,459,664
   21,128,489
  
Deferred fees and costs, net(24,143) nm
 (25,331) nm
 (25,991) nm
 (30,099) nm (30,790) nm
Total loans, net of deferred fees and costs$25,946,573
 100.0% $24,787,464
 100.0% $23,856,391
 100.0% $22,429,565
 100.0% $21,097,699
 100.0%
                    
*Loan balance in each category is before net deferred fees and costs and is expressed as a percentage of total loans, net of deferred fees and costs.
nm - not meaningful



The table below shows the maturities of loans, net of deferred fees and costs, as of December 31, 2021. Also provided are the amounts due after one year, classified according to the sensitivity in interest rates. Actual repayments of loans may differ from the contractual maturities reflected therein because borrowers have the right to prepay obligations with and without prepayment penalties. Additionally, the refinancing of such loans or the potential delinquency of such loans could create differences between the contractual maturities and the actual repayment of such loans.
Table 10 - Loan Maturities and Interest Rate Sensitivity
December 31, 2021
(in thousands)One Year Or LessOver One Year Through Five YearsOver Five Years Through Fifteen YearsOver Fifteen YearsTotal
Commercial, financial, and agricultural$1,723,646 $6,537,749 $3,350,674 $440,406 $12,052,475 
Owner-occupied1,245,442 3,913,702 2,345,824 3,718 7,508,686 
Total commercial and industrial2,969,088 10,451,451 5,696,498 444,124 19,561,161 
Investment properties1,592,382 6,640,083 1,630,114 6,576 9,869,155 
1-4 family properties226,863 328,079 89,251 1,276 645,469 
Land and development226,481 215,699 24,686 — 466,866 
Total commercial real estate2,045,726 7,183,861 1,744,051 7,852 10,981,490 
Consumer mortgages174,480 42,917 508,766 4,342,876 5,069,039 
Home equity lines51,088 219,947 205,094 805,860 1,281,989 
Credit cards299,556 — — — 299,556 
Other consumer loans97,394 732,839 1,157,028 131,462 2,118,723 
Total consumer622,518 995,703 1,870,888 5,280,198 8,769,307 
Loans, net of deferred fees and costs$5,637,332 $18,631,015 $9,311,437 $5,732,174 $39,311,958 
Loans due after one year:Fixed Interest RateFloating or Adjustable Interest RateTotal
Commercial, financial, and agricultural$2,596,116 $7,732,713 $10,328,829 
Owner-occupied3,141,817 3,121,427 6,263,244 
Total commercial and industrial5,737,933 10,854,140 16,592,073 
Investment properties2,354,041 5,922,732 8,276,773 
1-4 family properties323,151 95,455 418,606 
Land and development98,901 141,484 240,385 
Total commercial real estate2,776,093 6,159,671 8,935,764 
Consumer mortgages4,101,991 792,568 4,894,559 
Home equity lines71,118 1,159,783 1,230,901 
Other consumer loans1,552,357 468,972 2,021,329 
Total consumer5,725,466 2,421,323 8,146,789 
Loans, net of deferred fees and costs$14,239,492 $19,435,134 $33,674,626 
40

Deposits
Deposits provide the most significant funding source for interest earning assets. Total deposits were $26.72 billion at December 31, 2018, an increase of $572.4 million, or 2.2%, compared to year-end 2017. Non-interest-bearing deposits totaled $7.65 billion at December 31, 2018, a decrease of $35.4 million, or 0.5%, from December 31, 2017.
The following table shows the composition of averageperiod-end deposits for 20182021 and 2017.2020. See Table 1614 - Average Balances, Interest, and Yields/Rates in this Report for additional information on average deposits including average rates paid in 2018, 2017,2021, 2020, and 2016.2019.
Table 11 - Composition of Period-end Deposits
20212020
(dollars in thousands)Amount
%(1)
Amount
%(1)
Non-interest-bearing demand deposits(2)
$15,242,839 30.9 %$12,382,708 26.5 %
Interest-bearing demand deposits(2)
6,346,959 12.9 5,674,416 12.2 
Money market accounts(2)
14,886,424 30.1 13,541,236 29.0 
Savings deposits(2)
1,404,428 2.8 1,156,249 2.5 
Public funds6,284,553 12.7 6,760,628 14.5 
Time deposits(2)
2,427,073 4.9 3,605,928 7.7 
Brokered deposits2,835,000 5.7 3,570,406 7.6 
Total deposits$49,427,276 100.0 %$46,691,571 100.0 %
Core deposits(3)    
$46,592,276 94.3 %$43,121,165 92.4 %
Core transaction deposits(4)
$37,880,650 76.6 %$32,754,609 70.2 %
Brokered time deposits$1,024,448 2.1 %$1,590,096 3.4 %
Public funds time deposits$665,954 1.3 %$752,172 1.6 %
Table 13 - Composition of Average Deposits
 2018 2017
(dollars in thousands)Amount 
%(1)
 Amount 
%(1)
Non-interest-bearing demand deposits$7,656,233
 29.1% $7,351,015
 29.0%
Interest-bearing demand deposits4,855,603
 18.4
 4,867,029
 19.2
Money market accounts, excluding brokered deposits7,836,622
 29.8
 7,474,200
 29.4
Savings deposits820,501
 3.1
 830,317
 3.3
Time deposits, excluding brokered deposits3,358,039
 12.7
 3,227,446
 12.7
Brokered deposits1,817,120
 6.9
 1,624,381
 6.4
Total average deposits$26,344,118
 100.0% $25,374,388
 100.0%
   Average core deposits(2)    
$24,526,998
 93.1% $23,750,007
 93.6%
        
(1)    Deposits balance in each category expressed as percentage of total deposits.
(1)
Deposits balance in each category expressed as percentage of total average deposits.
(2)
See "Part II - Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Non-GAAP Financial Measures” of this Report for applicable reconciliation to GAAP measure.
Total average(2)    Excluding any public funds or brokered deposits.
(3)    Core deposits increased $969.7 million, or 3.8%, to $26.34 billion in 2018 from $25.37 billion in 2017. Average coreexclude brokered deposits.
(4)    Core transaction deposits which exclude total average brokeredconsist of non-interest-bearing demand deposits, were up $777.0 million, or 3.3%, from 2017, driven by growth in non-interest-bearinginterest-bearing demand deposits, money market accounts, and timesavings deposits excluding public funds and brokered deposits. Additionally, during the first quarter of 2018, Synovus obtained FDIC approval to report
Total period-end deposits related to our sweep money market product, offered by Synovus Securities, as a component of core deposits. Average balances for this product included in average core deposits in 2018 totaled $319.3 million. Average brokered deposits increased $192.7 million compared to 2017. See "Part II - Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Non-GAAP Financial Measures” of this Report for applicable reconciliation to GAAP measures.
Time deposits of $100,000 and greaterwere $49.43 billion at December 31, 20182021, up $2.74 billion, or 6%, compared to year-end 2020, due largely to client preferences for maintaining liquidity during 2021 as well as various fiscal stimulus efforts which further supported deposit growth, partially offset by strategic declines in time deposits. Core transaction deposits increased $5.13 billion, or 16%, compared to December 31, 2020, with growth in all categories. On an average basis, total deposits of $47.61 billion were up $4.57 billion, or 11%, compared to the prior year.
As of December 31, 2021 and 2017 were $3.752020, $25.91 billion and $3.36$23.39 billion, respectively, of our deposit portfolio was uninsured. The uninsured amounts are estimated based on the methodologies and included brokered time deposits of $1.20 billion and $1.41 billion, respectively. See Table 14assumptions used for the maturity distribution of time deposits of $100,000 or more. These larger deposits represented 14.0% and 12.8% of total deposits at December 31, 2018 and 2017, respectively, and included brokered time deposits which represented 4.5% and 5.4% of total deposits at December 31, 2018 and 2017, respectively.Bank's regulatory reporting requirements.
The following table shows maturitiesthe portion of time deposits of $100,000 or morethat are uninsured, by remaining time until maturity, at December 31, 2018.2021.
Table 12 - Maturity Distribution of Uninsured Time Deposits
(in thousands)December 31, 2021
3 months or less$139,744
Over 3 months through 6 months115,342
Over 6 months through 12 months744,921
Over 12 months146,693
Total outstanding$1,146,700
41
Table 14 - Maturity Distribution of Time Deposits of $100,000 or More  
(in thousands) December 31, 2018
3 months or less $581,513
Over 3 months through 6 months 645,907
Over 6 months through 12 months 1,255,159
Over 12 months 1,267,349
Total outstanding $3,749,928
   




Net Interest Income
The following table summarizes the components of net interest income for the years ended December 31, 2018, 2017,2021, 2020, and 2016,2019, including the tax-equivalent adjustment that is required in making yields on tax-exempt loans and investment securities comparable to taxable loans and investment securities. The taxable-equivalent adjustment is based on a 21% federal income tax rate for 2018 and a 35% federal income tax rate for 2017 and 2016.the three years shown.
Table 15 - Net Interest Income  
 Years Ended December 31,
Table 13 - Net Interest IncomeTable 13 - Net Interest IncomeYears Ended December 31,
(in thousands) 2018 2017 2016(in thousands)202120202019
Interest income $1,344,305
 $1,162,497
 $1,022,803
Interest income$1,653,343 $1,804,495 $2,050,638 
Taxable-equivalent adjustment 553
 1,124
 1,285
Taxable-equivalent adjustment3,185 3,424 3,025 
Interest income, taxable-equivalent 1,344,858
 1,163,621
 1,024,088
Interest income, taxable-equivalent1,656,528 1,807,919 2,053,663 
Interest expense 195,892
 139,188
 123,623
Interest expense120,396 291,747 454,835 
Net interest income, taxable-equivalent $1,148,966
 $1,024,433
 $900,465
Net interest income, taxable-equivalent$1,536,132 $1,516,172 $1,598,828 
      
Net interest income (interest income less interest expense) is the largest component of total revenues,revenue, representing earnings from the primary business of gathering funds from customerclient deposits and other sources, and investing those funds primarily in loans and investmentfixed-income securities. Synovus’ long-term objective is to manage those assets and liabilities to maximize net interest income while balancing interest rate, credit, liquidity, and capital risks.
Net interest income for 20182021 was $1.15$1.53 billion, up $125.1$20.2 million, or 12.2%1%, from 2017. On a taxable-equivalent basis, net interest income increased $124.5$1.51 billion in 2020, including $79.2 million or 12.2%, from 2017. During 2018, average earning assets increased $966.3in PPP fees during 2021 and $46.0 million or 3.3%, primarily as a result of increases in net loans and investment securities.
Net interest income for 2017 was $1.02 billion, up $124.1 million, or 13.8%, from 2016. On a taxable-equivalent basis, net interest income increased $124.0 million, or 13.8%, from 2016. During 2017, average earning assets increased $1.36 billion, or 4.9%, primarily as a result of an increase in net loans and investment securities.during 2020.
Net Interest Margin
Net interest margin is defined as taxable-equivalent net interest income divided by average totala measure of the spread between interest earning assets relative to the cost of funding and provides an indication ofcan be used to assess the efficiency of the earnings from balance sheet activities. The net interest margin is affected by changes in the spread between interest earning asset yields, andthe cost of interest-bearing liability costs, byliabilities, the percentage of interest earning assets funded by non-interest-bearing funding sources, and the mix of earning assets and interest-bearing liabilities.
The net interest margin was 3.86%3.01% for 2018, an increase2021, a decrease of 31 basis points17 bps from 2017.3.18% in 2020, due primarily to the decline in market interest rates in addition to average growth in investment securities available for sale and interest-bearing funds held at the Federal Reserve Bank. The yield on earning assets increased 48 basis pointsdecreased 54 bps to 4.51% and3.24% from 3.78% in 2020, while the effective cost of funds increased 19 basis pointsdecreased 37 bps to 0.69% (the cost of funds includes non-interest-bearing demand deposits).0.23% from 0.60% in 2020.
The primary components of the yield on interest earning assets are loan yields, yields on investment securities, and the yield on balances held with the Federal Reserve Bank. The factors positively impacting earning assetLoan yields were a 51 basis pointsdecreased 21 bps, due primarily to the decline in market interest rates, and yields on investment securities decreased 109 bps, due primarily to an acceleration in prepayments and related increase in loan yields driven primarily by four 25 basis points federal funds rate increases in 2018 as well as a 23 basis points increase in taxable investment securities yields primarily duepremium amortization, compared to higher reinvestment rates.
The primary factors impacting the cost of funds during 2018 were a 36 basis points increase in the cost of money market deposit accounts and a 47 basis points increase in the cost of time deposits driven largely by competitive repricing commensurate with the federal funds rate increases. These increases were partially offset by a higher level of non-interest-bearing funding and a 9 basis point decrease in the cost of long-term debt due to Synovus issuing lower rate debt following redemption of long-term debt in November of 2017.
The net interest margin was 3.55% for 2017, an increase of 28 basis points from 2016. The yield on earning assets increased 31 basis points to 4.03% and the cost of funds increased 3 basis points to 0.50%. The increase in loan yields was primarily due to three 25 basis points federal funds rate increases during 2017. The increase in taxable investment securities yields was due to a modest increase in the effective duration of the investment portfolio and higher reinvestment rates.2020. Earning asset yields were also positivelynegatively impacted by a reductionthe increase in cash balances held with the Federal Reserve Bank as compared to the prior year.
The decline in the effective cost of funds during 2021 was primarily driven by declines in market interest rates and liability remixing.
Earning Assets and Sources of Funds
Average total assets for 2021 increased $3.23 billion, or 6%, to $55.37 billion as compared to average total assets of $52.14 billion for 2020. Average interest earning assets increased $3.28 billion, or 7%, in 2021 as compared to the prior year and represented 92.4% of average total assets for 2021, as compared to 91.8% in 2020. The increase in average balances of lower yieldingearning assets resulted primarily from a $2.60 billion increase in average investment securities available for sale, a $1.44 billion increase in average interest-bearing funds held at the Federal Reserve Bank. The primary factors impacting the cost of funds during 2017 wereBank, and a 14 point basis points$302.5 million increase in the costaverage loans held for sale. The increases, which were largely due to excess liquidity from an influx of time deposits, and a 19 basis points increase in the cost of long-term debt. These increases were partially offset by a higher level$944.5 million, or 2%, decrease in average total loans, net of non-interest-bearing funding.


deferred fees and costs, which was impacted by reduced loan demand and also included a decrease of $338.8 million in PPP loans.
42

Table 16 - Average Balances, Interest, and Yields/Rates
 2018 2017 2016
(dollars in thousands)Average Balance Interest 
  Yield/
   Rate    
 Average Balance Interest 
  Yield/
   Rate    
 Average Balance Interest 
  Yield/
   Rate    
Assets                 
Interest earning assets:                 
Taxable loans, net(1)(2)    
$25,132,193
 $1,224,601
 4.87% $24,318,345
 $1,062,261
 4.37% $23,022,443
 $941,978
 4.09%
Tax-exempt loans, net(1)(2)(3)    
61,128
 2,631
 4.30
 66,174
 3,157
 4.77
 74,929
 3,469
 4.63
Less: Allowance for loan losses253,091
 —
 —
 251,667
 —
 —
 254,646
 —
 —
Loans, net24,940,230
 1,227,232
 4.92
 24,132,852
 1,065,418
 4.41
 22,842,726
 945,447
 4.14
Investment securities available for sale:    

            
Taxable investment securities4,077,304
 96,926
 2.38
 3,852,571
 82,664
 2.15
 3,563,818
 67,335
 1.89
Tax-exempt investment securities(3)    
86
 6
 6.51
 869
 54
 6.21
 3,335
 203
 6.09
Total investment securities4,077,390
 96,932
 2.38
 3,853,440
 82,718
 2.15
 3,567,153
 67,538
 1.89
Trading account assets14,025
 360
 2.57
 6,330
 141
 2.22
 5,332
 91
 1.71
Interest earning deposits with banks    41,191
 884
 2.15
 45,365
 636
 1.40
 22,121
 42
 0.19
Due from Federal Reserve Bank    529,501
 10,156
 1.89
 575,126
 6,470
 1.12
 847,346
 4,356
 0.51
Federal funds sold and securities purchased under resale agreements    36,392
 366
 1.01
 50,315
 384
 0.76
 74,407
 184
 0.25
FHLB and Federal Reserve Bank stock    167,240
 6,978
 4.17
 170,703
 5,928
 3.47
 87,520
 3,784
 4.32
Mortgage loans held for sale43,568
 1,950
 4.48
 49,082
 1,926
 3.92
 75,288
 2,646
 3.51
Total interest earning assets29,849,537
 1,344,858
 4.51
 28,883,213
 1,163,621
 4.03
 27,521,893
 1,024,088
 3.72
Cash and cash equivalents408,684
     392,720
     402,047
    
Premises and equipment, net429,542
     419,619
     430,651
    
Other real estate5,655
     17,789
     36,211
    
Other assets(4)    
975,429
     1,073,947
     1,090,148
    
Total assets$31,668,847
     $30,787,288
     $29,480,950
    
Liabilities and Equity                 
Interest-bearing liabilities:                 
Interest-bearing demand deposits    $4,855,603
 $17,457
 0.36% $4,867,029
 $11,919
 0.24% $4,299,026
 $7,198
 0.17%
Money market accounts8,185,156
 57,771
 0.71
 8,043,327
 28,269
 0.35
 7,702,353
 23,482
 0.30
Savings deposits820,501
 251
 0.03
 830,317
 457
 0.06
 794,096
 640
 0.08
Time deposits4,826,625
 68,392
 1.42
 4,282,700
 40,680
 0.95
 4,067,378
 32,886
 0.81
Federal funds purchased and securities sold under repurchase agreements    208,727
 523
 0.25
 184,093
 198
 0.11
 216,593
 200
 0.09
Other short-term borrowings163,206
 3,030
 1.83
 71,918
 752
 1.03
 61,680
 301
 0.48
Long-term debt1,724,552
 48,468
 2.77
 1,965,069
 56,913
 2.86
 2,174,342
 58,916
 2.67
Total interest-bearing liabilities20,784,370
 195,892
 0.94
 20,244,453
 139,188
 0.69
 19,315,468
 123,623
 0.64
Non-interest-bearing demand deposits7,656,233
     7,351,015
     7,017,168
    
Other liabilities230,043
     221,270
     208,808
    
Equity2,998,201
     2,970,550
     2,939,506
    
Total liabilities and equity$31,668,847
     $30,787,288
     $29,480,950
    
Net interest income, taxable equivalent net interest margin  $1,148,966
 3.86%   $1,024,433
 3.55%   $900,465
 3.27%
Less: taxable-equivalent adjustment  553
     1,124
     1,285
  
Net interest income  $1,148,413
     $1,023,309
     $899,180
  
                  
(1)
Average loans are shown net of deferred fees and costs. Non-performing loans are included.
(2)
Interest income includes net loan fees as follows: 2018 — $32.4 million, 2017 — $32.4 million, and 2016 — $30.8million.
(3)
Reflects taxable-equivalent adjustments, using the statutory federal tax rate (21% in 2018 and 35% in 2017 and 2016), adjusting interest on tax-exempt loans and investment securities to a taxable-equivalent basis.
(4)
Includes average net unrealized (losses)/gains on investment securities available for sale of $(133.6) million, $(34.4) million, and $30.1 million for the years ended December 31, 2018, 2017, and 2016, respectively.

Average interest-bearing liabilities for 2021 of $33.72 billion decreased $402.4 million, or 1%, from $34.12 billion in 2020. The decrease in average interest-bearing liabilities resulted from a $3.08 billion, or 39%, decrease in average time deposits as a result of continued strategic run-off of these higher cost deposits, a $1.12 billion, or 48%, decrease in average long-term debt, which includes redemption of $250.0 million in subordinated debt in the fourth quarter of 2020, and a $492.7 million decrease in other short-term borrowings. These decreases were mostly offset by a $2.81 billion, or 19%, increase in average money market deposits and a $1.19 billion, or 16%, increase in average interest-bearing demand deposits. These increases, along with an increase of $3.38 billion, or 28%, in average non-interest bearing demand deposits compared to 2020, were largely due to liquidity associated with various stimulus efforts and monetary policy.

Table 14 - Average Balances, Interest, and Yields/Rates
202120202019
(dollars in thousands)Average BalanceInterest  Yield/
   Rate		Average BalanceInterest  Yield/
   Rate		Average BalanceInterest  Yield/
   Rate
Assets
Interest earning assets:
Taxable loans, net(1)(2)    
$37,644,066 $1,470,587 3.91 %$38,597,852 $1,587,606 4.11 %$35,599,889 $1,806,060 5.07 %
Tax-exempt loans, net(1)(2)(3)    
506,779 15,165 2.99 497,467 16,274 3.27 355,675 14,208 3.99 
Less: Allowance for loan losses537,324 — — 513,743 — — 259,833 — — 
Loans, net37,613,521 1,485,752 3.95 38,581,576 1,603,880 4.16 35,695,731 1,820,268 5.10 
Investment securities available for sale(3)
9,603,343 140,077 1.46 7,006,894 178,582 2.55 6,755,496 208,867 3.09 
Trading account assets5,613 87 1.55 6,593 121 1.84 5,119 1382.70 
Interest earning deposits with banks    23,235 82 0.35 21,081 197 0.94 21,586 4912.27 
Interest-bearing funds with Federal Reserve Bank    2,885,418 3,777 0.13 1,442,609 2,839 0.19 472,814 10,384 2.17 
Federal funds sold and securities purchased under resale agreements    93,457 53 0.06 124,460 149 0.12 59,734 1,342 2.25 
FHLB and Federal Reserve Bank stock    159,176 2,891 1.82 223,606 7,073 3.16 245,196 8,918 3.64 
Mortgage loans held for sale203,840 5,935 2.91 215,788 6,412 2.97 80,997 3,233 3.99 
Other loans held for sale580,162 17,874 3.04 265,764 8,666 3.21 517 22 4.11 
Total interest earning assets51,167,765 $1,656,528 3.24 %47,888,371 $1,807,919 3.78 %43,337,190 $2,053,663 4.74 %
Cash and due from banks561,170 531,963 510,745 
Premises and equipment445,333 481,371 487,202 
Other real estate1,522 9,740 14,539 
Cash surrender value of bank-owned life insurance1,058,966 1,003,560 767,142 
Other assets(4)    
2,133,725 2,223,033 1,675,112 
Total assets$55,368,481 $52,138,038 $46,791,930 
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing demand deposits    $8,701,078 $9,844 0.11 %$7,510,429 $19,034 0.25 %$6,311,829 $42,254 0.67 %
Money market accounts17,496,230 31,391 0.18 14,690,298 72,312 0.49 11,198,199 145,048 1.30 
Savings deposits1,335,269 229 0.02 1,056,777 247 0.02 905,338 487 0.05 
Time deposits4,770,002 33,455 0.70 7,853,325 126,184 1.61 10,054,459 169,160 1.68 
Federal funds purchased and securities sold under repurchase agreements    210,949 128 0.06 192,967 274 0.14 236,601 522 0.22 
Other short-term borrowings— — — 492,697 7,643 1.53 1,123,613 25,663 2.25 
Long-term debt1,203,282 45,349 3.77 2,322,717 66,053 2.83 2,135,614 71,701 3.31 
Total interest-bearing liabilities33,716,810 $120,396 0.35 34,119,210 $291,747 0.84 31,965,653 $454,835 1.41 
Non-interest-bearing demand deposits15,304,120 11,925,114 9,359,894 
Other liabilities1,135,573 1,021,633 714,521 
Shareholders' equity5,211,978 5,072,081 4,751,862 
Total liabilities and shareholders' equity$55,368,481 $52,138,038 $46,791,930 
Net interest income, taxable-equivalent net interest margin$1,536,132 3.01 %$1,516,172 3.18 %$1,598,828 3.70 %
Less: taxable-equivalent adjustment3,185 3,424 3,025 
Net interest income$1,532,947 $1,512,748 $1,595,803 
(1)Average loans are shown net of deferred fees and costs. NPLs are included.
(2)Interest income includes net loan fees as follows: 2021 — $115.5 million, 2020 — $76.1 million, and 2019 — $35.6million.
(3)Reflects taxable-equivalent adjustments, using the statutory federal tax rate of 21%, in adjusting interest on tax-exempt loans and investment securities to a taxable-equivalent basis.
(4)Includes average net unrealized gains on investment securities available for sale of $46.0 million, $197.5 million, and $43.4 million for the years ended December 31, 2021, 2020, and 2019, respectively.
43
Table 17 - Rate/Volume Analysis
2018 Compared to 2017
Change Due to(1)
 
2017 Compared to 2016
Change Due to(1)
(in thousands)Volume/Mix Yield/Rate Net Change Volume/Mix Yield/Rate Net Change
Interest earned on:           
Taxable loans, net$35,565
 $126,775
 $162,340
 $53,002
 $67,281
 $120,283
Tax-exempt loans, net(2)
(241) (285) (526) (405) 93
 (312)
Taxable investment securities4,832
 9,430
 14,262
 5,457
 9,872
 15,329
Tax-exempt investment securities(2)
(49) 1
 (48) (150) 1
 (149)
Trading account assets171
 48
 219
 17
 33
 50
Interest earning deposits with banks(58) 306
 248
 44
 550
 594
Due from Federal Reserve Bank(511) 4,197
 3,686
 (1,388) 3,502
 2,114
Federal funds sold and securities
purchased under resale agreements    
(106) 88
 (18) (60) 260
 200
FHLB and Federal Reserve Bank stock(120) 1,170
 1,050
 3,594
 (1,450) 2,144
Mortgage loans held for sale(216) 240
 24
 (920) 200
 (720)
Total interest income39,267
 141,970
 181,237
 59,191
 80,342
 139,533
            
Interest paid on:           
Interest-bearing demand deposits(27) 5,565
 5,538
 966
 3,755
 4,721
Money market accounts496
 29,006
 29,502
 1,023
 3,764
 4,787
Savings deposits(6) (200) (206) 29
 (212) (183)
Time deposits5,167
 22,545
 27,712
 1,744
 6,050
 7,794
Federal funds purchased and securities sold under
repurchase agreements
27
 298
 325
 (29) 27
 (2)
Other short-term borrowings940
 1,338
 2,278
 49
 402
 451
Long-term debt(6,975) (1,470) (8,445) (5,671) 3,668
 (2,003)
Total interest expense(378) 57,082
 56,704
 (1,889) 17,454
 15,565
Net interest income$39,645
 $84,888
 $124,533
 $61,080
 $62,888
 $123,968
            
(1)

Table 15 - Rate/Volume Analysis
2021 Compared to 2020
Change Due to(1)
2020 Compared to 2019
Change Due to(1)
(in thousands)Volume/MixYield/RateNet ChangeVolume/MixYield/RateNet Change
Interest earned on:
Taxable loans, net$(39,201)$(77,818)$(117,019)$151,997 $(370,451)$(218,454)
Tax-exempt loans, net(2)
305 (1,414)(1,109)5,658 (3,592)2,066 
Investment securities(2)
66,209 (104,714)(38,505)7,768 (38,053)(30,285)
Trading account assets(18)(16)(34)40 (57)(17)
Interest earning deposits with banks20 (135)(115)(11)(283)(294)
Interest-bearing funds with Federal Reserve Bank2,741 (1,803)938 21,045 (28,590)(7,545)
Federal funds sold and securities
purchased under resale agreements    
(34)(62)(96)1,457 (2,650)(1,193)
FHLB and Federal Reserve Bank stock(2,036)(2,146)(4,182)(786)(1,059)(1,845)
Mortgage loans held for sale(355)(122)(477)5,378 (2,199)3,179 
Other loans held for sale10,092 (884)9,208 10,902 (2,258)8,644 
Total interest income37,723 (189,114)(151,391)203,448 (449,192)(245,744)
Interest paid on:
Interest-bearing demand deposits2,977 (12,167)(9,190)8,031 (31,251)(23,220)
Money market accounts13,749 (54,670)(40,921)45,397 (118,133)(72,736)
Savings deposits56 (74)(18)76 (316)(240)
Time deposits(49,642)(43,087)(92,729)(36,979)(5,997)(42,976)
Federal funds purchased and securities sold under
repurchase agreements
25 (171)(146)(96)(152)(248)
Other short-term borrowings(7,538)(105)(7,643)(14,196)(3,824)(18,020)
Long-term debt(31,680)10,976 (20,704)6,193 (11,841)(5,648)
Total interest expense(72,053)(99,298)(171,351)8,426 (171,514)(163,088)
Net interest income, taxable-equivalent$109,776 $(89,816)$19,960 $195,022 $(277,678)$(82,656)
(1)    Changes in net interest income are attributed to either changes in average balances (volume change) or changes in average rates (rate change) for earning assets and sources of funds on which interest is received or paid. Volume change is calculated as change in volume times the previous rate, while rate change is change in rate times the previous volume.
(2)    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.
44

Changes in net interest income are attributed to either changes in average balances (volume change) or changes in average rates (rate change) for earning assets and sources of funds on which interest is received or paid. Volume change is calculated as change in volume times the previous rate, while rate change is change in rate times the previous volume.
(2)
Reflects taxable-equivalent adjustments, using the statutory federal income tax rate (21% for 2018 and 35% for 2017 and 2016), in adjusting interest on tax-exempt loans and investment securities to a taxable-equivalent basis.
Non-interest IncomeRevenue
Non-interest incomerevenue for the year ended December 31, 20182021 was $280.1$450.1 million, down $65.2$56.4 million, or 18.9%11%, compared to the year ended December 31, 2017. The decrease was driven by2020. Gains on sales of investment securities of $78.9 million impacted the $75 million Cabela's Transaction Fee recorded in 2017.year ended December 31, 2020. Adjusted non-interest income, which excludes the Cabela's Transaction Fee and other items,revenue(1) was $448.0 million, up $12.4$27.6 million, or 4.5%7%, compared to 2017. 2020, due primarily to strong growth in core banking fees, fiduciary and asset management fees, and brokerage revenue, partially offset by the normalization of mortgage banking income. In 2022, we expect continued growth in strategic fee categories including core banking fees and wealth management, with an industry-wide reduction in secondary mortgage revenue muting overall fee income growth.
(1)See "Part II - Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Non-GAAP Financial Measures" of this Report for applicable reconciliation to GAAP measure.


The following table shows the principal components of non-interest income.revenue.
Table 16 - Non-interest Revenue
Years Ended December 31,December 31, 2021 vs December 31, 2020
(in thousands)202120202019$ Change% Change
Service charges on deposit accounts$86,310 $73,132 $88,190 $13,178 18 %
Fiduciary and asset management fees77,147 63,251 58,388 13,896 22 
 Card fees51,399 42,702 45,659 8,697 20 
Brokerage revenue56,439 44,781 41,608 11,658 26 
Mortgage banking income54,371 91,413 32,599 (37,042)(41)
Capital markets income26,118 27,336 30,529 (1,218)(4)
Income from bank-owned life insurance38,019 31,297 21,226 6,722 21 
Investment securities gains (losses), net(799)78,931 (7,659)(79,730)nm
Other non-interest revenue61,062 53,670 45,360 7,392 14 
Total non-interest revenue$450,066 $506,513 $355,900 $(56,447)(11)%
Core banking fees (1)
$165,481 $138,359 $154,621 $27,122 20 %
Table 18 - Non-interest Income
  Years Ended December 31,
(in thousands) 2018 2017 2016
Service charges on deposit accounts(1)
 $80,840
 $81,419
 $83,246
Fiduciary and asset management fees 54,685
 50,485
 46,594
Card fees(1)
 42,503
 39,376
 39,302
Brokerage revenue 36,567
 29,705
 27,028
Mortgage banking income 18,958
 22,798
 24,259
Income from bank-owned life insurance 15,403
 13,460
 11,364
Cabela's Transaction Fee —
 75,000
 —
Investment securities (losses) gains, net (1,296) (289) 6,011
Other fee income 19,974
 20,168
 20,220
Other non-interest income(1)
 12,459
 13,205
 15,170
Total non-interest income $280,093
 $345,327
 $273,194
       
(1)
Beginning January 1, 2018, concurrent with the adoption of ASU 2014-09, certain non-interest income categories have been revised. All prior periods have been reclassified to conform to the current year's presentation.
2018 vs. 2017
(1)    Service charges on deposit accounts, were $80.8 million in 2018, a decreasecard fees, and other non-interest revenue components including letter of $579 thousand compared to 2017. credit fees, ATM fees income, line of credit non-usage fees, gains from sales of government guaranteed loans, and miscellaneous other service charges.
Service charges on deposit accounts for 2021, which consist of NSFaccount analysis fees, account analysisNSF fees, and all other service charges. NSF fees of $36.0 million were down $621 thousand, partially offset by a $343 thousand increase oncharges, increased primarily due to higher account analysis fees, which were up $9.9 million, or 34%, following our pricing for value Synovus Forward initiative implemented during the first quarter of $25.0 million compared to 2017. The decline in2021. NSF fees from 2017 was primarily due to lower Regulation E opt-in ratesfor 2021 and 2020 comprised 31% and 36%, respectively, of service charges on new accounts.deposit accounts and 6% and 5%, respectively, of total non-interest revenue. All other service charges on deposit accounts, which consist primarily of monthly fees on retailconsumer demand deposit anddeposits, savings accounts, and small business accounts, were $19.8$21.3 million for 2018, down $301 thousand2021, up $3.1 million, or 17%, compared to 2017, due primarily to lower net fees on check orders.2020.
Fiduciary and asset management fees are derived from providing estate administration, personal trust, corporate trust, corporate bond, investment management, and financial planning, and family office services. FiduciaryThe increase in fiduciary and asset management fees were $54.7 million, an increase of $4.2 million, or 8.3%, from 2017. The increasefor 2021 was driven by growth in averagetotal assets under management, that occurred during the year duewhich increased 9% from 2020, to overall market conditions during the majority of 2018, increased productivity, as well as the addition of new talent. The total value of assets under management (including brokerage assets under management)$22.00 billion at December 31, 2018, was up 0.3% and totaled approximately $14.0 billion compared to December 31, 2017.2021. Assets under management consist of all assets where Synovus has investment authority. Assets under advisement were approximately $2.8 billion and $3.1 billion at December 31, 2018 and 2017, respectively. Assets under advisement consist of non-managed assets as well as non-custody assets where Synovus earns a consulting fee. Many of the fiduciary and asset management fee charges are based on asset values, and changes in these values throughout the year directly impact fees earned.
Card fees increased $3.1 million, or 7.9%, over 2017. Card fees consist primarily of credit card interchange fees, debit card interchange fees, and merchant discounts. Card fees are reported net of certain associated expense items including customerclient loyalty program expensesexpense and network expenses.expense. The increase in 20182021 from 2017 was driven by growth in2020 resulted from increased transaction volume for both credit and debitin all card transactions.fee categories.
Brokerage revenue was $36.6 million, a $6.9 million, or 23.1% increase over 2017. The increase in 2018 from 2017 was largely driven by growth in brokerage assets under management as well as an increase in brokerage transaction commissions. Brokerage revenue consists primarily of brokerage commissions as well as advisory fees earned from the management of customerclient assets. BrokerageThe increase in 2021 over 2020 was largely driven by a 32% growth in assets under management were approximately $2.7 billion at December 31, 2018, an increase of 10%and higher transaction revenue from $2.5 billion at December 31, 2017.favorable market conditions.
Mortgage banking income, consisting of net gains on loan origination/sales activities, was significantly lower compared to 2020, driven largely by a decline in secondary market revenue in addition to lower secondary market mortgage loan production. Secondary market revenue decreased $3.8$24.6 million, or 16.8%37%, primarily due to a lower pipeline and margin compression. Loan sales of $1.69 billion declined $421.1 million, or 20%. Total secondary market mortgage loan production was $1.60 billion in 2021, a decrease of $622.8 million, or 28%, compared to 2017, reflecting softer production volume2020.
Capital markets income primarily includes fee income from client derivative transactions. Additionally, capital markets income includes fee income from capital raising investment banking transactions and foreign exchange as well as other
45

miscellaneous income from capital market transactions. The decrease for 2021 was primarily a result of a $4.0 million decrease in fees on client derivative transactions as commercial client activity to lock in lower rates was elevated in 2020, partially offset by a rising interest rate environment.$2.4 million increase in loan syndication arranger fees.
Income from bank-owned life insurance increased $1.9 million, or 14.4%, compared to 2017, due to additional investments in bank-owned life insurance policies during 2017,BOLI, includes increases in the cash surrender value of policies and proceeds from insurance benefits. The increase in 2021 was driven by a $7.1 million increase in proceeds from insurance benefits.
Other fee income includesInvestment securities losses, net, of $799 thousand, reflected strategic sales of mortgage-backed securities during 2021. Investment securities gains, net, of $78.9 million for 2020 reflected strategic repositioning of the portfolio primarily during the latter part of the second quarter of 2020 to respond to the impact of market rate declines.
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 automated teller machineATM use, customer swap dealer fees, and other service charges.


The main components of other non-interestcharges and loan servicing fees, income arefrom insurance commissions, gains from sales of GGL/SBA loans, changes in fair value of private equity investments, and other miscellaneous items. Other non-interest2021 included a $6.3 million increase in income was down $746 thousand, or 5.6%, from 2017 due primarilyrelated to unrealized losses from declines in fair value of private equity investments.
2017 vs. 2016
Service charges on deposit accounts were $81.4 million in 2017, a decrease of $1.8 million, or 2.2%, from the previous year. NSF fees were $36.6 million, a decrease of $1.1 million, or 2.8%, from 2016. The decline in NSF fees from prior year wastax credit investments primarily due to lower Regulation E opt-in rates on new accounts as well as lower incident levels given higher average deposit balances. Account analysis fees were $24.7a $6.1 million up $396 thousand, or 1.6%, compared to 2016. Allincrease in favorable valuation adjustments for solar energy tax credit partnerships, a $3.5 million increase in other service charges on deposit accounts, which consist primarily from higher unused line of monthlycredit fees, on retail demand deposit and savings accounts, were $20.1a $2.1 million a decrease of $1.2 million, or 5.5%, compared to 2016. The decline in all other service charges was largely due to a one-time impact during 2017 from account level conversions required for Synovus Bank's transition to a single bank operating environment.
Fiduciary and asset management fees were $50.5 million, an increase of $3.9 million, or 8.4% from 2016. The increase was driven by growth in assets under management. Total assets under management (including brokerage assets under management), increased by 23% to approximately $14.0 billion in 2017 from 2016 due to the benefit of new talent additions as well as higher equity markets. Assets under advisement were approximately $3.1 billion at December 31, 2017, a 9% decline from 2016.
Brokerage revenue was $29.7 million, a $2.7 million, or 9.9%, increase from 2016. The increase in 2017 from 2016 was largely driven by growthinsurance revenue. 2020 included $4.5 million in brokerage assets under management due primarily to new talent additions. Brokerage assets under management were approximately $2.5 billion at December 31, 2017, an increase of 31% from $1.9 billion at December 31, 2016.
Mortgage banking income decreased $1.5 million, or 6.0%, compared to 2016, reflecting a decline in refinancing volume.
Income from bank-owned life insurance increased $2.1 million, or 18.4%, compared to 2016, due to additional investments in bank-owned life insurance policies during 2017, increases in the cash surrender value of policies, and proceeds from insurance benefits.
On September 25, 2017, Synovus Bank completed the Cabela's Transaction and received the Cabela's Transaction Fee. See "Part II - Item 8. Financial Statements and Supplementary Data - Note 2 - Acquisitions" in this Report for more informationrealized gains on the Cabela's Transaction.sale of positions in two publicly-traded equity investments, a gain of $2.5 million from the sale of non-relationship mortgage loans, and a sale-leaseback gain of $2.4 million associated with a bank office property.
Other non-interest income was down $2.0 million, or 13.0%, compared to 2016. The decrease was due primarily to declines in fair value of private equity investments.
Non-interest Expense
Non-interest expense for the year ended December 31, 20182021 was $829.5 million, an increase$1.10 billion, a decrease of $8.1$79.7 million, or 1.0%7%, compared to the year ended December 31, 2017.2020. Goodwill impairment expense of $44.9 million impacted 2020. Adjusted non-interest expense(1) for 2018 increased $31.12021 decreased $2.4 million or 4.0%, compared to 2017, driven primarily by an increase of $20.1 million, or 4.6%,2020 as higher expense related to Synovus Forward in salaries2020 allowed us to make strategic and other personnel expense, and an increase of $10.5 million, or 8.8%,impactful investments in net occupancy and equipmentmost areas while managing overall expense. The efficiency ratioratio-TE for 2021 was 57.99%55.38% compared to 58.32% in 2020, and the adjusted tangible efficiency ratio(1) was 56.33%54.29% compared to 55.69% in 2018. 2020.
(1)    See "Part II - Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Non-GAAP Financial Measures" of this Report for applicable reconciliation to GAAP measures.















measure.
The following table summarizes non-interest expense for the years ended December 31, 2018, 2017,2021, 2020, and 2016.2019.
Table 19 - Non-interest Expense  
  Years Ended December 31,
(in thousands) 2018 2017 2016
Salaries and other personnel expense $453,420
 $433,321
 $402,026
Net occupancy and equipment expense 130,482
 119,964
 109,347
Third-party processing expense 58,625
 54,708
 46,320
FDIC insurance and other regulatory fees 24,494
 27,011
 26,714
Professional fees 26,737
 26,232
 26,698
Advertising expense 20,881
 22,948
 20,264
Foreclosed real estate expense, net 2,204
 12,540
 12,838
Loss on early extinguishment of debt, net —
 23,160
 4,735
Earnout liability adjustments 11,652
 5,466
 —
Merger-related expense 10,065
 110
 1,636
Other operating expenses 90,895
 95,853
 105,345
Total non-interest expense $829,455
 $821,313
 $755,923
       
2018 vs. 2017
Table 17 - Non-interest Expense
Years Ended December 31,December 31, 2021 vs December 31, 2020
(in thousands)202120202019$ Change% Change
Salaries and other personnel expense$649,426 $618,214 $570,036 $31,212 5 %
Net occupancy, equipment, and software expense169,222 169,658 161,906 (436)— 
Third-party processing and other services86,688 87,992 79,225 (1,304)(1)
Professional fees32,785 56,899 35,300 (24,114)(42)
FDIC insurance and other regulatory fees22,355 25,210 31,696 (2,855)(11)
Amortization of intangibles9,516 10,560 11,603 (1,044)(10)
Goodwill impairment— 44,877 — (44,877)nm
Restructuring charges7,223 26,991 1,230 (19,768)nm
Loss on early extinguishment of debt— 10,466 4,592 (10,466)nm
Earnout liability adjustments507 4,908 10,457 (4,401)nm
Merger-related expense— — 56,580 — nm
Other operating expense122,182 123,799 136,343 (1,617)(1)
Total non-interest expense$1,099,904 $1,179,574 $1,098,968 $(79,670)(7)%
Salaries and other personnel expense increased $20.1 million, or 4.6%, compared to 2017,2020, due primarily to talent additions,an increase in incentive accruals due to higher production-based commissionthan expected performance, higher employee insurance from increased claims, and incentivehigher share-based compensation expense largely due to timing with a higher level of retirement eligible expense acceleration, partially offset by lower mortgage production-based commissions and annual merit increases, offset somewhatlower salary expense. Synovus employees totaled 4,988, down 259, or 5%, from December 31, 2020, led by decreases in employee health insurance expense.Synovus' voluntary early retirement program offered during the latter part of 2020 and branch closures.
46

Net occupancy, equipment, and equipmentsoftware expense increased $10.5 million, or 8.8%,decreased compared to 2017,2020, driven primarily by higher costs associated with additionalsavings from branch closures, mostly offset by continued investments in technology, as well as higher rent expense.including enhanced online deposit account origination, an integrated receivable solution, and our commercial banking digital platforms. Synovus Bank's branch network consisted of 249281 and 250289 branches at December 31, 20182021 and 2017,2020, respectively. We expect to close an additional 15% of our branch locations with an estimated run rate savings of approximately $12 million by the end of 2022.
Third-party processing and other services expense includes all third-party core operating system and processing charges as well as third-party loan servicing charges. Third-party processing expense increased $3.9 million, or 7.2%,decreased compared to 2017 driven2020 primarily due to Synovus' restructure during the second quarter of 2020 of certain of its third-party consumer-based lending partnership arrangements with a shift of new originations to held for sale, mostly offset by an increase of $4.3 million from servicing feesexpense associated with PPP loan growthforgiveness and higher information-technology related expense.
Professional fees decreased compared to 2020, from Synovus' two consumer-based lending partnerships.decreases in consulting fees related to Synovus Forward.
FDIC insurance and other regulatory fees declined $2.5 milliondecreased compared to 20172020, reflecting lower assessment rate primarily due primarily to elimination of the surcharge assessment for all large banksoverall elevated liquidity and subordinated debt issued by Synovus Bank in the fourth quarter of 2018. The FDIC removed2020.
During the surcharge assessments whenthird quarter of 2020, Synovus recognized a $44.9 million non-cash goodwill impairment charge representing the deposit insurance fund reachedgoodwill allocated to the required levelConsumer Mortgage reporting unit resulting from a combination of 1.35% at September 30, 2018.factors including the extended duration of lower market valuations, high volumes in refinance activity that have reduced mortgage yields, and the clarity around longer term policy actions designed to keep interest rates low.
Foreclosed real estate expense for 2017 totaled $12.5As part of its Synovus Forward initiative, during the years ended December 31, 2021 and 2020, Synovus recorded restructuring charges of $7.2 million and $27.0 million, respectively, which included balance sheet$2.3 million and $15.6 million, respectively, of severance charges. In 2020, severance charges included $13.7 million in one-time termination benefits associated with the aforementioned voluntary early retirement program. During the years ended December 31, 2021 and 2020, Synovus also recorded $4.6 million and $10.5 million, respectively, in lease termination charges and asset impairment charges related to branch closures and restructuring actionsof corporate real estate. Asset impairment charges during the three monthsyear ended September 30, 2017 with $7.1December 31, 2021 were net of $5.4 million recorded for discountsin gains on sales of certain building and branch locations. Synovus Bank operated 281 branches at December 31, 2021, compared to fair value for completed or planned ORE accelerated dispositions.289 branches at December 31, 2020, following the closing of 11 branches and opening of 3 new branches during 2021.
During 2020, Synovus utilized excess liquidity and debt proceeds from debt issued by Synovus Bank in 2020 and terminated $1.13 billion in long-term FHLB obligations and redeemed $250.0 million in subordinated notes, incurring $10.5 million in losses on early extinguishment of debt.
Earnout liability fair value adjustments in 2020 associated with the Global One acquisition increased due towere the result of higher than projected earnings and higher earnings estimates over the remaining contractual earnout period.period, reflecting the continued success of the Global One enterprise. The earnout period ended on June 30, 2021, and the final earnout payment occurred during the third quarter of 2021.
Merger-relatedOther operating expense of $10.1 millionincludes 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. Period over period fluctuations are primarily related to certain expenses or losses not expected to recur rather than changes in 2018 relates to the acquisition of FCB, which closed on January 1, 2019.
Fluctuations in othertrends. Other operating expenses in 2018expense for 2021 included a $2.3$4.0 million seed gift into a newly established donor advised fund. Other operating expense for 2020 included a $2.7 million valuation adjustment to the Visa derivativeon a MPS receivable and additional fixed asset impairment charges of $1.5 million, which were somewhat offset by additional net contingency recoveries of $2.3 million. Other operating expenses in 2017 included restructuring charges of $7.0 million consisting primarily of severance charges for termination benefits incurred in conjunction with a voluntary early retirement program offered during the first quarter of 2017.
2017 vs. 2016
Salaries and other personnel expense increased $31.3 million, or 7.8%, compared to 2016, due primarily to talent additions, higher self-insurance expense, annual merit increases, a one-time $1 thousand bonus per eligible employee, and the addition of Global One.
Net occupancy and equipment expense increased $10.6 million, or 9.7%, compared to 2016, as costs associated with growth in technology investments offset efficiencies gained in occupancy and related expenses.


Third-party processing expense increased $8.4 million, or 18.1%, compared to 2016 driven by an increase of $4.8 million from servicing fees associated with loan growth from Synovus' two consumer-based lending partnerships.
Advertising expense was up $2.7 million compared to 2016 as a result of continued increased brand awareness activities.
On November 9, 2017, Synovus redeemed all of the $300.0 million aggregate principal amount of its 7.875% senior notes due in 2019. 2017 results included a loss of $23.2 million related to early extinguishment of these notes.
Earnout liability fair value adjustments associated with the Global One acquisition increased due to higher earnings estimates over the contractual earnout period.
Fluctuations in other operating expenses in 2017 included restructuring charges of $7.0 million consisting primarily of severance charges for termination benefits incurred in conjunction with a voluntary early retirement program offered during the first quarter of 2017. Restructuring charges in 2016 totaled $8.3 million and primarily related to asset impairments from corporate real estate optimization activities and branch closures. Other operating expenses in 2016 also included $2.5 million in litigation settlement expenses.charge from termination of client swaps.
Income Taxes
Income tax expense was $118.9$228.9 million for the year ended December 31, 20182021 compared to $204.7$111.0 million and $141.7$201.2 million for the years ended December 31, 20172020 and 2016,2019, respectively. The effective income tax rate for the years ended December 31, 2018, 20172021, 2020 and 20162019 was 21.7%23.1%, 42.6%22.9% and 36.5%26.3%, respectively. The decrease in the effective income tax rate for 2018 was primarily due to the reduction in the federal corporate income tax rate from 35% to 21%. Additionally, 2017 included income tax expense of $47.2 million for the remeasurement of deferred tax assets and liabilities resulting from Federal Tax Reform.
Deferred tax assets represent amounts available to reduce income taxes payable in future years. At December 31, 2018,2021, net deferred tax assets were $141.1$169.1 million compared to $165.8$130.8 million at December 31, 2017.2020.
Synovus currently expects to realizeregularly assesses the $141.1 million inrealizability of its net deferred tax assets well in advancebased upon all available evidence, both positive and negative. Based upon the assessment, Synovus has established a valuation allowance of the statutory carryforward period. At December 31, 2018, $33.0$19.0 million or 23.4%, of the net deferred tax asset relates to state net operating losses which have expiration dates beginning in 2023 through 2036. State tax credits at December 31, 2018 total $20.12021 and $19.2 million and have expiration dates through the tax year 2028. Additionally, $88.0 million of the net deferred tax assets have no expiration date as ofat December 31, 2018.2020, on the portion of its $23.9 million at December 31, 2021 and $29.7 million at December 31, 2020 of federal and state NOLs that are not expected to be utilized prior to expiration in years 2023 through 2034. See "Part II - Item 8. Financial Statements and Supplementary Data - Note 1716 - Income Taxes" of this Report for additional discussion regarding deferred income taxes.
The Code contains provisions that limit the utilization of NOL carryovers if there has been an “ownership change” as defined in Section 382 of the Code. In general, this would occur if ownership of common stock held by one or more 5% shareholders increased by more than 50 percentage points over their lowest pre-change ownership within a three-year period. If Synovus experiences such an ownership change, the utilization of pre-change NOLs to reduce future state income tax obligations could be limited. To reduce the likelihood of such an ownership change, Synovus adopted a Rights Plan in 2010 that was ratified by Synovus shareholders in 2011 and has been subsequently amended and ratified by Synovus shareholders, with the current plan expiring in April 2019.
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Synovus currently expects an effective income tax rate of approximately 23% to 24% for the year ending December 31, 2019. The effective income tax rate in future periods could be affected by items that are infrequent in nature such as new legislation.



Credit Quality
During 2018,Synovus continuously monitors the quality of its loan portfolio by industry, property type, geography, as well as credit quality continued to strengthen, with most keymetrics. At December 31, 2021, credit quality measures improving from 2017 levels.metrics remained stable and near historical lows with NPA and NPL ratios of 0.40% and 0.33%, respectively, and total past dues of 0.15%, as a percentage of loans. Net charge-offs for 2021 remained low at $77.8 million, or 0.20%, of average loans.
Table 18 - Selected Credit Quality Metrics
December 31,
(dollars in thousands)202120202019
Non-performing loans$131,042 $151,079 $101,636 
Impaired loans held for sale    — 23,590 — 
ORE and other assets27,137 17,394 35,810 
 Non-performing assets$158,179 $192,063 $137,446 
Loans 90 days past due and still accruing$6,770 $4,117 $15,943 
As a % of loans0.02 %0.01 %0.04 %
Total past due loans and still accruing$57,565 $47,349 $123,793 
As a % of loans0.15 %0.12 %0.33 %
Accruing TDRs(1)
$119,804 $134,972 $133,145 
Non-performing loans as a % of total loans0.33 %0.39 %0.27 %
Non-performing assets as a % of total loans, impaired loans held for sale, ORE, and specific other assets0.40 0.50 0.37 
Total loans$39,311,958 $38,252,984 $37,162,450 
Net charge-offs77,788 94,712 57,612 
Net charge-offs/average loans0.20 %0.24 %0.16 %
Provision for (reversal of) loan losses$(100,351)$336,052 $87,720 
Provision for (reversal of) unfunded commitments(5,900)18,970 (2)
Provision for (reversal of) credit losses$(106,251)$355,022 $87,720 
Allowance for loan losses$427,597 $605,736 $281,402 
Reserve for unfunded commitments41,885 47,785 1,375 
Allowance for credit losses$469,482 $653,521 $282,777 
ACL to loans coverage ratio1.19 %1.71 %0.76 %
ALL to loans coverage ratio1.09 1.58 0.76 
ACL/NPLs358.27 432.57 278.23 
ALL/NPLs326.31 400.94 276.87 
Table 20 - Selected Credit Quality Metrics
 December 31,
(dollars in thousands)2018 2017 2016 2015 2014
Non-performing loans    $106,733
 $115,561
 $153,378
 $168,370
 $197,757
Impaired loans held for sale    1,506
 11,278
 —
 —
 3,607
Other real estate6,220
 3,758
 22,308
 47,030
 85,472
 Non-performing assets    $114,459
 $130,597
 $175,686
 $215,400
 $286,836
Loans 90 days past due and still accruing$3,798
 $4,414
 $3,135
 $2,621
 $4,637
As a % of loans0.01% 0.02% 0.01% 0.01% 0.02%
Total past due loans and still accruing$56,927
 $52,031
 $65,106
 $47,912
 $51,251
As a % of loans0.22% 0.21% 0.27% 0.21% 0.24%
Accruing TDRs$115,588
 $151,271
 $195,776
 $223,873
 $348,427
Non-performing loans as a % of total loans0.41% 0.47% 0.64% 0.75% 0.94%
Non-performing assets as a % of total loans, other loans held for sale, and ORE0.44
 0.53
 0.74
 0.96
 1.35
          
(1)    Does not include loan modifications made under the CARES Act.
(2)    Prior to CECL implementation on January 1, 2020, the provision for unfunded commitments was reflected within other non-interest expense.
Non-performing Assets
Total NPAs were $114.5 million at December 31, 2018, a $16.1 million, or 12.4%, decrease from $130.6$158.2 million at December 31, 2017.2021, a $33.9 million, or 18%, decrease from December 31, 2020. Total non-performing assetsNPAs as a percentage of total loans, other loans held for sale, ORE and specific other real estateassets declined 9 basis points10 bps to 0.44%0.40% at December 31, 20182021 compared to 0.53% at December 31, 2017.
Non-performing loans2020. NPLs were $106.7$131.0 million at December 31, 2018, an $8.82021, a $20.0 million, or 7.6%13%, decrease from $115.6 million at December 31, 2017. The decline was driven by the continued resolution and disposition of problem assets as well as lower NPL inflows. 20182020 primarily due to a 35% reduction in NPL inflows of $101.9 million were down $21.0 million, or 17.1%, from 2017. Total non-performing loans asand a percentage of total loans were 0.41% at December 31, 201857% increase in disposition volume compared to 0.47% at December 31, 2017.2020.
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The following table shows the components of NPAs by portfolio class at December 31, 20182021 and 2017.2020.
Table 21 - NPAs by Portfolio Class
 December 31,
 2018 2017
(in thousands)
NPLs(1)
 Impaired Loans Held for Sale ORE 
Total NPAs(2)
 
NPLs(1)
 Impaired Loans Held for Sale ORE 
Total NPAs(2)
Commercial, financial, and agricultural$69,295
 $132
 $—
 $69,427
 $70,130
 $3,691
 $908
 $74,729
Owner-occupied8,971
 —
 1,681
 10,652
 6,654
 904
 284
 7,842
Total commercial and industrial78,266
 132
 1,681
 80,079
 76,784
 4,595
 1,192
 82,571
Investment properties2,381
 —
 —
 2,381
 3,804
 141
 —
 3,945
1-4 family properties2,381
 265
 35
 2,681
 2,849
 2,497
 —
 5,346
Land and development2,953
 —
 122
 3,075
 5,797
 412
 1,435
 7,644
Total commercial real estate7,715
 265
 157
 8,137
 12,450
 3,050
 1,435
 16,935
Consumer20,752
 1,109
 4,382
 26,243
 26,327
 3,633
 1,131
 31,091
Total$106,733
 $1,506
 $6,220
 $114,459
 $115,561
 $11,278
 $3,758
 $130,597
                
(1)
NPL ratio is 0.41% and 0.47% at December 31, 2018 and2017, respectively.
(2)
NPA ratio is 0.44% and 0.53% at December 31, 2018 and2017, respectively.


Asset Dispositions
During 2018, 2017 and 2016, Synovus completed sales of distressed assets (consisting primarily of NPLs and ORE) with total carrying values of $45.0 million, $64.7 million, and $54.8 million, respectively. Distressed asset sales continue to be a component of Synovus' strategy to further strengthen the balance sheet, improve asset quality, and enhance future earnings.
Table 19 - NPAs by Portfolio Class
December 31,
20212020
(in thousands)NPLsORE and Other AssetsTotal NPAsNPLsORE and Other AssetsImpaired Loans Held for SaleTotal NPAs
Commercial, financial, and agricultural$61,787 $— $61,787 $77,386 $44 $— $77,430 
Owner-occupied11,196 11,393 22,589 20,019 739 — 20,758 
Total commercial and industrial72,983 11,393 84,376 97,405 783 — 98,188 
Investment properties5,850 223 6,073 24,631 251 23,590 48,472 
1-4 family properties4,563 — 4,563 3,619 — — 3,619
Land and development1,918 177 2,095 2,163 785 — 2,948
Total commercial real estate12,331 400 12,731 30,413 1,036 23,590 55,039
Consumer mortgages29,078 25 29,103 8,740 — — 8,740
Home equity lines9,760 — 9,760 12,145 — — 12,145
Other consumer loans6,890 — 6,890 2,376 — — 2,376
     Total consumer45,728 25 45,753 23,261 — — 23,261
Other assets— 15,319 15,319 — 15,575 — 15,575
Total$131,042 $27,137 $158,179 $151,079 $17,394 $23,590 $192,063 
Troubled Debt Restructurings
At December 31, 2018, troubled debt restructurings2021, TDRs (accruing and non-accruing) were $141.8$142.1 million, a decrease of $21.2$31.9 million, or 13.0%18%, compared to December 31, 2017. Non-accruing2020. Accruing TDRs of $26.2were $119.8 million at December 31, 2018 increased $14.52021, a decrease of $15.2 million, fromor 11%, compared to December 31, 2017. Accruing2020. Non-accruing TDRs were $115.6of $22.3 million at December 31, 2018 compared to $151.32021 decreased $16.7 million, ator 43%, from December 31, 2017, a decrease of $35.7 million, or 23.6%, primarily due to more loans qualifying for removal of TDR designation upon subsequent renewal, refinance, or modification at market terms and pay-offs. At December 31, 2018, the allowance for loan losses allocated to these accruing TDRs declined to $6.1 million compared to $8.7 million at December 31, 2017 due to the decreased level of accruing TDRs. 2020.
Accruing TDRs are considered performing because they are performing in accordance with the restructured terms. At December 31, 2018 and 2017,2021 approximately 98% and 99%, respectively, of accruing TDRs were current.current compared to 99% at December 31, 2020. In addition, subsequent defaults on accruing TDRs (defaults defined as the earlier of the TDR being placed on non-accrual status or reaching 90 days past due with respect to principal and/or interest payments within twelve months of the TDR designation) have continued to remain at lower levels with eight defaults with a recorded investment of $978 thousand for the year ended December 31, 2021 compared to seven defaults with a recorded investment of $21.7 million for the year ended December 31, 2020.
The table below shows accruing TDRs by risk grade at December 31, 20182021 and 2017.2020.
Table 20 - Accruing TDRs by Risk Grade
December 31,
20212020
(dollars in thousands)Amount%Amount%
Pass$56,479 47.1 %$72,463 53.7 %
Special mention11,387 9.5 8,935 6.6 
Substandard51,938 43.4 53,574 39.7 
  Total accruing TDRs$119,804 100.0 %$134,972 100.0 %
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Table 22 - Accruing TDRs by Risk Grade
 December 31,
 2018 2017
(dollars in thousands)Amount % Amount %
Pass$50,668
 43.9% $57,136
 37.8%
Special mention14,480
 12.5
 15,879
 10.5
Substandard50,440
 43.6
 78,256
 51.7
  Total accruing TDRs$115,588
 100.0% $151,271
 100.0%
        

The following table shows TDRs by portfolio class at December 31, 20182021 and 2017.2020.
Table 21 - TDRs by Portfolio Class
December 31,
(in thousands)20212020
Commercial, financial and agricultural$43,597 $46,792 
Owner-occupied34,493 44,185 
Total commercial and industrial78,090 90,977 
Investment properties17,900 38,212 
1-4 family properties3,687 4,184 
Land and development5,567 4,852 
Total commercial real estate27,154 47,248 
Consumer mortgages16,117 19,757 
Home equity lines11,659 8,386 
Other consumer loans9,090 7,639 
Total consumer36,866 35,782 
Total TDRs$142,110 $174,007 
Table 23 - TDRs by Portfolio Class   
 December 31,
(in thousands)2018 2017
Commercial, financial and agricultural$34,013
 $44,418
Owner-occupied46,138
 35,554
Total commercial and industrial80,151
 79,972
Investment properties13,858
 21,398
1-4 family properties5,964
 15,056
Land and development12,600
 15,728
Total commercial real estate32,422
 52,182
Consumer mortgages19,134
 19,818
Home equity lines2,063
 5,407
Other consumer loans8,060
 5,656
Total consumer29,257
 30,881
Total TDRs$141,830
 $163,035
    
Non-TDR Modifications due to COVID-19
Regulatory agencies have encouraged financial institutions to work prudently with borrowers who are or may be unable to meet their contractual payment obligations because of COVID-19. In the Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus (initially issued on March 22, 2020 and revised on April 7, 2020), for example, the regulatory agencies expressed their view of loan modification programs as positive actions that may mitigate adverse effects on borrowers due to COVID-19 and their unwillingness to criticize institutions for working with borrowers in a safe and sound manner. Moreover, the Interagency Statement provided that eligible loan modifications related to COVID-19 may be accounted for under section 4013 of the CARES Act or in accordance with ASC 310-40. On December 27, 2020, the Consolidated Appropriations Act, 2021 extended the applicable period of Section 4013 of the CARES Act. This extension allows banks to elect to not consider loan modifications related to COVID-19 that are made between March 1, 2020 and the earlier of January 1, 2022, or 60 days after the national emergency ends to borrowers that are current (i.e. less than 30 days past due as of December 31, 2019) as TDRs. The regulatory agencies further stated that performing loans granted payment deferrals due to COVID-19 are not considered past due or non-accrual. FASB confirmed the foregoing regulatory agencies' view, that such short-term modifications (e.g., six months) made on a good-faith basis in response to COVID-19 for borrowers who are current are not TDRs.
During 2020, Synovus provided relief programs consisting primarily of 90-day payment deferral relief to borrowers negatively impacted by COVID-19, and as of December 31, 2021, no loans were in a P&I deferral status as compared to 0.3% of the total loan portfolio at December 31, 2020. In addition to our P&I deferment program, under the CARES Act, we have also provided borrowers who have been impacted by COVID-19 with other modifications such as interest-only relief or amortization extensions on approximately 2% of total loans at both December 31, 2021 and December 31, 2020.
Past Due Loans
Past due loans have remained at low levels. As a percentage of total loans outstanding, loans 30 or more days past due and still accruing interest were 0.22%0.15% and 0.21%0.12% at December 31, 20182021 and 2017,2020, respectively.As a percentage of total loans outstanding, loans 90 days past due and still accruing interest were 0.01%0.02% and 0.02%0.01% at December 31, 20182021 and December 31, 2017,2020, respectively. These loans are in the process of collection, and management believes that sufficient collateral value securing these loans exists to cover contractual interest and principal payments.

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 December 31, 2021 declined $539.0 million, or 34%, compared to December 31, 2020 primarily due to upgrades in the hotel industry as a result of improved financial performance after being negatively impacted by COVID-19.

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Table 22 - Criticized and Classified LoansDecember 31,
(dollars in thousands)20212020
Special mention loans$489,150 $977,028 
Substandard loans526,117 553,720 
Doubtful loans10,630 33,204 
Loss loans2,058 3,032 
Criticized and Classified loans$1,027,955 $1,566,984 
As a % of total loans2.6 %4.1 %
Potential Problem Loans
Management continuously monitors non-performing and past due loans to mitigate further deterioration regarding the condition of these loans. Potential problem loans are defined by management as certain performing loans with a well-defined weakness where there is information about possible credit problems of borrowers which causes management to have doubts as to the ability of such borrowers to comply with the present repayment terms of such loans. Potential problem commercial loans were $323.9 million and $374.2 million at December 31, 2021 and 2020, respectively, and consist of substandard accruing loans (included in criticized and classified loans) but exclude both loans 90 days past due and still accruing interest and substandard accruing troubled debt restructurings,TDRs, which are reported separately. Management’s decision to include performing loans in the category of potential problem loans indicates that management has recognized a higher degree of risk associated with these loans. In addition to accruing loans 90 days past due and accruing restructured loans, Synovus had $114.5 million of potential problem commercial loans at December 31, 2018 compared to $103.3 million at December 31, 2017. Management’s current expectation of probable losses from potential problem loans is included in the allowance for loan losses,ACL, and management cannot predict at this time whether these potential problem loans ultimately will become non-performing loansNPLs or result in losses.
For more information, see the loan portfolio class by regulatory risk grade and origination year tables and additional information in "Part II - Item 8. Financial Statements and Supplementary Data - Note 3 - Loans and Allowance for Loan Losses" in this Report.
Net Charge-offs
Total 20182021 net charge-offs of $50.4were $77.8 million, or 0.20%, of average loans, decreased $19.3compared to total net charge-offs of $94.7 million, or 27.6%, compared to 2017. Total 2017 net charge-offs at $69.7 million, or 0.29%0.24% of average loans increased $40.9 million compared to $28.7 million, or 0.12% of average loans, for 2016. Total 2017 net charge-offs were elevated primarily due to $34.2 million in net charge-offs recorded during the third quarter of 2017 in conjunction with certain balance sheet restructuring actions which also included the transfer of $77.8 million in loans (consisting primarily of non-performing loans) to held-for-sale.
2020. The following table shows net charge-offs (recoveries) by portfolio class for the years ended December 31, 2018, 20172021 and 2016.2020.
Table 23 - Net Charge-offs
Years Ended December 31,
20212020
(dollars in thousands)Amount
%(1)
Amount
%(1)
Commercial and industrial$49,723 0.26 %$62,716 0.33 %
Commercial real estate7,948 0.08 10,356 0.10 
Consumer20,117 0.23 21,640 0.23 
Total net charge-offs$77,788 0.20 %$94,712 0.24 %
(1)    Net charge-off ratio as a percentage of average loans.
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Table 24 - Net Charge-offs (Recoveries) by Portfolio Class
 Years Ended December 31,
 2018 2017 2016
(dollars in thousands)Amount 
%(1)
 Amount 
%(1)
 Amount 
%(1)
Commercial, financial and agricultural$39,246
 0.54 % $25,427
 0.36% $12,255
 0.18 %
Owner-occupied2,364
 0.05
 17,132
 0.36
 3,713
 0.08
  Total commercial and industrial41,610
 0.34
 42,559
 0.36
 15,968
 0.14
Investment properties1,301
 0.02
 658
 0.01
 5,711
 0.10
1-4 family properties(1,785) (0.24) 2,678
 0.32
 (1,842) (0.19)
Land and development(5,296) (1.32) 831
 0.15
 (879) (0.13)
Total commercial real estate(5,780) (0.09) 4,167
 0.06
 2,990
 0.04
Consumer mortgages390
 0.01
 8,385
 0.34
 1,425
 0.07
Home equity lines1,795
 0.12
 4,328
 0.28
 1,462
 0.09
Credit cards4,831
 2.02
 4,931
 2.17
 4,500
 1.92
Other consumer loans7,564
 0.44
 5,305
 0.49
 2,393
 0.39
  Total consumer14,580
 0.24
 22,949
 0.43
 9,780
 0.21
Total net charge-offs$50,410
 0.20 % $69,675
 0.29% $28,738
 0.12 %
            

(1)
Net charge-off ratio as a percentage of average loans.
Provision for Loan(reversal of) Credit Losses and Allowance for LoanCredit Losses
The reversal of provision for credit losses of $106.3 million for the year ended December 31, 2021, included net charge-offs of $77.8 million and resulted primarily from the continued improvement in the credit outlook for the loan portfolio. The reversal of provision for credit losses is due to the reduction in the overall ACL as well as a reduction of $16.9 million in net charge offs compared to 2020. The change in reserves is due to the notable improvement in the economic environment compared to December 31, 2020 as evidenced by the improvement in the unemployment rate from 6.7% at the end of 2020 to 3.9% at December 31, 2021. Likewise, our economic and credit outlook have progressed substantially compared to 2020. The factors reducing the ACL were partially offset by purchases of $1.62 billion of third-party lending loans as well as net organic loan growth in 2021, requiring additional reserves of $38.6 million.
The ALL of $427.6 million and the reserve for unfunded commitments of $41.9 million, which is recorded in other liabilities, comprise the total ACL of $469.5 million at December 31, 2021. The ACL decreased $184.0 million compared to the December 31, 2020 ACL of $653.5 million, which consisted of an ALL of $605.7 million and the reserve for unfunded commitments of $47.8 million. The ACL to loans coverage ratio of 1.19% at December 31, 2021 was 52 bps lower compared to December 31, 2020. The reduction in the overall ACL is due to the notable improvement in the economic environment compared to December 31, 2020.
See "Part II - Item 8. Financial Statements and Supplementary Data - Note 41 - Summary of Significant Accounting Policies" and "Part II - Item 8. Financial Statements and Supplementary Data - Note 3 - Loans and Allowance for Loan Losses" and "Part II - Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies" of in this Report for furthermore information.
Provision for loan losses for the years ended December 31, 2018, 2017, and 2016 was $51.7 million, $67.2 million, and $28.0 million, respectively. The provision for loan losses for the year ended December 31, 2017 was elevated primarily due to Synovus' completion of certain balance sheet restructuring actions in the third quarter of 2017 in conjunction with transferring $77.8 million in loans (consisting primarily of non-performing loans) to held-for-sale. This action resulted in provision expense of $27.7 million due to the actual or planned sale of such loans in an accelerated timeline.
The allowance for loan losses at December 31, 2018 was $250.6 million, or 0.97% of total loans, compared to $249.3 million, or 1.01% of total loans, at December 31, 2017.


A summary by loan category of loans charged off, recoveries of loans previously charged off, and additions to the allowance through provision for loan losses for the years ended December 31, 2018 and 2017, 2016, 2015, and 2014 is presented in the following table:
Table 25 - Allowance for Loan Losses – Summary of Activity by Loan Category
 Years Ended December 31,
(dollars in thousands)2018 2017 2016 2015 2014
Allowance for loan losses at beginning of year$249,268
 $251,758
 $252,496
 $261,317
 $307,560
Allowance for loan losses of sold Memphis loans—
 —
 —
 —
 (1,019)
Loans charged off         
Commercial:         
Commercial, financial, and agricultural45,831
 31,154
 20,058
 16,589
 30,024
Owner-occupied2,944
 18,090
 4,981
 5,994
 8,917
Real estate — construction2,341
 5,294
 6,815
 9,019
 31,753
Real estate — mortgage2,067
 6,899
 11,401
 4,979
 17,963
Total commercial53,183
 61,437
 43,255
 36,581
 88,657
Consumer:         
Real estate — mortgage6,165
 16,901
 6,071
 13,020
 15,636
Consumer loans — credit cards5,462
 5,755
 5,376
 5,382
 6,114
Consumer loans — other9,244
 6,326
 3,258
 2,356
 3,131
  Total consumer20,871
 28,982
 14,705
 20,758
 24,881
Total loans charged off74,054
 90,419
 57,960
 57,339
 113,538
 Recoveries of loans previously charged off         
Commercial:         
Commercial, financial, and agricultural6,585
 5,727
 7,803
 8,125
 13,287
Owner-occupied580
 958
 1,268
 486
 1,341
Real estate — construction7,351
 4,173
 7,846
 8,202
 8,714
Real estate — mortgage2,837
 3,853
 7,380
 5,442
 3,073
Total commercial17,353
 14,711
 24,297
 22,255
 26,415
Consumer:         
Real estate — mortgage3,980
 4,188
 3,184
 4,518
 5,832
Consumer loans — credit cards631
 824
 876
 1,391
 1,583
Consumer loans — other1,680
 1,021
 865
 1,344
 653
Total consumer6,291
 6,033
 4,925
 7,253
 8,068
Recoveries of loans previously charged off23,644
 20,744
 29,222
 29,508
 34,483
Net loans charged off50,410
 69,675
 28,738
 27,831
 79,055
Provision for loan losses51,697
 67,185
 28,000
 19,010
 33,831
 Allowance for loan losses at end of year$250,555
 $249,268
 $251,758
 $252,496
 $261,317
Ratios:         
  Allowance for loan losses to loans, net of deferred fees and costs0.97% 1.01% 1.06% 1.13% 1.24%
  Net charge-offs as a percentage of average loans net of deferred fees and costs0.20% 0.29% 0.12% 0.13% 0.39%
Allowance to non-performing loans excluding collateral-dependent impaired loans with no related allowance297.68% 238.44% 202.01% 189.47% 197.22%
          



The following table shows the allocation of the allowance for loan losses by loan category at December 31, 2018, 2017, 2016, 2015,2021 and 2014.2020.
Table 24 - Allocation of Allowance for Loan Losses
December 31,
20212020
(dollars in thousands)Amount
%(1)
Amount
%(1)
Commercial and industrial$188,364 49.7 %$229,555 51.0 %
Commercial real estate97,760 27.9 130,742 27.0 
Consumer141,473 22.4 245,439 22.0 
Total allowance for loan losses$427,597 100.0 %$605,736 100.0 %
(1)    Loan balance in each category expressed as a percentage of loans, net of deferred fees and costs. See Table 6 - Loans by Portfolio Class in this Report for more information.


52
Table 26 - Allocation of Allowance for Loan Losses
 December 31,
 2018 2017 2016 2015 2014
(dollars in thousands)Amount 
%(1)
 Amount 
%(1)
 Amount 
%(1)
 Amount 
%(1)
 Amount 
%(1)
Commercial                   
Commercial, financial, and agricultural$92,608
 28.7% $87,781
 29.0% $88,208
 29.0% $83,859
 28.8% $76,981
 29.3%
Owner-occupied40,515
 20.5
 39,022
 19.5
 37,570
 19.4
 39,130
 19.2
 41,129
 19.4
Real estate — construction24,278
 5.5
 27,518
 6.5
 33,827
 7.1
 38,354
 9.7
 48,742
 8.1
Real estate — mortgage44,518
 19.8
 47,479
 21.5
 47,989
 23.7
 48,779
 23.2
 52,729
 24.7
Total commercial201,919
 74.5
 201,800
 76.5
 207,594
 79.2
 210,122
 80.9
 219,581
 81.5
                    
Consumer                   
Real estate — mortgage24,752
 17.1
 24,771
 16.7
 28,381
 16.4
 29,579
 16.1
 29,887
 15.9
Consumer loans — credit cards12,613
 1.0
 10,378
 0.9
 8,936
 1.0
 8,604
 1.1
 9,853
 1.2
Consumer loans — other11,271
 7.4
 12,319
 5.9
 6,847
 3.4
 4,191
 1.9
 1,996
 1.4
Total consumer48,636
 25.5
 47,468
 23.5
 44,164
 20.8
 42,374
 19.1
 41,736
 18.5
Total allowance for loan losses$250,555
 100.0% $249,268
 100.0% $251,758
 100.0% $252,496
 100.0% $261,317
 100.0%
                    
(1)

Loan balance in each category expressed as a percentage of total loans, net of deferred fees and costs. See Table 12 - Composition of Loan Portfolio for calculation.



Capital Resources
Synovus and Synovus Bank are required to comply with capital adequacy standards established by theirour primary federal regulator, the Federal Reserve. Synovus and Synovus Bank measure capital adequacy using the standardized approach to theunder Basel III Final Rule.III. At December 31, 2018,2021, Synovus and Synovus Bank's capital levels remained strong and exceeded well-capitalized requirements currently in effect. The following table presents certain ratios used to measure Synovus and Synovus Bank's capitalization.
Table 25 - Capital Ratios
(dollars in thousands)December 31, 2021December 31, 2020
CET1 capital
Synovus Financial Corp.$4,388,618 $4,034,865 
Synovus Bank4,998,698 4,641,711 
Tier 1 risk-based capital
Synovus Financial Corp.4,925,763 4,572,010 
Synovus Bank4,998,698 4,641,711 
Total risk-based capital
Synovus Financial Corp.5,827,196 5,604,230 
Synovus Bank5,587,757 5,361,611 
CET1 capital ratio
Synovus Financial Corp.9.50 %9.66 %
Synovus Bank10.83 11.11 
Tier 1 risk-based capital ratio
Synovus Financial Corp.10.66 10.95 
Synovus Bank10.83 11.11 
Total risk-based capital to risk-weighted assets ratio
Synovus Financial Corp.12.61 13.42 
Synovus Bank12.11 12.83 
Leverage ratio
Synovus Financial Corp.8.72 8.50 
Synovus Bank8.86 8.73 
Tangible common equity to tangible assets ratio(1)
Synovus Financial Corp.7.52 7.66 
Table 27 – Capital Ratios   
(dollars in thousands)December 31, 2018 December 31, 2017
CET1 capital (transitional)   
Synovus Financial Corp.$2,897,997
 $2,763,168
Synovus Bank3,382,497
 3,155,163
Tier 1 risk-based capital   
Synovus Financial Corp.3,090,416
 2,872,001
Synovus Bank3,382,497
 3,155,163
Total risk-based capital   
Synovus Financial Corp.3,601,376
 3,383,081
Synovus Bank3,633,457
 3,406,243
CET1 capital ratio (transitional)   
Synovus Financial Corp.9.95% 9.99%
Synovus Bank11.62
 11.43
Tier 1 risk-based capital ratio   
Synovus Financial Corp.10.61
 10.38
Synovus Bank11.62
 11.43
Total risk-based capital to risk-weighted assets ratio   
Synovus Financial Corp.12.37
 12.23
Synovus Bank12.49
 12.33
Leverage ratio   
Synovus Financial Corp.9.60
 9.19
Synovus Bank10.51
 10.12
Tangible common equity to tangible assets ratio(1)
   
Synovus Financial Corp.8.81
 8.88
    
(1)
See "Part II - Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations -Non-GAAP Financial Measures" of this Report for applicable reconciliation to GAAP measure.
The Basel III capital rules became effective January 1, 2015, for Synovus and Synovus Bank, subject to a transition period for several aspects, including the capital conservation buffer. For additional information on regulatory capital requirements, see "Part II - Item 8. Financial Statements and Supplementary Data - Note 11 - Regulatory Capital" in this Report.
At December 31, 2018, Synovus' CET1 ratio was 9.95% under the Basel III transitional provisions, and the estimated fully phased-in CET1 ratio was 9.92%, both of which are well in excess of regulatory requirements including the capital conservation buffer. (1)    See "Part II - Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Non-GAAP Financial Measures" inof this Report for applicable reconciliation to the most comparable GAAP measure.
At December 31, 2021, Synovus' CET1 ratio was 9.50%, well in excess of regulatory requirements including the capital conservation buffer of 2.5%. The December 31, 2021 CET1 ratio declined 16 bps compared to December 31, 2020, driven by growth in risk-weighted assets and the return of capital through share repurchases and common stock shareholder dividends as a result of strong financial performance. For more information on regulatory capital requirements, see "Part II - Item 8. Financial Statements and Supplementary Data - Note 10 - Regulatory Capital" in this Report. Management currentlyreviews the Company's capital position on an on-going basis and believes, based on internal capital analyses and earnings projections, that Synovus' capital positionSynovus is adequatewell positioned to meet current and futurerelevant regulatory minimum capital requirements inclusivestandards.
On January 20, 2022, Synovus announced that its Board of Directors approved a $0.01 increase in the capital conservation buffer.quarterly common stock dividend to $0.34 per share, effective with the quarterly dividend payable in April 2022. Additionally, Synovus' Board of Directors authorized share repurchases of up to $300 million in 2022.
In December 2018,On August 26, 2020, the federal banking regulators adopted asissued a final the transitional arrangements to permitrule (following an interim final rule issued on March 27, 2020) that allowed electing banking organizations that adopted CECL during 2020 to phase-inmitigate the day-one impactestimated effects of the adoption of ASU 2016-13, referred to as the current expected credit loss model,CECL on regulatory capital overfor two years, followed by a periodthree-year phase-in transition period. Synovus adopted CECL on January 1, 2020 and the December 31, 2021 regulatory capital ratios reflect Synovus' election of three years.the five-year transition provision. At December 31, 2021, $58.3 million, or a cumulative 13 bps benefit to CET1, was deferred. For additional information on ASU 2016-13,CECL, see "Part II - Item 8. Financial Statements and Supplementary Data - Note 1 - Summary of Significant Accounting Policies" in this Report.
On June 21, 2018, Synovus completed a public offering of $200 million of Series D Preferred Stock. The offering generated net proceeds of $195.1 million, which were largely used to fund the redemption of all of the outstanding shares of Series C Preferred Stock on August 1, 2018 for an aggregate redemption price of $130 million.
53



During both 2018 and 2017, Synovus repurchased $175.0 million of common stock and during 2016, Synovus repurchased $262.9 million of common stock.
During the fourth quarter of 2018, the Board of Directors authorized a new share repurchase program of up to $400 million, of which $300-$325 million is currently expected to be repurchased during 2019. Additionally, the Board of Directors approved a 20% increase in the quarterly common stock dividend to $0.30 per share, effective with the quarterly dividend payable in April 2019. Under the new share repurchase program, Synovus has repurchased $252.0 million, or 6.8 million shares, of common stock as of February 26, 2019.
Parent Company
The Parent Company’s net assets consist primarily of its investment in Synovus Bank. The ParentParent Company’s primary uses of cash are for the servicing of debt, payment of dividends to shareholders, and repurchases of common stock. The Parent Company also provides the necessary funds to strengthen the capital of its subsidiaries if needed. These uses of cash are primarily funded by dividends from Synovus Bank, borrowings from external sources, and equity offerings.
During 2018,2021, Synovus Bank and non-bank subsidiaries madepaid upstream cash distributionsdividends to thethe Parent Company totaling $260.0 million including cash dividends of $250.0$420.0 million. During 2017, Synovus Bank and non-bank subsidiaries made upstream cash distributions to the Parent Company totaling $451.0 million including cash dividends of $283.2 million. During 2016,During 2020, Synovus Bank paid upstream cash dividends of $325.0 million to the Parent Company.Company totaling $547.5 million and during 2019, Synovus Bank and non-bank subsidiaries paid upstream cash dividends to the Parent Company totaling $400.0 million.
Liquidity
Liquidity represents the extent to which Synovus has readily available sources of funding needed 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 interest rate risk,as well as market risk.
In accordance with Synovus policies and market risk and has the authority to establish policies relative to these risks.regulatory guidance, ALCO operating under liquidity and funding policies approved by the Board of Directors, actively analyzesevaluates contractual and anticipated cash flows in order to properly manage Synovus’ liquidity position.
Contractual and anticipated cash flows are analyzed under normal and stressed conditions to determine forward lookingproperly manage the Company's liquidity needs and sources.profile. Synovus analyzes liquidity needs under various scenarios of market conditions and operating performance. This analysis includes stress testing and measures expected sources and uses of funds under each scenario. Emphasis is placedplaces an emphasis on maintaining numerous sources of current and potentialcontingent liquidity to allow Synovus to meet its obligations to depositors, borrowers, and creditors on a timely basis.
Liquidity is generated primarily through various sources, including, but not limited to, maturities and repayments of loans by customers,clients, maturities and sales of investment securities, depositand growth in core and access to sources of funds other than deposits. Management continuously monitors and maintains appropriate levels of liquidity so as to provide adequate funding sources to manage customer deposit withdrawals, loan requests, and funding maturities. Liquidity is also enhanced by the acquisition of new deposits. Each of the local markets monitors deposit flows and evaluates local market conditions in an effort to retain and growwholesale deposits.
Synovus Bank also generates liquidity through the issuance of brokered certificates of deposit and money market accounts. Synovus Bank accesses these funds from a broad geographic base to diversify its sources of funding and liquidity. On September 25, 2017, Synovus Bank completed the Cabela's Transaction and thereby retained WFB's $1.10 billion brokered time deposit portfolio with a weighted average remaining maturity of 2.53 years and a weighted average rate of 1.83 percent (the balance of these deposits at December 31, 2018 was $707.2 million). Synovus Bankalso has the capacity to access funding through its membership in the FHLB system.system and through the Federal Reserve discount window. At December 31, 2018,2021, based on currently pledged collateral, Synovus Bank had access to incrementalFHLB funding of $728.4 million,$5.96 billion, subject to FHLB credit policies, through utilizationpolicies. Management continuously monitors and maintains appropriate levels of FHLB advances.liquidity so as to provide adequate funding sources to manage client deposit withdrawals, loan requests, and other funding demands.
In addition to bank level liquidity management, Synovus must manage liquidity at the parent company level for various operating needs including the servicing of debt, the payment of dividends on our common stock and preferred stock, share repurchases, payment of general corporate expensesexpense, 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 rules and relatedFederal Reserve Bank may require approval to pay dividends, based on certain regulatory statutes contain limitations on payments of dividends by Synovus without the approval of the GA DBF.and limitations.
On June 21, 2018, Synovus completed a public offering of $200 million of Series D Preferred Stock. The offering generated net proceeds of $195.1 million, which were largely used to fund the redemption of all of the outstanding shares of Series C Preferred Stock on August 1, 2018 for an aggregate redemption price of $130 million. Concurrent with the redemption of the Series C Preferred Stock, Synovus recognized a one-time, non-cash redemption charge of $4.0 million.


On November 1, 2017, Synovus issued $300.0 million aggregate principal amount of 3.125% senior notes maturing in 2022 in a public offering with aggregate proceeds of $296.9 million, net of discount and debt issuance costs. On November 9, 2017, Synovus redeemed all of the $300.0 million aggregate principal amount of its 7.875% senior notes due 2019 at a "make whole" premium. Additionally, during 2017, Synovus paid off the remaining balance of $278.6 million of its subordinated notes at their maturity date of June 15, 2017.
Synovus presently believes that the sources of liquidity discussed above, including existing liquid funds on hand, are sufficient to meet its anticipated funding needs. However, if economic conditions were to significantly deteriorate, regulatory capital requirements for Synovus or Synovus Bank were to increase as the result of regulatory directives or otherwise, or Synovus believes it is prudent to enhance current liquidity levels, then Synovus may seek additional liquidity from external sources. See "Part I – Item 1A. Risk Factors - Credit and Liquidity - 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.results." Furthermore, Synovus may, from time to time, take advantage of attractive market opportunities to refinance its existing debt, redeem its preferred stock, or strengthen its liquidity or capital position.
54

Contractual Cash Obligations
The following table summarizes, by remaining maturity, Synovus’ significant contractual cash obligations at December 31, 2018.2021. Excluded from the table below are certain liabilities with variable cash flows and/or no contractual maturity. See "Part II - Item 8. Financial Statements and Supplementary Data - Note 1514 - Commitments and Contingencies" of this Report for information on Synovus' commitments to extend credit including loan commitments and letters of credit along with commitments pursuantobligations related to low income housing tax credit partnerships.Synovus' sponsorship of MPS businesses. Additionally, see "Part II - Item 8. Financial Statements and Supplementary Data - Note 87 - Deposits" of this Report for information on contractual maturities of time deposits.
Table 26 - Contractual Cash Obligations
Payments Due After December 31, 2021
(in thousands)1 Year or LessAfter 1 YearTotal
Long-term debt obligations$344,433 $1,096,148 $1,440,581 
Lease obligations32,492 548,955 581,447 
Purchase commitments(1)
81,167 192,850 274,017 
Commitments to fund tax credits, CRA partnerships, and other investments(2)
182,989 67,744 250,733 
Total contractual cash obligations$641,081 $1,905,697 $2,546,778 
Table 28 - Contractual Cash Obligations
 Payments Due After December 31, 2018
(in thousands)1 Year or Less Over 1 - 3 Years 4 - 5 Years After 5 Years Total
Long-term debt obligations$52,462
 $931,491
 $589,596
 $294,041
 $1,867,590
Short-term borrowings655,525
 —
 —
 —
 655,525
Capital lease obligations113
 229
 249
 1,022
 1,613
Minimum operating lease obligations27,539
 54,972
 53,193
 83,316
 219,020
Purchase commitments(1)
45,864
 35,491
 8,261
 —
 89,616
Commitments to fund low income housing tax credit partnerships(2)
40,404
 5,545
 220
 954
 47,123
Total contractual cash obligations$821,907
 $1,027,728
 $651,519
 $379,333
 $2,880,487
          
(1)
(1)    Legally binding purchase obligations of $1.0 million or more.
(2)
Commitments to fund investments in low income housing tax credit partnerships have scheduled funding dates that are contingent on events that have not yet occurred, and may be subject to change.
Short-term Borrowings
The following table sets forth certain information regarding Synovus' short-term borrowings which include federal funds purchased, securities sold under repurchase agreements, and FHLB advances with original maturities of one year or less.
Table 29 - Short-term Borrowings      
(dollars in thousands) 2018 2017 2016
Balance at December 31, $887,692
 $261,190
 $159,699
Weighted average interest rate at December 31, 1.93% 0.65% 0.08%
Maximum month end balance during the year $887,692
 $390,044
 $414,245
Average amount outstanding during the year 371,933
 256,011
 278,273
Weighted average interest rate during the year 0.96% 0.37% 0.18%
       


Earning Assets and Sources of Funds
Average total assets for 2018 increased $881.6 million or 2.9%,more.
(2)    Commitments to $31.67 billion as comparedfund investments in tax credits, CRA partnerships, and other investments have scheduled funding dates that are contingent on events that have not yet occurred, and may be subject to average total assets for 2017. Average earning assets increased $966.3 million, or 3.3%, in 2018 as compared to the prior year. Average earning assets represented 94.3% and 93.8% of average total assets for 2018 and 2017, respectively. The increase in average earning assets resulted primarily from a $807.4 million increase in average net loans, and a $224.0 million increase in average investment securities. These increases were partially offset by a $45.6 million decrease in average interest-bearing funds held at the Federal Reserve Bank. Average time deposits, average non-interest-bearing demand deposits, and average money market deposits increased by $543.9 million, $305.2 million and $141.8 million, respectively, and represented the primary funding source growth for the year.change.
Average total assets for 2017 increased $1.31 billion, or 4.4%, to $30.79 billion as compared to average total assets for 2016. Average earning assets increased $1.36 billion, or 4.9%, in 2017 as compared to the prior year. Average earning assets represented 93.8% and 93.4% of average total assets for 2017 and 2016, respectively. The increase in average earning assets resulted primarily from a $1.29 billion increase in average net loans, and a $286.3 million increase in average investment securities. These increases were partially offset by a $272.2 million decrease in average interest-bearing funds held at the Federal Reserve Bank. Average interest-bearing demand deposits, non-interest-bearing demand deposits, and average money market deposits increased by $568.0 million, $333.8 million and $341.0 million, respectively, and represented the primary funding source growth for the year.
For more detailed information on the average balance sheets for the years ended December 31, 2018, 2017, and 2016, refer to Table 16 - Average Balances, Interest, and Yields/Rates.
The table below shows the maturities of selected loan categories as of December 31, 2018. Also provided are the amounts due after one year, classified according to the sensitivity in interest rates. Actual repayments of loans may differ from the contractual maturities reflected therein because borrowers have the right to prepay obligations with and without prepayment penalties. Additionally, the refinancing of such loans or the potential delinquency of such loans could create differences between the contractual maturities and the actual repayment of such loans.
Table 30 - Loan Maturities and Interest Rate Sensitivity
 December 31, 2018
(in thousands)One Year Or Less Over One Year Through Five Years Over Five Years Total
Selected loan categories:       
Commercial, financial, and agricultural$2,033,431
 $4,026,794
 $1,389,473
 $7,449,698
Owner-occupied1,019,081
 2,927,355
 1,385,072
 5,331,508
Real estate - construction578,422
 793,892
 45,843
 1,418,157
Total$3,630,934
 $7,748,041
 $2,820,388
 $14,199,363
        
Loans due after one year:       
Having predetermined interest rates      $4,570,603
Having floating or adjustable interest rates      5,997,826
Total      $10,568,429
        
Recently Issued Accounting Standards
See "Part II - Item 8. Financial Statements and Supplementary Data - Note 1 - Summary of Significant Accounting Policies" of this Report for further information.

55


Non-GAAP Financial Measures
The measures entitled adjusted non-interest income;revenue; adjusted non-interest expense; adjusted total revenues;revenue; adjusted tangible efficiency ratio; average core deposits; adjusted return on average assets; adjusted net income available to common shareholders; adjusted net income per common share, diluted; adjusted return on average common equity; return on average tangible common equity; adjusted return on average tangible common equity; and the tangible common equity to tangible assets ratio; and CET1 ratio (fully phased-in) 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 income,revenue, total non-interest expense, total revenues,TE revenue, efficiency ratio, total average deposits,ratio-TE, return on average assets, net income available to common shareholders, net income per common share, diluted, return on average common equity, and the ratio of total shareholders’ equity to total assets, and the CET1 ratio, 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 non-interest incomerevenue and adjusted total revenuesrevenue are measures used by management to evaluate non-interest incomerevenue and total revenuesTE revenue exclusive of net investment securities gains/losses,gains (losses), gain on sale and changes in fair value of private equity investments, net, and the Cabela's Transaction Fee.fair value adjustments on non-qualified deferred compensation. Adjusted non-interest expense and the adjusted tangible efficiency ratio are measures utilized by management to measure the success of expense management initiatives focused on reducing recurring controllable operating costs. Average core deposits is a measure used by management to evaluate organic growth of deposits and the quality of deposits as a funding source. Adjusted return on average assets, adjusted net income available to common shareholders, adjusted net income per common share, diluted, 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. TheAdjusted 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 adjusted return on average tangible common equity is a measure used by management in the same manner as the return on average tangible common equity except it is exclusive of items that are not indicative of ongoing operations and impact period-to-period comparisons. The tangible common equity to tangible assets ratio and the CET1 ratio (fully phased-in) areis used by management and bank regulators to assess the strength of our capital position. The computations of these measures are set forth in the tables below.

56


Table 27 - Reconciliation of Non-GAAP Financial Measures
Years Ended December 31,
(dollars in thousands)20212020
Adjusted non-interest revenue
Total non-interest revenue$450,066 $506,513 
Subtract/add: Investment securities (gains) losses, net799 (78,931)
Subtract: Gain on sale and increase in fair value of private equity investments, net— (4,775)
Subtract: Fair value adjustment on non-qualified deferred compensation(2,816)(2,310)
Adjusted non-interest revenue$448,049 $420,497 
Adjusted non-interest expense
Total non-interest expense$1,099,904 $1,179,574 
Subtract: Earnout liability adjustments(507)(4,908)
Subtract: Goodwill impairment— (44,877)
Subtract: Restructuring charges(7,223)(26,991)
Subtract: Valuation adjustment to Visa derivative(2,656)(890)
Subtract: Loss on early extinguishment of debt— (10,466)
Subtract: Fair value adjustment on non-qualified deferred compensation(2,816)(2,310)
Adjusted non-interest expense$1,086,702 $1,089,132 
Adjusted total revenue and adjusted tangible efficiency ratio
Adjusted non-interest expense$1,086,702 $1,089,132 
Subtract: Amortization of intangibles(9,516)(10,560)
Adjusted tangible non-interest expense$1,077,186 $1,078,572 
Net interest income$1,532,947 $1,512,748 
Add: Tax equivalent adjustment3,185 3,424 
Add: Total non-interest revenue450,066 506,513 
Total TE revenue$1,986,198 $2,022,685 
Subtract/add: Investment securities (gains) losses, net799 (78,931)
Subtract: Gain on sale and increase in fair value of private equity investments, net— (4,775)
Subtract: Fair value adjustment on non-qualified deferred compensation(2,816)(2,310)
Adjusted total revenue$1,984,181 $1,936,669 
Efficiency ratio-TE55.38 %58.32 %
Adjusted tangible efficiency ratio54.29 55.69 

57

Table 31 - Reconciliation of Non-GAAP Financial Measures     
 Years Ended December 31,
(dollars in thousands)2018 2017 2016
Adjusted non-interest income     
Total non-interest income$280,093
 $345,327
 $273,194
Subtract: Cabela's Transaction Fee—
 (75,000) —
Add/subtract: Investment securities losses (gains), net1,296
 289
 (6,011)
Add: Decrease in fair value of private equity investments, net4,743
 3,093
 1,026
Adjusted non-interest income$286,132
 $273,709
 $268,209
      
Adjusted non-interest expense    

Total non-interest expense$829,455
 $821,313
 $755,923
Subtract: Discounts to fair value for ORE accelerated dispositions—
 (7,082) —
Subtract: Asset impairment charges related to accelerated disposition of corporate real estate and other properties—
 (1,168) —
Subtract: Earnout liability adjustments(11,652) (3,759) —
Subtract: Merger-related expense(10,065) (110) (1,636)
Add/subtract: Litigation settlement/contingency expense4,026
 (701) (2,511)
Add/subtract: Restructuring charges, net51
 (7,014) (8,267)
Subtract: Amortization of intangibles(1,167) (1,059) (521)
Subtract: Valuation adjustment to Visa derivative(2,328) —
 (5,795)
Subtract: Loss on early extinguishment of debt, net—
 (23,160) (4,735)
Adjusted non-interest expense$808,320
 $777,260
 $732,458
      
Adjusted total revenues and adjusted tangible efficiency ratio     
Adjusted non-interest expense$808,320
 $777,260
 $732,458
Net interest income1,148,413
 1,023,309
 899,180
Add: Tax equivalent adjustment553
 1,124
 1,285
Add: Total non-interest income280,093
 345,327
 273,194
Add/subtract: Investment securities losses (gains), net1,296
 289
 (6,011)
Total FTE revenues$1,430,355
 $1,370,049
 $1,167,648
Subtract: Cabela's Transaction Fee—
 (75,000) —
Add: Decrease in fair value of private equity investments, net4,743
 3,093
 1,026
Adjusted total revenues$1,435,098
 $1,298,142
 $1,168,674
Efficiency ratio57.99% 59.95% 64.74%
Adjusted tangible efficiency ratio56.33
 59.87
 62.67
      
      
 December 31,  
Average core deposits2018 2017  
Average total deposits$26,344,118
 $25,374,388
  
Subtract: Average brokered deposits(1,817,120) (1,624,381)  
Average core deposits$24,526,998
 $23,750,007
 

      




Table 27 - Reconciliation of Non-GAAP Financial Measures, continued
Years Ended December 31,
(in thousands, except per share data)20212020
Adjusted return on average assets
Net income$760,467 $373,695 
Add: Earnout liability adjustments507 4,908 
Add: Goodwill impairment— 44,877 
Add: Restructuring charges7,223 26,991 
Add: Valuation adjustment to Visa derivative2,656 890 
Add: Loss on early extinguishment of debt— 10,466 
Subtract/add: Investment securities (gains) losses, net799 (78,931)
Subtract: Gain on sale and increase in fair value of private equity investments, net— (4,775)
Add/subtract: Tax effect of adjustments(2,702)11,748 
Adjusted net income$768,950 $389,869 
Total average assets$55,368,481 $52,138,038 
Return on average assets1.37 %0.72 %
Adjusted return on average assets1.39 0.75 
Adjusted net income per common share, diluted
Net income available to common shareholders$727,304 $340,532 
Add: Earnout liability adjustments507 4,908 
Add: Goodwill impairment— 44,877 
Add: Restructuring charges7,223 26,991 
Add: Valuation adjustment to Visa derivative2,656 890 
Add: Loss on early extinguishment of debt— 10,466 
Subtract/add: Investment securities (gains) losses, net799 (78,931)
Subtract: Gain on sale and increase in fair value of private equity investments, net— (4,775)
Add/subtract: Tax effect of adjustments(2,702)11,748 
Adjusted net income available to common shareholders$735,787 $356,706 
Weighted average common shares outstanding, diluted148,495 148,210 
Net income per common share, diluted$4.90 $2.30 
Adjusted net income per common share, diluted4.95 2.41 
58

Table 31 - Reconciliation of Non-GAAP Financial Measures, continued   
 Years Ended December 31,
(in thousands, except per share data)2018 2017
Adjusted return on average assets   
Net income$428,476
 $275,474
Subtract: Cabela's Transaction Fee—
 (75,000)
Add: Provision expense on loans transferred to held-for-sale—
 27,710
Add: Discounts to fair value for ORE accelerated dispositions—
 7,082
Add: Asset impairment charges related to accelerated disposition of corporate real estate and other properties—
 1,168
Subtract/add: Income tax (benefit) expense, net related to Federal Tax Reform, SAB 118, State Tax Reform, and adjusted portion of other discrete items(9,148) 42,334
Add: Earnout liability adjustments11,652
 3,759
Add: Merger-related expense10,065
 110
Subtract/add: Litigation settlement/contingency expense(4,026) 701
Subtract/add: Restructuring charges, net(51) 7,014
Add: Amortization of intangibles1,167
 1,059
Add: Valuation adjustment to Visa derivative2,328
 —
Add: Loss on early extinguishment of debt, net—
 23,160
Add: Investment securities losses, net1,296
 289
Add: Decrease in fair value of private equity investments, net4,743
 3,093
Subtract/add: Tax effect of adjustments(1,283) 1,337
Adjusted net income$445,219
 $319,290
Total average assets$31,668,847
 $30,787,288
Return on average assets1.35% 0.89%
Adjusted return on average assets1.41
 1.04
    
Adjusted net income available to common shareholders and adjusted net income per common share, diluted   
Net income available to common shareholders$410,478
 $265,236
Subtract: Cabela's Transaction Fee—
 (75,000)
Add: Provision expense on loans transferred to held-for-sale—
 27,710
Add: Discounts to fair value for ORE accelerated dispositions—
 7,082
Add: Asset impairment charges related to accelerated disposition of corporate real estate and other properties—
 1,168
Subtract/add: Income tax (benefit) expense, net related to Federal Tax Reform, SAB 118, State Tax Reform, and adjusted portion of other discrete items(9,148) 42,334
Add: Earnout liability adjustments11,652
 3,759
Add: Preferred stock redemption charge4,020
 —
Add: Merger-related expense10,065
 110
Subtract/add: Litigation settlement/contingency expense(4,026) 701
Subtract/add: Restructuring charges, net(51) 7,014
Add: Amortization of intangibles1,167
 1,059
Add: Valuation adjustment to Visa derivative2,328
 —
Add: Loss on early extinguishment of debt, net—
 23,160
Add: Investment securities losses, net1,296
 289
Add: Decrease in fair value of private equity investments, net4,743
 3,093
Subtract/add: Tax effect of adjustments(1,283) 1,337
Adjusted net income available to common shareholders$431,241
 $309,052
Weighted average common shares outstanding, diluted118,378
 122,012
Adjusted net income per common share, diluted$3.64

$2.53
    
Table 27 - Reconciliation of Non-GAAP Financial Measures, continued
Years Ended December 31,
(dollars in thousands)20212020
Adjusted return on average common equity and adjusted return on average tangible common equity
Net income available to common shareholders$727,304 $340,532 
Add: Earnout liability adjustments507 4,908 
Add: Goodwill impairment— 44,877 
Add: Restructuring charges7,223 26,991 
Add: Valuation adjustment to Visa derivative2,656 890 
Add: Loss on early extinguishment of debt— 10,466 
Subtract/add: Investment securities (gains) losses, net799 (78,931)
Subtract: Gain on sale and increase in fair value of private equity investments, net— (4,775)
Add/subtract: Tax effect of adjustments(2,702)11,748 
Adjusted net income available to common shareholders$735,787 $356,706 
Add: Amortization of intangibles7,108 7,825 
Adjusted net income available to common shareholders excluding amortization of intangibles$742,895 $364,531 
Total average shareholders' equity less preferred stock$4,674,833 $4,534,935 
Subtract: Goodwill(452,390)(485,987)
Subtract: Other intangible assets, net(40,307)(50,427)
Total average tangible shareholders' equity less preferred stock$4,182,136 $3,998,521 
Return on average common equity15.56 %7.51 %
Adjusted return on average common equity15.74 7.87 
Adjusted return on average tangible common equity17.76 9.12 



December 31,
(dollars in thousands)20212020
Tangible common equity to tangible assets ratio
Total assets$57,317,226 $54,394,159 
Subtract: Goodwill(452,390)(452,390)
Subtract: Other intangible assets, net(35,596)(45,112)
Tangible assets$56,829,240 $53,896,657 
Total shareholders’ equity$5,296,800 $5,161,334 
Subtract: Goodwill(452,390)(452,390)
Subtract: Other intangible assets, net(35,596)(45,112)
Subtract: Preferred Stock, no par value(537,145)(537,145)
Tangible common equity$4,271,669 $4,126,687 
Total shareholders’ equity to total assets ratio9.24 %9.49 %
Tangible common equity to tangible assets ratio7.52 7.66 

59
Table 31 - Reconciliation of Non-GAAP Financial Measures, continued   
 Years Ended December 31,
(dollars in thousands)2018 2017
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$410,478
 $265,236
Subtract: Cabela's Transaction Fee—
 (75,000)
Add: Provision expense on loans transferred to held-for-sale—
 27,710
Add: Discounts to fair value for ORE accelerated dispositions—
 7,082
Add: Asset impairment charges related to accelerated disposition of corporate real estate and other properties—
 1,168
Subtract/add: Income tax (benefit) expense, net related to Federal Tax Reform, SAB 118, State Tax Reform, and adjusted portion of other discrete items(9,148) 42,334
Add: Preferred stock redemption charge4,020
 —
Add: Earnout liability adjustments11,652
 3,759
Add: Merger-related expense10,065
 110
Subtract/add: Litigation settlement/contingency expense(4,026) 701
Subtract/add: Restructuring charges, net(51) 7,014
Add: Amortization of intangibles1,167
 1,059
Add: Valuation adjustment to Visa derivative2,328
 —
Add: Loss on early extinguishment of debt, net—
 23,160
Add: Investment securities losses, net1,296
 289
Add: Decrease in fair value of private equity investments, net4,743
 3,093
Subtract/add: Tax effect of adjustments(1,283) 1,337
Adjusted net income available to common shareholders$431,241
 $309,052
    
Net income available to common shareholders$410,478
 $265,236
Add: Amortization of intangibles893
 667
Net income available to common shareholders excluding amortization of intangibles$411,371
 $265,903
    
Total average shareholders' equity less preferred stock$2,821,311
 $2,844,570
Subtract: Goodwill(57,315) (57,779)
Subtract: Other intangible assets, net(10,424) (12,030)
Total average tangible shareholders' equity less preferred stock$2,753,572
 $2,774,761
Return on average common equity14.55% 9.32%
Adjusted return on average common equity15.29
 10.86
Return on average tangible common equity14.94
 9.58
Adjusted return on average tangible common equity15.66
 11.14
    






Table 31 - Reconciliation of Non-GAAP Financial Measures, continued
 December 31,
(dollars in thousands)2018 2017 2016 2015 2014
Tangible common equity to tangible assets ratio         
Total assets$32,669,192
 $31,221,837
 $30,104,002
 $28,792,653
 $27,050,237
Subtract: Goodwill(57,315) (57,315) (59,678) (24,431) (24,431)
Subtract: Other intangible assets, net(9,875) (11,254) (13,223) (471) (1,265)
Tangible assets$32,602,002
 $31,153,268
 $30,031,101
 $28,767,751
 $27,024,541
          
Total shareholders’ equity$3,133,602
 $2,961,566
 $2,927,924
 $3,000,196
 $3,041,270
Subtract: Goodwill(57,315) (57,315) (59,678) (24,431) (24,431)
Subtract: Other intangible assets, net(9,875) (11,254) (13,223) (471) (1,265)
Subtract: Preferred Stock, no par value(195,140) (125,980) (125,980) (125,980) (125,980)
Tangible common equity$2,871,272
 $2,767,017
 $2,729,043
 $2,849,314
 $2,889,594
Total shareholders’ equity to total assets ratio9.59% 9.49% 9.73% 10.42% 11.24%
Tangible common equity to tangible assets ratio8.81
 8.88
 9.09
 9.90
 10.69
 December 31,
(dollars in thousands)2018
CET1 ratio (fully phased-in) 
CET1$2,897,997
Subtract: Adjustment related to capital components(2,721)
CET1 (fully phased-in)$2,895,276
Total risk-weighted assets$29,121,309
Total risk-weighted assets (fully phased-in)$29,198,139
CET1 ratio9.95%
CET1 ratio (fully phased-in)9.92
  






ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market Risk and Interest Rate Sensitivity
Market risk reflects the risk of economic loss resulting from adverse changes in market prices and interest rates. This risk of loss can be reflected in either diminished current market values within the balance sheet or reduced current and potential net income. Synovus’ most significant market risk is interest rate risk. This risk arises primarily from Synovus’ core banking activities of extending loans and accepting deposits.
Managing interest rate risk is a primary goal of the asset liability management function. Synovus attempts to achieve consistency in net interest income while limiting volatility arising from changes in interest rates. Synovus seeks to accomplish this goal by balancing the maturity and repricing characteristics of assets and liabilities along with the selective use of derivative instruments. SynovusThe Company manages itsthis exposure to fluctuations in interest rates throughaccordance with policies that are established by ALCO and approved by the Risk Committee of the Board of Directors. ALCO meets periodically and has responsibility for developing asset liability management policies, reviewing the interest rate sensitivity of Synovus, and developing and implementing strategies to improve balance sheet structure and interest rate risk positioning.
Synovus measures the sensitivity of net interest income to changes in market interest rates through the utilizationuse of simulation modeling. On at least a quarterly basis,This effort involves assessing the following twenty-four month time period is simulated to determine a baselineCompany's forecasted net interest income forecastprofile under various scenarios and over varying time horizons. The results of these simulations aid in measuring the sensitivity of this forecastCompany's exposures and relative sensitivities, namely to changes in interest rates. These simulationsThe scenarios generally include all of Synovus’ earning assets and liabilities. Forecastednumerous assumptions, including those related to changes in the balance sheet, changes, primarily reflecting loaninterest rates, prepayment trends, and deposit growth forecasts, are includedthe repricing characteristics of non-contractual deposits. Such assumptions may change through time as a result of a host of factors, including changes in the periods modeled. Projected rates for loans and deposits are based on management’s outlook and local market conditions. Anticipated deposit mix changes in eachbalance sheet as well as the interest rate scenario are also includedenvironment. The simulation modeling process is performed in the periods modeled. Assumptions utilized in the model are updateda manner consistent with Synovus policies and procedures with results reviewed on an ongoingon-going basis and are reviewed and approved by ALCO and the Risk Committee of the Board of Directors.
The magnitude and velocity of rate changes among the various asset and liability groups exhibit different characteristics for each possible interest rate scenario; additionally, customer loan and deposit preferences can vary in response to changing interest rates. Simulation modeling enables Synovus to capture the expected effect of these differences. Synovus also models expected changes in the shape of interest rate yield curves for each rate scenario. Simulation also enables Synovus to capture the effect of expected prepayment level changes on selected assets and liabilities subject to prepayment.
With this 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 current targeted range of 2.25%0% to 2.50%0.25% and the current prime rate of 5.50%3.25%. Synovus has modeled the impact of a gradualan immediate increase in short-termmarket interest rates across the yield curve of 100 and 200 basis points and a gradual decrease of 100 basis points,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 model indicatesderived from this simulation suggests that compared with a net interest income forecast assuming stable rates, net interest income is projected to increase by 2.0%6.5% and increase by 3.4%14.5% if interest rates increased by 100 and 200 basis points,bps, respectively. Net interest income is projected to decline by 2.0% if interest rates decreased by 100 basis points. These changes are within Synovus' policy limit of a maximum 5% negative change.
Table 32 - Twelve Month Net Interest Income Sensitivity(1)
Change in Short-term Interest Rates (in basis points) Estimated Change in Net Interest Income As of December 31,
2018 2017
+200 3.4% 3.6%
+100 2.0% 1.9%
Flat —% —%
-100 -2.0% -4.7%
     
(1)
Does not include assets and liabilities of FCB which were acquired January 1, 2019.
The measured interest rate sensitivity indicatesresults indicate that the Company has an asset sensitive position over the next year, which could serve to improve net interest income in a rising interest rate environment or reduce net interest income in a declining rate environment. The actual realized change in net interest income would depend on several factors, some of which could serve to diminish or eliminate the asset sensitivity in a rising rate environment. These factors include a higher than projected level of deposit customer migration to higher cost deposits, such as certificates of deposit, which would increase total interest expense and serve to reduce the realized level of asset sensitivity. Another factor which could impact the realized interest rate sensitivity in a rising rate environment is the repricing behavior of interest-bearing non-maturity deposits.



Table 28 - Twelve Month Net Interest Income Sensitivity
Change in Interest Rates (in bps)Estimated Change in Net Interest Income As of December 31,
20212020
+20014.5%N/A
+1006.5%7.2%
While all of the above estimates are reflective of the general interest rate sensitivity of Synovus, local market conditions, the realized growth and their impact on loan and deposit pricing would be expected toremixing of the balance sheet, as well as the broader macroeconomic environment could all have a significant impact on the realized level of net interest income. Actual realized balance sheet growthboth the sensitivity and mix would also impact the realized level of net interest income.
TheIn addition to assessing net interest income sensitivities, we also perform simulation model isanalyses to assess the primary tool utilizedsensitivity of our Economic Value of Equity (EVE) relative 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 economic value of equity (EVE). This EVE modeling allows Synovus to capture longer-term repricing risk and options risk embedded in the balance sheet. Simulation modeling is utilized to measure the economic value of equity and its sensitivity to immediate changes in market interest rates. These simulations value only the current balance sheet and do not incorporate growth assumptions used in the net interest income simulation. The EVE is measured as the net fairdiscounted present value of assets liabilities, and off-balance sheet financial instruments derived fromderivative cash flows minus the discounted present value of futureliability cash flows discounted at current market interest rates. From this baseline valuation, Synovus evaluates changes in the valueflows. Management uses EVE sensitivity as an additional means of each of these items in variousmeasuring interest rate scenarios to determine the net impact on the economic valueand incorporates this form of equity. Key assumptions utilized in the model, namely loananalysis within its governance and investment prepayments, deposit repricing betas, and non-maturity deposit durations have a significant impact on the results of the EVE simulations.limits framework.
As illustrated in the table below, the EVE model indicates that, compared with a valuation assuming stable rates, EVE is projected to increase by 1.3% and 0.7%, assuming an immediate and sustained increase in interest rates of 100 and 200 basis points, respectively. EVE is projected to decrease by 13.9% assuming an immediate and sustained decrease of 100 basis points. These changes are within Synovus' policy limit of a maximum negative change of 20%. These metrics reflect a relatively stable interest rate risk position compared to last year.
Table 33 - Economic Value of Equity Sensitivity(1)
  
Immediate Change in Interest Rates (in basis points) Estimated Change in EVE As of December 31,
 2018 2017
+200 0.7% -0.2%
+100 1.3% 1.6%
-100 -13.9% -16.9%
     
(1)
Does not include assets and liabilities of FCB which were acquired January 1, 2019.
Synovus is also subject to market risk in certain of its fee income business lines. Financial management services revenues,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 customerclient activity, are also subject to market risk. This risk is not considered significant, as trading activities are limited and subject to risk policy limits. 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 could be negatively impacted during a period of rising interest rates. The extension of commitments to customersclients to fund mortgage loans also subjects Synovus to market risk. This risk is primarily created by the time periodperiods between making the commitment, and closing, and delivering the loan. Synovus seeks to minimize this exposure by utilizing various risk management tools, the primary of which are forward sales commitments and best efforts commitments.
60

Derivative Instruments for Interest Rate Risk Management
As part of its overall interest rate risk management activities, Synovus utilizes derivative instruments to manage its exposure to various types of interest rate risks. These derivative instruments generally consist of interest rate swaps, interest rate lock commitments made to prospective mortgage loan customers, and commitments to sell fixed-rate mortgage loans. Interest rate lock commitments represent derivative instruments when it is intended that such loans will be sold.
Synovus may also utilize interest rate swaps to managestructural interest rate risks primarily arising from its core banking activities. These interest rate swapby executing end-user derivative transactions generally involve the exchange of fixed and floating interest rate payment obligations without the exchange of underlying principal amounts. Swapsdesignated as hedges. Hedging relationships may be designated as either a cash flow hedgeshedge, which mitigates risk exposure to the variability of future cash flows or other forecasted transactions, or a fair value hedges. 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 December 31, 20182021 and 2020, the Company had $3.60 billion and $3.00 billion, respectively, in notional amounts outstanding of interest rate swaps designated as cash flow hedging instruments to hedge its exposure to contractually specified interest rate risk associated with floating rate loans.
LIBOR Transition
In July 2017, the FCA, which regulates LIBOR, announced that it intends to stop persuading or compelling banks to submit rates for the calculation of LIBOR at the end of 2021. On March 5, 2021, the FCA confirmed that all LIBOR settings will either cease to be provided by any administrator or no longer be representative immediately after December 31, 2017,2021 for the 1-week and 2-month US dollar settings and immediately after June 30, 2023 for all remaining US dollar settings.
The ARRC proposed SOFR as its preferred rate as an alternative to LIBOR and proposed a paced market transition plan to SOFR from LIBOR. Organizations are currently working on industry-wide and company-specific transition plans related to derivatives and cash markets exposed to LIBOR. As noted within "Part I - Item 1A. Risk Factors" of this Report, Synovus holds instruments that may be impacted by the discontinuance of LIBOR, which include floating rate obligations, loans, deposits, derivatives and hedges, and other financial instruments. Synovus has established a cross-functional LIBOR transition working group with representation from all business lines, support and control functions, and legal counsel that has 1) assessed the Company's current exposure to LIBOR indexed instruments and the data, systems and processes that will be impacted; 2) established a detailed implementation plan; 3) formulated communications and learning activities to support clients and colleagues; and 4) developed a formal governance structure for the transition. For the last several years, loan agreement provisions for new and renewed loans included LIBOR fallback language to ensure transition from LIBOR when such transition occurs. All direct exposures resulting from existing financial contracts that mature after 2021 have been inventoried and are monitored on an ongoing basis. The Company discontinued the use of LIBOR as of December 31, 2021 with limited exceptions as permitted by regulatory guidance or internal policies. Synovus has expanded its product offerings and currently offers multiple alternative reference rates including SOFR, BSBY, and Prime indices. As of December 31, 2021, the Company had no outstanding interestapproximately $14 billion in loans tied to LIBOR that mature after June 30, 2023. Remediation activities are underway to modify or transition existing exposures to alternate index rates or to convert the rate swap contracts utilizedunder existing fallback language. We do not currently expect a material financial impact to manage interest rate risk.

the Company or our clients regardless of which index or indices the Company offers as alternatives to LIBOR.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
61


Report of Independent Registered Public Accounting Firm
TheTo the Board of Directors and Shareholders
Synovus Financial Corp.:

Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Synovus Financial Corp. and subsidiaries (the Company) as of December 31, 20182021 and 2017,2020, the related consolidated statements of income, comprehensive income, changes in shareholders’ equity, and cash flows for each of the years in the three‑yearthree-year period ended December 31, 20182021, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 20182021 and 2017,2020, and the results of its operations and its cash flows for each of the years in the three‑yearthree-year period ended December 31, 2018,2021, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2018,2021, based on criteria established in Internal Control -– Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 28, 201925, 2022 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
Change in Accounting Principle
As discussed in Note 1 to the consolidated financial statements, the Company has changed its method of accounting for the recognition and measurement of credit losses as of January 1, 2020 due to the adoption of ASC 326, Financial Instruments - Credit Losses.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Assessment of the allowance for loan losses for loans held for investment evaluated on a collective basis
As discussed in Notes 1 and 3 to the consolidated financial statements, the Company’s allowance for loan losses was $427.6 million as of December 31, 2021, a substantial portion of which relates to loans held for investment evaluated on a collective basis (the collective allowance). The Company estimated the December 31, 2021 collective allowance on a collective (pool) basis for loans grouped with similar risk characteristics based upon the nature of the loan type. The Company estimated the 2021 collective allowance using a discounted cash flow model for each loan group over the contractual term of the loan, adjusted for expected prepayments and curtailments where appropriate. Such model applies the forecasted PD, which is the probability that a borrower will default, adjusted for relevant macroeconomic factors, comprising multiple weighted scenarios representing different plausible outcomes, and LGD, which is the estimate of the amount of net loss in the event of default to the estimated cash flows. To the extent the estimated lives of the loans in the portfolio extend beyond the reasonable and supportable forecast of two years, the Company reverts on a straight-line basis back to the historical loss rates over a one-year period. The resulting life-of-loan loss estimate may be adjusted for certain
62

quantitative and qualitative factors to address uncertainty and limitations in the quantitative model such as the enacted government stimulus and changes in the unemployment rate.
We identified the assessment of the December 31, 2021 collective allowance as a critical audit matter. A high degree of audit effort, including specialized skills and knowledge, and subjective and complex auditor judgment was involved in the assessment. Specifically, the assessment encompassed the evaluation of the 2021 collective allowance methodology, including the methods and models used to estimate the inputs to the discounted cash flow model including the forecasted PD and LGD, portfolio segmentation, the selection of the macroeconomic forecasts and the weighting of each, the selection of macroeconomic factors, the reasonable and supportable forecast period, reversion methodology, and the historical observation period. The assessment also included an evaluation of the significant assumption that quantitative adjustments to historical default observations and changes in the unemployment rate are necessary to address uncertainty and limitations in the quantitative model. The assessment also included an evaluation of the conceptual soundness and performance monitoring of the forecasted PD and LGD models. In addition, auditor judgment was required to evaluate the sufficiency of audit evidence obtained.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the measurement of the 2021 collective allowance estimates, including controls over the:
•development of the 2021 collective allowance methodology
•continued use and appropriateness of changes to the forecasted PD and LGD models
•identification and determination of the significant assumptions used in the forecasted PD and LGD models, portfolio segmentation, the selection of the macroeconomic forecasts and the weighting of each, the selection of the macroeconomic factors, the reasonable and supportable forecast period, reversion methodology, and the historical observation period
•development of the quantitative adjustment, including the significant assumptions that adjustments to historical default observations and changes in unemployment are necessary to address uncertainty and limitations in the quantitative model
•conceptual soundness and performance monitoring of the forecasted PD and LGD models
•analysis of 2021 collective allowance results, trends, and ratios.
We evaluated the Company’s process to develop the 2021 collective allowance estimate by testing certain sources of data, variables, and assumptions that the Company used, and considered the relevance and reliability of such data, variables, and assumptions. We also involved credit risk professionals with specialized skills and knowledge who assisted in:
•evaluating the Company’s 2021 collective allowance on loans methodology for compliance with U.S. generally accepted accounting principles
•evaluating assumptions made by the Company relative to the macroeconomic forecasts, including the appropriateness of their weightings and selection of macroeconomic factors, and forecasted PD and LGD used in the discounted cash flow models by comparing them to relevant Company-specific metrics and trends and the applicable industry and regulatory practices
•testing the historical observation period and reasonable and supportable forecast and reversion methodology to evaluate the length of each period by comparing to specific portfolio risk characteristics and trends
•determining whether the loan portfolio is segmented by similar risk characteristics by comparing to the Company’s business environment and relevant industry practices
•assessing the conceptual soundness and performance monitoring of the forecasted PD and LGD models by inspecting the model documentation to determine whether the models are suitable for their intended use
•evaluating the significant assumption that quantitative adjustments to historical default observations and changes in the unemployment rate are necessary to address uncertainty and limitations in the quantitative model and the effect of the quantitative adjustments on the 2021 collective allowance compared with relevant credit risk factors, and credit trends.
We also assessed the sufficiency of the audit evidence obtained related to the collective allowance by evaluating the:
•cumulative results of the audit procedures
•qualitative aspects of the Company’s accounting practices
•potential bias in the accounting estimates.

/s/ KPMG LLP

We have served as the Company’s auditor since 1975.
/s/ KPMG LLP
Atlanta, Georgia
February 28, 201925, 2022

63









Report of Independent Registered Public Accounting Firm
TheTo the Board of Directors and Shareholders
Synovus Financial Corp.:

Opinion on Internal Control Over Financial Reporting
We have audited Synovus Financial Corp.’s and subsidiaries (the Company) internal control over financial reporting as of December 31, 2018,2021, based on criteria established inInternal Control -– Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2018,2021, based on criteria established in Internal Control -– Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company and subsidiaries as of December 31, 20182021 and 2017,2020, the related consolidated statements of income, comprehensive income, changes in shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2018,2021, and the related notes (collectively, the consolidated financial statements), and our report dated February 28, 201925, 2022 expressed an unqualified opinion on those consolidated financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’sManagement's Report on Internal Control overOver Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ KPMG LLP

Atlanta, Georgia
February 28, 201925, 2022

64



Synovus Financial Corp.
Consolidated Balance Sheets
  December 31,
(in thousands, except share and per share data) 2018 2017
ASSETS    
Cash and due from banks $468,426
 $397,848
Interest-bearing funds with Federal Reserve Bank 641,476
 460,928
Interest earning deposits with banks 19,841
 26,311
Federal funds sold and securities purchased under resale agreements 13,821
 47,846
     Total cash, cash equivalents, restricted cash, and restricted cash equivalents(1)
 1,143,564
 932,933
Mortgage loans held for sale, at fair value 37,129
 48,024
Investment securities available for sale, at fair value 3,991,632
 3,987,069
Loans, net of deferred fees and costs 25,946,573
 24,787,464
Allowance for loan losses (250,555) (249,268)
Loans, net 25,696,018
 24,538,196
Cash surrender value of bank-owned life insurance 554,134
 540,958
Premises and equipment, net 434,307
 426,813
Goodwill 57,315
 57,315
Other intangible assets 9,875
 11,254
Deferred tax asset, net 141,134
 165,788
Other assets 604,084
 513,487
Total assets $32,669,192
 $31,221,837
LIABILITIES AND SHAREHOLDERS' EQUITY    
Liabilities    
Deposits:    
Non-interest-bearing deposits $7,650,967
 $7,686,339
Interest-bearing deposits 19,069,355
 18,461,561
Total deposits 26,720,322
 26,147,900
Federal funds purchased and securities sold under repurchase agreements 237,692
 161,190
Other short-term borrowings 650,000
 100,000
Long-term debt 1,657,157
 1,606,138
Other liabilities 270,419
 245,043
Total liabilities 29,535,590
 28,260,271
Shareholders' Equity    
Series C Preferred Stock - no par value; 5,200,000 outstanding at December 31, 2017 —
 125,980
Series D Preferred Stock - no par value; authorized 100,000,000 shares; 8,000,000 shares issued and outstanding at December 31, 2018 195,140
 —
Common stock - $1.00 par value; authorized 342,857,143 shares; 143,300,449 issued at December 31, 2018 and 142,677,449 issued at December 31, 2017; 115,865,510 outstanding at December 31, 2018 and 118,897,295 outstanding at December 31, 2017 143,300
 142,678
Additional paid-in capital 3,060,561
 3,043,129
Treasury stock, at cost – 27,434,939 shares at December 31, 2018 and 23,780,154 shares at December 31, 2017 (1,014,746) (839,674)
Accumulated other comprehensive loss, net (94,420) (54,754)
Retained earnings 843,767
 544,207
Total shareholders’ equity 3,133,602
 2,961,566
Total liabilities and shareholders' equity $32,669,192
 $31,221,837
     
See accompanying notes to audited consolidated financial statements.
(1)
See "Note 1 - Summary of Significant Accounting Policies" of this Report for information on Synovus' change in presentation of cash and cash equivalents.



Synovus Financial Corp.
Consolidated Statements of Income
  Years Ended December 31,
(in thousands, except per share data) 2018 2017 2016
Interest income:      
Loans, including fees $1,226,648
 $1,064,276
 $944,233
Investment securities available for sale 96,928
 82,699
 67,467
Mortgage loans held for sale 1,950
 1,926
 2,646
Federal Reserve Bank balances 10,156
 6,470
 4,356
Other earning assets 8,623
 7,126
 4,101
Total interest income 1,344,305
 1,162,497
 1,022,803
Interest expense:      
Deposits 143,871
 81,325
 64,206
Federal funds purchased, securities sold under repurchase agreements, and other short-term borrowings 3,553
 950
 501
Long-term debt 48,468
 56,913
 58,916
Total interest expense 195,892
 139,188
 123,623
Net interest income 1,148,413
 1,023,309
 899,180
Provision for loan losses 51,697
 67,185
 28,000
Net interest income after provision for loan losses 1,096,716
 956,124
 871,180
Non-interest income:      
Service charges on deposit accounts 80,840
 81,419
 83,246
Fiduciary and asset management fees 54,685
 50,485
 46,594
Card fees 42,503
 39,376
 39,302
Brokerage revenue 36,567
 29,705
 27,028
Mortgage banking income 18,958
 22,798
 24,259
Income from bank-owned life insurance 15,403
 13,460
 11,364
Cabela's Transaction Fee —
 75,000
 —
Investment securities (losses) gains, net (1,296) (289) 6,011
Other fee income 19,974
 20,168
 20,220
Other non-interest income 12,459
 13,205
 15,170
Total non-interest income 280,093
 345,327
 273,194
Non-interest expense:      
Salaries and other personnel expense 453,420
 433,321
 402,026
Net occupancy and equipment expense 130,482
 119,964
 109,347
Third-party processing expense 58,625
 54,708
 46,320
FDIC insurance and other regulatory fees 24,494
 27,011
 26,714
Professional fees 26,737
 26,232
 26,698
Advertising expense 20,881
 22,948
 20,264
Foreclosed real estate expense, net 2,204
 12,540
 12,838
Loss on early extinguishment of debt, net —
 23,160
 4,735
Earnout liability adjustments 11,652
 5,466
 —
Merger-related expense 10,065
 110
 1,636
Other operating expenses 90,895
 95,853
 105,345
Total non-interest expense 829,455
 821,313
 755,923
Income before income taxes 547,354
 480,138
 388,451
Income tax expense 118,878
 204,664
 141,667
Net income 428,476
 275,474
 246,784
Less: Preferred stock dividends and redemption charge 17,998
 10,238
 10,238
Net income available to common shareholders $410,478
 $265,236
 $236,546
Net income per common share, basic $3.49
 $2.19
 $1.90
Net income per common share, diluted 3.47
 2.17
 1.89
Weighted average common shares outstanding, basic 117,644
 121,162
 124,389
Weighted average common shares outstanding, diluted 118,378
 122,012
 125,078
       
December 31,
(in thousands, except share and per share data)20212020
ASSETS
Cash and due from banks$432,925 $531,579 
Interest-bearing funds with Federal Reserve Bank2,479,006 3,586,565 
Interest earning deposits with banks25,535 20,944 
Federal funds sold and securities purchased under resale agreements72,387 113,829 
Total cash, cash equivalents, and restricted cash3,009,853 4,252,917 
Investment securities available for sale, at fair value10,918,329 7,962,438 
Loans held for sale (includes $108,198 and $216,647, measured at fair value, respectively)750,642 760,123 
Loans, net of deferred fees and costs39,311,958 38,252,984 
Allowance for loan losses(427,597)(605,736)
Loans, net38,884,361 37,647,248 
Cash surrender value of bank-owned life insurance1,068,616 1,049,373 
Premises, equipment and software, net407,241 463,959 
Goodwill452,390 452,390 
Other intangible assets, net35,596 45,112 
Other assets1,790,198 1,760,599 
Total assets$57,317,226 $54,394,159 
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits:
Non-interest-bearing deposits$16,392,653 $13,477,854 
Interest-bearing deposits33,034,623 33,213,717 
Total deposits49,427,276 46,691,571 
Securities sold under repurchase agreements264,133 227,922 
Long-term debt1,204,229 1,202,494 
Other liabilities1,124,788 1,110,838 
Total liabilities52,020,426 49,232,825 
Shareholders’ Equity
Preferred stock - no par value; authorized 100,000,000 shares; issued 22,000,000537,145 537,145 
Common stock - $1.00 par value; authorized 342,857,143 shares; issued 169,383,758 and 168,132,522; outstanding 145,010,086 and 148,039,495169,384 168,133 
Additional paid-in capital3,894,109 3,851,208 
Treasury stock, at cost; 24,373,672 and 20,093,027 shares(931,497)(731,806)
Accumulated other comprehensive income (loss), net(82,321)158,635 
Retained earnings1,709,980 1,178,019 
Total shareholders’ equity5,296,800 5,161,334 
Total liabilities and shareholders' equity$57,317,226 $54,394,159 
See accompanying notes to the audited consolidated financial statements.



65

Synovus Financial Corp.
Consolidated Statements of Income
Years Ended December 31,
(in thousands, except per share data)202120202019
Interest income:
Loans, including fees$1,482,567 $1,600,462 $1,817,285 
Investment securities available for sale140,077 178,575 208,826 
Loans held for sale23,809 15,078 3,254 
Federal Reserve Bank balances3,777 2,839 10,384 
Other earning assets3,113 7,541 10,889 
Total interest income1,653,343 1,804,495 2,050,638 
Interest expense:
Deposits74,919 217,777 356,949 
Federal funds purchased, securities sold under repurchase agreements, and other liabilities128 7,917 26,185 
Long-term debt45,349 66,053 71,701 
Total interest expense120,396 291,747 454,835 
Net interest income1,532,947 1,512,748 1,595,803 
Provision for (reversal of) credit losses(1)
(106,251)355,022 87,720 
Net interest income after provision for credit losses1,639,198 1,157,726 1,508,083 
Non-interest revenue:
Service charges on deposit accounts86,310 73,132 88,190 
Fiduciary and asset management fees77,147 63,251 58,388 
Card fees51,399 42,702 45,659 
Brokerage revenue56,439 44,781 41,608 
Mortgage banking income54,371 91,413 32,599 
Capital markets income26,118 27,336 30,529 
Income from bank-owned life insurance38,019 31,297 21,226 
Investment securities gains (losses), net(799)78,931 (7,659)
Other non-interest revenue61,062 53,670 45,360 
Total non-interest revenue450,066 506,513 355,900 
Non-interest expense:
Salaries and other personnel expense649,426 618,214 570,036 
Net occupancy, equipment, and software expense169,222 169,658 161,906 
Third-party processing and other services86,688 87,992 79,225 
Professional fees32,785 56,899 35,300 
FDIC insurance and other regulatory fees22,355 25,210 31,696 
Goodwill impairment— 44,877 — 
Restructuring charges7,223 26,991 1,230 
Merger-related expense— — 56,580 
Other operating expense132,205 149,733 162,995 
Total non-interest expense1,099,904 1,179,574 1,098,968 
Income before income taxes989,360 484,665 765,015 
Income tax expense228,893 110,970 201,235 
Net income760,467 373,695 563,780 
Less: Preferred stock dividends33,163 33,163 22,881 
Net income available to common shareholders$727,304 $340,532 $540,899 
Net income per common share, basic$4.95 $2.31 $3.50 
Net income per common share, diluted4.90 2.30 3.47 
Weighted average common shares outstanding, basic147,041 147,415 154,331 
Weighted average common shares outstanding, diluted148,495 148,210 156,058 
(1)    Beginning January 1, 2020, provision calculation is based on current expected credit loss methodology. Prior to January 1, 2020, calculation was based on incurred loss methodology.
    See accompanying notes to the audited consolidated financial statements.
66

Synovus Financial Corp.
Consolidated Statements of Comprehensive Income
 December 31, 2018 December 31, 2017 December 31, 2016
(in thousands)Before-tax Amount Tax (Expense) Benefit Net of Tax Amount Before-tax Amount Tax (Expense) Benefit Net of Tax Amount Before-tax Amount Tax (Expense) Benefit Net of Tax Amount
Net income$547,354
 $(118,878) $428,476
 $480,138
 $(204,664) $275,474
 $388,451
 $(141,667) $246,784
Net change related to cash flow hedges:                 
Reclassification adjustment for losses realized in net income—
 —
 —
 130
 (50) 80
 467
 (180) 287
Net unrealized (losses) gains on investment securities available for sale:                 
Reclassification adjustment for net losses (gains) realized in net income1,296
 (336) 960
 289
 (111) 178
 (6,011) 2,314
 (3,697)
Net unrealized (losses) gains arising during the period(44,565) 11,542
 (33,023) 1,038
 (362) 676
 (36,432) 14,027
 (22,405)
Net unrealized (losses) gains(43,269) 11,206
 (32,063) 1,327
 (473) 854
 (42,443) 16,341
 (26,102)
Post-retirement unfunded health benefit:                 
Reclassification adjustment for gains realized in net income(132) 34
 (98) (110) 43
 (67) (144) 56
 (88)
Actuarial (losses) gains arising during the period(46) 12
 (34) 61
 (23) 38
 102
 (39) 63
Net decrease in unrealized gains, net(178) 46
 (132) (49) 20
 (29) (42) 17
 (25)
Other comprehensive (loss) income$(43,447) $11,252
 $(32,195) $1,408
 $(503) $905
 $(42,018) $16,178
 $(25,840)
Comprehensive income
 

 $396,281
 
 

 $276,379
 
 

 $220,944
                  
Years Ended December 31,
202120202019
(in thousands)Before-tax AmountIncome TaxNet of Tax AmountBefore-tax AmountIncome TaxNet of Tax AmountBefore-tax AmountIncome TaxNet of Tax Amount
Net income$989,360 $(228,893)$760,467 $484,665 $(110,970)$373,695 $765,015 $(201,235)$563,780 
Unrealized gains (losses) on investment securities available for sale:
Net unrealized gains (losses) arising during the period(234,550)60,304 (174,246)108,626 (28,135)80,491 217,501 (56,331)161,170 
Reclassification adjustment for realized (gains) losses included in net income799 (202)597 (78,931)20,443 (58,488)7,659 (1,984)5,675 
     Net change(233,751)60,102 (173,649)29,695 (7,692)22,003 225,160 (58,315)166,845 
Unrealized gains (losses) on derivative instruments designated as cash flow hedges:
Net unrealized gains (losses) arising during the period(77,948)20,243 (57,705)99,193 (25,691)73,502 (8,570)2,220 (6,350)
Reclassification adjustment for realized (gains) losses included in net income(12,862)3,260 (9,602)(2,765)716 (2,049)— — — 
     Net change(90,810)23,503 (67,307)96,428 (24,975)71,453 (8,570)2,220 (6,350)
Post-retirement unfunded health benefit:
Actuarial losses arising during the period— — — — — — (510)132 (378)
Reclassification adjustment for realized gains included in net income— — — (618)156 (462)(70)14 (56)
     Net change— — — (618)156 (462)(580)146 (434)
Total other comprehensive income (loss)$(324,561)$83,605 $(240,956)$125,505 $(32,511)$92,994 $216,010 $(55,949)$160,061 
Comprehensive income$519,511 $466,689 $723,841 
See accompanying notes to the audited consolidated financial statements.

67


Synovus Financial Corp.
Consolidated Statements of Changes in Shareholders' Equity
  
(in thousands, except per share data)
Series C Preferred Stock Series D Preferred Stock 
Common
Stock
 
Additional
Paid-in
Capital
 
Treasury
Stock
 
Accumulated
Other
Comprehensive
Income (Loss)
 Retained Earnings Total
Balance at December 31, 2015$125,980
 $—
 $140,592
 $2,989,981
 $(401,511) $(29,819) $174,973
 $3,000,196
Net income—
 —
 —
 —
 —
 —
 246,784
 246,784
Other comprehensive loss, net of income taxes—
 —
 —
 —
 —
 (25,840) —
 (25,840)
Cash dividends declared on common stock - $0.48 per share—
 —
 —
 —
 —
 —
 (59,425) (59,425)
Cash dividends paid on Series C Preferred Stock—
 —
 —
 —
 —
 —
 (10,238) (10,238)
Repurchases of common stock—
 —
 —
 —
 (263,084) —
 —
 (263,084)
Issuance of common stock for acquisition—
 —
 821
 25,771
 —
 —
 —
 26,592
Restricted share unit vesting and taxes paid related to net share settlement—
 —
 316
 (5,030) —
 —
 (327) (5,041)
Stock options exercised—
 —
 297
 4,858
 —
 —
 —
 5,155
Share-based compensation net tax deficiency—
 —
 —
 (790) —
 —
 —
 (790)
Share-based compensation expense—
 —
 —
 13,615
 —
 —
 —
 13,615
Balance at December 31, 2016$125,980
 $—
 $142,026
 $3,028,405
 $(664,595) $(55,659) $351,767
 $2,927,924
Net income—
 —
 —
 —
 —
 —
 275,474
 275,474
Other comprehensive income, net of income taxes—
 —
 —
 —
 —
 905
 —
 905
Cash dividends declared on common stock - $0.60 per share—
 —
 —
 —
 —
 —
 (72,506) (72,506)
Cash dividends paid on Series C Preferred Stock—
 —
 —
 —
 —
 —
 (10,238) (10,238)
Repurchases of common stock—
 —
 —
 —
 (175,079) —
 —
 (175,079)
Issuance of common stock for earnout payment—
 —
 118
 5,342
 —
 —
 —
 5,460
Restricted share unit vesting and taxes paid related to net share settlement—
 —
 336
 (8,039) —
 —
 (290) (7,993)
Stock options exercised—
 —
 198
 3,242
 —
 —
 —
 3,440
Share-based compensation expense—
 —
 —
 14,179
 —
 —
 —
 14,179
Balance at December 31, 2017$125,980
 $—
 $142,678
 $3,043,129
 $(839,674) $(54,754) $544,207
 $2,961,566
Cumulative-effect adjustment from adoption of ASU 2014-09—
 —
 —
 —
 —
 —
 (685) (685)
Reclassification from adoption of ASU 2018-02—
 —
 —
 —
 —
 (7,588) 7,588
 —
Cumulative-effect adjustment from adoption of ASU 2016-01—
 —
 —
 —
 —
 117
 (117) —
Net income—
 —
 —
 —
 —
 —
 428,476
 428,476
Other comprehensive loss, net of income taxes—
 —
 —
 —
 —
 (32,195) —
 (32,195)
Cash dividends declared on common stock - $1.00 per share—
 —
 —
 —
 —
 —
 (117,355) (117,355)
Cash dividends paid on Series C Preferred Stock—
 —
 —
 —
 —
 —
 (7,678) (7,678)
Redemption of Series C Preferred Stock(125,980) —
 —
 —
 —
 —
 (4,020) (130,000)
Issuance of Series D Preferred Stock, net of issuance costs—
 195,140
 —
 —
 —
 —
 —
 195,140
Cash dividends paid on Series D Preferred Stock—
 —
 —
 —
 —
 —
 (6,300) (6,300)
Repurchases of common stock—
 —
 —
 —
 (175,072) —
 —
 (175,072)
Issuance of common stock for earnout payment—
 —
 199
 7,228
 —
 —
 —
 7,427
Restricted share unit vesting and taxes paid related to net share settlement—
 —
 297
 (8,452) —
 —
 (349) (8,504)
Stock options exercised—
 —
 126
 2,013
 —
 —
 —
 2,139
Share-based compensation expense—
 —
 —
 16,643
 —
 —
 —
 16,643
Balance at December 31, 2018$—
 $195,140
 $143,300
 $3,060,561
 $(1,014,746) $(94,420) $843,767
 $3,133,602
                
  
(in thousands, except per share data)
Preferred StockCommon
Stock		Additional
Paid-in
Capital		Treasury
Stock		AOCIRetained EarningsTotal
Balance at December 31, 2018$195,140 $143,300 $3,060,561 $(1,014,746)$(94,420)$843,767 $3,133,602 
Cumulative-effect of change in accounting principle for leases (ASU 2016-02), net of tax— — — — — 4,270 4,270 
Net income— — — — — 563,780 563,780 
Other comprehensive income (loss), net of income taxes— — — — 160,061 — 160,061 
FCB acquisition:
Issuance of common stock, net of issuance costs— 22,043 682,103 — — — 704,146 
Common stock reissued— — — 1,014,746 — (137,176)877,570 
Fair value of exchanged equity awards and warrants attributed to purchase price— — 43,972 — — — 43,972 
Cash dividends declared on common stock - $1.20 per share— — — — — (183,091)(183,091)
Cash dividends declared on preferred stock(1)
— — — — — (22,881)(22,881)
Issuance of Series E Preferred Stock, net of issuance costs342,005 — — — — — 342,005 
Repurchases of common stock including costs to repurchase— — — (725,398)— — (725,398)
Issuance of common stock for earnout payment— 344 11,502 — — — 11,846 
Restricted share unit vesting and taxes paid related to net share settlement— 302 (8,831)— — (326)(8,855)
Stock options/warrants exercised, net— 812 15,364 — — — 16,176 
Warrants exercised with net settlement and common stock reissued— — (9,822)9,838 — (16)— 
Share-based compensation expense— — 24,487 — — — 24,487 
Balance at December 31, 2019$537,145 $166,801 $3,819,336 $(715,560)$65,641 $1,068,327 $4,941,690 
Cumulative-effect of change in accounting principle for credit losses (ASU 2016-13), net of tax(2)
— — — — — (35,721)(35,721)
Net income— — — — — 373,695 373,695 
Other comprehensive income (loss), net of income taxes— — — — 92,994 — 92,994 
Cash dividends declared on common stock - $1.32 per share— — — — — (194,658)(194,658)
Cash dividends declared on preferred stock(1)
— — — — — (33,163)(33,163)
Repurchases of common stock including costs to repurchase— — — (16,246)— — (16,246)
Issuance of common stock for earnout payment— 379 8,316 — — — 8,695 
Restricted share unit vesting and taxes paid related to net share settlement— 389 (7,503)— — (461)(7,575)
Stock options exercised, net— 564 12,418 — — — 12,982 
Share-based compensation expense— — 18,641 — — — 18,641 
Balance at December 31, 2020$537,145 $168,133 $3,851,208 $(731,806)$158,635 $1,178,019 $5,161,334 
Net income— — — — — 760,467 760,467 
Other comprehensive income (loss), net of income taxes— — — — (240,956)— (240,956)
Cash dividends declared on common stock - $1.32 per share— — — — — (193,695)(193,695)
Cash dividends declared on preferred stock(1)
— — — — — (33,163)(33,163)
Repurchases of common stock including costs to repurchase— — — (199,932)— — (199,932)
Issuance of common stock for earnout payment— — 4,955 125 — — 5,080 
Restricted share unit vesting and taxes paid related to net share settlement— 355 (6,254)— — (1,645)(7,544)
Stock options exercised, net— 896 18,214 — — — 19,110 
Warrants exercised with net settlement and common stock reissued— — (113)116 — (3)— 
Share-based compensation expense— — 26,099 — — — 26,099 
Balance at December 31, 2021$537,145 $169,384 $3,894,109 $(931,497)$(82,321)$1,709,980 $5,296,800 
(1)    For the years ended December 31, 2021 and 2020, dividends per share were $1.58 and $1.47 for Series D and Series E Preferred Stock, respectively. For the year ended December 31, 2019, dividends per share were $1.58 and $0.73 for Series D and E Preferred Stock. respectively.
(2)    For additional information, see "Part II - Item 8. Financial Statements and Supplementary Data - Note 1 - Summary of Significant Accounting Policies.
See accompanying notes to the audited consolidated financial statements.

68


Synovus Financial Corp.
Consolidated Statements of Cash Flows
Years Ended December 31,Years Ended December 31,
(in thousands)2018 2017 2016(in thousands)202120202019
Operating Activities     Operating Activities
Net income$428,476
 $275,474
 $246,784
Net income$760,467 $373,695 $563,780 
Adjustments to reconcile net income to net cash provided by operating activities:     Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses51,697
 67,185
 28,000
Provision for (reversal of) credit lossesProvision for (reversal of) credit losses(106,251)355,022 87,720 
Depreciation, amortization, and accretion, net55,172
 59,121
 58,228
Depreciation, amortization, and accretion, net157,987 106,107 8,079 
Deferred income tax expense36,215
 231,056
 128,837
Originations of mortgage loans held for sale(543,073) (622,564) (705,394)
Proceeds from sales of mortgage loans held for sale565,672
 642,193
 724,712
Gain on sales of mortgage loans held for sale, net(12,291) (13,450) (13,780)
Deferred income tax expense (benefit)Deferred income tax expense (benefit)45,000 (86,192)86,633 
Originations of loans held for saleOriginations of loans held for sale(3,698,368)(3,466,170)(872,105)
Proceeds from sales of loans held for saleProceeds from sales of loans held for sale3,749,502 2,936,398 816,223 
Gain on sales of loans held for sale, netGain on sales of loans held for sale, net(42,513)(67,115)(21,448)
Increase in other assets(83,957) (74,090) (9,600)Increase in other assets(78,728)(411,632)(127,636)
Increase (decrease) in other liabilities22,202
 28,651
 (4,239)Increase (decrease) in other liabilities(21,674)281,866 43,066 
Investment securities losses (gains), net1,296
 289
 (6,011)
Loss on early extinguishment of debt, net—
 23,160
 4,735
Investment securities (gains) losses, netInvestment securities (gains) losses, net799 (78,931)7,659 
Share-based compensation expense16,643
 14,179
 13,615
Share-based compensation expense27,795 18,641 24,487 
OtherOther— 55,343 4,592 
Net cash provided by operating activities538,052
 631,204
 465,887
Net cash provided by operating activities794,016 17,032 621,050 
Investing Activities     Investing Activities
Net cash received in acquisition—
 —
 6,146
Net cash received in business combination, net of cash paidNet cash received in business combination, net of cash paid— — 201,100 
Proceeds from maturities and principal collections of investment securities available for sale603,099
 632,875
 894,123
Proceeds from maturities and principal collections of investment securities available for sale3,051,158 2,291,536 1,102,651 
Proceeds from sales of investment securities available for sale35,066
 812,293
 968,606
Proceeds from sales of investment securities available for sale565,400 2,649,686 2,923,787 
Purchases of investment securities available for sale(700,194) (1,729,902) (2,051,283)Purchases of investment securities available for sale(6,877,712)(6,036,179)(4,300,021)
Proceeds from sales of loans22,915
 42,726
 15,046
Proceeds from sales of loans111,168 1,426,954 74,123 
Proceeds from sales of other real estate and other assets12,854
 17,480
 43,834
Net increase in loans including purchases of loans(1,235,260) (1,060,582) (1,129,422)
Purchases of loansPurchases of loans(1,624,182)(126,152)(667,954)
Net (increase) decrease in loansNet (increase) decrease in loans373,964 (2,461,302)(1,361,693)
Net purchases of Federal Reserve Bank stockNet purchases of Federal Reserve Bank stock(1,220)(658)(55,335)
Net (purchases) redemptions of Federal Home Loan Bank stock(25,500) 7,438
 (4,250)Net (purchases) redemptions of Federal Home Loan Bank stock(1,200)129,710 (45,856)
Net (purchases) redemptions of Federal Reserve Bank stock(282) 2,984
 (97,293)
Purchases of bank-owned life insurance policies, net of settlements2,412
 (148,110) (28,126)
Net increase in premises and equipment(53,159) (51,106) (34,317)
Net (purchases) proceeds from settlement of bank-owned life insurance policiesNet (purchases) proceeds from settlement of bank-owned life insurance policies19,045 (242,300)16,637 
Net increase in premises, equipment and softwareNet increase in premises, equipment and software(25,954)(30,102)(61,208)
OtherOther25,367 45,834 19,907 
Net cash used in investing activities(1,338,049) (1,473,904) (1,416,936)Net cash used in investing activities(4,384,166)(2,352,973)(2,153,862)
Financing Activities     Financing Activities
Net increase in deposits571,897
 1,499,085
 1,404,558
Net increase in deposits2,735,705 8,284,519 797,612 
Net increase (decrease) in federal funds purchased and securities sold under repurchase agreements76,502
 1,491
 (17,326)Net increase (decrease) in federal funds purchased and securities sold under repurchase agreements36,211 62,232 (101,142)
Net increase (decrease) in other short-term borrowings550,000
 100,000
 (50,000)Net increase (decrease) in other short-term borrowings— (1,745,843)1,103,560 
Repayments and redemption of long-term debt(2,230,052) (2,350,422) (2,213,688)Repayments and redemption of long-term debt— (2,408,939)(157,226)
Proceeds from issuance of long-term debt2,280,000
 1,771,866
 1,875,000
Proceeds from issuance of long-term debt, netProceeds from issuance of long-term debt, net— 1,445,492 497,045 
Dividends paid to common shareholders(106,224) (54,670) (59,425)Dividends paid to common shareholders(194,677)(189,967)(167,923)
Dividends paid to preferred shareholders(13,978) (10,238) (10,238)Dividends paid to preferred shareholders(33,163)(33,163)(17,741)
Net proceeds from issuance of Series D Preferred Stock195,140
 —
 —
Redemption of Series C Preferred Stock(130,000) —
 —
Stock options exercised2,139
 3,440
 5,155
Earnout payment(1,220) (892) —
Proceeds from issuance of preferred stock, netProceeds from issuance of preferred stock, net— — 342,005 
Issuances, net of taxes paid, under equity compensation plansIssuances, net of taxes paid, under equity compensation plans11,566 5,407 7,321 
Repurchase of common stock(175,072) (175,079) (263,084)Repurchase of common stock(199,932)(16,246)(725,398)
Taxes paid related to net share settlement of equity awards(8,504) (7,993) (5,041)
OtherOther(8,624)(1,552)(1,947)
Net cash provided by financing activities1,010,628
 776,588
 665,911
Net cash provided by financing activities2,347,086 5,401,940 1,576,166 
Increase (decrease) in cash and cash equivalents including restricted cash210,631
 (66,112) (285,138)Increase (decrease) in cash and cash equivalents including restricted cash(1,243,064)3,065,999 43,354 
Cash, cash equivalents, restricted cash, and restricted cash equivalents at beginning of year(1)
932,933
 999,045
 1,284,183
Cash, cash equivalents, restricted cash, and restricted cash equivalents at end of year(1)
$1,143,564
 $932,933
 $999,045
Cash, cash equivalents, and restricted cash at beginning of yearCash, cash equivalents, and restricted cash at beginning of year4,252,917 1,186,918 1,143,564 
Cash, cash equivalents, and restricted cash at end of yearCash, cash equivalents, and restricted cash at end of year$3,009,853 $4,252,917 $1,186,918 
     
Supplemental Disclosures:Supplemental Disclosures:
Income taxes paidIncome taxes paid$204,214 $110,828 $101,781 
Interest paidInterest paid132,923 319,282 464,712 
Non-cash Activities:Non-cash Activities:
Common stock issued, treasury stock reissued, equity awards/warrants exchanged to acquire FCBCommon stock issued, treasury stock reissued, equity awards/warrants exchanged to acquire FCB— — 1,625,688 
Loans foreclosed and transferred to other real estateLoans foreclosed and transferred to other real estate12,408 2,163 19,423 
Loans transferred to (from) loans held for sale at fair valueLoans transferred to (from) loans held for sale at fair value(859)49,821 72,707 


Supplemental Cash Flow Information     
Cash paid during the year for:     
Income taxes, net$41,008
 $18,040
 $9,340
Interest180,241
 143,237
 123,560
Non-cash Activities:     
Loans foreclosed and transferred to other real estate13,168
 7,154
 16,214
Premises and equipment transferred to/(from) other assets, net896
 7,733
 25,231
Topic 606 cumulative-effect adjustment to opening balance of retained earnings(685) —
 —
Subtopic 825-10 equity investment securities available for sale transferred to other assets at fair value3,162
 —
 —
Loans transferred to (from) other loans held for sale at fair value, net12,568
 52,829
 14,621
Dividends declared on common stock during the year but paid after year-end28,966
 17,835
 —
Settlement of earnout payment with shares of common stock7,427
 5,460
 —
Acquisition:     
Fair value of non-cash assets acquired—
 —
 408,054
Fair value of liabilities assumed—
 —
 387,608
Fair value of common stock issued—
 —
 26,592
      
(1)
See "Note 1 - Summary of Significant Accounting Policies" of this Report for information on Synovus' change in presentation of cash and cash equivalents.
See accompanying notes to the audited consolidated financial statements.

69


Note 1 - Summary of Significant Accounting Policies
Business Operations
Synovus provides integrated financialcommercial and consumer banking in addition to a full suite of specialized products and services including commercial and retailprivate banking, financialtreasury management, insurance, andwealth management, mortgage services, premium finance, asset-based lending, structured lending, and international banking to its customersclients through its wholly-owned subsidiary bank, Synovus Bank, primarily in offices located throughout Alabama, Florida, Georgia, Alabama, South Carolina Florida, and Tennessee.
In addition to our banking operations, we also provide various other financial planning and investment advisory services to our customersclients through direct and indirect wholly-owned non-bank subsidiaries, including: Synovus Securities, headquartered in Columbus, Georgia, which specializes in professional portfolio management for fixed-income securities, investment banking, the execution of securities transactions as a broker/dealer, and the provision of individual investment advice on equity and other securities; and Synovus Trust, headquartered in Columbus, Georgia, which provides trust, asset management, and financial planning services; and Synovus Mortgage, headquartered in Birmingham, Alabama, which offers mortgage services.
Principles of Consolidation and Basis of Presentation
The consolidated financial statements of Synovus include the accounts of the Parent Company and its consolidated subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The accounting and financial reporting policies of Synovus are in accordance with U.S. GAAP and conform to the accounting and reporting guidelines prescribed by bank regulatory authorities. Prior periods'period consolidated financial statements are reclassified whenever necessary to conform to the current periods'period presentation. No reclassifications of prior period balances were material to the consolidated financial statements unless specifically disclosed.
The Company’s consolidated financial statements include all entities in which the Company has a controlling financial interest. A variable interest entity (VIE)VIE for which Synovus or a subsidiary has been determined to be the primary beneficiary is also consolidated. The determination of whether a controlling financial interest exists is based on whether a single party has both the power to direct the activities of the VIE that most significantly impact the VIE's economic performance and the obligation to absorb the losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. Investments in VIEs where Synovus is not the primary beneficiary are accounted for using either the proportional amortization method or equity method of accounting. TheseThe Company uses the hypothetical liquidation at book value (HLBV) method for equity investments when the liquidation rights and priorities as defined by an equity investment agreement differ from what is reflected by the underlying percentage ownership interests.
Investments in VIEs are included in other assets inon the consolidated balance sheets, and the Company's proportionate share of income or loss is included as either a component of income tax expense (proportional amortization method) or non-interest income (equity method). The maximum potential exposure to losses relative to investments in VIEs is generally limited to the sum of the outstanding balance, future funding commitments and any related loans to the entity. The assessment of whether or not the Company has a controlling interest (i.e., the primary beneficiary) in a VIE is performed on an on-going basis. Refer to "Part II - Item 8. Financial Statements and Supplementary Data - Note 1514 - Commitments and Contingencies" of this Report for additional details regarding Synovus' involvement with VIEs.
Immaterial Correction of Prior Period Financial Statements
During the third quarter of 2021, the Company made corrections to proceeds and purchases of investment securities available for sale by adjusting for the impact of timing differences associated with unsettled trades that crossed certain reporting periods. The Company concluded that the corrections were not material to any prior or current periods from a combined qualitative and quantitative perspective.
A summary of corrections is presented below.
Corrected Consolidated Statement of Cash Flows
(unaudited)
Year Ended December 31, 2020
(in thousands)As ReportedAdjustmentAs Corrected
Investing Activities
Proceeds from sales of investment securities available for sale$4,054,670 $(1,404,984)$2,649,686 
Purchases of investment securities available for sale(7,441,163)1,404,984 (6,036,179)
Net cash used in investing activities$2,352,973 $— $2,352,973 

70

Use of Estimates
In preparing the consolidated financial statements in accordance with U.S. 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 revenuesrevenue and expensesexpense 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 allowance for loan losses;ACL, estimates of fair value;value, income taxes;taxes, and contingent liabilities including legal matters and the Global One Earnout Payments, among others.liabilities.
Business Combinations
Assets and liabilities acquired in business combinations are recorded at their acquisition date fair values, except as provided for by the applicable accounting guidance, with any excess recorded as goodwill. The results of operations of the acquired company are combined with Synovus’ results from the acquisition date forward. In accordance with ASC Topic 805, Business Combinations, the Company generally records provisional amounts at the time of acquisition based on the information available to the Company. The provisional estimates of fair values may be adjusted for a period of up to one year (“measurement period”) from the date of acquisition if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date. Subsequently,Subsequent to the acquisition date, adjustments recorded during the measurement period are recognized in the current reporting period. Acquisition costs are expensed when incurred. Additional information regarding acquisitions is provided in "Part II - Item 8. Financial Statements and Supplementary Data - Note 2 - Acquisitions".
Cash, and Cash Equivalents, and Restricted Cash
Cash and cash equivalents consist of cash and due from banks as well as interest-bearing funds with Federal Reserve Bank, interest earning deposits with banks, and federal funds sold and securities purchased under resale agreements, which are inclusive

of any restricted cash and restricted cash equivalents. At December 31, 2018, no cash balances were required to be on deposit with the Federal Reserve Bank to meet reserve requirements and at December 31, 2017, required deposits with the Federal Reserve Bank amounted to $8.6 million. Cash and cash equivalents included $25.6 million at December 31, 2018 and $49.7 million at December 31, 2017, which were pledged to collateralize certain derivative instruments and letters of credit. Federal funds sold and securities purchased under resale agreements, and federal funds purchased and securities sold under repurchase agreements generally mature in one day.
In connection with the adoption of ASU 2016-18, Statement of Cash Flows-Restricted Cash, Synovus changed its presentation of cash and cash equivalents, effective January 1, 2018, to include cash and due from banks as well as interest-bearing funds with Federal Reserve Bank, interest earning deposits with banks, and federal funds sold and securities purchased under resale agreements, which are inclusive of any restricted cash and restricted cash equivalents. Priorequivalents. On March 15, 2020, the Federal Reserve Board announced that, effective March 26, 2020, it would reduce reserve requirement ratios to 2018, cashzero percent for all depository institutions. Cash and cash equivalents only included cash$65.1 million at December 31, 2021 and due from banks. Prior periods have been revised$158.7 million at December 31, 2020, which were pledged to maintain comparability.
Mortgage Loans Held for Salecollateralize certain derivative instruments and Mortgage Banking Income
Mortgage Loans Held for Sale
Mortgage loans held for sale are initially measured at fair value under the fair value option election with subsequent changes in fair value recognized as a componentletters of mortgage banking income in the consolidated statements of income.
Mortgage Banking Income
Mortgage banking income consists primarily of origination and ancillary fees on loans originated for sale, and gains and losses from the sale of mortgage loans. Mortgage loans are sold servicing released, without recourse or continuing involvement, and meet ASC Topic 860, Transfers and Servicing criteria for sale accounting.credit.
Investment Securities Available for Sale
Investment securities available for sale are carried at fair value with unrealized gains and losses, net of the related tax effect, excluded from earnings and reported as a separate component of shareholders' equity within accumulated other comprehensive income (loss) until realized.
Synovus performs a quarterly assessment of itsFor investment securities available for sale to determine if the decline in fair value of a security below its amortized cost is deemed to be other-than-temporary. Factors included in the assessment include the length of time the security has been in aan unrealized loss position, the extent that the fair value is below amortized cost, and the credit standing of the issuer. Other-than-temporary impairment losses are recognized on securities when: (1)if Synovus has an intention to sell the security; (2)security, or it is more likely than not that the security will be required to be sold prior to recovery; or (3)recovery, the security is written down to its fair value. The write down is charged against the ACL with any additional impairment recorded in earnings. If the aforementioned criteria are not met, Synovus does not expectperforms a quarterly assessment of its available for sale debt securities to recoverdetermine if the entiredecline in fair value of a security below its amortized cost basis of the security. Other-than-temporary impairment losses are reflected in earnings as realized losses to the extent the impairment is related to credit losses. The amountlosses or other factors. Management considers the extent to which fair value is less than amortized cost, the issuer of the security, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. In assessing whether credit-related impairment exists, the present value of cash flows expected to be collected from the security is compared to the security's amortized cost. If the present value of cash flows expected to be collected is less than the security's amortized cost basis, the difference is attributable to credit losses. For such differences, Synovus records an ACL with an offset to provision for credit losses. Synovus limits the ACL recorded to the amount the security's fair value is less than the amortized cost basis. Impairment losses related to other factors isare recognized in other comprehensive income (loss).
Interest income on securities available for sale is recorded on the accrual basis. Accrued interest on available for sale debt securities is excluded from the ACL determination and is recognized within other assets on the consolidated balance sheets. Available for sale debt securities are placed on non-accrual status when we no longer expect to receive all contractual amounts due, which is generally at 90 days past due. Accrued interest receivable is reversed against interest income when a security is placed on non-accrual status. Accordingly, we do not recognize an allowance for credit loss against accrued interest receivable.
Premiums and discounts are amortized or accreted over the life of the related security as an adjustment to yield using the effective interest method and prepayment assumptions. Actual prepayment experienceunless the premium is reviewed periodically andrelated to callable debt securities. For these securities, the timing ofamortization period is shortened to the accretion and amortization is adjusted accordingly. Interest income on securities available for sale is recorded on the accrual basis. earliest call date.
Realized gains and losses for securities are included in investment securities gains (losses), net, on the consolidated statements of income and are derived using the specific identification method, on a trade date basis.
71

Mortgage Loans Held for Sale and Mortgage Banking Income
Mortgage Loans Held for Sale
Mortgage loans held for sale are initially measured at fair value under the fair value option election with subsequent changes in fair value recognized in mortgage banking income on the consolidated statements of income.
Mortgage Banking Income
Mortgage banking income consists primarily of origination and ancillary fees on mortgage loans originated for sale, and gains and losses from the sale of those loans. Mortgage loans are sold servicing released, without recourse or continuing involvement, and meet ASC Topic 860, Transfers and Servicing criteria for sale accounting.
Other Loans Held for Sale
Other loans held for sale are carried at the lower of cost or estimated fair value.
Loans Held for Investment and Interest Income on Loans
Loans the Company has the intent and ability to hold for the foreseeable future are reported at principal amounts outstanding less amounts charged off, net of deferred fees and expenses.costs, and purchase premium/discount. Interest income and deferred fees, net of expenses on loans, areis recognized on a level yield basis.
Non-accrual Loans
Loans on which the accrual of interest has been discontinued are designated as non-accrual loans. Accrual of interest is discontinued on loans when reasonable doubt exists as to the full collection of interest or principal, or when loans become contractually past due for 90 days or more as to either interest or principal, in accordance with the terms of the loan agreement, unless they are both well-secured and in the process of collection. When a loan is placed on non-accrual status, previously accrued and uncollected interest is reversed as an adjustment to interest income on loans. Interest payments received on non-accrual loans are generally recorded as a reduction of principal. As payments are received on non-accruing loans, interest income can be recognized on a cash basis; however, there must be an expectation of full repayment of the remaining recorded principal balance. The remaining portion of this payment is recorded as a reduction to principal. Loans are generally returned to accruing status when they are brought fully current with respect to interest and principal and when, in the judgment of management, the loans are estimated to be fully collectible as to both principal and interest, and the borrower has sustained repayment performance under the terms of the loan agreement for a reasonable period of time (generally six months).

Impaired Loans
Impaired loans are loans for which it is probable that Synovus will not be able to collect all amounts due according to the contractual terms of the loan agreements and include all loans modified in a troubled debt restructuring (TDR). Impaired loans do not include smaller-balance homogeneous loans that are collectively evaluated for impairment, which consist of most consumer loans and commercial loan relationships lower than $1.0 million. Impairment is measured as described below under "allowance for loan losses." Interest income on non-accrual impaired loans is recognized as described above under "non-accrual loans." At December 31, 2018 and 2017, substantially all non-accrual impaired loans were collateral-dependent and secured by real estate. Impaired accruing loans generally consist of those TDRs for which management has concluded that the collectability of the loan is not in doubt.
Troubled Debt Restructurings
When borrowers are experiencing financial difficulties, Synovus may, in order to assist the borrowers in repaying the principal and interest owed to Synovus, make certain modifications to the borrower's loan. All loan modifications, renewals, and refinances are evaluated for TDR classification. All TDRs are consideredThe ALL on a TDR is measured using the same method as all other loans held for investment, except that the original interest rate, and not the rate specified with the restructuring, is used to be impaired loans, anddiscount the amount of impairment, if any, is determined in accordance with ASC Topic 310-10-35.
expected cash flows. Concessions provided by Synovus in a TDR are generally made in order to assist borrowers so that debt service is not interrupted and to mitigate the potential for loan losses. A number of factors are reviewed when a loan is renewed, refinanced, or modified, including cash flows, collateral values, guarantees, and loan structures. Concessions are primarily in the form of providing a below market interest rate given the borrower's credit risk to assist the borrower in managing cash flows, an extension of the maturity of the loan generally for less than one year, or a period of time generally less than one year with a reduction of required principal and/or interest payments (e.g., interest only for a period of time). Insignificant periods of reduction of principal and/or interest payments, or one timeshort-term deferrals, of three months or less, are generally not considered to be financial concessions. Further, it is generally Synovus' practice not to defer principal and/or interest for more than twelve months.
Non-accruing TDRs may generally be returned to accrual status if there has been a period of performance, usually at least a six-month sustained period of repayment performance in accordance with the agreement. In the fiscal year subsequent to a loan's initial reporting as a TDR, a TDR that has been renewed for a borrower who is no longer experiencing financial difficulty (as evidenced by a period of performance), which yields a market rate of interest at the time of a renewal, and for which no principal was forgiven, is no longer considered a TDR.
Concentrations of Credit Risk
A substantial portion of the loan portfolio is secured by real estate in markets located throughout Alabama, Florida, Georgia, Alabama, South Carolina Florida, and Tennessee. Accordingly, the ultimate collectability of a substantial portion of the loan portfolio is susceptible to changes in market conditions in these areas.
Loan Origination Fees and Costs
Loan origination fees and direct loan origination costs are deferred and amortized to net interest income over the life of the related loan or over the commitment period as a yield adjustment.
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Allowance for Credit Losses (ACL)
On January 1, 2020, Synovus adopted ASU 2016-13 (and all subsequent ASUs on this topic, collectively, ASC 326), which replaced the existing incurred loss impairment guidance with an expected credit loss methodology (referred to as CECL). CECL requires management’s estimate of credit losses over the full remaining expected life of loans and other financial instruments and for Synovus, applies to loans, unfunded loan commitments, accrued interest receivable, and available for sale debt securities. Upon adoption, Synovus applied the modified retrospective approach and recorded an after-tax cumulative-effect adjustment to beginning retained earnings for non-PCD assets (formerly non-PCI assets) and unfunded commitments of $35.7 million. Additionally, an initial estimate of expected credit losses on PCD assets (formerly PCI or ASC 310-30) was recognized with an offset to the cost basis of the related loans of $62.2 million. As permitted by transition guidance, Synovus did not reassess whether PCI assets met the criteria of PCD assets as of the adoption date. The remaining non-credit discount (based on the adjusted amortized cost basis) will be accreted into interest income. Results for reporting periods after adoption are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP.
The following table illustrates the impact of ASC 326 adoption:
As of January 1, 2020
in thousandsPre-ASC 326 AdoptionImpact of ASC 326 AdoptionAs Reported under ASC 326
Assets
Allowance for loan losses:
Commercial and industrial$145,782 $(2,310)$143,472 
Commercial real estate67,430 (651)66,779 
Consumer68,190 85,955 154,145 
Total allowance for loan losses$281,402 $82,994 $364,396 
Liabilities
Reserve for unfunded commitments$1,375 $27,440 $28,815 
Allowance for credit losses$282,777 $110,434 $393,211 
The following table illustrates the distribution of the ASC 326 adoption impact to loans and equity:
As of January 1, 2020
in thousandsPre-ASC 326 AdoptionImpact of ASC 326 AdoptionAs Reported under ASC 326
Loans, net$36,881,048 $(20,767)$36,860,281 
Retained earnings1,068,327 (35,721)1,032,606 
Allowance for Loan Losses (ALL)
The allowanceALL on loans held for loan lossesinvestment represents management's estimate of probablecredit losses inherentexpected over the life of the loans included in the funded loanSynovus' existing loans held for investment portfolio. Changes to the allowance are recorded through a provision for loancredit losses and reduced by loans charged-off, net of recoveries. Determining the appropriateness of the allowance is complex and requires judgment by management about the effect of matters that are inherently uncertain.
ImpairedAccrued but uncollected interest is recorded in other assets on the consolidated balance sheets. In general, the Company does not record an ACL for accrued interest receivables as allowable per ASC 326-20-30-5A as Synovus' non-accrual policies result in the timely write-off of accrued but uncollected interest.
Credit loss measurement
Synovus' loan loss estimation process includes procedures to appropriately consider the unique characteristics of its loan portfolio segments (C&I, CRE and consumer). These segments are further disaggregated into loan classes, the level at which credit quality is assessed and monitored (as described in the subsequent sections).
The ALL is measured on a collective (pool) basis when similar risk characteristics exist. Loans are grouped based upon the nature of the loan type and are further segregated based upon the methods for risk assessment. Credit loss assumptions are primarily estimated using a DCF model applied to the aforementioned loan groupings. This model calculates an expected life-of-loan loss percentage for each loan category by considering the forecasted PD, which is the probability that a borrower will default, adjusted for relevant forecasted macroeconomic factors comprising multiple weighted scenarios representing different plausible outcomes, and LGD, which is the estimate of the amount of net loss in the event of default.
Impaired
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Expected credit losses are estimated over the contractual term of the loan, adjusted for expected prepayments and curtailments when appropriate. Management's determination of the contract term excludes expected extensions, renewals, and modifications unless either of the following applies: there is a reasonable expectation at the reporting date that a TDR will be executed with an individual borrower, or an extension or renewal option is included in the contract at the reporting date that is not unconditionally cancellable by Synovus.
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 (which is two years for Synovus), the Company reverts, on a straight-line basis back to the historical rates over a one year period.
Life-of-loan loss percentages may also be adjusted, as necessary, for certain quantitative and qualitative factors that in management's judgment are generallynecessary to reflect losses expected in the portfolio. These adjustments address inherent limitations in the quantitative model including uncertainty and limitations, among others.
The above reflects the ALL estimation process for most commercial and consumer sub-pools. In some cases, Synovus may apply other acceptable loss rate models to smaller sub-pools.
Loans that do not share risk characteristics are individually evaluated on a loan by loan basis with specific reserves, if any, recorded as appropriate. Specific reserves are determined based on ASC 310-10-35, which provides for measurement of a loan's impairment based on one of threetwo methods: i) discounted cash flow based upon the loan's contractual effective interest rate ii) at the loan's observable market price, or iii) at the fair value of the collateral, less costs to sell if the loan is collateral-dependent.
UnderFor individually evaluated loans, under the discounted cash flowDCF method, impairment isresulting expected credit losses are recorded as a specific reserve with a charge-off for any portion of the impairment.expected credit loss that is determined not to be recoverable. The reserve is reassessed each quarter and adjusted as appropriate based on changes in estimated cash flows. Additionally, where guarantors are determined to be a source of repayment, an assessment of the guarantee is required. This guarantee assessment would include, but not be limited to, factors such as type and feature of the guarantee, consideration for the guarantor's financial strength and capacity to service the loan in combination with the guarantor's other financial obligations as well as the guarantor's willingness to assist in servicing the loan.
IfFor individually evaluated loans, if the loan is collateral-dependent, then the fair value of the loan's collateral, less estimated selling costs, is compared to the loan's carrying amount to determine impairment. Fair value is estimated using appraisals performed by a certified or licensed appraiser. Management also considers other factors or recent developments, such as changes in absorption rates or market conditions at the time of valuation, selling costs and anticipated sales values, taking into account management's plans for disposition, which could result in adjustments to the fair value estimates indicated in the appraisals. The assumptions used in determining the amount of the impairment are subject to significant judgment. Use of different assumptions, for example, changes in the fair value of the collateral or management's plans for disposition could have a significant impact on the amount of impairment.

Purchased Loans with Credit Deterioration
Purchased loans are evaluated upon acquisition in order to determine if the loan, or pool of loans, has experienced more-than-insignificant deterioration in credit quality since origination or issuance. In the performance of this evaluation, Synovus considers the pertinent facts and circumstances for each impaired loan when selecting the appropriate method to measure impairment, and quarterly evaluates each selection to ensure its continued appropriateness and evaluates the reasonableness of specific reserves, if any.
Non-impaired Loans
For loans that are not considered impaired, the allocated allowance for loan losses is determined based upon EL factors, which are applied to groupings of specific loan types by loan risk ratings. The EL is determined based upon a PD, which is the probability that a borrower, segregated by loan type and loan risk grade, will default, and LGD, which is the estimatemigration of the amount of net loss in the event of default. The groupingscredit quality of the loans at origination in comparison to the credit quality at acquisition.
Purchased loans classified as PCD are recognized in accordance with ASC 326-20-30, whereby the amortized cost basis of the PCD asset is ‘grossed-up’ by the initial estimate of credit losses with an offset to the ALL. This acquisition date allowance has no income statement effect. Post-acquisition, any changes in estimates of expected credit losses are recorded through the provision for credit losses. Non-credit discounts or premiums are accreted or amortized, respectively into loan categories are determinedinterest income using the interest method.
Loans formerly accounted for as purchased credit-impaired in accordance with ASC 310-30 were automatically transitioned to PCD classification. The Company did not maintain ASC 310-30 pools. PCD loans were integrated into existing pool structures based upon the nature of the loan typestype and the level of inherent risk associated with the various loan categories. The loan groupings are further segregated based upon the individual loan risk ratings as described below. noted above.
The EL factors appliedaccounting treatment for purchased loans classified as non-PCD is the same as loans held for investment as detailed in the methodology are periodically re-evaluated and adjusted to reflect changesabove section.
Allowance for Credit Losses on Off-balance-sheet Credit Exposures
Synovus maintains a separate ACL for off-balance-sheet credit exposures, including unfunded loan commitments, unless the associated obligation is unconditionally cancellable by the Company. This allowance is included in historical loss levels or other risks.
Allocated EL factors may also be adjusted,liabilities on the consolidated balance sheets with associated expense recognized as necessary, for certain qualitative factors that in management's judgment are necessary to reflect losses incurred in the portfolio.
Qualitative factors that management considers in the analysis include:
changes in lending policies and procedures, including changes in underwriting standards and collection, charge-off, and recovery practices not considered elsewhere in estimating credit losses
changes in the volume and severity of past due loans, the volume of non-accrual loans, and the volume and severity of adversely classified or graded loans
loan growth
effects of changes in credit concentrations
experience, ability, and depth of lending management, loan review personnel, and other relevant staff
changes in the qualitya component of the loan review function
national and local economic trends and conditions
value of underlying collateralprovision for collateral-dependent loans
other external factors such as the effects for the current competitive, legal, and regulatory environment
The adjusted EL factors by portfolio are then adjusted by a loss emergence period for each loan type. A loss emergence period represents the amount of time between when a loss event first occurs to when it is charged off. The loss emergence period was determined for each loan type basedcredit losses on the Company's historical experienceconsolidated statements of income. The reserve for off-balance-sheet credit exposures considers the likelihood that funding will occur and is validated at least annually.estimates the expected credit losses on resulting commitments expected to be funded over their estimated life using the estimated loss rates on loans held for investment.
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Commercial Loans - Risk Ratings
Synovus utilizes two primary methods for risk assessment of the commercial loan portfolio: SRR Assessment and DRR Assessment. DRR is a statistical model approach to risk rating that includes a PD and a LGD. The SRR model is an expert judgment based model that results in a blended (i.e. single) rating. The single and dual risk ratings are based on the borrowers' credit risk profile, considering factors such as debt service history, current and estimated prospective cash flow information, collateral supporting the credit, source of repayment as well as other variables, as appropriate.
Each loan is assigned a risk rating during its initial approval process. For SRR loans, this process begins with a loan rating recommendation from the loan officer responsible for originating the loan. Commercial SRR loans are graded on a 10-point scale and include classifications of special mention, substandard, doubtful, and loss consistent with bank regulatory classifications. The primary determinants of the risk ratings for commercial SRR loans are the reliability of the primary source of repayment and the borrower's expected performance (i.e., the likelihood that the borrower will be able to service its obligations in accordance with the terms). Expected performance will beis based upon a full analysis of the borrower's historical financial results, current financial strength and future prospects, which includes any external drivers.
The DRR methodology is used for larger relationships within theC&I loan portfolio as well as certain income-producing real estate loans.IPRE loans. At December 31, 20182021 and 2017, approximately $7.6 billion2020, approximately 41%and 40% of C&Itotal commercial loans waswere rated using the DRR methodology.methodology, respectively. The DRR includes sixteen PD categories and nine categories for estimating losses given an event of default. The result is an EL rate established for each borrower.categories.
The loan rating (for both SRR and DRR loans) is subject to approvals from other members of management, regional credit and/or loan committees depending on the size of the loan and loan's credit attributes. Loan ratings are regularly re-evaluated based upon annual scheduled credit reviews or on a more frequent basis if determined prudent by management. Additionally, an independent loan review function evaluates Synovus' risk rating processes on a continuous basis.
Consumer Loans – Risk Ratings
Consumer loans are subject to uniform lending policies and consist primarily of loans with strong borrower credit scores. Synovus makes consumer lending decisions based upon a number of key credit risk determinants including FICO scores as well as loan-to-value and debt-to-income ratios. Consumer loans are generally assigned a risk rating on a 9-point scale at the time of origination based on credit bureau scores, with a loan grade of 1 assigned as the lowest level of risk and a loan grade of 6 as the highest level of risk. No loans graded higher than a 6 at origination are approved for funding. At 90-119 days past due, a loan grade of 7-substandard non-accrual rating is

applied and at 120 days past due, the loan is generally downgraded to grade 9-loss andor is generally charged-off. The consumer loan portfolio is sent on a quarterly basis to a consumer credit bureau-based ratingsreporting agency for a refresh of clients' credit scores so that management can evaluate ongoing consistency or negative migration in the quality of the portfolio. Revolving lines of credit are updated at least semi-annuallyreviewed for a material change in financial circumstances and, when appropriate, the ratingsline of credit may be suspended for further advances. FICO scores within the residential real estate portfolio have generally remained stable over the last several years.
The Allowance for Loan Losses, for periods before 2020, was established as follows:
a.Impaired loans were generally evaluated on a loan by loan basis with specific reserves, if any, recorded as appropriate. Specific reserves were determined based on ASC 310-10-35, which provided for measurement of a loan's impairment based on one of three methods: i) discounted cash flow based upon the past due status are updated monthly.loan's contractual effective interest rate, ii) at the loan's observable market price, or iii) at the fair value of the collateral, less costs to sell if the loan was collateral-dependent.
b.For loans that were not considered impaired, the allocated allowance for loan losses was calculated consistent with ASC 450, and determined based upon EL factors, which were applied to groupings of specific loan types by loan risk ratings. Allocated EL factors were also adjusted, as necessary, for certain qualitative factors that in management's judgment were necessary to reflect losses incurred in the portfolio.
Transfers of Financial Assets
Transfers of financial assets in which Synovus has surrendered control over the transferred assets are accounted for as sales. Control over transferred assets is considered to be surrendered when 1) the assets have been legally isolated from Synovus or any consolidated affiliates, even in bankruptcy or other receivership, 2) the transferee has the right to pledge or exchange the assets with no conditions that constrain the transferee and provide more than a trivial benefit to Synovus, and 3) Synovus does not maintain effective control over the transferred assets. If the transfer is accounted for as a sale, the transferred assets are derecognized from the balance sheet and a gain or loss on sale is recognized inon the consolidated statements of income. If the sale criteria are not met, the transfer is accounted for as a secured borrowing and the transferred assets remain on Synovus' consolidated balance sheets and the proceeds from the transaction are recognized as a liability.
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Cash Surrender Value of Bank-Owned Life Insurance
Investments in bank-owned life insurance policies on certain current and former officers and employees of Synovus are recorded at the net realizable value of the policies. Net realizable value is the cash surrender value of the policies less any applicable surrender charges and any policy loans. Synovus has not borrowed against the cash surrender value of these policies. Changes in the cash surrender value of the policies as well as proceeds from insurance benefits are recorded in income from bank-owned life insurance inon the consolidated statements of income.
Premises, Equipment and EquipmentSoftware
Premises, equipment and equipment,software including bank owned branch locations and leasehold improvements are reported at cost, less accumulated depreciation and amortization, which are computed using the straight-line method over the estimated useful lives of the related assets. Buildings and improvements are depreciated over an average of 10 to 40 years, while furniture, equipment, and equipmentsoftware are depreciated and amortized over a range of 3 to 10 years. Synovus capitalizes certain costs associated with the acquisition or development of internal-use software. Once the software is ready for its intended use, these costs are amortized on a straight-line basis over the software’s expected useful life over a range of the lesser of contract terms or 3 to 7 years. Leasehold improvements are depreciated over the shorter of the estimated useful life or the remainder of the lease term. Synovus reviews long-lived assets, such as premises and equipment, for impairment whenever events and circumstances indicate that the carrying amount of an asset may not be recoverable. Maintenance and repairs are charged to non-interest expense and improvements that extend the useful life of the asset are capitalized to the asset's carrying value and depreciated.
Goodwill and Other Intangible Assets
Goodwill represents the excess purchase price over the fair value of identifiable net assets of acquired businesses. Goodwill is tested for impairment at the reporting unit level, on anequivalent to a business segment or one level below. Synovus performs its annual basisevaluation of goodwill impairment during the fourth quarter of each year and as events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Synovus reviews goodwillRefer to "Part II - Item 8. Financial Statements and Supplementary Data - Note 5 - Goodwill and Other Intangible Assets" of this Report for impairment asdetails of June 30th and at interim periods if indicators of impairment exist.the evaluation.
Synovus applies judgment when assessing goodwill for impairment. ASC 350-20-35-3A, Goodwill Subsequent Measurement - Qualitative Assessment, provides the option to perform a qualitative assessment to determine whether the two-step goodwill impairment test is necessary. Synovus applies the qualitative assessment guidance to determine if the following factors indicate that goodwill is more likely than not impaired: macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, other relevant entity-specific events, events affecting the reporting unit, and common stock share price. Management applies judgment when weighing the factors most likely to impact a reporting unit's fair value.
Other intangible assets relate primarily to a core deposit intangible and borrower relationships trade name, and a distribution network resulting from a business acquisition. Theseacquisitions. The core deposit intangible is amortized over its estimated useful life of approximately ten years utilizing an accelerated method. The remaining intangible assets are amortized using straight line methods based on the remaining lives of the assets. Amortizationassets with amortization periods rangeranging from eight to ten years. Amortization periods for intangible assets are monitored to determine if events and circumstances require such periods to be reduced.
Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of the intangible assets is measured by a comparison of the asset's carrying amount of the asset to future undiscounted cash flows expected to be generated by the asset. If such assets are considered impaired, the amount of theAny resulting impairment to be recognized is measured by the amount by which the carrying value of the assets exceeds the fair value of the assets basedasset (based on the discounted expected futureundiscounted cash flows expected to be generated by the assets.asset).
Segment Disclosures
ASC Topic 280, Segment Reporting, requires information be reported about a company’s operating segments using a “management approach.” Reportable segments are identified in these standards as those revenue-producing components for which discrete financial information is produced internally and which are subject to evaluation by the chief operating decision maker in deciding how to allocate resources to segments.making resource allocation decisions. Based on this guidance, Synovus identified its overall banking3 major reportable business segments: Community Banking, Wholesale Banking, and Financial Management Services (FMS), with functional activities such as treasury, technology, operations, as its

onlymarketing, finance, enterprise risk, legal, human resources, corporate communications, executive management, among others, included in Treasury and Corporate Other. Refer to "Part II - Item 8. Financial Statements and Supplementary Data - Note 17 - Segment Reporting" of this Report for additional details. 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 segment. As the overall banking operations comprise substantially all of Synovus' consolidated operations, no separate segment disclosures are presented.may be periodically revised.
Other Assets
Other assets include ROU assets, FRB and FHLB stock, derivative asset positions, net deferred tax assets, accrued interest receivable and investments in LIHTC, accounts receivable, prepaid expensestax credits, other investments, and other balances as shown in "Part II - Item 8. Financial Statements and Supplementary Data - Note 76 - Other Assets" of this Report. FRB
As a member of the Federal Reserve System, Synovus is currently required to purchase and FHLBhold shares of capital stock is recordedin the Federal Reserve Bank of Atlanta (recorded at amortized cost, which approximates fair value.value, of $143.7 million and $142.5 million at December 31, 2021 and 2020, respectively) in an amount equal to the greater of 6% of its capital and surplus or 0.6%
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of deposits. As a member of the FHLB, Synovus is also required to purchase and hold shares or capital stock in the FHLB (recorded at amortized cost, which approximates fair value, of $16.2 million and $15.0 million at December 31, 2021 and 2020, respectively) in an amount equal to its membership base investment plus an activity-based investment determined according to the level of outstanding FHLB advances.
Derivative Instruments
Synovus’ risk management policies emphasize the management of interest rate risk within acceptable guidelines. Synovus’ objective in maintaining these policies is to limit volatility in net interest income arising from changes in interest rates. Risks to be managed include both fair value and cash flow risks. Utilization of derivative financial instruments provides a valuable tool to assist in the management of these risks.
All derivative instruments are recorded on the consolidated balance sheets at their respective fair values, net of variation margin payments, as components of other assets and other liabilities. The accounting for changes in fair value (i.e., unrealized gains or losses) of a derivative instrument depends on whether it qualifies and has been designated and qualifies as part of a hedging relationship.relationship in accordance with ASC Topic 815, Derivatives and Hedging. Synovus formally assesses, both at the hedge’s inception and on an ongoing basis, whether the derivative instruments that are used are highly effective in offsetting changes in fair values or cash flows of the hedged items.
Fair value hedges - If the hedged exposure is a fair value exposure, the unrealized gain or loss on the derivative instrument is recognized in earnings in the period of change, in the same income statement line as the offsetting unrealized loss or gain on the hedged item attributable to the risk being hedged. When a fair value hedge is discontinued, the remaining cumulative adjustments to the hedged item and accumulated amounts in OCI are accounted for in the same manner as other components of the carrying amount of the asset or liability. If the hedged item is derecognized, the accumulated amounts in OCI are immediately reclassified to net income. 
Cash flow hedges - If the hedged exposure is a cash flow exposure, the effective portion of the gain or loss on the derivative instrument is reported initially as a component of accumulated other comprehensive income (loss), net of the tax impact, and subsequently reclassified into earnings when the hedged transaction affects earnings with the impacts recorded in the same income statement line item used to present the earnings effect of the hedged item. Any amounts excluded fromWhen a cash flow hedge is discontinued but the assessment of hedge effectiveness,hedged cash flows or forecasted transactions are reportedstill expected to occur, gains or losses that were accumulated in earnings immediately as a component of other non-interest income on the consolidated statements of income or recorded to other comprehensive income and recognized inare amortized into earnings over the life ofsame periods which the hedging instrument. hedged transactions are still expected to affect earnings. If, however, it is probable the forecasted transactions will no longer occur, the accumulated amounts in OCI at the de-designation date are immediately recognized in earnings. 
If the derivative instrument is not designated as a hedge, the gain or loss on the derivative instrument is recognized in earnings as a component of other non-interest incomerevenue on the consolidated statements of income in the period of change.
Synovus also holds derivative instruments, which consist of interest rate lock agreements related to expected funding of fixed-rate mortgage loans to customersclients (interest rate lock commitments) and forward commitments to sell mortgage-backed securities and individual fixed-rate mortgage loans. Synovus’ objective in obtaining the forward commitments is to mitigate the interest rate risk associated with the interest rate lock commitments and the mortgage loans that are held for sale. Both the interest rate lock commitments and the forward commitments are reported at fair value, with adjustments recorded in current period earnings in mortgage banking income.
Synovus also enters into interest rate swap agreements to facilitate the risk management strategies of certain commercial banking customers.clients. Synovus mitigates this risk by entering into equal and offsetting interest rate swap agreements with highly rated third-party financial institutions. The interest rate swap agreements are free-standing derivatives and are recorded at fair value with any unrealized gain or loss recorded in current period earnings in other non-interest income.revenue. These instruments, and their offsetting positions, are recorded in other assets and other liabilities on the consolidated balance sheets.
Advertising ExpenseNon-interest Revenue
Advertising costsSynovus' contracts with clients generally do not contain terms that require significant judgment to determine the amount of revenue to recognize. Synovus' policies for recognizing non-interest revenue within the scope of ASC Topic 606, Revenue from Contracts with Customers, including the nature and timing of such revenue streams, are expensedincluded below.
Service Charges on Deposit Accounts: Revenue from service charges on deposit accounts is earned through cash management, wire transfer, and other deposit-related services, as incurredwell as overdraft, NSF, account management and recordedother deposit-related fees. Revenue is recognized for these services either over time, corresponding with deposit accounts' monthly cycle, or at a point in time for transaction-related services and fees. Payment for service charges on deposit accounts is primarily received immediately or in the following month through a direct charge to clients' accounts.
Fiduciary and Asset Management Fees: Fiduciary and asset management fees are primarily comprised of fees earned from the management and administration of trusts and other client assets. Synovus' performance obligation is generally satisfied over
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time and the resulting fees are recognized monthly, based upon the month-end market value of the assets under management and the applicable fee rate. Payment is generally received a few days after month-end through a direct charge to clients' accounts. Synovus does not earn performance-based incentives.
Card Fees: Card fees consist primarily of interchange fees from consumer credit and debit cards processed by card association networks, as well as merchant discounts, and other card-related services. Interchange rates are generally set by the credit card associations and based on purchase volumes and other factors. Interchange fees and merchant discounts are recognized concurrently with the delivery of service on a daily basis as transactions occur. Payment is typically received immediately or in the following month. Card fees are reported net of certain associated expense items including loyalty program expense and network expense.
Brokerage Revenue: Brokerage revenue consists primarily of commissions. Additionally, brokerage revenue includes advisory fees earned from the management of client assets. Transactional revenues are based on the size and number of transactions executed at the client's direction and are generally recognized on the trade date with payment received on the settlement date. Advisory fees for brokerage services are recognized and collected monthly and are based upon the month-end market value of the assets under management at a rate predetermined in the contract.
Capital Markets Income (within the scope of ASC Topic 606): Investment banking income, a component of capital markets income, is comprised primarily of securities underwriting fees and remarketing fees. Synovus assists corporate clients in raising capital by offering equity or debt securities to potential investors. The transaction fees are based on a percentage of the total transaction amount. The underwriting and remarketing fees are recognized on the trade date when the securities are sold to third-party investors with payment received on the settlement date.
Insurance Revenue (included in other non-interest expense.revenue on the consolidated statements of income): Insurance revenue primarily consists of commissions received on annuity and life product sales. The commissions are recognized as revenue when the client executes an insurance policy with the insurance carrier. In some cases, Synovus receives payment of trailing commissions each year when the client pays its annual premium.
Other Fees (included in other non-interest revenue on the consolidated statements of income): Other fees within the scope of ASC Topic 606 primarily consist of revenue generated from safe deposit box rental fees and lockbox services. Fees are recognized over time, on a monthly basis, as Synovus' performance obligation for services is satisfied. Payment is received upfront for safe deposit box rentals and in the following month for lockbox services.
Income Taxes
Synovus is a domestic corporation that files a consolidated federal income tax return with its wholly-owned subsidiaries and files state income tax returns on a consolidated or separate entity basis with the various taxing jurisdictions based on its taxable presence. The current income tax payable or receivable is an estimate of the amounts currently owed to or due from taxing authorities in which Synovus conducts business. It also includes increases and decreases in the amount of taxes payable for uncertain tax positions reported in tax returns for the current and/or prior years.
Synovus uses the asset and liability method to account for future income taxes expected to be paid or received (i.e., deferred income taxes). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement (GAAP) carrying amounts of existing assets and liabilities and their respective tax bases, including operating losses and tax credit carryforwards. The deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in income tax rates is recognized in income in the period that includes the enactment date.
Synovus characterizes its AMT tax credit carryforward as an income tax receivable and is expected to be realized over time either through a reduction in taxes currently payable or cash collection. Accordingly, it is classified as a current asset.

A valuation allowance is required for deferred tax assets if, based on available evidence, it is more likely than not that all or some portion of the asset will not be realized. In making this assessment, all sources of taxable income available to realize the deferred tax asset are considered, including taxable income in prior carryback years, future reversals of existing temporary differences, tax planning strategies, and future taxable income exclusive of reversing temporary differences and carryforwards. The predictability that future taxable income, exclusive of reversing temporary differences, will occur is the most subjective of these four sources. Changes in the valuation allowance are recorded through income tax expense.
Significant estimates used in accounting for income taxes relate to the valuation allowance for deferred tax assets, estimates of the realizability of income tax credits, utilization of net operating losses,NOLs, the determination of taxable income, and the determination of temporary differences between book and tax bases.
Synovus accrues tax liabilities for uncertain income tax positions based on current assumptions regarding the expected outcome by weighing the facts and circumstances available at the reporting date. If related tax benefits of a transaction are not more likely than not of being sustained upon examination, Synovus will accrue a tax liability or reduce a deferred tax asset for the expected tax impact associated with the transaction. Events and circumstances may alter the estimates and assumptions used
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in the analysis of its income tax positions and, accordingly, Synovus' effective tax rate may fluctuate in the future. Synovus recognizes accrued interest and penalties related to unrecognized incomeuncertain tax benefitspositions as a component of income tax expense.
Share-based Compensation
Synovus has a long-term incentive plan under which the Compensation and Human Capital Committee of the Board of Directors has the authority to grant share-based awards to Synovus employees. Synovus' share-based compensation costs associated with employee grants are recorded as a component of salaries and other personnel expense inon the consolidated statements of income. Share-based compensation costs associated with grants made to non-employee directors of Synovus are recorded as a component of other operating expenses.expense. Vesting for grants of share-based awards granted to Synovus employees during 2018 accelerates upon retirement for plan participants who have reached age 65 and who also have no less than ten years of service at the date of their election to retire. Share-based compensation expense for service-based awards that contain a graded vesting schedule is recognized net of estimated forfeitures for plan participants on a straight-line basis over the shorter of the requisite service period for the entire award or the period until reaching retirement eligibility. The non-employee director restricted share units become fully vested and transferable upon the earlier to occur of the completion of three years of service or the date the holder reaches the mandatory retirement age, as set forth in the Company's Corporate Governance Guidelines. Thus, share-based compensation expense for non-employee awards is recognized over the shorter of three years or mandatory retirement. Synovus records all tax effects associated with share-based compensation through the income statement.
Earnings per Share
Basic net income per common share is computed by dividing net income available to common shareholders by the average common shares outstanding for the period. Diluted net income per common share reflects the dilution that could occur if securities or other contracts to issue common stock were exercised or converted. The dilutive effect of outstanding options and restricted share units is reflected in diluted net income per common share, unless the impact is anti-dilutive, by application of the treasury stock method.
Share Repurchases
Common stock repurchases are recorded at cost. At the date of repurchase, stockholders'shareholders' equity is reduced by the repurchase price and includes commissions and other transaction expenses that arise from the repurchases. The Company has not historically retired shares repurchased, but Synovus' policy is to record retirement of shares in accordance with ASC 505-30-30. If treasury shares are subsequently reissued, treasury stock is reduced by the cost of such stock with differences between cost and the re-issuance date fair value recorded in additional paid-in capital or retained earnings, as applicable.
Fair Value Measurements and Disclosures
Synovus carries various assets and liabilities at fair value based on the fair value accounting guidance under ASC Topic 820, Fair Value Measurements, and ASC Topic 825, Financial Instruments. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an “exit price”) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

Fair Value Hierarchy
Synovus determines the fair value of its financial instruments based on the fair value hierarchy established under ASC 820-10,820-10-35, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the financial instrument's fair value measurement in its entirety. There are three levels of inputs that may be used to measure fair value. The three levels of inputs of the valuation hierarchy are defined below:
Level 1Quoted prices (unadjusted) in active markets for identical assets and liabilities for the instrument or security to be valued.
Level 2Observable inputs other than Level 1 quoted prices, such as quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active or model-based valuation techniques for which all significant assumptions are derived principally from or corroborated by observable market data.
Level 3Unobservable inputs that are supported by little, if any, market activity for the asset or liability.
Valuation Methodology by Instrument - Recurring Basis
The following is a description of the valuation methodologies used for the major categories of financial assets and liabilities measured at fair value on a recurring basis.
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Investment Securities Available for Sale and Trading Account Assets/Liabilities
The fair values of trading securities and investment securities available for sale and trading securities are primarily based on actively traded markets where prices are based on either quoted market prices or observed transactions. Management employs independent third-party pricing services to provide fair value estimates for Synovus' investment securities available for sale and trading securities. Fair values for fixed income investment securities are typically determined based upon quoted market prices, and/or inputs that are observable in the market, either directly or indirectly, for substantially similar securities. Level 1 securities are typically exchange quoted prices and include financial instruments such as U.S. Treasury securities and marketable equity securities, and mutual fund investments.securities. Level 2 securities are typically matrix priced by the third-party pricing service to calculate the fair value. Such fair value measurements consider observable data such as market spreads, cash flows, yield curves, live trading levels, trade execution data, market consensus prepayments speeds, credit information, and the respective terms and conditions for debt instruments. The types of securities classified as Level 2 within the valuation hierarchy primarily consist of collateralized mortgage obligations, mortgage-backed securities, debt securities of GSEs and agencies, corporate debt, asset-backed securities, and state and municipal securities.
When there is limited activity or less transparency around inputs to valuation, Synovus develops valuations based on assumptions that are not readily observable in the marketplace; these securities are classified as Level 3 within the valuation hierarchy. The majority of the balance of Level 3 investment securities available for sale consists primarily of trust preferred securities issued by financial institutions. To determine the fair value of the trust preferred securities, management uses a measurement technique that utilizes credit spreads and/or credit indices available from a third-party pricing service.  In addition, for each trust preferred security, management projects non-credit adjusted cash flows, and discounts those cash flows to net present value incorporating a relevant credit spread in the discount rate.  Other inputs to calculating fair value include potential discounts for lack of marketability.
Management uses various validation procedures to confirm the prices received from pricing services are reasonable. Such validation procedures include reference to market quotes and a review of valuations and trade activity of comparable securities. Consideration is given to the nature of the quotes (e.g., indicative or firm) and the relationship of recently evidenced market activity to the prices provided by the third-party pricing service. Further, management also employs the services of an additional independent pricing firm as a means to verify and confirm the fair values of the primary independent pricing firms.
When there is limited activity or less transparency around inputs to valuation, Synovus develops valuations based on assumptions that are not readily observable in the marketplace; these securities are classified as Level 3 within the valuation hierarchy.
Mortgage Loans Held for Sale
Synovus elected to apply the fair value option for mortgage loans originated with the intent to sell to investors.investors in the secondary market. When loans are not committed to an investor at a set price, fair value is derived from a hypothetical bulk sale model. The bidmodel using current market pricing conventionindicators. A best execution valuation model is used for loan pricing for similar assets. The valuation model isassets based upon forward settlements of a pool of loans of similar coupon, maturity, product, and credit attributes. The inputs to the model are continuously updated with available market and historical data. As the loans are sold in the secondary market and primarily used as collateral for securitizations, the valuation model representsmethodology attempts to reflect the highest and best use of the loans inpricing execution available to Synovus’ principal market. Mortgage loans held for sale are classified within Level 2 of the valuation hierarchy.
Other investments
The other investments in which Synovus holds a limited partner interest consist of i) funds that invest in privately held companies and ii) funds previously invested in privately held companies which become publicly traded securities. Funds invested in privately held companies are classified as Level 3 and the estimated fair value of the company is the estimated fair value as an exit price the fund would receive if it were to sell the company in the marketplace. The fair value of the fund's underlying investments is estimated through the use of valuation models, such as option pricing or a discounted cash flow model. Synovus typically sells shares in any investment after initial public offering (IPO) lock-up periods have ended.
Mutual Funds
Mutual funds (including those held in rabbi trusts) primarily invest in equity and fixed income securities. Shares of mutual funds are valued based on quoted market prices and are therefore classified within Level 1 of the fair value hierarchy.

Derivative Assets and Liabilities
Fair values of interest rate swaps, interest rate lock commitments and forward commitments are estimated based on an internally developed model that uses readily observable market data such as interest rates, prices and indices to generate continuous yield or pricing curves, volatility factors, and customerclient credit-related adjustments.adjustments, subject to the anticipated loan funding probability (pull-through rate). These fair value estimates are classified as Level 2 within the valuation hierarchy.
Fair values of interest rate swaps are determined using a discounted cash flow analysis on the expected cash flows of each derivative which also includes a credit value adjustment for client swaps or provided by the clearing house, or centralized counter party (CCP), for swaps within our hedging program. An independent third-party valuation is used to verify and confirm these values, which are classified as Level 2 within the fair value hierarchy.
Valuation Methodology by Instrument - Non-recurring Basis
The following is a description of the valuation methodologies used for the major categories of financial assets and liabilities measured at fair value on a non-recurring basis.

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Loans
Loans measured at fair value on a non-recurring basis consist of loans that do not share similar risk characteristics. These loans are typically collateral dependent loans that are valued using third-party appraised value of collateral less estimated selling price (Level 3).
Other Loans Held for Sale
Loans are transferred to other loans held for sale at fair valueamortized cost when Synovus makes the determination to sell specifically identified loans. If the amortized cost exceeds fair value a valuation allowance is established for the difference. The fair value of the loans is primarily determined by analyzing the underlying collateral of the loan and the anticipated market prices of similar assets less estimated costs to sell. At the time of transfer, if the estimated fair value is less than the carrying amount, the difference isany credit losses are determined in accordance with Synovus' policy and recorded as a charge-off against the allowance for loan losses. DecreasesSubsequent changes in the valuation allowance due to changes in the fair value subsequent to the transfer, as well as gains/losses realized from the sale of these assets, are recorded as gains/losses on other loans held for sale, net, as a component of non-interest expense on the consolidated statements of income (Level 3).
Other Real Estate
Other Real Estate (ORE) consists of properties obtained through a foreclosure proceeding or through an in-substance foreclosure in satisfaction of loans. A loan is classified as an in-substance foreclosure when Synovus has taken possession of the collateral regardless of whether formal foreclosure proceedings have taken place.
At foreclosure, ORE is recorded at the lower of cost or fair value less estimated selling costs, which establishes a new cost basis. Subsequent to foreclosure, ORE is evaluated quarterly and reported at fair value less estimated selling costs, not to exceed the new cost basis, determined by review of current appraisals, as well as the review of comparable sales and other estimates of fair value obtained principally from independent sources, adjusted for estimated selling costs (Level 3). Any adjustments are recorded as a component of foreclosed real estate expense, net within ouron the consolidated statements of income.
Other Assets Held for Sale
Other assets held for sale consist of certain premises and equipment held for sale. The fair value of these assets is determined primarily on the basis of appraisals or BOV, as circumstances warrant, adjusted for estimated selling costs. Both techniques engage licensed or certified professionals that use inputs such as absorption rates, capitalization rates, and market comparables (Level 3).
Fair Value of Financial Instruments
Cash, and Cash Equivalents, and Restricted Cash
Cash and cash equivalents, interest bearing funds with the Federal Reserve Bank, interest earning deposits with banks, and federal funds sold and securities purchased under resale agreements are repriced on a short-term basis; as such, the carrying value closely approximates fair value. Since these amounts relate to highly liquid assets, these are considered a Level 1 measurement.
Loans, net of Deferred Fees and Costs
ASU 2016-01, adopted during 2018, emphasized the existing requirement to use an exit price concept to measure fair value for disclosure purposes in determining the fair value of loans. Synovus' exit price methodology, adopted during 2018,Synovus estimates the fair value of loans based on the present value of the future cash flows using the interest rate that would be charged for a similar loan to a borrower with similar risk, adjusted for a liquidity discount based on the estimated time period to complete a sale transaction with a market participant. Prior to 2018, Synovus' method to estimate the fair value of its loan portfolio did not incorporate the exit price concept of fair value. Loans are considered a Level 3 fair value measurement.
Deposits
The fair value of deposits with no stated maturity, such as non-interest bearingnon-interest-bearing demand accounts, interest bearing demand deposits, money market accounts, and savings accounts, is estimated to be equal to the amount payable on demand as of that respective date. 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. Synovus has determined that the appropriate classification for deposits is Level 2 due to the ability to reasonably measure all inputs to valuation based on observable market variables.




Short-term and Long-term Debt
Short-term and long-term debt is considered a Level 2 valuation, as management relies on market prices for bonds or debt that is similar, but not necessarily identical, to the debt being valued. Short-term debt that matures within ten days is assumed to be at fair value and is considered a Level 1 measurement.
Long-term Debt
Long-term debt balances are presented net of discounts and premiums as well as debt issuance costs that arise from the issuance of long-term debt. Discounts, premiums and debt issuance costs are amortized using the effective interest rate method
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or straight-line method (when the financial statement impacts of this method are not materially different from the former method).
Contingent Liabilities and Legal Costs
Synovus estimates its contingent liabilities with respect to outstanding legal matters based on information currently available to management, management’s estimates about the probability of outcomes of each case and the advice of legal counsel. Management accrues an estimated loss from a loss contingency when information available indicates that it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. In addition, it must be probable that one or more future events will occur confirming the fact of the loss. Significant judgment is required in making these estimates and management must make assumptions about matters that are highly uncertain. Accordingly, the actual loss may be more or less than the current estimate.
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. As there are further developments, Synovus will reassess these legal matters and the related potential liabilities and will revise, when needed, its estimate of contingent liabilities.
Legal costs, including attorney fees, incurred in connection with pending litigation and other loss contingencies are expensed as incurred.
Recently Adopted Accounting Standards
ASU 2014-09, Revenue from Contracts with Customers (Topic 606) issued by the FASB2020-08, Codification Improvements to Subtopic 310-20, Receivables – Nonrefundable Fees and Other Costs.The guidance in May 2014, and all subsequent ASUs that modified Topic 606.this ASU 2014-09 implements a common revenue standard that establishes principles for reporting information about the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts to provide goods or services to customers. The core principle of the revenue model is that a company will recognize revenue when it transfers control of goods or services to customers at an amount that reflects the consideration to which it expects to be entitled in exchange for those goods or services. The scope of the guidance explicitly excludes net interest income as well as many other revenues from financial assets. Management reviewed its revenue streams and contracts with customers and did not identify material changespertains to the timing or amount of revenue recognition. Synovus adopted these ASUs on the required effective date of January 1, 2018 utilizing the modified retrospective method of adoption. The adoption resulted inshortened amortization period for certain purchased callable debt securities held at a cumulative effect adjustment of $685 thousandpremium, which premium is amortized to the opening balance of retained earnings. Beginning January 1, 2018,next call date, and clarifies that each reporting period an entity should reevaluate the effective yield if there is no remaining premium or no further call dates remaining. The amendments in connection with the adoption of this standard, Synovus began including merchant discounts and other card-related fees in card fees. For periods prior to January 1, 2018, these amounts were previously presented in other non-interest income and have been reclassified for comparability. See "Part II - Item 8. Financial Statements and Supplementary Data - Note 18 - Non-interest Income" for the required disclosures in accordance with this ASU.
ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. In February 2018, the FASB issued final guidance on reclassification of tax effects stranded in other comprehensive income due to Federal Tax Reform. The guidance provides entities the option to reclassify the tax effects that are stranded in accumulated other comprehensive income, or AOCI, as a result of Federal Tax Reform to retained earnings. The guidance is effective for fiscal years beginning after December 15, 2018; early adoption is permitted.2020. Synovus elected to early adoptadopted ASU 2018-02 as of2020-08 effective January 1, 2018 and elected2021 with no material impact to reclassify the income tax effects of Federal Tax Reform from AOCI to retained earnings. For Synovus, tax effects stranded in AOCI due to Federal Tax Reform totaled $7.6 million atconsolidated financial statements.
ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. In December 31, 2017 and primarily related to unrealized losses on the available-for-sale investment securities portfolio. The reclassification adjustment resulted in an increase to retained earnings as of January 1, 2018 of $7.6 million and a corresponding decrease to AOCI for the same amount.
ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. In January 2016,2019, the FASB issued ASU 2016-01, which included targeted amendments2019-12 to simplify and reduce complexities when accounting guidance for recognition, measurement, presentation, and disclosure of financial instruments. ASU 2016-01 requires equity investments (except those accounted for underincome taxes by removing certain exceptions. Among the equity method of accounting or those that are consolidated) to be measured at fair value with changes in fair value recognized in net income. This ASU requires a cumulative-effect adjustment to retained earnings as of the beginning of the reporting period of adoption to reclassify the cumulative change in fair value of equity securities previously recognized in AOCI. ASU 2016-01 became effective for Synovus on January 1, 2018. The adoption of the guidance resulted in a transfer of investments in mutual funds of $3.2 million, at fair value, from investment securities available for sale to other assets and a $117 thousand cumulative-effect adjustment that decreased retained earnings, with offsetting related adjustments to deferred

taxes and AOCI. ASU 2016-01 also emphasizes the existing requirement to use an exit price concept to measure fair value for disclosure purposes in determining the fair value of loans. Determination of the fair value under the exit price method requires judgment because substantially all of the loans within the loan portfolio do not have observable market prices. Synovus' exit price methodology, adopted during 2018, estimates the fair value of loans based on the present value of the future cash flows using the interest rate that would be charged for a similar loan to a borrower with similar risk, adjusted for a liquidity discount based on the estimated time period to complete a sale transaction with a market participant. The adoptionprovisions of this guidance did not have a significantis the requirement that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. ASU 2019-12 is effective for public entities for fiscal years beginning after December 15, 2020. Synovus adopted ASU 2019-12 effective January 1, 2021 with no material impact on Synovus' fair value disclosures.
ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement.consolidated financial statements unless there are changes in tax law that require recognition as set forth in this guidance.
ASU 2021-06, Presentation of Financial Statements (Topic 205), Financial Services - Depository and Lending (Topic 942), and Financial Services-Investment Companies (Topic 946). In August 2018,2021, the FASB issued ASU 2018-13,2021-06 which changesamends SEC paragraphs in the fair value measurementcodification pursuant to SEC Final Rule Releases No. 33-10786 and No. 33-10835. These rule releases amend disclosure requirements applicable to acquisitions and dispositions of ASC 820.businesses and also amend statistical disclosures that banks and bank holding companies provide to investors. ASU 2021-06 eliminates disclosures that overlap with SEC rules or US GAAP. The amendments in this ASU remove, modify,were effective upon its addition to the FASB codification with no material effect to the consolidated financial statements
Recently Issued Accounting Standards Not Yet Adopted
2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and add certain required disclosures on fair value measurements.Contract Liabilities from Contracts with Customers. In October 2021, the FASB issued ASU 2021-08 to address diversity in practice related to the accounting for revenue contracts with customers acquired in a business combination. Generally, this new guidance will result in the acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree (in accordance with ASC 606). The guidance isin ASU 2021-08 should be applied prospectively to acquisitions occurring on or after the effective date. For Synovus, the amendments in this Update are effective for fiscal years beginning after December 15, 2019; early adoption is permitted. Synovus elected to early adopt ASU 2018-13 for eliminated and modified disclosures upon issuance of this ASU. Synovus will delay adoption of the additional disclosures until their effective date. The adoption of this guidance did not have a significant impact on Synovus' fair value disclosures.
ASU 2018-15, Intangibles - Goodwill and Other - Internal Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. In August 2018, the FASB issued ASU 2018-15, which amends ASC 350-40. The ASU aligns the requirements for capitalizing implementation costs for a hosting arrangement that is a service contract with those incurred for hosting arrangements that contain a software license as well as those incurred to develop or implement software for internal use. This guidance is effective for fiscal years beginning after December 15, 2019; early adoption is permitted. Synovus elected to early adopt ASU 2018-15, on a prospective basis, upon issuance of this ASU. As of December 31, 2018, approximately $500 thousand of certain qualifying implementation costs related to hosting arrangements under a service contract were capitalized in accordance with this guidance.
ASU 2017-12, Derivatives and Hedging (Topic 815) - Targeted Improvements to Accounting for Hedging Activities.In August 2017, the FASB issued ASU 2017-12 which amends the hedge accounting model to enable entities to better portray the economics of their risk management activities in the financial statements and enhance the transparency and understandability of hedge results. A modified retrospective transition method of adoption is required. The Company elected to early adopt the amendments effective October 1, 2018. As Synovus had no designated hedges during 2018, the adoption of the amendments did not impact the Company’s consolidated financial statements during this period.
Recently Issued Accounting Standards Updates
The following ASUs will be implemented effective January 1, 2019 or later:
ASU 2016-13, Financial Instruments-Credit Losses (CECL). In June 2016, the FASB issued new guidance related to credit losses. The new guidance (and all subsequent ASUs) replaces the existing incurred loss impairment guidance with an expected credit loss methodology. The new guidance will require management’s estimate of credit losses over the full remaining expected life of loans and other financial instruments. For Synovus, the standard will apply to loans, unfunded loan commitments, and debt securities available for sale. The standard is effective for fiscal years beginning after December 15, 2019 and2022, including interim periods within those fiscal years with earlyyears. Early adoption of the amendments is permitted, onincluding adoption in an interim period.
ASU 2021-01, Reference Rate Reform (Topic 848). In January 1, 2019. Synovus2021, the FASB issued ASU 2021-01 which provides optional expedients and exceptions in Topic 848 for derivative instruments and hedge accounting modifications resulting from the discounting transition of reference rate reform. The expedients and exceptions provided by ASU 2021-01 will adopt the guidance on January 1, 2020. Upon adoption, Synovus will record a cumulative-effect adjustment to retained earningsnot be available after December 31, 2022, other than for existing hedging relationships entered into by December 31, 2022. The ASU may be applied as of the beginning of an interim period that includes or is subsequent to March 12, 2020, until the reporting periodsunset date of adoption. In addition, the amendments provide for a simplified accounting model for purchased financial assets with a more-than-insignificant amount of credit deterioration since their acquisition ("PCD assets"). The initial estimate of expected credit losses on PCD assets will be recognized through the ALL with an offset to the cost basisDecember 31, 2022. Synovus adopted ASU 2020-04 Reference Rate Reform: Facilitation of the related financial asset at acquisition. Synovus is in the processEffects of implementing the new credit loss standard, with efforts being led by a cross-functional steering committee. Management expects that the allowance for loan losses will be higher under the new standard; however, management is still in the process of determining the magnitude of the impactReference Rate Reform on its financial statements and regulatory capital ratios. Additionally, the extent of the expected increase on the allowance for loan losses will depend upon the composition of the loan portfolio upon adoption of the standard, as well as economic conditions and forecasts at that time.
ASU 2016-02, Leases (ASC 842). In February 2016, the FASB issued ASU 2016-02, its new standard on lease accounting. ASU 2016-02 introduces a lessee model that brings most leases on the balance sheet and disclose key information about leasing arrangements. Under the new standard, all lessees will recognize a right-of-use asset and a lease liability, including operating leases, with a lease term greater than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. From a lessor perspective, the accounting model is largely unchanged from existing GAAP. Additional amendments include, but are not limited to, the elimination of leveraged leases; modification to the definition of a lease; amendments on sale and leaseback transactions; and disclosure of additional qualitative and quantitative information.
In July 2018, the FASB issued ASU 2018-11, Leases (ASC 842), Targeted Improvements. The ASU 2018-11 amendments include an optional transition method to apply ASU 2016-02 on a prospective basis as of the effective date, with a cumulative- effect adjustment to retained earnings in the period of adoption, instead of applying the guidance using the modified retrospective

approach as originally required under ASU 2016-02. ASU 2018-11 also provides lessors with a practical expedient, by class of underlying asset, to not separate lease and non-lease components under certain circumstances, and clarifies which guidance (ASC 842 or ASC 606) to apply to the combined lease and non-lease components.
Synovus will elect the optional transition method provided through ASU 2018-11 and will adopt ASU 2016-02 prospectively on January 1, 2019. As such, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. Synovus will elect the package of practical expedients to not reassess (a) whether existing contracts contain leases, (b) lease classification for existing leases, and (c) initial direct cost for any existing leases as well as the short-term lease recognition exemption for all leases that qualify. Additionally, we will not elect the practical expedient to not separate lease and non-lease components for all of our leases.
On adoption, we currently expect to:
Recognize additional operating liabilities estimated at 1.1% of total assets, with corresponding ROU assets of the same amount based on the present value of the remaining rental payments under current leasing standards for existing operating leases;
Recognize deferred gains, net of income taxes, of $3.9 million associated with sale-leaseback transactions that previously did not qualify for recognition as a cumulative-effect adjustment to the beginning balance of retained earnings; and
Provide significant new disclosures about our leasing activities.
Synovus does not expect this ASU to have a material impact on the timing of expense recognition in its consolidated statements of income.
ASU 2017-04, Intangibles-Goodwill and Other, Simplifying the Test for Goodwill Impairment:In January 2017, the FASB issued ASU 2017-04, which simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Therefore, any carrying amount which exceeds the reporting unit’s fair value (up to the amount of goodwill recorded) will be recognized as an impairment loss. The ASU is effective for annual reporting periods beginning after December 15, 2019, including interim periods within those periods. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. Synovus plans to early adopt the guidance, effective January 1, 2019 and will apply the guidance prospectively, beginning with its annual impairment test as of June 30, 2019. Based on recent goodwill impairment tests, which did not require the application of Step 2, Synovus does not expect the adoption of this ASU to have an immediate impact.
Note 2 - Acquisitions
Cabela's Transaction
On September 25, 2017, Synovus' wholly owned subsidiary, Synovus Bank, completed the acquisition of certain assets and assumption of certain liabilities of WFB. Immediately following the closing of this transaction, Synovus Bank sold WFB’s credit card assets and related liabilities to Capital One Bank (USA), National Association, a bank subsidiary of Capital One Financial Corporation.
Synovus retained WFB’s $1.10 billion brokered time deposits portfolio, which had a weighted average remaining maturity of 2.53 years and a weighted average rate of 1.83% as of September 25, 2017. The transaction was accounted for as an assumption of a liability (accounted for under the asset acquisition model). In accordance with ASC 820, Fair Value Measurements and Disclosures, the brokered time deposit portfolio was recorded at $1.10 billion, which was the amount of cash received for the deposits and represented the estimated fair value of the deposits at the transaction date. Additionally, Synovus received a $75.0 million transaction fee from Cabela’s Incorporated and Capital One, which was recognized into earnings on September 25, 2017 upon closing of the transaction, based on having achieved the recognition criteria outlined in SEC SAB Topic 13.A, Revenue Recognition.
Acquisition of Global One
On October 1, 2016, Synovus completed its acquisition of all of the outstanding stock of Global One. Under the terms of the merger agreement, Synovus acquired Global One for an up-front payment of $30 million, consisting of the issuance of 821 thousand shares of Synovus common stock valued at $26.6 million and $3.4 million in cash, with additional payments to Global One's former shareholders over a three to five year period based on earnings from the Global One business, as further discussed below.


The acquisition of Global One constituted a business combination. Accordingly, the assets acquired and liabilities assumed were recorded at their estimated fair valuesReporting on October 1, 2016. The determination2020. While Synovus has not yet finalized the election of fair value required managementoptional expedients for ASU 2021-01, we do not currently expect there to make estimates about discount rates, future expected earnings and cash flows, market conditions, future loan growth, and other future events that are highly subjective in nature and subject to change.
Under the terms of the merger agreement, the purchase price includes additional annual payments ("Earnout Payments") to Global One's former shareholders overbe a three to five year period, with amounts based on a percentage of "Global One Earnings," as defined in the merger agreement. The Earnout Payments consist of shares of Synovus common stock as well as a smaller cash consideration component. The first and second annual Earnout Payments were made during November 2017 and November 2018, consisting of the issuance of 118 thousand and 199 thousand shares, respectively, of Synovus common stock valued at $5.5 million and $7.4 million, respectively, and $892 thousand and $1.2 million in cash, respectively. During 2018, Synovus recorded an $11.7 million increasematerial financial impact to the earnout liability driven by increased earnings projectionsCompany regardless of Global One. The total fair value ofwhich optional expedients the earnout liability at December 31, 2018 was $14.4 million based on the estimated fair value of the remaining Earnout Payments.Company selects to replace LIBOR.

82

Note 32 - Investment Securities Available for Sale
The amortized cost, gross unrealized gains and losses, and estimated fair values of investment securities available for sale at December 31, 20182021 and 20172020 are summarized below.
December 31, 2021
(in thousands)Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value
U.S. Treasury securities$120,465 $— $(2,627)$117,838 
U.S. Government agency securities53,214 1,374 (387)54,201 
Mortgage-backed securities issued by U.S. Government agencies790,329 768 (11,464)779,633 
Mortgage-backed securities issued by U.S. Government sponsored enterprises8,063,890 50,491 (102,080)8,012,301 
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises951,691 4,658 (16,726)939,623 
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises479,420 8,644 (6,320)481,744 
Asset-backed securities514,188 — — 514,188 
Corporate debt securities and other debt securities18,309 492 — 18,801 
Total investment securities available for sale$10,991,506 $66,427 $(139,604)$10,918,329 
December 31, 2020
(in thousands)Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value
U.S. Treasury securities$20,257 $— $— $20,257 
U.S. Government agency securities79,638 2,682 — 82,320 
Mortgage-backed securities issued by U.S. Government agencies1,216,012 7,930 (5,925)1,218,017 
Mortgage-backed securities issued by U.S. Government sponsored enterprises4,865,858 134,188 — 5,000,046 
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises1,245,644 15,309 (10,576)1,250,377 
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises354,244 16,677 — 370,921 
Corporate debt securities and other debt securities20,211 457 (168)20,500 
Total investment securities available for sale$7,801,864 $177,243 $(16,669)$7,962,438 
  December 31, 2018
(in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value
U.S. Treasury securities $123,436
 $—
 $(1,359) $122,077
U.S. Government agency securities 38,021
 361
 —
 38,382
Mortgage-backed securities issued by U.S. Government agencies 100,060
 172
 (3,027) 97,205
Mortgage-backed securities issued by U.S. Government sponsored enterprises 2,460,498
 1,981
 (63,829) 2,398,650
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises 1,215,406
 2,997
 (29,885) 1,188,518
Commercial mortgage-backed securities issued by U.S. Government sponsored enterprises 131,492
 613
 (2,240) 129,865
Corporate debt and other debt securities 17,000
 150
 (215) 16,935
Total investment securities available for sale $4,085,913
 $6,274
 $(100,555) $3,991,632
         
  December 31, 2017
(in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value
U.S. Treasury securities $83,608
 $—
 $(934) $82,674
U.S. Government agency securities 10,771
 91
 —
 10,862
Mortgage-backed securities issued by U.S. Government agencies 121,283
 519
 (1,362) 120,440
Mortgage-backed securities issued by U.S. Government sponsored enterprises 2,621,694
 5,037
 (31,105) 2,595,626
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises 1,135,259
 144
 (23,404) 1,111,999
Commercial mortgage-backed securities issued by U.S. Government sponsored enterprises 45,124
 22
 (249) 44,897
State and municipal securities 180
 —
 —
 180
Corporate debt and other securities 20,320
 294
 (223) 20,391
Total investment securities available for sale $4,038,239
 $6,107
 $(57,277) $3,987,069
         
At December 31, 20182021 and 2017,2020, investment securities with a carrying value of $1.56$4.03 billion and $2.00$3.84 billion,, respectively, were pledged to secure certain deposits and securities sold under repurchase agreementsother liabilities, as required by law andor contractual agreements.



83

Synovus has reviewedGross unrealized losses on investment securities and the fair value of the related securities, aggregated by investment category and length of time that areindividual securities have been in ana continuous unrealized loss position, as of at December 31, 20182021 and 2017 for OTTI and does not consider anyDecember 31, 2020 are presented below.
December 31, 2021
Less than 12 Months12 Months or LongerTotal
(in thousands)Fair ValueGross Unrealized LossesFair ValueGross Unrealized LossesFair ValueGross Unrealized Losses
U.S. Treasury securities$49,648 $(379)$47,590 $(2,248)$97,238 $(2,627)
U.S. Government agency securities21,760 (387)— — 21,760 (387)
Mortgage-backed securities issued by U.S. Government agencies461,078 (5,858)244,264 (5,606)705,342 (11,464)
Mortgage-backed securities issued by U.S. Government sponsored enterprises5,729,476 (82,671)643,758 (19,409)6,373,234 (102,080)
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises187,431 (3,981)504,238 (12,745)691,669 (16,726)
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises146,672 (2,951)83,533 (3,369)230,205 (6,320)
Total$6,596,065 $(96,227)$1,523,383 $(43,377)$8,119,448 $(139,604)
December 31, 2020
Less than 12 Months12 Months or LongerTotal
(in thousands)Fair ValueGross Unrealized LossesFair ValueGross Unrealized LossesFair ValueGross Unrealized Losses
Mortgage-backed securities issued by U.S. Government agencies$566,896 $(5,925)$— $— $566,896 $(5,925)
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises803,429 (10,576)— — 803,429 (10,576)
Corporate debt securities and other debt securities9,337 (168)— — 9,337 (168)
Total$1,379,662 $(16,669)$— $— $1,379,662 $(16,669)
As of December 31, 2021, Synovus had 143 investment securities in an unrealizeda loss position to be other-than-temporarily impaired. If Synovus intended to sellfor less than twelve months and 37 investment securities in a security in an unrealized loss position the entire unrealized loss would be reflected in earnings.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.
For investment securities that Synovus does not expect As such, no write-downs to sell, or it is not more likely than not it will be required to sell prior to recovery of itsthe amortized cost basis of the credit componentportfolio were recorded at December 31, 2021.
At December 31, 2021, no ACL was established for investment securities. Substantially all of an OTTI would be recognized in earnings and the non-credit component would be recognized in OCI. Currently, unrealized losses on debtthe 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 attributable to increases in interest rates on comparable securities fromissued, guaranteed or otherwise supported by the date of purchase. Synovus regularly evaluates its investment securities portfolio to ensure that there are no conditions that would indicate that unrealized losses represent OTTI. These factors include the length of time the security has been in a loss position, the extent that the fair value is below amortized cost, and the credit standingUnited States government, an agency of the issuer. As of December 31, 2018, Synovus had 9 investment securities inUnited States government, or a loss position for less than twelve months and 123 investment securities in a loss position for twelve months or longer.
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 December 31, 2018 and December 31, 2017 are presented below.
  December 31, 2018
  Less than 12 Months 12 Months or Longer Total
(in thousands) 
Fair
Value
 
Gross Unrealized
Losses
 
Fair
Value
 
Gross Unrealized
Losses
 
Fair
Value
 
Gross Unrealized
Losses
U.S. Treasury securities $39,031
 $(118) $63,570
 $(1,241) $102,601
 $(1,359)
Mortgage-backed securities issued by U.S. Government agencies 2,059
 (2) 79,736
 (3,025) 81,795
 (3,027)
Mortgage-backed securities issued by U.S. Government sponsored enterprises 130,432
 (700) 2,105,358
 (63,129) 2,235,790
 (63,829)
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises —
 —
 964,732
 (29,885) 964,732
 (29,885)
Commercial mortgage-backed securities issued by U.S. Government sponsored enterprises 58,998
 (1,298) 44,220
 (942) 103,218
 (2,240)
Corporate debt and other debt securities —
 —
 1,785
 (215) 1,785
 (215)
Total $230,520
 $(2,118) $3,259,401
 $(98,437) $3,489,921
 $(100,555)
             
  December 31, 2017
  Less than 12 Months 12 Months or Longer Total
(in thousands) 
Fair
Value
 
Gross Unrealized
Losses
 
Fair
Value
 
Gross Unrealized
Losses
 
Fair
Value
 
Gross Unrealized
Losses
U.S Treasury securities $34,243
 $(443) $29,562
 $(491) $63,805
 $(934)
Mortgage-backed securities issued by U.S. Government agencies 36,810
 (357) 55,740
 (1,005) 92,550
 (1,362)
Mortgage-backed securities issued by U.S. Government sponsored enterprises 1,238,464
 (10,014) 929,223
 (21,091) 2,167,687
 (31,105)
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises 653,781
 (9,497) 426,237
 (13,907) 1,080,018
 (23,404)
Commercial mortgage-backed securities issued by U.S. Government sponsored enterprises 32,548
 (249) —
 —
 32,548
 (249)
Corporate debt and other securities —
 —
 5,097
 (223) 5,097
 (223)
Total $1,995,846
 $(20,560) $1,445,859
 $(36,717) $3,441,705
 $(57,277)
             


government sponsored enterprise.
The amortized cost and fair value by contractual maturity of investment securities available for sale at December 31, 20182021 are shown below. The expected life of mortgage-backed securitiesMBSs 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, mortgage-backed securitiesMBSs and CMOs, which are not due at a single maturity date, have been classified based on the final contractual maturity date.
84

 Distribution of Maturities at December 31, 2018Distribution of Maturities at December 31, 2021
(in thousands) 
Within One
Year
 
1 to 5
Years
 
5 to 10
Years
 
More Than
10 Years
 Total(in thousands)Within One Year1 to 5
Years		5 to 10
Years		More Than
10 Years		Total
Amortized Cost          Amortized Cost
U.S. Treasury securities $19,476
 $103,960
 $—
 $—
 $123,436
U.S. Treasury securities$20,600 $— $99,865 $— $120,465 
U.S. Government agency securities 1,917
 6,118
 29,986
 —
 38,021
U.S. Government agency securities756 321 52,137 — 53,214 
Mortgage-backed securities issued by U.S. Government agencies —
 —
 24,076
 75,984
 100,060
Mortgage-backed securities issued by U.S. Government agencies— 842 131 789,356 790,329 
Mortgage-backed securities issued by U.S. Government sponsored enterprises —
 52,656
 414,265
 1,993,577
 2,460,498
Mortgage-backed securities issued by U.S. Government sponsored enterprises28 — 80,539 7,983,323 8,063,890 
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises —
 —
 26,950
 1,188,456
 1,215,406
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises— — 146 951,545 951,691 
Commercial mortgage-backed securities issued by U.S. Government sponsored enterprises —
 —
 131,492
 —
 131,492
Corporate debt and other debt securities —
 —
 15,000
 2,000
 17,000
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprisesCommercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises— 181,144 211,328 86,948 479,420 
Asset-backed securitiesAsset-backed securities514,188 — — — 514,188 
Corporate debt securities and other debt securitiesCorporate debt securities and other debt securities9,502 — 8,807 — 18,309 
Total amortized cost $21,393
 $162,734
 $641,769
 $3,260,017
 $4,085,913
Total amortized cost$545,074 $182,307 $452,953 $9,811,172 $10,991,506 
          
Fair Value          Fair Value
U.S. Treasury securities $19,476
 $102,601
 $—
 $—
 $122,077
U.S. Treasury securities$20,600 $— $97,238 $— $117,838 
U.S. Government agency securities 1,922
 6,161
 30,299
 —
 38,382
U.S. Government agency securities760 322 53,119 — 54,201 
Mortgage-backed securities issued by U.S. Government agencies —
 —
 23,698
 73,507
 97,205
Mortgage-backed securities issued by U.S. Government agencies— 870 136 778,627 779,633 
Mortgage-backed securities issued by U.S. Government sponsored enterprises —
 52,316
 404,554
 1,941,780
 2,398,650
Mortgage-backed securities issued by U.S. Government sponsored enterprises28 — 83,271 7,929,002 8,012,301 
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises —
 —
 26,291
 1,162,227
 1,188,518
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises— — 150 939,473 939,623 
Commercial mortgage-backed securities issued by U.S. Government sponsored enterprises —
 —
 129,865
 —
 129,865
Corporate debt and other securities —
 —
 15,150
 1,785
 16,935
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprisesCommercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises— 182,821 209,311 89,612 481,744 
Asset-backed securitiesAsset-backed securities514,188 — — — 514,188 
Corporate debt securities and other debt securitiesCorporate debt securities and other debt securities9,730 — 9,071 — 18,801 
Total fair value $21,398
 $161,078
 $629,857
 $3,179,299
 $3,991,632
Total fair value$545,306 $184,013 $452,296 $9,736,714 $10,918,329 
          
Proceeds from sales, grossGross gains and gross losses on sales of securities available for sale for the years ended December 31, 2018, 2017,2021, 2020, and 20162019 are presented below. The specific identification method is used to reclassify gains and losses out of other comprehensive income at the time of sale.
(in thousands)202120202019
Gross realized gains on sales$1,191 $85,375 $10,370 
Gross realized losses on sales(1,990)(6,444)(18,029)
Investment securities gains (losses), net$(799)$78,931 $(7,659)

85
(in thousands) 2018 2017 2016
Proceeds from sales of investment securities available for sale $35,066
 $812,293
 $968,606
Gross realized gains on sales $—
 $7,942
 $9,586
Gross realized losses on sales (1,296) (8,231) (3,575)
Investment securities (losses) gains, net $(1,296) $(289) $6,011
       



Note 43 - Loans and Allowance for Loan Losses
Loans outstanding, by classification, at December 31, 2018Aging and 2017 are summarized below.Non-Accrual Analysis
  December 31,
(in thousands) 2018 2017
Commercial, financial, and agricultural $7,449,698
 $7,179,487
Owner-occupied 5,331,508
 4,844,163
Total commercial and industrial 12,781,206
 12,023,650
Investment properties 5,560,951
 5,670,065
1-4 family properties 679,870
 781,619
Land and development 323,670
 483,604
Total commercial real estate 6,564,491
 6,935,288
Consumer mortgages 2,934,235
 2,633,503
Home equity lines 1,515,796
 1,514,227
Credit cards 258,245
 232,676
Other consumer loans 1,916,743
 1,473,451
Total consumer 6,625,019
 5,853,857
Total loans 25,970,716
 24,812,795
Deferred fees and costs, net (24,143) (25,331)
Total loans, net of deferred fees and costs $25,946,573
 $24,787,464
     





The following istables provide a summary of current, accruing past due, and non-accrual loans by portfolio class as of December 31, 20182021 and 2017.December 31, 2020.
December 31, 2021
(in thousands)CurrentAccruing 30-89 Days Past DueAccruing 90 Days or Greater Past DueTotal Accruing Past DueNon-accrual with an ALLNon-accrual without an ALLTotal
Commercial, financial, and agricultural$11,973,974 $13,028 $3,686 $16,714 $37,918 $23,869 $12,052,475 
Owner-occupied7,493,804 3,627 59 3,686 7,146 4,050 7,508,686 
Total commercial and industrial19,467,778 16,655 3,745 20,400 45,064 27,919 19,561,161 
Investment properties9,861,303 1,285 717 2,002 3,273 2,577 9,869,155 
1-4 family properties639,631 1,182 93 1,275 4,535 28 645,469 
Land and development463,949 845 154 999 1,918 — 466,866 
Total commercial real estate10,964,883 3,312 964 4,276 9,726 2,605 10,981,490 
Consumer mortgages5,033,579 6,256 126 6,382 29,078 — 5,069,039 
Home equity lines1,269,610 2,619 — 2,619 9,760 — 1,281,989 
Credit cards296,695 1,584 1,277 2,861 — — 299,556 
Other consumer loans2,090,806 20,369 658 21,027 6,890 — 2,118,723 
Total consumer8,690,690 30,828 2,061 32,889 45,728 — 8,769,307 
Loans, net of deferred fees and costs$39,123,351 $50,795 $6,770 $57,565 $100,518 $30,524 $39,311,958 
December 31, 2020
Current, Accruing Past Due, and Non-accrual Loans 
December 31, 2018 
( in thousands)Current Accruing 30-89 Days Past Due Accruing 90 Days or Greater Past Due Total Accruing Past Due Non-accrual Total 
(in thousands)(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$7,372,301
 $7,988
 $114
 $8,102
 $69,295
 $7,449,698
 Commercial, financial, and agricultural$12,321,514 $10,256 $996 $11,252 $55,527 $21,859 $12,410,152 
Owner-occupied5,317,023
 5,433
 81
 5,514
 8,971
 5,331,508
 Owner-occupied7,087,992 1,913 92 2,005 20,019 — 7,110,016 
Total commercial and industrial12,689,324
 13,421
 195
 13,616
 78,266
 12,781,206
 Total commercial and industrial19,409,506 12,169 1,088 13,257 75,546 21,859 19,520,168 
Investment properties5,557,224
 1,312
 34
 1,346
 2,381
 5,560,951
 Investment properties9,075,843 2,751 154 2,905 24,631 — 9,103,379 
1-4 family properties674,648
 2,745
 96
 2,841
 2,381
 679,870
 1-4 family properties621,492 3,548 36 3,584 2,383 1,236 628,695 
Land and development319,978
 739
 —
 739
 2,953
 323,670
 Land and development591,048 422 — 422 1,899 264 593,633 
Total commercial real estate6,551,850
 4,796
 130
 4,926
 7,715
 6,564,491
 Total commercial real estate10,288,383 6,721 190 6,911 28,913 1,500 10,325,707 
Consumer mortgages2,922,136
 7,150
 —
 7,150
 4,949
 2,934,235
 Consumer mortgages5,495,415 8,851 485 9,336 8,740 — 5,513,491 
Home equity lines1,496,562
 7,092
 28
 7,120
 12,114
 1,515,796
 Home equity lines1,521,575 4,006 — 4,006 12,145 — 1,537,726 
Credit cards252,832
 3,066
 2,347
 5,413
 —
 258,245
 Credit cards276,778 2,363 1,877 4,240 — — 281,018 
Other consumer loans1,894,352
 17,604
 1,098
 18,702
 3,689
 1,916,743
 Other consumer loans1,062,899 9,122 477 9,599 2,376 — 1,074,874 
Total consumer6,565,882
 34,912
 3,473
 38,385
 20,752
 6,625,019
 Total consumer8,356,667 24,342 2,839 27,181 23,261 — 8,407,109 
Total loans$25,807,056
 $53,129
 $3,798
 $56,927
 $106,733
 $25,970,716
(1) 
Loans, net of deferred fees and costsLoans, net of deferred fees and costs$38,054,556 $43,232 $4,117 $47,349 $127,720 $23,359 $38,252,984 
            
December 31, 2017 
( in thousands)Current Accruing 30-89 Days Past Due Accruing 90 Days or Greater Past Due Total Accruing Past Due Non-accrual Total 
Commercial, financial, and agricultural$7,097,127
 $11,214
 $1,016
 $12,230
 $70,130
 $7,179,487
 
Owner-occupied4,830,150
 6,880
 479
 7,359
 6,654
 4,844,163
 
Total commercial and industrial11,927,277
 18,094
 1,495
 19,589
 76,784
 12,023,650
 
Investment properties5,663,665
 2,506
 90
 2,596
 3,804
 5,670,065
 
1-4 family properties775,023
 3,545
 202
 3,747
 2,849
 781,619
 
Land and development476,131
 1,609
 67
 1,676
 5,797
 483,604
 
Total commercial real estate6,914,819
 7,660
 359
 8,019
 12,450
 6,935,288
 
Consumer mortgages2,622,061
 3,971
 268
 4,239
 7,203
 2,633,503
 
Home equity lines1,490,808
 5,629
 335
 5,964
 17,455
 1,514,227
 
Credit cards229,015
 1,930
 1,731
 3,661
 —
 232,676
 
Other consumer loans1,461,223
 10,333
 226
 10,559
 1,669
 1,473,451
 
Total consumer5,803,107
 21,863
 2,560
 24,423
 26,327
 5,853,857
 
Total loans$24,645,203
 $47,617
 $4,414
 $52,031
 $115,561
 $24,812,795
(2) 
            
(1)
Total before net deferred fees and costs of $24.1 million.
(2)
Total before net deferred fees and costs of $25.3 million.
Interest income recorded on non-accrual loans outstanding at December 31, 2018 and 2017was $3.2 million and $2.7 million during 2018 and 2017, respectively. Interest income that would have been recorded on these non-accrual loans if the loans werehad been current and performing in accordance with their contractualoriginal terms was$7.3was $11.1 million and $9.1$12.6 million during the years ended December 31, 2021 and 2020, respectively. Of the interest income recognized during 2018the years ended December 31, 2021 and 2017,2020, cash-basis interest income was$1.8 million and $3.9 million, respectively.
Pledged Loans
Loans with carrying values of $8.40$14.19 billion and $7.93$15.05 billion, respectively, were pledged as collateral for borrowings and capacity at December 31, 20182021 and 20172020 respectively, to the FHLB and Federal Reserve Bank.



86


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. PPP loans, which are categorized as C&I loans and guaranteed by the SBA, were $399.6 million and $2.19 billion net of unearned fees at December 31, 2021 and 2020, respectively.
Commercial Real Estate Loans - CRE loans primarily consist of income-producing investment properties loans. Additionally, CRE loans include 1-4 family properties loans as well as land and development loans. Investment properties loans consist of construction and mortgage loans for income-producing properties and are primarily made to finance multi-family properties, hotels, office buildings, shopping centers, warehouses and other commercial development properties. 1-4 family properties loans include construction loans to homebuilders and commercial mortgage loans related to 1-4 family rental properties and are almost always secured by the underlying property being financed by such loans. These properties are primarily located in the markets served by Synovus. Land and development loans include commercial and residential development as well as land acquisition loans and are secured by land held for future development, typically in excess of one year. Properties securing these loans are substantially within markets served by Synovus, and loan terms generally include personal guarantees from the principals. Loans in this portfolio are underwritten based on the LTV of the collateral and the capacity of the guarantor(s).
Consumer Loans - The consumer loan portfolio consists of a wide variety of loan products offered through Synovus' banking network including first and second residential mortgages, HELOCs, and 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 HELOCs 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 at least quarterlyno less frequently than annually using the standard asset classification system utilized by the federal banking agencies. These classifications are divided into three groups –groups: Not ClassifiedCriticized (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 classified as substandardSubstandard 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 lines)HELOCs) secured by junior liens on 1-4 family residential properties also consider available information on the payment status of the associated senior lienliens with other financial institutions.
87

Loan Portfolio Credit Exposure by Risk Grade 
  December 31, 2018 
(in thousands) Pass Special Mention 
Substandard(1)
 
Doubtful(2)
 
Loss(3)
 Total 
Commercial, financial, and agricultural $7,190,517
 $118,188
 $140,218
 $775
 $—
 $7,449,698
 
Owner-occupied 5,212,473
 55,038
 63,572
 425
 —
 5,331,508
 
Total commercial and industrial 12,402,990
 173,226
 203,790
 1,200
 —

12,781,206
 
Investment properties 5,497,344
 40,516
 23,091
 —
 —
 5,560,951
 
1-4 family properties 663,692
 6,424
 9,754
 —
 —

679,870
 
Land and development 297,855
 12,786
 13,029
 —
 —
 323,670
 
Total commercial real estate 6,458,891
 59,726
 45,874
 —
 —
 6,564,491
 
Consumer mortgages 2,926,712
 —
 7,425
 98
 —
 2,934,235
 
Home equity lines 1,501,316
 —
 13,130
 174
 1,176
 1,515,796
 
Credit cards 255,904
 —
 858
 —
 1,483
(4) 
258,245
 
Other consumer loans 1,912,902
 —
 3,841
 —
 —
 1,916,743
 
Total consumer 6,596,834
 —
 25,254
 272
 2,659
 6,625,019
 
Total loans $25,458,715
 $232,952
 $274,918
 $1,472
 $2,659
 $25,970,716
(5) 
              
  December 31, 2017 
(in thousands) Pass Special Mention 
Substandard(1)
 
Doubtful(2)
 
Loss(3)
 Total 
Commercial, financial, and agricultural $6,929,506
 $115,912
 $132,818
 $1,251
 $—
 $7,179,487
 
Owner-occupied 4,713,877
 50,140
 80,073
 73
 —
 4,844,163
 
Total commercial and industrial 11,643,383
 166,052
 212,891
 1,324
 —
 12,023,650
 
Investment properties 5,586,792
 64,628
 18,645
 —
 —
 5,670,065
 
1-4 family properties 745,299
 19,419
 16,901
 —
 —
 781,619
 
Land and development 431,759
 33,766
 14,950
 3,129
 —
 483,604
 
Total commercial real estate 6,763,850
 117,813
 50,496
 3,129
 —
 6,935,288
 
Consumer mortgages 2,622,499
 —
 10,607
 291
 106
 2,633,503
 
Home equity lines 1,491,105
 —
 21,079
 285
 1,758

1,514,227
 
Credit cards 230,945
 —
 399
 —
 1,332
(4) 
232,676
 
Other consumer loans 1,470,944
 —
 2,168
 329
 10

1,473,451
 
Total consumer 5,815,493
 —
 34,253
 905
 3,206
 5,853,857
 
Total loans $24,222,726
 $283,865
 $297,640
 $5,358
 $3,206
 $24,812,795
(6) 
              
The following table summarizes each loan portfolio class by regulatory risk grade and origination year as of December 31, 2021 as required by CECL.
December 31, 2021
Term Loans Amortized Cost Basis by Origination YearRevolving Loans
(in thousands)20212020201920182017PriorAmortized Cost BasisConverted to Term LoansTotal
Commercial, financial and agricultural
Pass$2,397,405 $1,332,549 $922,396 $607,918 $433,045 $903,995 $5,056,168 $42,809 $11,696,285 
Special Mention2,731 15,166 17,571 10,433 2,242 2,489 71,996 — 122,628 
Substandard(1)
16,105 50,979 40,125 10,383 16,473 37,565 51,269 33 222,932 
Doubtful(2)
469 — 1,601 8,512 — — 48 — 10,630 
Total commercial, financial and agricultural2,416,710 1,398,694 981,693 637,246 451,760 944,049 5,179,481 42,842 12,052,475 
Owner-occupied
Pass1,776,086 1,276,797 1,117,825 858,721 708,942 1,150,386 437,724 — 7,326,481 
Special Mention702 19,950 4,724 10,202 18,109 36,481 — — 90,168 
Substandard(1)
7,312 1,294 8,386 43,276 6,169 25,329 — — 91,766 
Doubtful(2)
— — — — — — — — — 
Loss271 — — — — — — — 271 
Total owner-occupied1,784,371 1,298,041 1,130,935 912,199 733,220 1,212,196 437,724 — 7,508,686 
Total commercial and industrial4,201,081 2,696,735 2,112,628 1,549,445 1,184,980 2,156,245 5,617,205 42,842 19,561,161 
Investment properties
Pass2,823,978 1,463,503 1,905,534 1,019,765 738,036 1,284,013 278,697 — 9,513,526 
Special Mention6,163 — 32,290 63,900 59,194 44,532 33,659 — 239,738 
Substandard(1)
1,465 326 8,550 57,127 3,564 23,505 21,354 — 115,891 
Total investment properties2,831,606 1,463,829 1,946,374 1,140,792 800,794 1,352,050 333,710 — 9,869,155 
1-4 family properties
Pass295,082 82,976 51,939 43,025 49,057 57,025 55,588 — 634,692 
Special Mention192 207 641 — — 239 — — 1,279 
Substandard(1)
1,999 — 566 4,222 489 2,177 45 — 9,498 
Total 1-4 family properties297,273 83,183 53,146 47,247 49,546 59,441 55,633 — 645,469 
Land and development
Pass141,614 42,201 77,868 34,058 37,167 44,989 44,730 — 422,627 
Special Mention— 800 1,900 31,458 — 1,179 — — 35,337 
Substandard(1)
824 1,149 46 3,021 807 3,055 — — 8,902 
Total land and development142,438 44,150 79,814 68,537 37,974 49,223 44,730 — 466,866 
Total commercial real estate3,271,317 1,591,162 2,079,334 1,256,576 888,314 1,460,714 434,073 — 10,981,490 
88

December 31, 2021
Term Loans Amortized Cost Basis by Origination YearRevolving Loans
(in thousands)20212020201920182017PriorAmortized Cost BasisConverted to Term LoansTotal
Consumer mortgages
Pass$1,293,106 $1,551,510 $570,344 $216,277 $392,422 $991,080 $296 $— $5,015,035 
Substandard(1)
1,031 3,680 5,943 12,387 5,717 25,025 — — 53,783 
Loss(3)
— — 5 — — 216 — — 221 
Total consumer mortgages1,294,137 1,555,190 576,292 228,664 398,139 1,016,321 296 — 5,069,039 
Home equity lines
Pass— — — — — — 1,199,635 67,139 1,266,774 
Substandard(1)
— — — — — — 9,058 5,359 14,417 
Doubtful(2)
— — — — — — — — — 
Loss(3)
— — — — — — 658 140 798 
Total home equity lines— — — — — — 1,209,351 72,638 1,281,989 
Credit cards
Pass— — — — — — 298,287 — 298,287 
Substandard(1)
— — — — — — 521 — 521 
Loss(4)
— — — — — — 748 — 748 
Total credit cards— — — — — — 299,556 — 299,556 
Other consumer loans— 
Pass654,818 709,077 127,131 50,007 86,175 97,780 385,308 — 2,110,296 
Substandard(1)
668 1,550 2,064 1,308 1,892 750 175 — 8,407 
   Loss— — — — — 20 — — 20 
Total other consumer loans655,486 710,627 129,195 51,315 88,067 98,550 385,483 — 2,118,723 
Total consumer1,949,623 2,265,817 705,487 279,979 486,206 1,114,871 1,894,686 72,638 8,769,307 
Loans, net of deferred fees and costs$9,422,021 $6,553,714 $4,897,449 $3,086,000 $2,559,500 $4,731,830 $7,945,964 $115,480 $39,311,958 
(1)    Includes $172.3 million and $190.6 millionThe majority of loans within Substandard risk grade are accruing loans at December 31, 20182021.
(2)    Loans within Doubtful risk grade are on non-accrual status and generally have an ALL equal to 50% of the loan amount.
(3)    Loans within Loss risk grade are on non-accrual status and have an ALL equal to the full loan amount.
(4)    Represent amounts that were 120 days past due. These credits are downgraded to the Loss category with an ALL equal to the full loan amount and are generally charged off upon reaching 181 days past due in accordance with the FFIEC Retail Credit Classification Policy.



















89



December 31, 2020
Term Loans Amortized Cost Basis by Origination YearRevolving Loans
(in thousands)20202019201820172016PriorAmortized Cost BasisConverted to Term LoansTotal
Commercial, financial and agricultural
Pass$3,819,048 $1,333,460 $847,283 $582,612 $551,413 $633,871 $4,102,751 $49,762 $11,920,200 
Special Mention63,307 40,618 12,723 22,070 1,665 5,545 60,741 489 207,158 
Substandard(1)
28,698 36,618 24,867 36,072 12,808 35,172 84,498 514 259,247 
Doubtful(2)
— 3,721 19,778 — — — 48 — 23,547 
Total commercial, financial and agricultural3,911,053 1,414,417 904,651 640,754 565,886 674,588 4,248,038 50,765 12,410,152 
Owner-occupied
Pass1,321,680 1,275,435 1,131,183 982,056 555,932 1,297,070 349,566 — 6,912,922 
Special Mention6,170 9,995 10,682 14,138 1,582 13,768 — — 56,335 
Substandard(1)
2,570 22,793 42,615 26,033 7,316 29,794 — — 131,121 
Doubtful(2)
— — 9,638 — — — — — 9,638 
Total owner-occupied1,330,420 1,308,223 1,194,118 1,022,227 564,830 1,340,632 349,566 — 7,110,016 
Total commercial and industrial5,241,473 2,722,640 2,098,769 1,662,981 1,130,716 2,015,220 4,597,604 50,765 19,520,168 
Investment properties
Pass1,055,440 2,126,667 1,999,345 1,091,880 483,780 1,301,088 229,044 — 8,287,244 
Special Mention1,482 66,160 176,794 136,004 138,362 129,401 55,440 — 703,643 
Substandard(1)
1,007 4,770 24,476 19,820 21,875 40,509 35 — 112,492 
Total investment properties1,057,929 2,197,597 2,200,615 1,247,704 644,017 1,470,998 284,519 — 9,103,379 
1-4 family properties
Pass197,320 95,145 70,267 88,454 38,729 97,374 27,657 — 614,946 
Special Mention402 — 508 109 786 118 — — 1,923 
Substandard(1)
1,527 653 4,312 1,141 554 2,299 1,340 — 11,826 
Total 1-4 family properties199,249 95,798 75,087 89,704 40,069 99,791 28,997 — 628,695 
Land and development
Pass84,985 173,302 83,734 92,911 12,249 76,380 53,250 — 576,811 
Special Mention857 1,995 2,866 282 — 1,332 636 — 7,968 
Substandard(1)
1,229 425 4,664 915 136 1,485 — — 8,854 
Total land and development87,071 175,722 91,264 94,108 12,385 79,197 53,886 — 593,633 
Total commercial real estate1,344,249 2,469,117 2,366,966 1,431,516 696,471 1,649,986 367,402 — 10,325,707 
90

December 31, 2020
Term Loans Amortized Cost Basis by Origination YearRevolving Loans
(in thousands)20202019201820172016PriorAmortized Cost BasisConverted to Term LoansTotal
Consumer mortgages
Pass$1,871,512 $874,769 $425,711 $678,255 $685,810 $965,382 $1,040 $— $5,502,479 
Substandard(1)
33 961 748 889 866 7,224 — — 10,721 
Loss(3)
— — — — — 291 — — 291 
Total consumer mortgages1,871,545 875,730 426,459 679,144 686,676 972,897 1,040 — 5,513,491 
Home equity lines
Pass— — — — — — 1,429,755 90,832 1,520,587 
Substandard(1)
— — — — — — 9,698 5,996 15,694 
Doubtful(2)
— — — — — — — 19 19 
Loss(3)
— — — — — — 1,283 143 1,426 
Total home equity lines— — — — — — 1,440,736 96,990 1,537,726 
Credit cards
Pass— — — — — — 279,142 — 279,142 
Substandard(1)
— — — — — — 595 — 595 
Loss(4)
— — — — — — 1,281 — 1,281 
Total credit cards— — — — — — 281,018 — 281,018 
Other consumer loans— 
Pass252,160 190,820 89,187 100,459 80,365 61,040 297,637 — 1,071,668 
Substandard(1)
19 762 262 1,195 121 585 227 — 3,171 
   Loss— — — — — 35 — — 35 
Total other consumer loans252,179 191,582 89,449 101,654 80,486 61,660 297,864 — 1,074,874 
Total consumer2,123,724 1,067,312 515,908 780,798 767,162 1,034,557 2,020,658 96,990 8,407,109 
Loan, net of deferred fees and costs$8,709,446 $6,259,069 $4,981,643 $3,875,295 $2,594,349 $4,699,763 $6,985,664 $147,755 $38,252,984 
(1)    The majority of loans within Substandard risk grade are accruing loans at December 31, 2017, respectively.
(2)
The loans within this risk grade are on non-accrual status and generally have an allowance for loan losses equal to 50% of the loan amount.
(3)
The loans within this risk grade are on non-accrual status and have an allowance for loan losses equal to the full loan amount.
(4)
Represent amounts that were 120 days past due. These credits are downgraded to the Loss category with an allowance for loan losses 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.
(5)
Total before net deferred fees and costs of $24.1 million.
(6)
Total before net deferred fees and costs of $25.3 million.
2020.

(2)    Loans within Doubtful risk grade are on non-accrual status and generally have an ALL equal to 50% of the loan amount.

(3)    Loans within Loss risk grade are on non-accrual status and have an ALL equal to the full loan amount.

(4)    Represent amounts that were 120 days past due. These credits are downgraded to the Loss category with an ALL equal to the full loan amount and are generally charged off upon reaching 181 days past due in accordance with the FFIEC Retail Credit Classification Policy.

Collateral-Dependent Loans

We classify a loan as collateral-dependent when our borrower is experiencing financial difficulty, and we expect repayment to be provided substantially through the operation or sale of collateral. Our commercial loans have collateral that is comprised of real estate and business assets. Our consumer loans have collateral that is substantially comprised of residential real estate.
There were no significant changes in the extent to which collateral secures our collateral-dependent loans during the years ended December 31, 2021 and 2020.
91

Rollforward of Allowance for Loan Losses
The following table detailstables detail the changechanges in the allowance for loan lossesALL by loan segment for the years ended December 31, 2018, 20172021, 2020, and 2016.2019. On January 1, 2020, Synovus adopted ASC 326, which replaced the existing incurred loss methodology with an expected credit loss methodology (referred to as CECL). Under the incurred loss methodology, reserves for credit losses were recognized only when the losses were probable or had been incurred; under CECL, companies are required to recognize the full amount of expected credit losses for the lifetime of the financial assets, based on historical experience, current conditions and reasonable and supportable forecasts. See "Part II - Item 8. Financial Statements and Supplementary Data - Note 1 - Summary of Significant Accounting Policies" of this Report for more information on Synovus' adoption of CECL.
  As Of and For The Year Ended December 31, 2018
(in thousands) Commercial & Industrial Commercial Real Estate Consumer Total
Allowance for loan losses        
Beginning balance $126,803
 $74,998
 $47,467
 $249,268
Charge-offs (48,775) (4,408) (20,871) (74,054)
Recoveries 7,165
 10,188
 6,291
 23,644
Provision for loan losses 47,930
 (11,982) 15,749
 51,697
Ending balance(4)
 $133,123
 $68,796
 $48,636
 $250,555
Ending balance: individually evaluated for impairment     $10,207
 $2,598
 $744
 $13,549
Ending balance: collectively evaluated for impairment $122,916
 $66,198
 $47,892
 $237,006
Loans        
Ending balance: total loans(1) (4)
 $12,781,206
 $6,564,491
 $6,625,019
 $25,970,716
Ending balance: individually evaluated for impairment $105,422
 $33,198
 $28,306
 $166,926
Ending balance: collectively evaluated for impairment $12,675,784
 $6,531,293
 $6,596,713
 $25,803,790
         
  As Of and For The Year Ended December 31, 2017
(in thousands) Commercial & Industrial Commercial Real Estate Consumer Total
Allowance for loan losses        
Beginning balance $125,778
 $81,816
 $44,164
 $251,758
Charge-offs (49,244) (12,193) (28,982) (90,419)
Recoveries 6,685
 8,026
 6,033
 20,744
Provision for loan losses 43,584
 (2,651) 26,252
 67,185
Ending balance(4)
 $126,803
 $74,998
 $47,467
 $249,268
Ending balance: individually evaluated for impairment     $9,515
 $4,240
 $1,153
 $14,908
Ending balance: collectively evaluated for impairment $117,288
 $70,758
 $46,314
 $234,360
Loans        
Ending balance: total loans(2) (4)
 $12,023,650
 $6,935,288
 $5,853,857
 $24,812,795
Ending balance: individually evaluated for impairment $111,334
 $56,896
 $32,056
 $200,286
Ending balance: collectively evaluated for impairment $11,912,316
 $6,878,392
 $5,821,801
 $24,612,509
         
  As Of and For The Year Ended December 31, 2016
(in thousands) Commercial & Industrial Commercial Real Estate Consumer Total
Allowance for loan losses        
Beginning balance $122,989
 $87,133
 $42,374
 $252,496
Charge-offs (25,039) (18,216) (14,705) (57,960)
Recoveries 9,071
 15,226
 4,925
 $29,222
Provision for loan losses 18,757
 (2,327) 11,570
 28,000
Ending balance(4)
 $125,778
 $81,816
 $44,164
 $251,758
Ending balance: individually evaluated for impairment     $8,384
 $7,916
 $1,811
 $18,111
Ending balance: collectively evaluated for impairment $117,394
 $73,900
 $42,353
 $233,647
Loans        
Ending balance: total loans(3) (4)
 $11,543,806
 $7,374,112
 $4,964,464
 $23,882,382
Ending balance: individually evaluated for impairment $120,560
 $91,410
 $37,526
 $249,496
Ending balance: collectively evaluated for impairment $11,423,246
 $7,282,702
 $4,926,938
 $23,632,886
         
(1)    Total before net deferred fees and costs of $24.1 million.
(2)
Total before net deferred fees and costs of $25.3 million.
(3)
Total before net deferred fees and costs of $26.0 million.
(4)
As of and for the years ended December 31, 2018, 2017, and 2016, there were no purchased credit-impaired loans and no allowance for loan losses for purchased credit-impaired loans.


Below is a detailed summary of impaired loans (including accruing TDRs) by class as of December 31, 2018 and 2017 and for For the yearsyear ended December 31, 2018, 20172021, Synovus had no significant transfers to loans held for sale. For the year ended December 31, 2020, Synovus reversed a net amount of $18.3 million in previously established reserves for credit losses associated with net transfers to held for sale of $1.43 billion in performing loans, primarily related to third-party single-service consumer loans and 2016.non-relationship consumer mortgages. For the year ended December 31, 2019, Synovus had no significant transfers to loans held for sale.
As of and For The Year Ended December 31, 2021
(in thousands)Commercial & IndustrialCommercial Real EstateConsumerTotal
Allowance for loan losses:
Beginning balance$229,555 $130,742 $245,439 $605,736 
Charge-offs(59,457)(15,392)(30,383)(105,232)
Recoveries9,734 7,444 10,266 27,444 
Provision for (reversal of) loan losses8,532 (25,034)(83,849)(100,351)
Ending balance$188,364 $97,760 $141,473 $427,597 
As of and For The Year Ended December 31, 2020
(in thousands)Commercial & IndustrialCommercial Real EstateConsumerTotal
Allowance for loan losses:
Beginning balance, prior to adoption of ASC 326$145,782 $67,430 $68,190 $281,402 
Impact from adoption of ASC 326(2,310)(651)85,955 82,994 
Beginning balance, after adoption of ASC 326$143,472 $66,779 $154,145 $364,396 
Charge-offs(76,260)(13,213)(29,789)(119,262)
Recoveries13,544 2,857 8,149 24,550 
Provision for (reversal of) loan losses148,799 74,319 112,934 336,052 
Ending balance$229,555 $130,742 $245,439 $605,736 
As of and For The Year Ended December 31, 2019
(in thousands)Commercial & IndustrialCommercial Real EstateConsumerTotal
Allowance for loan losses:
Beginning balance$133,123 $68,796 $48,636 $250,555 
Charge-offs(49,572)(5,540)(24,023)(79,135)
Recoveries7,827 8,618 5,078 21,523 
Provision for (reversal of) loan losses53,665 (4,444)38,499 87,720 
Transfer of unfunded commitment reserve739 — — 739 
Ending balance$145,782 $67,430 $68,190 $281,402 
The ALL of $427.6 million and the reserve for unfunded commitments of $41.9 million, which is recorded in other liabilities, comprise the total ACL of $469.5 million at December 31, 2021.The ACL decreased $184.0 million compared to the December 31, 2020 ACL of $653.5 million, which consisted of an ALL of $605.7 million and the reserve for unfunded commitments of $47.8 million. The ACL to loans coverage ratio of 1.19% at December 31, 2021 was 52 bps lower compared to December 31, 2020.
92

The reduction in the overall ACL is due to the notable improvement in the economic environment compared to December 31, 2020 as evidenced by the decrease in the unemployment rate from 6.7% at the end of 2020 to 3.9% at December 31, 2021. Likewise, our economic and credit outlook have progressed substantially compared to 2020. The factors reducing the ACL were partially offset by purchases of $1.62 billion of third-party lending loans as well as net organic loan growth in 2021, requiring additional reserves of $38.6 million.
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 and probability-weighted internally. The scenarios include a baseline forecast, an upside scenario reflecting an accelerated recovery, a downside scenario that reflects adverse economic conditions, and an additional adverse scenario that assumes consistent slow growth that is less optimistic than the baseline. At December 31, 2018, 2017,2021, economic scenario weights incorporated a 43% downside bias. The baseline outlook used in the December 31, 2021 estimate showed stable economic conditions with the unemployment rate at 3.7% by the end of 2022 compared to a baseline forecast from December 31, 2020 that still represented recessionary conditions.



93

TDRs
Information about Synovus' TDRs is presented in the following tables. Synovus began entering into loan modifications with borrowers in response to the COVID-19 pandemic, some of which have not been classified as TDRs, and 2016, impaired loans of $51.3 million, $49.0 million, and $53.7 million, respectively, were on non-accrual status.
Impaired Loans (including accruing TDRs)
  December 31, 2018 December 31, 2017
   Recorded Investment   Recorded Investment 
(in thousands) Unpaid Principal BalanceWithout an ALLWith an ALLRelated Allowance Unpaid Principal BalanceWithout an ALLWith an ALLRelated Allowance
Commercial, financial, and agricultural $65,150
$22,298
$34,222
$7,133
 $75,427
$8,220
$65,715
$7,406
Owner-occupied 49,588
—
48,902
3,074
 37,441
—
37,399
2,109
Total commercial and industrial 114,738
22,298
83,124
10,207
 112,868
8,220
103,114
9,515
Investment properties 13,916
—
13,916
1,523
 23,364
—
23,364
1,100
1-4 family properties 5,586
—
5,586
131
 15,056
—
15,056
504
Land and development 16,283
265
13,431
944
 20,216
56
18,420
2,636
Total commercial real estate 35,785
265
32,933
2,598
 58,636
56
56,840
4,240
Consumer mortgages 19,506
—
19,506
343
 18,668
—
18,668
569
Home equity lines 3,264
—
3,235
224
 8,039
2,746
5,096
114
Other consumer loans 5,565
—
5,565
177
 5,546
—
5,546
470
Total consumer 28,335
—
28,306
744
 32,253
2,746
29,310
1,153
Total impaired loans $178,858
$22,563
$144,363
$13,549
 $203,757
$11,022
$189,264
$14,908
  Years Ended December 31,
  2018 2017 2016
(in thousands) Average Recorded Investment
Interest Income Recognized(1)
 Average Recorded Investment
Interest Income Recognized(1)
 Average Recorded Investment
Interest Income Recognized(1)
Commercial, financial and agricultural $65,976
$2,316
 $72,154
$2,127
 $58,289
$1,876
Owner-occupied 42,341
1,851
 40,498
1,509
 60,694
2,133
Total commercial and industrial 108,317
4,167
 112,652
3,636
 118,983
4,009
Investment properties 18,564
767
 28,749
1,178
 38,373
1,485
1-4 family properties 9,813
782
 16,099
1,021
 40,723
919
Land and development 16,841
249
 24,637
404
 28,891
1,026
Total commercial real estate 45,218
1,798
 69,485
2,603
 107,987
3,430
Consumer mortgages 19,516
134
 18,319
376
 21,863
1,014
Home equity lines 3,491
820
 7,748
896
 10,713
451
Other consumer loans 5,327
297
 4,765
266
 5,062
303
Total consumer 28,334
1,251
 30,832
1,538
 37,638
1,768
Total impaired loans $181,869
$7,216
 $212,969
$7,777
 $264,608
$9,207
          
(1)
Of the interest income recognized during the years ended December 31, 2018, 2017, or 2016, cash-basis interest income was $1.8 million, $815 thousand, and $1.0 million, respectively.









therefore are not included in the discussion below.The following tables represent, by concession type, the post-modification balance for loans restructuredmodified or renewed during the years ended December 31, 2018, 2017,2021, 2020, and 20162019 that were reported as accruing or non-accruing TDRs.
TDRs by Concession Type
Year Ended December 31, 2021
(in thousands, except contract data)Number of ContractsBelow Market Interest Rate
Other Concessions(1)
Total
Commercial, financial, and agricultural152 $12,746 $8,096 $20,842 
Owner-occupied24 5,908 868 6,776 
Total commercial and industrial176 18,654 8,964 27,618 
Investment properties9 3,130 — 3,130 
1-4 family properties13 1,131 123 1,254 
Land and development8 1,948 60 2,008 
Total commercial real estate30 6,209 183 6,392 
Consumer mortgages18 2,512 1,006 3,518 
Home equity lines55 4,991 258 5,249 
Other consumer loans103 435 5,720 6,155 
Total consumer176 7,938 6,984 14,922 
Loans, net of deferred fees and costs382 $32,801 $16,131 $48,932 (2)
Year Ended December 31, 2020
(in thousands, except contract data)Number of ContractsBelow Market Interest Rate
Other Concessions(1)
Total
Commercial, financial, and agricultural152 $10,939 $11,912 $22,851 
Owner-occupied22 4,536 1,530 6,066 
Total commercial and industrial174 15,475 13,442 28,917 
Investment properties9 29,679 1,420 31,099 
1-4 family properties22 1,769 1,105 2,874 
Land and development4 606 — 606 
Total commercial real estate35 32,054 2,525 34,579 
Consumer mortgages23 1,866 2,789 4,655 
Home equity lines63 1,970 2,530 4,500 
Other consumer loans57 1,185 2,779 3,964 
Total consumer143 5,021 8,098 13,119 
Loans, net of deferred fees and costs352 $52,550 $24,065 $76,615 (3)
94

TDRs by Concession Type 
TDRs by Concession Type (continued)TDRs by Concession Type (continued)
Year Ended December 31, 2018Year Ended December 31, 2019
(in thousands, except contract data)Number of Contracts Below Market Interest Rate 
Other Concessions(1)
 Total (in thousands, except contract data)Number of ContractsBelow Market Interest Rate
Other Concessions(1)
Total
Commercial, financial, and agricultural46
 $3,807
 $3,957
 $7,764
 Commercial, financial, and agricultural127 $9,042 $9,873 $18,915 
Owner-occupied16
 7,589
 5,705
 13,294
 Owner-occupied22 9,017 861 9,878 
Total commercial and industrial62
 11,396
 9,662
 21,058
 Total commercial and industrial149 18,059 10,734 28,793 
Investment properties10
 8,070
 2,215
 10,285
 Investment properties8 1,548 — 1,548 
1-4 family properties25
 2,481
 2,014
 4,495
 1-4 family properties18 2,182 643 2,825 
Land and development5
 122
 1,856
 1,978
 Land and development8 1,187 30 1,217 
Total commercial real estate40
 10,673
 6,085
 16,758
 Total commercial real estate34 4,917 673 5,590 
Consumer mortgages19
 5,590
 93
 5,683
 Consumer mortgages18 1,587 1,361 2,948 
Home equity lines4
 172
 339
 511
 Home equity lines70 3,024 2,522 5,546 
Other consumer loans92
 1,834
 3,983
 5,817
 Other consumer loans109 1,712 5,270 6,982 
Total consumer115
 7,596
 4,415
 12,011
 Total consumer197 6,323 9,153 15,476 
Total loans217
 $29,665
 $20,162
 $49,827
(2) 
Loans, net of deferred fees and costsLoans, net of deferred fees and costs380 $29,299 $20,560 $49,859 (4)
        
(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 years ended December 31, 2021, 2020, and 2019.
 Year Ended December 31, 2017
(in thousands, except contract data)Number of Contracts Below Market Interest Rate 
Other Concessions(1)
 Total 
Commercial, financial, and agricultural56
 $9,434
 $12,145
 $21,579
 
Owner-occupied4
 35
 1,705
 1,740
 
Total commercial and industrial60
 9,469
 13,850
 23,319
 
Investment properties1
 —
 121
 121
 
1-4 family properties35
 2,786
 2,040
 4,826
 
Land and development6
 157
 1,614
 1,771
 
Total commercial real estate42
 2,943
 3,775
 6,718
 
Consumer mortgages11
 2,539
 1,190
 3,729
 
Other consumer loans38
 1,624
 1,333
 2,957
 
Total consumer49
 4,163
 2,523
 6,686
 
Total loans151
 $16,575
 $20,148
 $36,723
(3) 
         
(2)    No charge-offs were recorded during the year ended December 31, 2021 upon restructuring of these loans.

(3)No charge-offs were recorded during the year ended December 31, 2020 upon restructuring of these loans.

(4)    No charge-offs were recorded during the year ended December 31, 2019 upon restructuring of these loans.
TDRs by Concession Type (continued) 
 Year Ended December 31, 2016 
(in thousands, except contract data)Number of Contracts Below Market Interest Rate 
Other Concessions(1)
 Total 
Commercial, financial, and agricultural63
 $17,509
 $7,160
 $24,669
 
Owner-occupied9
 7,884
 550
 8,434
 
Total commercial and industrial72
 25,393
 7,710
 33,103
 
Investment properties4
 1,825
 3,518
 5,343
 
1-4 family properties39
 5,499
 1,488
 6,987
 
Land and development14
 —
 4,099
 4,099
 
Total commercial real estate57
 7,324
 9,105
 16,429
 
Consumer mortgages7
 413
 51
 464
 
Home equity lines5
 225
 123
 348
 
Credit cards—
 —
 —
 —
 
Other consumer loans28
 394
 2,256
 2,650
 
Total consumer40
 1,032
 2,430
 3,462
 
Total loans169
 $33,749
 $19,245
 $52,994
(4) 
         
(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 years ended December 31, 2018, 2017, or 2016.
(2)
Net charge-offs of $403 thousand were recorded during 2018 upon restructuring of these loans.
(3)
No charge-offs were recorded during 2017 upon restructuring of these loans.
(4)
No charge-offs were recorded during 2016 upon restructuring of these loans.
For the years ended December 31, 2018, 20172021, 2020 and 2016,2019, there were eight8 defaults with a recorded investment of $10.5 million,eight$978 thousand, 7 defaults with a recorded investment of $4.0$21.7 million, and two4 defaults with a recorded investment of $181$326 thousand, respectively, 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).
If at the time that a loan was designated as a TDR the loan was not already impaired, the measurement As of impairment resulting from the TDR designation changes from a general pool-level reserve to a specific loan measurement of impairment in accordance with ASC 310-10-35. Generally, the change in the allowance for loan losses resulting from such a TDR is not significant. At December 31, 2018, the allowance for loan losses allocated2021 and 2020, there were no commitments to accruing TDRs totaling $115.6 million was $6.1 million comparedlend a material amount of additional funds to accruing TDRs of $151.3 million with an allocated allowance for loan losses of $8.7 millionany clients whose loans were classified as TDRs.
95

Note 4 - Premises, Equipment and Software
Premises, equipment and software at December 31, 2017. Non-accrual non-homogeneous loans (commercial-type impaired loan relationships greater than $1 million) that are designated as TDRs are individually measured for the amount of impairment, if any, both before2021 and after the TDR designation.


Note 5 - Premises and Equipment
Premises and equipment at December 31, 2018 and 20172020 consist of the following:
(in thousands)20212020
Land$104,768 $113,828 
Buildings and improvements361,593 407,735 
Leasehold improvements55,098 53,174 
Furniture, equipment and software441,091 481,560 
Construction in progress18,918 13,052 
Total premises, equipment and software981,468 1,069,349 
Less: Accumulated depreciation and amortization(574,227)(605,390)
Net premises, equipment and software$407,241 $463,959 
(in thousands)  2018 2017
Land  $96,310
 $96,759
Buildings and improvements  392,952
 388,254
Leasehold improvements  39,832
 38,970
Furniture and equipment  435,223
 413,876
Construction in progress  16,608
 15,956
Total premises and equipment  980,925
 953,815
Less: Accumulated depreciation and amortization  (546,618) (527,002)
Premises and equipment, net  $434,307
 $426,813
      
Net premises, equipment, and equipmentsoftware included $1.45$2.2 million and $1.55$3.4 million related to net capitalfinance leases at December 31, 20182021 and 2017, respectively. Aggregate rent expense (principally for offices) net of sublease income, totaled $25.4 million, $22.0 million, and $21.4 million for the years ended December 31, 2018, 2017, and 2016,2020, respectively. Depreciation and amortization expense for the years ended December 31, 2018, 2017,2021, 2020, and 20162019 totaled $42.6$50.5 million, $42.2$51.6 million, and $37.1$49.2 million, respectively.
During the years ended December 31, 20182021 and 2017,2020, Synovus transferred premises and equipment with a net book value of $911 thousand$33.4 million, including $17.6 million of real estate related to our headquarters in Columbus, and $3.3$7.0 million, respectively, to other properties held for sale, a component of other assets.
Lease Commitments
Synovus and its subsidiaries have entered into long-term operating leases for various facilities and equipment. Management expects that as these leases expire they will be renewed or replaced by similar leases based on need.
At December 31, 2018, minimum rental commitments under all such non-cancelable leases for the next five years and thereafter are presented below.
(in thousands) 
2019$27,539
202027,474
202127,498
202228,097
202325,096
Thereafter83,316
Total$219,020
  
Note 65 - Goodwill and Other Intangible Assets
At bothGoodwill allocated to each reporting unit at December 31, 20182021 and 2017, the net carrying value of goodwill was $57.3 million, consisting of goodwill associated with two reporting units. Aggregate other intangible assets amortization expense for the years ended December 31, 2018, 2017, and 2016 was $1.2 million, $1.1 million, and $521 thousand, respectively. As2020 is presented as follows:
(in thousands)Community Banking Reporting UnitWholesale Banking Reporting UnitConsumer Mortgage Reporting UnitWealth Management Reporting UnitTotal
Balance as of December 31, 2019$256,323 $171,636 $44,877 $24,431 $497,267 
Goodwill impairment— — (44,877)— (44,877)
Balance as of December 31, 2020$256,323 $171,636 $— $24,431 $452,390 
Change in goodwill— — — — — 
Balance as of December 31, 2021$256,323 $171,636 $— $24,431 $452,390 
Goodwill is evaluated for impairment on an annual basis or whenever an event occurs or circumstances change to indicate that it is more likely than not that an impairment loss has been incurred (i.e., a triggering event). During the fourth quarter of December 31, 2018, estimated amortization expense associated with other intangible asset balances over each of the next five years is $1.2 million.
As of June 30, 2018,2021, Synovus completed its annual goodwill impairment evaluation applying ASC 350-20-35-3A Goodwill Subsequent Measurement - Qualitative Assessment Approach and concluded that goodwill was not impaired.







The following table shows During 2020, Synovus recorded a $44.9 million goodwill impairment charge representing all of the carrying amount of goodwill byallocated to the Consumer Mortgage reporting unit forresulting from a combination of factors, including the year ended December 31, 2018:
(in thousands) Synovus Bank Reporting Unit Trust Services Reporting Unit Total
Balance as of December 31, 2017      
Goodwill $32,884
 $24,431
 $57,315
Accumulated impairment losses —
 —
 —
Balance as of December 31, 2018 $32,884
 $24,431
 $57,315
       
extended duration of lower market valuations, high volumes in refinance activity that reduced mortgage yields, and the clarity around the FOMC's longer term policy actions designed to keep interest rates low.
The following table shows the gross carrying amount and accumulated amortization of other intangible assets as of December 31, 20182021 and 2017. Other intangible assets2020, which primarily consist of customer relationship intangibles.core deposit intangible assets. The CDI is being amortized over its estimated useful life of approximately ten years utilizing an accelerated method. Aggregate other intangible assets amortization expense for the years ended December 31, 2021, 2020, and 2019 was $9.5 million, $10.6 million, and $11.6 million, respectively, and is included in amortization of intangibles expense within non-interest expense.
96

(in thousands) 2018 2017
Other intangible assets, gross carrying amount $13,140
 $13,140
Other intangible assets, adjustment (212) —
Other intangible assets, accumulated amortization (3,053) (1,886)
Other intangible assets, net carrying amount $9,875
 $11,254
     
(in thousands)Gross Carrying AmountAccumulated AmortizationNet Carrying Value
December 31, 2021
CDI$57,400 $(28,178)$29,222 
Other12,500 (6,126)6,374 
Total other intangible assets$69,900 $(34,304)$35,596 
December 31, 2020
CDI57,400 (19,829)$37,571 
Other12,500 (4,959)7,541 
Total other intangible assets$69,900 $(24,788)$45,112 
The estimated amortization expense of other intangible assets for the next five years is as follows:
(in thousands)Amortization Expense
2022$8,472 
20237,429 
20246,366 
20255,266 
20264,195 
97

Note 76 - Other Assets
Significant balances included in other assets at December 31, 20182021 and 20172020 are presented below.
(in thousands)20212020
Investments in tax credits, CRA partnerships, and other investments$426,137 $262,855 
ROU assets411,472 380,380 
Derivative asset positions191,708 401,295 
Deferred tax asset, net169,051 130,848 
Federal Reserve Bank and FHLB Stock159,941 157,520 
Accrued interest receivable145,659 177,865 
Accounts receivable81,325 88,286 
Mutual funds and mutual funds held in rabbi trusts43,657 37,650 
Prepaid expense42,874 45,088 
MPS receivable(1)
15,320 15,575 
Other investments12,185 1,021 
Other real estate11,818 1,819 
Trading account assets, at fair value8,391 10,880 
Miscellaneous other assets70,660 49,517 
Total other assets$1,790,198 $1,760,599 
(1)    See "Part II - Item 8. Financial Statements and Supplementary Data - Note 14 - Commitments and Contingencies" in this Report for more information on this receivable which is classified as a NPA.
(in thousands)2018 2017
Federal Reserve Bank and FHLB Stock$185,225
 $159,443
Accrued interest receivable89,425
 80,036
Investments in low income housing tax credit partnerships83,736
 60,068
Accounts receivable80,271
 43,878
Prepaid expenses38,035
 33,298
Derivative asset positions19,332
 11,722
Taxes receivable13,150
 46,330
Private equity investments11,028
 15,771
Other real estate6,220
 3,758
Trading account assets, at fair value3,130
 3,820
Miscellaneous other assets74,532
 55,363
Total other assets$604,084
 $513,487
    
Note 87 - Deposits
A summary of interest-bearing deposits at December 31, 20182021 and 20172020 is presented below.
(in thousands)
20212020
Interest-bearing demand deposits(1)
$9,321,611 $8,838,710 
Money market accounts(1)
16,364,338 15,277,829 
Savings accounts1,420,647 1,168,672 
Time deposits(1)
3,093,027 4,358,100 
Brokered deposits2,835,000 3,570,406 
Total interest-bearing deposits$33,034,623 $33,213,717 
(in thousands)
 2018 2017
Interest-bearing demand deposits $4,756,239
 $5,157,175
Money market accounts, excluding brokered deposits 8,143,975
 7,435,941
Savings accounts 817,385
 798,935
Time deposits, excluding brokered deposits 3,803,726
 3,108,385
Brokered deposits 1,548,030
 1,961,125
Total interest-bearing deposits $19,069,355
 $18,461,561
     
(1)    Excluding brokered deposits
The aggregate amount of time deposits of $250,000$250,000 or more was $1.10$1.33 billion at December 31, 20182021 and $921.8 million$1.80 billion at December 31, 2017.2020.


The following table presents contractual maturities of all time deposits, at December 31, 2018.
(in thousands) 
Maturing within one year$3,323,071
Between 1 - 2 years973,732
2 - 3 years426,823
3 - 4 years57,347
4 - 5 years217,622
Thereafter4,801
 $5,003,396
  
Note 9 - Long-term Debt and Short-term Borrowings
Short-term Borrowings
Short-term borrowingsincluding brokered time deposits, at December 31, 2018 and 2017 consisted of the following:2021.
(in thousands)
Maturing within one year$3,025,020
Between 1 - 2 years789,274
2 - 3 years171,042
3 - 4 years79,903
4 - 5 years41,967
Thereafter10,269
Total$4,117,475
98
 2018 2017
(dollars in thousands)   
Federal funds purchased$628
 $—
Securities sold under repurchase agreements237,064
 161,190
FHLB advances with original maturities of one year or less650,000
 100,000
  Total short-term borrowings$887,692
 $261,190
    
The following table sets forth additional information on Synovus' short-term borrowings for the years indicated.

(dollars in thousands) 2018 2017 2016
Total balance at December 31, $887,692
 $261,190
 $159,699
Weighted average interest rate at December 31, 1.93% 0.65% 0.08%
Maximum month-end balance during the year $887,692
 $390,044
 $414,245
Average amount outstanding during the year 371,933
 256,011
 278,273
Weighted average interest rate during the year 0.96% 0.37% 0.18%
       
























Note 8 - Long-term Debt
Long-term debt at December 31, 20182021 and 20172020 is presented in the following table:
(dollars in thousands)20212020
Parent Company:
3.125% senior notes, due November 1, 2022, $300.0 million par value with semi-annual interest payments and principal to be paid at maturity$299,479 $298,853 
5.90% Fixed-to-Fixed Rate Subordinated Notes issued February 7, 2019, due February 7, 2029, subject to redemption prior to February 7, 2029: $300.0 million par value with semi-annual interest payments at 5.90% for the first five years and semi-annual payments thereafter at a fixed rate of 3.379% above the 5-Year Mid-Swap Rate as of the reset date297,855 297,553 
LIBOR + 1.80% junior subordinated debentures, due June 15, 2035, $10.0 million par value with quarterly interest payments and principal to be paid at maturity (rate of 2.00% at December 31, 2021 and 2.02% at December 31, 2020)10,000 10,000 
Total long-term debt — Parent Company$607,334 $606,406 
Synovus Bank:
2.289% Fixed-to-Floating Rate Senior Bank Notes issued February 12, 2020, due February 10, 2023, subject to redemption on February 10, 2022: $400.0 million par value with semi-annual interest payments at 2.289% for the first two years and quarterly payments thereafter at an adjustable rate equal to the then-current SOFR + 94.5 bps per annum(1)
$399,269 $398,594 
4.00% Fixed-to-Fixed Rate Subordinated Bank Notes issued October 29, 2020, due October 29, 2030, $200.0 million par value with semi-annual interest payments at 4.00% for the first five years and semi-annual payments thereafter at a fixed rate of 3.625% above the 5-Year U.S. Treasury Rate197,626 197,349 
FRB PPP Lending Facility— 145 
Total long-term debt — Synovus Bank596,895 596,088 
Total long-term debt$1,204,229 $1,202,494 
(dollars in thousands)2018 2017
Parent Company:   
3.125% senior notes, due November 1, 2022, $300 million par value with semi-annual interest payments and principal to be paid at maturity$297,603
 $296,971
5.75% fixed to adjustable rate subordinated notes issued December 7, 2015, due December 15, 2025, $250 million par value with semi-annual interest payments at 5.75% for the first five years and quarterly payments thereafter at an adjustable rate equal to the then-current three month LIBOR rate + 418.2 basis points and principal to be paid at maturity248,101
 247,618
LIBOR + 1.80% debentures, due April 19, 2035, $10 million par value with quarterly interest payments and principal to be paid at maturity (rate of 4.59% at December 31, 2018 and 3.39% at December 31, 2017)10,000
 10,000
Total long-term debt — Parent Company555,704
 554,589
Synovus Bank:   
FHLB advances with interest and principal payments due at various maturity dates through 2022 and interest rates ranging from 2.49% to 2.56% at December 31, 2018 (weighted average interest rate of 2.53% and 1.43% at December 31, 2018 and 2017, respectively)1,100,000
 1,050,000
Capital lease with interest and principal payments due at various dates through 2031 (rate of 1.59% at both December 31, 2018 and 2017)1,453
 1,549
Total long-term debt — Synovus Bank1,101,453
 1,051,549
Total long-term debt$1,657,157
 $1,606,138
    
On November 1, 2017,(1)    Subsequent to December 31, 2021, Synovus issued $300.0Bank called these Notes and settled them on February 10, 2022 with a net payment of $405.3 million aggregatethat included principal, amount of 3.125% senior notes maturing in 2022 in a public offering with aggregate proceeds of $296.9 million, net of discountinterest, and written off debt issuance costs. On November 9, 2017, Synovus redeemed all of the $300.0 million aggregate principal amount of its 7.875% senior notes due 2019 at a "make whole" premium. 2017 results included a loss of $23.2 million related to early extinguishment of these notes. Additionally, during 2017, Synovus paid off the remaining balance of $278.6 million of its subordinated notes at their maturity date of June 15, 2017.See "Part II - Item 8. Financial Statements and Supplementary Data - Note 19 - Subsequent Event" in this Report for more information.
The provisions of the indentures governing Synovus’ long-term debt contain certain restrictions within specified limits on mergers, sales of all or substantially all of Synovus' assets and limitations on sales and issuances of voting stock of subsidiaries and Synovus’ ability to pay dividends on its capital stock if there is an event of default under the applicable indenture. As of December 31, 20182021 and 2017,2020, Synovus and its subsidiaries were in compliance with the covenants in these agreements.
The FHLB advances are secured by certain loans receivable with a recorded balance of $3.76 billion at December 31, 2018 and $3.40 billion at December 31, 2017.
Contractual annual principal payments on long-term debt for the next five years and thereafter are shown in the following table. These maturities are based upon the par value of the long-term debt.
 
(in thousands)
Parent
Company		Synovus BankTotal
2022$300,000 

$— $300,000 
2023— 400,000 (1)400,000 
2024— — — 
2025— — — 
2026— — — 
Thereafter310,000 200,000 510,000 
Total$610,000 $600,000 $1,210,000 
(1)    Subsequent to December 31, 2021, Synovus Bank called these Notes and settled them on February 10, 2022 with a net payment of $405.3 million that included principal, interest, and written off debt issuance costs. See "Part II - Item 8. Financial Statements and Supplementary Data - Note 19 - Subsequent Event" in this Report for more information.
99
 
(in thousands)
 Parent
Company		 Synovus Bank Total
2019 $—

$90
 $90
2020 —
 400,092
 400,092
2021 —
 450,096
 450,096
2022 300,000
 250,107
 550,107
2023 —
 109
 109
Thereafter 260,000
 959
 260,959
Total $560,000
 $1,101,453
 $1,661,453
       



Note 109 - Shareholders' Equity and Other Comprehensive Income
The following table shows the changes in shares of preferred and common stock issued and common stock held as treasury shares for the three years ended December 31, 2018.2021, 2020, and 2019.
 
 
(shares in thousands)
Series D Preferred Stock IssuedSeries E Preferred Stock IssuedTotal Preferred Stock IssuedCommon Stock IssuedTreasury Stock HeldCommon Stock Outstanding
Balance at December 31, 20188,000 — 8,000 143,300 27,434 115,866 
FCB acquisition:
Issuance of common stock for acquisition— — — 22,043 — 22,043 
Common stock reissued— — — — (27,434)27,434 
Warrants exercised and common stock reissued— — — — (260)260 
Issuance of preferred stock— 14,000 14,000 — — — 
Issuance of common stock for earnout payment— — — 344 — 344 
Restricted share unit activity— — — 302��— 302 
Stock options exercised— — — 812 — 812 
Repurchase of common stock— — — — 19,903 (19,903)
Balance at December 31, 20198,000 14,000 22,000 166,801 19,643 147,158 
Issuance of common stock for earnout payment— — — 379 — 379 
Restricted share unit activity— — — 389 — 389 
Stock options exercised— — — 564 — 564 
Repurchase of common stock— — — — 450 (450)
Balance at December 31, 20208,000 14,000 22,000 168,133 20,093 148,040 
Warrants exercised and common stock reissued— — — — (3)3 
Common stock reissued for earnout payment— — — — (125)125 
Restricted share unit activity— — — 355 — 355 
Stock options exercised— — — 896 — 896 
Repurchase of common stock— — — — 4,409 (4,409)
Balance at December 31, 20218,000 14,000 22,000 169,384 24,374 145,010 
 
 
(shares in thousands)
Series C Preferred Stock Issued (Redeemed) Series D Preferred Stock Issued Common Stock Issued Treasury Stock Held Common Stock Outstanding
Balance at December 31, 20155,200
 —
 140,592
 11,045
 129,547
Issuance of common stock for acquisition—
 —
 821
 —
 821
Restricted share unit activity—
 —
 316
 —
 316
Stock options exercised—
 —
 297
 —
 297
Repurchase of common stock—
 —
 —
 8,715
 (8,715)
Balance at December 31, 20165,200
 —
 142,026
 19,760
 122,266
Issuance of common stock for earnout payment—
 —
 118
 —
 118
Restricted share unit activity—
 —
 336
 —
 336
Stock options exercised—
 —
 198
 —
 198
Repurchase of common stock—
 —
 —
 4,021
 (4,021)
Balance at December 31, 20175,200
 —
 142,678
 23,781
 118,897
Issuance of preferred stock—
 8,000
 —
 —
 —
Redemption of preferred stock(5,200) —
 —
 —
 —
Issuance of common stock for earnout payment—
 —
 199
 —
 199
Restricted share unit activity—
 —
 297
 —
 297
Stock options exercised—
 —
 126
 —
 126
Repurchase of common stock—
 —
 —
 3,653
 (3,653)
Balance at December 31, 2018—
 8,000
 143,300
 27,434
 115,866
          
Issuance of Series D Preferred Stock
On June 21, 2018, Synovus completedThe following table presents a $200 million public offeringsummary of Series D Preferred Stock $25.00 per share liquidation preference. The offering generated net proceedsas of $195.1 million. December 31, 2021, 2020, and 2019.
Issuance DatePublic Offering AmountNet ProceedsEarliest Redemption Date
Dividend Rate(1)
Liquidation Preference
Series DJune 21, 2018$200.0  million$195.1  millionJune 21, 20236.300 %(2)$25 per share
Series EJuly 1, 2019$350.0  million$342.0  millionJuly 1, 20245.875 %(3)$25 per share
(1)     Dividends on the sharesall series of Preferred Stock are non-cumulative and, if declared, will accrue and be payable in arrears, quarterly.
(2)     Dividends, if declared, will be paid quarterly at a rate per annum equal to 6.300% for each dividend period from the original issue date to, but excluding, June 21, 2023. From and including June 21, 2023, the dividend rate will change to a floating rate equal to the three-month LIBOR plus a spread of 3.352% per annum. The Series D
(3)     Dividends, if declared, will be paid quarterly at a rate per annum equal to 5.875% for each dividend period from the original issue date to, but excluding, July 1, 2024. From and including July 1, 2024, the dividend rate will change and reset every five years on July 1 at a rate equal to the five-year U.S. Treasury Rate plus 4.127% per annum.
All series of Preferred Stock isare redeemable at Synovus' option in whole or in part, from time to time, on the earliest redemption date or any dividend paymentsubsequent reset date, on or after June 21, 2023, or in whole but not in part, at any time within 90 days following a regulatory capital treatment event, in each case, at a redemption price equal to $25.00$25 per share, plus any declared and unpaid dividends, without accumulation of any undeclared dividends. The Series DAll series of Preferred Stock hashave no preemptive or conversion rights. Except in limited circumstances, the Series Dall series of Preferred Stock doesdo not have any voting rights.
Redemption of Series C Preferred
100

Common Stock
On August 1, 2018, Synovus redeemed all 5,200,000 outstanding shares of Series C Preferred Stock for a cash price of $25.00 per share, without interest, for an aggregate redemption price of $130.0 million and paid a dividend of $2.6 million on the Series C Preferred Stock. The redemption of the Series C Preferred Stock was funded primarily with proceeds from Synovus' public offering of $200 million of Series D Preferred Stock completed in June 2018. Concurrent with the redemption, Synovus recognized a one-time, non-cash redemption charge of $4.0 million.
Repurchases of Common Stock
During 2018,2021, Synovus repurchased $175.0$199.9 million, or 3.74.4 million shares, of common stock through open market transactions under the $150 million and $25 million share repurchase programs authorized during the fourth quarter of 2017 and fourth quarter of 2018, respectively, for execution during 2018.program announced on January 26, 2021.
During 2017,2020, Synovus repurchased $175.0$16.2 million, or 4.0450 thousand shares, of common stock through open market transactions under the share repurchase program announced on January 24, 2020.
During 2019, Synovus repurchased $725.0 million, or 19.9 million shares, of common stock through open market transactions under the $200$725.0 million share repurchase program, with $400.0 million authorized during the fourth quarter of 20162018 for execution during 2017.
During 2016, Synovus completed its $300in 2019 and $325.0 million share repurchase program with repurchases of $262.9 million, or 8.7 million shares, of common stock. This program was authorized during the third quarter of 2015 and was executed over a 15 month period through a combination of open market transactions and an ASR. Share repurchases of common stock during 2016 executed through


open market transactions totaled $212.9 million, or 7.3 million shares, and $50.0 million, or 1.4 million shares, were executed through an ASR.
Warrant
At December 31, 2017 and 2016, Synovus had warrants outstanding issued to Treasury to purchase up to 2.2 million shares of Synovus common stock at a per share exercise price of $65.52. These warrants expired unexercised on December 19, 2018 and therefore were not outstanding as of December 31, 2018. The warrants were issued by Synovus to Treasury in 2008 in connection with the Capital Purchase Program, promulgated under the Emergency Economic Stabilization Act of 2008.2019.
Accumulated Other Comprehensive Income (Loss)
The following table illustrates activity within the balances in accumulated other comprehensive income (loss)AOCI by component, and is shown for the years ended December 31, 2018, 2017,2021, 2020, and 2016.2019.
Changes in Accumulated Other Comprehensive Income (Loss) by Component (Net of Income Taxes)
(in thousands)
Net Unrealized Gains (Losses) on Investment Securities Available for Sale(1)
Net Unrealized Gains (Losses) on Cash Flow Hedges(1)
Post-Retirement Unfunded Health BenefitTotal
Balance at December 31, 2018$(83,179)$(12,137)$896 $(94,420)
Other comprehensive income (loss) before reclassifications161,170 (6,350)(378)154,442 
Amounts reclassified from accumulated other comprehensive income (loss)5,675 — (56)5,619 
Net current period other comprehensive income (loss)166,845 (6,350)(434)160,061 
Balance at December 31, 2019$83,666 $(18,487)$462 $65,641 
Other comprehensive income (loss) before reclassifications80,491 73,502 — 153,993 
Amounts reclassified from accumulated other comprehensive income (loss)(58,488)(2,049)(462)(60,999)
Net current period other comprehensive income (loss)22,003 71,453 (462)92,994 
Balance at December 31, 2020$105,669 $52,966 $— $158,635 
Other comprehensive income (loss) before reclassifications(174,246)(57,705)— (231,951)
Amounts reclassified from accumulated other comprehensive income (loss)597 (9,602)— (9,005)
Net current period other comprehensive income (loss)(173,649)(67,307)— (240,956)
Balance at December 31, 2021$(67,980)$(14,341)$— $(82,321)
Changes in Accumulated Other Comprehensive Income (Loss) by Component (Net of Income Taxes)
(in thousands)
Net Unrealized
 Gains (Losses) on Cash Flow Hedges
 
Net Unrealized
Gains (Losses) on Investment Securities Available for Sale
  Post-Retirement Unfunded Health Benefit Total
Balance at December 31, 2015$(12,504) $(18,222) $907
 $(29,819)
Other comprehensive loss before reclassifications—
 (22,405) 63
 (22,342)
Amounts reclassified from accumulated other comprehensive income (loss)287
 (3,697) (88) (3,498)
Net current period other comprehensive income (loss)287
 (26,102) (25) (25,840)
Balance at December 31, 2016$(12,217) $(44,324) $882
 $(55,659)
Other comprehensive income before reclassifications—
 676
 38
 714
Amounts reclassified from accumulated other comprehensive income (loss)80
 178
 (67) 191
Net current period other comprehensive income (loss)80
 854
 (29) 905
Balance at December 31, 2017$(12,137) $(43,470) $853
 $(54,754)
Other comprehensive loss before reclassifications—
 (33,023) (34) (33,057)
Amounts reclassified from accumulated other comprehensive income (loss)—
 960
 (98) 862
Net current period other comprehensive loss—
 (32,063) (132) (32,195)
Reclassification from adoption of ASU 2018-02—
 (7,763) 175
 (7,588)
Cumulative-effect adjustment from adoption of ASU 2016-01—
 117
 —
 117
Balance at December 31, 2018$(12,137) $(83,179) $896
 $(94,420)
        
In accordance with ASC 740-20-45-11(b), a deferred tax asset valuation allowance associated with unrealized gains and losses not recognized in income is charged directly to other comprehensive income (loss). During the years 2010 and 2011, Synovus recorded a deferred tax asset valuation allowance associated with net unrealized losses not recognized in income directly to other comprehensive income (loss) by applying the portfolio approach for allocation of the valuation allowance. Synovus has consistently applied the portfolio approach which treats derivative instruments and available for sale securities as a single portfolio. As of December 31, 2018,(1)    For all periods presented, the ending balance in net unrealized gains (losses) on cash flow hedges and net unrealized gains (losses) on investment securities available for sale and cash flow hedges includes unrealized losses of $12.1$13.3 million and $13.3$12.1 million, respectively, related to the residual tax effects remaining in OCI due to the previously established deferred tax asset valuation allowance. Underallowances 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.
Note 1110 - Regulatory Capital
Synovus and Synovus Bank are each subject to regulatory capital requirements administered by the federal and state banking agencies.agencies under Basel III. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, Synovus and Synovus Bank must meet specificSpecific capital levels that involve quantitative measures of both on- and off-balance sheet items as calculated under regulatory capital


guidelines. guidelines must be met. Capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.
The Basel III capital rules became effective January 1, 2015, for Synovus and Synovus Bank, subject to a transition period for several aspects, including the capital conservation buffer. When fully phased-in on January 1, 2019, the Basel III Additionally, regulatory capital rules include a capital conservation buffer of 2.5% that is added on top of each of the minimum risk-based capital ratios (thein order to avoid restrictions on capital distributions and discretionary bonuses. Management currently believes, based on internal capital analyses and earnings projections, that Synovus' and Synovus Bank’s capital positions are each adequate to meet regulatory minimum capital requirements inclusive of the capital conservation buffer in effect in 2018 is 1.9%). As a financial holding company, Synovus and its subsidiary bank, buffer.
101

Synovus Bank areis also required to maintain certain capital levels, required for a well-capitalized institution as defined by federal banking regulations. Under the capital rules, Synovus and Synovus Bank are well-capitalized if each has a CET1 ratio of 6.5% or greater, a Tier 1 risk-based capital ratio of 8% or greater, a total risk-based capital ratio of 10% or greater, a leverage ratio of 5% or greater, and are not be subject to any written agreement, order, capital directive, or prompt corrective action directive from a federal and/or state banking regulatory agencyrequiring it to meet and maintain a specific capital level for any capital measure.measure, in order to be considered a well-capitalized institution as defined by federal prompt corrective action banking regulations.
Management currently believes, based on internal capital analyses and earnings projections, that Synovus' capital position is adequate to meet current and future regulatory minimum capital requirements inclusive of the capital conservation buffer.
The following table summarizes regulatory capital information at December 31, 20182021 and 20172020 for Synovus and Synovus Bank.
Actual Capital
Minimum Requirement For Capital Adequacy(1)
To Be Well-Capitalized Under Prompt Corrective Action Provisions(2)
(dollars in thousands)202120202021202020212020
Synovus Financial Corp.
CET1 capital$4,388,618 $4,034,865 $2,079,435 $1,879,551 N/AN/A
Tier 1 risk-based capital4,925,763 4,572,010 2,772,581 2,506,068 N/AN/A
Total risk-based capital5,827,196 5,604,230 3,696,774 3,341,425 N/AN/A
CET1 capital ratio9.50 %9.66 %4.50 %4.50 %N/AN/A
Tier 1 risk-based capital ratio10.66 10.95 6.00 6.00 N/AN/A
Total risk-based capital ratio12.61 13.42 8.00 8.00 N/AN/A
Leverage ratio8.72 8.50 4.00 4.00 N/AN/A
Synovus Bank
CET1 capital$4,998,698 $4,641,711 $2,076,515 $1,880,757 $2,999,410 $2,716,650 
Tier 1 risk-based capital4,998,698 4,641,711 2,768,686 2,507,677 3,691,581 3,343,569 
Total risk-based capital5,587,757 5,361,611 3,691,581 3,343,569 4,614,477 4,176,461 
CET1 capital ratio10.83 %11.11 %4.50 %4.50 %6.50 %6.50 %
Tier 1 risk-based capital ratio10.83 11.11 6.00 6.00 8.00 8.00 
Total risk-based capital ratio12.11 12.83 8.00 8.00 10.00 10.00 
Leverage ratio8.86 8.73 4.00 4.00 5.00 5.00 
(1)    The additional capital conservation buffer in effect is 2.5%.
(2)    The prompt corrective action provisions are applicable at the bank level only.
 Actual Capital 
Minimum Requirement For Capital Adequacy(1)
 
To Be Well-Capitalized Under Prompt Corrective Action Provisions(2)
(dollars in thousands)2018 2017 2018 2017 2018 2017
Synovus Financial Corp.           
CET1 capital$2,897,997
 $2,763,168
 $1,310,460
 $1,250,488
 N/A
 N/A
Tier 1 risk-based capital3,090,416
 2,872,001
 1,747,280
 1,660,074
 N/A
 N/A
Total risk-based capital3,601,376
 3,383,081
 2,329,706
 2,213,432
 N/A
 N/A
CET1 capital ratio9.95% 9.99% 4.50% 4.50% N/A
 N/A
Tier 1 risk-based capital ratio10.61
 10.38
 6.00
 6.00
 N/A
 N/A
Total risk-based capital ratio12.37
 12.23
 8.00
 8.00
 N/A
 N/A
Leverage ratio9.60
 9.19
 4.00
 4.00
 N/A
 N/A
Synovus Bank           
CET1 capital$3,382,497
 $3,155,163
 $1,309,527
 $1,247,462
 $1,891,538
 $1,795,004
Tier 1 risk-based capital3,382,497
 3,155,163
 1,746,035
 1,656,927
 2,328,047
 2,209,236
Total risk-based capital3,633,457
 3,406,243
 2,328,047
 2,209,236
 2,910,059
 2,761,545
CET1 capital ratio11.62% 11.43% 4.50% 4.50% 6.50% 6.50%
Tier 1 risk-based capital ratio11.62
 11.43
 6.00
 6.00
 8.00
 8.00
Total risk-based capital ratio12.49
 12.33
 8.00
 8.00
 10.00
 10.00
Leverage ratio10.51
 10.12
 4.00
 4.00
 5.00
 5.00
            
(1)
The additional capital conservation buffer in effect in 2018 and 2017 was 1.9%, and 1.3%, respectively.
(2)
The prompt corrective action provisions are applicable at the bank level only.


Note 1211 - 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 years ended December 31, 2018, 2017,2021, 2020, and 2016.2019. 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.
Years Ended December 31,Years Ended December 31,
(in thousands, except per share data)2018 2017 2016(in thousands, except per share data)202120202019
Net income$428,476
 $275,474
 $246,784
Net income$760,467 $373,695 $563,780 
Preferred stock dividends and redemption charge17,998
 10,238
 10,238
Less: Preferred stock dividendsLess: Preferred stock dividends33,163 33,163 22,881 
Net income available to common shareholders$410,478
 $265,236
 $236,546
Net income available to common shareholders$727,304 $340,532 $540,899 
Weighted average common shares outstanding117,644
 121,162
 124,389
Weighted average common shares outstanding147,041 147,415 154,331 
Potentially dilutive shares from outstanding equity-based awards and Earnout Payments734
 850
 689
Effect of dilutive outstanding equity-based awards, warrants, and earnout paymentsEffect of dilutive outstanding equity-based awards, warrants, and earnout payments1,454 795 1,727 
Weighted average diluted common shares118,378
 122,012
 125,078
Weighted average diluted common shares148,495 148,210 156,058 
Net income per common share, basic$3.49
 $2.19
 $1.90
Net income per common share, basic$4.95 $2.31 $3.50 
Net income per common share, diluted$3.47
 $2.17
 $1.89
Net income per common share, diluted$4.90 $2.30 $3.47 
     
For the years ended December 31, 2018, 2017,2021, 2020, and 2016,2019, there were 1.7 million, 2.2 million,21 thousand, 602 thousand, and 2.2 million40 thousand, respectively, potentially dilutive shares respectively, related to Warrant and stock options to purchase shares of common stock that were outstanding during 2018, 2017, and 2016, respectively, but were not included in the computation of diluted net income per common share because the effect would have been anti-dilutive. The outstanding warrants, issued to Treasury by Synovus to purchase up to 2.2 million shares of Synovus common stock at a per share exercise price of $65.52, expired on December 19, 2018.


102

Note 1312 - Fair Value Accounting
Fair value accounting guidance defines fair value as the exchange price that would be received to sell an asset or paid to transfer a liability (an "exit price") in the principal or most advantageous market available to the entity in an orderly transaction between market participants, on the measurement date. See "Note"Part II - Item 8. Financial Statements and Supplementary Data - Note 1 - Summary of Significant Accounting Policies" of this Report for a description of how fair value measurements are determined.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following table presents all financial instruments measured at fair value on a recurring basis as of December 31, 20182021 and 2017.2020.
December 31, 2021December 31, 2020
(in thousands)Level 1Level 2Level 3Total Assets and Liabilities at Fair ValueLevel 1Level 2Level 3Total Assets and Liabilities at Fair Value
Assets
Trading securities:
Mortgage-backed securities issued by U.S. Government agencies$— $197 $— $197 $— $10,185 $— $10,185 
Collateralized mortgage obligations issued by U.S. Government sponsored enterprises— 671 — 671 — 158 — 158 
Other mortgage-backed securities— — — — — 178 — 178 
State and municipal securities— 560 — 560 — 176 — 176 
Asset-backed securities— 6,963 — 6,963 — 183 — 183 
Total trading securities$— $8,391 $— $8,391 $— $10,880 $— $10,880 
Investment securities available for sale:
U.S. Treasury securities$117,838 $— $— $117,838 $20,257 $— $— $20,257 
U.S. Government agency securities— 54,201 — 54,201 — 82,320 — 82,320 
Mortgage-backed securities issued by U.S. Government agencies— 779,633 — 779,633 — 1,218,017 — 1,218,017 
Mortgage-backed securities issued by U.S. Government sponsored enterprises— 8,012,301 — 8,012,301 — 5,000,046 — 5,000,046 
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises— 939,623 — 939,623 — 1,250,377 — 1,250,377 
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises— 481,744 — 481,744 — 370,921 — 370,921 
Asset-backed securities— 514,188 — 514,188 — — — — 
Corporate debt securities and other debt securities— 18,801 — 18,801 — 18,479 2,021 20,500 
Total investment securities available for sale$117,838 $10,800,491 $— $10,918,329 $20,257 $7,940,160 $2,021 $7,962,438 
Mortgage loans held for sale— 108,198 — 108,198 — 216,647 — 216,647 
Other investments— — 12,185 12,185 — — 1,021 1,021 
Mutual funds and mutual funds held in rabbi trusts43,657 — — 43,657 37,650 — — 37,650 
GGL/SBA loans servicing asset— — 3,233 3,233 — — 3,258 3,258 
Derivative assets— 191,708 — 191,708 — 401,295 — 401,295 
Liabilities
Trading liability for short positions$— $200 $— $200 $— $7,717 $— $7,717 
Mutual fund held in rabbi trusts27,205 — — 27,205 20,752 — — 20,752 
Earnout liability— — — — — — 5,677 5,677 
Derivative liabilities— 95,067 3,535 98,602 — 155,119 2,048 157,167 
103
 December 31, 2018
(in thousands)Level 1 Level 2 Level 3 Total Assets and Liabilities at Fair Value
Assets       
Trading securities:       
U.S. Government agency securities$—
 $44
 $—
 $44
State and municipal securities—

1,064
 —
 1,064
Other investments1,128
 894
 —
 2,022
Total trading securities$1,128
 $2,002
 $—
 $3,130
Mortgage loans held for sale—
 37,129
 —
 37,129
Investment securities available for sale:       
U.S. Treasury securities$122,077
 $—
 $—
 $122,077
U.S. Government agency securities—
 38,382
 —
 38,382
Mortgage-backed securities issued by U.S. Government agencies—
 97,205
 —
 97,205
Mortgage-backed securities issued by U.S. Government sponsored enterprises—
 2,398,650
 —
 2,398,650
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises—
 1,188,518
 —
 1,188,518
Commercial mortgage-backed securities issued by U.S. Government sponsored enterprises—
 129,865
 —
 129,865
 Corporate debt and other debt securities    —
 15,150
 1,785
 16,935
Total investment securities available for sale$122,077
 $3,867,770
 $1,785
 $3,991,632
Private equity investments—
 —
 11,028
 11,028
Mutual funds3,168
 —
 —
 3,168
Mutual funds held in rabbi trusts12,844
 —
 —
 12,844
GGL/SBA loans servicing asset—
 —
 3,729
 3,729
Derivative assets:       
Interest rate contracts$—
 $18,388
 $—
 $18,388
Mortgage derivatives(1)
—
 944
 —
 944
Total derivative assets$—
 $19,332
 $—
 $19,332
Liabilities       
Earnout liability(2)
—
 —
 14,353
 14,353
Derivative liabilities:      —
Interest rate contracts$—
 $15,716
 $—
 $15,716
Mortgage derivatives(1)
—
 819
 —
 819
Visa derivative—
 —
 1,673
 1,673
Total derivative liabilities$—
 $16,535
 $1,673
 $18,208
        



 December 31, 2017
(in thousands)Level 1 Level 2 Level 3 Total Assets and Liabilities at Fair Value
Assets       
Trading securities:       
U.S. Government agency securities$—
 $3,002
 $—
 $3,002
Collateralized mortgage obligations issued by U.S. Government sponsored agencies or enterprises—
 296
 —
 296
Other investments522
 —
 —
 522
Total trading securities$522
 $3,298
 $—
 $3,820
Mortgage loans held for sale—
 48,024
 —
 48,024
Investment securities available for sale:       
U.S. Treasury securities$82,674
 $—
 $—
 $82,674
U.S. Government agency securities—
 10,862
 —
 10,862
Mortgage-backed securities issued by U.S.Government agencies—
 120,440
 —
 120,440
Mortgage-backed securities issued by U.S. Government sponsored enterprises—
 2,595,626
 —
 2,595,626
Collateralized mortgage obligations issued by U.S. Government sponsored agencies or enterprises—
 1,111,999
 —
 1,111,999
Commercial mortgage-backed securities issued by U.S. Government sponsored enterprises—
 44,897
 —
 44,897
State and municipal securities—
 180
 —
 180
 Corporate debt and other securities    3,162
 15,294
 1,935
 20,391
Total investment securities available for sale$85,836
 $3,899,298
 $1,935
 $3,987,069
Private equity investments—
 —
 15,771
 15,771
Mutual funds held in rabbi trusts14,140
 —
 —
 14,140
GGL/SBA loans servicing asset—
 —
 4,101
 4,101
Derivative assets:       
Interest rate contracts$—
 $10,786
 $—
 $10,786
Mortgage derivatives (1)
—
 936
 —
 936
Total derivative assets$—
 $11,722
 $—
 $11,722
Liabilities       
Trading account liabilities—
 1,000
 —
 1,000
Earnout liability(2)
—
 —
 11,348
 11,348
Derivative liabilities:       
Interest rate contracts$—
 $12,638
 $—
 $12,638
Mortgage derivatives(1)
—
 129
 —
 129
Visa derivative—
 —
 4,330
 4,330
Total derivative liabilities$—
 $12,767
 $4,330
 $17,097
        
(1 ) Mortgage derivatives consist of customer interest rate lock commitments that relate to the potential origination of mortgage loans, which would be classified as held for sale and forward loan sales commitments with third-party investors.
(2 )
Earnout liability consists of contingent consideration obligation related to Global One acquisition.
Fair Value Option
Synovus has elected the fair value option for mortgage loans held for sale primarily to ease the operational burden required to maintain hedge accounting for these loans. Synovus is still able to achieve effective economic hedges on mortgage loans held for sale without the time and expense needed to manage a hedge accounting program.
The following table summarizes the difference between the fair value and the unpaid principal balanceUPB 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 instrument-specific credit risk.


Years Ended December 31,Years Ended December 31,
(in thousands)2018 2017 2016(in thousands)202120202019
Changes in fair value included in net income:     Changes in fair value included in net income:
Mortgage loans held for sale$95
 $754
 $(667)Mortgage loans held for sale$(3,942)$3,400 $1,675 
Mortgage loans held for sale:     Mortgage loans held for sale:
Fair value37,129
 48,024
 51,545
Fair value108,198 216,647 115,173 
Unpaid principal balance35,848
 46,839
 51,114
Unpaid principal balance105,785 210,292 112,218 
Fair value less aggregate unpaid principal balance$1,281
 $1,185
 $431
Fair value less aggregate unpaid principal balance$2,413 $6,355 $2,955 
     
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
During 20182021 and 2017,2020, Synovus did not have any transfers in or out of Level 3 in the fair value hierarchy. For
2021
(in thousands)Investment Securities Available for SaleOther InvestmentsGGL/SBA Loans Servicing AssetEarnout LiabilityVisa Derivative Liability
Beginning balance$2,021 $1,021 $3,258 $(5,677)$(2,048)
Total gains (losses) realized/unrealized:
Included in earnings— 1,164 (1,339)(507)(2,656)
Sales(2,021)— — — — 
Additions— 10,000 

— — — 
Settlements— — 1,314 6,184 1,169 
Ending balance$— $12,185 $3,233 $— $(3,535)
Total net gains (losses) for the year included in earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities still held at December 31, 2021$— $1,164 $— 0$(2,656)
2020
(in thousands)Investment Securities Available for SaleOther InvestmentsGGL/SBA Loans Servicing AssetEarnout LiabilityVisa Derivative Liability
Beginning balance$2,105 $3,887 $3,040 $(11,016)$(2,339)
Total gains (losses) realized/unrealized:
Included in earnings— (2,866)(1,000)(4,908)(890)
Unrealized gains (losses) included in other comprehensive income(84)— — — — 
Additions— — 1,218 — — 
Settlements— — — 10,247 1,181 
Ending balance$2,021 $1,021 $3,258 $(5,677)$(2,048)
Total net gains (losses) for the year included in earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities still held at December 31, 2020$— $(2,866)$— $(4,908)$(890)


104


The table below provides an overview of the years ended December 31, 2018valuation techniques and 2017, total net losses includedsignificant unobservable inputs used in earnings attributablethose techniques to measure financial instruments that are classified within Level 3 of the valuation hierarchy and are measured at fair value on a recurring basis. The range of sensitivities that management utilized in its fair value calculations is deemed acceptable in the industry with respect to the change in net unrealized losses relating to assets/liabilities still held at December 31, 2018 and 2017 was $18.1 million and $8.6 million, respectively.identified financial instruments.
 2018
(in thousands)Investment Securities Available for Sale  Private Equity Investments 
GGL/SBA
Loans Servicing Asset(1)
 
Earnout Liability(2)
 Visa Derivative Liability
Beginning balance, January 1, 2018$1,935
 $15,771
 $4,101
 $(11,348) $(4,330)
Total (losses) gains realized/unrealized:         
Included in earnings—
 (4,743) (1,752) (11,652) (2,328)
Unrealized (losses) gains included in other comprehensive income(150) —
 —
 —
 —
Additions—
 —

1,380
 —
 —
Settlements—
 —
 —
 8,647
 4,985
Ending balance, December 31, 2018$1,785
 $11,028
 $3,729
 $(14,353) $(1,673)
Total net losses for the year included in earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities still held at December 31, 2018$—
 $(4,743) $—
 $(11,652) $(1,673)
          
 2017
(in thousands)Investment Securities Available for Sale  Private Equity Investments 
GGL/SBA
Loans Servicing Asset(1)
 
Earnout Liability(2)
 Visa Derivative Liability
Beginning balance, January 1, 2017$1,796
 $25,493
 $—
 $(14,000) $(5,768)
Total (losses) gains realized/unrealized:         
Included in earnings—
 (3,093) (1,681) (5,466) —
Unrealized gains included in other comprehensive income139
 —
 —
 —
 —
Additions—
 —
 1,330
 —
 —
Sales—
 (6,629) —
 —
 —
Settlements—
 —
 —
 6,352
 1,438
Transfer from amortization method to fair value—
 —
 4,452
 —
 —
Measurement period adjustments related to Global One acquisition—
 —
 —
 1,766
 —
Ending balance, December 31, 2017$1,935
 $15,771
 $4,101
 $(11,348) $(4,330)
Total net losses for the year included in earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities still held at December 31, 2017$—
 $(3,093) $—
 $(5,466) $—
          
(1)
Effective January 1, 2017, Synovus elected the fair value option for determining the value of the GGL/SBA loans servicing asset. Prior to 2017, Synovus accounted for the GGL/SBA loans servicing asset using the amortization method.
(2)
Earnout liability consists of contingent consideration obligation related to the Global One acquisition.




December 31, 2021December 31, 2020
(dollars in thousands)Valuation TechniqueSignificant Unobservable InputLevel 3 Fair ValueRate/RangeLevel 3 Fair ValueRate/Range
Assets measured at fair value on a recurring basis
Investment Securities Available for Sale:
Corporate debt and other debt securities trust preferred securityDiscounted cash flow analysisDiscount rate
Forecasted average Prime reset rate		$—N/A$2,0214.96% 4.06%
Other investmentsIndividual analysis of each investee companyMultiple factors, including but not limited to, current operations, financial condition, cash flows, evaluation of business management and financial plans, and recently executed financing transactions related to the investee companies$12,185N/A$1,021N/A
GGL/SBA loans servicing assetDiscounted cash flow analysisDiscount rate
Prepayment speeds		$3,233 8.55% 18.50%$3,258 10.79% 18.81%
Earnout liabilityOption pricing methods and Monte Carlo simulationFinancial projections of Global One through June 30, 2021$—N/A$5,677N/A
Visa derivative liabilityDiscounted cash flow analysisEstimated timing of resolution of Covered Litigation and future cumulative deposits to the litigation escrow for settlement of the Covered Litigation$3,535
0-1.8 years
(3Q 2023)
$2,048
0-1.8 years
(3Q 2022)
Assets Measured at Fair Value on a Non-recurring Basis
Certain assets are recordedrequired to be measured at fair value on a non-recurring basis.basis subsequent to their initial recognition. These non-recurringassets and liabilities are not measured at fair value on an ongoing basis; however, they are subject to fair value adjustments typically are a resultin certain circumstances, such as when there is evidence of the application of lower of cost or fair value accounting occurring during the period recorded as a charge-off with associated provision expense or write-down in non-interest expense. For example, if the fair value of an asset in these categories falls below its cost basis, it is considered to be at fair value at the end of the period of the adjustment.impairment. The following tables present table presentsassets measured at fair value on a non-recurring basis as of the dates indicated for which there was a fair value adjustment duringadjustment.
December 31, 2021December 31, 2020
(in thousands)Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Loans(1)
$— $— $19,482 $19,482 $— $— $44,802 $44,802 
Other real estate— — 270 270 — — 860 860 
MPS receivable— — — — — — 15,575 15,575 
Other assets held for sale— — 1,256 1,256 — — 2,354 2,354 

105

Years Ended December 31,
(in thousands)20212020Location in Consolidated Statements of Income
Loans(1)
$27,613 $21,927 Provision for credit losses
Other real estate120 200 Other operating expense
MPS receivable— 2,663 Other operating expense
Other assets held for sale462 2,292 Other operating expense
(1) Collateral-dependent loans that are written down to fair value of collateral.
The table below provides an overview of the period.valuation techniques and significant unobservable inputs used in those techniques to measure financial instruments that are classified within Level 3 of the valuation hierarchy and are measured at fair value on a non-recurring basis.


As of December 31, 2018
Fair Value Adjustments
for the Year Ended December 31, 2018
(in thousands)Level 1 Level 2 Level 3
Impaired loans*        $—
 $—
 $21,742
$7,575
Other loans held for sale—
 —
 1,494
809
Other real estate—
 —
 3,827
523
Other assets held for sale—
 —
 1,104
482
       
 As of December 31, 2017
Fair Value Adjustments
for the Year Ended December 31, 2017
 Level 1 Level 2 Level 3
Impaired loans*        $—
 $—
 $3,603
$991
Other loans held for sale—
 —
 10,197
13,004
Other real estate—
 —
 3,363
2,413
Other assets held for sale—
 —
 5,334
2,491
       
*Collateral-dependent impaired loans that are written down toDecember 31, 2021December 31, 2020
Valuation TechniqueSignificant Unobservable Input
Range
(Weighted Average)(1)
Range
(Weighted Average)(1)
Assets measured at fair value during the period.on a non-recurring basis
LoansThird-party appraised value of collateral less estimated selling costsDiscount to appraised value
Estimated selling costs		0%-71% (48%) 0%-10% (7%)0%-39% (25%) 0%-7% (7%)
Loans held for saleAnalysis of anticipated market prices for similar assets less estimated selling costsMarket price analysis for similar assets
Estimated selling costs		N/AN/A
Other real estateThird-party appraised value of real estate less estimated selling costsDiscount to appraised value
Estimated selling costs		0%-48% (24%) 0%-10% (7%)0%-23% (12%) 0%-10% (7%)
MPS receivable(2)
Third-party appraised value of business less estimated selling costsDiscount to appraised value
Estimated selling costs		N/AN/A
Other assets held for saleThird-party appraised value less estimated selling costs or BOVDiscount to appraised value
Estimated selling costs		0%-51% (20%) 0%-10% (7%)0%-66% (45%) 0%-10% (7%)


(1)    The weighted average is the measure of central tendencies; it is not the value that management is using for the asset or liability.










































(2)    See "Part II - Item 8. Financial Statements and Supplementary Data - Note 14 - Commitments and Contingencies" of this Report for more information on this receivable which was classified as a NPA at December 31, 2021 and 2020.
Fair Value of Financial Instruments
The following table presentspresents the carrying and estimated fair values of financial instruments at December 31, 20182021 and 2017.2020. 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 - "SummarySummary of Significant Accounting Policies" of this Report for a description of how fair value measurements are determined.
106

December 31, 2018December 31, 2021

(in thousands)
Carrying Value Fair Value Level 1 Level 2 Level 3(in thousands)Carrying ValueFair ValueLevel 1Level 2Level 3
Financial assets         Financial assets
Total cash, cash equivalents, restricted cash, and restricted cash equivalents$1,143,564
 $1,143,564
 $1,143,564
 $—
 $—
Trading account assets3,130
 3,130
 1,128
 2,002
 —
Mortgage loans held for sale37,129
 37,129
 —
 37,129
 —
Other loans held for sale1,506
 1,506
 —
 —
 1,506
Total cash, cash equivalents, and restricted cashTotal cash, cash equivalents, and restricted cash$3,009,853 $3,009,853 $3,009,853 $— $— 
Trading securitiesTrading securities8,391 8,391 — 8,391 — 
Investment securities available for sale3,991,632
 3,991,632
 122,077
 3,867,770
 1,785
Investment securities available for sale10,918,329 10,918,329 117,838 10,800,491 — 
Private equity investments11,028
 11,028
 —
 —
 11,028
Mutual funds3,168
 3,168
 3,168
 —
 —
Mutual funds held in rabbi trusts12,844
 12,844
 12,844
 —
 —
Loans, net25,696,018
 25,438,890
 —
 —
 25,438,890
Loans held for saleLoans held for sale750,642 749,980 — 108,198 641,782 
Other investmentsOther investments12,185 12,185 — — 12,185 
Mutual funds and mutual funds held in rabbi trustsMutual funds and mutual funds held in rabbi trusts43,657 43,657 43,657 — — 
Loans, net of deferred fees and costsLoans, net of deferred fees and costs38,884,361 39,118,275 — — 39,118,275 
GGL/SBA loans servicing asset3,729
 3,729
 —
 —
 3,729
GGL/SBA loans servicing asset3,233 3,233 — — 3,233 
FRB and FHLB stockFRB and FHLB stock159,941 159,941 — 159,941 — 
Derivative assets19,332
 19,332
 —
 19,332
 —
Derivative assets191,708 191,708 — 191,708 — 
Financial Liabilities         Financial Liabilities
Non-interest-bearing deposits$7,650,967
 $7,650,967
 $—
 $7,650,967
 $—
Non-interest-bearing deposits$16,392,653 $16,392,653 $— $16,392,653 $— 
Non-time interest-bearing deposits14,065,959
 14,065,959
 —
 14,065,959
 —
Non-time interest-bearing deposits28,917,148 28,917,148 — 28,917,148 — 
Time deposits5,003,396
 4,989,570
 —
 4,989,570
 —
Time deposits4,117,475 4,125,673 — 4,125,673 — 
Total deposits$26,720,322
 $26,706,496
 $—
 $26,706,496
 $—
Total deposits$49,427,276 $49,435,474 $— $49,435,474 $— 
Federal funds purchased and securities sold under repurchase agreements237,692
 237,692
 237,692
 —
 —
Other short-term borrowings650,000
 650,000
 —
 650,000
 —
Securities sold under repurchase agreementsSecurities sold under repurchase agreements264,133 264,133 264,133 — — 
Trading liability for short positionsTrading liability for short positions200 200 — 200 — 
Long-term debt1,657,157
 1,649,642
 —
 1,649,642
 —
Long-term debt1,204,229 1,243,147 — 1,243,147 — 
Earnout liability14,353
 14,353
 —
 —
 14,353
Mutual fund held in rabbi trustsMutual fund held in rabbi trusts27,205 27,205 27,205 — — 
Derivative liabilities18,208
 18,208
 —
 16,535
 1,673
Derivative liabilities98,602 98,602 — 95,067 3,535 
         
107

December 31, 2017December 31, 2020

(in thousands)
Carrying Value Fair Value Level 1 Level 2 Level 3(in thousands)Carrying ValueFair ValueLevel 1Level 2Level 3
Financial assets         Financial assets
Total cash, cash equivalents, restricted cash, and restricted cash equivalents$932,933
 $932,933
 $932,933
 $—
 $—
Trading account assets3,820
 3,820
 522
 3,298
 —
Mortgage loans held for sale48,024
 48,024
 —
 48,024
 —
Other loans held for sale11,356
 11,356
 —
 —
 11,356
Total cash, cash equivalents, and restricted cashTotal cash, cash equivalents, and restricted cash$4,252,917 $4,252,917 $4,252,917 $— $— 
Trading securitiesTrading securities10,880 10,880 — 10,880 — 
Investment securities available for sale3,987,069
 3,987,069
 85,836
 3,899,298
 1,935
Investment securities available for sale7,962,438 7,962,438 20,257 7,940,160 2,021 
Private equity investments15,771
 15,771
 —
 —
 15,771
Mutual funds held in rabbi trusts14,140
 14,140
 14,140
 —
 —
Loans, net24,538,196
 24,507,141
 —
 —
 24,507,141
Loans held for saleLoans held for sale760,123 760,939 — 216,647 544,292 
Other investmentsOther investments1,021 1,021 — — 1,021 
Mutual funds and mutual funds held in rabbi trustsMutual funds and mutual funds held in rabbi trusts37,650 37,650 37,650 — — 
Loans, net of deferred fees and costsLoans, net of deferred fees and costs37,647,248 37,605,881 — — 37,605,881 
GGL/SBA loans servicing asset4,101
 4,101
 —
 —
 4,101
GGL/SBA loans servicing asset3,258 3,258 — — 3,258 
FRB and FHLB stockFRB and FHLB stock157,520 157,520 — 157,520 — 
Derivative assets11,722
 11,722
 —
 11,722
 —
Derivative assets401,295 401,295 — 401,295 — 
Financial Liabilities         Financial Liabilities
Trading account liabilities1,000
 1,000
 —
 1,000
 —
Non-interest-bearing deposits$7,686,339
 $7,686,339
 $—
 $7,686,339
 $—
Non-interest-bearing deposits$13,477,854 $13,477,854 $— $13,477,854 $— 
Non-time interest-bearing deposits13,941,814
 13,941,814
 —
 13,941,814
 —
Non-time interest-bearing deposits27,265,521 27,265,521 — 27,265,521 — 
Time deposits4,519,747
 4,523,661
 —
 4,523,661
 —
Time deposits5,948,196 5,970,146 — 5,970,146 — 
Total deposits$26,147,900
 $26,151,814
 $—
 $26,151,814
 $—
Total deposits$46,691,571 $46,713,521 $— $46,713,521 $— 
Federal funds purchased and securities sold under repurchase agreements161,190
 161,190
 161,190
 —
 —
Other short-term borrowings100,000
 100,000
 —
 100,000
 —
Securities sold under repurchase agreementsSecurities sold under repurchase agreements227,922 227,922 227,922 — — 
Trading liability for short positionsTrading liability for short positions7,717 7,717 — 7,717 — 
Long-term debt1,606,138
 1,621,814
 —
 1,621,814
 —
Long-term debt1,202,494 1,266,825 — 1,266,825 — 
Earnout liability11,348
 11,348
 —
 —
 11,348
Earnout liability5,677 5,677 — — 5,677 
Mutual fund held in rabbi trustsMutual fund held in rabbi trusts20,752 20,752 20,752 — — 
Derivative liabilities17,097
 17,097
 —
 12,767
 4,330
Derivative liabilities157,167 157,167 — 155,119 2,048 
         
Note 1413 - Derivative Instruments
As part of its overall interest rate risk management activities, Synovus utilizes derivative instruments to manage its exposure to various types of interest rate risk. Theserisk, exposures related to liquidity and credit risk, and to facilitate client transactions. The primary types of derivative instruments generallyutilized by Synovus consist of interest rate swaps, interest rate lock commitments made to prospective mortgage loan customers, and forwardclients, commitments to sell fixed-rate mortgage loans.loans, and foreign currency exchange forwards. Interest rate lock commitments represent derivative instruments since it is intended that such loans will be sold. Synovus may also utilize interest rate swaps to manage interest rate risks primarily arising from its core banking activities. As of December 31, 2018 and 2017, Synovus had no outstanding interest rate swap contracts utilized to manage interest rate risk related to core banking activities. 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" of this Report for additional information regarding accounting policies for derivatives.
Hedging Derivatives
Cash flow hedge 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, if the hedged exposure is a cash flow exposure, the effective portion of the gain or loss on the derivative instrument is reported initially as a component of accumulated other comprehensive income (loss), net of the tax impact, and subsequently reclassified into earnings when the hedged transaction affects earnings with the impacts recorded in the same income statement line item used to present the earnings effect of the hedged item. When a cash flow hedge relationship is discontinued but the hedged cash flows, or forecasted transactions, are still expected to occur, gains or losses that were accumulated in OCI are amortized into earnings over the same periods which the hedged transactions 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 net unrealized gains of $1.2 million, or $930 thousand, after tax, in OCI during the year ended December 31, 2021 and $9.8 million, or $7.3 million, after-tax, in OCI, during the year ended December 31, 2020, related to terminated cash flow hedges, which are being recognized into earnings in conjunction with the effective terms of the original swaps
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through the second quarter of 2026. Synovus recognized pre-tax income of $12.9 million and $2.8 million, respectively, during the years ended December 31, 2021 and 2020 related to the amortization of terminated cash flow hedges.
As of December 31, 2021, Synovus expects to reclassify into earnings approximately $27 million in pre-tax income 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 $4 million in pre-tax income related to the amortization of terminated cash flow hedges. As of December 31, 2021, the maximum length of time over which Synovus is hedging its exposure to the variability in future cash flows is through the third quarter of 2026.
For derivative instruments that are not designated as hedging instruments, changes in the fair value of the derivatives are recognized in earnings immediately.
Client Related Derivative Positions
Synovus enters into interest rate swap agreements to facilitate the risk management strategies of certain commercial banking clients. Synovus mitigates this risk largely by entering into equal and offsetting interest rate swap agreements with highly rated counterparties. The interest rate swap agreements are free-standing derivatives and are recorded at fair value on Synovus' consolidated balance sheets. The credit risk to these clients is evaluated and included in the calculation of fair value. Fair value changes including credit-related adjustments are recorded as a component of capital markets income.
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 customerclient 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, customer creditclient risk rating, collateral value, and customerclient 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 customerclient specific risk.

Mortgage Derivatives


Customer Related Derivative PositionsSynovus originates first lien residential mortgage loans for sale into the secondary market. Mortgage loans are sold either individually or in a bulk sale by Synovus on a whole loan servicing-released basis to third-party servicing aggregators for potential conversion into mortgage-backed securities which can be traded in the secondary market or retained on their respective balance sheet.
Synovus enters into interest rate swap agreementslock commitments for residential mortgage loans which commits it to facilitatelend funds to a potential borrower at a specific interest rate and within a specified period of time. Interest rate lock commitments that relate to the origination of mortgage loans that, if originated, will be held for sale, are considered derivative financial instruments under applicable accounting guidance. Outstanding interest rate lock commitments expose Synovus to the risk management strategiesthat the price of a small numberthe mortgage loans underlying the commitments may decline due to increases in mortgage interest rates from inception of commercial banking customers. Synovus mitigates thisthe rate lock to the funding of the loan and the eventual commitment for sale into the secondary market.
Forward commitments to sell primarily fixed-rate mortgage loans are entered into to reduce the exposure to market risk by entering into equalarising from potential changes in interest rates, which could affect the fair value of mortgage loans held for sale and offsettingoutstanding interest rate swap agreements with highly rated counterparties. Thelock commitments, which guarantee a certain interest rate swap agreementsif the loan is ultimately funded or granted by Synovus as a mortgage loan held for sale. The commitments to sell mortgage loans are free-standing derivativesat fixed prices and are recordedscheduled to settle at fair value on Synovus' consolidated balance sheets. Fair value changes are recorded as a component of non-interest income.specified dates that generally do not exceed 90 days.
Visa Derivative
In conjunction with the sale of Class B shares of common stock issued by Visa to Synovus as a Visa USA member, Synovus entered into a derivative contract with the purchaser, which provides for settlements between the parties based upon a change in the ratio for conversion of Visa Class B shares to Visa Class A shares. The conversion ratio changes when Visa deposits funds to a litigation escrow established by Visa to pay settlements for certain litigation, for which Visa is indemnified by Visa USA members. The litigation escrow is funded by proceeds from Visa’s conversion of Class B shares.
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The fair value of the derivative contract is determined based on management's estimate of the timing and amount of the Covered Litigation settlement, and the resulting payments due to the counterparty under the terms of the contract. During the years ended December 31, 2021 and 2020, Synovus recorded fair value adjustments of $2.7 million and $890 thousand, respectively, in other non-interest expense. Management believes that the estimate of Synovus' exposure to the Visa indemnification andincluding fees associated with the Visa derivative is adequate based on current information, including Visa's recent announcements and disclosures. However, future developments in the litigation could require changes to Synovus' estimate.
Mortgage Derivatives
Synovus originates first lien residential mortgage loans for sale into the secondary market. Mortgage loans are sold by Synovus for conversion to securities and the servicing of these loans is sold to a third-party servicing aggregator, or Synovus sells the mortgage loans as whole loans to investors either individually or in bulk on a servicing released basis.
Synovus enters into interest rate lock commitments for residential mortgage loans which commits it to lend funds to a potential borrower at a specific interest rate and within a specified period of time. Interest rate lock commitments that relate to the origination of mortgage loans that, if originated, will be held for sale, are considered derivative financial instruments under applicable accounting guidance. Outstanding interest rate lock commitments expose Synovus to the risk that the price of the mortgage loans underlying the commitments may decline due to increases in mortgage interest rates from inception of the rate lock to the funding of the loan.
Forward commitments to sell primarily fixed-rate mortgage loans are entered into to reduce the exposure to market risk arising from potential changes in interest rates, which could affect the fair value of mortgage loans held for sale and outstanding rate lock commitments, which guarantee a certain interest rate if the loan is ultimately funded or granted by Synovus as a mortgage loan held for sale. The commitments to sell mortgage loans are at fixed prices and are scheduled to settle at specified dates that generally do not exceed 90 days.
Collateral Requirements
Pursuant to the Dodd-Frank Act, certainCertain derivative transactions have collateral requirements, both at the inception of the trade, and as the value of each derivative position changes. As of December 31, 20182021 and 2017,2020, collateral totaling $22.4$64.5 million and $43.8$155.4 million, respectively, was pledged to the derivative counterparties to comply with collateral requirements.requirements in the normal course of business. 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 inon the consolidated balance sheets and related disclosures. At December 31, 2018,2021 and 2020, Synovus had a variation margin of $3.1$94.6 million which reducedand $162.7 million, respectively, reducing the derivative liability, and at December 31, 2017, the variation margin of $1.5 million reduced the derivative asset.liability.



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The following table reflects the notional amount and fair value of derivative instruments included on the consolidated balance sheetssheets.
December 31, 2021December 31, 2020
Fair ValueFair Value
(in thousands)Notional Amount
Derivative Assets(1)
Derivative Liabilities(2)
Notional Amount
Derivative Assets(1)
Derivative Liabilities(2)
Derivatives in cash flow hedging relationships:
Interest rate contracts$3,600,000 $22,004 $20,395 $3,000,000 $80,802 $— 
Total derivatives designated as hedging instruments$22,004 $20,395 $80,802 $— 
Derivatives not designated:
  as hedging instruments
Interest rate contracts(3)
$9,653,600 $167,560 $74,514 $8,784,141 $314,234 $153,204 
Mortgage derivatives - interest rate lock commitments99,006 2,105 — 306,138 6,259 — 
Mortgage derivatives - forward commitments to sell fixed-rate mortgage loans105,500 — 122 230,500 — 1,611 
Other contracts(4)
293,059 — 36 234,884 — 304 
Foreign exchange contracts(5)
22,387 39 — 24,125 00
Visa derivative— — 3,535 — — 2,048 
Total derivatives not designated as hedging instruments$169,704 $78,207 $320,493 $157,167 
(1)    Derivative assets are recorded in other assets on the consolidated balance sheets.
(2)    Derivative liabilities are recorded in other liabilities on the consolidated balance sheets.
(3)    Includes interest rate contracts for client swaps and offsetting positions, net of variation margin payments.
(4)    Includes risk participation agreements sold. Additionally, the notional amount of risk participation agreements purchased was $81.2 million and $2.6 million at December 31, 20182021 and 2017.2020, respectively.
(5)     The fair value of foreign exchange contracts was negligible at December 31, 2020 due to the very short duration of these contracts.
    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.
The following table presents the effect of hedging derivative instruments on the consolidated statements of income and the total amounts for the respective line item affected for the years ended December 31, 2021, 2020, and 2019.
(in thousands)202120202019
Total amounts presented on the consolidated statements of income in interest income on loans$31,522 $22,215 $— 
Gain/loss on cash flow hedging relationships:(1)
Interest rate swaps:
Realized gains (losses) reclassified from AOCI, pre-tax, to interest income on loans12,862 2,765 — 
Pre-tax income recognized on cash flow hedges$12,862 $2,765 $— 
(1)    See "Part II - Item 8. Financial Statements and Supplementary Data - Note 9 - Shareholders' Equity and Other Comprehensive Income" in this Report for additional information.

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 December 31, 2018 December 31, 2017
   Fair Value   Fair Value
(in thousands)Notional Amount 
Derivative Assets(1)
 
Derivative Liabilities(2)
 Notional Amount 
Derivative Assets(1)
 
Derivative Liabilities(2)
Derivatives not designated
as hedging instruments:		           
Interest rate contracts (3)
$1,840,288
 $18,388
 $15,716
 $1,466,059
 $10,786
 $12,638
Mortgage derivatives - interest rate lock commitments52,420
 944
 —
 49,304
 936
 —
Mortgage derivatives - forward commitments to sell fixed-rate mortgage loans65,500
 —
 819
 72,500
 —
 129
Visa derivative—
 —
 1,673
 —
 —
 4,330
 Total derivatives not designated as hedging instruments      $19,332
 $18,208
   $11,722
 $17,097
            
(1)
Derivative assets are recorded in other assets on the consolidated balance sheets.
(2)
Derivative liabilities are recorded in other liabilities on the consolidated balance sheets.
(3)
Includes interest rate contracts for customer swaps and offsetting positions, net of variation margin payments.
    Pre-tax    The pre-tax effect of changes in fair value from derivative instruments not designated as hedging instruments on the consolidated statements of income for the years ended December 31, 2018, 20172021, 2020 and 20162019 is presented below.
Gain (Loss) Recognized in Consolidated Statements of Income
For The Years Ended December 31,
(in thousands)Location in Consolidated Statements of Income202120202019
Derivatives not designated as hedging instruments:
Interest rate contracts(1)
Capital markets income$100 $(777)$(338)
Other contracts(2)
Capital markets income269 (213)(91)
Foreign exchange contractsCapital markets income39 — — 
Mortgage derivatives - interest rate lock commitmentsMortgage banking income(4,154)4,969 346 
Mortgage derivatives - forward commitments to sell fixed-rate mortgage loansMortgage banking income1,489 (1,443)651 
Visa derivativeOther non-interest expense2,656 (890)(3,611)
Total derivatives not designated as hedging instruments$399 $1,646 $(3,043)
(1)    Gain (loss) represents net fair value adjustments (including credit related adjustments) for client swaps and offsetting positions. Additionally, losses related to termination of client swaps of $2.5 million were recorded in other non-interest expense during 2020.
(2)    Includes risk participation agreements sold.
   Gain (Loss) Recognized in Consolidated Statements of Income
   For The Years Ended December 31,
(in thousands)Location in Consolidated Statements of Income 2018 2017 2016
Derivatives not designated as hedging instruments:       
Interest rate contracts(1)
Other non-interest income $(29) $20
 $76
Mortgage derivatives - interest rate lock commitmentsMortgage banking income 8
 (634) 182
Mortgage derivatives - forward commitments to sell fixed-rate mortgage loansMortgage banking income (691) (2,025) 1,725
Visa derivativeOther non-interest expense (2,328) —
 (5,795)
 Total derivatives not designated as hedging instruments      $(3,040) $(2,639) $(3,812)
        
(1)
Gain (loss) represents net fair value adjustments (including credit related adjustments) for customer swaps and offsetting positions.
Note 1514 - 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 customers.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 customerclient 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 low income housingtax credits, CRA partnerships, and other investments.
The contractual amount of these financial instruments represents Synovus' maximum credit risk should the counterparty draw upon the commitment, and should the counterparty subsequently fail to perform according to the terms of the contract. Since many of the commitments are expected to expire without being drawn upon, total commitment amounts do not necessarily represent future cash requirements. Additionally, certain commitments (primarily consumer) can generally be canceled by providing notice to the borrower.


The allowance for credit lossesACL associated with unfunded commitments and letters of credit is a component of the unfunded commitments reserve recorded within other liabilities on the consolidated balance sheets. At December 31, 2021, the ACL for unfunded commitments was $41.9 million, compared to a reserve of $47.8 million at December 31, 2020. Additionally, an immaterial amount of unearned fees relating to letters of credit are recorded within other liabilities on the consolidated balance sheets. These amounts are not material to Synovus' consolidated balance sheets.
Synovus invests in certain low income housing tax creditLIHTC partnerships which are engaged in the development and operation of affordable multi-family housing utilizing the LIHTC pursuant to Section 42 of the Code. Additionally, Synovus invests in certain solar energy tax credit partnerships pursuant to Section 48 of the Code and certain new market tax credit partnerships pursuant to section 45D of the Code. Synovus typically acts as a limited partner in these investments and does not exert control over the operating or financial policies of the partnerships and as such, is not considered the primary beneficiary of the partnership. For certain of its LIHTC investments, Synovus typically 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 areis 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 featuresprovisions required to be met at the project level.
Synovus also invests in CRA partnerships, including SBIC programs, and other investments. The SBIC is a program initiated by the SBA in 1958 to assist in the funding of small business loans.
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December 31,December 31,
(in thousands)2018 2017(in thousands)20212020
Letters of credit *$157,675
 $153,372
Letters of credit(1)
Letters of credit(1)
$183,463 $190,562 
Commitments to fund commercial and industrial loans5,527,017
 5,090,827
Commitments to fund commercial and industrial loans9,069,588 8,200,608 
Commitments to fund commercial real estate, construction, and land development loans2,034,223
 1,567,583
Commitments to fund commercial real estate, construction, and land development loans3,593,171 3,290,041 
Commitments under home equity lines of credit1,258,657
 1,137,714
Commitments under home equity lines of credit1,805,869 1,602,831 
Unused credit card lines775,003
 779,254
Unused credit card lines999,787 1,012,313 
Other loan commitments400,983
 351,358
Other loan commitments604,353 472,233 
Total letters of credit and unfunded lending commitments$10,153,558
 $9,080,108
Total letters of credit and unfunded lending commitments$16,256,231 $14,768,588 
   
Investments in low income housing tax credit partnerships:   
Tax credits, CRA partnerships, and other investments:Tax credits, CRA partnerships, and other investments:
Carrying amount included in other assets$83,736
 $60,068
Carrying amount included in other assets$426,137 $262,855 
Amount of future funding commitments included in carrying amount47,123
 39,994
Short-term construction loans and letter of credit commitments1,585
 7,180
Funded portion of short-term loans and letters of credit5,595
 —
Amount of future funding commitmentsAmount of future funding commitments250,733 133,946 
Permanent and short-term construction loans and letter of credit commitments(2)
Permanent and short-term construction loans and letter of credit commitments(2)
204,391 82,786 
Funded portion of permanent and short-term loans and letters of credit(3)
Funded portion of permanent and short-term loans and letters of credit(3)
104,315 9,528 
   
* (1)    Represent the contractual amount net of risk participations purchased of approximately $26 million and $30 million at December 31, 2021 and December 31, 2020, respectively.
(2)    Represent the contractual amount net of risk participations of $46.0 million.$3.0 million and $1.8 million at December 31, 2021 and December 31, 2020, respectively
(3)    Represent the contractual amount net of risk participations of $3.0 million and $234 thousand at December 31, 2021 December 31, 2020, respectively.
Merchant Services
In accordance with credit and debit card association rules, Synovus provides merchant processing services for clients. In addition, Synovus sponsors various third-party MPS businesses that process credit and debit card transactions on behalf of various 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 merchant processor,MPS, which is primarily liable for any losses on covered transactions. However, if the merchant processora 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, by retaining cash reserve accounts and/or by obtaining other security. For the years ended December 31, 20182021 and 2017,2020, Synovus and the sponsored entities processed and settled $68.99$105.14 billion and $62.08$78.19 billion of transactions, respectively.
Synovus began covering and has continued to covercovered chargebacks related to a particular sponsored MPS during 2019 and 2018 where the MPS’s cash reserve account was unavailable to support the chargebacks. As of December 31, 2018, Synovus had advanced $22.92021, the remaining amount, net of reserves, included in other assets and classified in NPAs, is $15.3 million, compared to the MPS to cover these chargebacks.$15.6 million at December 31, 2020. While Synovus has contractual protections to mitigate against loss, repayment of suchthe amounts owed to Synovus will depend in large part upon the continued financial viability and/or valuation of the MPS and the favorable resolution of any resulting disputes over the funds.MPS.
Legal Proceedings
Synovus and its subsidiaries are subject to various legal proceedings, claims and claimsdisputes 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, tax matters, inquiries and investigations. Synovus, like many other financial institutions, has been the target of numerous 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 individualsindividual borrowers related to their loans, and allegations of violations of state and federal laws and regulations relating to banking practices, including putative class action matters and also claims asserted by shareholders or purported shareholders against Synovus, members of Synovus' Board of Directors, and members of Synovus' management team.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 loans,assets, which could adversely affect Synovus' results of operations during the period in which the write-down or charge-off were to occur.
In addition, on February 15, 2019, a shareholder derivative action, LeMay v. Synovus Financial Corp., Civil Action No. 19-A-01389-9, was filed in the Superior Court of Gwinnett County, Georgia against the Company and certain of its directors and officers alleging breach of fiduciary duties, unjust enrichment, gross mismanagement, corporate waste, disgorgement of compensation, injunctive relief, attorney’s fees and expenses, and punitive damages.  Synovus believes that the allegations are without merit and intends to defend against this matter vigorously. 
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 December 31, 20182021 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
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considers whether it is able to estimate the total reasonably possible loss or range of loss. An event is “reasonably possible” if “the chance of the future event or events occurring is more than remote but less than likely.” An event is “remote” if “the chance of the future event or events occurring is more than slight but less than reasonably possible." In many situations, Synovus may be unable to estimate reasonably possible losses due to the preliminary nature of the legal matters, as well as a variety of other factors and uncertainties. For those legal matters where Synovus is able to estimate a range of reasonably possible losses, management currently estimates the aggregate range from our outstanding litigation is from zero to $5 million in excess of the amounts accrued, if any, related to those matters. This estimated aggregate range is based upon information currently available to Synovus, and the actual losses could prove to be lower or higher. As there are further developments in these legal matters, Synovus will reassess these matters, and the estimated range of reasonably possible losses may change as a result of this assessment. Based on Synovus' current knowledge and advice of counsel, management presently does not believe that the liabilities arising from these legal matters will have a material adverse effect on Synovus' consolidated financial condition, results of operations or cash flows. However, it is possible that the ultimate resolution of these legal matters could have a material adverse effect on Synovus' results of operations or financial condition for any particular period.
Synovus intends to vigorously pursue all available defenses to these legal matters, but will also consider other alternatives, including settlement, in situations where there is an opportunity to resolve such legal matters on terms that Synovus considers to be favorable, including in light of the continued expense and distraction of defending such legal matters. Synovus maintains insurance coverage, which may be available to cover legal fees, or potential losses that might be incurred in connection with such legal matters. The above-noted estimated range of reasonably possible losses does not take into consideration insurance coverage which may or may not be available for the respective legal matters.
Note 1615 - Share-based Compensation and Other Employment Benefit Plans
General Description of Share-based Plans
Synovus has a long-term incentive plan under which the Compensation and Human Capital Committee of the Board of Directors has the authority to grant share-based awards to Synovus employees. The 20132021 Omnibus Plan authorizes 8.6authorized 5.8 million common share equivalents available for grant, where grants of options count as one share equivalent and grants of full value awards (e.g., restricted share units, market restricted share units, and performance share units) count as two share equivalents. Any restricted share units that are forfeited and options that expire unexercised will again become available for issuance under the Plan. At December 31, 2018, Synovus had a total of 4.8 million common share equivalents of its authorized but unissued common stock reserved for future grants under the 2013 Omnibus Plan.grants. The Plan permits grants of share-based compensation including stock options, restricted share units, market restricted share units, and performance share units. The grants generally include vesting periods of three years. The restricted share units and the market restricted share units contain a service-based vesting period of three years with most awards vesting pro-rata over three years. Restricted share units are primarily equity-based but can be cash settled as well. When cash settled awards are granted, they are classified as a liability and revalued quarterly. As further discussed below, market restricted share units and performance share units are granted at a defined target level and are compared annually to required market and performance metrics to determine actual units vested and for performance share units, compensation expense. Synovus has historically issued new shares to satisfy share option exercises and share unit conversions. Dividend equivalents are paid on outstanding restricted share units, market restricted share units, and performance share units in the form of additional restricted share units that vest over the same vesting period or the vesting period left on the original restricted share unit grant. TheAny restricted share units that are forfeited and options that expire unexercised will again become available for issuance under the market restricted2021 Omnibus Plan. At December 31, 2021, Synovus had a total of 5.8 million common share units granted during 2018, 2017, and 2016 contain a service-based vesting periodequivalents of three years with most awards vesting pro-rata over three years.


its authorized but unissued common stock reserved for future grants under the 2021 Omnibus Plan.
Share-based Compensation Expense
Total share-based compensation expense was $16.6 million, $14.2 million,recognized for 2021, 2020, and $13.6 million for 2018, 2017, and 2016, respectively. 2019 is presented in the following table by its classification within total non-interest expense.
Years Ended December 31,
(in thousands)202120202019
Salaries and other personnel expense$26,957 $17,827 $19,618 
Merger-related expense— — 4,219 
Other operating expense838 814 650 
Total share-based compensation expense included in non-interest expense$27,795 $18,641 $24,487 
The total income tax benefit recognized inon the consolidated statements of income related to share-based compensation expense was $3.9$7.0 million,, $5.2 $4.8 million, and $5.0$6.3 million for 2018, 2017,2021, 2020, and 2016,2019, respectively. No share-based compensation costs have been capitalized for the years ended December 31, 2018, 2017,2021, 2020, and 2016.2019. As of December 31, 2018,2021, total unrecognized compensation cost related to the unvested portion of share-based compensation arrangements involving shares of Synovus stock was $20.5$30.3 million. This cost is expected to be recognized over a weighted average remaining period of 1.87 years.
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Stock Options
There were no stock option grants in 2018, 2017,2021, 2020, or 2016. 2019; however, Synovus assumed 3.2 million outstanding employee and director stock options in the FCB Merger on January 1, 2019. The estimated fair value of the converted stock options was determined using a Hull-White model in a binomial lattice option pricing framework with the following weighted average assumptions:
2019
Stock price (Synovus' closing stock price on December 31, 2018)$31.99 
Weighted average fair value of converted stock options11.50 
Risk-free interest rate2.51 %
Expected stock price volatility26.4 %
Dividend yield3.13 %
Term to expiration5.1 years
A summary of stock option activity and changes during the years ended December 31, 2018, 2017,2021, 2020, and 20162019 is presented below.
Stock Options
202120202019
(in thousands, except per share data)QuantityWeighted-Average Exercise PriceQuantityWeighted-Average Exercise PriceQuantityWeighted-Average Exercise Price
Outstanding at beginning of year2,401 $22.47 3,037 $22.74 640 $16.93 
Assumed in acquisition— — — — 3,230 23.22 
Options exercised(923)22.07 (572)22.67 (820)19.91 
Options forfeited/expired/canceled— — (64)33.50 (13)34.23 
Options outstanding at end of year1,478 $22.71 2,401 $22.47 3,037 $22.74 
Options exercisable at end of year1,478 $22.71 2,401 $22.47 2,399 $19.52 
Stock Options     
 2018 2017 2016
 Shares Weighted-Average Exercise Price Shares Weighted-Average Exercise Price Shares Weighted-Average Exercise Price
Outstanding at beginning of year775,730
 $17.85
 973,361
 $17.76
 1,741,975
 $37.88
Options exercised(126,344) 16.92
 (197,631) 17.41
 (297,225) 17.35
Options forfeited—
 —
 —
 —
 (1,597) 17.64
Options expired/canceled(9,485) 92.26
 —
 —
 (469,792) 92.62
Options outstanding at end of year639,901
 $16.93
 775,730
 $17.85
 973,361
 $17.76
Options exercisable at end of year639,901
 $16.93
 775,730
 $17.85
 973,361
 $17.76
            
The aggregate intrinsic value for both outstanding and exercisable stock options at December 31, 20182021 was $9.6$37.2 million and theirwith a weighted average remaining contractual life was 3.36 yearsof 2.51 years.
The intrinsic value of stock options exercised during the years ended December 31, 2018, 2017,2021, 2020, and 20162019 was $4.4$21.3 million, $5.1$5.3 million, and $4.7$13.6 million, respectively. Cash received from option exercises of common stock for the years ended December 31, 2018, 2017, and 2016 was $2.1 million, $3.4 million, and $5.2 million, respectively. The total grant date fair value of stock options vested during 2016 was $7.4 million.
Restricted Share Units, Market Restricted Share Units, and Performance Share Units
Compensation expense is measured based on the grant date fair value of restricted share units, market restricted share units, and performance share units. The fair value of restricted share units and performance share units that do not contain market conditions is equal to the market price of common stock on the grant date. The fair value of market restricted share units granted was estimated on the date of grant using a Monte Carlo simulation model with the following weighted average assumptions:
 2018 2017 2016202120202019
Risk-free interest rate 2.32% 1.48% 0.81%Risk-free interest rate2.87 %1.42 %2.40 %
Expected stock price volatility 22.5
 22.9
 25.7
Expected stock price volatility56.1 25.4 24.4 
Dividend yield 1.3
 1.2
 1.8
Simulation period 3.0 years
 3.0 years
 3.0 years
Simulation period2.9 years3.0 years3.0 years
      
The stock price expected volatility was based on Synovus' historical volatility for grants in 2021, 2020 and implied volatility.2019. The Monte Carlo model estimates fair value based on 100,000 simulations of future share price using a theoretical model of stock price behavior.


A summary of restricted share units outstanding and changes during the years ended December 31, 2018, 2017, and 2016 is presented below (excluding market restricted and performance share units).
115
Restricted Share Units   
 Share Units Weighted-Average Grant Date Fair Value
Outstanding at December 31, 2015762,767
 $24.57
Granted350,458
 26.43
Dividend equivalents granted11,105
 26.43
Vested(406,496) 23.10
Forfeited(12,067) 23.96
Outstanding at December 31, 2016705,767
 26.38
Granted242,804
 41.82
Dividend equivalents granted5,839
 41.82
Vested(341,825) 26.25
Forfeited(46,637) 26.28
Outstanding at December 31, 2017565,948
 33.25
Granted248,697
 47.34
Dividend equivalents granted7,259
 44.10
Vested(280,459) 30.86
Forfeited(15,652) 38.60
Outstanding at December 31, 2018525,793
 $41.18
    

The total fair value of restricted share units vested during 2018, 2017, and 2016 was $13.6 million, $14.4 million, and $11.4 million, respectively. As of December 31, 2018, total unrecognized compensation cost related to restricted share units was $11.0 million. This cost is expected to be recognized over a weighted average remaining period of 1.44 years.
Synovus granted market restrictedperformance share units, which included a market condition with respect to 50% of the award, to senior management during the years ended December 31, 2018, 2017,2021 and 2016.2020. The performance share units have a three-year service-based vesting component, a 50% weighted performance condition based on adjusted ROATCE, and a 50% weighted market condition based on Synovus' relative TSR. The number of performance share units that will ultimately vest ranges from 0% to 150% of a defined target based on Synovus' relative TSR and three-year weighted average adjusted ROATCE.
During the year ended December 31, 2019, Synovus granted market restricted share units and performance share units to senior management. The market restricted share units have a three-year service-based vesting component as well as a total shareholder return multiplier.multiplier and the performance share units vest upon meeting certain service and performance conditions. The number of market restricted share units that will ultimately vest ranges from 75% to 125% of a defined target based on Synovus' total shareholder return (TSR). The total fair value of market restricted share units vested during 2018, 2017,TSR. Adjusted ROAA and 2016 was $5.1 million, $4.8 million, and $2.6 million, respectively. At December 31, 2018, total unrecognized compensation cost related to market restricted share units was $3.4 million with a weighted average remaining period of 1.35 years. A summary of market restricted share units outstanding and changes during the years ended December 31, 2018, 2017, and 2016 is presented below.


Market Restricted Share Units   
 Share Units Weighted-Average Grant Date Fair Value
Outstanding at December 31, 2015158,248
 $27.02
Granted93,913
 26.93
Dividend equivalents granted3,095
 26.93
Quantity change by TSR factor9,970
 26.93
Vested(82,817) 26.40
Outstanding at December 31, 2016182,409
 27.25
Granted78,174
 43.52
Dividend equivalents granted2,811
 43.52
Quantity change by TSR factor22,182
 27.25
Vested(114,013) 26.78
Outstanding at December 31, 2017171,563
 35.24
Granted57,851
 48.46
Dividend equivalents granted3,204
 41.91
Quantity change by TSR factor17,882
 33.21
Vested(105,459) 33.21
Forfeited(952) 38.32
Outstanding at December 31, 2018144,089
 $41.91
    
Synovus granted performance share units to senior management during the years ended December 31, 2018, 2017, and 2016. These units vest upon meeting certain service and performance conditions. Beginning in 2018, return on average assets (ROAA) and return on average tangible common equity (ROATCE)adjusted ROATCE performance is evaluated each year over a three-year performance period, with share distribution determined at the end of the three years. The number of performance share units that will ultimately vest ranges from 0% to 150% of defined targets based on Synovus' three-year weighted average adjusted ROAA and ROATCE (as defined). Prior to 2018, performance was evaluated using only ROAA. The total fair value of performance share units vested during 2018 was $4.3 million. At December 31, 2018, total unrecognized compensation cost related to performance share units was $6.0 million with a weighted average remaining period of 1.40 years. adjusted ROATCE.
A summary of restricted share units and market/performance share units outstanding and changes during the years ended December 31, 2018, 2017,2021, 2020, and 20162019 is presented below.
Restricted Share UnitsMarket/Performance Share Units
(in thousands, except per share data)QuantityWeighted-Average Grant Date Fair ValueQuantityWeighted-Average Grant Date Fair Value
Outstanding at December 31, 2018526 $41.18 392 $39.62 
Granted573 36.27 305 37.22 
Assumed in acquisition136 31.99 — — 
Vested(304)37.04 (152)30.87 
Forfeited(114)37.04 (50)39.45 
Outstanding at December 31, 2019817 38.32 495 40.85 
Granted822 32.42 204 37.74 
Vested(384)38.04 (214)41.31 
Forfeited(34)35.97 (46)39.03 
Outstanding at December 31, 20201,221 34.50 439 39.37 
Granted599 42.31 141 42.94 
Vested(482)37.05 (58)42.43 
Forfeited(93)31.41 — — 
Outstanding at December 31, 20211,245 $37.00 522 $37.59 
Performance Share Units   
 Share Units Weighted-Average Grant Date Fair Value
Outstanding at December 31, 2015151,567
 $26.01
Granted83,529
 25.95
Dividend equivalents granted3,384
 25.95
Outstanding at December 31, 2016238,480
 25.99
Granted72,825
 41.61
Dividend equivalents granted2,562
 41.61
Vested(69,326) 23.47
Outstanding at December 31, 2017244,541
 31.54
Granted86,774
 47.23
Dividend equivalents granted4,418
 28.06
Vested(84,326) 28.06
Adjustment for performance vs. target(1,250) 28.06
Forfeited(1,900) 33.52
Outstanding at December 31, 2018248,257
 $38.29
    


Excess tax benefit/deficiency
During 2018, Synovus recognized $3.3 million of income tax benefits through the income statement from share-based compensation excess tax benefits upon the vestingThe total fair value of restricted share units market restricted share units, vested during 2021, 2020, and 2019 was $19.8 million, $13.4 million, and $11.2 million, respectively. The total fair value of market/performance share units vested during 2021, 2020, and exercise of stock options. During 2017, Synovus recognized $5.02019 was $2.4 million, of income tax benefits through the income statement from share-based compensation excess tax benefits upon the vesting of restricted share units, market restricted share units, performance share units,$7.9 million, and exercise of stock options. During 2016, Synovus recognized a share-based compensation net tax deficiency of $790 thousand associated primarily with expired and canceled stock options. The net deficiency was recorded as a reduction of additional paid-in-capital within shareholders' equity.$5.7 million, respectively.
The following table provides aggregate information regarding grants under all Synovus equity compensation plans at December 31, 2018.

 
 
 
 
Plan Category
 
(a) Number of Securities to be Issued
Upon Vesting of Restricted
Share Units, Market
Restricted Share Units, and Performance Share Units(1)
 (b) Number of Securities to be Issued
Upon Exercise of Outstanding Options		 (c) Weighted-Average
Exercise Price of
Outstanding Options in Column (b)		 (d) Number of Shares Remaining Available for Issuance Excluding Shares Reflected in Columns (a) and (b)
Shareholder approved equity compensation plans for shares of Synovus stock 918,139
 639,901
 $16.93
 4,849,161
         
(1)
Market restricted and performance share units included at defined target levels. Actual shares issued upon vesting may differ based on actual TSR and ROAA and ROATCE over the measurement period.
Other Employment Benefit Plans
For the yearyears ended December 31, 2018,2021, 2020, and 2019, Synovus provided a 100% matching contribution on the first 5% of eligible employee 401(k) contributions for a total annual contribution of $15.7 million. $21.5 million, $21.3 million, and $18.8 million, respectively.
For the years ended December 31, 20172021, 2020, and 2016, Synovus provided a 100% matching contribution on the first 4% of eligible employee 401(k) contributions for a total annual contribution of $11.5 million and $10.8 million, respectively. Effective December 29, 2017, Synovus' non-contributory profit sharing plan was merged into the 401(k) plan.
For the years ended December 31, 2018, 2017, and 2016,2019, Synovus sponsored a stock purchase plan for directors and employees whereby Synovus made contributions equal to 15% of employee and director voluntary contributions, subject to certain maximum contribution limitations. The funds are used to purchase outstanding shares of Synovus common stock. Synovus recorded as expense $942 thousand, $860 thousand,$1.1 million, $1.1 million, and $826 thousand$1.1 million for contributions to these plans in 2018, 2017,2021, 2020, and 2016,2019, respectively.
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Note 1716 - Income Taxes
The components of income tax expense (benefit) included inon the consolidated statements of income for the years ended December 31, 2018, 2017,2021, 2020, and 20162019 are presented below:
(in thousands)202120202019
Current
Federal$153,911 $187,741 $112,517 
State29,982 9,421 2,085 
Total current income tax expense183,893 197,162 114,602 
Deferred
Federal28,873 (90,777)46,182 
State16,127 4,585 40,451 
Total deferred income tax expense (benefit)45,000 (86,192)86,633 
Total income tax expense$228,893 $110,970 $201,235 
(in thousands)2018 2017 2016
Current     
Federal$75,582
 $(32,341) $7,329
State7,081
 5,949
 5,501
Total current income tax expense (benefit)82,663
 (26,392) 12,830
Deferred     
Federal24,894
 229,917
 117,463
State11,321
 1,139
 11,374
Total deferred income tax expense36,215
 231,056
 128,837
Total income tax expense$118,878
 $204,664
 $141,667
      
Income tax expense does not reflect the tax effects of net unrealized gains (losses) on investment securities available for sale and post-retirement unfunded health benefits. These effects are presented in the consolidated statements of comprehensive income.


The 2018 financial results reflect a $9.8 million tax benefit resulting from the completion of the remeasurement of the deferred tax assets and liabilities from Federal Tax Reform in accordance with ASC Topic 740, Income Taxes. This included a $3.9 million tax benefit for the refinement of provisional amounts previously reported under SEC Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (SAB 118) and a $5.9 million return to provision benefit associated with the 2017 tax return. In 2017, Synovus made a reasonable estimate, based on the information available, of the impact from the reduction in the corporate tax rate on the remeasurement of applicable deferred tax assets and liabilities, which resulted in an additional provisional federal income tax expense of $47.2 million.
Income tax expense as shown inon the consolidated statements of income differed from the amounts computed by applying the U.S. federal income taxstatutory rate of 21 percent to income before income taxes for the year ended December 31, 2018, and 35 percent for the years ended 2017December 31, 2021, 2020, and 2016.2019. A reconciliation of the differences is presented below:
Years Ended December 31,
(dollars in thousands)202120202019
Income tax expense at statutory federal income tax rate$207,765 $101,779 $160,653 
Increase (decrease) resulting from:
State income tax expense, net of federal income tax benefit38,452 11,168 33,764 
Income not subject to tax(10,455)(9,207)(6,564)
Low income housing tax credits and other tax benefits, net of amortization(4,858)(2,611)(1,583)
FDIC premiums4,111 4,744 5,802 
General business tax credits(3,727)(657)(678)
Excess tax benefit from share-based compensation(3,084)311 (1,337)
    Executive compensation1,096 1,501 6,385 
    Goodwill impairment— 9,424 — 
Other, net(407)(5,482)4,793 
Total income tax expense$228,893 $110,970 $201,235 
Effective tax rate23.1 %22.9 %26.3 %





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 Years Ended December 31,
(dollars in thousands)2018 2017 2016
Income tax expense at statutory federal income tax rate$114,944
 $168,048
 $135,957
Increase (decrease) resulting from:     
State income tax expense, net of federal income tax benefit17,270
 11,961
 13,256
Adjustment related to reduction in U.S. federal statutory income tax rate(1)(2) 
(9,865) 46,573
 —
Non-deductible expenses7,556
 2,435
 813
Low income housing tax credits and other tax benefits(6,421) (2,759) —
Low income housing tax credit amortization5,316
 268
 —
Change in valuation allowance(3)
(3,431) (6,227) (2,055)
Bank-owned life insurance(3,055) (4,702) (3,402)
Excess tax benefit from share-based compensation(2,801) (4,318) —
General business tax credits(4)
(1,163) (4,615) (1,213)
Other, net528
 (2,000) (1,689)
Total income tax expense$118,878
 $204,664
 $141,667
Effective tax rate21.7% 42.6% 36.5%
      
(1) Does not include a 2017 provisional tax expense adjustment of $608 thousand which is included as a componentThe components of the change in the valuation allowance. The 2017 income tax effect of the provisional federal income tax expense of $47.2 million relating to Federal Tax Reform represents 9.8% of income before taxes.
(2) 2017 includes a $7.6 million expense from remeasurement of deferred tax assets relating to unrealized losses on available for sale securities which were initially recorded through accumulated other comprehensive income (AOCI).   As further described in Note 1, ASU 2018-02, issued in February 2018, provides for the reclassification of the tax effects stranded in AOCI resulting from Federal Tax Reform to retained earnings.   As a result, Synovus elected to apply the ASU 2018-02 guidance during the reporting period ending on March 31, 2018 and reclassified $7.6 million from AOCI to retained earnings.
(3)2017 includes provisional federal income tax expense of $608 thousand related to Federal Tax Reform.
(4) 2017 includes research and development tax credits for the tax years 2013-2017 totaling $4.6 million.




Details for significant portions of theCompany's deferred tax assets and liabilities at December 31, 20182021 and 20172020 are presented below:
(in thousands)20212020
Deferred tax assets
Allowance for loan losses$112,180 $165,691 
Lease liability102,412 98,340 
Employee benefits and deferred compensation35,782 27,917 
Net operating loss carryforwards23,897 29,684 
Net unrealized losses on investment securities available for sale and cash flow hedges19,261 — 
Deferred revenue18,487 24,751 
Tax credit carryforwards15,870 8,605 
Fair value of investment securities and loans6,439 10,093 
Non-performing loan interest2,621 12,472 
Other7,100 9,819 
Total gross deferred tax assets344,049 387,372 
Less valuation allowance(19,003)(19,191)
Total deferred tax assets325,046 368,181 
Deferred tax liabilities
Right-of-use asset(98,773)(98,681)
Excess tax over financial statement depreciation(27,355)(40,452)
Purchase accounting intangibles(14,820)(14,458)
Other properties held for sale(5,345)(3,025)
Prepaid expense(4,631)(5,955)
Net unrealized gains on investment securities available for sale and cash flow hedges— (64,344)
Other(5,071)(10,418)
Total gross deferred tax liabilities(155,995)(237,333)
Net deferred tax assets$169,051 $130,848 
(in thousands)2018 2017
Deferred tax assets   
Allowance for loan losses$63,952
 $66,034
Net operating loss carryforwards33,008
 41,059
Net unrealized losses on investment securities available for sale24,419
 13,253
Employee benefits and deferred compensation20,363
 18,333
Tax credit carryforwards20,088
 19,175
Deferred revenue10,189
 12,311
Lease rental2,526
 2,549
Non-performing loan interest2,442
 10,388
Other9,415
 6,343
Total gross deferred tax assets186,402
 189,445
Less valuation allowance—
 (3,431)
Total deferred tax assets186,402
 186,014
Deferred tax liabilities   
Excess tax over financial statement depreciation(31,260) (8,080)
Other properties held for sale(5,469) (5,447)
Other(8,539) (6,699)
Total gross deferred income tax liabilities(45,268) (20,226)
Net deferred tax assets$141,134
 $165,788
    
TheSynovus believes the realization of net decreasedeferred tax assets (after valuation allowance) at December 31, 2021 is more likely than not based on its history of cumulative profitability as well as expectations of future taxable income, including reversals of taxable temporary differences, in the valuation allowance forjurisdictions in which it operates.
Synovus expects that a portion of its $23.9 million of federal and state NOLs, which have carryforward periods ending in tax years 2023 through 2034, will not be realized before their carryforward period lapses and the years ended December 31, 2018 and 2017 was $3.4 million and $6.2 million, respectively. The decrease in 2018 related to the expiration of unused state tax credits which hadCompany has accordingly established a valuation allowance recorded. The decrease in 2017 was related to the expirationamount of unused state tax credits which had a valuation allowance and the reversal of valuation allowance on state tax credits that now have been determined to be utilized before they expire.
Management assesses the realizability of deferred tax assets$19.0 million at each reporting period. The determination of whether a valuation allowance for deferred tax assets is appropriate is subject to considerable judgment and requires an evaluation of all the positive and negative evidence. At December 31, 2018, the Company is not in a three-year cumulative loss position; accordingly, it does not have significant negative evidence to consider when evaluating the realization of its deferred2021 and $19.2 million at December 31, 2020. State tax assets. Positive evidence supporting the realization of the Company’scredit deferred tax assets at December 31, 2018 includes generation of taxable income in 2018, 2017, and 2016, continued improvement in credit quality, strong capital position, as well as sufficient amounts of projected future taxable income, of the appropriate character, to support the realization of the $141.1 million net deferred tax asset at December 31, 2018. Synovus expects to realize its net deferred tax asset of $141.1 million through the reversal of existing taxable temporary differences and projected future taxable income. Based on the assessment of all the positive and negative evidence at December 31, 2018, management has concluded that it is more likely than not that the results of future operations will generate sufficient taxable income to realize the deferred tax assets.
Synovus expects to realize substantially all of the $141.1 million in net deferred tax assets well in advance of the statutory carryforward period. At December 31, 2018, $88.0 million of existing net deferred tax assets are not related to net operating losses or credits and therefore, have no expiration dates. $33.0 million of the deferred tax assets relate to state net operating losses which will expire in installments annually through the tax year 2036. State tax credits at December 31, 20182021 total $20.1$15.9 million and have expiration dates through the tax year 2028.2031.

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State NOLNOLs and tax credit carryforwards as of December 31, 20182021 are summarized in the following table.
Tax CarryforwardsAs of December 31, 2021
(in thousands)Expiration DatesDeferred
Tax Asset, Before Valuation Allowance		Valuation AllowanceNet Deferred Tax Asset Balance
Net operating losses - federal2027-2033$19,592 $(15,851)$3,741 
Net operating losses - states2023-20344,305 (3,152)1,153 
Other credits - states2022-203115,870 — 15,870 
Tax CarryforwardsAs of December 31, 2018
(in thousands)Expiration Dates 
Deferred
Tax Asset Balance
 Valuation Allowance Net Deferred Tax Asset Balance 
Pre-Tax Earnings Necessary to Realize(1)
Net operating losses - states2023-2027 $1,431
 $—
 $1,431
 $1,429,499
Net operating losses - states2028-2032 39,483
 —
 39,483
 914,384
Net operating losses - states2033-2036 356
 —
 356
 7,356
Other credits - states2019-2023 20,164
 —
 20,164
 N/A
Other credits - states2024-2028 2,388
 —
 2,388
 N/A
          
(1)
N/A indicates credits are not measured on a pre-tax earnings basis.
Synovus is subject to income taxation in the United States and various state and local taxing jurisdictions. Synovus' federal income tax return is filed on a consolidated basis, while state income tax returns are filed on both a consolidated and separate entity basis. Currently, there are no years for which Synovus filed a federal income tax return that are under examination by the IRS. Additionally,Generally, Synovus is no longer subject to income tax examinations by the IRS for years before 2015,2018 and excluding certain limited exceptions, Synovus is no longer subject to income tax examinations by state and local income tax authorities for years before 2015. However, amounts reported as net operating losses and tax credit carryovers from closed tax periods remain subject to review by most tax authorities. Although Synovus is unable to determine the ultimate outcome of current and future examinations, Synovus believes that the liability recorded for uncertain tax positions is adequate.resolution of these examinations will not have a material effect on the consolidated financial statements.
A reconciliation of the beginning and ending amount of unrecognized income tax benefits is as follows (unrecognized state income tax benefits are not adjusted for the federal income tax impact).
Years Ended December 31,
(in thousands)202120202019
Balance at January 1,$20,250 $20,994 $18,586 
Additions based on income tax positions related to current year3,754 461 550 
Additions for income tax positions of prior years(1)
1,379 147 — 
Additions from acquisition— — 3,464 
Reductions for income tax positions of prior years(200)(327)(1,589)
Statute of limitation expirations(79)(820)(17)
Settlements— (205)— 
Balance at December 31,$25,104 $20,250 $20,994 
 Years Ended December 31,
(in thousands)2018 2017 2016
Balance at January 1,$15,117
 $14,745
 $12,745
Additions based on income tax positions related to current year1,165
 152
 —
Additions for income tax positions of prior years(1)
2,321
 934
 1,811
Additions from acquisition—
 —
 608
Reductions for income tax positions of prior years—
 (706) —
Statute of limitation expirations(17) (8) (419)
Balance at December 31,$18,586
 $15,117
 $14,745
      
(1)    Includes deferred tax benefits that could reduce future tax liabilities.
(1)
Includes deferred tax benefits that could reduce future tax liabilities.
Accrued interest and penalties related to unrecognized income tax benefits are includedrecognized as a component of income tax expense. Accrued interestexpense, and penalties on unrecognized income tax benefits totaled $227 thousand, $105 thousand,$3.3 million, $2.7 million, and $38 thousand$3.3 million as of December 31, 2018, 20172021, 2020 and 2016,2019, respectively. Unrecognized income tax benefits as of December 31, 2018, 20172021, 2020 and 20162019 that, if recognized, would affect the effective income tax rate totaled $15.2$23.5 million, $12.3$19.1 million and $9.9$20.4 million (net of the federal benefit on state income tax issues). Accrued interest and penalties during 2018 and 2017 totaled $193 thousand and $76 thousand,, respectively. It is reasonably possible that significant changes in the balance of unrecognized tax benefits may occur within the next 12 months. At this time, Synovus expects that $316 thousand$2.3 million of uncertain income tax positions will be either settled or resolved during the next twelve months.

119


Note 1817 - Non-interest IncomeSegment Reporting
Non-interest income includes revenue from various types of transactionsSynovus' 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. Prior to customers. the fourth quarter of 2019, Synovus identified its overall banking operations as its only reportable segment. During the fourth quarter of 2019, Synovus announced changes in its organizational structure and segmented its business into 3 major reportable business segments: Community Banking, Wholesale 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' third-party lending consumer loans and loans held for sale, as well as PPP loans, are included in Treasury and Corporate Other.The management accounting policies and processes utilized in compiling segment financial information are highly subjective and, unlike financial accounting, are not based on authoritative guidance similar to GAAP. As a result, reported segment results are not necessarily comparable with similar information reported by other financial institutions.
The Community Banking business segment serves clients using a relationship-based approach through its branch, ATM, commercial, and private wealth network in addition to mobile, Internet, and telephone banking. This segment primarily provides individual, small business, and corporate clients with an array of comprehensive banking products and services including commercial, home equity, and other consumer loans, credit and debit cards, and deposit accounts.
The Wholesale Banking business segment serves primarily larger corporate clients by providing commercial lending and deposit services through specialty teams including middle market, CRE, senior housing, national accounts, premium finance, structured lending, healthcare, asset-based lending, and community investment capital.
The Financial Management Services business segment serves its clients by providing mortgage and trust services and also specializing in professional portfolio management for fixed-income securities, investment banking, the execution of securities transactions as a broker/dealer, asset management, financial planning, and family office services, as well as the provision of individual investment advice on equity and other securities.
Synovus uses a centralized FTP methodology to attribute appropriate net interest income to the business segments. The intent of the FTP methodology is to transfer interest rate risk from the business segments by providing matched duration funding of assets and liabilities. The result is to centralize the financial impact, management, and reporting of interest rate risk in the Treasury and Corporate Other function where it can be centrally monitored and managed. Treasury and Corporate Other includes certain assets and/or liabilities managed within that function. Additionally, Treasury and Corporate Other also charges (credits) an internal cost of funds for assets held in (or pays for funding provided by) each business segment. The process for determining FTP is based on a number of factors and assumptions, including prevailing market interest rates, the expected lives of various assets and liabilities, and the Company's broader funding profile.
The following table reflects non-interesttables present certain financial information for each reportable business segment for the years ended December 31, 2021, 2020, and 2019 and as of December 31, 2021 and 2020. The fourth quarter of 2019 was the first financial period in which the new segment reporting became effective; thus, to provide comparable prior year information, Synovus has included proforma business segment financial information for the full year 2019 utilizing various allocation methodologies based on balance sheet and income disaggregatedstatement items assigned to each business segment. 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 revenue type, lineeach reportable business segment may be periodically revised.
During the year ended December 31, 2021, Treasury and Corporate Other's net interest income benefited from the recognition of business, and the amount$79.2 million of revenue that is in scope and outPPP fees, an increase of scope of Topic 606$33.2 million from $46.0 million for the year ended December 31, 2018.
Non-interest Income by Line of Business
 For the Year Ended December 31, 2018
(in thousands)Community Banking Corporate Banking Retail Banking Financial Management Services Other Total
Revenues in scope of Topic 606           
Service charges on deposit accounts$22,633
 $1,932
 $54,123
 $—
 $2,152
 $80,840
Fiduciary and asset management fees—
 —
 —
 54,685
 —
 54,685
Card fees834
 —
 41,669
 —
 —
 42,503
Brokerage revenue—
 —
 —
 36,567
 —
 36,567
Insurance revenue—
 —
 —
 5,410
 —
 5,410
Other fees—
 —
 1,943
 —
 1,084
 3,027
 $23,467
 $1,932
 $97,735
 $96,662
 $3,236
 $223,032
            
Revenues out of scope of Topic 606(1)
9,098
 7,598
 6,656
 22,786
 10,923
 57,061
Total non-interest income$32,565
 $9,530
 $104,391
 $119,448
 $14,159
 $280,093
            
(1)
Out of scope non-interest income is presented for the purpose of reconciling non-interest income amounts within the scope of Topic 606 to non-interest income amounts presented on Synovus' consolidated statements of income.
Following is a discussion of key revenues within2020. During the scope of Topic 606:
Service Charges on Deposit Accounts: Revenue from service charges on deposit accounts is earned through cash management, wire transfer, and other deposit-related services, as well as overdraft, non-sufficient funds, account management and other deposit-related fees. Revenue is recognized for these services either over time, corresponding with deposit accounts' monthly cycle, or at a point in time for transaction-related services and fees. Payment for service charges on deposit accounts is primarily received immediately or in the following month through a direct charge to customers' accounts.
Fiduciary and Asset Management Fees: Fiduciary and asset management fees are primarily comprised of fees earned from the management and administration of trusts and other customer assets. Synovus' performance obligation is generally satisfied over time and the resulting fees are recognized monthly, based upon the month-end market value of the assets under management and the applicable fee rate. Payment is generally received a few days after month-end through a direct charge to customers' accounts. Synovus does not earn performance-based incentives.
Card Fees: Card fees consist primarily of interchange fees from consumer credit and debit cards processed by card association networks, as well as merchant discounts, and other card-related services. Interchange rates are generally set by the credit card associations and based on purchase volumes and other factors. Interchange fees and merchant discounts are recognized concurrently with the delivery of service on a daily basis as transactions occur. Payment is typically received immediately or in the following month. Card fees are reported net of certain associated expense items including loyalty program expenses and network expenses.
Brokerage Revenue: Brokerage revenue consists primarily of commissions. Additionally, brokerage revenue includes advisory fees earned from the management of customer assets. Advisory fees for brokerage services are recognized and collected monthly and are based upon the month-end market value of the assets under management at a rate predetermined in the contract. Transactional revenues are based on the size and number of transactions executed at the client's direction and are generally recognized on the trade date with payment received on the settlement date.
Insurance Revenue: Insurance revenue primarily consists of commissions received on annuity and life product sales. The commissions are recognized as revenue when the customer executes an insurance policy with the insurance carrier. In some cases, Synovus receives payment of trailing commissions each year when the customer pays its annual premium. For the years ended December 31, 20182020, Synovus strategically repositioned the investment securities portfolio, which resulted in net gains of $78.9 million in the Treasury and 2017,Corporate Other segment. Additionally, during the year ended December 31, 2020, Synovus recognized an immaterial amounta $44.9 million non-cash goodwill impairment charge representing all of insurance trailing commissions.


Other Fees: Other fees primarily consist of revenues generated from safe deposit box rental fees and lockbox services. Fees are recognized over time, on a monthly basis, as Synovus' performance obligation for servicesthe goodwill allocated to the Consumer Mortgage reporting unit (which is satisfied. Payment is received upfront for safe deposit box rentals andincluded in the following month for lockbox services.FMS reportable segment) resulting from a combination of factors, including the extended duration of lower market valuations, high volumes in refinance activity that reduced mortgage yields, and the clarity around longer term policy actions designed to keep interest rates low.
120

Year Ended December 31, 2021
(in thousands)Community BankingWholesale BankingFinancial Management ServicesTreasury and Corporate OtherSynovus Consolidated
Net interest income$808,700 $557,943 $79,173 $87,131 $1,532,947 
Non-interest revenue128,026 34,590 211,002 76,448 450,066 
Non-interest expense290,817 90,074 184,257 534,756 1,099,904 
Pre-provision net revenue$645,909 $502,459 $105,918 $(371,177)$883,109 
Year Ended December 31, 2020
(in thousands)Community BankingWholesale BankingFinancial Management ServicesTreasury and Corporate OtherSynovus Consolidated
Net interest income$854,021 $548,152 $79,362 $31,213 $1,512,748 
Non-interest revenue111,256 26,379 224,620 144,258 506,513 
Non-interest expense297,071 85,250 232,222 565,031 1,179,574 
Pre-provision net revenue$668,206 $489,281 $71,760 $(389,560)$839,687 
Year Ended December 31, 2019 (Proforma)
(in thousands)Community BankingWholesale BankingFinancial Management ServicesTreasury and Corporate OtherSynovus Consolidated
Net interest income$825,219 $518,033 $112,431 $140,120 $1,595,803 
Non-interest revenue136,657 28,948 154,166 36,129 355,900 
Non-interest expense302,327 71,393 152,115 573,133 1,098,968 
Pre-provision net revenue$659,549 $475,588 $114,482 $(396,884)$852,735 
December 31, 2021
(dollars in thousands)Community BankingWholesale BankingFinancial Management ServicesTreasury and Corporate OtherSynovus Consolidated
Loans, net of deferred fees and costs$10,791,343 $21,496,050 $4,994,494 $2,030,071 $39,311,958 
Deposits$32,226,477 $12,370,554 $826,639 $4,003,606 $49,427,276 
Full-time equivalent employees2,139 284 7941,670 4,887 
December 31, 2020
(dollars in thousands)Community BankingWholesale BankingFinancial Management ServicesTreasury and Corporate OtherSynovus Consolidated
Loans, net of deferred fees and costs$11,171,055 $18,810,729 $5,370,748 $2,900,452 $38,252,984 
Deposits$29,141,242 $11,958,105 $739,200 $4,853,024 $46,691,571 
Full-time equivalent employees2,296 285 835 1,718 5,134 

121

Note 1918 - Condensed Financial Information of Synovus Financial Corp. (Parent Company only)
Condensed Balance Sheets
December 31,
(in thousands)20212020
Assets
Cash due from bank subsidiary$389,071 $439,352 
Funds due from other depository institutions9,277 9,277 
     Total cash, cash equivalents, and restricted cash398,348 448,629 
Investment in consolidated bank subsidiary, at equity5,381,311 5,239,849 
Investment in consolidated nonbank subsidiaries, at equity69,712 46,271 
Note receivable from bank subsidiary100,000 100,000 
Other assets25,538 16,975 
Total assets$5,974,909 $5,851,724 
Liabilities and Shareholders' Equity
Liabilities:
Long-term debt$607,334 $606,406 
Other liabilities70,775 83,984 
Total liabilities678,109 690,390 
Shareholders’ equity:
Preferred stock537,145 537,145 
Common stock169,384 168,133 
Additional paid-in capital3,894,109 3,851,208 
Treasury stock(931,497)(731,806)
Accumulated other comprehensive income (loss), net(82,321)158,635 
Retained earnings1,709,980 1,178,019 
Total shareholders’ equity5,296,800 5,161,334 
Total liabilities and shareholders’ equity$5,974,909 $5,851,724 

Condensed Statements of Income
Years Ended December 31,
(in thousands)202120202019
Income
Cash dividends received from subsidiaries$420,000 $547,500 $400,000 
Interest income777 3,341 5,920 
Other income (loss)1,070 4,966 11,590 
Total income421,847 555,807 417,510 
Expense
Interest expense27,616 42,911 41,328 
Other expense10,300 10,584 13,528 
Total expense37,916 53,495 54,856 
Income before income taxes and equity in undistributed income of subsidiaries    383,931 502,312 362,654 
Allocated income tax benefit(7,834)(12,202)(9,753)
Income before equity in undistributed income of subsidiaries    391,765 514,514 372,407 
Equity in undistributed income (loss) of subsidiaries368,702 (140,819)191,373 
Net income760,467 373,695 563,780 
Dividends on preferred stock33,163 33,163 22,881 
Net income available to common shareholders$727,304 $340,532 $540,899 
122

Condensed Balance Sheets 
 December 31,
(in thousands)2018 2017
Assets   
Cash due from bank subsidiary$213,096
 $191,275
Funds due from other depository institutions9,927
 19,911
     Total cash, cash equivalents, restricted cash, and restricted cash equivalents(1)
223,023
 211,186
Investment in consolidated bank subsidiary, at equity3,418,471
 3,232,129
Investment in consolidated nonbank subsidiaries, at equity34,586
 40,731
Other assets62,915
 69,762
Total assets$3,738,995
 $3,553,808
Liabilities and Shareholders' Equity   
Liabilities:   
Long-term debt$555,704
 $554,589
Other liabilities49,689
 37,653
Total liabilities605,393
 592,242
Shareholders’ equity:   
Series C Preferred Stock—
 125,980
Series D Preferred Stock195,140
 —
Common stock143,300
 142,678
Additional paid-in capital3,060,561
 3,043,129
Treasury stock(1,014,746) (839,674)
Accumulated other comprehensive loss, net(94,420) (54,754)
Retained earnings843,767
 544,207
Total shareholders’ equity3,133,602
 2,961,566
Total liabilities and shareholders’ equity$3,738,995
 $3,553,808
    
(1)
See "Note 1 - Summary of Significant Accounting Policies" of this Report for information on Synovus' change in presentation of cash and cash equivalents.


Condensed Statements of Comprehensive Income
Years Ended December 31,
202120202019
(in thousands)Before-tax AmountIncome TaxNet of Tax AmountBefore-tax AmountIncome TaxNet of Tax AmountBefore-tax AmountIncome TaxNet of Tax Amount
Net income$989,360 $(228,893)$760,467 $484,665 $(110,970)$373,695 $765,015 $(201,235)$563,780 
Reclassification adjustment for realized (gains) losses included in net income on investment securities available for sale— — — — — — (22)6 (16)
Other comprehensive gain (loss) of bank subsidiary(324,561)83,605 (240,956)125,505 (32,511)92,994 216,032 (55,955)160,077 
Other comprehensive income (loss)$(324,561)$83,605 $(240,956)$125,505 $(32,511)$92,994 $216,010 $(55,949)$160,061 
Comprehensive income$519,511 $466,689 $723,841 

Condensed Statements of Cash Flows
Years Ended December 31,
(in thousands)202120202019
Operating Activities
Net income$760,467 $373,695 $563,780 
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed (income) loss of subsidiaries(368,702)140,819 (191,373)
Deferred income tax expense (benefit)(7,296)3,962 1,775 
Net increase (decrease) in other liabilities(2,082)11,243 43,617 
Net decrease in other assets5,280 17,441 3,367 
Other, net928 (5,132)1,037 
Net cash provided by operating activities388,595 542,028 422,203 
Investing Activities
Proceeds from sales of investment securities available for sale— — 97,389 
Advance of long-term note receivable due from bank subsidiary— — (100,000)
Return of investment non-bank subsidiary— — 790 
Proceeds from sales of equity securities— 23,141 — 
Increase in other investments(10,000)— — 
Net cash received in business combination, net of cash paid— — 4,813 
Net cash provided by investing activities(10,000)23,141 2,992 
Financing Activities
Dividends paid to common and preferred shareholders(227,840)(223,130)(185,664)
Repurchase of common stock(199,932)(16,246)(725,398)
Redemption of long-term debt— (250,000)— 
Proceeds from issuance of long-term debt, net— — 297,174 
Proceeds from issuance of preferred stock, net— — 342,005 
Other(1,104)(1,552)(1,947)
Net cash used in financing activities(428,876)(490,928)(273,830)
Increase (decrease) in cash, cash equivalents, and restricted cash(50,281)74,241 151,365 
Cash, cash equivalents, and restricted cash at beginning of year448,629 374,388 223,023 
Cash, cash equivalents, and restricted cash at end of year$398,348 $448,629 $374,388 
123
Condensed Statements of Income 
 Years Ended December 31,
(in thousands)2018 2017 2016
Income     
Cash dividends received from subsidiaries(1)
$250,000
 $283,210
 $325,000
Cash distributions received from subsidiaries(1)
10,000
 167,790
 —
Interest income1,703
 1,443
 2,565
Other (loss) income(3,904) 345
 4,595
Total income257,799
 452,788
 332,160
Expenses     
Interest expense25,287
 43,922
 52,831
Other expenses21,455
 33,955
 20,652
Total expenses46,742
 77,877
 73,483
Income before income taxes and equity in undistributed
income (loss) of subsidiaries    
211,057
 374,911
 258,677
Allocated income tax benefit(13,690) (30,421) (25,628)
Income before equity in undistributed income (loss) of subsidiaries    224,747
 405,332
 284,305
Equity in undistributed income (loss) of subsidiaries203,729
 (129,858) (37,521)
Net income428,476
 275,474
 246,784
Dividends and redemption charge on preferred stock17,998
 10,238
 10,238
Net income available to common shareholders$410,478
 $265,236
 $236,546
      
(1)
Substantially all cash dividends and distributions are from Synovus Bank.

Condensed Statements of Comprehensive Income
 December 31, 2018 December 31, 2017 December 31, 2016
(in thousands)Before-tax Amount Tax (Expense) Benefit Net of Tax Amount Before-tax Amount Tax (Expense) Benefit Net of Tax Amount Before-tax Amount Tax (Expense) Benefit Net of Tax Amount
Net income$547,354
 $(118,878) $428,476
 $480,138
 $(204,664) $275,474
 $388,451
 $(141,667) $246,784
Reclassification adjustment for losses realized in net income on cash flow hedges—
 —
 —
 130
 (50) 80
 467
 (180) 287
Reclassification adjustment for net gains realized in net income on investment securities available for sale—
 —
 —
 (5,506) 2,120
 (3,386) (5,763) 2,219
 (3,544)
Net unrealized gains on investment securities available for sale—
 —
 —
 —
 —
 —
 2,358
 (908) 1,450
Other comprehensive (loss) gain of bank subsidiary(43,447) 11,252
 (32,195) 6,784
 (2,573) 4,211
 (39,080) 15,047
 (24,033)
Other comprehensive (loss) income$(43,447) $11,252
 $(32,195) $1,408
 $(503) $905
 $(42,018) $16,178
 $(25,840)
Comprehensive income    $396,281
     $276,379
     $220,944
                  



Condensed Statements of Cash Flows 
 Years Ended December 31,
(in thousands)2018 2017 2016
Operating Activities     
Net income$428,476
 $275,474
 $246,784
Adjustments to reconcile net income to net cash provided by operating activities:     
Equity in undistributed (income) loss of subsidiaries(203,729) 129,858
 37,521
Deferred income tax expense1,055
 60,931
 17,989
Net increase (decrease) in other liabilities9,551
 (1,095) 7,746
Net decrease (increase) in other assets6,723
 (8) (9,214)
Other, net1,115
 (3,330) (1,648)
Net cash provided by operating activities243,191
 461,830
 299,178
Investing Activities     
Proceeds from sales of investment securities available for sale—
 4,305
 —
Outlays for business combinations—
 —
 (3,408)
Net decrease in short-term notes receivable from non-bank subsidiaries    —
 35,200
 31,800
Net cash provided by investing activities—
 39,505
 28,392
Financing Activities     
Dividends paid to common and preferred shareholders(120,202) (64,908) (69,663)
Repurchases of common stock(175,072) (175,079) (263,084)
Repayments and redemption of long-term debt—
 (600,386) (130,048)
Proceeds from issuance of long-term debt—
 296,866
 —
Net proceeds from issuance of Series D Preferred Stock195,140
 —
 —
Redemption of Series C Preferred Stock(130,000) —
 —
Earnout payment(1,220) (892) —
Net cash used in financing activities(231,354) (544,399) (462,795)
Increase (decrease) in cash and cash equivalents including restricted cash11,837
 (43,064) (135,225)
Cash, cash equivalents, restricted cash, and restricted cash equivalents at beginning of year(1)
211,186
 254,250
 389,475
Cash, cash equivalents, restricted cash, and restricted cash equivalents at end of year(1)
$223,023
 $211,186
 $254,250
      
(1) See "Note 1 - Summary of Significant Accounting Policies" of this Report for information on Synovus' change in presentation of cash and cash equivalents.
See accompanying notes to the audited consolidated financial statements.
For the years ended December 31, 2018, 2017,2021, 2020, and 2016,2019, the Parent Company paid income taxes of $41.7$203.2 million $18.0, $119.1 million, and $9.5$101.6 million, respectively. For the years ended December 31, 2018, 2017,2021, 2020, and 2016,2019, the Parent CompanyCompany paid interest of $24.2$27.3 million, $51.0$42.0 million, and $53.1$33.1 million, respectively.


Note 2019 - Subsequent EventsEvent
Acquisition of FCB Financial Holdings, Inc.
Effective January 1, 2019, Synovus completed its acquisition of all of the outstanding stock of FCB Financial Holdings, Inc. (FCB), a bank holding company based in Weston, Florida. The fair value of the consideration transferred totaled approximately $1.60 billion. Effective January 1, 2019, Florida Community Bank merged into Synovus Bank. At the acquisition date, FCB had total loans of $9.42 billion, total deposits of $10.89 billion and operated 51 full service banking centers through its wholly-owned banking subsidiary, Florida Community Bank. With the addition of FCB, Synovus will become a top five regional bank by deposits in the Southeast region. The addition of FCB will elevate Synovus' growth profile through a deepened presence in high-growth Florida markets. Conversion of FCB systems is expected during the second quarter of 2019.
As the acquisition of FCB was completed afterSubsequent to December 31, 2018, Synovus' consolidated financial statements as2021, Synovus Bank provided irrevocable notice to its holders of and forits intent to redeem the years ended December 31, 2018 do not include amounts for FCB. Merger-related expenses totaling $10.12.289% Fixed-to-Floating Senior Bank Notes of $400 million relatingpar value that were subject to this transactionredemption. The Notes were recorded during the year ended December 31, 2018. Given the timing of the closing of this transaction, Synovus is currently in the process of valuing the assets acquired and liabilities assumed in the business combination. As a result, we are not yet able to provide the amounts to be recognized as of the closing date for the major classes of assets acquired and liabilities assumed and other related disclosures.
If the acquisition of FCB had been completed on January 1, 2018, unaudited pro forma total revenue, net of interest expense would have been approximately $1.9 billion for 2018, and unaudited pro forma net income available to common shareholders would have been approximately $613 million. The unaudited pro forma results include the impact of amortizing and accreting certain estimated purchase accounting adjustments such as intangible assets as well as fair value adjustments to loans, deposits, and long-term debt. Merger-related expenses that occurred at the effective time of the merger or subsequent to the merger are not reflected in the unaudited pro forma amounts. Cost savings are also not reflected in the unaudited pro forma amounts for the twelve months ended December 31, 2018. The pro forma information does not necessarily reflect the results of operations that would have occurred had Synovus merged with FCB at the beginning of 2018.
Issuance of Subordinated Debt
On February 7, 2019, Synovus completed a public offering of $300.0 million aggregate principal amount of 5.900% fixed-to-fixed rate subordinated notes due in 2029.  Subject to any redemption prior to February 7, 2029, the notes will bear interest at the rate of 5.900% per annum for the first five years and, thereafter, at a fixed rate which will be 3.379% above the 5-Year Mid-Swap Rate as of the reset date. Interest on the notes will be payable semi-annually in arrears. The notes will matureredeemed on February 7, 2029.


Summary10, 2022 with a net payment of Quarterly Financial Data (Unaudited)
Presented below is a summary$405.3 million that included $400.0 million in principal, $4.6 million in interest, and $675 thousand of the unaudited consolidated quarterly financial data for the years ended December 31, 2018 and 2017.written off debt issuance costs.
124
 2018
 
(in thousands, except per share data)
Fourth Quarter 
Third
Quarter
 Second Quarter 
First
Quarter
Interest income$357,395
 $343,942
 $329,834
 $313,134
Net interest income297,933
 291,619
 284,577
 274,284
Provision for loan losses12,149
 14,982
 11,790
 12,776
Income before income taxes143,854
 128,008
 142,117
 133,375
Income tax expense38,784
 18,949
 30,936
 30,209
Net income105,070
 109,059
 111,181
 103,166
Net income available to common shareholders101,919
 99,330
 108,622
 100,607
Net income per common share, basic0.88
 0.85
 0.92
 0.85
Net income per common share, diluted0.87
 0.84
 0.91
 0.84

 2017
 Fourth Quarter 
Third
Quarter
 Second Quarter 
First
Quarter
Interest income$306,934
 $297,652
 $285,510
 $272,401
Net interest income269,713
 262,572
 251,097
 239,927
Provision for loan losses8,565
 39,686
 10,260
 8,674
Income before income taxes103,966
 152,675
 117,791
 105,704
Income tax expense74,361
 54,668
 41,788
 33,847
Net income    29,605
 98,007
 76,003
 71,857
Net income available to common shareholders    27,046
 95,448
 73,444
 69,298
Net income per common share, basic0.23
 0.79
 0.60
 0.57
Net income per common share, diluted0.23
 0.78
 0.60
 0.56
        





ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
NONE.
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures. In connection with the preparation of this Annual Report on Form 10-K, 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 Securities Exchange Act of 1934 (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 December 31, 2018,2021, Synovus' disclosure controls and procedures were effective.
Synovus regularly engages in productivity and efficiency initiatives to streamline operations, reduce expenses, and increase revenue. Additionally, investment in new and updated information technology systems has enhanced information gathering and processing capabilities, and allowed management to operate in a more centralized environment for critical processing and monitoring functions. Management of Synovus is responsible for identifying, documenting, and evaluating the adequacy of the design and operation of the controls implemented during each process change described above. 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 year ended December 31, 20182021 that has materially affected, or is reasonably likely to materially affect, Synovus' internal control over financial reporting.
Management's Report on Internal Control Over Financial Reporting. Management of Synovus is responsible for establishing and maintaining effective internal control over financial reporting for Synovus Financial Corp. and its subsidiaries (“we” and “our”), as that term is defined in Exchange Act Rules 13a-15(f). Synovus conducted an evaluation of the effectiveness of our internal control over Synovus' financial reporting as of December 31, 20182021 based on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on that evaluation, we concluded that our internal control over financial reporting is effective as of December 31, 2018.2021.
KPMG LLP, an independent registered public accounting firm, has audited the consolidated financial statements included in this Annual Report and has issued a report on the effectiveness of our internal control over financial reporting, whichand this report is included in "Part II - Item 8. Financial Statements and Supplementary Data" of this Report.
/s/ Kessel D. Stelling/s/ Kevin S. Blair
Kessel D. Stelling                        Kevin S. Blair
Chairman of the Board, /s/ Kevin S. Blair/s/ Andrew J. Gregory, Jr.
Kevin S. BlairAndrew J. Gregory, Jr.
President and Chief Executive OfficerSenior Executive Vice President Chief Operating Officer and Interim Chief Financial Officer
Changes in Internal Control Over Financial Reporting. No change in our internal control over financial reporting occurred during the fourth fiscal quarter ended December 31, 20182021 covered by this Report that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
NONE.




Part III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
GOVERNANCENot applicable.
Information included under the following captions in our Proxy Statement is incorporated in this document by reference:
“PROPOSALS TO BE VOTED ON” - “PROPOSAL 1: ELECTION OF 10 DIRECTORS”;
“EXECUTIVE OFFICERS”;
“SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE”; and
“CORPORATE GOVERNANCE AND BOARD MATTERS” - “Consideration of Director Candidates - Shareholder Candidates” and “Committees of the Board” - “Audit Committee.”
We have a Code of Business Conduct and Ethics that applies to all directors, officers and employees, including our principal executive officer, principal financial officer and principal accounting officer. You can find our Code of Business Conduct and Ethics in the Corporate Governance section of our website at investor.synovus.com. We will post any amendments to the Code of Business Conduct and Ethics and any waivers that are required to be disclosed by the rules of either the SEC or the NYSE in the Corporate Governance section of our website.
Because our common stock is listed on the NYSE, our chief executive officer is required to make, and he has made, an annual certification to the NYSE stating that he was not aware of any violation by us of the corporate governance listing standards of the NYSE. Our chief executive officer made his annual certification to that effect to the NYSE as of May 1, 2017. In addition, we have filed, as exhibits to this Annual Report, the certifications of our chief executive officer and chief financial officer required under Section 302 of the Sarbanes-Oxley Act of 2002.
ITEM 4. MINE SAFETY DISCLOSURES
NOT APPLICABLE.
125

Part III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Information included under the following captions in our Proxy Statement is incorporated in this document by reference:
•“PROPOSALS TO BE VOTED ON” - “PROPOSAL 1: ELECTION OF 13 DIRECTORS”;
•“EXECUTIVE OFFICERS”;
•“DELINQUENT SECTION 16(a) REPORTS”; and
•“CORPORATE GOVERNANCE AND BOARD MATTERS” - “Consideration of Director Candidates - Shareholder Candidates” and “Committees of the Board” - “Audit Committee.”
We have a Code of Business Conduct and Ethics that applies to all directors, officers and employees, including our principal executive officer, principal financial officer and principal accounting officer. You can find our Code of Business Conduct and Ethics in the Corporate Governance section of our website at investor.synovus.com. We will post any amendments to the Code of Business Conduct and Ethics and any waivers that are required to be disclosed by the rules of either the SEC or the NYSE in the Corporate Governance section of our website.
Because our common stock is listed on the NYSE, our chief executive officer is required to make, and he has made, an annual certification to the NYSE stating that he was not aware of any violation by us of the corporate governance listing standards of the NYSE. Our chief executive officer made his annual certification to that effect to the NYSE as of April 30, 2021. In addition, we have filed, as exhibits to this Annual Report, the certifications of our chief executive officer and chief financial officer required under Section 302 of the Sarbanes-Oxley Act of 2002.
ITEM 11. EXECUTIVE COMPENSATION
Information included under the following captions in our Proxy Statement is incorporated in this document by reference:
•“DIRECTOR COMPENSATION”;
•“EXECUTIVE COMPENSATION” - “Compensation Discussion and Analysis”; “Compensation and Human Capital Committee Report”; “Summary Compensation Table” and the compensation tables and related information which follow the Summary Compensation Table; and
“CORPORATE• “CORPORATE GOVERNANCE AND BOARD MATTERS” - “Committees of the Board” - “Compensation and Human Capital Committee Interlocks and Insider Participation.”
The information included under the heading “Compensation and Human Capital Committee Report” in our Proxy Statement is incorporated herein by reference; however, this information shall not be deemed to be “soliciting material” or to be “filed” with the Commission or subject to regulation 14A or 14C, or to the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Information pertaining to equity compensation plans is contained in "Part II - Item 8. Financial Statements and Supplementary Data - Note 1615 - Share-based Compensation and Other Employment Benefit Plans" of this Report and are incorporated herein by reference.
Information included under the following captions in our Proxy Statement is incorporated in this document by reference:
•“STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS”; and
•“PRINCIPAL SHAREHOLDERS.”
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Information included under the following captions in our Proxy Statement is incorporated in this document by reference:
•“CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS”; and
•“CORPORATE GOVERNANCE AND BOARD MATTERS” - “Independence.”




126

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Our independent registered public accounting firm is KPMG LLP, Atlanta, GA, Auditor Firm ID: 185.
Information included under the following captions in our Proxy Statement is incorporated in this document by reference:
•“AUDIT COMMITTEE REPORT” - “KPMG LLP Fees and Services” (excluding the information under the main caption “AUDIT COMMITTEE REPORT”); and
•“AUDIT COMMITTEE REPORT” - “Policy on Audit Committee Pre-Approval.”






127

Part IV


ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) 1. Financial Statements
The following consolidated financial statements of Synovus and our subsidiaries and related reports of Synovus' independent registered public accounting firm are incorporated in this Item 15 by reference from Part"Part II - Item 8. Financial Statements and Supplementary DataData" of this Report.
Consolidated Balance Sheets as of December 31, 20182021 and 20172020
Consolidated Statements of Income for the Years ended December 31, 2018, 20172021, 2020 and 20162019
Consolidated Statements of Changes in Shareholders' Equity and Comprehensive Income for the Years Ended December 31, 2018, 20172021, 2020 and 20162019
Consolidated Statements of Cash Flows for the Years Ended December 31, 2018, 20172021, 2020 and 20162019
Notes to Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm (on consolidated financial statements)
Report of Independent Registered Public Accounting Firm (on the effectiveness of internal control over financial reporting)
Management's Report on Internal Control Over Financial Reporting is incorporated by reference from Part"Part II - Item 9A. Controls and ProceduresProcedures" of this Report.
2. Financial Statement Schedules
None are applicable because the required information has been incorporated in the consolidated financial statements and notes thereto of Synovus and our subsidiaries which are incorporated in this Report by reference.
3. Exhibits
The following exhibits are filed herewith or are incorporated to other documents previously filed with the SEC. With the exception of those portions of the Proxy Statement that are expressly incorporated by reference in this Report, such documents are not to be deemed filed as part of this Report.


































Exhibit
128

Number
Description
2.1
Agreement and Plan of Merger by and among Synovus, FCB Financial Holdings, Inc. and Azalea Merger Sub Corp. and Synovus dated as of July 23, 2018, incorporated by reference to Exhibit 2.1 of the Synovus’ Current Report on Form 8-K dated July 23, 2018, as filed with the SEC on July 25, 2018.
Exhibit
Number		Description
3.1
Amended and Restated Articles of Incorporation of Synovus, as amended, incorporated by reference to Exhibit 3.1 of Synovus’ Quarterly Report on Form 10-Q for the quarter ended June 30, 2010, as filed with the SEC on August 9, 2010.
3.2
Articles of Amendment to the Amended and Restated Articles of Incorporation of Synovus with respect to the Series C Preferred Stock, incorporated by reference to Exhibit 3.1 to Synovus' Current Report of Form 8-K dated July 25, 2013, as filed with the SEC on July 25, 2013.
3.3
Articles of Amendment to the Amended and Restated Articles of Incorporation of Synovus, incorporated by reference to Exhibit 3.1 to Synovus' Current Report on Form 8-K dated April 29, 2014, as filed with the SEC on April 29, 2014.
3.4
Articles of Amendment to the Amended and Restated Articles of Incorporation of Synovus, incorporated by reference to Exhibits 3.1 to Synovus' Current Report on Form 8-K dated May 19, 2014, as filed with SEC on May 19, 2014.
3.5
Articles of Amendment to the Amended and Restated Articles of Incorporation of Synovus, incorporated by reference to Exhibit 3.1 of Synovus' Current Report on Form 8-K dated June 20, 2018,April 22, 2020, as filed with the SEC on June 21, 2018.April 24, 2020.
3.63.2 
Restated Bylaws as amended, of Synovus, incorporated by reference to Exhibit 3.13.2 of Synovus' Current Report on Form 8-K dated November 8, 2010,April 22, 2020, as filed with the SEC on November 9, 2010.April 24, 2020.
4.1
Specimen Physical Stock Certificatephysical stock certificate of Synovus, incorporated by reference to Exhibit 4.1 to Synovus' Current Report on Form 8-K dated May 19, 2014, as filed with SEC on May 19, 2014.
4.2
Specimen stock certificate for Fixed Rate Cumulative Perpetual Preferred Stock, Series A, incorporated by reference to Exhibit 4.2 of Synovus’ Current Report on Form 8-K dated December 17, 2008, as filed with the SEC on December 22, 2008.
4.3
Specimen stock certificate for Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series D, incorporated by reference to Exhibit 4.1 of Synovus' Current Report inon Form 8-K dated June 20, 2018, as filed with the SEC on June 21, 2018.
4.44.3 
Form of 2009 Warrant Agreement, as amended, incorporated by reference to Exhibit 10.4 of FCB's Registration Statement on Form S-1/A (No 333-196935), as filed with the SEC on July 22, 2014.
4.5
Shareholder Rights Plan, dated as of April 26, 2010, between Synovus Financial Corp. and Mellon Investor Services LLC, as Rights Agent, which includes the Form of Articles of Amendment to the Articles of Incorporation of Synovus Financial Corp. (Series B Participating CumulativeSpecimen stock certificate for Fixed-Rate Non-Cumulative Perpetual Preferred Stock) as Exhibit A, the Summary of Terms of the Rights Agreement as Exhibit B and the Form of Right Certificate as Exhibit C, incorporated by reference to Exhibit 4.1 of Synovus’ Current Report on Form 8-K dated April 26, 2010, as filed with the SEC on April 26, 2010.
4.6
Amendment No. 1 dated as of September 6, 2011 to Shareholder Rights Plan between Synovus Financial Corp. and American Stock, Transfer & Trust Company, LLC,Series E, incorporated by reference to Exhibit 4.1 of Synovus' Current Report on Form 8-K dated September 6, 2011,July1, 2019, as filed with the SEC on September 6, 2011.July 1, 2019.


4.4 
Exhibit
Number
Description
4.7
Amendment No. 2 dated of Synovus' securities registered under Section 12 of the Securities Exchange Act of 1934, as of April 24, 2013 to Shareholder Rights Plan between Synovus Financial Corp. and American Stock Transfer & Trust Company, LLC,amended, incorporated by reference to Exhibit 4.14.4 of Synovus' CurrentAnnual Report on Form 8-K dated April 24, 2013,10-K for the period ended December 31, 2020, as filed with the SEC on April 24, 2013.March 1, 2021.
4.84.5 
Amendment No. 3 dated as of April 20, 2016 to Shareholder Rights Plan between Synovus Financial Corp. and American Stock Transfer & Trust Company, LLC, incorporated by reference to Exhibit 4.1 of Synovus' Current Report on Form 8-K dated April 20, 2016, as filed with the SEC on April 21, 2016.
4.9
Summary of Plan Adjustments, effective as of May 16, 2014, to Shareholder Rights Plan between Synovus Financial Corp. and American Stock Transfer & Trust Company, LLC, incorporated by reference to Exhibit 99.2 of Synovus' Current Report on Form 8-K dated May 19, 2014, as filed with the SEC on May 19, 2014.
4.10
Indenture, dated as of June 20, 2005, between Synovus Financial Corp. and The Bank of New York Trust Company, N.A., as trustee, incorporated by reference to Exhibit 4.1 of Synovus' Registration Statement on Form S-4 (No. 333-126767), as filed with the SEC on July 21, 2005.
4.114.6 
Senior Notes Indenture, dated as of February 13, 2012, between Synovus Financial Corp. and The Bank of New York Mellon Trust Company, N.A., as trustee, incorporated by reference to Exhibit 4.1 of Synovus' Current Report on Form 8-K dated February 8, 2012, as filed with the SEC on February 13, 2012.
4.124.7 
Subordinated Indenture, dated as of December 7, 2015, between Synovus Financial Corp. and The Bank of New York Mellon Trust Company, N.A., as trustee, incorporated by reference to Exhibit 4.1 of Synovus' Current Report on Form 8-K dated December 2, 2015, as filed with the SEC on December 7, 2015.
4.134.8 
First Supplemental Indenture, dated as of December 7, 2015, between Synovus Financial Corp. and The Bank of New York Mellon Trust Company, N.A., as trustee, incorporated by reference to Exhibit 4.2 of Synovus' Current Report on Form 8-K dated December 2, 2015, as filed with the SEC on December 7, 2015.
4.144.9 
Second Supplemental Indenture, dated as of February 7, 2019, between Synovus Financial Corp. and The Bank of New York Mellon Trust Company, N.A., as trustee, incorporated by reference to Exhibit 4.1 of Synovus' Current Report on Form 8-K dated February 7, 2019, as filed with the SEC on February 7, 2019.
10.14.10 
10.210.1 
Amendment No. 1 dated September 6, 2011 to Synovus Financial Corp. 2011 Director Stock Purchase Plan, incorporated by reference to Exhibit 10.1 of Synovus' Current Report on Form 8-K dated September 6, 2011, as filed with the SEC on September 6, 2011.*
10.3
Amendment No. 2 dated February 28, 2013 to Synovus Financial Corp. 2011 Director Stock Purchase, incorporated by reference to Exhibit 10.6 of Synovus' Annual Report on Form 10-K for the fiscal year ended December 31, 2012, as filed with the SEC on March 1, 2013. *
10.4
Synovus Financial Corp. 2011 Employee Stock Purchase Plan, incorporated by reference to Exhibit 10.1 of Synovus' Registration Statement on Form S-8 (Registration No. 333-174265), as filed with the SEC on May 17, 2011.*
10.5
Amended and Restated Synovus Financial Corp. Directors' Deferred Compensation Plan, incorporated by reference to Exhibit 10.2 of Synovus' Quarterly Report on Form 10-Q for the quarter ended June 30, 2008, as filed with the SEC on August 8, 2008.*
10.2 
First Amendment to Synovus Financial Corp. Directors' Deferred Compensation Plan, incorporated by reference to Exhibit 10.1 of Synovus' Quarterly Report on Form 10-Q for quarter ended September 30, 2021, as filed with the SEC on November 3, 2021.*


129

Exhibit
Number
Description
Exhibit
Number		Description
10.610.3 
Synovus Financial Corp. Executive Salary Contribution Death Benefit Plan, incorporated by reference to Exhibit 10.1 of Synovus' Quarterly Report on Form 10-Q for the quarter ended June 30, 2009, as filed with the SEC on August 10, 2009.*
10.710.4 
Third Amended and Restated Synovus Financial Corp. Deferred Compensation Plan, incorporated by reference to Exhibit 10.15 of Synovus' Annual Report on Form 10-K for the fiscal year ended December 31, 2012, as filed with the SEC on March 1, 2013.*
10.810.5 
Amendment No. 1 to Third Amended and Restated Synovus Deferred Compensation Plan, incorporated by reference to Exhibit 10.1 of Synovus' Quarterly Report on Form 10-Q for the period ended June 30, 2017, as filed with the SEC on August 4, 2017.*
10.6 
10.7 
Synovus Financial Corp. 2007 Omnibus Plan, incorporated by reference to Exhibit 10.1 of Synovus' Current Report on Form 8-K dated April 25, 2007, as filed with the SEC on April 25, 2007.*
10.8 
Amendment No. 1 to the Synovus Financial Corp. 2007 Omnibus Plan dated February 9, 2017, incorporated by reference to Exhibit 10.14 of Synovus' Annual Report on Form 10-K for the fiscal year ended December 31, 2016, as filed with the SEC on February 27, 2017.*
10.9 
Form of Revised Stock Option Agreement for stock option awards under the Synovus Financial Corp. 2007 Omnibus Plan, incorporated by reference to Exhibit 10.2 of Synovus' Current Report on Form 8-K dated January 29, 2008, as filed with the SEC on January 29, 2008.*
10.10 
Form of Retention Stock Option Agreement for retention stock option awards under the Synovus Financial Corp. 2007 Omnibus Plan, incorporated by reference to Exhibit 10.1 of Synovus' Current Report on Form 8-K dated January 29, 2008, as filed with the SEC on January 29, 2008.*
10.11 
Form of Restricted Stock Option Agreement for 2010 stock option awards under the Synovus Financial Corp. 2007 Omnibus Plan, incorporated by reference to Exhibit 10.1 of Synovus' Current Report on Form 8-K dated January 29, 2010, as filed with the SEC on January 29, 2010.*
10.12 
Form of Non-Employee Director Restricted Stock Unit Award Agreement under the Synovus Financial Corp. 2007 Omnibus Plan, incorporated by reference to Exhibit 10.1 of Synovus' Quarterly Report on Form 10-Q for the period ended March 31, 2012, as filed with the SEC on May 10, 2012.*
10.13 
Synovus Financial Corp. 2013 Omnibus Plan, incorporated by reference to Exhibit 10.18 of Synovus' Annual Report on Form 10-K for the fiscal year ended December 31, 2016, as filed with the SEC on February 27, 2017.*
10.14 
Amendment No. 1 to the Synovus Financial Corp. 2013 Omnibus Plan dated February 9, 2017, incorporated by reference to Exhibit 10.19 of Synovus' Annual Report on Form 10-K for the fiscal year ended December 31, 2016, as filed with the SEC on February 27, 2017.*
10.15 
Form of Stock Option Agreement for the stock option awards under the Synovus Financial Corp. 2013 Omnibus Plan, incorporated by reference to Exhibit 10.3 to Synovus' Current Report on Form 8-K dated June 18, 2013, as filed with the SEC on June 20, 2013.*
130

Exhibit
Number		Description
10.16 
Form of Performance Stock Unit Agreement for performance-based restricted stock awards under the Synovus Financial Corp. 2013 Omnibus Plan, incorporated by reference to Exhibit 10.2 of Synovus' Current Report on Form 8-K dated January 22, 2014, as filed with the SEC on January 24, 2014.*
10.17 
Form of Revised Performance Stock Unit Agreement for performance-based restricted stock awards under the Synovus Financial Corp. 2013 Omnibus Plan, incorporated by reference to Exhibit 10.1 of Synovus' Current Report on Form 8-K dated February 11, 2016, as filed with the SEC on February 18, 2016.*
10.18 
Form of Revised Performance Stock Unit Agreement for performance-based restricted stock awards under the Synovus Financial Corp. 2013 Omnibus Plan, incorporated by reference to Exhibit 10.35 of Synovus' Annual Report on Form 10-K for the period ended December 31, 2017, as filed with the SEC on February 28, 2018.*
10.19 
Form of Market Restricted Stock Unit Agreement for market restricted stock awards under the Synovus Financial Corp. 2013 Omnibus Plan, incorporated by reference to Exhibit 10.1 of Synovus' Current Report on Form 8-K dated December 11, 2013, as filed with the SEC on December 13, 2013.*
10.20 
Form of 2014 Market Restricted Stock Unit Agreement for market restricted stock awards under the Synovus Financial Corp. 2013 Omnibus Plan, incorporated by reference to Exhibit 10.3 of Synovus' Current Report on Form 8-K dated January 22, 2014, as filed with the SEC on January 24, 2014.*
10.21 
Form of Revised Market Restricted Stock Unit Agreement for market restricted stock awards under the Synovus Financial Corp. 2013 Omnibus Plan, incorporated by reference to Exhibit 10.2 of Synovus' Current Report on Form 8-K dated February 11, 2016, as filed with the SEC on February 18, 2016.*
10.22 
Form of Revised Market Restricted Stock Unit Agreement for market restricted stock awards under the Synovus Financial Corp. 2013 Omnibus Plan, incorporated by reference to Exhibit 10.36 of Synovus' Annual Report on Form 10-K for the period ended December 31, 2017, as filed with the SEC on February 28, 2018.*
10.23 
Form of Restricted Stock Unit Agreement for restricted stock awards under the Synovus Financial Corp. 2013 Omnibus Plan, incorporated by reference to Exhibit 10.2 to Synovus' Current Report on Form 8-K dated June 18, 2013, as filed with the SEC on June 20, 2013.*
10.24 
Form of Revised Restricted Stock Unit Agreement for restricted stock awards under the Synovus Financial Corp. 2013 Omnibus Plan, incorporated by reference to Exhibit 10.37 of Synovus' Annual Report on Form 10-K for the period ended December 31, 2017, as filed with the SEC on February 28, 2018.*
10.25 
Form of Director Restricted Stock Unit Agreement for the Synovus Financial Corp. 2013 Omnibus Plan, incorporated by reference to Exhibit 10.4 to Synovus' Current Report on Form 8-K dated June 18, 2013, as filed with the SEC on June 20, 2013.*
10.26 
Form of Cash-Settled Restricted Stock Unit Agreement for cash-settled restricted stock awards under the Synovus Financial Corp. 2013 Omnibus Plan, incorporated by reference to Exhibit 10.46 to Synovus' Annual Report on Form 10-K for the period ended December 31, 2020, as filed with the SEC on March 1, 2021.*
10.27 
Bond Street Holdings, LLC 2009 Stock Option Plan, incorporated by reference to Exhibit 10.1 of FCB's Registration Statement on Form S-1 (No. 333-196935), as filed with the SEC on June 20, 2014.*
10.28 
Bond Street Holdings, LLC 2013 Stock Incentive Plan, incorporated by reference to Exhibit 10.2 of FCB's Registration Statement on Form S-1 (No. 333-196935), as filed with the SEC on June 20, 2014.*
10.29 
FCB 2016 Stock Incentive Plan, incorporated by reference to Exhibit A of the FCB Proxy Statement for the 2016 Annual Meeting of Stockholders on Schedule 14A, as filed with the SEC on April 5, 2016.*
131

Exhibit
Number		Description
10.30 
First Amendment to the FCB 2016 Stock Incentive Plan, incorporated by reference to Item 8.01 of FCB's Current Report on Form 8-K dated May 5, 2016, as filed with the SEC on May 5, 2016.*
10.31 
Form of Incentive Stock Option Grant Agreement, incorporated by reference to Exhibit 10.3 of FCB's Registration Statement on Form S-1 (No. 333-196935), as filed with the SEC on June 20, 2014.*
10.32 
Form of FCB RSU Agreement, incorporated by reference to Exhibit 10.4 of FCB's Registration Statement on Form S-1/A (No. 333-196935), as filed with the SEC on July 22, 2014.*
10.33 
Form of Indemnification Agreement for directors and executive officers of Synovus, incorporated by reference to Exhibit 10.1 of Synovus' Current Report on Form 8-K dated July 26, 2007, as filed with the SEC on July 26, 2007.*
10.34 
10.35 
Summary of Board of Directors Compensation, incorporated by reference to Exhibit 10.1 of Synovus' Quarterly Report on Form 10-Q for the period ended March 31, 2021, as filed with the SEC on May 6, 2021.*
10.36 
Form of Change of Control Agreement for executive officers, incorporated by reference to Exhibit 10.1 of Synovus' Quarterly Report on Form 10-Q for the quarter ended June 30, 2008, as filed with the SEC on August 8, 2008.*
10.910.37 
Form of Change of Control Agreement for executive officers, incorporated by reference to Exhibit 10.17 of Synovus' Annual Report on Form 10-K for the fiscal year ended December 31, 2013, as filed with the SEC on February 28, 2014.*
10.1010.38 
Riverside Bank Amended and Restated Salary Continuation Agreement adopted as of June 1, 2005 by and between Riverside Bank and Kessel D. Stelling, incorporated by reference to Exhibit 10.17 of Synovus' Annual Report on Form 10-K for the period ended December 31, 2011, as filed with the SEC on February 29, 2012.*
10.11
Synovus Financial Corp. 2007 Omnibus Plan, incorporated by reference to Exhibit 10.1 of Synovus' Current Report on Form 8-K dated April 25, 2007, as filed with the SEC on April 25, 2007.*
10.12
Amendment No. 1 to the Synovus Financial Corp. 2007 Omnibus Plan dated February 9, 2017, incorporated by reference to Exhibit 10.14 of Synovus' Annual Report on Form 10-K for the fiscal year ended December 31, 2016, as filed with the SEC on February 27, 2017.*
10.13
Form of Revised Stock Option Agreement for stock option awards under the Synovus Financial Corp. 2007 Omnibus Plan, incorporated by reference to Exhibit 10.2 of Synovus' Current Report on Form 8-K dated January 29, 2008, as filed with the SEC on January 29, 2008.*
10.14
Form of Retention Stock Option Agreement for retention stock option awards under the Synovus Financial Corp. 2007 Omnibus Plan, incorporated by reference to Exhibit 10.2 of Synovus' Current Report on Form 8-K dated January 29, 2008, as filed with the SEC on January 29, 2008.*
10.15
Form of Restricted Stock Option Agreement for 2010 stock option awards under the Synovus Financial Corp. 2007 Omnibus Plan, incorporated by reference to Exhibit 10.1 of Synovus' Current Report on Form 8-K dated January 29, 2010, as filed with the SEC on January 29, 2010.*
10.16
Synovus Financial Corp. 2013 Omnibus Plan, incorporated by reference to Exhibit 10.18 of Synovus' Annual Report on Form 10-K for the fiscal year ended December 31, 2016, as filed with the SEC on February 27, 2017.*
10.17
Amendment No. 1 to the Synovus Financial Corp. 2013 Omnibus Plan dated February 9, 2017, incorporated by reference to Exhibit 10.19 of Synovus' Annual Report on Form 10-K for the fiscal year ended December 31, 2016, as filed with the SEC on February 27, 2017.*
10.18
Form of Market Restricted Stock Unit Agreement for market restricted stock awards under the Synovus Financial Corp. 2013 Omnibus Plan, incorporated by reference to Exhibit 10.1 of Synovus' Current Report on Form 8-K dated December 11, 2013, as filed with the SEC on December 13, 2013.*


Exhibit
Number
10.39 		Description
10.19
Form of Performance Stock Unit Agreement for performance-based restricted stock awards under the Synovus Financial Corp. 2013 Omnibus Plan, incorporated by reference to Exhibit 10.2 of Synovus' Current Report on Form 8-K dated January 22, 2014, as filed with the SEC on January 24, 2014.*
10.20
Form of 2014 Market Restricted Stock Unit Agreement for market restricted stock awards under the Synovus Financial Corp. 2013 Omnibus Plan, incorporated by reference to Exhibit 10.3 of Synovus' Current Report on Form 8-K dated January 22, 2014, as filed with the SEC on January 24, 2014.*
10.21
Form of Restricted Stock Unit Agreement for the Synovus Financial Corp. 2013 Omnibus Plan, incorporated by reference to Exhibit 10.2 to Synovus' Current Report on Form 8-K dated June 18, 2013, as filed with the SEC on June 20, 2013.*
10.22
Form of Stock Option Agreement for the Synovus Financial Corp. 2013 Omnibus Plan, incorporated by reference to Exhibit 10.3 to Synovus' Current Report on Form 8-K dated June 18, 2013, as filed with the SEC on June 20, 2013.*
10.23
Form of Director Restricted Stock Unit Agreement for the Synovus Financial Corp. 2013 Omnibus Plan, incorporated by reference to Exhibit 10.1 to Synovus' Current Report on Form 8-K dated June 18, 2013, as filed with the SEC on June 20, 2013.*
10.24
Form of Indemnification Agreement for directors and executive officers of Synovus, incorporated by reference to Exhibit 10.1 of Synovus' Current Report on Form 8-K dated July 26, 2007, as filed with the SEC on July 26, 2007.*
10.25
Summary of Annual Base Salaries of Synovus' Named Executive Officers.*
10.26
Summary of Board of Directors Compensation, incorporated by reference to Exhibit 10.1 of Synovus' Quarterly Report on Form 10-Q for the period ended March 31, 2018, as filed with the SEC on May 7, 2018.*
10.27
First Amendment to the Bank of North Georgia Amended and Restated Salary Continuation Agreement dated September 10, 2007, effective as of January 1, 2005, by and between Bank of North Georgia, as successor in interest to Riverside Bank, and Kessel D. Stelling, Jr., incorporated by reference to Exhibit 10.37 of Synovus' Current Report on Form 10-K for the period ended December 31, 2011, as filed with the SEC on February 29, 2012.*
10.2810.40 
Riverside Bank Split Dollar Agreement dated December 23, 1999, by and between Riverside Bank and Kessel D. Stelling, Jr., incorporated by reference to Exhibit 10.38 of Synovus' Current Report on Form 10-K for the period ended December 31, 2011, as filed with the SEC on February 29, 2012.*
10.2910.41 
Form of Non-Employee Director Restricted Stock Unit Award Agreement under the Synovus Financial Corp. 2007Amended and Restated Clawback Policy, incorporated by reference to Exhibit 10.30 of Synovus' Annual Report on Form 10-K for the period ended December 31, 2018, as filed with the SEC on February 28, 2019.*
10.42 
Form of Confidentiality and Nonsolicitation Agreement for executive officers of Synovus, incorporated by reference to Exhibit 10.43 of Synovus' Annual Report on Form 10-K for the period ended December 31, 2019, as filed with the SEC on March 2, 2020.*
132

Exhibit
Number		Description
10.43 
Succession and Advisory Services Letter Agreement between Synovus and Kessel D. Stelling dated as of December 17, 2020, incorporated by reference to Exhibit 10.1 of Synovus' Current Report on Form 8-K dated December 17, 2020, as filed with the SEC on December 17, 2020.*
10.44 
Synovus Financial Corp. 2021 Omnibus Plan, incorporated by reference to Exhibit 10.110.2 of Synovus' Quarterly Report on Form 10-Q for the period ended March 31, 2012,2021, as filed with the SEC on May 10, 2012.6, 2021.*
10.3010.45 
Synovus Financial Corp. Amended and Restated Clawback Policy.2021 Director Stock Purchase Plan, incorporated by reference to Exhibit 10.3 of Synovus' Quarterly Report on Form 10-Q for the period ended March 31, 2021, as filed with the SEC on May 6, 2021.*
10.3110.46 
Synovus Financial Corp. 2021 Employee Stock Purchase Plan, incorporated by reference to Exhibit 10.4 of Synovus' Quarterly Report on Form 10-Q for the period ended March 31, 2021, as filed with the SEC on May 6, 2021.*
10.47 
Form of RevisedDirector Restricted Stock Unit Agreement for restricted stock awards to directors under the Synovus Financial Corp. 2021 Omnibus Plan, incorporated by reference to Exhibit 10.5 of Synovus' Quarterly Report on Form 10-Q for the period ended March 31, 2021, as filed with the SEC on May 6, 2021.*
10.48 
Form of Restricted Stock Unit Agreement for restricted stock awards under the Synovus Financial Corp. 2021 Omnibus Plan.*
10.49 
Form of Cash-Settled Restricted Stock Unit Agreement for cash-settled restricted stock awards under the Synovus Financial Corp. 2021 Omnibus Plan.*
10.50 
Form of Performance Stock Unit Agreement for performance-based restricted stock awards under the Synovus Financial Corp. 20132021 Omnibus Plan, incorporated by reference to Exhibit 10.1 of Synovus' Current Report on Form 8-K dated February 11, 2016, as filed with the SEC on February 18, 2016.Plan.*
10.32
Form of Revised Market Restricted Stock Unit Agreement for market restricted stock awards under the Synovus Financial Corp. 2013 Omnibus Plan, incorporated by reference to Exhibit 10.2 of Synovus' Current Report on Form 8-K dated February 11, 2016, as filed with the SEC on February 18, 2016.*


Exhibit
Number
14 		Description
10.33
Amendment No. 1 to Third Amended and Restated Synovus Deferred Compensation Plan, incorporated by reference to Exhibit 10.1 of Synovus' Quarterly Report on Form 10-Q for the period ended June 30, 2017, as filed with the SEC on August 4, 2017.*
10.34
Form of Revised Performance Stock Unit Agreement for performance-based restricted stock awards under the Synovus Financial Corp. 2013 Omnibus Plan., incorporated by reference to Exhibit 10.35 of Synovus' Annual Report on Form 10-K for the period ended December 31, 2017, as filed with the SEC on February 28, 2018.*
10.35
Form of Revised Market Restricted Stock Unit Agreement for market restricted stock awards under the Synovus Financial Corp. 2013 Omnibus Plan, incorporated by reference to Exhibit 10.36 of Synovus' Annual Report on Form 10-K for the period ended December 31, 2017, as filed with the SEC on February 28, 2018.*
10.36
Form of Revised Restricted Stock Unit Agreement for restricted stock awards under the Synovus Financial Corp. 2013 Omnibus Plan, incorporated by reference to Exhibit 10.37 of Synovus' Annual Report on Form 10-K for the period ended December 31, 2107, as filed with the SEC on February 28, 2018.*
10.37
Bond Street Holdings, LLC 2009 Stock Option Plan, incorporated by reference to Exhibit 10.1 of FCB's Registration Statement on Form S-1 (No. 333-196935), as filed with the SEC on June 20, 2014.*
10.38
Bond Street Holdings, LLC 2013 Stock Incentive Plan, incorporated by reference to Exhibit 10.2 of FCB's Registration Statement on Form S-1 (No. 333-196935), as filed with the SEC on June 20, 2014.*
10.39
FCB 2016 Stock Incentive Plan, incorporated by reference to Exhibit A of the FCB Proxy Statement for the 2016 Annual Meeting of Stockholders on Schedule 14A, as filed with the SEC on April 5, 2016.*
10.40
First Amendment to the FCB 2016 Stock Incentive Plan, incorporated by reference to Item 8.01 of FCB's Current Report on Form 8-K dated May 5, 2016, as filed with the SEC on May 5, 2016.*
10.41
Form of Incentive Stock Option Grant Agreement, incorporated by reference to Exhibit 10.3 of FCB's Registration Statement on Form S-1 (No. 333-196935), as filed with the SEC on June 20, 2014.*
10.42
Form of RSU Agreement, incorporated by reference to Exhibit 10.4 of FCB's Registration Statement on Form S-1/A (No. 333-196935), as filed with the SEC on July 22, 2014.*
14
Code of Business Conduct and Ethics, incorporated by reference to Exhibit 99.1 of Synovus' Current Report ofon Form 8-K dated October 24, 2014, as filed with the SEC on October 24, 2014.24,2014.
21.1
23.1
24.1
Powers of Attorney contained on the signature pages of this 20182021 Annual Report on Form 10-K and incorporated herein by reference.
31.1
31.2


Exhibit
Number
32 		Description
32
101
Interactive Data File
104 Cover Page Interactive Data File (formatted as inline XBRL and included in Exhibit 101).
133

*Indicates management contracts and compensatory plans and arrangements.
(b) Exhibits
See the response to Item 15(a)(3) above.

(c) Financial Statement Schedules
See the response to Item 15(a)(2) above.

134




SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, Synovus Financial Corp. has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
SYNOVUS FINANCIAL CORP.
Date:February 28, 201925, 2022By:/s/ Kessel D. StellingKevin S. Blair
Kessel D. StellingKevin S. Blair
Chairman of the Board, President and Chief Executive Officer


POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Kessel D. Stelling. and Kevin S. BlairBlair. and Andrew J. Gregory, Jr. and each of them, his or her true and lawful attorney(s)-in-fact and agent(s), with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any or all amendments to this report and to file the same, with all exhibits and schedules thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney(s)-in-fact and agent(s) full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney(s)-in-fact and agent(s), or their substitute(s), may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of Section 13 or 15(d) the Securities Exchange Act of 1934, as amended, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
SignatureTitleDate
/s/ Kevin S. BlairPresident, Chief Executive Officer and DirectorFebruary 25, 2022
Kevin S. Blair(Principal Executive Officer)
/s/ Andrew J. Gregory, Jr.Executive Vice President and Chief Financial OfficerFebruary 25, 2022
       Andrew J. Gregory, Jr.(Principal Financial Officer)
/s/ Jill K. HurleyChief Accounting OfficerFebruary 25, 2022
Jill K. Hurley(Principal Accounting Officer)
/s/ Tim E. BentsenDirectorFebruary 25, 2022
Tim E. Bentsen
SignatureTitleDate
/s/ Kessel D. Stelling
Chairman of the Board, President,
Chief Executive Officer and Director
February 28, 2019
 Kessel D. Stelling(Principal Executive Officer)
/s/ Kevin S. BlairSenior Executive Vice President, Chief Operating Officer and Interim Chief Financial OfficerFebruary 28, 2019
Kevin S. Blair(Principal Financial Officer)
/s/ Jill K. HurleyChief Accounting OfficerFebruary 28, 2019
Jill K. Hurley(Principal Accounting Officer)
/s/ Catherine A. AllenDirectorFebruary 28, 2019
Catherine A. Allen
/s/ Tim E. BentsenDirectorFebruary 28, 2019
Tim E. Bentsen
/s/ F. Dixon Brooke, Jr.DirectorFebruary 28, 201925, 2022
F. Dixon Brooke, Jr.
/s/ Stephen T. ButlerDirectorFebruary 28, 2019
Stephen T. Butler


Signature/s/ Stephen T. ButlerTitleDirectorDateFebruary 25, 2022
Stephen T. Butler
/s/ Elizabeth W. CampDirectorFebruary 28, 201925, 2022
Elizabeth W. Camp
/s/ Pedro CherryDirectorFebruary 25, 2022
         Pedro Cherry
135

SignatureTitleDate
/s/ Diana M. MurphyDirectorFebruary 28, 201925, 2022
Diana M. Murphy
/s/ Jerry W. NixDirectorFebruary 28, 2019
Jerry W. Nix
/s/ Harris PastidesDirectorFebruary 28, 201925, 2022
       Harris Pastides
/s/ Joseph J. Prochaska, Jr.DirectorFebruary 28, 201925, 2022
       Joseph J. Prochaska, Jr.
/s/ John L. StallworthDirectorFebruary 28, 201925, 2022
John L. Stallworth
/s/ Melvin T. StithKessel D. StellingDirectorExecutive Chairman of the BoardFebruary 28, 201925, 2022
Melvin T. StithKessel D. Stelling
/s/ Barry L. StoreyDirectorFebruary 28, 201925, 2022
Barry L. Storey
/s/ Philip W. TomlinsonTeresa WhiteDirectorFebruary 28, 201925, 2022
Philip W. TomlinsonTeresa White







141
136