0000018349us-gaap:FairValueMeasurementsNonrecurringMember2020-09-30

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

 
FORM 10-Q
 

☒ Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended September 30, 2020March 31, 2021
Commission file number 1-10312
 

syn-20210331_g1.jpg
SYNOVUS FINANCIAL CORP.
(Exact name of registrant as specified in its charter)

 
Georgia58-1134883
(State or other jurisdiction of incorporation or organization)
   (I.R.S. Employer Identification No.)

1111 Bay Avenue, Suite 500

Columbus,Georgia31901
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (706) 641-6500
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $1.00 Par ValueSNVNew York Stock Exchange
Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series DSNV - PrDNew York Stock Exchange
Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series ESNV - PrENew York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes ☒  No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes ☒  No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer☒Accelerated 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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐    No ☒
As of November 4, 2020, 147,806,270April 30, 2021, 148,599,905 shares of the registrant's common stock, $1.00 par value, were outstanding.




Table of Contents

Page
Financial Information
Index of Defined Terms
i
Item 1.Financial Statements (Unaudited)
Consolidated Balance Sheets as of September 30, 2020March 31, 2021 and December 31, 20192020
1
Consolidated Statements of Income for the Three and Nine Months Ended September 30,March 31, 2021 and 2020 and 2019
2
Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30,March 31, 2021 and 2020 and 2019
3
Consolidated Statements of Changes in Shareholders' Equity for the Three and Nine Months Ended September 30,March 31, 2021 and 2020 and 2019
4
Consolidated Statements of Cash Flows for the NineThree Months Ended September 30,March 31, 2021 and 2020 and 2019
65
Notes to Unaudited Interim Consolidated Financial Statements
76
Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations
4332
Item 3.
7155
Item 4.Controls and Procedures
7155
Other Information
Item 1.Legal Proceedings
7256
Item 1A.Risk Factors
7256
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
7256
Item 3.Defaults Upon Senior Securities
7256
Item 4.Mine Safety Disclosures
7256
Item 5.Other Information
7256
Item 6.Exhibits
7357
Signatures
7458





SYNOVUS FINANCIAL CORP.
INDEX OF DEFINED TERMS

Throughout this discussion, references to "Synovus", "we", "our", "us", "the Company" and similar terms refer to the consolidated entity consisting of Synovus Financial Corp. and its subsidiaries unless the context indicates that we refer only to the Parent Company, Synovus Financial Corp. When we refer to the "Bank" or "Synovus Bank" we mean our only bank subsidiary, Synovus Bank.
ACL – Allowance for credit losses (ALL, reserve on unfunded loan commitments, and reserve, if required, on debt securities)
ALCO – Synovus' Asset Liability Management Committee
ALL – Allowance for loan losses
AOCI – Accumulated other comprehensive income
Acquisition Date – Effective January 1, 2019, Synovus completed its acquisition of FCB Financial Holdings, Inc.
ARRC – Alternative Reference Rates Committee
ASC – Accounting Standards Codification
ASC 310-30 loans – Loans 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
Basel III – The third Basel Accord developed by the Basel Committee on Banking Supervision to strengthen existing regulatory capital requirements
BOLI – Bank-owned life insurance
bp(s) – Basis point(s)
C&I – Commercial and industrial
CARES Act – The Coronavirus Aid, Relief, and Economic Security Act
CDC – Centers for Disease Control
CDI – Core Deposit Intangible
CECL – Current expected credit losses
CET1 – Common Equity Tier 1 Capital defined by Basel III capital rules
CMO – Collateralized mortgage obligation
Code – Internal Revenue Code, as amended
Company – Synovus Financial Corp. and its wholly-owned subsidiaries, except where the context requires otherwise
Covered Litigation – Certain Visa litigation for which Visa is indemnified by Visa USA members
COVID-19 – Coronavirus disease 2019
CRA – Community Reinvestment Act
CRE – Commercial real estate
DCF – Discounted cash flow
Dodd-Frank Act – The Dodd-Frank Wall Street Reform and Consumer Protection Act
EFFR– Effective Federal Funds Rate
EVE – Economic value of equity
Exchange Act – Securities Exchange Act of 1934, as amended
FASB – Financial Accounting Standards Board
i

FCA – Financial Conduct Authority
FCB – FCB Financial Holdings, Inc. and its wholly-owned subsidiaries, except where the context requires otherwise
FDIC – Federal Deposit Insurance Corporation
Federal Reserve Bank – The 12 banks that are the operating arms of the U.S. central bank. They implement the policies of the Federal Reserve Board 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
i

Federal Reserve System – The 12 Federal Reserve Banks, with each one serving member banks in its own district. This system, supervised by the Federal Reserve Board, has broad regulatory powers over the money supply and the credit structure
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
FMS – Financial Management Services, a division of Synovus Bank
FOMC – Federal Open Market Committee
FTE – Fully taxable-equivalent
FTP – Funds transfer pricing
GA DBF – Georgia Department of Banking and Finance
GAAP – Generally Accepted Accounting Principles in the United States of America
GGL – Government guaranteed loans
Global One – Entaire Global Companies, Inc., the parent company of Global One Financial, Inc., as acquired by Synovus on October 1, 2016.
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
LGD – Loss given default
LIBOR – London Interbank Offered Rate
LIHTC – Low Income Housing Tax Credit
LTV – Loan-to-collateral value ratio
MBS – Mortgage-backed security
Merger Agreement – Agreement and Plan of Merger by and among Synovus, FCB and Azalea Merger Sub Corp., a subsidiary of Synovus, dated as of July 23, 2018
Merger – The merger effected by the Merger Agreement
MLO – Mortgage loan originator
MPS – Merchant processing servicer(s)
MRSU – Market Restricted Share Unit
NAICS – North American Industry Classification System
nm – not meaningful
NPA – Non-performing assets
NPL – Non-performing loans
NSF – Non-sufficient funds
ii

OCI – Other comprehensive income
ORE – Other real estate
P&I – Principal and interest
PAA – Purchase accounting adjustments
Parent Company – Synovus Financial Corp.
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
PSU – Performance Share Unit
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 D Preferred Stock – Synovus' Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series D, $25 liquidation preference
Series E Preferred Stock – Synovus' Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series E, $25 liquidation preference
SOFR – Secured Overnight Financing Rate
ii

Synovus – Synovus Financial Corp.
Synovus Bank – A Georgia state-chartered bank and wholly-owned subsidiary of Synovus through which Synovus conducts its banking operations
Synovus' 20192020 Form 10-K – Synovus' Annual Report on Form 10-K for the year ended December 31, 20192020
Synovus Forward – Synovus' revenue growth and expense efficiency initiatives announced in January of 2020
Synovus Securities – Synovus Securities, Inc., a wholly-owned subsidiary of Synovus
Synovus Trust – Synovus Trust Company, N.A., a wholly-owned subsidiary of Synovus Bank
TDR – Troubled debt restructuring (as defined in ASC 310-40)
TJCA – U.S. Tax Cuts and Jobs Act of 2017
TSR – Total shareholder return
UPB – Unpaid principal balance
Visa – The Visa U.S.A., Inc. card association or its affiliates, collectively
Visa Class A shares – Class A shares of common stock issued by Visa are publicly traded shares which are not subject to restrictions on sale
Visa Class B shares – Class B shares of common stock issued by Visa which are subject to restrictions with respect to sale until all of the Covered Litigation has been settled. Class B shares will be convertible into Visa Class A shares using a then-current conversion ratio upon the lifting of restrictions with respect to sale of Visa Class B shares
Visa Derivative – A derivative contract with the purchaser of Visa Class B shares which provides for settlements between the purchaser and Synovus based upon a change in the ratio for conversion of Visa Class B shares into Visa Class A shares

iii


PART I. FINANCIAL INFORMATION
ITEM 1. - FINANCIAL STATEMENTS
SYNOVUS FINANCIAL CORP.
CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands, except share and per share data)(in thousands, except share and per share data)September 30, 2020December 31, 2019(in thousands, except share and per share data)March 31, 2021December 31, 2020
ASSETSASSETSASSETS
Cash and due from banksCash and due from banks$578,026 $535,846 Cash and due from banks$493,645 $531,625 
Interest-bearing funds with Federal Reserve BankInterest-bearing funds with Federal Reserve Bank1,266,313 553,390 Interest-bearing funds with Federal Reserve Bank2,722,100 3,586,565 
Interest earning deposits with banksInterest earning deposits with banks20,929 20,635 Interest earning deposits with banks23,969 20,944 
Federal funds sold and securities purchased under resale agreementsFederal funds sold and securities purchased under resale agreements120,095 77,047 Federal funds sold and securities purchased under resale agreements88,552 113,783 
Total cash, cash equivalents, restricted cash, and restricted cash equivalents1,985,363 1,186,918 
Total cash, cash equivalents, and restricted cash Total cash, cash equivalents, and restricted cash3,328,266 4,252,917 
Investment securities available for sale, at fair valueInvestment securities available for sale, at fair value7,566,525 6,778,670 Investment securities available for sale, at fair value8,825,757 7,962,438 
Loans held for sale (includes $285,899 and $115,173 measured at fair value, respectively)745,160 115,173 
Loans held for sale (includes $242,010 and $216,647 measured at fair value, respectively)Loans held for sale (includes $242,010 and $216,647 measured at fair value, respectively)993,887 760,123 
Loans, net of deferred fees and costsLoans, net of deferred fees and costs39,549,847 37,162,450 Loans, net of deferred fees and costs38,805,101 38,252,984 
Allowance for loan lossesAllowance for loan losses(603,800)(281,402)Allowance for loan losses(563,214)(605,736)
Loans, netLoans, net38,946,047 36,881,048 Loans, net38,241,887 37,647,248 
Cash surrender value of bank-owned life insuranceCash surrender value of bank-owned life insurance1,044,046 775,665 Cash surrender value of bank-owned life insurance1,054,475 1,049,373 
Premises and equipment, net471,208 493,940 
Premises, equipment and software, netPremises, equipment and software, net454,911 463,959 
GoodwillGoodwill452,390 497,267 Goodwill452,390 452,390 
Other intangible assets, netOther intangible assets, net47,752 55,671 Other intangible assets, net42,733 45,112 
Other assetsOther assets1,782,047 1,418,930 Other assets1,764,705 1,760,599 
Total assetsTotal assets$53,040,538 $48,203,282 Total assets$55,159,011 $54,394,159 
LIABILITIES AND SHAREHOLDERS' EQUITYLIABILITIES AND SHAREHOLDERS' EQUITYLIABILITIES AND SHAREHOLDERS' EQUITY
LiabilitiesLiabilitiesLiabilities
Deposits:Deposits:Deposits:
Non-interest-bearing depositsNon-interest-bearing deposits$13,075,081 $9,439,485 Non-interest-bearing deposits$14,660,287 $13,477,854 
Interest-bearing depositsInterest-bearing deposits31,590,823 28,966,019 Interest-bearing deposits32,708,664 33,213,717 
Total depositsTotal deposits44,665,904 38,405,504 Total deposits47,368,951 46,691,571 
Federal funds purchased and securities sold under repurchase agreements202,344 165,690 
Securities sold under repurchase agreementsSecurities sold under repurchase agreements293,659 227,922 
Other short-term borrowingsOther short-term borrowings400,000 1,753,560 Other short-term borrowings0 7,717 
Long-term debtLong-term debt1,628,385 2,153,897 Long-term debt1,202,825 1,202,494 
Other liabilitiesOther liabilities1,079,363 782,941 Other liabilities1,131,859 1,103,121 
Total liabilitiesTotal liabilities47,975,996 43,261,592 Total liabilities49,997,294 49,232,825 
Shareholders' EquityShareholders' EquityShareholders' Equity
Preferred stock - no par value; authorized 100,000,000 shares; issued 22,000,000Preferred stock - no par value; authorized 100,000,000 shares; issued 22,000,000537,145 537,145 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 167,410,950 and 166,800,623; outstanding 147,317,923 and 147,157,596167,411 166,801 
Common stock - $1.00 par value; authorized 342,857,143 shares; issued 168,978,380 and 168,132,522; outstanding 148,888,513 and 148,039,495Common stock - $1.00 par value; authorized 342,857,143 shares; issued 168,978,380 and 168,132,522; outstanding 148,888,513 and 148,039,495168,978 168,133 
Additional paid-in capitalAdditional paid-in capital3,832,142 3,819,336 Additional paid-in capital3,864,281 3,851,208 
Treasury stock, at cost; 20,093,027 and 19,643,027 shares(731,806)(715,560)
Treasury stock, at cost; 20,089,867 and 20,093,027 sharesTreasury stock, at cost; 20,089,867 and 20,093,027 shares(731,690)(731,806)
Accumulated other comprehensive income, netAccumulated other comprehensive income, net174,914 65,641 Accumulated other comprehensive income, net15,278 158,635 
Retained earningsRetained earnings1,084,736 1,068,327 Retained earnings1,307,725 1,178,019 
Total shareholders' equityTotal shareholders' equity5,064,542 4,941,690 Total shareholders' equity5,161,717 5,161,334 
Total liabilities and shareholders' equityTotal liabilities and shareholders' equity$53,040,538 $48,203,282 Total liabilities and shareholders' equity$55,159,011 $54,394,159 
See accompanying notes to unaudited interim consolidated financial statements.
1


SYNOVUS FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands, except per share data)2020201920202019
Interest income:
Loans, including fees$384,275 $463,437 $1,213,609 $1,368,769 
Investment securities available for sale43,196 53,761 139,784 156,493 
Loans held for sale6,341 978 9,047 2,144 
Federal Reserve Bank balances285 2,288 2,187 8,659 
Other earning assets1,453 2,951 6,389 8,320 
Total interest income435,550 523,415 1,371,016 1,544,385 
Interest expense:
Deposits43,194 94,082 185,670 274,466 
Federal funds purchased, securities sold under repurchase agreements, and other short-term borrowings176 7,843 7,885 18,599 
Long-term debt15,190 19,393 50,645 54,785 
Total interest expense58,560 121,318 244,200 347,850 
Net interest income376,990 402,097 1,126,816 1,196,535 
Provision for credit losses(1)
43,383 27,562 343,956 63,250 
Net interest income after provision for credit losses333,607 374,535 782,860 1,133,285 
Non-interest revenue:
Service charges on deposit accounts17,813 22,952 54,069 65,805 
Fiduciary and asset management fees15,885 14,686 46,009 42,743 
Card fees10,823 12,297 30,959 34,334 
Brokerage revenue10,604 11,071 32,987 30,502 
Mortgage banking income31,229 10,351 66,987 23,313 
Capital markets income5,690 7,396 22,984 21,557 
Income from bank-owned life insurance7,778 5,139 21,572 15,605 
Investment securities (losses) gains, net(1,550)(3,731)76,594 (5,502)
Other non-interest revenue16,139 8,599 39,591 29,588 
Total non-interest revenue114,411 88,760 391,752 257,945 
Non-interest expense:
Salaries and other personnel expense154,994 142,516 464,268 424,952 
Net occupancy, equipment, and software expense41,554 41,017 125,475 119,262 
Third-party processing and other services20,620 18,528 63,466 55,403 
Professional fees13,377 9,719 39,358 25,379 
FDIC insurance and other regulatory fees6,793 7,242 18,922 21,872 
Goodwill impairment44,877 0 44,877 0 
Merger-related expense0 353 0 57,493 
Other operating expenses34,440 56,935 120,710 128,486 
Total non-interest expense316,655 276,310 877,076 832,847 
Income before income taxes131,363 186,985 297,536 558,383 
Income tax expense39,789 51,259 74,250 146,287 
Net income91,574 135,726 223,286 412,096 
Less: Preferred stock dividends8,291 8,291 24,872 14,591 
Net income available to common shareholders$83,283 $127,435 $198,414 $397,505 
Net income per common share, basic$0.57 $0.84 $1.35 $2.53 
Net income per common share, diluted0.56 0.83 1.34 2.51 
Weighted average common shares outstanding, basic147,314 152,238 147,304 156,819 
Weighted average common shares outstanding, diluted147,976 154,043 148,037 158,595 
(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.
Three Months Ended March 31,
(in thousands, except per share data)20212020
Interest income:
Loans, including fees$372,491 $427,337 
Investment securities available for sale29,458 51,653 
Loans held for sale6,462 792 
Federal Reserve Bank balances673 1,508 
Other earning assets733 2,607 
Total interest income409,817 483,897 
Interest expense:
Deposits25,018 86,002 
Federal funds purchased, securities sold under repurchase agreements, and other short-term borrowings34 5,932 
Long-term debt10,908 18,703 
Total interest expense35,960 110,637 
Net interest income373,857 373,260 
(Reversal of) provision for credit losses(18,575)158,722 
Net interest income after provision for credit losses392,432 214,538 
Non-interest revenue:
Service charges on deposit accounts20,033 20,689 
Fiduciary and asset management fees17,954 15,174 
Card fees11,996 10,950 
Brokerage revenue12,974 12,398 
Mortgage banking income22,315 12,227 
Capital markets income7,505 11,243 
Income from bank-owned life insurance8,843 6,038 
Investment securities (losses) gains, net(1,990)8,734 
Other non-interest revenue11,326 6,404 
Total non-interest revenue110,956 103,857 
Non-interest expense:
Salaries and other personnel expense161,477 149,678 
Net occupancy, equipment, and software expense41,134 42,194 
Third-party processing and other services20,032 22,700 
Professional fees9,084 10,675 
FDIC insurance and other regulatory fees5,579 5,278 
Other operating expenses29,828 45,754 
Total non-interest expense267,134 276,279 
Income before income taxes236,254 42,116 
Income tax expense49,161 3,595 
Net income187,093 38,521 
Less: Preferred stock dividends8,291 8,291 
Net income available to common shareholders$178,802 $30,230 
Net income per common share, basic$1.20 $0.21 
Net income per common share, diluted1.19 0.20 
Weighted average common shares outstanding, basic148,467 147,311 
Weighted average common shares outstanding, diluted149,780 148,401 
See accompanying notes to unaudited interim consolidated financial statements.
2


SYNOVUS FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited)

Three Months Ended September 30,Three Months Ended March 31,
2020201920212020
(in thousands)(in thousands)Before-tax AmountIncome TaxNet of Tax AmountBefore-tax AmountIncome TaxNet of Tax Amount(in thousands)Before-tax AmountIncome TaxNet of Tax AmountBefore-tax AmountIncome TaxNet of Tax Amount
Net incomeNet income$131,363 $(39,789)$91,574 $186,985 $(51,259)$135,726 Net income$236,254 $(49,161)$187,093 $42,116 $(3,595)$38,521 
Unrealized gains (losses) on investment securities available for sale:Unrealized gains (losses) on investment securities available for sale:Unrealized gains (losses) on investment securities available for sale:
Net unrealized gains (losses) arising during the periodNet unrealized gains (losses) arising during the period(29,428)7,622 (21,806)33,919 (8,786)25,133 Net unrealized gains (losses) arising during the period(165,241)42,781 (122,460)158,341 (41,011)117,330 
Reclassification adjustment for realized (gains) losses included in net incomeReclassification adjustment for realized (gains) losses included in net income1,550 (401)1,149 3,731 (966)2,765 Reclassification adjustment for realized (gains) losses included in net income1,990 (515)1,475 (8,734)2,262 (6,472)
Net changeNet change(27,878)7,221 (20,657)37,650 (9,752)27,898 Net change(163,251)42,266 (120,985)149,607 (38,749)110,858 
Unrealized gains (losses) on derivative instruments designated as cash flow hedges:Unrealized gains (losses) on derivative instruments designated as cash flow hedges:Unrealized gains (losses) on derivative instruments designated as cash flow hedges:
Net unrealized gains (losses) arising during the periodNet unrealized gains (losses) arising during the period(8,954)2,319 (6,635)(1,182)306 (876)Net unrealized gains (losses) arising during the period(29,057)7,874 (21,183)108,639 (28,138)80,501 
Reclassification adjustment for realized (gains) losses included in net incomeReclassification adjustment for realized (gains) losses included in net income(1,031)267 (764)0 0 0 Reclassification adjustment for realized (gains) losses included in net income(1,599)410 (1,189)(120)31 (89)
Net changeNet change(9,985)2,586 (7,399)(1,182)306 (876)Net change(30,656)8,284 (22,372)108,519 (28,107)80,412 
Post-retirement unfunded health benefit:
Actuarial gains (losses) arising during the period0 0 0 (510)132 (378)
Reclassification adjustment for realized (gains) losses included in net income0 0 0 0 0 0 
Net change0 0 0 (510)132 (378)
Total other comprehensive income (loss)Total other comprehensive income (loss)$(37,863)$9,807 $(28,056)$35,958 $(9,314)$26,644 Total other comprehensive income (loss)$(193,907)$50,550 $(143,357)$258,126 $(66,856)$191,270 
Comprehensive incomeComprehensive income$63,518 $162,370 Comprehensive income$43,736 $229,791 
Nine Months Ended September 30,
20202019
(in thousands)Before-tax AmountIncome TaxNet of Tax AmountBefore-tax AmountIncome TaxNet of Tax Amount
Net income$297,536 $(74,250)$223,286 $558,383 $(146,287)$412,096 
Unrealized gains (losses) on investment securities available for sale:
Net unrealized gains (losses) arising during the period116,975 (30,297)86,678 226,160 (58,574)167,586 
Reclassification adjustment for realized (gains) losses included in net income(76,594)19,838 (56,756)5,502 (1,425)4,077 
Net change40,381 (10,459)29,922 231,662 (59,999)171,663 
Unrealized gains (losses) on derivative instruments designated as cash flow hedges:
Net unrealized gains (losses) arising during the period108,508 (28,104)80,404 (1,182)306 (876)
Reclassification adjustment for realized (gains) losses included in net income(1,421)368 (1,053)0 0 0 
Net change107,087 (27,736)79,351 (1,182)306 (876)
Post-retirement unfunded health benefit:
Actuarial gains (losses) arising during the period0 0 0 (510)132 (378)
Reclassification adjustment for realized (gains) losses included in net income0 0 0 (70)14 (56)
Net change0 0 0 (580)146 (434)
Total other comprehensive income (loss)$147,468 $(38,195)$109,273 $229,900 $(59,547)$170,353 
Comprehensive income$332,559 $582,449 
See accompanying notes to unaudited interim consolidated financial statements.
3


SYNOVUS FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(unaudited)
(in thousands, except per share data)Preferred StockCommon
Stock		Additional
Paid-in
Capital		Treasury
Stock		Accumulated
Other
Comprehensive
Income (Loss)		Retained EarningsTotal
Balance, July 1, 2020$537,145 $167,406 $3,826,726 $(731,806)$202,970 $1,050,527 $5,052,968 
Net income— — — — — 91,574 91,574 
Other comprehensive loss, net of income taxes— — — — (28,056)— (28,056)
Cash dividends declared on common stock - $0.33 per share— — — — — (48,614)(48,614)
Cash dividends declared on preferred stock(2)
— — — — — (8,291)(8,291)
Restricted share unit vesting and taxes paid related to net share settlement— 2 434 — — (460)(24)
Stock options exercised, net— 3 30 — — — 33 
Share-based compensation expense— — 4,952 — — — 4,952 
Balance at September 30, 2020$537,145 $167,411 $3,832,142 $(731,806)$174,914 $1,084,736 $5,064,542 
Balance, July 1, 2019$195,140 $166,080 $3,801,748 $(344,901)$49,289 $886,460 $4,753,816 
Net income— — — — — 135,726 135,726 
Other comprehensive income, net of income taxes— — — — 26,644 — 26,644 
Cash dividends declared on common stock - $0.30 per share— — — — — (44,476)(44,476)
Cash dividends declared on preferred stock(2)
— — — — — (8,291)(8,291)
Issuance of Series E Preferred Stock, net of issuance costs341,410 — — — — — 341,410 
Repurchases of common stock including costs to repurchase— — — (343,690)— — (343,690)
Restricted share unit vesting and taxes paid related to net share settlement— 9 219 — — (326)(98)
Stock options exercised, net— 112 2,514 — — — 2,626 
Warrants exercised with net settlement and common stock reissued— — (8,494)8,510 — (16)0 
Share-based compensation expense— — 5,171 — — — 5,171 
Balance at September 30, 2019$536,550 $166,201 $3,801,158 $(680,081)$75,933 $969,077 $4,868,838 
4

(in thousands, except per share data)Preferred StockCommon
Stock		Additional
Paid-in
Capital		Treasury
Stock		Accumulated
Other
Comprehensive
Income (Loss)		Retained EarningsTotal
Balance, 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 financial instruments - credit losses (ASU 2016-13), net of tax(1)
— — — — — (35,721)(35,721)
Net income— — — — — 223,286 223,286 
Other comprehensive income, net of income taxes— — — — 109,273 — 109,273 
Cash dividends declared on common stock - $0.99 per share— — — — — (145,824)(145,824)
Cash dividends declared on preferred stock(3)
— — — — — (24,872)(24,872)
Repurchases of common stock including costs to repurchase— — — (16,246)— — (16,246)
Restricted share unit vesting and taxes paid related to net share settlement— 381 (7,349)— — (460)(7,428)
Stock options exercised, net— 229 6,282 — — — 6,511 
Share-based compensation expense— — 13,873 — — — 13,873 
Balance at September 30, 2020$537,145 $167,411 $3,832,142 $(731,806)$174,914 $1,084,736 $5,064,542 
Balance, 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— — — — — 412,096 412,096 
Other comprehensive income, net of income taxes— — — — 170,353 — 170,353 
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 - $0.90 per share— — — — — (138,947)(138,947)
Cash dividends declared on preferred stock(3)
— — — — — (14,591)(14,591)
Issuance of Series E Preferred Stock, net of issuance costs341,410 — — — — — 341,410 
Repurchases of common stock including costs to repurchase— — — (688,860)— — (688,860)
Restricted share unit vesting and taxes paid related to net share settlement— 294 (8,709)— — (326)(8,741)
Stock options/warrants exercised, net— 564 10,598 0 — — 11,162 
Warrants exercised with net settlement and common stock reissued— — (8,763)8,779 — (16)0 
Share-based compensation expense— — 21,396 — — — 21,396 
Balance at September 30, 2019$536,550 $166,201 $3,801,158 $(680,081)$75,933 $969,077 $4,868,838 
(in thousands, except per share data)Preferred StockCommon
Stock		Additional
Paid-in
Capital		Treasury
Stock		Accumulated
Other
Comprehensive
Income (Loss)		Retained EarningsTotal
Balance, December 31, 2020$537,145 $168,133 $3,851,208 $(731,806)$158,635 $1,178,019 $5,161,334 
Net income— — — — — 187,093 187,093 
Other comprehensive loss, net of income taxes— — — — (143,357)— (143,357)
Cash dividends declared on common stock - $0.33 per share— — — — — (49,093)(49,093)
Cash dividends declared on preferred stock(1)
— — — — — (8,291)(8,291)
Restricted share unit vesting and taxes paid related to net share settlement— 271 (6,456)— — 0 (6,185)
Stock options exercised, net— 574 11,978 — — — 12,552 
Warrants exercised with net settlement and common stock reissued— — (113)116 — (3)0 
Share-based compensation expense— — 7,664 — — — 7,664 
Balance at March 31, 2021$537,145 $168,978 $3,864,281 $(731,690)$15,278 $1,307,725 $5,161,717 
Balance, 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— — — — — (35,721)(35,721)
Net income— — — — — 38,521 38,521 
Other comprehensive income, net of income taxes— — — — 191,270 — 191,270 
Cash dividends declared on common stock - $0.33 per share— — — — — (48,598)(48,598)
Cash dividends declared on preferred stock(1)
— — — — — (8,291)(8,291)
Repurchases of common stock including costs to repurchase— — — (16,246)— — (16,246)
Restricted share unit vesting and taxes paid related to net share settlement— 345 (7,602)— — 0 (7,257)
Stock options exercised, net— 214 6,053 — — — 6,267 
Share-based compensation expense— — 3,570 — — — 3,570 
Balance at March 31, 2020$537,145 $167,360 $3,821,357 $(731,806)$256,911 $1,014,238 $5,065,205 
(1)For additional information, see "Part I - Item 1. Financial Statements and Supplementary Data - Note 1 - Basis of Presentation" in this Report.
(2)    For the three months ended September 30,March 31, 2021 and 2020, dividends per share were $0.39 and $0.37 for Series D and Series E Preferred Stock, respectively. For the three months ended September 30, 2019, dividends per share were $0.39 and $0.37 for Series D and Series E Preferred Stock, respectively.
(3)    For the nine months ended September 30, 2020, dividends per share were $1.17 and $1.11 for Series D and Series E Preferred Stock, respectively. For the nine months ended September 30, 2019, dividends per share were $1.17 and $0.37 for Series D and Series E Preferred Stock, respectively.
See accompanying notes to unaudited interim consolidated financial statements.
54


SYNOVUS FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Nine Months Ended September 30,Three Months Ended March 31,
(in thousands)(in thousands)20202019(in thousands)20212020
Operating ActivitiesOperating ActivitiesOperating Activities
Net incomeNet income$223,286 $412,096 Net income$187,093 $38,521 
Adjustments to reconcile net income to net cash (used) provided by operating activities:Adjustments to reconcile net income to net cash (used) provided by operating activities:Adjustments to reconcile net income to net cash (used) provided by operating activities:
Provision for credit losses343,956 63,250 
(Reversal of) provision for credit losses(Reversal of) provision for credit losses(18,575)158,722 
Depreciation, amortization, and accretion, netDepreciation, amortization, and accretion, net77,385 8,969 Depreciation, amortization, and accretion, net52,395 23,649 
Deferred income tax (benefit) expense(60,433)42,594 
Deferred income tax expense (benefit)Deferred income tax expense (benefit)17,926 (10,978)
Originations of loans held for saleOriginations of loans held for sale(2,221,302)(603,086)Originations of loans held for sale(1,075,343)(254,395)
Proceeds from sales of loans held for sale1,657,738 527,354 
Proceeds from sales and payments on loans held for saleProceeds from sales and payments on loans held for sale857,872 259,224 
Gain on sales of loans held for sale, netGain on sales of loans held for sale, net(50,001)(15,453)Gain on sales of loans held for sale, net(16,293)(9,497)
Increase in other assets(397,220)(135,448)
Increase in other liabilities234,018 32,345 
Investment securities (gains) losses, net(76,594)5,502 
Goodwill impairment44,877 0 
Loss on early extinguishment of debt2,057 4,592 
Decrease (increase) in other assetsDecrease (increase) in other assets17,437 (442,711)
(Decrease) increase in other liabilities(Decrease) increase in other liabilities(11,936)260,486 
Investment securities losses (gains), netInvestment securities losses (gains), net1,990 (8,734)
Share-based compensation expenseShare-based compensation expense13,873 21,396 Share-based compensation expense7,664 3,570 
Net cash (used in) provided by operating activities(208,360)364,111 
Other Other0 1,904 
Net cash provided by operating activitiesNet cash provided by operating activities20,230 19,761 
Investing ActivitiesInvesting ActivitiesInvesting Activities
Net cash received in business combination, net of cash paid0 201,100 
Proceeds from maturities and principal collections of investment securities available for saleProceeds from maturities and principal collections of investment securities available for sale1,567,889 780,538 Proceeds from maturities and principal collections of investment securities available for sale852,628 341,431 
Proceeds from sales of investment securities available for saleProceeds from sales of investment securities available for sale3,932,368 2,456,137 Proceeds from sales of investment securities available for sale223,977 413,180 
Purchases of investment securities available for salePurchases of investment securities available for sale(6,180,812)(3,614,139)Purchases of investment securities available for sale(2,125,567)(755,558)
Proceeds from sales of equity securities23,141 0 
Proceeds from sales of loansProceeds from sales of loans1,293,366 71,530 Proceeds from sales of loans21,535 11,808 
Proceeds from sales of other real estate and other assets18,204 15,859 
Net increase in loans(3,703,203)(1,278,772)
Net redemptions (purchases) of Federal Home Loan Bank stock96,772 (75,735)
Purchases of loansPurchases of loans(606,985)0 
Net decrease (increase) in loansNet decrease (increase) in loans5,084 (1,065,125)
Net purchases of Federal Home Loan Bank stockNet purchases of Federal Home Loan Bank stock(1,200)(978)
Net purchases of Federal Reserve Bank stockNet purchases of Federal Reserve Bank stock(454)(45,856)Net purchases of Federal Reserve Bank stock0 (454)
Net (purchases) proceeds from settlement of bank-owned life insurance policies(248,023)15,208 
Net increase in premises and equipment(22,786)(40,195)
Net proceeds from settlement (purchases) of bank-owned life insurance policiesNet proceeds from settlement (purchases) of bank-owned life insurance policies3,784 (249,942)
Net increase in premises, equipment and softwareNet increase in premises, equipment and software(4,027)(6,941)
OtherOther1,247 8,547 
Net cash used in investing activitiesNet cash used in investing activities(3,223,538)(1,514,325)Net cash used in investing activities(1,629,524)(1,304,032)
Financing ActivitiesFinancing ActivitiesFinancing Activities
Net increase in depositsNet increase in deposits6,259,108 (185,362)Net increase in deposits677,380 1,420,659 
Net increase in federal funds purchased and securities sold under repurchase agreementsNet increase in federal funds purchased and securities sold under repurchase agreements36,655 (69,412)Net increase in federal funds purchased and securities sold under repurchase agreements65,737 147,086 
Net change in other short-term borrowings(1,353,560)1,582,000 
Net decrease in other short-term borrowingsNet decrease in other short-term borrowings(7,717)(578,560)
Repayments and redemption of long-term debtRepayments and redemption of long-term debt(1,776,913)(157,226)Repayments and redemption of long-term debt0 (251,904)
Proceeds from issuance of long-term debt, netProceeds from issuance of long-term debt, net1,248,441 497,045 Proceeds from issuance of long-term debt, net0 1,248,441 
Dividends paid to common shareholdersDividends paid to common shareholders(141,353)(123,446)Dividends paid to common shareholders(48,834)(44,149)
Dividends paid to preferred shareholdersDividends paid to preferred shareholders(24,872)(9,450)Dividends paid to preferred shareholders(8,291)(3,150)
Proceeds from issuance of Preferred stock0 341,410 
Stock options and warrants exercised6,511 11,162 
Repurchase of common stockRepurchase of common stock(16,246)(688,860)Repurchase of common stock0 (16,246)
Taxes paid related to net share settlement of equity awards(7,428)(8,741)
Issuances, net of taxes paid, under equity compensation plansIssuances, net of taxes paid, under equity compensation plans6,368 (990)
Net cash provided by financing activitiesNet cash provided by financing activities4,230,343 1,189,120 Net cash provided by financing activities684,643 1,921,187 
Increase in cash and cash equivalents including restricted cash798,445 38,906 
Cash, cash equivalents, restricted cash, and restricted cash equivalents at beginning of period1,186,918 1,143,564 
Cash, cash equivalents, restricted cash, and restricted cash equivalents at end of period$1,985,363 $1,182,470 
(Decrease) increase in cash and cash equivalents including restricted cash(Decrease) increase in cash and cash equivalents including restricted cash(924,651)636,916 
Cash, cash equivalents, and restricted cash, at beginning of periodCash, cash equivalents, and restricted cash, at beginning of period4,252,917 1,186,918 
Cash, cash equivalents, and restricted cash at end of periodCash, cash equivalents, and restricted cash at end of period$3,328,266 $1,823,834 
Supplemental Disclosures:Supplemental Disclosures:Supplemental Disclosures:
Income taxes paidIncome taxes paid$68,253 $88,480 Income taxes paid$48,505 $920 
Interest paidInterest paid268,046 350,388 Interest paid46,599 109,340 
Non-cash ActivitiesNon-cash ActivitiesNon-cash Activities
Common stock issued, treasury stock reissued, equity awards/warrants exchanged to acquire FCB0 1,625,688 
Securities sold during the period but settled after period-endSecurities sold during the period but settled after period-end0 169,748 
Securities purchased during the period but settled after period-endSecurities purchased during the period but settled after period-end53,699 113,818 
Loans foreclosed and transferred to other real estateLoans foreclosed and transferred to other real estate2,163 14,084 Loans foreclosed and transferred to other real estate720 1,951 
Loans transferred to loans held for sale at fair value46,178 0 
Dividends declared on common stock during the period but paid after period-endDividends declared on common stock during the period but paid after period-end48,614 44,476 Dividends declared on common stock during the period but paid after period-end49,093 48,598 
Dividends declared on preferred stock during the period but paid after period-endDividends declared on preferred stock during the period but paid after period-end5,141 5,141 Dividends declared on preferred stock during the period but paid after period-end5,141 5,141 
See accompanying notes to unaudited interim consolidated financial statements.
65


Notes to Unaudited Interim Consolidated Financial Statements
Note 1 - Basis of Presentation and Accounting Policies
General
The accompanying unaudited interim consolidated financial statements of Synovus Financial Corp. include the accounts of the Parent Company and its consolidated subsidiaries. Synovus Financial Corp. is a financial services company based in Columbus, Georgia. Through its wholly-owned subsidiary, Synovus Bank, a Georgia state-chartered bank that is a member of the Federal Reserve System, the Company provides commercial and retail banking in addition to a full suite of specialized products and services including private banking, treasury management, wealth management, mortgage services, premium finance, asset-based lending, structured lending, and international banking. Synovus also provides financial planning, and investment advisory services through its wholly-owned subsidiaries, Synovus Trust and Synovus Securities, as well at its GLOBALT and Creative Financial Group divisions. Synovus Bank is positioned in markets in the Southeast, with 292 288 branches and 389388 ATMs in Alabama, Florida, Georgia, South Carolina, and Tennessee.
The accompanying unaudited interim consolidated financial statements have been prepared in accordance with the instructions to the SEC Form 10-Q and Article 10 of Regulation S-X; therefore, they do not include all information and footnotes necessary for a fair presentation of financial position, results of operations, comprehensive income, and cash flows in conformity with GAAP. All adjustments consisting of normally recurring accruals that, in the opinion of management, are necessary for a fair presentation of the consolidated financial position and results of operations for the periods covered by this Report have been included. The accompanying unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes appearing in Synovus' 20192020 Form 10-K.
Reclassifications
Prior periods' consolidated financial statements are reclassified whenever necessary to conform to the current periods' presentation.
Use of Estimates in the Preparation of Financial Statements
In preparing the consolidated financial statements in accordance with GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the respective consolidated balance sheets and the reported amounts of revenues and expenses for the periods presented. Actual results could differ significantly from those estimates.
Material estimates that are particularly susceptible to change relate to the determination of the ACL; estimates of fair value, including goodwill impairment assessment;value; income taxes; and contingent liabilities.
Non-TDR Modifications due to COVID-19
Coronavirus Aid, Relief, and Economic Security Act (CARES Act)
The U.S. has been operating under a presidentially declared state of emergency since March 13, 2020 ("National Emergency"). On March 27, 2020, the CARES Act was signed into law. Among other emergency measures aimed to lessen the impact of COVID-19, the CARES Act creates a forbearance program for federally backed mortgage loans, protects borrowers from negative credit reporting due to loan accommodations related to the National Emergency, and provides financial institutions the option to temporarily suspend certain requirements under GAAP related to TDRs for a limited period of time to account for the effects of COVID-19.
Regulatory agencies 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. Section 4013 of the CARES Act allows banks to elect to not consider loan modifications related to COVID-19 that are made between March 1, 2020 and the earlier of December 31, 2020, 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. As such, beginning in late March 2020, Synovus provided relief programs consisting primarily of 90-day payment deferral relief of P&I to borrowers negatively impacted by COVID-19 and has primarily accounted for these loan modifications in accordance with ASC 310-40. See "Part II - Item 8. Financial Statements and Supplementary Data - Note 1 - Summary of Significant Accounting Policies" to the consolidated financial statements of Synovus' 2019 Form 10-K for information on Synovus' TDR policy. During the third quarter, upon
7

evaluation of facts and circumstances, the CARES Act was elected for certain loan modifications that met the criteria of section 4013 of the CARES Act. The deferred payments along with interest accrued during the deferral period are generally due and payable on the maturity date of the existing loan. Based on the terms of the deferral relief program which did not provide for forgiveness of interest, Synovus has recognized interest income on loans during the deferral period.
U.S. Small Business Administration Paycheck Protection Program (PPP)
Synovus is participating in the Paycheck Protection Program, which is a loan program that originated from the CARES Act and was subsequently expanded by the Paycheck Protection Program and Health Care Enhancement Act ("PPPHCEA Act"). The PPP is designed to provide U.S. small businesses with cash-flow assistance through loans guaranteed by the SBA. If the borrower meets certain criteria and uses the proceeds toward certain eligible expenses in accordance with the requirements of the PPP, the borrower's obligation to repay the loan can be forgiven up to the full principal amount of the loan and any accrued interest. Upon borrower forgiveness, the SBA pays the Company for the principal and accrued interest owed on the loan. If the full principal of the loan is not forgiven, the loan will operate according to the original loan terms with the SBA guaranty remaining. Under this program, Synovus provided nearly $2.9 billion in funding to close to 19,000 customers. The average PPP loan was approximately $150 thousand, and the customers that received those loans employ over 335 thousand individuals. As compensation for originating the loans, the Company receives lender processing fees from the SBA ranging from 1% to 5%, based on the size of the loan, which are deferred and will be amortized over the loans' contractual lives and recognized as interest income. Upon forgiveness of a loan by the SBA, any unrecognized net deferred fees related to the loan will be recognized as interest income in the period the SBA forgiveness payment is received.
Recently Adopted Accounting Standards
ASU 2016-13, Financial Instruments-Credit Losses (ASC 326).On January 1, 2020, Synovus adopted ASU 2016-13 (and all subsequent ASUs on this topic), which replaces 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 
8

On August 26, 2020, the federal banking regulators issued a final rule (following an interim final rule issued on March 27, 2020) that allows electing banking organizations that adopt CECL during 2020 to mitigate the estimated effects of CECL on regulatory capital for two years, followed by a three-year phase-in transition period. Regulatory capital ratios in 2020 reflect Synovus' election of the five-year transition provision.
In conjunction with the adoption of ASC 326, the following are additional disclosures about our significant accounting policies related to CECL.
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.
For investment securities available for sale in an unrealized loss position, if Synovus has an intention to sell the security, or it is more likely than not that the security will be required to be sold prior to 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 is not met, Synovus performs a quarterly assessment of its available for sale debt securities to determine if the decline in fair value of a security below its amortized cost is related to credit losses 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 expense. 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 are recognized in other comprehensive income (loss).
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.
Loans Held for Investment and Interest Income
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 costs, and purchase premiums/discounts. Interest income, net deferred fees, and purchase premium/discount amortization/accretion on loans, are recognized on a level yield basis.
Allowance for Credit Losses for Loans Held for Investment (ALL)
The allowance for credit losses on loans held for investment are included in the ALL and represent management's estimate of credit losses expected over the life of the loans included in Synovus' existing loans held for investment portfolio. Changes to the allowance are recorded through a provision for credit 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.
Accrued 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 individual loan risk ratings. 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, and LGD, which is the estimate of the amount of net loss in the event of default.
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
9

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 one year 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 necessary 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 subpools.
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 two methods: discounted cash flow based upon the loan's contractual effective interest rate or at the fair value of the collateral, less costs to sell if the loan is collateral-dependent.
For individually evaluated loans, under the DCF method, resulting expected credit losses are recorded as a specific reserve with a charge-off for any portion of the 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.
For 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.
Troubled debt restructurings
The 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 discount the expected cash flows.
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 migration of the credit 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 interest 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 type and are further segregated based upon the individual loan risk ratings as noted above.
The accounting treatment for purchased loans classified as non-PCD is the same as loans held for investment as detailed in the above 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 other liabilities on the consolidated balance sheets with offsetting expense recognized as a component of the provision for credit losses on the
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consolidated statements of income. The reserve for off-balance-sheet credit exposures considers the likelihood that funding will occur and estimates the expected credit losses on resulting commitments expected to be funded over its estimated life using the estimated loss rates on loans held for investment.
Recently Issued Accounting Standards Not Yet Adopted
ASU 2020-04, Reference Rate Reform: Facilitation of the Effects of Reference Rate Reform on Financial Reporting (ASC 848). Facilitation of the Effects of Reference Rate Reform on Financial Reporting, provides temporary, optional guidance to ease the potential burden in accounting for, or recognizing the effects of, the transition away from the LIBOR or other interbank offered rate on financial reporting. To help with the transition to new reference rates, the ASU provides optional expedients and exceptions for applying GAAP to affected contract modifications and hedge accounting relationships. The main provisions include:
•A change in a contract’s reference interest rate would be accounted for as a continuation of that contract rather than as the creation of a new one for contracts, including loans, debt, leases, and other arrangements, that meet specific criteria.
•When updating its hedging strategies in response to reference rate reform, an entity would be allowed to preserve its hedge accounting.
The guidance is applicable only to contracts or hedge accounting relationships that reference LIBOR or another reference rate expected to be discontinued. Because the guidance is meant to help entities through the transition period, it will be in effect for a limited time and will not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022, for which an entity has elected certain optional expedients that are retained through the end of the hedging relationship. The amendments in this ASU are effective March 12, 2020 through December 31, 2022. We are evaluating the impact of adopting the new guidance on the consolidated financial statements on an ongoing basis with no material expected impact at this time.
ASU 2020-08, Codification Improvements to Subtopic 310-20, Receivables – Nonrefundable Fees and Other Costs. The guidance in this ASU pertains to the shortened amortization period for certain purchased callable debt securities held atat a premium, which premium is amortized to the earliest call date in accordance with ASC 310-20-25-33, and clarifies that an entity should reevaluate whether a callable debt security is within the scope of paragraph 310-20-25-33 for each reporting period. The amendments in this ASU are effective for fiscal years beginning after December 15, 2020. Early adoption is not permitted. We are evaluatingSynovus adopted ASU 2020-08 effective January 1, 2021 with no material impact to the impact of adopting the new guidance on theunaudited consolidated financial statements.
Note 2 - AcquisitionsASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.
Acquisition In December 2019, the FASB issued ASU 2019-12 to simplify and reduce complexities when accounting for income taxes by removing certain exceptions. Among the provisions of FCB Financial Holdings, Inc.
this guidance are 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.EffectiveASU 2019-12 is effective for public entities for fiscal years beginning after December 15, 2020. Synovus adopted ASU 2019-12 effective January 1, 2019, Synovus completed its acquisition2021 with no material impact to the unaudited consolidated financial statements unless there are changes in tax law that require recognition as set forth in this guidance.
Recently Issued Accounting Standards Not Yet Adopted
ASU 2021-01, Reference Rate Reform (Topic 848): Scope: In January 2021, the FASB issued ASU 2021-01 which provides optional expedients and exceptions in Topic 848 for derivative instruments and hedge accounting modifications resulting from the discounting transition of allreference rate reform.The expedients and exceptions provided by ASU 2021-01 will not 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 outstanding stockbeginning of FCB, a bank holding company based in Weston, Florida, for total consideration of $1.63 billion. Effective January 1, 2019, FCB's wholly-owned banking subsidiary, Florida Community Bank, National Association, merged into Synovus Bank. The acquisition of FCB expanded Synovus' presence in Florida andan interim period that includes or is subsequent to March 12, 2020, until the Southeast, adding $9.29 billion in loans and $10.93 billion in deposits on the Acquisition Date. The acquisition of FCB constituted a business combination and was accounted for under the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations, with the valuation finalized assunset date of December 31, 20192022. Synovus adopted ASU 2020-04 . The results of FCB's operations are included in Synovus' consolidated financial statements since the Acquisition Date.
During 2019, in connection with the FCB acquisition, Synovus incurred merger-related expense totaling $0.4 million and $57.5 million for the three and nine months ended September 30, 2019, respectively, primarily related to employment compensation agreements, severance, professional services, and contract termination charges.
See "Part II - Item 8. Financial Statements and Supplementary Data - Note 2 - Acquisitions" to the consolidated financial statements of Synovus' 2019 Form 10-K for additional information on Synovus' acquisition of FCB.
Acquisition of Global One
On October 1, 2016, Synovus completed its acquisition of allReference Rate Reform: Facilitation of the outstanding stockEffects of Global One. Under the terms of the merger agreement, the purchase price included additional annual payments ("Earnout Payments") to Global One's former shareholders over a period not to extend beyond June 30, 2021, 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. During the three months ended September 30, 2020, Synovus did not record any adjustments to the earnout liability and during the nine months ended September 30, 2020, Synovus recorded a $4.9 million increase to the earnout liability driven by increased earnings and earnings projections of Global One. The total fair value of the earnout liability at September 30, 2020 was $15.9 million.
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Reference Rate Reform on Financial Reporting on October 1, 2020. Synovus has not yet elected optional expedients for ASU 2021-01.
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 September 30, 2020March 31, 2021 and December 31, 20192020 are summarized below.
September 30, 2020March 31, 2021
(in thousands)(in thousands)Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value(in thousands)Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value
U.S. Treasury securitiesU.S. Treasury securities$20,254 $0 $0 $20,254 U.S. Treasury securities$70,085 $0 $(3,629)$66,456 
U.S. Government agency securitiesU.S. Government agency securities153,984 3,056 (426)156,614 U.S. Government agency securities79,148 2,026 0 81,174 
Mortgage-backed securities issued by U.S. Government agenciesMortgage-backed securities issued by U.S. Government agencies1,132,816 2,655 (6,079)1,129,392 Mortgage-backed securities issued by U.S. Government agencies964,709 1,542 (11,069)955,182 
Mortgage-backed securities issued by U.S. Government sponsored enterprisesMortgage-backed securities issued by U.S. Government sponsored enterprises4,402,051 138,611 (276)4,540,386 Mortgage-backed securities issued by U.S. Government sponsored enterprises6,100,521 78,507 (77,253)6,101,775 
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprisesCollateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises1,331,011 18,495 (4,222)1,345,284 Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises1,155,180 12,678 (10,635)1,157,223 
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprisesCommercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises334,463 19,694 0 354,157 Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises440,556 12,006 (7,348)445,214 
State and municipal securities500 1 0 501 
Corporate debt securities and other debt securitiesCorporate debt securities and other debt securities20,186 141 (390)19,937 Corporate debt securities and other debt securities18,235 504 (6)18,733 
Total investment securities available for saleTotal investment securities available for sale$7,395,265 $182,653 $(11,393)$7,566,525 Total investment securities available for sale$8,828,434 $107,263 $(109,940)$8,825,757 
December 31, 2019December 31, 2020
(in thousands)(in thousands)Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value(in thousands)Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value
U.S. Treasury securitiesU.S. Treasury securities$19,855 $0 $0 $19,855 U.S. Treasury securities$20,257 $0 $0 $20,257 
U.S. Government agency securitiesU.S. Government agency securities35,499 1,042 0 36,541 U.S. Government agency securities79,638 2,682 0 82,320 
Mortgage-backed securities issued by U.S. Government agenciesMortgage-backed securities issued by U.S. Government agencies56,328 560 (72)56,816 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 enterprisesMortgage-backed securities issued by U.S. Government sponsored enterprises5,079,396 103,495 (2,076)5,180,815 Mortgage-backed securities issued by U.S. Government sponsored enterprises4,865,858 134,188 0 5,000,046 
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprisesCollateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises629,706 7,349 (204)636,851 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 enterprisesCommercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises357,291 14,301 0 371,592 Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises354,244 16,677 0 370,921 
State and municipal securities2,069 6 0 2,075 
Asset-backed securities323,237 4,315 (152)327,400 
Corporate debt securities and other debt securitiesCorporate debt securities and other debt securities144,410 2,317 (2)146,725 Corporate debt securities and other debt securities20,211 457 (168)20,500 
Total investment securities available for saleTotal investment securities available for sale$6,647,791 $133,385 $(2,506)$6,778,670 Total investment securities available for sale$7,801,864 $177,243 $(16,669)$7,962,438 
At September 30, 2020both March 31, 2021 and December 31, 2019,2020, investment securities with a carrying value of $2.34$3.84 billion and $1.71 billion, respectively, were pledged to secure certain deposits and other liabilities, as required by law or contractual agreements.

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Gross unrealized losses on investment securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at September 30, 2020March 31, 2021 and December 31, 20192020 are presented below.
September 30, 2020March 31, 2021
Less than 12 Months12 Months of LongerTotalLess than 12 Months12 Months or LongerTotal
(in thousands)(in thousands)Fair ValueGross Unrealized LossesFair ValueGross Unrealized LossesFair ValueGross Unrealized Losses(in thousands)Fair ValueGross Unrealized LossesFair ValueGross Unrealized LossesFair ValueGross Unrealized Losses
U.S. Government agency securities$48,921 $(426)$0 $0 $48,921 $(426)
U.S. Treasury securitiesU.S. Treasury securities$46,195 $(3,629)$0 $0 $46,195 $(3,629)
Mortgage-backed securities issued by U.S. Government agenciesMortgage-backed securities issued by U.S. Government agencies800,908 (6,079)0 0 800,908 (6,079)Mortgage-backed securities issued by U.S. Government agencies784,433 (11,069)0 0 784,433 (11,069)
Mortgage-backed securities issued by U.S. Government sponsored enterprisesMortgage-backed securities issued by U.S. Government sponsored enterprises180,899 (276)0 0 180,899 (276)Mortgage-backed securities issued by U.S. Government sponsored enterprises4,214,454 (77,253)0 0 4,214,454 (77,253)
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprisesCollateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises609,208 (4,222)0 0 609,208 (4,222)Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises770,319 (10,635)0 0 770,319 (10,635)
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprisesCommercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises176,469 (7,348)0 0 176,469 (7,348)
Corporate debt securities and other debt securitiesCorporate debt securities and other debt securities11,115 (390)0 0 11,115 (390)Corporate debt securities and other debt securities9,498 (6)0 0 9,498 (6)
TotalTotal$1,651,051 $(11,393)$0 $0 $1,651,051 $(11,393)Total$6,001,368 $(109,940)$0 $0 $6,001,368 $(109,940)
December 31, 2019December 31, 2020
Less than 12 Months12 Months of LongerTotalLess than 12 Months12 Months or LongerTotal
(in thousands)(in thousands)Fair ValueGross Unrealized LossesFair ValueGross Unrealized LossesFair ValueGross Unrealized Losses(in thousands)Fair ValueGross Unrealized LossesFair ValueGross Unrealized LossesFair ValueGross Unrealized Losses
Mortgage-backed securities issued by U.S. Government agenciesMortgage-backed securities issued by U.S. Government agencies$19,543 $(70)$355 $(2)$19,898 $(72)Mortgage-backed securities issued by U.S. Government agencies$566,896 $(5,925)$0 $0 $566,896 $(5,925)
Mortgage-backed securities issued by U.S. Government sponsored enterprises768,040 (2,076)0 0 768,040 (2,076)
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprisesCollateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises57,670 (204)0 0 57,670 (204)Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises803,429 (10,576)0 0 803,429 (10,576)
Asset-backed securities37,156 (116)4,954 (36)42,110 (152)
Corporate debt securities and other debt securitiesCorporate debt securities and other debt securities9,505 (2)0 0 9,505 (2)Corporate debt securities and other debt securities9,337 (168)0 0 9,337 (168)
TotalTotal$891,914 $(2,468)$5,309 $(38)$897,223 $(2,506)Total$1,379,662 $(16,669)$0 $0 $1,379,662 $(16,669)
As of September 30, 2020,March 31, 2021, Synovus had 28115 investment securities in a loss position for less than twelve months and 0 investment securities in a loss position for twelve months or longer. At December 31, 2019, Synovus had 26 investment securities in a loss position for less than twelve months and 5 investment securities in a loss position for twelve months or longer. Synovus does not intend to sell investment securities in an unrealized loss position prior to the recovery of the unrealized loss, which may not be until maturity, and has the ability and intent to hold those securities for that period of time. Additionally, Synovus is not currently aware of any circumstances which will require it to sell any of the securities that are in an unrealized loss position prior to the respective securities' recovery of all such unrealized losses. As such, no write-downs to the amortized cost basis of the portfolio were recorded in the current period. During the latter part of the second quarter of 2020, as part of an overall strategic repositioning of the investment securities portfolio, Synovus realized net gains of $69.4 million from sales of investment securities, including losses of $5.7 millionrelated to the sale of Synovus' remaining portfolio of asset-backed securities.at March 31, 2021.
At September 30, 2020,March 31, 2021, 0 ACL was established for investment securities. Substantially all of the unrealized losses on the securities portfolio were the result of changes in market interest rates compared to the date the securities were acquired rather than the credit quality of the issuers or underlying loans.
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U.S. Treasury and agency securities and agency mortgage-backed securities are issued, guaranteed or otherwise supported by the United States government, an agency of the United States government, or a government sponsored enterprise.
The amortized cost and fair value by contractual maturity of investment securities available for sale at September 30, 2020March 31, 2021 are shown below. The expected life of MBSs or CMOs may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. For purposes of the maturity table, MBSs and CMOs, which are not due at a single maturity date, have been classified based on the final contractual maturity date.
Distribution of Maturities at September 30, 2020
(in thousands)Within One
Year		1 to 5
Years		5 to 10
Years		More Than
10 Years		Total
Amortized Cost
U.S. Treasury securities$20,254 $0 $0 $0 $20,254 
U.S. Government agency securities430 26,432 127,122 0 153,984 
Mortgage-backed securities issued by U.S. Government agencies0 1,585 311 1,130,920 1,132,816 
Mortgage-backed securities issued by U.S. Government sponsored enterprises0 310 73,420 4,328,321 4,402,051 
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises0 0 248 1,330,763 1,331,011 
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises0 109,731 112,089 112,643 334,463 
State and municipal securities0 0 0 500 500 
Corporate debt securities and other debt securities0 9,505 8,681 2,000 20,186 
Total amortized cost$20,684 $147,563 $321,871 $6,905,147 $7,395,265 
Fair Value
U.S. Treasury securities$20,254 $0 $0 $0 $20,254 
U.S. Government agency securities438 26,243 129,933 0 156,614 
Mortgage-backed securities issued by U.S. Government agencies0 1,641 324 1,127,427 1,129,392 
Mortgage-backed securities issued by U.S. Government sponsored enterprises0 319 76,148 4,463,919 4,540,386 
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises0 0 259 1,345,025 1,345,284 
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises0 116,705 118,468 118,984 354,157 
State and municipal securities0 0 0 501 501 
Corporate debt securities and other debt securities0 9,315 8,822 1,800 19,937 
Total fair value$20,692 $154,223 $333,954 $7,057,656 $7,566,525 
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Distribution of Maturities at March 31, 2021
(in thousands)Within One
 Year		1 to 5
Years		5 to 10
 Years		More Than
 10 Years		Total
Amortized Cost
U.S. Treasury securities$20,261 $0 $49,824 $0 $70,085 
U.S. Government agency securities430 1,594 77,124 0 79,148 
Mortgage-backed securities issued by U.S. Government agencies0 1,232 162 963,315 964,709 
Mortgage-backed securities issued by U.S. Government sponsored enterprises76 87 77,685 6,022,673 6,100,521 
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises0 0 206 1,154,974 1,155,180 
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises4,126 109,488 227,357 99,585 440,556 
Corporate debt securities and other debt securities0 9,504 8,731 0 18,235 
Total amortized cost$24,893 $121,905 $441,089 $8,240,547 $8,828,434 
Fair Value
U.S. Treasury securities$20,261 $0 $46,195 $0 $66,456 
U.S. Government agency securities438 1,623 79,113 0 81,174 
Mortgage-backed securities issued by U.S. Government agencies0 1,281 169 953,732 955,182 
Mortgage-backed securities issued by U.S. Government sponsored enterprises77 88 80,469 6,021,141 6,101,775 
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises0 0 215 1,157,008 1,157,223 
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises4,126 113,783 224,116 103,189 445,214 
Corporate debt securities and other debt securities0 9,498 9,235 0 18,733 
Total fair value$24,902 $126,273 $439,512 $8,235,070 $8,825,757 
Proceeds from sales, gross gains, and gross losses on sales of securities available for sale for the three and nine months ended September 30,March 31, 2021 and 2020 and 2019 are presented below. The specific identification method is used to reclassify gains and losses out of other comprehensive income at the time of sale.
Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended March 31,
(in thousands)(in thousands)2020201920202019(in thousands)20212020
Proceeds from sales of investment securities available for saleProceeds from sales of investment securities available for sale$1,249,507 $709,464 $3,932,368 $2,456,137 Proceeds from sales of investment securities available for sale$223,977 $413,180 
Gross realized gains on salesGross realized gains on sales0 140 83,840 9,270 Gross realized gains on sales0 8,734 
Gross realized losses on sales(1)
Gross realized losses on sales(1)
(1,550)(3,871)(7,246)(14,772)
Gross realized losses on sales(1)
(1,990)0 
Investment securities gains (losses), netInvestment securities gains (losses), net$(1,550)$(3,731)$76,594 $(5,502)Investment securities gains (losses), net$(1,990)$8,734 
(1)    Losses recognized during 2020 primarily relate to the sale of Synovus' remaining portfolio of asset-backed securities during the second quarter of 2020. Additionally, losses include an $802 thousand third quarter 2020 settlement adjustment to the gain recognized on second quarter 2020 securities sales.
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Note 43 - Loans and Allowance for Loan Losses
Aging and Non-Accrual Analysis
The following tables provide a summary of current, accruing past due, and non-accrual loans by portfolio class as of September 30, 2020March 31, 2021 and December 31, 2019.2020.
September 30, 2020March 31, 2021
(in thousands)(in thousands)Current
Accruing 30-89 Days Past Due
Accruing 90 Days or Greater Past DueTotal Accruing Past DueNon-accrual with an ALLNon-accrual without an ALLTotal(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 agriculturalCommercial, financial and agricultural$13,009,877 $13,967 $829 $14,796 $67,415 $27,950 $13,120,038 Commercial, financial and agricultural$12,573,032 $12,545 $292 $12,837 $59,145 $17,315 $12,662,329 
Owner-occupiedOwner-occupied6,869,346 4,131 375 4,506 10,623 9,638 6,894,113 Owner-occupied7,009,586 4,422 305 4,727 17,192 0 7,031,505 
Total commercial and industrialTotal commercial and industrial19,879,223 18,098 1,204 19,302 78,038 37,588 20,014,151 Total commercial and industrial19,582,618 16,967 597 17,564 76,337 17,315 19,693,834 
Investment propertiesInvestment properties9,628,029 5,620 538 6,158 28,260 0 9,662,447 Investment properties9,305,441 4,295 400 4,695 16,880 8,709 9,335,725 
1-4 family properties1-4 family properties649,225 2,092 350 2,442 2,135 1,236 655,038 1-4 family properties633,971 871 61 932 2,815 1,236 638,954 
Land and developmentLand and development645,148 583 268 851 2,126 265 648,390 Land and development553,698 3,661 89 3,750 1,801 0 559,249 
Total commercial real estateTotal commercial real estate10,922,402 8,295 1,156 9,451 32,521 1,501 10,965,875 Total commercial real estate10,493,110 8,827 550 9,377 21,496 9,945 10,533,928 
Consumer mortgagesConsumer mortgages5,643,745 6,475 872 7,347 7,433 0 5,658,525 Consumer mortgages5,283,865 4,109 0 4,109 11,201 0 5,299,175 
Home equity linesHome equity lines1,601,705 3,176 29 3,205 10,297 0 1,615,207 Home equity lines1,417,714 2,446 16 2,462 12,191 0 1,432,367 
Credit cardsCredit cards259,262 1,894 3,673 5,567 0 0 264,829 Credit cards263,660 1,835 1,876 3,711 0 0 267,371 
Other consumer loansOther consumer loans1,116,334 11,866 578 12,444 1,459 0 1,130,237 Other consumer loans1,563,272 7,705 765 8,470 6,684 0 1,578,426 
Total consumerTotal consumer8,621,046 23,411 5,152 28,563 19,189 0 8,668,798 Total consumer8,528,511 16,095 2,657 18,752 30,076 0 8,577,339 
Total loans$39,422,671 $49,804 $7,512 $57,316 $129,748 $39,089 $39,648,824 (1)
Loans, net of deferred fees and costsLoans, net of deferred fees and costs$38,604,239 $41,889 $3,804 $45,693 $127,909 $27,260 $38,805,101 

December 31, 2019
(in thousands)CurrentAccruing 30-89 Days Past DueAccruing 90 Days or Greater Past DueTotal Accruing Past DueNon-accrual
ASC 310-30 Loans(2)
Total
Commercial, financial and agricultural$9,124,285 $38,916 $1,206 $40,122 $56,017 $1,019,135 $10,239,559 
Owner-occupied5,691,095 5,164 576 5,740 9,780 823,196 6,529,811 
Total commercial and industrial14,815,380 44,080 1,782 45,862 65,797 1,842,331 16,769,370 
Investment properties7,264,794 1,344 0 1,344 1,581 1,736,608 9,004,327 
1-4 family properties733,984 2,073 304 2,377 2,253 41,401 780,015 
Land and development629,363 808 0 808 1,110 78,161 709,442 
Total commercial real estate8,628,141 4,225 304 4,529 4,944 1,856,170 10,493,784 
Consumer mortgages3,681,553 4,223 730 4,953 11,369 1,848,493 5,546,368 
Home equity lines1,691,759 7,038 171 7,209 12,034 2,155 1,713,157 
Credit cards263,065 3,076 2,700 5,776 0 0 268,841 
Other consumer loans2,363,101 18,688 616 19,304 5,704 8,185 2,396,294 
Total consumer7,999,478 33,025 4,217 37,242 29,107 1,858,833 9,924,660 
Total loans$31,442,999 $81,330 $6,303 $87,633 $99,848 $5,557,334 $37,187,814 (3)
(1)    Total before net deferred fees and costs of $99.0 million.
(2)    Represents loans (at fair value) acquired from FCB accounted for under ASC 310-30, net of discount of $90.3 million and payments since Acquisition Date and also include $1.8 million in non-accrual loans, $9.6 million in accruing 90 days or greater past due loans, and $26.5 million in 30-89 days past due loans.
(3)    Total before net deferred fees and costs of $25.4 million.
December 31, 2020
(in thousands)CurrentAccruing 30-89 Days Past DueAccruing 90 Days or Greater Past DueTotal Accruing Past DueNon-accrual with an ALLNon-accrual without an ALLTotal
Commercial, financial and agricultural$12,321,514 $10,256 $996 $11,252 $55,527 $21,859 $12,410,152 
Owner-occupied7,087,992 1,913 92 2,005 20,019 0 7,110,016 
Total commercial and industrial19,409,506 12,169 1,088 13,257 75,546 21,859 19,520,168 
Investment properties9,075,843 2,751 154 2,905 24,631 0 9,103,379 
1-4 family properties621,492 3,548 36 3,584 2,383 1,236 628,695 
Land and development591,048 422 0 422 1,899 264 593,633 
Total commercial real estate10,288,383 6,721 190 6,911 28,913 1,500 10,325,707 
Consumer mortgages5,495,415 8,851 485 9,336 8,740 0 5,513,491 
Home equity lines1,521,575 4,006 0 4,006 12,145 0 1,537,726 
Credit cards276,778 2,363 1,877 4,240 0 0 281,018 
Other consumer loans1,062,899 9,122 477 9,599 2,376 0 1,074,874 
Total consumer8,356,667 24,342 2,839 27,181 23,261 0 8,407,109 
Loans, net of deferred fees and costs$38,054,556 $43,232 $4,117 $47,349 $127,720 $23,359 $38,252,984 
Interest income on non-accrual loans outstanding that would have been recorded if the loans had been current and performing in accordance with their original terms was $4.3$3.4 million and $2.5$2.1 million for the three months ended September 30,March 31, 2021 and 2020, and 2019, respectively, and $9.2 million and $8.0 million for the nine months ended September 30, 2020 and 2019,
15

respectively. Of the interest income recognized during the three months ended September 30,March 31, 2021 and 2020, and 2019, cash-basis interest income was $1.3 million$622 thousand and $363$961 thousand, respectively. Cash-basis interest income was $2.7 million and $2.0 million for the nine months ended September 30, 2020 and 2019, respectively.

10



Pledged Loans
Loans with carrying values of $15.29$14.27 billion and $12.11$15.05 billion, respectively, were pledged as collateral for borrowings and capacity at September 30, 2020March 31, 2021 and December 31, 2019,2020, respectively, to the FHLB and Federal Reserve Bank.
Portfolio Segment Risk Factors
The risk characteristics and collateral information of each portfolio segment are as follows:
Commercial and Industrial Loans - The C&I loan portfolio is comprised of general middle market and commercial banking clients across a diverse set of industries. In accordance with Synovus' lending policy, each loan undergoes a detailed underwriting process which incorporates uniform underwriting standards and oversight in proportion to the size and complexity of the lending relationship. These loans are secured by collateral such as business equipment, inventory, and real estate. Whether for real estate or non-real estate purpose, credit decisions on loans in the C&I portfolio are based on cash flow from the operations of the business as the primary source of repayment of the debt, with underlying real estate or other collateral being the secondary source of repayment. PPP loans, which are categorized as C&I loans, were $2.71$2.36 billion net of unearned fees at September 30, 2020March 31, 2021 and are guaranteed by the SBA.
Commercial Real Estate Loans - CRE loans primarily consist of income-producing investment properties loans. Additionally, CRE loans include 1-4 family properties loans as well as land and development loans. Investment properties loans consist of construction and mortgage loans for income-producing properties and are primarily made to finance multi-family properties, hotels, office buildings, shopping centers, warehouses and other commercial development properties. 1-4 family properties loans include construction loans to homebuilders and commercial mortgage loans related to 1-4 family rental properties and are almost always secured by the underlying property being financed by such loans. These properties are primarily located in the markets served by Synovus. Land and development loans include commercial and residential development as well as land acquisition loans and are secured by land held for future development, typically in excess of one year. Properties securing these loans are substantially within markets served by Synovus, and loan terms generally include personal guarantees from the principals. Loans in this portfolio are underwritten based on the LTV of the collateral and the capacity of the guarantor(s).
Consumer Loans - The consumer loan portfolio consists of a wide variety of loan products offered through Synovus' banking network including first and second residential mortgages, HELOCs, and credit card loans, as well as home improvement loans, student, personal, and personalauto loans from third-party lending partnerships.lending. The majority of Synovus' consumer loans are consumer mortgages and HELOCs secured by first and second liens on residential real estate primarily located in the markets served by Synovus. The primary source of repayment for all consumer loans is generally the personal income of the borrower(s).
Credit Quality Indicators
The credit quality of the loan portfolio is reviewed and updated no less frequently than quarterly using the standard asset classification system utilized by the federal banking agencies. These classifications are divided into three groups: Not Criticized (Pass), Special Mention, and Classified or Adverse rating (Substandard, Doubtful, and Loss) and are defined as follows:
Pass - loans which are well protected by the current net worth and paying capacity of the obligor (or guarantors, if any) or by the fair value, less cost to acquire and sell in a timely manner, of any underlying collateral.
Special Mention - loans which have potential weaknesses that deserve management's close attention. These loans are not adversely classified and do not expose an institution to sufficient risk to warrant an adverse classification.
Substandard - loans which are inadequately protected by the current net worth and paying capacity of the obligor or by the collateral pledged, if any. Loans with this classification are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.
Doubtful - loans which have all the weaknesses inherent in loans classified as Substandard with the added characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable on the basis of currently known facts, conditions, and values.
Loss - loans which are considered by management to be uncollectible and of such little value that their continuance on the institution's books as an asset, without establishment of a specific valuation allowance or charge-off, is not warranted. Synovus fully reserves for any loans rated as Loss.
In the following tables, consumer loans are generally assigned a risk grade similar to the classifications described above; however, upon reaching 90 days and 120 days past due, they are generally downgraded to Substandard and Loss, respectively, in accordance with the FFIEC Retail Credit Classification Policy. Additionally, in accordance with Interagency Supervisory
16

Guidance, the risk grade classifications of consumer loans (consumer mortgages and HELOCs) secured by junior liens on 1-4
11


family residential properties also consider available information on the payment status of any associated senior liens with other financial institutions.
The following table summarizestables summarize each loan portfolio class by risk grade and origination year as of September 30,March 31, 2021 and December 31, 2020 as required under CECL.
September 30, 2020March 31, 2021
Term Loans Amortized Cost Basis by Origination YearRevolving LoansTerm Loans Amortized Cost Basis by Origination YearRevolving Loans
(in thousands)(in thousands)20202019201820172016PriorAmortized Cost BasisConverted to Term LoansTotal(in thousands)20212020201920182017PriorAmortized Cost BasisConverted to Term LoansTotal
Commercial, financial and agriculturalCommercial, financial and agriculturalCommercial, financial and agricultural
PassPass$4,056,896 $1,429,402 $974,892 $667,989 $566,178 $815,006 $4,049,741 $60,299 $12,620,403 Pass$1,059,766 $3,169,156 $1,277,288 $784,112 $557,454 $1,181,305 $4,072,579 $45,856 $12,147,516 
Special MentionSpecial Mention49,283 39,929 21,599 33,376 8,404 7,986 63,455 506 224,538 Special Mention807 57,063 38,581 7,942 18,243 3,678 95,135 465 221,914 
Substandard(1)
Substandard(1)
27,247 12,646 14,879 36,007 12,373 40,342 102,364 516 246,374 
Substandard(1)
772 64,917 33,901 11,166 23,815 42,824 90,617 114 268,126 
Doubtful(2)
Doubtful(2)
0 3,721 19,778 186 915 91 4,032 0 28,723 
Doubtful(2)
0 512 4,055 19,894 0 0 312 0 24,773 
Total commercial, financial and agriculturalTotal commercial, financial and agricultural4,133,426 1,485,698 1,031,148 737,558 587,870 863,425 4,219,592 61,321 13,120,038 Total commercial, financial and agricultural1,061,345 3,291,648 1,353,825 823,114 599,512 1,227,807 4,258,643 46,435 12,662,329 
Owner-occupiedOwner-occupiedOwner-occupied
PassPass953,513 1,189,845 1,212,541 1,032,744 643,841 1,338,513 328,656 0 6,699,653 Pass250,215 1,306,635 1,271,373 1,089,766 880,566 1,640,599 383,907 0 6,823,061 
Special MentionSpecial Mention3,029 19,004 18,746 11,767 3,604 7,278 0 0 63,428 Special Mention429 5,603 10,306 19,447 10,200 15,568 0 0 61,553 
Substandard(1)
Substandard(1)
1,788 14,686 36,319 29,794 6,521 32,286 0 0 121,394 
Substandard(1)
92 3,783 26,473 45,438 26,186 35,281 0 0 137,253 
Doubtful(2)
Doubtful(2)
0 0 9,638 0 0 0 0 0 9,638 
Doubtful(2)
0 0 0 9,638 0 0 0 0 9,638 
Total owner-occupiedTotal owner-occupied958,330 1,223,535 1,277,244 1,074,305 653,966 1,378,077 328,656 0 6,894,113 Total owner-occupied250,736 1,316,021 1,308,152 1,164,289 916,952 1,691,448 383,907 0 7,031,505 
Total commercial and industrialTotal commercial and industrial5,091,756 2,709,233 2,308,392 1,811,863 1,241,836 2,241,502 4,548,248 61,321 20,014,151 Total commercial and industrial1,312,081 4,607,669 2,661,977 1,987,403 1,516,464 2,919,255 4,642,550 46,435 19,693,834 
Investment propertiesInvestment propertiesInvestment properties
PassPass784,989 2,241,547 2,193,526 1,376,648 606,029 1,404,524 239,503 0 8,846,766 Pass266,356 1,189,454 2,196,482 1,879,176 917,367 1,623,228 276,553 0 8,348,616 
Special MentionSpecial Mention1,222 66,438 147,928 141,036 166,053 129,887 30,206 0 682,770 Special Mention0 1,321 81,524 229,161 163,844 284,980 56,102 0 816,932 
Substandard(1)
Substandard(1)
812 2,655 24,965 14,927 821 88,693 38 0 132,911 
Substandard(1)
1,040 987 8,413 58,991 23,677 76,974 95 0 170,177 
Total investment propertiesTotal investment properties787,023 2,310,640 2,366,419 1,532,611 772,903 1,623,104 269,747 0 9,662,447 Total investment properties267,396 1,191,762 2,286,419 2,167,328 1,104,888 1,985,182 332,750 0 9,335,725 
1-4 family properties1-4 family properties1-4 family properties
PassPass139,919 125,473 80,610 94,889 49,122 100,984 49,594 0 640,591 Pass66,477 179,602 79,636 60,281 78,564 116,823 41,043 0 622,426 
Special MentionSpecial Mention419 0 524 111 800 120 0 0 1,974 Special Mention271 399 0 366 0 894 0 0 1,930 
Substandard(1)
Substandard(1)
1,514 1,517 3,837 1,038 489 2,560 1,518 0 12,473 
Substandard(1)
1,812 1,691 439 5,521 1,199 2,596 1,340 0 14,598 
Total 1-4 family propertiesTotal 1-4 family properties141,852 126,990 84,971 96,038 50,411 103,664 51,112 0 655,038 Total 1-4 family properties68,560 181,692 80,075 66,168 79,763 120,313 42,383 0 638,954 
1712


September 30, 2020March 31, 2021
Term Loans Amortized Cost Basis by Origination YearRevolving LoansTerm Loans Amortized Cost Basis by Origination YearRevolving Loans
(in thousands)(in thousands)20202019201820172016PriorAmortized Cost BasisConverted to Term LoansTotal(in thousands)20212020201920182017PriorAmortized Cost BasisConverted to Term LoansTotal
Land and developmentLand and developmentLand and development
PassPass$56,935 $204,012 $91,630 $106,490 $12,564 $90,474 $58,092 $0 $620,197 Pass23,510 84,651 134,182 81,260 83,035 79,755 59,018 0 545,411 
Special MentionSpecial Mention0 2,172 4,277 5,784 0 1,828 3,550 0 17,611 Special Mention97 849 1,986 1,455 173 383 0 0 4,943 
Substandard(1)
Substandard(1)
1,627 1,104 4,675 1,085 527 1,564 0 0 10,582 
Substandard(1)
22 1,221 50 3,980 893 2,729 0 0 8,895 
Total land and developmentTotal land and development58,562 207,288 100,582 113,359 13,091 93,866 61,642 0 648,390 Total land and development23,629 86,721 136,218 86,695 84,101 82,867 59,018 0 559,249 
Total commercial real estateTotal commercial real estate987,437 2,644,918 2,551,972 1,742,008 836,405 1,820,634 382,501 0 10,965,875 Total commercial real estate359,585 1,460,175 2,502,712 2,320,191 1,268,752 2,188,362 434,151 0 10,533,928 
Consumer mortgagesConsumer mortgagesConsumer mortgages
PassPass1,579,366 964,882 481,718 764,384 755,595 1,102,091 1,005 0 5,649,041 Pass258,674 1,796,593 797,705 358,353 585,879 1,438,675 1,012 0 5,236,891 
Substandard(1)
Substandard(1)
49 197 777 805 2,412 5,170 0 0 9,410 
Substandard(1)
206 181 2,615 11,939 11,008 36,034 0 0 61,983 
Loss(3)
Loss(3)
0 0 0 0 0 74 0 0 74 
Loss(3)
0 0 0 0 0 301 0 0 301 
Total consumer mortgagesTotal consumer mortgages1,579,415 965,079 482,495 765,189 758,007 1,107,335 1,005 0 5,658,525 Total consumer mortgages258,880 1,796,774 800,320 370,292 596,887 1,475,010 1,012 0 5,299,175 
Home equity linesHome equity linesHome equity lines
PassPass0 0 0 0 0 0 1,513,600 86,404 1,600,004 Pass0 0 0 0 0 0 1,329,980 85,254 1,415,234 
Substandard(1)
Substandard(1)
0 0 0 0 0 0 8,603 5,173 13,776 
Substandard(1)
0 0 0 0 0 0 9,717 6,422 16,139 
Doubtful(2)
Doubtful(2)
0 0 0 0 0 0 0 19 19 
Doubtful(2)
0 0 0 0 0 0 0 19 19 
Loss(3)
Loss(3)
0 0 0 0 0 0 1,243 165 1,408 
Loss(3)
0 0 0 0 0 0 832 143 975 
Total home equity linesTotal home equity lines0 0 0 0 0 0 1,523,446 91,761 1,615,207 Total home equity lines0 0 0 0 0 0 1,340,529 91,838 1,432,367 
Credit cardsCredit cardsCredit cards
PassPass0 0 0 0 0 0 261,207 0 261,207 Pass0 0 0 0 0 0 265,496 0 265,496 
Substandard(1)
Substandard(1)
0 0 0 0 0 0 828 0 828 
Substandard(1)
0 0 0 0 0 0 521 0 521 
Loss(4)
Loss(4)
0 0 0 0 0 0 2,794 0 2,794 
Loss(4)
0 0 0 0 0 0 1,354 0 1,354 
Total credit cardsTotal credit cards0 0 0 0 0 0 264,829 0 264,829 Total credit cards0 0 0 0 0 0 267,371 0 267,371 
Other consumer loansOther consumer loansOther consumer loans
PassPass136,944 229,039 142,260 161,717 112,805 76,244 268,840 0 1,127,849 Pass7,626 797,532 169,798 74,833 88,716 126,009 306,096 0 1,570,610 
Substandard(1)
Substandard(1)
0 720 163 474 64 714 253 0 2,388 
Substandard(1)
0 15 2,273 1,572 2,967 691 264 0 7,782 
Loss(4)
Loss(4)
0 0 0 0 0 34 0 0 34 
Total other consumer loansTotal other consumer loans136,944 229,759 142,423 162,191 112,869 76,958 269,093 0 1,130,237 Total other consumer loans7,626 797,547 172,071 76,405 91,683 126,734 306,360 0 1,578,426 
Total consumerTotal consumer1,716,359 1,194,838 624,918 927,380 870,876 1,184,293 2,058,373 91,761 8,668,798 Total consumer266,506 2,594,321 972,391 446,697 688,570 1,601,744 1,915,272 91,838 8,577,339 
Total loans(5)
$7,795,552 $6,548,989 $5,485,282 $4,481,251 $2,949,117 $5,246,429 $6,989,122 $153,082 $39,648,824 
Loans, net of deferred fees and costsLoans, net of deferred fees and costs$1,938,172 $8,662,165 $6,137,080 $4,754,291 $3,473,786 $6,709,361 $6,991,973 $138,273 $38,805,101 
(1)    The majority of loans within Substandard risk grade are accruing loans at September 30,March 31, 2021.
(2)    Loans within Doubtful risk grade are on non-accrual status and generally have an ALL equal to 50% of the loan amount.
(3)    Loans within Loss risk grade are on non-accrual status and have an ALL equal to the full loan amount.
(4)    Represent amounts that were 120 days past due. These credits are downgraded to the Loss category with an ALL equal to the full loan amount and are generally charged off upon reaching 181 days past due in accordance with the FFIEC Retail Credit Classification Policy.
13


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)
0 3,721 19,778 0 0 0 48 0 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 0 6,912,922 
Special Mention6,170 9,995 10,682 14,138 1,582 13,768 0 0 56,335 
Substandard(1)
2,570 22,793 42,615 26,033 7,316 29,794 0 0 131,121 
Doubtful(2)
0 0 9,638 0 0 0 0 0 9,638 
Total owner-occupied1,330,420 1,308,223 1,194,118 1,022,227 564,830 1,340,632 349,566 0 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 0 8,287,244 
Special Mention1,482 66,160 176,794 136,004 138,362 129,401 55,440 0 703,643 
Substandard(1)
1,007 4,770 24,476 19,820 21,875 40,509 35 0 112,492 
Total investment properties1,057,929 2,197,597 2,200,615 1,247,704 644,017 1,470,998 284,519 0 9,103,379 
1-4 family properties
Pass197,320 95,145 70,267 88,454 38,729 97,374 27,657 0 614,946 
Special Mention402 0 508 109 786 118 0 0 1,923 
Substandard(1)
1,527 653 4,312 1,141 554 2,299 1,340 0 11,826 
Total 1-4 family properties199,249 95,798 75,087 89,704 40,069 99,791 28,997 0 628,695 
Land and development
Pass84,985 173,302 83,734 92,911 12,249 76,380 53,250 0 576,811 
Special Mention857 1,995 2,866 282 0 1,332 636 0 7,968 
Substandard(1)
1,229 425 4,664 915 136 1,485 0 0 8,854 
Total land and development87,071 175,722 91,264 94,108 12,385 79,197 53,886 0 593,633 
Total commercial real estate1,344,249 2,469,117 2,366,966 1,431,516 696,471 1,649,986 367,402 0 10,325,707 
14


December 31, 2020
Term Loans Amortized Cost Basis by Origination YearRevolving Loans
(in thousands)20202019201820172016PriorAmortized Cost BasisConverted to Term LoansTotal
Consumer mortgages
Pass1,871,512 874,769 425,711 678,255 685,810 965,382 1,040 0 5,502,479 
Substandard(1)
33 961 748 889 866 7,224 0 0 10,721 
Loss(3)
0 0 0 0 0 291 0 0 291 
Total consumer mortgages1,871,545 875,730 426,459 679,144 686,676 972,897 1,040 0 5,513,491 
Home equity lines— 
Pass0 0 0 0 0 0 1,429,755 90,832 1,520,587 
Substandard(1)
0 0 0 0 0 0 9,698 5,996 15,694 
Doubtful(2)
0 0 0 0 0 0 0 19 19 
Loss(3)
0 0 0 0 0 0 1,283 143 1,426 
Total home equity lines0 0 0 0 0 0 1,440,736 96,990 1,537,726 
Credit cards
Pass0 0 0 0 0 0 279,142 0 279,142 
Substandard(1)
0 0 0 0 0 0 595 0 595 
Loss(4)
0 0 0 0 0 0 1,281 0 1,281 
Total credit cards0 0 0 0 0 0 281,018 0 281,018 
Other consumer loans— 
Pass252,160 190,820 89,187 100,459 80,365 61,040 297,637 0 1,071,668 
Substandard(1)
19 762 262 1,195 121 585 227 0 3,171 
Loss(4)
0 0 0 0 0 35 0 0 35 
Total other consumer loans252,179 191,582 89,449 101,654 80,486 61,660 297,864 0 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 
Loans, 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, 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.
(5)    Total before net deferred fees and costs of $99.0 million.



18

The following table summarizes each loan portfolio class by risk grade as of December 31, 2019.
December 31, 2019
(in thousands)PassSpecial Mention
Substandard(1)
Doubtful(2)
Loss(3)
Total
Commercial, financial and agricultural$9,927,059 $128,506 $182,831 $1,163 $0 $10,239,559 
Owner-occupied6,386,055 58,330 85,426 0 0 6,529,811 
Total commercial and industrial16,313,114 186,836 268,257 1,163 0 16,769,370 
Investment properties8,930,360 16,490 57,477 0 0 9,004,327 
1-4 family properties766,529 3,249 10,237 0 0 780,015 
Land and development681,003 18,643 9,796 0 0 709,442 
Total commercial real estate10,377,892 38,382 77,510 0 0 

10,493,784 
Consumer mortgages5,527,746 0 18,376 97 149 

5,546,368 
Home equity lines1,697,086 0 14,806 21 1,244 

1,713,157 
Credit cards266,146 0 818 0 1,877 (4)268,841 
Other consumer loans2,390,199 0 6,095 0 0 

2,396,294 
Total consumer9,881,177 0 40,095 118 3,270 9,924,660 
Total loans(5)
$36,572,183 $225,218 $385,862 $1,281 $3,270 $37,187,814 
(1)    The majority of loans within Substandard risk grade are accruing loans at December 31, 2019.
(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.
(5)    Total before net deferred fees and costs of $25.4 million.
Collateral-Dependent Loans
We classify a loan as collateral-dependent when our borrower is experiencing financial difficulty, and we expect repayment to be provided substantially through the operation or sale of collateral. Our commercial loans have collateral that is comprised of real estate and business assets. Our consumer loans have collateral that is substantially comprised of residential real estate.
There were no significant changes in the extent to which collateral secures our collateral-dependent loans during the three and nine months ended September 30, 2020.March 31, 2021.
1915


Rollforward of Allowance for Loan Losses
The following tables detail the changes in the ALL by loan segment for the three and nine months ended September 30, 2020March 31, 2021 and 2019. Additionally, during the three and nine months ended September 30, 2020, Synovus reversed $6.1 million and $19.4 million, respectively, in previously established reserves for credit losses associated with the transfer to held for sale of $513.2 million and $1.31 billion, respectively, in performing loans primarily related to third-party single-service consumer loans and non-relationship consumer mortgages.2020.
As Of and For the Three Months Ended September 30, 2020
(in thousands)Commercial & IndustrialCommercial Real EstateConsumerTotal
Allowance for loan losses:
Beginning balance$229,915 $171,526 $187,207 $588,648 
Charge-offs(19,367)(6,878)(9,101)(35,346)
Recoveries3,796 1,225 1,859 6,880 
Provision for (reversal of) loan losses46,256 (22,068)19,430 43,618 
Ending balance$260,600 $143,805 $199,395 $603,800 
As Of and For the Three Months Ended September 30, 2019
(in thousands)Commercial & IndustrialCommercial Real EstateConsumerTotal
Allowance for loan losses:
Beginning balance$138,004 $63,463 $55,909 $257,376 
Charge-offs(15,425)(3,275)(6,026)(24,726)
Recoveries2,276 1,490 1,035 4,801 
Provision for loan losses17,156 280 10,126 27,562 
Ending balance$142,011 $61,958 $61,044 $265,013 
As Of and For the Nine Months Ended September 30, 2020
(in thousands)Commercial & IndustrialCommercial Real EstateConsumerTotal
Allowance for loan losses:
Beginning balance, prior to adoption of ASU 2016-13$145,782 $67,430 $68,190 $281,402 
Impact from adoption of ASU 2016-13
(2,310)(651)85,955 82,994 
Charge-offs(57,497)(8,585)(23,917)(89,999)
Recoveries8,798 2,160 6,468 17,426 
Provision for loan losses165,827 83,451 62,699 311,977 
Ending balance$260,600 $143,805 $199,395 $603,800 
As Of and For the Nine Months Ended September 30, 2019
(in thousands)Commercial & IndustrialCommercial Real EstateConsumerTotal
Allowance for loan losses:
Beginning balance$133,123 $68,796 $48,636 $250,555 
Charge-offs(39,558)(5,369)(17,363)(62,290)
Recoveries6,087 3,788 3,623 13,498 
Provision for (reversal of) loan losses42,359 (5,257)26,148 63,250 
Ending balance$142,011 $61,958 $61,044 $265,013 




20

As Of and For the Three Months Ended March 31, 2021
(in thousands)Commercial & IndustrialCommercial Real EstateConsumerTotal
Allowance for loan losses:
Beginning balance$229,555 $130,742 $245,439 $605,736 
Charge-offs(9,417)(10,319)(5,589)(25,325)
Recoveries2,772 1,026 1,323 5,121 
Provision for (reversal of) loan losses31,867 (7,637)(46,548)(22,318)
Ending balance$254,777 $113,812 $194,625 $563,214 
As Of and For the Three Months Ended March 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(14,885)(1,017)(7,972)(23,874)
Recoveries1,741 399 1,673 3,813 
Provision for loan losses86,622 40,956 21,539 149,117 
Ending balance$216,950 $107,117 $169,385 $493,452 
The ALL of $603.8$563.2 million and the reserve for unfunded commitments of $60.8$51.5 million, which is recorded in other liabilities, comprise the total ACL of $664.6$614.7 million at September 30, 2020.March 31, 2021, which decreased during the first quarter of 2021 by $38.8 million, resulting in an ACL to loans coverage ratio of 1.58%. The modeling assumptions for the first quarter of 2021 utilized a two-year reasonable and supportable forecast period and comprised a multiple-scenario economic framework. 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. The ACL increased duringat March 31, 2021 incorporates a baseline outlook with moderate economic expansion and benefits from the third quarterestimated impact of 2020 by $14.9 million to $664.6 million as of September 30, 2020.Since the adoption of CECL on January 1, 2020, the ACL has increased $271.4 million due primarily to uncertainty and deterioration in the economic environment caused by the COVID-19 pandemic.government stimulus. Provision for credit losses (which includes the provisionprovisions for loan losses and unfunded commitments)commitments. The reversal of $43.4provision for credit losses of $18.6 million for the three months ended September 30, 2020 March 31, 2021included net charge-offs of $28.5$20.2 million and resulted from the impact of downgrades largely concentrated in the hotelimproved economic outlook and stable loan portfolio whichmetrics that were mostlypartially offset by improvement in the economic forecast which included adjustments for the estimated impact of currently enacted government stimulus plans, as well as reserve releases from loan dispositions. Provision for credit losses of $344.0 million for the nine months ended September 30, 2020, resulted in the buildingincreased size of the ACL required under CECL primarilyloan portfolio including $15.2 million in reserves added as a result of deterioration in the economic environment due to the impactpurchases of COVID-19.$607.0 million of third-party lending loans, including a $476.2 million prime auto purchase.
Our modeling process incorporates quantitative and qualitative considerations that are used to inform CECL estimates. The internally developed economic forecast used to determine the ACL as of September 30, 2020 was approved late in the third quarter of 2020 pursuant to Synovus' economic forecasting governance processes. The modeling assumptions for the third quarter of 2020 included adjustments for the estimated impact of currently enacted government stimulus plans and an unemployment rate ending the 2020 year around8% before declining modestly in 2021. This, along with credit migration and other loan portfolio activity, resulted in an increase of the ACL to loans coverage ratio during the quarter of 5 bps to 1.68%, or1.80% excluding PPP loans, at September 30, 2020.
Significant economic uncertainty remains as a result of the continuing COVID-19 crisis, and the trajectory of the economic recovery including any additional government stimulus plans will impact subsequent period CECL reserves.

2116



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 therefore are not included in the discussion below. See "Part I-Item 1.II - Item 8. Financial Statements and Supplementary Data - Note 1 - BasisSummary of Presentation"Significant Accounting Policies" in this ReportSynovus' 2020 Form 10-K for more information on Synovus' loan modifications due to COVID-19. The following tables represent, by concession type, the post-modification balance for loans modified or renewed during the three and nine months ended September 30,March 31, 2021 and 2020 and 2019 that were reported as accruing or non-accruing TDRs.
TDRs by Concession TypeTDRs by Concession TypeTDRs by Concession Type
Three Months Ended September 30, 2020Three Months Ended March 31, 2021
(in thousands, except contract data)(in thousands, except contract data)Number of ContractsBelow 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 agriculturalCommercial, financial and agricultural42 $3,335 $670 $4,005 Commercial, financial and agricultural40 $3,233 $2,563 $5,796 
Owner-occupiedOwner-occupied7 1,753 0 1,753 Owner-occupied5 1,254 399 1,653 
Total commercial and industrialTotal commercial and industrial49 5,088 670 5,758 Total commercial and industrial45 4,487 2,962 7,449 
Investment propertiesInvestment properties2 294 93 387 Investment properties5 1,984 0 1,984 
1-4 family properties1-4 family properties5 74 114 188 1-4 family properties5 463 39 502 
Land and developmentLand and development1 40 0 40 Land and development1 0 43 43 
Total commercial real estateTotal commercial real estate8 408 207 615 Total commercial real estate11 2,447 82 2,529 
Consumer mortgagesConsumer mortgages3 496 23 519 Consumer mortgages0 0 0 0 
Home equity linesHome equity lines17 471 648 1,119 Home equity lines13 587 162 749 
Other consumer loansOther consumer loans3 48 85 133 Other consumer loans73 129 4,619 4,748 
Total consumerTotal consumer23 1,015 756 1,771 Total consumer86 716 4,781 5,497 
Total TDRsTotal TDRs80 $6,511 $1,633 $8,144 (2)Total TDRs142 $7,650 $7,825 $15,475 (2)
Three Months Ended September 30, 2019Three Months Ended March 31, 2020
(in thousands, except contract data)(in thousands, except contract data)Number of ContractsBelow 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 agriculturalCommercial, financial and agricultural27 $2,577 $1,917 $4,494 Commercial, financial and agricultural36 $3,724 $2,011 $5,735 
Owner-occupiedOwner-occupied7 2,822 861 3,683 Owner-occupied5 1,367 96 1,463 
Total commercial and industrialTotal commercial and industrial34 5,399 2,778 8,177 Total commercial and industrial41 5,091 2,107 7,198 
Investment propertiesInvestment properties4 385 0 385 Investment properties2 23,070 0 23,070 
1-4 family properties1-4 family properties4 766 0 766 1-4 family properties6 724 442 1,166 
Land and developmentLand and development1 473 0 473 Land and development1 449 0 449 
Total commercial real estateTotal commercial real estate9 1,624 0 1,624 Total commercial real estate9 24,243 442 24,685 
Consumer mortgagesConsumer mortgages10 1,008 118 1,126 Consumer mortgages6 515 1,083 1,598 
Home equity linesHome equity lines25 364 1,635 1,999 Home equity lines19 275 964 1,239 
Other consumer loansOther consumer loans27 473 1,222 1,695 Other consumer loans29 78 1,897 1,975 
Total consumerTotal consumer62 1,845 2,975 4,820 Total consumer54 868 3,944 4,812 
Total TDRsTotal TDRs105 $8,868 $5,753 $14,621 (3)Total TDRs104 $30,202 $6,493 $36,695 (3)
(1)    Other concessions generally include term extensions, interest only payments for a period of time, or principal forgiveness, but there was no0 principal forgiveness for the three months ending September 30, 2020March 31, 2021 and 2019.2020.
(2)    NaN net charge-offs were recorded during the three months ended September 30, 2020March 31, 2021.
(3)    NaN net charge-offs were recorded during the three months ended September 30, 2019.


22

Nine Months Ended September 30, 2020
(in thousands, except contract data)Number of ContractsBelow Market Interest Rate
Other Concessions(1)
Total
Commercial, financial and agricultural118 $8,562 $4,681 $13,243 
Owner-occupied19 3,573 1,530 5,103 
Total commercial and industrial137 12,135 6,211 18,346 
Investment properties6 28,963 93 29,056 
1-4 family properties15 867 1,105 1,972 
Land and development3 581 0 581 
Total commercial real estate24 30,411 1,198 31,609 
Consumer mortgages19 1,568 2,589 4,157 
Home equity lines50 926 2,530 3,456 
Other consumer loans50 145 2,779 2,924 
Total consumer119 2,639 7,898 10,537 
Total TDRs280 $45,185 $15,307 $60,492 (2)
Nine Months Ended September 30, 2019
(in thousands, except contract data)Number of ContractsBelow Market Interest Rate
Other Concessions(1)
Total
Commercial, financial and agricultural61 $5,703 $4,404 $10,107 
Owner-occupied13 4,854 861 5,715 
Total commercial and industrial74 10,557 5,265 15,822 
Investment properties6 1,048 0 1,048 
1-4 family properties14 2,072 0 2,072 
Land and development3 641 0 641 
Total commercial real estate23 3,761 0 3,761 
Consumer mortgages15 1,245 1,332 2,577 
Home equity lines50 2,686 1,740 4,426 
Other consumer loans79 1,167 3,599 4,766 
Total consumer144 5,098 6,671 11,769 
Total TDRs241 $19,416 $11,936 $31,352 (3)
(1)    Other concessions generally include term extensions, interest only payments for a period of time, or principal forgiveness, but there was no principal forgiveness for the nine months ending September 30, 2020 and 2019.
(2)    NaN net charge-offs were recorded during the nine months ended September 30,March 31, 2020.
(3)    NaN net charge-offs were recorded during the nine months ended September 30, 2019.
For the three and nine months ended September 30, 2020March 31, 2021 there was 1 default with a recorded investment of $21 thousand and 5were 0 defaults with a recorded investment of $666 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) compared to 3 defaults with a recorded investment of $321 thousand and 4 defaults with a recorded investment of $326$618 thousand for the three and nine months ended September 30, 2019, respectively.March 31, 2020. As of September 30, 2020March 31, 2021 and December 31, 2019,2020, there were 0 commitments to lend a material amount of additional funds to any customer whose loan was classified as a TDR.

23
17



Note 54 - Goodwill and Other Intangible Assets
Goodwill allocated to each reporting unit at September 30, 2020March 31, 2021 and December 31, 20192020 is presented as follows (the FMS reportable segment includes 2 reporting units of Consumer Mortgage and Wealth Management):
(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 impairment0 0 (44,877)0 (44,877)
Balance as of September 30, 2020$256,323 $171,636 $0 $24,431 $452,390 
(in thousands)Community Banking Reporting UnitWholesale Banking Reporting UnitConsumer Mortgage Reporting UnitWealth Management Reporting UnitTotal
Balance as of December 31, 2020$256,323 $171,636 $0 $24,431 $452,390 
Goodwill acquired and adjustments during the year0 0 0 0 0 
Balance as of March 31, 2021$256,323 $171,636 $0 $24,431 $452,390 
Goodwill is not amortized but is evaluated for impairment on an annual basis or whenever an event occurs or circumstances change to indicate that it is more likely than not that an impairment loss has been incurred (i.e., a triggering event). Synovus conducted aperforms its annual evaluation of goodwill impairment assessment asduring the fourth quarter of December 31, 2019, following Synovus' reorganization, applying ASC 350-20-35-3A Goodwill Subsequent Measurement - Qualitative Assessment Approach and concluded that goodwill was not impaired.each year. See "Part II - Item 8. Financial Statements and Supplementary Data - Note 19 -Segment Reporting"7 - Goodwill and Other Intangible Assets" to the consolidated financial statements of Synovus' 20192020 Form 10-K for information on Synovus' reorganization during 2019.
During 2020, Synovus performed interim goodwill impairment tests as of September 30, 2020, June 30, 2020 and March 31, 2020 based on quarterly assessments of triggering events that included Synovus' stock price trading below book value, an extremely low interest rate environment, as well as general recessionary economic conditions caused by the COVID-19 pandemic. Quantitativequantitative assessments of goodwill impairment include determining the estimated fair value of each reporting unit, utilizing a combination of discounted cash flow and market-based approaches, and comparing that fair value to each reporting unit's carrying amount. The discounted cash flow method included updated internal forecasts, long-term profitability targets, growth rates and discount rates. The market approach was based on a comparison of certain financial metrics of Synovus' reporting units to guideline public company peers. The income-based discounted cash flow approach was more heavily weighted (60%) than the market-based approach (40%) due to significant volatility in the market since the pandemic was declared a National Emergency.
Based on the assessment performed at September 30, 2020, Synovus recognized a $44.9 million goodwill impairment charge representing all goodwill allocated to the Consumer Mortgage reporting unit, while the fair values of the Community Banking, Wholesale Banking and Wealth Management reporting units continued to exceed the respective carrying values. The projected cash flows of the Consumer Mortgage reporting unit declined from the prior period valuations due to significant mortgage refinance activity at record-low mortgage rates and the FOMC's updated guidance in the third quarter of 2020 regarding inflation targeting and their expectations for interest rates to remain low for an extended period of time. The primarily fixed rate, longer duration nature of Synovus’ mortgage portfolio especially impacted the Consumer Mortgage reporting unit. In addition, the excess of fair value over the carrying amount for the Community Banking and Wholesale Banking reporting units was less than 10% at September 30,during 2020.
Due to the high degree of subjectivity involved in estimating the fair value of Synovus' reporting units, a decline in Synovus' expected future cash flows or estimated growth rates due to further deterioration in the economic environment, or continued market capitalization of Synovus below book value, could result in an additional goodwill impairment charge that is material to Synovus' results from operations, but would not materially impact our financial condition.
The following table shows the gross carrying amount and accumulated amortization of other intangible assets as of September 30, 2020March 31, 2021 and December 31, 2019,2020, which primarily consist of core deposit intangible assets acquired in the FCB acquisition.assets. The CDI is being amortized over its estimated useful life of approximately ten years utilizing an accelerated method. Aggregate other intangible assets amortization expense for the three and nine months ended September 30,March 31, 2021 and 2020 was $2.6$2.4 million and $7.9 million, respectively. Aggregate other intangible assets amortization for the three and nine months ended September 30, 2019 was $2.9 million and $8.7$2.6 million, respectively.
24

(in thousands)(in thousands)Gross Carrying AmountAccumulated AmortizationNet Carrying Value(in thousands)Gross Carrying AmountAccumulated AmortizationNet Carrying Value
September 30, 2020
CDI$57,400 $(17,481)$39,919 
Other12,500 (4,667)7,833 
Total other intangible assets$69,900 $(22,148)$47,752 
December 31, 2019
March 31, 2021March 31, 2021
CDICDI$57,400 $(10,436)$46,964 CDI$57,400 $(21,916)$35,484 
OtherOther12,500 (3,793)8,707 Other12,500 (5,251)7,249 
Total other intangible assetsTotal other intangible assets$69,900 $(14,229)$55,671 Total other intangible assets$69,900 $(27,167)$42,733 
December 31, 2020December 31, 2020
CDICDI$57,400 $(19,829)$37,571 
OtherOther12,500 (4,959)7,541 
Total other intangible assetsTotal other intangible assets$69,900 $(24,788)$45,112 

Note 65 - Shareholders' Equity and Other Comprehensive Income (Loss)
Repurchases of Common Stock
During the three months ended September 30, 2020, Synovus did not repurchase any shares of its common stock. During the nine months ended September 30, 2020, Synovus repurchased $16.2 million, or 450 thousand shares of its common stock, at an average price of $36.08 per share, under the share repurchase program announced on January 24, 2020.
Dividends
The following table presents dividends declared related to common stock. For information related to preferred stock dividends, see "Part II - Item 8. Financial Statements and Supplementary Data - Note 1011 - Shareholders' Equity and Other Comprehensive Income" to the consolidated financial statements of Synovus' 20192020 Form 10-K.
Three Months Ended September 30,Nine Months Ended September 30,
2020201920202019
Cash dividends declared per share$0.33 $0.30 $0.99 $0.90 
Three Months Ended March 31,
20212020
Cash dividends declared per common share$0.33 $0.33 

Repurchases of Common Stock
Equity-Based Compensation Plans
The following tables summarizeSynovus announced on January 26, 2021 that its Board of Directors authorized share repurchases of up to $200 million in 2021. During the statusfirst quarter of Synovus' stock options, restricted2021, the Company did not complete any share units, market restricted share units, and performance share units as of September 30, 2020 and activity for the nine months ended September 30, 2020.
Stock Options
(in thousands, except per share amounts)QuantityWeighted-Average Exercise Price Per Share
Outstanding at January 1, 20203,037 $22.74 
Exercised(239)28.28 
Expired/canceled(64)29.75 
Outstanding at September 30, 20202,734 $22.09 

25

RSUs, MRSUs, and PSUs
(in thousands, except per share amounts)QuantityWeighted-Average Grant Date Fair Value Per Share
Non-vested at January 1, 20201,312 $39.28 
Granted893 32.91 
Quantity change based on TSR and performance factors44 35.11 
Dividend equivalents granted56 33.50 
Vested(590)38.85 
Forfeited(58)36.22 
Non-vested at September 30, 20201,657 $35.80 
repurchases.
Changes in Accumulated Other Comprehensive Income (Loss) by Component (Net of Income Taxes)
The following tables illustrate activity within the balances in accumulated other comprehensive income (loss) by component for the three and nine months ended September 30, 2020March 31, 2021 and 2019.2020.
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, July 1, 2020$134,245 $68,263 $462 $202,970 
Other comprehensive income (loss) before reclassifications(21,806)(6,635)0 (28,441)
Amounts reclassified from AOCI1,149 (764)0 385 
Net current period other comprehensive income (loss)(20,657)(7,399)0 (28,056)
Balance at September 30, 2020$113,588 $60,864 $462 $174,914 
Balance, July 1, 2019$60,586 $(12,137)$840 $49,289 
Other comprehensive income (loss) before reclassifications25,133 (876)(378)23,879 
Amounts reclassified from AOCI2,765 0 0 2,765 
Net current period other comprehensive income (loss)27,898 (876)(378)26,644 
Balance at September 30, 2019$88,484 $(13,013)$462 $75,933 
Balance, January 1, 2020$83,666 $(18,487)$462 $65,641 
Other comprehensive income (loss) before reclassifications86,678 80,404 0 167,082 
Amounts reclassified from AOCI(56,756)(1,053)0 (57,809)
Net current period other comprehensive income (loss)29,922 79,351 0 109,273 
Balance at September 30, 2020$113,588 $60,864 $462 $174,914 
Balance, January 1, 2019$(83,179)$(12,137)$896 $(94,420)
Other comprehensive income (loss) before reclassifications167,586 (876)(378)166,332 
Amounts reclassified from AOCI4,077 0 (56)4,021 
Net current period other comprehensive income (loss)171,663 (876)(434)170,353 
Balance at September 30, 2019$88,484 $(13,013)$462 $75,933 
18


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, December 31, 2020$105,669 $52,966 $0 $158,635 
Other comprehensive income (loss) before reclassifications(122,460)(21,183)0 (143,643)
Amounts reclassified from AOCI1,475 (1,189)0 286 
Net current period other comprehensive income (loss)(120,985)(22,372)0 (143,357)
Balance at March 31, 2021$(15,316)$30,594 $0 $15,278 
Balance, December 31, 2019$83,666 $(18,487)$462 $65,641 
Other comprehensive income (loss) before reclassifications117,330 80,501 0 197,831 
Amounts reclassified from AOCI(6,472)(89)0 (6,561)
Net current period other comprehensive income (loss)110,858 80,412 0 191,270 
Balance at March 31, 2020$194,524 $61,925 $462 $256,911 
(1)    For all periods presented, the ending balance in net unrealized gains (losses) on cash flow hedges and 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 residual tax effects remaining in OCI due to previously established deferred tax asset valuation allowances in 2010 and 2011. In accordance with ASC 740-20-45-11(b), under the portfolio approach, these unrealized losses are realized at the time the entire portfolio is sold or disposed.
2619


Note 76 - 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 "Part II - Item 8. Financial Statements and Supplementary Data - Note 1 - Summary of Significant Accounting Policies" of Synovus' 20192020 Form 10-K for a description of how fair value measurements are determined.
Assetsvaluation methodologies for assets and Liabilities Measured at Fair Value on a Recurring Basis
The following tables present all financial instrumentsliabilities measured at fair value on a recurring basis as of September 30, 2020 and December 31, 2019.non-recurring basis.
September 30, 2020
(in thousands)Level 1Level 2Level 3Total Assets and Liabilities at Fair Value
Assets
Trading securities:
Mortgage-backed securities issued by U.S. Government agencies$0 $18 $0 $18 
Collateralized mortgage obligations issued by U.S. Government sponsored enterprises0 604 0 604 
Other mortgage-backed securities0 673 0 673 
State and municipal securities0 579 0 579 
Asset-backed securities0 2,497 0 2,497 
Total trading securities$0 $4,371 $0 $4,371 
Investment securities available for sale:
U.S. Treasury securities$20,254 $0 $0 $20,254 
U.S. Government agency securities0 156,614 0 156,614 
Mortgage-backed securities issued by U.S. Government agencies0 1,129,392 0 1,129,392 
Mortgage-backed securities issued by U.S. Government sponsored enterprises0 4,540,386 0 4,540,386 
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises0 1,345,284 0 1,345,284 
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises0 354,157 0 354,157 
State and municipal securities0 501 0 501 
Corporate debt securities and other debt securities0 18,137 1,800 19,937 
Total investment securities available for sale$20,254 $7,544,471 $1,800 $7,566,525 
Mortgage loans held for sale0 285,899 0 285,899 
Private equity investments0 0 958 958 
Mutual funds and mutual funds held in rabbi trusts35,174 0 0 35,174 
GGL/SBA loans servicing asset0 0 3,100 3,100 
Derivative assets0 463,028 0 463,028 
Liabilities
Earnout liability$0 $0 $15,924 $15,924 
Derivative liabilities0 178,508 1,460 179,968 
27

The following table presents assets and liabilities measured at estimated fair value on a recurring basis.
December 31, 2019March 31, 2021December 31, 2020
(in thousands)(in thousands)Level 1Level 2Level 3Total Assets and Liabilities at Fair Value(in thousands)Level 1Level 2Level 3Total Estimated Fair ValueLevel 1Level 2Level 3Total Estimated Fair Value
Assets
Recurring fair value measurementsRecurring fair value measurements
Trading securities:Trading securities:Trading securities:
Mortgage-backed securities issued by U.S. Government agenciesMortgage-backed securities issued by U.S. Government agencies$0 $0 $0 $0 $0 $10,185 $0 $10,185 
Collateralized mortgage obligations issued by U.S. Government sponsored enterprisesCollateralized mortgage obligations issued by U.S. Government sponsored enterprises$0 $2,486 $0 $2,486 Collateralized mortgage obligations issued by U.S. Government sponsored enterprises0 555 0 555 0 158 0 158 
Other mortgage-backed securitiesOther mortgage-backed securities0 1,284 0 1,284 Other mortgage-backed securities0 375 0 375 0 178 0 178 
State and municipal securitiesState and municipal securities0 65 0 65 State and municipal securities0 1,541 0 1,541 0 176 0 176 
Asset-backed securitiesAsset-backed securities0 3,227 0 3,227 Asset-backed securities0 1,915 0 1,915 0 183 0 183 
Other investments0 150 0 150 
Total trading securitiesTotal trading securities$0 $7,212 $0 $7,212 Total trading securities$0 $4,386 $0 $4,386 $0 $10,880 $0 $10,880 
Investment securities available for sale:Investment securities available for sale:Investment securities available for sale:
U.S. Treasury securitiesU.S. Treasury securities$19,855 $0 $0 $19,855 U.S. Treasury securities$66,456 $0 $0 $66,456 $20,257 $0 $0 $20,257 
U.S. Government agency securitiesU.S. Government agency securities0 36,541 0 36,541 U.S. Government agency securities0 81,174 0 81,174 0 82,320 0 82,320 
Mortgage-backed securities issued by U.S. Government agenciesMortgage-backed securities issued by U.S. Government agencies0 56,816 0 56,816 Mortgage-backed securities issued by U.S. Government agencies0 955,182 0 955,182 0 1,218,017 0 1,218,017 
Mortgage-backed securities issued by U.S. Government sponsored enterprisesMortgage-backed securities issued by U.S. Government sponsored enterprises0 5,180,815 0 5,180,815 Mortgage-backed securities issued by U.S. Government sponsored enterprises0 6,101,775 0 6,101,775 0 5,000,046 0 5,000,046 
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprisesCollateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises0 636,851 0 636,851 Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises0 1,157,223 0 1,157,223 0 1,250,377 0 1,250,377 
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprisesCommercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises0 371,592 0 371,592 Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises0 445,214 0 445,214 0 370,921 0 370,921 
State and municipal securities0 2,075 0 2,075 
Asset-backed securities0 327,400 0 327,400 
Corporate debt securities and other debt securitiesCorporate debt securities and other debt securities0 144,620 2,105 146,725 Corporate debt securities and other debt securities0 18,733 0 18,733 0 18,479 2,021 20,500 
Total investment securities available for saleTotal investment securities available for sale$19,855 $6,756,710 $2,105 $6,778,670 Total investment securities available for sale$66,456 $8,759,301 $0 $8,825,757 $20,257 $7,940,160 $2,021 $7,962,438 
Mortgage loans held for saleMortgage loans held for sale0 115,173 0 115,173 Mortgage loans held for sale$0 $242,010 $0 $242,010 $0 $216,647 $0 $216,647 
Private equity investmentsPrivate equity investments15,502 0 3,887 19,389 Private equity investments0 0 1,053 1,053 0 0 1,021 1,021 
Mutual funds and mutual funds held in rabbi trustsMutual funds and mutual funds held in rabbi trusts32,348 0 0 32,348 Mutual funds and mutual funds held in rabbi trusts39,943 0 0 39,943 37,650 0 0 37,650 
GGL/SBA loans servicing assetGGL/SBA loans servicing asset0 0 3,040 3,040 GGL/SBA loans servicing asset0 0 3,305 3,305 0 0 3,258 3,258 
Derivative assetsDerivative assets0 140,016 0 140,016 Derivative assets0 276,831 0 276,831 0 401,295 0 401,295 
Liabilities
Trading liability for short positionsTrading liability for short positions$1,560 $0 $0 $1,560 Trading liability for short positions0 0 0 0 0 7,717 0 7,717 
Earnout liabilityEarnout liability0 0 11,016 11,016 Earnout liability0 0 5,677 5,677 0 0 5,677 5,677 
Derivative liabilitiesDerivative liabilities0 34,732 2,339 37,071 Derivative liabilities0 135,725 1,768 137,493 0 155,119 2,048 157,167 
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.
20


The following table summarizes the difference between the fair value and the UPB of mortgage loans held for sale and the changes in fair value of these loans. An immaterial portion of these changes in fair value was attributable to changes in instrument-specific credit risk.
Mortgage Loans Held for SaleMortgage Loans Held for SaleMortgage Loans Held for Sale
(in thousands)(in thousands)As of September 30, 2020As of December 31, 2019(in thousands)As of March 31, 2021As of December 31, 2020
Fair valueFair value$285,899 $115,173 Fair value$242,010 $216,647 
Unpaid principal balanceUnpaid principal balance276,709 112,218 Unpaid principal balance240,287 210,292 
Fair value less aggregate unpaid principal balanceFair value less aggregate unpaid principal balance$9,190 $2,955 Fair value less aggregate unpaid principal balance$1,723 $6,355 

Changes in Fair Value Included in Net IncomeThree Months Ended March 31,
(in thousands)20212020
Mortgage loans held for sale$(4,632)$619 
28Activity for Level 3 Assets and Liabilities

Se
Changes in Fair Value Included in Net Income
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2020201920202019
Mortgage loans held for sale$251 $892 $6,235 $1,593 
e "Part II - Item 8. Financial Statements and Supplementary Data - Note 14 - Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Accounting" of Synovus' 2020 Form 10-K for a description of the valuation techniques and significant inputs for Level 3 assets and liabilities that are measured at fair value on a recurring and non-recurring basis. During the three and nine months ended September 30,March 31, 2021 and 2020, Synovus did not have any transfers in or out of Level 3 in the fair value hierarchy. During the nine months ended September 30, 2019, Synovus had transfers outThe following tables provide rollforwards of Level 3 into Level 1 in the fair value hierarchy as certain funds within private equity investments became public with traded securities.
Three Months Ended September 30, 2020
(in thousands)Investment Securities Available for SalePrivate Equity InvestmentsGGL / SBA
Loans Servicing Asset		Earnout
Liability		Visa Derivative
Beginning balance, July 1, 2020$1,662 $698 $3,019 $(15,924)$(1,755)
Total gains (losses) realized/unrealized:
Included in earnings0 260 (187)0 0 
Unrealized gains (losses) included in OCI138 0 0 0 0 
Additions0 0 268 0 0 
Settlements0 0 0 0 295 
Ending balance, September 30, 2020$1,800 $958 $3,100 $(15,924)$(1,460)
Total net gains (losses) for the period included in earnings attributable to the change in unrealized gains/(losses) relating to assets/liabilities still held at September 30, 2020    $0 $260 $0 $0 $0 
Three Months Ended September 30, 2019
(in thousands)Investment Securities Available for SalePrivate Equity InvestmentsGGL / SBA
Loans Servicing Asset		Earnout
Liability		Visa Derivative
Beginning balance, July 1, 2019$2,017 $13,341 $3,326 $(14,353)$(1,049)
Total gains (losses) realized/unrealized:
Included in earnings0 1,194 (298)(10,457)(2,500)
Unrealized gains (losses) included in OCI(26)0 0 0 0 
Additions0 0 322 0 0 
Settlements0 (3,246)0 0 214 
Ending balance, September 30, 2019$1,991 $11,289 $3,350 $(24,810)$(3,335)
Total net gains (losses) for the period included in earnings attributable to the change in unrealized gains/(losses) relating to assets/liabilities still held at September 30, 2019$0 $777 $0 $(10,457)$(2,500)
29

Nine Months Ended September 30, 2020
(in thousands)Investment Securities Available for SalePrivate Equity InvestmentsGGL / SBA
Loans Servicing Asset		Earnout
Liability		Visa Derivative
Beginning balance, January 1, 2020$2,105 $3,887 $3,040 $(11,016)$(2,339)
Total gains (losses) realized/unrealized:
Included in earnings(2,929)(742)(4,908)0 
Unrealized gains (losses) included in OCI(305)0 0 0 0 
Additions0 0 802 0 0 
Settlements0 0 0 0 879 
Ending balance, September 30, 2020$1,800 $958 $3,100 $(15,924)$(1,460)
Total net gains (losses) for the period included in earnings attributable to the change in unrealized gains/(losses) relating to assets/liabilities still held at September 30, 2020    $0 $(2,929)$0 $(4,908)$0 
Nine Months Ended September 30, 2019
(in thousands)Investment Securities Available for SalePrivate Equity InvestmentsGGL / SBA
Loans Servicing Asset		Earnout
Liability		Visa Derivative
Beginning balance, January 1, 2019$1,785 $11,028 $3,729 $(14,353)$(1,673)
Total (losses) gains realized/unrealized:
Included in earnings0 3,507 (1,091)(10,457)(2,500)
Unrealized gains (losses) included in OCI206 0 0 0 0 
Additions0 0 712 0 0 
Settlements0 (3,246)0 0 838 
Ending balance, September 30, 2019$1,991 $11,289 $3,350 $(24,810)$(3,335)
Total net gains (losses) for the period included in earnings attributable to the change in unrealized losses relating to assets/liabilities still held at September 30, 2019$0 $3,090 $0 $(10,457)$(2,500)

30

The table below provides an overview of the valuation techniquesassets and significant unobservable inputs used in those techniques to measure financial instruments that are classified within Level 3 of the valuation hierarchy and areliabilities 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 identified financial instruments.
Three Months Ended March 31, 2021
(in thousands)Investment Securities Available for SalePrivate Equity InvestmentsGGL / SBA
Loans Servicing Asset		Earnout
Liability		Visa Derivative
Beginning balance$2,021 $1,021 $3,258 $(5,677)$(2,048)
Total gains (losses) realized/unrealized:
Included in earnings0 32 (178)0 0 
Sales(2,021)0 0 0 0 
Additions0 0 225 0 0 
Settlements0 0 0 0 280 
Ending balance$0 $1,053 $3,305 $(5,677)$(1,768)
Total net gains (losses) for the period included in earnings attributable to the change in unrealized gains/(losses) relating to assets/liabilities still held at March 31, 2021$0 $32 $0 $0 $0 
Three Months Ended March 31, 2020
(in thousands)Investment Securities Available for SalePrivate Equity InvestmentsGGL / SBA
Loans Servicing Asset		Earnout
Liability		Visa Derivative
Beginning balance$2,105 $3,887 $3,040 $(11,016)$(2,339)
Total gains (losses) realized/unrealized:
Included in earnings0 (632)(264)0 0 
Unrealized gains (losses) included in OCI(543)0 0 0 0 
Additions0 0 373 0 0 
Settlements0 0 0 0 289 
Ending balance$1,562 $3,255 $3,149 $(11,016)$(2,050)
Total net gains (losses) for the period included in earnings attributable to the change in unrealized gains/(losses) relating to assets/liabilities still held at March 31, 2020$0 $(632)$0 $0 $0 

September 30, 2020
(dollars in thousands)Valuation TechniqueSignificant Unobservable InputLevel 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 security		Discounted cash flow analysisDiscount rate
Forecasted average Prime reset rate		$1,800   5.83% 3.79%
Private equity 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$958N/A
GGL/SBA loans servicing assetDiscounted cash flow analysisDiscount rate
Prepayment speeds		$3,100 9.68% 19.20%
Earnout liabilityOption pricing methods and Monte Carlo simulationFinancial projections of Global One$15,924N/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$1,460
0-1.2 years

21


(4Q 2021)
Assets Measured at Fair Value on a Non-recurring Basis
Certain assets are required to be measured at fair value on a nonrecurring basis subsequent to their initial recognition. These assets and liabilities are not measured at fair value on an ongoing basis; however, they are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment. The following table presents assets measured at fair value on a non-recurring basis as of the dates indicated for which there was a fair value adjustment.
September 30, 2020December 31, 2019March 31, 2021March 31, 2020
(in thousands)(in thousands)Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total(in thousands)Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Loans(1)
Loans(1)
$0 $0 $27,440 $27,440 $0 $0 $1,461 $1,461 
Loans(1)
$0 $0 $14,026 $14,026 $0 $0 $0 $0 
Other real estateOther real estate0 0 1,750 1,750 0 0 8,023 8,023 Other real estate0 0 0 0 0 0 460 460 
MPS receivableMPS receivable0 0 17,915 17,915 0 0 21,437 21,437 MPS receivable0 0 0 0 0 0 18,490 18,490 
Other assets held for saleOther assets held for sale0 0 1,634 1,634 0 0 1,238 1,238 Other assets held for sale0 0 0 0 0 0 1,206 1,206 
(1)Collateral-dependent loans that were written down to fair value of collateral.
ORE properties are included in other assets on the consolidated balance sheets. The carrying value of ORE at September 30, 2020March 31, 2021 and December 31, 20192020 was $5.4$1.4 million and $14.4$1.8 million, respectively.
31

The following table presents fair value adjustments recognized in earnings for the three and nine months ended September 30,March 31, 2021 and 2020 and 2019 for assets measured at fair value on a non-recurring basis still held at period-end.
Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended March 31,Location in Consolidated Statements of Income
(in thousands)(in thousands)2020201920202019(in thousands)20212020
Loans(1)
Loans(1)
$5,661 $4,170 $20,412 $4,718 
Loans(1)
$7,002 $0 Provision for credit losses
Other real estateOther real estate107 74 138 569 Other real estate0 5 Other operating expenses
MPS receivableMPS receivable0 0 2,663 0 MPS receivable0 2,663 Other operating expenses
Other assets held for saleOther assets held for sale0 0 2,120 91 Other assets held for sale0 1,391 Other operating expenses
(1) Collateral-dependent loans that were written down to fair value of collateral.
The table below provides an overview of the 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.
22

September 30, 2020
Valuation TechniqueSignificant Unobservable Input
Range
(Weighted Average)(1)
Assets measured at fair value on a non-recurring basis
LoansThird-party appraised value of collateral less estimated selling costsDiscount to appraised value
Estimated selling costs		0%-36% (28%) 0%-10% (7%)
Other real estateThird-party appraised value of real estate less estimated selling costsDiscount to appraised value
Estimated selling costs		0%-20% (10%) 0%-10% (7%)
MPS receivable(2)
Third-party appraised value of business less estimated selling costsDiscount to appraised value
Estimated selling costs		N/A
Other assets held for saleThird-party appraised value less estimated selling costs or BOVDiscount to appraised value
Estimated selling costs		0%-66% (53%) 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 I - Item 1. Notes to Unaudited Interim Financial Statements - Note 10 - Commitments and Contingencies" of this Report for more information on this receivable which was classified as a NPA at September 30, 2020 and December 31, 2019.
32

Fair Value of Financial Instruments
The following tables present the carrying and estimated fair values of financial instruments at September 30, 2020March 31, 2021 and December 31, 2019.2020. 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 - Summary of Significant Accounting Policies" to the consolidated financial statements of Synovus' 20192020 Form 10-K for a description of how fair value measurements are determined.
September 30, 2020March 31, 2021
(in thousands)(in thousands)Carrying ValueFair ValueLevel 1Level 2Level 3(in thousands)Carrying ValueFair ValueLevel 1Level 2Level 3
Financial assetsFinancial assetsFinancial assets
Total cash, cash equivalents, restricted cash, and restricted cash equivalents$1,985,363 $1,985,363 $1,985,363 $0 $0 
Total cash, cash equivalents, and restricted cashTotal cash, cash equivalents, and restricted cash$3,328,266 $3,328,266 $3,328,266 $0 $0 
Trading securitiesTrading securities4,371 4,371 0 4,371 0 Trading securities4,386 4,386 0 4,386 0 
Investment securities available for saleInvestment securities available for sale7,566,525 7,566,525 20,254 7,544,471 1,800 Investment securities available for sale8,825,757 8,825,757 66,456 8,759,301 0 
Loans held for saleLoans held for sale745,160 744,615 0 285,899 458,716 Loans held for sale993,887 993,902 0 242,010 751,892 
Private equity investmentsPrivate equity investments958 958 0 0 958 Private equity investments1,053 1,053 0 0 1,053 
Mutual funds and mutual funds held in rabbi trustsMutual funds and mutual funds held in rabbi trusts35,174 35,174 35,174 0 0 Mutual funds and mutual funds held in rabbi trusts39,943 39,943 39,943 0 0 
Loans, netLoans, net38,946,047 38,923,265 0 0 38,923,265 Loans, net38,241,887 38,126,309 0 0 38,126,309 
GGL/SBA loans servicing assetGGL/SBA loans servicing asset3,100 3,100 0 0 3,100 GGL/SBA loans servicing asset3,305 3,305 0 0 3,305 
Derivative assetsDerivative assets463,028 463,028 0 463,028 0 Derivative assets276,831 276,831 0 276,831 0 
Financial liabilitiesFinancial liabilitiesFinancial liabilities
Non-interest-bearing depositsNon-interest-bearing deposits$13,075,081 $13,075,081 $0 $13,075,081 $0 Non-interest-bearing deposits$14,660,287 $14,660,287 $0 $14,660,287 $0 
Non-time interest-bearing depositsNon-time interest-bearing deposits24,831,480 24,831,480 0 24,831,480 0 Non-time interest-bearing deposits27,492,165 27,492,165 0 27,492,165 0 
Time depositsTime deposits6,759,343 6,797,139 0 6,797,139 0 Time deposits5,216,499 5,240,983 0 5,240,983 0 
Total depositsTotal deposits$44,665,904 $44,703,700 $0 $44,703,700 $0 Total deposits$47,368,951 $47,393,435 $0 $47,393,435 $0 
Federal funds purchased and securities sold under repurchase agreements202,344 202,344 202,344 0 0 
Other short-term borrowings400,000 400,000 0 400,000 0 
Securities sold under repurchase agreementsSecurities sold under repurchase agreements293,659 293,659 293,659 0 0 
Long-term debtLong-term debt1,628,385 1,687,448 0 1,687,448 0 Long-term debt1,202,825 1,274,158 0 1,274,158 0 
Earnout liabilityEarnout liability15,924 15,924 0 0 15,924 Earnout liability5,677 5,677 0 0 5,677 
Derivative liabilitiesDerivative liabilities179,968 179,968 0 178,508 1,460 Derivative liabilities137,493 137,493 0 135,725 1,768 
3323



December 31, 2019December 31, 2020
(in thousands)(in thousands)Carrying ValueFair ValueLevel 1Level 2Level 3(in thousands)Carrying ValueFair ValueLevel 1Level 2Level 3
Financial assetsFinancial assetsFinancial assets
Total cash, cash equivalents, restricted cash, and restricted cash equivalents$1,186,918 $1,186,918 $1,186,918 $0 $0 
Total cash, cash equivalents, and restricted cashTotal cash, cash equivalents, and restricted cash$4,252,917 $4,252,917 $4,252,917 $0 $0 
Trading securitiesTrading securities7,212 7,212 0 7,212 0 Trading securities10,880 10,880 0 10,880 0 
Investment securities available for saleInvestment securities available for sale6,778,670 6,778,670 19,855 6,756,710 2,105 Investment securities available for sale7,962,438 7,962,438 20,257 7,940,160 2,021 
Mortgage loans held for sale115,173 115,173 0 115,173 0 
Loans held for saleLoans held for sale760,123 760,939 0 216,647 544,292 
Private equity investmentsPrivate equity investments19,389 19,389 15,502 0 3,887 Private equity investments1,021 1,021 0 0 1,021 
Mutual funds and mutual funds held in rabbi trustsMutual funds and mutual funds held in rabbi trusts32,348 32,348 32,348 0 0 Mutual funds and mutual funds held in rabbi trusts37,650 37,650 37,650 0 0 
Loans, netLoans, net36,881,048 36,931,256 0 0 36,931,256 Loans, net37,647,248 37,605,881 0 0 37,605,881 
GGL/SBA loans servicing assetGGL/SBA loans servicing asset3,040 3,040 0 0 3,040 GGL/SBA loans servicing asset3,258 3,258 0 0 3,258 
Derivative assetsDerivative assets140,016 140,016 0 140,016 0 Derivative assets401,295 401,295 0 401,295 0 
Financial liabilitiesFinancial liabilitiesFinancial liabilities
Non-interest-bearing depositsNon-interest-bearing deposits$9,439,485 $9,439,485 $0 $9,439,485 $0 Non-interest-bearing deposits$13,477,854 $13,477,854 $0 $13,477,854 $0 
Non-time interest-bearing depositsNon-time interest-bearing deposits19,891,711 19,891,711 0 19,891,711 0 Non-time interest-bearing deposits27,265,521 27,265,521 0 27,265,521 0 
Time depositsTime deposits9,074,308 9,112,459 0 9,112,459 0 Time deposits5,948,196 5,970,146 0 5,970,146 0 
Total depositsTotal deposits$38,405,504 $38,443,655 $0 $38,443,655 $0 Total deposits$46,691,571 $46,713,521 $0 $46,713,521 $0 
Federal funds purchased and securities sold under repurchase agreements165,690 165,690 165,690 0 0 
Securities sold under repurchase agreementsSecurities sold under repurchase agreements227,922 227,922 227,922 0 0 
Trading liability for short positionsTrading liability for short positions1,560 1,560 1,560 0 0 Trading liability for short positions7,717 7,717 0 7,717 0 
Other short-term borrowings1,752,000 1,752,000 0 1,752,000 0 
Long-term debtLong-term debt2,153,897 2,185,717 0 2,185,717 0 Long-term debt1,202,494 1,266,825 0 1,266,825 0 
Earnout liabilityEarnout liability11,016 11,016 0 0 11,016 Earnout liability5,677 5,677 0 0 5,677 
Derivative liabilitiesDerivative liabilities37,071 37,071 0 34,732 2,339 Derivative liabilities157,167 157,167 0 155,119 2,048 
Note 87 - Derivative Instruments and Hedging Activities
Synovus utilizes derivative instruments to manage its exposure to various types of interest rate risk, exposures related to liquidity and credit risk, and to facilitate customer transactions. The primary types of derivative instruments utilized by Synovus consist of interest rate swaps, interest rate lock commitments made to prospective mortgage loan customers, commitments to sell fixed-rate mortgage loans, and foreign currency exchange forwards. Interest rate lock commitments represent derivative instruments since it is intended that such loans will be sold. Synovus is party to master netting arrangements with its dealer counterparties; however, Synovus does not offset assets and liabilities under these arrangements for financial statement presentation purposes. See "Part II - Item 8. Financial Statements and Supplementary Data - Note 1 - Summary of Significant Accounting Policies" to the consolidated financial statements of Synovus' 20192020 Form 10-K 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 related toon the derivative instrument is reported initially reported as a component of accumulated other comprehensive income (loss), net of the tax impact, and subsequently reclassified into earnings when the forecastedhedged transaction affects earnings or whenearnings with the hedge is terminated and includedimpacts recorded in the same income statement line item asused to present the earnings effect of the hedged item.item. When a cash flow hedge relationship is discontinued but the hedged cash flows, or forecasted transactions, are still expected to occur, gains or losses that were accumulated in OCI are amortized into earnings over the same periods which the hedged transactions would have affected earnings. If, however, it is probable the forecasted transactions will no longer occur, the remaining accumulated amounts in OCI at the de-designation date are immediately recognized in earnings.
Synovus recorded an unrealized gaingains of $757 thousand, or $565 thousand, after tax, in OCI during the first quarter of 2021 and $9.8 million, or $7.3 million, after-tax, in OCI, during the first quarter of 2020, related to terminated cash flow hedges, which isare being recognized into earnings in conjunction with the effective terms of the original swaps through the third fourth
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quarter of 2025. Synovus recognized pre-tax income of $1.0$1.6 million and $1.4 million, respectively, during the three and nine months ended September 30, 2020March 31, 2021 related to the amortization of terminated cash flow hedges.
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As of September 30, 2020,March 31, 2021, Synovus expects to reclassify into earnings approximately $40$43 million in pre-tax income due to the receipt or payment of pre-tax gains from AOCI into interest incomepayments on all cash flow hedges overwithin the next twelve months. Included in this amount is approximately $5$13 million in pre-tax gainsincome related to the amortization of terminated cash flow hedges. As of September 30, 2020,March 31, 2021, the maximum length of time over which Synovus is hedging its exposure to the variability in future cash flows is through the first quarter of 2024.2026.
For derivative instruments that are not designated as hedging instruments, changes in the fair value of the derivatives are recognized in earnings immediately.
Counterparty Credit Risk and Collateral
Entering into derivative contracts potentially exposes Synovus to the risk of counterparties’ failure to fulfill their legal obligations, including, but not limited to, potential amounts due or payable under each derivative contract. Notional principal amounts are often used to express the volume of these transactions, but the amounts potentially subject to credit risk are much smaller. Synovus assesses the credit risk of its dealer counterparties by regularly monitoring publicly available credit rating information, evaluating other market indicators, and periodically reviewing detailed financials. Dealer collateral requirements are determined via risk-based policies and procedures and in accordance with existing agreements. Synovus seeks to minimize dealer credit risk by dealing with highly rated counterparties and by obtaining collateral for exposures above certain predetermined limits. Management closely monitors credit conditions within the customer 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 risk rating, collateral value, and customer 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 customer specific risk.
Collateral Requirements
Pursuant to the Dodd-Frank Act, certain derivative transactions have collateral requirements, both at the inception of the trade and as the value of each derivative position changes. As of September 30, 2020March 31, 2021 and December 31, 2019,2020, collateral totaling $159.8$121.7 million and $84.6$155.4 million, respectively, was pledged to the derivative counterparties to comply with collateral requirements. For derivatives cleared through central clearing houses, the variation margin payments made are legally characterized as settlements of the derivatives. As a result, these variation margin payments are netted against the fair value of the respective derivative contracts in the consolidated balance sheets and related disclosures. At September 30, 2020March 31, 2021 and December 31, 2019,2020, Synovus had a variation margin of $187.0$81.8 million and $113.7$162.7 million respectively, each reducing the derivative liability.

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The following table reflects the notional amount and fair value of derivative instruments included on the consolidated balance sheets. Beginning on October 19, 2020, CME Group Inc. transitioned price alignment and discounting for swap futures from the daily EFFR to the SOFR. This change will not have a material impact on Synovus' financial statements.
September 30, 2020December 31, 2019March 31, 2021December 31, 2020
Fair ValueFair ValueFair ValueFair Value
(in thousands)(in thousands)Notional Amount
Derivative Assets (1)
Derivative Liabilities (2)
Notional Amount
Derivative Assets (1)
Derivative Liabilities (2)
(in thousands)Notional Amount
Derivative Assets (1)
Derivative Liabilities (2)
Notional Amount
Derivative Assets (1)
Derivative Liabilities (2)
Derivatives in cash flow hedging relationships:Derivatives in cash flow hedging relationships:Derivatives in cash flow hedging relationships:
Interest rate contractsInterest rate contracts$2,750,000 $90,116 $0 $2,000,000 $54 $8,624 Interest rate contracts$3,250,000 $55,873 $4,885 $3,000,000 $80,802 $0 
Total derivatives designated as hedging instruments Total derivatives designated as hedging instruments $90,116 $0 $54 $8,624 Total derivatives designated as hedging instruments $55,873 $4,885 $80,802 $0 
Derivatives not designated
as hedging instruments:		Derivatives not designated
as hedging instruments:		Derivatives not designated
as hedging instruments:
Interest rate contracts(3)
Interest rate contracts(3)
$8,761,038 $362,700 $176,338 $7,258,159 $138,672 $25,849 
Interest rate contracts(3)
$8,891,025 $211,787 $130,737 $8,784,141 $314,234 $153,204 
Mortgage derivatives - interest rate lock commitmentsMortgage derivatives - interest rate lock commitments451,953 10,212 0 70,481 1,290 0 Mortgage derivatives - interest rate lock commitments284,662 4,540 0 306,138 6,259 0 
Mortgage derivatives - forward commitments to sell fixed-rate mortgage loansMortgage derivatives - forward commitments to sell fixed-rate mortgage loans492,500 0 1,793 107,000 0 168 Mortgage derivatives - forward commitments to sell fixed-rate mortgage loans298,000 4,631 0 230,500 0 1,611 
Other contracts(4)
Other contracts(4)
186,074 0 377 145,764 0 91 
Other contracts(4)
170,131 0 103 234,884 0 304 
Visa derivativeVisa derivative— 0 1,460 — 0 2,339 Visa derivative0 0 1,768 0 0 2,048 
Total derivatives not designated as hedging instruments Total derivatives not designated as hedging instruments $372,912 $179,968 $139,962 $28,447 Total derivatives not designated as hedging instruments $220,958 $132,608 $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 customer 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 $2.7$2.5 million and $3.0$2.6 million at September 30, 2020March 31, 2021 and December 31, 2019,2020, respectively.
Synovus also provides foreign currency exchange services, primarily forward contracts, with counterparties to allow commercial customers to mitigate exchange rate risk. Synovus covers its risk by entering into an offsetting foreign currency exchange forward contract. The notional amount of foreign currency exchange forwards was $25.1$18.4 million and $32.9$24.1 million at September 30, 2020March 31, 2021 and December 31, 2019,2020, respectively. The fair value of foreign currency exchange forwards was negligible at September 30, 2020March 31, 2021 and December 31, 20192020 due to the very short duration of these contracts.
The following table presents the effect of hedging derivative instruments on the consolidated statements of income and the total amounts for the respective line item affected for the three and nine months ended September 30,March 31, 2021 and 2020 and 2019.
Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended March 31,
(in thousands)(in thousands)2020201920202019(in thousands)20212020
Total amounts presented in the consolidated statements of income in interest income on loansTotal amounts presented in the consolidated statements of income in interest income on loans$8,509 $0 $13,595 $0 Total amounts presented in the consolidated statements of income in interest income on loans$8,342 $3,637 
 
Gain/loss on cash flow hedging relationships:(1)
Gain/loss on cash flow hedging relationships:(1)
Gain/loss on cash flow hedging relationships:(1)
Interest rate swaps:Interest rate swaps:Interest rate swaps:
Realized gains (losses) reclassified from AOCI, pre-tax, to interest income on loansRealized gains (losses) reclassified from AOCI, pre-tax, to interest income on loans1,031 0 1,421 0 Realized gains (losses) reclassified from AOCI, pre-tax, to interest income on loans1,599 120 
Pre-tax income recognized on cash flow hedgesPre-tax income recognized on cash flow hedges$1,031 $0 $1,421 $0 Pre-tax income recognized on cash flow hedges$1,599 $120 
(1)    See "Part I - Item 1. Financial Statements and Supplementary Data - Note 65 - Shareholders' Equity and Other Comprehensive Income (Loss) in this Report for additional information.

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The pre-tax effect of changes in fair value from derivative instruments not designated as hedging instruments on the consolidated statements of income for the three and nine months ended September 30,March 31, 2021 and 2020 and 2019 is presented below.
Gain (Loss) Recognized in Consolidated Statements of IncomeGain (Loss) Recognized in Consolidated Statements of Income
Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended March 31,
(in thousands)(in thousands)Location in Consolidated Statements of Income2020201920202019(in thousands)Location in Consolidated Statements of Income20212020
Derivatives not designated as hedging instruments:Derivatives not designated as hedging instruments:Derivatives not designated as hedging instruments:
Interest rate contracts(1)
Interest rate contracts(1)
Capital markets income$176 $549 $225 $640 
Interest rate contracts(1)
Capital markets income$947 $(604)
Other contracts(2)
Other contracts(2)
Capital markets income47 (144)(286)(144)
Other contracts(2)
Capital markets income201 (337)
Mortgage derivatives - interest rate lock commitmentsMortgage derivatives - interest rate lock commitmentsMortgage banking income2,532 22 8,922 970 Mortgage derivatives - interest rate lock commitmentsMortgage banking income(1,719)7,024 
Mortgage derivatives - forward commitments to sell fixed-rate mortgage loansMortgage derivatives - forward commitments to sell fixed-rate mortgage loansMortgage banking income(396)642 (1,624)413 Mortgage derivatives - forward commitments to sell fixed-rate mortgage loansMortgage banking income6,242 (4,929)
Visa derivativeOther non-interest expense0 (2,500)0 (2,500)
Total derivatives not designated as hedging instrumentsTotal derivatives not designated as hedging instruments$2,359 $(1,431)$7,237 $(621)Total derivatives not designated as hedging instruments$5,671 $1,154 
(1)    Additionally, losses related to termination of customer swaps of $2.5 million were recorded in other non-interest expense during the first quarter of 2020. Gain (loss) represents net fair value adjustments (including credit related adjustments) for customer swaps and offsetting positions.
(2)Includes risk participation agreements sold.

Note 98 - Net Income Per Common Share
The following table displays a reconciliation of the information used in calculating basic and diluted earningsnet income per common share for the three and nine months ended September 30, 2020March 31, 2021 and 2019.
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands, except per share data)2020201920202019
Basic Net Income Per Common Share:
Net income available to common shareholders$83,283 $127,435 $198,414 $397,505 
Weighted average common shares outstanding147,314 152,238 147,304 156,819 
Net income per common share, basic$0.57 $0.84 $1.35 $2.53 
Diluted Net Income Per Common Share:
Net income available to common shareholders$83,283 $127,435 $198,414 $397,505 
Weighted average common shares outstanding147,314 152,238 147,304 156,819 
Effect of dilutive outstanding equity-based awards, warrants, and earnout payments662 1,805 733 1,776 
Weighted average diluted common shares147,976 154,043 148,037 158,595 
Net income per common share, diluted$0.56 $0.83 $1.34 $2.51 
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.2020. Diluted net income per common share reflectsincorporates the dilution that could occur if securities or other contracts to issue common stock were exercised or converted. The dilutive effectpotential impact of outstanding stock options, restricted share units, and warrants is reflected in diluted net income per common share, unless the impact is anti-dilutive, by applicationcontingently issuable shares, including awards which require future service as a condition of delivery of the treasury stock method.underlying common stock.
Three Months Ended March 31,
(in thousands, except per share data)20212020
Basic Net Income Per Common Share:
Net income available to common shareholders$178,802 $30,230 
Weighted average common shares outstanding148,467 147,311 
Net income per common share, basic$1.20 $0.21 
Diluted Net Income Per Common Share:
Net income available to common shareholders$178,802 $30,230 
Weighted average common shares outstanding148,467 147,311 
Effect of dilutive outstanding equity-based awards, warrants, and earnout payments1,313 1,090 
Weighted average diluted common shares149,780 148,401 
Net income per common share, diluted$1.19 $0.20 
As of September 30,March 31, 2021 and 2020, and 2019, there were 75832 thousand and 40557 thousand, respectively, potentially dilutive shares related to stock options to purchase shares of common stock that were outstanding during these quarters. Potentially dilutive shares are not included in the computation of diluted net income per common share because the effect would be anti-dilutive.
Note 109 - 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. Synovus uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments.instruments. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed
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expiration dates or other termination clauses and may require payment of a fee. Synovus also has commitments to fund certain low-income housing investments, solar energy, and CRA 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.
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The ACL associated with unfunded commitments and letters of credit is recorded within other liabilities on the consolidated balance sheets. Upon adoption of CECL on January 1, 2020, Synovus recorded $27.4 million in unfunded commitment reserves due to the consideration under CECL of expected utilization over the life of such commitments. At September 30, 2020,March 31, 2021, the ACL for unfunded commitments was $60.8$51.5 million, including the impact of CECL and COVID-19, compared to a reserve of $1.4$47.8 million at December 31, 2019.2020. Additionally, an immaterial amount of unearned fees relating to letters of credit are recorded within other liabilities on the consolidated balance sheets. See "Part I-Item 1. Financial Statements and Supplementary Data - Note 1 - Basis of Presentation" in this Report for more information on Synovus' adoption of CECL.
Synovus invests in certain LIHTC partnerships which are engaged in the development and operation of affordable multi-family housing pursuant to Section 42 of the Code. Additionally, Synovus invests in certain solar energy tax credit partnerships pursuant to Section 48 of the Code. Synovus typically acts as a limited partner in these investments and does not exert control over the operating or financial policies of the partnerships and as such, is not considered the primary beneficiary of the partnership. For certain of its LIHTC investments, Synovus provides financing during the construction and development of the properties and is at risk for the funded amount of its equity investment plus the outstanding amount of any construction loans in excess of the fair value of the collateral for the loan, but has no obligation to fund the operations or working capital of the partnerships and is not exposed to losses beyond Synovus’ investment. Synovus receives tax credits related to these investments which are subject to recapture by taxing authorities based on compliance provisions required to be met at the project level.
Synovus also invests in certain other CRA partnerships including SBIC programs. The SBIC is a program initiated by the SBA in 1958 to assist in the funding of small business loans.
(in thousands)(in thousands)September 30, 2020December 31, 2019(in thousands)March 31, 2021December 31, 2020
Letters of credit*Letters of credit*$177,000 $202,614 Letters of credit*$191,359 $190,562 
Commitments to fund commercial and industrial loansCommitments to fund commercial and industrial loans7,990,189 7,018,152 Commitments to fund commercial and industrial loans8,464,375 8,200,608 
Commitments to fund commercial real estate, construction, and land development loansCommitments to fund commercial real estate, construction, and land development loans2,891,857 3,032,252 Commitments to fund commercial real estate, construction, and land development loans3,229,163 3,290,041 
Commitments under home equity lines of creditCommitments under home equity lines of credit1,588,844 1,501,452 Commitments under home equity lines of credit1,643,659 1,602,831 
Unused credit card linesUnused credit card lines984,636 877,929 Unused credit card lines984,268 1,012,313 
Other loan commitmentsOther loan commitments458,509 485,371 Other loan commitments511,084 472,233 
Total letters of credit and unfunded lending commitmentsTotal letters of credit and unfunded lending commitments$14,091,035 $13,117,770 Total letters of credit and unfunded lending commitments$15,023,908 $14,768,588 

Investments in low income housing, solar energy tax credit and other CRA partnerships:
LIHTC, solar energy tax credit and other CRA partnerships:LIHTC, solar energy tax credit and other CRA partnerships:
Carrying amount included in other assetsCarrying amount included in other assets$214,615 $146,612 Carrying amount included in other assets$303,676 $262,855 
Amount of future funding commitments included in carrying amountAmount of future funding commitments included in carrying amount124,866 78,266 Amount of future funding commitments included in carrying amount166,390 133,946 
Permanent and short-term construction loans and letter of credit commitmentsPermanent and short-term construction loans and letter of credit commitments52,686 2,124 Permanent and short-term construction loans and letter of credit commitments155,060 84,552 
Funded portion of permanent and short-term loans and letters of creditFunded portion of permanent and short-term loans and letters of credit5,194 3,196 Funded portion of permanent and short-term loans and letters of credit17,404 9,762 
*    Represent the contractual amount net of risk participations purchased of approximately $31$29.6 million and $33$30.2 million at September 30, 2020March 31, 2021 and December 31, 2019,2020, respectively.
Merchant Services
In accordance with credit and debit card association rules, Synovus provides merchant processing services for customers. Prior to the second quarter of 2020, these services were provided through a referral relationship which was replaced during the second quarter of 2020customers with a new contractual arrangement under which certain sales and processing support are provided through an outside merchant services provider with Synovus owning the merchant contract relationship. In addition, Synovus sponsors various third-party MPS businesses that process credit and debit card transactions on behalf of merchants. In connection with these services, a liability may arise in the event of a billing dispute between the merchant and a cardholder that is ultimately resolved in the cardholder's favor. If the merchant defaults on its obligations, the cardholder, through its issuing bank, generally has until six months after the date of the transaction to present a chargeback to the MPS, which is primarily liable for any losses on covered transactions. However, if a sponsored MPS fails to meet its obligations, then Synovus, as the sponsor, could be held liable for the disputed amount. Synovus seeks to mitigate this risk through its contractual arrangements
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with the MPS and the merchants by withholding future settlements, retaining cash reserve accounts and/or obtaining other security. For the three and nine months ended September 30,March 31, 2021 and 2020, Synovus and the sponsored entities processed and settled $20.23$26.03 billion and $55.47 billion of transactions, respectively. For the three and nine months ended September 30, 2019, the sponsored entities processed and settled $19.13 billion and $55.72$18.37 billion of transactions, respectively.
Synovus covered 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 September 30, 2020,March 31, 2021, the remaining amount, due to Synovus from the MPS is $20.6 million, compared to $21.4 million at December 31, 2019. During the first quarternet of 2020, Synovus recorded a $2.7 million reserve in other operating expenses associated with the chargebacks, reflecting the amount that Synovus does not expect to collect. The net balance of $17.9 million at September 30, 2020 isreserves, included in other assets and classified in NPAs.NPAs, is $15.5 million, compared to $15.6 million at December 31, 2020. While Synovus has contractual protections to mitigate against loss, repayment of the amounts owed to Synovus will depend in large part upon the continued financial viability and/or valuation of the MPS and the availability of any cash reserve accounts.MPS.
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Legal Proceedings
Synovus and its subsidiaries are subject to various legal proceedings, claims and disputes that arise in the ordinary course of its business. Additionally, in the ordinary course of business, Synovus and its subsidiaries are subject to regulatory and governmental examinations, information gathering requests, inquiries and investigations. Synovus, like many other financial institutions, has been the target of legal actions and other proceedings asserting claims for damages and related relief for losses. These actions include mortgage loan and other loan put-back claims, claims and counterclaims asserted by individual borrowers related to their loans, allegations of violations of state and federal laws and regulations relating to banking practices, and allegations related to Synovus' participation in government stimulus programs, including putative class action matters. In addition to actual damages, if Synovus does not prevail in such asserted legal actions, credit-related litigation could result in additional write-downs or charge-offs of assets, which could adversely affect Synovus' results of operations during the period in which the write-down or charge-off were to occur.
Synovus carefully examines and considers each legal matter, and, in those situations where Synovus determines that a particular legal matter presents loss contingencies that are both probable and reasonably estimable, Synovus establishes an appropriate reserve. An event is considered to be probable if the future event is likely to occur. While the final outcome of any legal proceeding is inherently uncertain, based on the information currently available, advice of counsel and available insurance coverage, management believes that the amounts accrued with respect to legal matters as of September 30, 2020March 31, 2021 are adequate. The actual costs of resolving legal claims may be higher or lower than the amounts accrued.
In addition, where Synovus determines that there is a reasonable possibility of a loss in respect of legal matters, Synovus considers whether it is able to estimate the total reasonably possible loss or range of loss. An event is “reasonably possible” if “the chance of the future event or events occurring is more than remote but less than likely.” An event is “remote” if “the chance of the future event or events occurring is more than slight but less than reasonably possible." In many situations, Synovus may be unable to estimate reasonably possible losses due to the preliminary nature of the legal matters, as well as a variety of other factors and uncertainties. For those legal matters where Synovus is able to estimate a range of reasonably possible losses, management currently estimates the aggregate range from our outstanding litigation is from 0 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 1110 - Segment Reporting
Synovus' business segments are based on the products and services provided or the customers served and as of the fourth quarter of 2019, reflect the manner in which financial information is evaluated by the chief operating decision makers. Prior to the fourth quarter of 2019, Synovus identified its overall banking operations as its only reportable segment. Synovus has 3 major reportable business segments: Community Banking, Wholesale Banking, and Financial Management Services (FMS),
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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, revenues, and expenses not allocated or attributable to a particular business segment are included in Treasury and Corporate Other. Synovus's third-party lending partnership consumer loans and held for sale loans as well as PPP C&I 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 customers 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 customers with an array of comprehensive banking products and services including commercial, home equity, and other consumer loans, credit and debit cards, and deposit accounts.
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The Wholesale Banking business segment serves primarily larger corporate customers 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 asset-based lending.community investment capital.
The FMSFinancial Management Services (FMS) business segment serves its customers 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, and 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 rate is based on a number of factors and assumptions, including prevailing market interest rates, for comparable durationthe expected lives of various assets (or liabilities).and liabilities, and the Company's broader funding profile.
The following tables present certain financial information for each reportable business segment for the three and nine months ended September 30,March 31, 2021 and 2020. During the three months ended September 30, 2020, Synovus recognized a $44.9 million non-cash goodwill impairment charge representing all of the goodwill allocated to the Consumer Mortgage reporting unit (which is included in the FMS reportable segment) driven by significant mortgage refinance activity at record-low mortgage rates and the FOMC's updated guidance in the third quarter of 2020 regarding inflation targeting and their expectations for interest rates to remain low for an extended period of time. To provide comparable prior year information, Synovus has included proforma business segment financial information for the three and nine months ended September 30, 2019 utilizing various allocation methodologies based on balance sheet and income statement 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 each reportable business segment may be periodically revised.
Three Months Ended September 30, 2020Three Months Ended March 31, 2021
(in thousands)(in thousands)Community BankingWholesale BankingFinancial Management ServicesTreasury and Corporate OtherSynovus Consolidated(in thousands)Community BankingWholesale BankingFinancial Management ServicesTreasury and Corporate OtherSynovus Consolidated
Net interest incomeNet interest income$220,426 $139,080 $20,986 $(3,502)$376,990 Net interest income$206,242 $134,074 $20,995 $12,546 $373,857 
Non-interest revenueNon-interest revenue29,982 5,496 65,820 13,113 114,411 Non-interest revenue29,754 7,319 58,583 15,300 110,956 
Non-interest expenseNon-interest expense68,571 19,530 92,931 135,623 316,655 Non-interest expense68,058 20,724 47,674 130,678 267,134 
Pre-provision net revenuePre-provision net revenue$181,837 $125,046 $(6,125)$(126,012)$174,746 Pre-provision net revenue$167,938 $120,669 $31,904 $(102,832)$217,679 

Three Months Ended March 31, 2020
(in thousands)Community BankingWholesale BankingFinancial Management ServicesTreasury and Corporate OtherSynovus Consolidated
Net interest income$196,504 $123,170 $17,384 $36,202 $373,260 
Non-interest revenue30,324 9,327 47,384 16,822 103,857 
Non-interest expense73,973 20,713 43,391 138,202 276,279 
Pre-provision net revenue$152,855 $111,784 $21,377 $(85,178)$200,838 



30


Three Months Ended September 30, 2019 Proforma
(in thousands)Community BankingWholesale BankingFinancial Management ServicesTreasury and Corporate OtherSynovus Consolidated
Net interest income$203,197 $133,773 $26,582 $38,545 $402,097 
Non-interest revenue35,145 7,092 40,966 5,557 88,760 
Non-interest expense76,414 25,413 40,413 134,070 276,310 
Pre-provision net revenue$161,928 $115,452 $27,135 $(89,968)$214,547 
March 31, 2021
(dollars in thousands)Community BankingWholesale BankingFinancial Management ServicesTreasury and Corporate OtherSynovus Consolidated
Loans, net of deferred fees and costs$10,745,585 $19,305,649 $5,175,578 $3,578,289 $38,805,101 
Total deposits$30,897,797 $11,288,606 $744,745 $4,437,803 $47,368,951 
Total full-time equivalent employees2,173 282 833 1,773 5,061 
December 31, 2020
(dollars in thousands)Community BankingWholesale BankingFinancial Management ServicesTreasury and Corporate OtherSynovus Consolidated
Loans, net of deferred fees and costs$11,171,013 $18,810,729 $5,370,790 $2,900,452 $38,252,984 
Total deposits$29,141,242 $11,958,105 $739,200 $4,853,024 $46,691,571 
Total full-time equivalent employees2,199 285 832 1,818 5,134 

Nine Months Ended September 30, 2020
(in thousands)Community BankingWholesale BankingFinancial Management ServicesTreasury and Corporate OtherSynovus Consolidated
Net interest income$638,311 $407,265 $56,600 $24,640 $1,126,816 
Non-interest revenue89,413 20,406 166,067 115,866 391,752 
Non-interest expense219,859 63,176 184,501 409,540 877,076 
Pre-provision net revenue$507,865 $364,495 $38,166 $(269,034)$641,492 
31

Nine Months Ended September 30, 2019 Proforma
(in thousands)Community BankingWholesale BankingFinancial Management ServicesTreasury and Corporate OtherSynovus Consolidated
Net interest income$625,450 $388,241 $86,425 $96,419 $1,196,535 
Non-interest revenue101,971 21,787 111,873 22,314 257,945 
Non-interest expense225,141 55,141 111,139 441,426 832,847 
Pre-provision net revenue$502,280 $354,887 $87,159 $(322,693)$621,633 

September 30, 2020
(dollars in thousands)Community BankingWholesale BankingFinancial Management ServicesTreasury and Corporate OtherSynovus Consolidated
Total loans net of deferred fees and costs$11,489,106 $19,204,961 $5,412,944 $3,442,836 $39,549,847 
Total deposits$28,870,928 $10,339,568 $414,243 $5,041,165 $44,665,904 
Total full-time equivalent employees2,200 285 843 1,904 5,232
December 31, 2019
(dollars in thousands)Community BankingWholesale BankingFinancial Management ServicesTreasury and Corporate OtherSynovus Consolidated
Total loans net of deferred fees and costs$12,170,914 $17,643,509 $5,285,455 $2,062,572 $37,162,450 
Total deposits$25,610,777 $8,314,184 $284,716 $4,195,827 $38,405,504 
Total full-time equivalent employees2,301 213 839 1,911 5,264 

Note 12 - Subsequent Events
Issuance of Subordinated Debt by Synovus Bank
On October 29, 2020, Synovus Bank issued $200.0 million aggregate principal amount of 4.000% Fixed-to-Fixed Rate Subordinated Bank Notes due October 29, 2030 (the "Maturity Date"). Subject to any redemption prior to the Maturity Date, the Notes will bear interest from and including the original issue date to, but excluding, October 29, 2025 (the ‘‘Reset Date’’), at a fixed rate of 4.000% per annum and from and including the Reset Date to, but excluding the Maturity Date, the Notes will


bear interest at a fixed rate that will be the Five-year U.S. Treasury Rate (as defined) as of the Reset Determination Date, plus 3.625% per annum. Interest on the Notes will be payable semi-annually in arrears on April 29 and October 29 of each year, commencing on April 29, 2021. Synovus Bank may redeem the Notes, in whole but not in part, (i) at any time within 90 days following a Regulatory Capital Treatment Event or Tax Event (in each case as defined) or Synovus Bank becoming required to be registered as an investment company pursuant to the Investment Company Act of 1940, as amended, or (ii) on the Reset Date, in each case at a redemption price equal to 100% of the principal amount of the Notes, plus accrued and unpaid interest, if any, to but excluding the redemption date. The Notes are not redeemable at the option or election of holders.
Voluntary Early Retirement Program
Synovus incurred approximately $14 million in one-time termination benefit restructuring charges in October 2020 associated with a voluntary early retirement program offered to employees as part of the Synovus Forward efficiency initiatives.
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ITEM 2. – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
In this Report, the words “Synovus,” “the Company,” “we,” “us,” and “our” refer to Synovus Financial Corp. together with Synovus Bank and Synovus' other wholly-owned subsidiaries, except where the context requires otherwise.
FORWARD-LOOKING STATEMENTS
Certain statements made or incorporated by reference in this Report which are not statements of historical fact, including those under “Management's Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere in this Report, constitute forward-looking statements within the meaning of, and subject to the protections of, Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements include statements with respect to Synovus' beliefs, plans, objectives, goals, targets, expectations, anticipations, assumptions, estimates, intentions and future performance and involve known and unknown risks, many of which are beyond Synovus' control and which may cause Synovus' actual results, performance or achievements or the financial services industry or economy generally, to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements.
All statements other than statements of historical fact are forward-looking statements. You can identify these forward-looking statements through Synovus' use of words such as “believes,” “anticipates,” “expects,” “may,” “will,” “assumes,” “predicts,” “could,” “should,” “would,” “intends,” “targets,” “estimates,” “projects,” “plans,” “potential” and other similar words and expressions of the future or otherwise regarding the outlook for Synovus' future business and financial performance and/or the performance of the financial services industry and economy in general. Forward-looking statements are based on the current beliefs and expectations of Synovus' management and are subject to significant risks and uncertainties. Actual results may differ materially from those contemplated by such forward-looking statements. A number of factors could cause actual results to differ materially from those contemplated by the forward-looking statements in this document. Many of these factors are beyond Synovus' ability to control or predict. These factors include, but are not limited to:
(1)the risks and uncertainties related to the impact of the COVID-19 pandemic on our assets, business, capital and liquidity, financial condition, prospects and results of operations;

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

(3)the risk that any further economic downturn and contraction could have a material adverse effect on our capital, liquidity, financial condition, credit quality, results of operations and future growth, including the risk that the current economic contraction could last much longer and be much more severe if efforts to contain the pandemic are unsuccessful and restrictions on movement last longer than currently anticipated;unsuccessful;

(3)(4)the risk that competition in the financial services industry may adversely affect our future earnings and growth;

(5)our ability to attract and retain employees and the impact of executive management transitions that are key to our growth and efficiency strategies;

(6) the riskrisks that our asset quality may deteriorate, our allowance for credit 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 loan or other receivables;

(4)(7)the impact of recent and proposed or potential changes in governmental policy, laws and regulations, including recently enacted laws, regulations and guidance related to government stimulus programs related to the COVID-19 pandemic, proposed and potentialrecently 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;

(5)(8)changes in the costinterest rate environment, including changes to the federal funds rate to include a negative interest rate environment, and availability ofcompetition in our primary market area may result in increased funding due to changes in the deposit marketcosts or reduced earning assets yields, thus reducing margins and credit market;net interest income;

(6)(9)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;

32


(10) the risks that if economic conditions worsen furtherrelated to our implementation of new lines of business, new products and services or regulatory capital rules are modified, we may be required to undertake initiatives to improve our capital position;new technologies;

(7)(11)risks related to our business relationships with, and reliance upon, third parties that have strategic partnerships with us or that provide key components of our business infrastructure, including the costs of services and products provided to us by third parties, and risks related to disruptions in service or financial difficulties with a third-party vendor or business relationship;

(12)the risk that our enterprise risk management framework, our compliance program, or our corporate governance and supervisory oversight functions may not identify or address risks adequately, which may result in unexpected losses;

(13) 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;

(8)(14) changes in the interest rate environment, includingcost and availability of funding due to changes toin the federal funds rate to include a possible negative interest rate environment,deposit market and competition in our primary market area may result in increased funding costs or reduced earning assets yields, thus further reducing margins and net interest income;credit market;

(9)the risk that competition in the financial services industry may adversely affect our future earnings and growth;

43

(10)(15) risks related to the ability of our operational framework to identify and manage risks associated with our business such as credit risk, that we may not realize the expected benefits fromcompliance risk, reputational risk, and operational risk, including by virtue of our efficiencyrelationships with third-party business partners, as well as our relationship with third-party vendors and growth initiatives or that we may not be able to realize those cost savings or revenue initiatives in the time period expected, which could negatively impact our future profitability;other service providers;

(11)(16) our ability to identify and address cyber-security risks such as data security breaches, malware, "denial of service" attacks, "hacking" and identity theft, a failure of which could disrupt our business and result in the disclosure of and/or misuse or misappropriation of confidential or proprietary information, disruption or damage of our systems, increased costs, significant losses, or adverse effects to our reputation;

(12)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;

(13)our ability to attract and retain employees that are key to our strategic and growth initiatives;

(14)the risk related to our implementation of new lines of business, new products and services or new technologies;

(15)our ability to receive dividends from our subsidiaries could affect our liquidity, including our ability to pay dividends or take other capital actions;

(16)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;

(17)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;

(18)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 third-party business partners, as well as our relationship with third-party vendors and other service providers;

(19)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;

(20) 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;

(21)(18)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;

(22)risks related to the fluctuation in our stock price and general volatility in the stock market;

(23)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)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;

(20)risks related to the continued use, availability and reliability of LIBOR and the risks related to the transition from LIBOR to other benchmark rates;

(21)restrictions or limitations on access to funds from historical and alternative sources of liquidity could adversely affect our overall liquidity, which could restrict our ability to make payments on our obligations and our ability to support asset growth and sustain our operations and the operations of Synovus Bank;

(22)our ability to receive dividends from our subsidiaries could affect our liquidity, including our ability to pay dividends or take other capital actions;

(23)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;

(24)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;

(25) 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;

(25)(26) risks relatedthe risk that our concentrated operations in the Southeastern U.S. make us vulnerable to the continued use, availability and reliability of LIBORlocal economic conditions, local weather catastrophes, public health issues, and other "benchmark" rates;external events;

33


(26)(27)the costs and effects of litigation, investigations inquiries or similar matters, or adverse facts and developments related thereto, including the costs and effects of litigation related to our participation in government stimulus programs associated with the COVID-19 pandemic;

44
(28)risks related to the fluctuation in our stock price and general volatility in the stock market;

(27)(29) the effects of any damages to our reputation resulting from developments related to any of the items identified above; and

(28)(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 II - Item 1A. Risk Factors" of this Report.
For a discussion of these and other risks that may cause actual results to differ from expectations, refer to “Part I-ItemI - Item 1A. Risk Factors” and other information contained in Synovus' 20192020 Form 10-K and our other periodic filings, including quarterly reports on Form 10-Q and current reports on Form 8-K, that we file from time to time with the SEC. All written or oral forward-looking statements that are made by or are attributable to Synovus are expressly qualified by this cautionary notice. You should not place undue reliance on any forward-looking statements since those statements speak only as of the date on which the statements are made.Synovus undertakes no obligation to update any forward-looking information and statements, whether oral or written,statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of new information or unanticipated events, except as may otherwise be required by law.
INTRODUCTION AND CORPORATE PROFILE
Synovus Financial Corp. is a financial services company and a registered bank holding company headquartered in Columbus, Georgia. Through its wholly-owned subsidiary, Synovus Bank, a Georgia state-chartered bank that is a member of the Federal Reserve System, the Company provides commercial and retail banking in addition to a full suite of specialized products and services including private banking, treasury management, wealth management, mortgage services, premium finance, asset-based lending, structured lending, and international banking. Synovus also provides financial planning, and investment advisory services through its wholly-owned subsidiaries, Synovus Trust and Synovus Securities, as well as its GLOBALT and Creative Financial Group divisions.
Synovus Bank is positioned in some of the highest growth markets in the Southeast, with 292288 branches in Alabama, Florida, Georgia, South Carolina, and Tennessee.
The following financial review summarizes the significant trends, changes in our business, transactions, and other matters affecting Synovus’ results of operations for the three and nine months ended September 30, 2020March 31, 2021 and financial condition as of September 30, 2020March 31, 2021 and December 31, 2019.2020. This discussion supplements, and should be read in conjunction with, the unaudited interim consolidated financial statements and notes thereto contained elsewhere in this Report and the consolidated financial statements of Synovus, the notes thereto, and management’s discussion and analysis contained in Synovus’ 2019Synovus' 2020 Form 10-K.
Management's Discussion and Analysis of Financial Condition and Results of Operations consists of:
•Discussion of Results of Operations - Reviews Synovus' financial performance, as well as selected balance sheet items, items from the statements of income, significant transactions, and certain key ratios that illustrate Synovus' performance.

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

•Additional Disclosures - Discusses additional important matters including critical accounting policies and non-GAAP financial measures used within this Report.
A reading of each section is important to understand fully our financial performance.
4534


DISCUSSION OF RESULTS OF OPERATIONS
Table 1 - Consolidated Financial HighlightsTable 1 - Consolidated Financial HighlightsTable 1 - Consolidated Financial Highlights
Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended March 31,
(dollars in thousands, except per share data)(dollars in thousands, except per share data)20202019Change20202019Change(dollars in thousands, except per share data)20212020Change
Net interest incomeNet interest income$376,990 $402,097 (6)%$1,126,816 $1,196,535 (6)%Net interest income$373,857 $373,260 — %
Provision for credit losses(1)
43,383 27,562 57 343,956 63,250 444 
(Reversal of) provision for credit losses(Reversal of) provision for credit losses(18,575)158,722 (112)
Non-interest revenueNon-interest revenue114,411 88,760 29 391,752 257,945 52 Non-interest revenue110,956 103,857 7 
Adjusted non-interest revenue(2)(1)
Adjusted non-interest revenue(2)(1)
115,701 91,297 27 310,446 259,940 19 
Adjusted non-interest revenue(2)(1)
112,946 99,378 14 
Total FTE revenues492,357 491,676 — 1,521,171 1,456,736 4 
Adjusted total revenues(2)
493,647 494,213 — 1,439,865 1,458,731 (1)
Total FTE revenueTotal FTE revenue485,587 477,903 2 
Adjusted total revenue(1)
Adjusted total revenue(1)
487,577 473,424 3 
Non-interest expenseNon-interest expense316,655 276,310 15 877,076 832,847 5 Non-interest expense267,134 276,279 (3)
Adjusted non-interest expense(2)(1)
Adjusted non-interest expense(2)(1)
268,742 258,474 4 816,310 757,834 8 
Adjusted non-interest expense(2)(1)
266,603 271,155 (2)
Income before income taxesIncome before income taxes131,363 186,985 (30)297,536 558,383 (47)Income before income taxes236,254 42,116 461 
Net incomeNet income91,574 135,726 (33)223,286 412,096 (46)Net income187,093 38,521 386 
Net income available to common shareholdersNet income available to common shareholders83,283 127,435 (35)198,414 397,505 (50)Net income available to common shareholders178,802 30,230 492 
Net income per common share, basicNet income per common share, basic0.57 0.84 (32)1.35 2.53 (47)Net income per common share, basic1.20 0.21 487 
Net income per common share, dilutedNet income per common share, diluted0.56 0.83 (32)1.34 2.51 (47)Net income per common share, diluted1.19 0.20 486 
Adjusted net income per common share, diluted(2)(1)
Adjusted net income per common share, diluted(2)(1)
0.89 0.97 (9)1.32 2.96 (55)
Adjusted net income per common share, diluted(2)(1)
1.21 0.21 483 
Net interest margin(3)(2)
Net interest margin(3)(2)
3.10 %3.69 %(59)  bps3.20 %3.72 %(52)  bps
Net interest margin(3)(2)
3.04 %3.37 %(33)  bps
Net charge-off ratio(3)(2)
Net charge-off ratio(3)(2)
0.29 0.22 7 0.25 0.18 7 
Net charge-off ratio(3)(2)
0.21 0.21 — 
Return on average assets(3)(2)
Return on average assets(3)(2)
0.69 1.14 (45)0.58 1.18 (60)
Return on average assets(3)(2)
1.40 0.32 108 
Adjusted return on average assets(3)(2)
Adjusted return on average assets(3)(2)
1.05 1.33 (28)0.57 1.39 (82)
Adjusted return on average assets(3)(2)
1.41 0.32 109 
Efficiency ratio-FTEEfficiency ratio-FTE64.31 56.20 811 57.66 57.17 49 Efficiency ratio-FTE55.01 57.81 (280)
Adjusted tangible efficiency ratio(2)(1)
Adjusted tangible efficiency ratio(2)(1)
53.91 51.71 220 56.14 51.36 478 
Adjusted tangible efficiency ratio(2)(1)
54.19 56.72 (253)
(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.
(2)    See "Table 14 - Reconciliation of Non-GAAP Financial Measures” in this Report for the applicable reconciliation to the most comparable GAAP measure.
(3)(2)    Annualized
September 30, 2020June 30, 2020Sequential Quarter ChangeSeptember 30, 2019Year-Over-Year ChangeMarch 31, 2021December 31, 2020Sequential Quarter ChangeMarch 31, 2020Year-Over-Year Change
(dollars in thousands)(dollars in thousands)(dollars in thousands)
Loans, net of deferred fees and costsLoans, net of deferred fees and costs$39,549,847 $39,914,297 $(364,450)$36,417,826 $3,132,021 Loans, net of deferred fees and costs$38,805,101 $38,252,984 $552,117 $38,258,024 $547,077 
Total average loansTotal average loans39,762,572 40,136,090 (373,518)36,201,322 3,561,250 Total average loans38,212,267 38,884,551 (672,284)37,593,045 619,222 
Total depositsTotal deposits44,665,904 44,194,580 471,324 37,433,070 7,232,834 Total deposits47,368,951 46,691,571 677,380 39,826,585 7,542,366 
Core deposits (excludes brokered deposits)Core deposits (excludes brokered deposits)40,756,645 39,904,278 852,367 34,237,575 6,519,070 Core deposits (excludes brokered deposits)44,174,284 43,121,165 1,053,119 35,838,637 8,335,647 
Core transaction deposits (excludes brokered and public fund deposits)Core transaction deposits (excludes brokered and public fund deposits)30,988,237 29,425,251 1,562,986 23,794,467 7,193,770 Core transaction deposits (excludes brokered and public fund deposits)34,804,575 32,754,609 2,049,966 24,790,621 10,013,954 
Total average depositsTotal average deposits44,339,497 43,096,475 1,243,022 37,714,145 6,625,352 Total average deposits46,454,878 45,973,980 480,898 38,687,207 7,767,671 
Non-performing assets ratioNon-performing assets ratio0.49 %0.44 %5   bps0.42 %7 bpsNon-performing assets ratio0.50 %0.50 %—   bps0.50 %— bps
Non-performing loans ratioNon-performing loans ratio0.43 0.37 6 0.32 11 Non-performing loans ratio0.40 0.39 1 0.41 (1)
Past due loans over 90 daysPast due loans over 90 days0.02 0.02 — 0.04 (2)Past due loans over 90 days0.01 0.01 — 0.02 (1)
CET1 capitalCET1 capital$3,913,402 $3,827,229 $86,173 $3,660,078 $253,324 CET1 capital$4,184,715 $4,034,865 $149,850 $3,744,415 $440,300 
Tier 1 capitalTier 1 capital4,450,547 4,364,374 86,173 4,196,628 253,919 Tier 1 capital4,721,860 4,572,010 149,850 4,281,560 440,300 
Total risk-based capitalTotal risk-based capital5,536,918 5,459,568 77,350 5,023,138 513,780 Total risk-based capital5,733,956 5,604,230 129,726 5,289,039 444,917 
CET1 capital ratioCET1 capital ratio9.30 %8.90 %40   bps8.96 %34 bpsCET1 capital ratio9.74 %9.66 %8   bps8.70 %104 bps
Tier 1 capital ratioTier 1 capital ratio10.57 10.15 42 10.27 30 Tier 1 capital ratio10.99 10.95 4 9.95 104 
Total risk-based capital ratioTotal risk-based capital ratio13.16 12.70 46 12.30 86 Total risk-based capital ratio13.34 13.42 (8)12.29 105 
Total shareholders’ equity to total assets ratioTotal shareholders’ equity to total assets ratio9.55 9.34 21 10.22 (67)Total shareholders’ equity to total assets ratio9.36 9.49 (13)10.01 (65)
Tangible common equity ratio(1)
Tangible common equity ratio(1)
7.67 7.41 26 8.04 (37)
Tangible common equity ratio(1)
7.55 7.66 (11)7.94 (39)
Return on average common equity(2)
Return on average common equity(2)
7.28 7.48 (20)11.36 (408)
Return on average common equity(2)
15.77 12.31 346 2.75 1,302 
Adjusted return on average common equity(1)(2)
Adjusted return on average common equity(1)(2)
11.48 3.00 848 13.35 (187)
Adjusted return on average common equity(1)(2)
15.93 13.91 202 2.79 1,314 
Adjusted return on average tangible common equity(1)(2)
Adjusted return on average tangible common equity(1)(2)
13.24 3.60 964 15.46 (222)
Adjusted return on average tangible common equity(1)(2)
18.04 15.79 225 3.39 1,465 
(1)    See "Table 14 - Reconciliation of Non-GAAP Financial Measures” in this Report for the applicable reconciliation to the most comparable GAAP measure.
(2)    Quarter annualized
4635


Economic Environment and Recent Events
The ongoing COVID-19 healthcare crisis and public health response have triggered recessionary economic and financial market conditions during the majority of the first nine months of 2020. 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 COVID-19 pandemic by taking measures early, beginning in March 2020, to improve the health and safety of our customers, team members, and communities including remote work capabilities and branch service enhancements; bonus payments to hourly team members required to work on-site;payment deferments on approximately $6 billionof our loan portfolio during the second quarter; and forgiveness of NSF and monthly service charges for impacted customers. Synovus participated in the Paycheck Protection Program (PPP) and delivered close to 19,000 loans totaling nearly $2.9 billion during the second quarter. The average PPP loan was approximately $150 thousand, and the customers that received those loans employed over 335 thousand individuals. Synovus has also participated in the Federal Reserve's Main Street Lending Program to support small and medium-sized businesses impacted by COVID-19. Additionally, although the vast majority of our customers were no longer in a payment deferment program at the end of the third quarter, we have continued to work with our borrowers who have been impacted by the pandemic.
In September, six months after converting our branches to drive-thru and appointment-only, our retail branch network re-opened its lobbies to walk-in customers, implementing CDC safety guidelines and branch design enhancements, including plexiglass barriers, customer directional signage, mask requirements and social distancing protocols. Synovus' team members, many of whom worked remotely during the second and third quarters, re-entered the work place in a phased-in approach. This re-entry was carefully designed by team members themselves and carefully monitored through re-entry surveys and touchpoints. Synovus also provided additional benefits for team members directly impacted by the virus, including supplemental paid-time off and expanded medical benefits. In our communities, we have responded to the COVID-19 healthcare crisis and economic uncertainty with financial contributions to more than a dozen organizations for COVID-19 relief efforts, matching contributions for COVID-19 donations to the American Red Cross, and meal donations for first responders and health care workers.
In light of current economic uncertainty, Synovus has suspended its share repurchase activity beyond the $16.2 million completed during the first quarter and withdrawn 2020 guidance and long-term goals announced at the beginning of the year. Significant economic uncertainty remains, including the trajectory of the economic recovery which we expect will be impacted by any additional government stimulus plans.
Synovus is committed to addressing racial equality and social justice and has taken a number of actions during the third quarter to expand efforts to advance economic empowerment and racial equity, including establishing an internal advisory council to the CEO comprised of certain senior African American leaders, funding a $1.0 million contribution to the United Negro College Fund for the establishment of a scholarship for African American students in our footprint, providing foundational unconscious bias training to additional leaders across the footprint, and continuing to diversify an already strong and diverse Board of Directors with a new independent director. We continue to make progress toward the objectives of our CEO-sponsored inclusion and diversity initiative to improve minority representation within our team member population and female and minority representation in senior leadership, all while improving inclusiveness of all team members.
During the third quarter, we communicated new leadership expectations and leadership training development tools for our team members. We also launched a new leadership development program for our leaders. These new expectation and training tools are intended to help team members understand what leadership looks like at the Company, and to ensure alignment of the daily work experience with the Company’s culture and values.
Executive Summary
Net income available to common shareholders for the thirdfirst quarter of 20202021 was $83.3$178.8 million, or $0.56$1.19 per diluted common share, a decline of 35% and 32%, respectively, cosignificant increase compared to $30.2 million, or $0.20 per diluted common share, inmpared to the thirdfirst quarter of 2019 and adjusted2020. Adjusted net income per common share, diluted(1) was $0.89, down 9%$1.21, compared to $0.97 for the third quarter of 2019. Net income available to common shareholders$0.21 for the first nine monthsquarters of 2021 and 2020, was $198.4 million, or $1.34 per diluted common share, a decline of 50% and 47%, respectively, compared to the first nine months of 2019 and adjusted net income per common share, diluted(1) was $1.32, down 55% compared to $2.96 for the first nine months of 2019.respectively. The year-over-year decline in adjusted net income per common share for all periodsincrease was impacted by deterioration in the economic environment caused by the COVID-19 pandemic and driven by a significant increase in provision for credit losses recorded during the first quarter of 2020 due to the onset of COVID-19 following the adoption of CECL on January 1, 2020, a 225 bps reduction in the federal funds rate, and PAA including loan discount accretion and deposit premium amortization that positively impacted 2019.2020.
Net interest income for the nine three months ended September 30, 2020March 31, 2021 was $1.13 billion, down $69.7$373.9 million, or 6%,up $597 thousand compared to the same period in 2019. The decrease2020 including $24.9 million in year-over-year net interest income was due to declinesPPP processing fees during the first quarter of $62.5 million
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in PAA (primarily comprised of declines of $27.0 million of loan accretion and $32.9 million of deposit premium amortization) associated with the FCB acquisition and declines in market interest rates, which were somewhat offset by higher average earning assets.2021. Net interest margin was down 5233 bps over the comparable nine-month periodsthree-month period to 3.20%3.04%, due primarily to the decline in market interest rates in addition to declines in PAA.and accelerated prepayment activity. On a sequential quarter basis, net interest income was up $424 thousanddown $12.1 million and net interest margin for the third quarter was 3.10%, which was down 38 bps compared to the second quarter of 2020. The sequential quarter decline in net interest marginincome was primarily driven by the impactdue to a lower day count and a continuation of bond repositioning and student loan sales executed in the second quarter of 2020,low-rate pressure, partially offset by further declines in deposit pricing and favorable deposit remixing trends. We continuecontinued deployment of excess liquidity. As we progress through the year, we expect to expect modest downward pressure on NIM as the repricing within our fixed-rate asset portfolios is partially offset by continued declinessee increases in overall deposit costs. Excluding the potential impacts from PPP forgiveness, we expect net interest income, excluding PPP fees, driven by loan growth, deployment of liquidity, a deceleration of prepayments, and net interest margin to decrease modestly in the fourth quarter of 2020 as compared to the third quarter of 2020.further deposit cost reductions.
Non-interest revenue for the thirdfirst quarter of 20202021 was $114.4$111.0 million, up $25.7$7.1 million, or 29%, and year-to-date was $391.8 million, up $133.8 million, or 52%7%, compared to the same periodsperiod in 2019.2020. Adjusted non-interest revenue(1), which excludes net investment securities gains/(losses) and gain on sale/increase/(decrease) in fair value increase/(decrease) of private equity investments, for the thirdfirst quarter of 20202021 was $115.7$112.9 million, up $24.4$13.6 million, or 27%14%, from the thirdfirst quarter of 2019, and on a year-to-date basis was $310.4 million compared to $259.9 million for the first nine months of 2019, up $50.5 million, or 19%2020. The increase in adjusted non-interest revenue was due primarily to strong growth inNet mortgage banking income with recordof $22.3 million remained strong and drove the year-over-year increase in non-interest revenue. While first quarter 2021 mortgage production driven bylevels remained elevated, the current rate environment. In the fourth quarter, we expectrecent increase in interest rates is likely to see declines in mortgage revenue, as compared to the third quarter of 2020.reduce production levels going forward.
Non-interest expense for the thirdfirst quarter of 20202021 was $316.7$267.1 million up $40.3, down $9.1 million, or 15%3%, compared to the thirdfirst quarter of 20192020 and adjusted non-interest expense(1) of $268.7$266.6 million was up $10.3down $4.6 million, or 4%2%. On a year-to-date basis, non-interest expense was up $44.2 million, or 5%, and adjusted non-interest expense(1) was up $58.5 million, or 8%. During the three months ended September 30, 2020, Synovus recognized a $44.9 million non-cash goodwill impairment charge representing the goodwill allocated to the Consumer Mortgage reporting unit. The increase in adjusted expense during the first nine months of 2020 was largely driven by mortgage production commissions, expense associated with Synovus' internal revenue growth and efficiency initiatives, COVID-19 related expenses, and investments in talent and technology. The efficiency ratio-FTE for the first nine months of 2020 was 57.66%, compared to 57.17% for the first nine months of 2019. The adjusted tangible efficiency ratio(1) for the first ninethree months of 20202021 was 56.14%54.19%, up 478down 253 bps compared to the same period a year ago. Excluding up-front expenses associated with Synovus Forward initiatives, we expect adjusted non-interestWe remain committed to prudent expense management, enabling us to continue investing in the fourth quarter to be in-line with adjusted non-interest expense in the third quarter of 2020.areas that position us for greater success, deliver a superior customer experience, and promote profitable growth.
At September 30, 2020, totalMarch 31, 2021, loans, net of deferred fees and costs, of $39.55$38.81 billion, increased $2.39 billion,$552.1 million, or 6%1%, from December 31, 20192020 led by CRE growth of $208.2 million as the recovery of commercial real estate markets continued, C&I growth of $3.24 billion, including $2.71 billion$173.7 million driven by a $170.1 million increase in PPP loans, net of unearned fees, and CREconsumer growth of $472.1$170.2 million primarily due to purchases of $607.0 million of third-party lending loans, including a $476.2 million prime auto portfolio purchase. These growth metrics were partially offset by a $1.26 billion declinedeclines in consumer loans. The decline in consumer loans ismortgages and HELOCs of $214.3 million and $105.4 million, respectively, as consumers across the resultindustry continued to use government stimulus to reduce revolving credit balances and deleverage.
At March 31, 2021, credit metrics remained stable with NPAs, NPLs, and past dues all near historical lows at Synovus, and net charge-offs remained low and declined $1.9 million on a sequential quarter basis to $20.2 million, or 21 basis points. Given elevated levels of the strategic disposition of $1.28 billion in third-party single-service consumerliquidity and non-relationship consumer mortgage loans. We expect loans, excluding the impact of PPP forgiveness, to be relatively flatcontinued economic recovery, particularly in the fourth quarter, as compared toSoutheast, we are not expecting a significant change in net charge-offs in the third quarter of 2020.
near term. The ACL at September 30, 2020March 31, 2021 totaled $664.6$614.7 million, an increasea decrease of $381.8$38.8 million from December 31, 2019, reflecting a building2020, resulting from the improved economic outlook and stable loan portfolio metrics that were partially offset by the increased size of the ACL required under CECL primarily as a result of uncertainty and deterioration in the economic environment due to COVID-19.loan portfolio. The ACL to loans coverage ratio at March 31, 2021 was 1.68%1.58%, or 1.80%,1.69% excluding PPP loans, at September 30, 2020. Current credit metrics deteriorated slightlyand incorporates an outlook with NPAs at 49 bps, NPLs at 43 bps,moderate economic expansion and total past due loans at 14 bps; however, we have not experienced widespread deterioration inbenefits from the portfolio. Year-to-date, net charge-offs are 25 bps compared to 18 bps in the prior year. Synovus expects some pressure on credit metrics over the next few quarters, which aligns with the reserve builds to-date during 2020 under CECL.recently approved government stimulus.
Total period-end deposits at September 30, 2020March 31, 2021 increased $6.26 billion,$677.4 million, or 16%1%, compared to December 31, 2019.2020. Core transaction deposits (non-interest bearing, NOW/savings, and money market deposits excluding public and brokered funds) increased $6.82$2.05 billion, or 28%6%, compared to December 31, 2019.2020. The significant increase in deposit balances compared to December 31, 20192020 is due largely to the current economic environment as well as government stimulus programs including deposits associated with PPP loans.
At September 30, 2020,March 31, 2021, Synovus' CET1 ratio was 9.30%9.74%, well in excess of regulatory requirements including the capital conservation buffer of 2.5%. The September 30, 2020 CET1 ratio improved 40 bps compared to June 30, 2020, and improved 35was up 8 bps compared to December 31, 2019 from a combination2020, driven by earnings. Synovus announced on January 26, 2021 that its Board of earnings and balance sheet activities. These balance sheet activities includedDirectors authorized share repurchases of up to $200 million in 2021. During the settlementfirst quarter of our2021, the Company did not complete any share repurchases. During the second quarter bond repositioning and our on-going efforts to manage non-relationship loan portfoliosof 2021, Synovus had repurchased $23.2 million, or 499 thousand shares of its common stock, at an average price of $46.52 per share, as we prioritize our balance sheet for core, client relationships.of May 5, 2021.
More detail on Synovus' financial results for the three and nine months ended September 30, 2020March 31, 2021 may be found in subsequentsubsequent sections of "Item 2. – Management's Discussion and Analysis of Financial Condition and Results of Operations" of this Report. See also "Item 1A. - Risk Factors" of this Report.
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(1) See "Table 14 - Reconciliation of Non-GAAP Financial Measures” in this Report for applicable reconciliation to the most comparable GAAP measure.
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Changes in Financial Condition
During the ninethree months ended September 30, 2020,March 31, 2021, total assets increased $4.84 billion$764.9 million from $48.20$54.39 billion at December 31, 20192020 to $53.04$55.16 billion. Loans increased $2.39 billion,$552.1 million, including $2.71 billiincreases of $170.1 millionon in PPP loans net of unearned fees and la $476.2 million indirect auto portfolio purchase. Looansans held for sale increased $630.0 million as Synovus transitioned certain third-party lending partnership consumer loans to held for sale.$233.8 million. Investment securities available for sale increased $787.9$863.3 million andwhile cash and cash equivalents increased $798.4 million. Additional increases in total assets at September 30, 2020, compared to December 31, 2019, included increases in BOLI investments of $268.4 million driven by additional investments in BOLI policies and increases in other assets of $363.1 million primarily from an increase in the fair value of derivative assets of $323.0decreased $924.7 million.
The growth in assets was primarily funded by increases of $6.26 billion$677.4 million in deposits. Other short-term borrowings declined $1.35 billion and long-term debt decreased $525.5Securities sold under repurchase agreements increased $65.7 million. Other liabilities increased $296.4 million and included an increase in the fair value of derivative liabilities of $142.9 million, an increase in reserves on unfunded commitments of $59.4 million, and an increase in income taxes payable of $38.4 million. Total shareholders' equity increased $122.9 million during the nine months ended September 30,at March 31, 2021 was flat, as compared to December 31, 2020, primarily due toand included net income of $223.3$187.1 million increases inand proceeds from stock option exercises of $12.6 million, offset by unrealized gains of $29.9 millionlosses in investment securities available for sale and $79.4 million in cash flow hedges offset partially byof $121.0 million and $22.4 million, respectively, and dividends declared on common stock of $145.8 million and dividends declared on preferred stock of $24.9 million.
Synovus adopted CECL on January 1, 2020 with an increase to the ALL of $83.0$49.1 million and an increase to the reserve on unfunded commitments of $27.4$8.3 million, with offsetting increases in loans of $62.2 million related to acquired PCI loans and net deferred tax assets of $12.5 million and a reduction to retained earnings of $35.7 million. The ACL at September 30, 2020 was $664.6 million, an increase of $381.8 million from December 31, 2019, reflecting significant economic stress due to the COVID-19 healthcare crisis.respectively.
The loan to deposit ratio was 88.6%81.9% at September 30,both March 31, 2021 and December 31, 2020, compared to 96.8%96.1% at DecemberMarch 31, 2019, and 97.3% at September 30, 2019.2020.
Loans
The following table compares the composition of the loan portfolio at September 30, 2020,March 31, 2021, December 31, 2019,2020, and September 30, 2019.March 31, 2020.
Table 2 - Loans by Portfolio ClassTable 2 - Loans by Portfolio ClassTable 2 - Loans by Portfolio Class
September 30, 2020 vs. December 31, 2019 ChangeSeptember 30, 2020 vs. September 30, 2019 ChangeMarch 31, 2021 vs. December 31, 2020 ChangeMarch 31, 2021 vs. March 31, 2020 Change
(dollars in thousands)(dollars in thousands)September 30, 2020December 31, 2019September 30, 2019(dollars in thousands)March 31, 2021December 31, 2020March 31, 2020
Commercial, financial and agriculturalCommercial, financial and agricultural$13,120,038 33.2 %$10,239,559 27.6 %$2,880,479 28 %$9,846,830 27.0 %$3,273,208 33 %Commercial, financial and agricultural$12,662,329 32.6 %$12,410,152 32.4 %$252,177 2 %$10,902,455 28.4 %$1,759,874 16 %
Owner-occupiedOwner-occupied6,894,113 17.4 6,529,811 17.6 364,302 6 6,571,485 18.1 322,628 5 Owner-occupied7,031,505 18.1 7,110,016 18.6 (78,511)(1)6,907,893 18.1 123,612 2 
Total commercial and industrialTotal commercial and industrial20,014,151 50.6 16,769,370 45.2 3,244,781 19 16,418,315 45.1 3,595,836 22 Total commercial and industrial19,693,834 50.7 19,520,168 51.0 173,666 1 17,810,348 46.5 1,883,486 11 
Investment propertiesInvestment properties9,662,447 24.4 9,004,327 24.2 658,120 7 8,843,545 24.3 818,902 9 Investment properties9,335,725 24.1 9,103,379 23.8 232,346 3 9,024,916 23.6 310,809 3 
1-4 family properties1-4 family properties655,038 1.7 780,015 2.1 (124,977)(16)805,756 2.2 (150,718)(19)1-4 family properties638,954 1.6 628,695 1.6 10,259 2 736,937 1.9 (97,983)(13)
Land and developmentLand and development648,390 1.6 709,442 1.9 (61,052)(9)663,689 1.8 (15,299)(2)Land and development559,249 1.4 593,633 1.6 (34,384)(6)713,505 1.9 (154,256)(22)
Total commercial real estateTotal commercial real estate10,965,875 27.7 10,493,784 28.2 472,091 4 10,312,990 28.3 652,885 6 Total commercial real estate10,533,928 27.1 10,325,707 27.0 208,221 2 10,475,358 27.4 58,570 1 
Consumer mortgagesConsumer mortgages5,658,525 14.3 5,546,368 14.9 112,157 2 5,470,730 15.0 187,795 3 Consumer mortgages5,299,175 13.7 5,513,491 14.4 (214,316)(4)5,613,997 14.7 (314,822)(6)
Home equity linesHome equity lines1,615,207 4.1 1,713,157 4.6 (97,950)(6)1,675,092 4.6 (59,885)(4)Home equity lines1,432,367 3.7 1,537,726 4.0 (105,359)(7)1,793,486 4.7 (361,119)(20)
Credit cardsCredit cards264,829 0.7 268,841 0.7 (4,012)(1)267,874 0.8 (3,045)(1)Credit cards267,371 0.7 281,018 0.7 (13,647)(5)261,581 0.7 5,790 2 
Other consumer loansOther consumer loans1,130,237 2.9 2,396,294 6.5 (1,266,057)(53)2,295,486 6.3 (1,165,249)(51)Other consumer loans1,578,426 4.1 1,074,874 2.9 503,552 47 2,303,254 6.0 (724,828)(31)
Total consumerTotal consumer8,668,798 22.0 9,924,660 26.7 (1,255,862)(13)9,709,182 26.7 (1,040,384)(11)Total consumer8,577,339 22.2 8,407,109 22.0 170,230 2 9,972,318 26.1 (1,394,979)(14)
Total loans39,648,824 100.3 37,187,814 100.1 2,461,010 7 36,440,487 100.1 3,208,337 9 
Deferred fees and costs, net(98,977)(0.3)(25,364)(0.1)(73,613)290 (22,661)(0.1)(76,316)337 
Total loans, net of deferred fees and costs$39,549,847 100.0 %$37,162,450 100.0 %$2,387,397 6 %$36,417,826 100.0 %$3,132,021 9 %
Loans, net of deferred fees and costsLoans, net of deferred fees and costs$38,805,101 100.0 %$38,252,984 100.0 %$552,117 1 %$38,258,024 100.0 %$547,077 1 %
At September 30, 2020, totalMarch 31, 2021, loans, net of deferred fees and costs, of $39.55$38.81 billion, increased $2.39 billion,$552.1 million, or 6%1%, from December 31, 20192020 led by CRE growth of $208.2 million as the recovery of commercial real estate markets continued, C&I growth of $3.24 billion, including $2.71 billion$173.7 million driven by a $170.1 million increase in PPP loans, net of unearned fees, and CREconsumer growth of $472.1$170.2 million primarily due to purchases of $607.0 million of third-party lending loans, including a $476.2 million prime auto loans purchase. These growth metrics were partially offset by a $1.26 billion declinedeclines in consumer loans. The decline in consumer loans ismortgages and HELOCs of $214.3 million and $105.4 million, respectively, as consumers across the result of the strategic disposition of $1.28 billion in third-party single-service consumerindustry continued to use government stimulus to reduce revolving credit balances and non-relationship consumer mortgage loans. Total loans at September 30, 2020 declined $364.5 million sequentially due to strategic dispositions of $531.8
49

million primarily in third-party single-service consumer loans and non-relationship consumer mortgage loans. Excluding the impact of asset dispositions and PPP loan payoffs, we had sequential quarter net loan growth of $170.3 million. We expect loans, excluding the impact of PPP forgiveness, to be relatively flat in the fourth quarter, as compared to the third quarter of 2020.deleverage. C&I loans remain the largest component of our loan portfolio, representing 50.6%50.7% of total loans, while CRE and consumer loans represent 27.7%27.1% and 22.0%22.2%, respectively. Our portfolio composition is established through a comprehensive concentration management policy which sets limits for C&I, CRE, and consumer loan levels as well as for sub-categories therein.
U.S. Small Business Administration Paycheck Protection Program (PPP)
Synovus is participating in the Paycheck Protection Program (“PPP”),PPP, which is a loan program that originated from the CARES Act and was subsequently expanded by the Paycheck Protection Program and Health Care Enhancement Act, (“PPPHCEA Act”) which was passed by Congress on April 23, 2020 and signed into law on April 24, 2020. Under the initial program, PPP loans are forgivable, in whole or in part, if the proceeds are used for payroll and other permitted purposes in accordance with the requirements of the PPP. These loans carry a fixed rate of 1.00% and a term of two years, if not forgiven, in whole or in part.The loans are guaranteedguaranteed by the SBA. The SBA pays the originating bank a processing fee ranging from 1% to 5%, based on the size of the loan. Synovus began accepting applications from qualified customers on April 3, 2020 and provided nearly $2.9 billion in funding to close to 19,000 customers through the initial PPP, at
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an average loan size of approximately $150 thousand. In the fourth quarter of 2020, Synovus began receiving first draw PPP loan forgiveness that totals $1.25 billion, or $1.20 billion net of unearned fees, life-to-date through March 31, 2021, including PPP loan forgiveness of $711 million, or $687 million net of unearned fees, during the second quarter. The average PPP loan was approximately $150 thousand, and the customers that received those loans employ over 335 thousand individuals. In Octoberfirst quarter of 2021.
On December 27, 2020, the Economic Aid to Hard-Hit Businesses, Nonprofits, and Venues Act was signed into law, and authorized the SBA announced a streamlined forgiveness processto reopen the PPP for certainfirst draw loans, as well as guarantee second draw PPP loans of $50,000up to $2 million for certain eligible borrowers that previously received a PPP loan. These loans carry a fixed rate of 1.00% and a term of five years, if not forgiven, in whole or lessin part. The loans are guaranteed by the SBA. The SBA pays the originating bank a processing fee based on the size of the loan.
On March 11, 2021, the American Rescue Plan Act of 2021 was enacted which primarily expanded and approximately 7%clarified eligibility for first and second draw PPP loans and revised the exclusions from payroll costs for purposes of ourloan forgiveness.
Synovus began participating in the second phase of the PPP balances fall within this threshold.on January 19, 2021 with almost 10,000 applications submitted totaling $1.09 billion and total fundings of $894 million, or $857 million net of unearned fees, as of March 31, 2021. The total balance of PPP loans was $2.36 billion as of March 31, 2021, compared to $2.19 billion as of December 31, 2020.
Commercial Loans
Total commercial loans (which are comprised of C&I and CRE loans) at September 30, 2020March 31, 2021 were $30.98$30.23 billion, or 78.3%77.9%, of the total loan portfolio, compared to $27.26$29.85 billion, or 73.4%78.0%, at December 31, 20192020 and $26.73$28.29 billion, or 73.4%73.9%, at September 30, 2019.March 31, 2020.
At September 30, 2020,March 31, 2021, Synovus had 6 eightcommercial loan relationships with total commitments of $100 million or more (including amounts funded), with noone single relationship exceeding $150 million in commitments.
Commercial and Industrial Loans
The C&I loan portfolio represents the largest category of Synovus' loan portfolio and is primarily comprised of general middle market and commercial banking clients across a diverse setwide range of industries. The following table shows the composition of the C&I loan portfolio aggregated by NAICS code. In accordance with Synovus' lending policy, each loan undergoes a detailed underwriting process which incorporates uniform underwriting standards and oversight in proportion to the size and complexity of the lending relationship. As of September 30, 2020, 80.7%March 31, 2021, 82.5% (93.7% excluding PPP loans) of Synovus' C&I loans are secured by real estate, business equipment, inventory, and other types of collateral compared to 92.6%83.2% (93.8% excluding PPP loans) as of December 31, 2019.2020. C&I loans grew $3.24 billion,$173.7 million, or 19.3%1%, from December 31, 2019,2020, driven primarily by$2.71 billion a $170.1 million increase in PPP loans net of unearned fees at September 30, 2020.March 31, 2021.
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Table 3 - Commercial and Industrial Loans by IndustryTable 3 - Commercial and Industrial Loans by IndustryTable 3 - Commercial and Industrial Loans by Industry
September 30, 2020December 31, 2019March 31, 2021December 31, 2020
(dollars in thousands)(dollars in thousands)Amount
%(1)
Amount
%(1)
(dollars in thousands)Amount
%(1)
Amount
%(1)
Health care and social assistanceHealth care and social assistance$3,679,193 18.4 %$3,083,355 18.4 %Health care and social assistance$3,962,288 20.1 %$3,891,162 19.9 %
Finance and insuranceFinance and insurance1,531,747 7.7 1,263,521 7.5 Finance and insurance1,772,701 9.0 1,685,797 8.6 
Accommodation and food servicesAccommodation and food services1,325,876 6.7 1,205,107 6.2 
ManufacturingManufacturing1,384,392 6.9 1,208,688 7.2 Manufacturing1,323,787 6.7 1,275,169 6.5 
Retail tradeRetail trade1,364,773 6.8 1,202,958 7.2 Retail trade1,256,529 6.4 1,303,263 6.7 
Accommodation and food services1,310,059 6.5 921,515 5.5 
Wholesale tradeWholesale trade1,163,470 5.9 1,152,082 5.9 
Professional, scientific, and technical servicesProfessional, scientific, and technical services1,266,776 6.3 883,433 5.3 Professional, scientific, and technical services1,122,222 5.7 1,133,549 5.8 
Wholesale trade1,181,295 5.9 1,138,145 6.8 
Real estate and rental and leasingReal estate and rental and leasing1,118,034 5.7 1,158,367 5.9 
Other servicesOther services1,178,357 5.9 1,005,420 6.0 Other services1,104,261 5.6 1,123,109 5.8 
Real estate and rental and leasing1,118,949 5.6 1,126,828 6.7 
ConstructionConstruction1,081,726 5.4 702,892 4.2 Construction1,056,487 5.4 1,036,652 5.3 
Transportation and warehousingTransportation and warehousing953,810 4.8 854,954 5.1 Transportation and warehousing938,935 4.8 924,275 4.7 
Arts, entertainment and recreation854,972 4.3 771,846 4.6 
Arts, entertainment, and recreationArts, entertainment, and recreation702,007 3.6 777,905 4.0 
Real estate otherReal estate other686,309 3.4 615,441 3.7 Real estate other701,448 3.6 686,350 3.5 
Educational servicesEducational services606,981 3.0 409,639 2.4 Educational services439,818 2.2 395,193 2.0 
Public AdministrationPublic Administration421,655 2.1 342,329 2.0 Public Administration437,142 2.2 435,636 2.2 
Administration, support, waste management, and remediationAdministration, support, waste management, and remediation404,894 2.0 302,711 1.8 Administration, support, waste management, and remediation368,172 1.9 377,065 1.9 
Agriculture, forestry, fishing, and huntingAgriculture, forestry, fishing, and hunting392,273 2.0 369,185 2.2 Agriculture, forestry, fishing, and hunting357,473 1.8 383,010 2.0 
InformationInformation377,391 1.9 314,740 1.9 Information312,333 1.6 291,425 1.5 
Other Industries218,599 1.1 251,770 1.5 
Other industriesOther industries230,851 1.1 285,052 1.6 
Total commercial and industrial loansTotal commercial and industrial loans$20,014,151 100.0 %$16,769,370 100.0 %Total commercial and industrial loans$19,693,834 100.0 %$19,520,168 100.0 %
(1)    Loan balance in each category expressed as a percentage of total C&I loans.
At September 30, 2020, $13.12March 31, 2021, $12.66 billion of C&I loans, or 33.2%32.6% of the total loan portfolio (including PPP loans of $2.71 billion net of unearned fees)$2.36 billion), represented loans originated for the purpose of financing commercial, financial, and agricultural business activities. The primary source of repayment on these loans is revenue generated from products or services offered by the business or organization. The secondary source of repayment is the collateral, which consists primarily of equipment, inventory, accounts receivable, time deposits, cash surrender value of life insurance, and other business assets.
At September 30, 2020, $6.89March 31, 2021, $7.03 billion of C&I loans, or 17.4%18.1% of the total loan portfolio, represented loans originated for the purpose of financing owner-occupied properties. The financing of owner-occupied facilities is considered a C&I loan even though there is improved real estate as collateral. This treatment is a result of the credit decision process, which focuses on cash flow from operations of the business to repay the debt. The secondary source of repayment on these loans is the underlying real estate. These loans are predominately secured by owner-occupied and other real estate, and to a lesser extent, other types of collateral.
Commercial Real Estate Loans
CRE loans consist primarily of income-producing investment properties loans. Additionally, CRE loans include 1-4 family properties loans as well as land and development loans. Total CRE loans of $10.97$10.53 billion increased $472.1208.2 million, or 4%2%, from December 31, 20192020, driven primarily by growth in income-producing investment properties.properties as the recovery of commercial real estate markets continues.
Investment properties loans consist of construction and mortgage loans for income-producing properties and are primarily made to finance multi-family properties, hotels, office buildings, shopping centers, warehouses and other commercial development properties. Total investment properties loans as of September 30, 2020March 31, 2021 were $9.66$9.34 billion, or 88.1%88.6%, of the CRE loan portfolio, and increased $658.1$232.3 million, or 7%3%, from December 31, 20192020 with most sub-categories experiencing growth other than shopping centers,warehouses, which were down $86.6$7.8 million, or 5%1%, from December 31, 2019.2020.
1-4 Family Properties Loans
1-4 family properties loans include construction loans to home builders and commercial mortgage loans related to 1-4 family rental properties and are almost always secured by the underlying property being financed by such loans. These properties are primarily located in the markets served by Synovus. At September 30, 2020,March 31, 2021, 1-4 family properties loans totaled $655.0$639.0 million, or 6.0%6.1% of the CRE loan portfolio, and decreasedincreased by $125.0$10.3 million, or 16%2%, from December 31, 2019.2020.
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51

Land and Development Loans
Land and development loans include commercial and residential development as well as land acquisition loans and are secured by land held for future development, typically in excess of one year. Properties securing these loans are substantially within markets served by Synovus and loan terms generally include personal guarantees from the principals. Loans in this portfolio are underwritten based on the LTV of the collateral and the capacity of the guarantor(s). Land and development loans of $648.4$559.2 million at September 30, 2020March 31, 2021 decreased $61.1$34.4 million, or 9%6%, from $709.4$593.6 million at December 31, 2019.2020.
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, student, personal, and personal loansauto loans from third-party lending partnerships.lending. The majority of Synovus' consumer loans are consumer mortgages and HELOCs secured by first and second liens on residential real estate primarily located in the markets served by Synovus.
Consumer loans at September 30, 2020 of $8.67 billion decreased $1.26 billion, or 13%, compared to December 31, 2019 due to the strategic disposition of certain third-party single-service consumer loans and non-relationship consumer mortgage loans. Consumer mortgages grew $112.2 million, or 2.0%, from December 31, 2019 due to record production primarily resulting from the low rate environment in addition to continued successful recruiting of MLOs somewhat offset by the strategic sale of $180.2 million in non-relationship consumer mortgage loans. HELOCs decreased $98.0 million, or 6%, from December 31, 2019. Credit card loans of $264.8 million at September 30, 2020 included $56.6 million of commercial credit card loans,and decreased $4.0 million from $268.8 million at December 31, 2019. Other consumer loans decreased $1.27 billion, or 53%, from December 31, 2019 primarily due to the strategic disposition of certain third-party single-service consumer loans totaling $1.10 billion. As of September 30, 2020, third-party lending partnerships had combined balances of $714.3 million, or 1.8%, of the total loan portfolio, compared to $1.98 billion, or 5.3%, of the total loan portfolio, at DecemberMarch 31, 2019.
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 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 least annually, the consumer loan portfolio data 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 ALL. 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 September 30, 2020,2021, weighted-average FICO scores within the residential real estate portfolio based on committed balances were 790for HELOCs and 778 773for Consumer Mortgages.
52Consumer loans at March 31, 2021 of $8.58 billion increased $170.2 million, or 2%, compared to December 31, 2020. Consumer mortgages decreased $214.3 million, or 4%, from December 31, 2020, and HELOCs decreased $105.4 million, or 7%, from December 31, 2020. Credit card loans of $267.4 million at March 31, 2021 decreased $13.6 million, or 5% from $281.0 million at December 31, 2020. The reductions in consumer mortgages, HELOCs, and credit card loans are primarily a result of consumers continuing to use government stimulus to reduce revolving credit balances and deleverage as well as the competitive low rate environment. Other consumer loans, which primarily includes third-party lending, increased $503.6 million, or 47%, from December 31, 2020. As of March 31, 2021, third-party lending balances totaled $1.18 billion, or 3.0%, of the total loan portfolio, and increased $503.2 million, or 74%, compared to December 31, 2020, led by purchases of $607.0 million of third-party lending loans, including a $476.2 million prime auto loans purchase. We believe that the risk-return profile, the 2-year average life, and the liquidity of the asset class is a good fit under current market conditions. We will continue to use third-party lending to manage the balance sheet, which could lead to increases in this portfolio.

Deposits
Deposits provide the most significant funding source for interest earning assets. The following table shows the composition of period-end deposits asas of the dates indicated. See Table 10 - Average Balances and Yields/Rates in this Report for information on average deposits including average rates.
Table 4 - Composition of Period-end DepositsTable 4 - Composition of Period-end DepositsTable 4 - Composition of Period-end Deposits
(dollars in thousands)(dollars in thousands)September 30, 2020
%(1)
June 30, 2020
%(1)
December 31, 2019
%(1)
September 30, 2019
%(1)
(dollars in thousands)March 31, 2021
%(1)
December 31, 2020
%(1)
March 31, 2020
%(1)
Non-interest-bearing demand deposits(2)
Non-interest-bearing demand deposits(2)
$12,129,777 27.2 %$11,830,675 26.8 %$8,661,220 22.6 %$8,970,218 24.0 %
Non-interest-bearing demand deposits(2)
$13,742,075 29.0 %$12,382,708 26.5 %$8,968,756 22.5 %
Interest-bearing demand deposits(2)
Interest-bearing demand deposits(2)
5,291,135 11.8 5,057,234 11.4 4,769,505 12.4 4,714,817 12.6 
Interest-bearing demand deposits(2)
5,841,749 12.3 5,674,416 12.2 4,617,368 11.6 
Money market accounts(2)
Money market accounts(2)
12,441,340 27.8 11,457,223 26.0 9,827,357 25.6 9,212,140 24.6 
Money market accounts(2)
13,943,717 29.5 13,541,236 29.0 10,255,014 25.8 
Savings deposits(2)
Savings deposits(2)
1,125,985 2.5 1,080,119 2.4 909,500 2.4 897,292 2.4 
Savings deposits(2)
1,277,034 2.7 1,156,249 2.5 949,483 2.4 
Public fundsPublic funds5,791,944 13.0 5,347,351 12.1 4,622,318 12.0 3,795,320 10.1 Public funds6,154,948 13.0 6,760,628 14.5 5,261,383 13.2 
Time deposits(2)
Time deposits(2)
3,976,464 8.9 5,131,676 11.6 6,185,611 16.1 6,647,788 17.8 
Time deposits(2)
3,214,761 6.8 3,605,928 7.7 5,786,633 14.5 
Brokered depositsBrokered deposits3,909,259 8.8 4,290,302 9.7 3,429,993 8.9 3,195,495 8.5 Brokered deposits3,194,667 6.7 3,570,406 7.6 3,987,948 10.0 
Total depositsTotal deposits$44,665,904 100.0 %$44,194,580 100.0 %$38,405,504 100.0 %$37,433,070 100.0 %Total deposits$47,368,951 100.0 %$46,691,571 100.0 %$39,826,585 100.0 %
Core deposits(3)
Core deposits(3)
$40,756,645 91.2 %$39,904,278 90.3 %$34,975,511 91.1 %$34,237,575 91.5 %
Core deposits(3)
$44,174,284 93.3 %$43,121,165 92.4 %$35,838,637 90.0 %
Core transaction deposits(4)
Core transaction deposits(4)
$30,988,237 69.4 %$29,425,251 66.6 %$24,167,582 62.9 %$23,794,467 63.6 %
Core transaction deposits(4)
$34,804,575 73.5 %$32,754,609 70.2 %$24,790,621 62.2 %
Time deposits greater than $100,000, including brokered and public fundsTime deposits greater than $100,000, including brokered and public funds$5,478,221 12.3 %$6,875,462 15.6 %$7,262,833 18.9 %$7,574,038 20.2 %Time deposits greater than $100,000, including brokered and public funds$4,105,424 8.7 %$4,748,029 10.2 %$7,176,468 18.0 %
Brokered time depositsBrokered time deposits$1,996,133 4.5 %$2,442,940 5.5 %$2,154,095 5.6 %$2,098,643 5.6 %Brokered time deposits$1,281,027 2.7 %$1,590,096 3.4 %$2,229,596 5.6 %
(1)    Deposits balance in each category expressed as percentage of total deposits.
(2)    Excluding any public funds or brokered deposits.
(3)    Core deposits exclude brokered deposits.
(4)    Core transaction deposits consist of non-interest-bearing demand deposits, interest-bearing demand deposits, money market accounts, and savings deposits excluding public funds and brokered deposits.
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Total period-end deposits at September 30, 2020March 31, 2021 increased $471.3$677.4 million, or 1%, compared to June 30, 2020, andDecember 31, 2020. Core transaction deposits increased $6.26$2.05 billion, or 16%6%, compared to December 31, 2019. Core transaction deposits increased $1.56 billion, or 5%, sequentially, and increased $6.82 billion, or 28%, compared to December 31, 2019. The significant increase in deposit balances compared to December 31, 2019 is2020, due largely to the current uncertain economic environment as well as government stimulus programs including deposits associated with the second phase of PPP loans. The sequential quarter growth in lower cost core transaction accounts of $1.56$2.05 billion included growth in non-interest-bearing demand deposits of $299.1 million,$1.36 billion, money market accounts of $984.1$402.5 million, NOW accounts of $233.9$167.3 million, and savings balances of $45.9$120.8 million, and more than offset strategic declinesdecreases of $1.16 billion$391.2 million and $381.0$375.7 million in time deposits and brokered deposits, respectively.respectively, as well as declines of $605.7 million in public funds. Total deposit costcosts declined 146 bps during the thirdfirst quarter of 2020,2021, compared to the secondfourth quarter of 2020, due to pricing diligencerepricing and product remixing.remixing within the deposit portfolio.
On an average basis, the increase in total deposits was $1.24 billion,$480.9 million, or 3%1%, compared to the secondfourth quarter of 2020.
Non-interest Revenue
Non-interest revenue for the thirdfirst quarter of 20202021 was $114.4$111.0 million, up $25.7$7.1 million, or 29%, and year-to-date was $391.8 million, up $133.8 million, or 52%7%, compared to the same periodsperiod in 20192020. Adjusted non-interest revenue, which excludes net investment securities gains/(losses) and gain on sale/increase/(decrease) in fair value increase/(decrease) of private equity investments, for the thirdfirst quarter of 20202021 was $115.7$112.9 million, up $24.4$13.6 million, or 27%14%, from the thirdfirst quarter of 2019, and on a year-to-date basis was $310.4 million compared to $259.9 million for the first nine months of 2019, up $50.5 million, or 19%2020. The increase in adjusted non-interest revenue was due primarily to strong growth inNet mortgage banking income with recordof $22.3 million remained strong and drove the year-over-year increase in non-interest revenue. While first quarter 2021 mortgage production driven bylevels remained elevated, the current rate environment. In the fourth quarter, we expectrecent increase in interest rates is likely to see declines in mortgage revenue, as compared to the third quarter of 2020.reduce production levels going forward. See "Table 14 - Reconciliation of Non-GAAP Financial Measures” in this Report for applicable reconciliation to GAAP measures.
53

The following table shows the principal components of non-interest revenue.
Table 5 - Non-interest revenue
Table 5 - Non-interest RevenueTable 5 - Non-interest Revenue
Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended March 31,
(dollars in thousands)(dollars in thousands)20202019% Change20202019% Change(dollars in thousands)20212020% Change
Service charges on deposit accountsService charges on deposit accounts$17,813 $22,952 (22)%$54,069 $65,805 (18)%Service charges on deposit accounts$20,033 $20,689 (3)%
Fiduciary and asset management feesFiduciary and asset management fees15,885 14,686 8 46,009 42,743 8 Fiduciary and asset management fees17,954 15,174 18 
Card feesCard fees10,823 12,297 (12)30,959 34,334 (10)Card fees11,996 10,950 10 
Brokerage revenueBrokerage revenue10,604 11,071 (4)32,987 30,502 8 Brokerage revenue12,974 12,398 5 
Mortgage banking incomeMortgage banking income31,229 10,351 202 66,987 23,313 187 Mortgage banking income22,315 12,227 83 
Capital markets incomeCapital markets income5,690 7,396 (23)22,984 21,557 7 Capital markets income7,505 11,243 (33)
Income from bank-owned life insuranceIncome from bank-owned life insurance7,778 5,139 51 21,572 15,605 38 Income from bank-owned life insurance8,843 6,038 47 
Investment securities (losses) gains, netInvestment securities (losses) gains, net(1,550)(3,731)nm76,594 (5,502)nmInvestment securities (losses) gains, net(1,990)8,734 nm
Gain on sale and increase in fair value of private equity investments260 1,194 nm4,712 3,507 nm
Decrease in fair value of private equity investmentsDecrease in fair value of private equity investments— (4,255)nm
Other non-interest revenueOther non-interest revenue15,879 7,405 114 34,879 26,081 34 Other non-interest revenue11,326 10,659 6 
Total non-interest revenueTotal non-interest revenue$114,411 $88,760 29 %$391,752 $257,945 52 %Total non-interest revenue$110,956 $103,857 7 %
Three and Nine Months Ended September 30, 2020March 31, 2021 compared to September 30, 2019March 31, 2020
Service charges on deposit accounts for the three and nine months ended September 30, 2020March 31, 2021 were down $5.1 million,$656 thousand, or 22%3%, and $11.7 million, or 18%, respectively, due primarilylargely to the impact of COVID-19, including fewer transactions and the impact of higher average balances due toas a result of stimulus funds. Service charges on deposit accounts consist of NSF fees, account analysis fees, and all other service charges. NSF fees were dowdon $4.4wn $3.0 million, or 43%, and $9.3 million, or 33%34%, for the three and nine months ended September 30, 2020, respectively.March 31, 2021. Account analysis fees were up $168 thousand,$2.2 million, or 2%, and down $283 thousand, or 1%32%, for the three and nine months ended September 30, 2020, respectively.March 31, 2021, following our pricing for value initiative implemented during the first quarter of 2021 as part of Synovus Forward. All other service charges on deposit accounts, which consist primarily of monthly fees on retail demand deposits, saving accounts, and small business accounts, for the three and nine months ended September 30, 2020,March 31, 2021, were down $882up $132 thousand, or 16%, and $2.2 million, or 14%, respectively.3%.
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. Fiduciary and asset management fees increased $1.2$2.8 million, or 8%, and $3.3 million, or 8%18%, for the three and nine months ended September 30, 2020, respectivelMarch 31, 2021y.. The increases were driven by growth in total assets under management which increased by 8%35% year-over-year to $17.54$20.59 billion.
Card fees for the three and nine months ended September 30, 2020March 31, 2021 were down $1.5 million, or 12%, and $3.4up $1.0 million, or 10%, respectively, due to lowerwith increased transaction volume as a result of the impact of COVID-19.in all card fee categories. 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 customer loyalty program expenses and network expenses.
Brokerage revenue of $10.6$13.0 million for the three months ended September 30, 2020March 31, 2021 was down $466up $576 thousand, or 4%, and for the nine months ended September 30, 2020 was $33.0 million, up $2.5 million, or 8%5%. The year-over-year growthincrease was driven by growth in assets under management increasing contributions from 2019 new hires, and higher transaction revenue from elevated driven by favorable
41


market volatility.conditions. Brokerage revenue consists primarily of brokerage commissions as well as advisory fees earned from the management of customer assets.
Mortgage banking income was significantly higher in the first ninethree months of 2020,2021, with increasesan increase of $20.9$10.1 million and $43.7 million forcompared to the three and nine months ended September 30, 2020, respectively.March 31, 2020. Mortgage banking income was driven by higher production and sales, including an increase in refinance volume, due primarily to a decline in long-term interest rates.volume. Total secondary market mortgage loan production was $653.9$573.1 million, up $371.3 million, and $1.54 billion, up $916.9$318.6 million, for the three and nine months ended September 30, 2020, respectively.March 31, 2021. While first quarter 2021 mortgage production levels remained elevated, the recent increase in interest rates is likely to reduce production levels going forward.
Capital markets income primarily includes fee income from customer derivative transactions. Additionally, capital markets income includes fee income from capital raising investment banking transactions and foreign exchange as well as other miscellaneous income from capital market transactions. While capitalCapital markets income was $1.7$3.7 million lower for the three months ended September 30, 2020March 31, 2021, capital markets income for the first nine months of 2020 was up $1.4 million, as commercial clients lockedclient activity to lock in lower rates on borrowings latewas elevated in the first quarter.2020.
Income from BOLI, which includes increases in the cash surrender value of policies and proceeds from insurance benefits, increased $2.6$2.8 million, or 51%, and $6.0 million, or 38%47%, for the three and nine months ended September 30, 2020,
54

respectively,March 31, 2021, due primarily to additional investments in BOLI policies during the first quarter of 2020.income on proceeds from insurance benefits. The first ninethree months of 20202021 included income on proceeds from insurance benefits of $1.3$2.1 million compared to $233$118 thousand in 2019.2020.
Investment securities gains (losses),losses, net, of $(1.6) million and $76.6$2.0 million for the three and nine months ended September 30, 2020, respectively,March 31, 2021 reflected strategic repositioningsales of the portfolio primarily during the latter part of the second quarter of 2020. The transactions were primarily focused on agency mortgage-backed securities, but also included the disposition of Synovus' remaining $155.0 million in asset-backed securities.
Gain on sale and increase/(decrease) in fair value of private equity investments included realized gains during the second quarter of 2020 from the sale of positions in two publicly traded equity investments, offset partially by write-downs on two smaller remaining investments.
The main components of other non-interest revenue are fees for letters of credit and unused lines of credit, safe deposit box fees, access fees for ATM use, other service charges and loan servicing fees, income from insurance commissions, gains from sales of GGL/SBA loans, and other miscellaneous items. Insurance commission revenue forThe three months ended March 31, 2021 included unrealized valuation gains of $3.5 million associated with deferred compensation and the three and nine months ended September 30, 2020 was up $1.6 million and $1.7 million, respectively. The third quarter of 2020 included a $2.8 million favorable valuation adjustment for tax credit investments and a gain of $2.5 million from the sale of non-relationship mortgage loans. Additionally, the first quarter ofMarch 31, 2020 included a sale-leaseback gain of $2.4 million associated with a bank office property while the second quarter of 2020 included an unfavorable valuation adjustment of $1.6 million for tax credit investments.million.
Non-interest Expense
Non-interest expense for the thirdfirst quarter of 20202021 was $316.7$267.1 million up $40.3, down $9.1 million, or 15%3%, compared to the thirdfirst quarter of 20192020 and adjusted non-interest expense of $268.7$266.6 million was up $10.3down $4.6 million, or 4%2%. On a year-to-date basis, non-interest expense was up $44.2 million, or 5%, and adjusted non-interest expense was up $58.5 million, or 8%. During the three months ended September 30, 2020, Synovus recognized a $44.9 million non-cash goodwill impairment charge representing the goodwill allocated to the Consumer Mortgage reporting unit. The increase in adjusted expense during the first nine months of 2020 was largely driven by mortgage production commissions, expense associated with Synovus' internal revenue growth and efficiency initiatives, COVID-19 related expenses, and investments in talent and technology. The efficiency ratio-FTE for the first nine months of 2020 was 57.66%, compared to 57.17% for the first nine months of 2019. The adjusted tangible efficiency ratio for the first ninethree months of 20202021 was 56.14%54.19%, up 478down 253 bps compared to the same period a year ago. Excluding expenses associated with Synovus Forward initiatives, we expect adjusted non-interestWe remain committed to prudent expense management, enabling us to continue investing in the fourth quarter to be in-line with adjusted non-interest expense in the third quarter of 2020.areas that position us for greater success, deliver a superior customer experience, and promote profitable growth. See "Table 14 - Reconciliation of Non-GAAP Financial Measures” in this Report for applicable reconciliation to GAAP measures.
The following table summarizes the components of non-interest expense.
Table 6 - Non-interest Expense
Three Months Ended September 30,Nine Months Ended September 30,
(dollars in thousands)20202019% Change20202019% Change
Salaries and other personnel expense$154,994 $142,516 9 %$464,268 $424,952 9 %
Net occupancy, equipment, and software expense41,554 41,017 1 125,475 119,262 5 
Third-party processing and other services20,620 18,528 11 63,466 55,403 15 
Professional fees13,377 9,719 38 39,358 25,379 55 
FDIC insurance and other regulatory fees6,793 7,242 (6)18,922 21,872 (14)
Amortization of intangibles2,640 2,901 (9)7,920 8,702 (9)
Goodwill impairment44,877 — nm44,877 — nm
Earnout liability adjustments— 10,457 nm4,908 10,457 nm
Merger-related expense— 353 nm— 57,493 nm
Restructuring charges2,882 (66)nm8,924 (29)nm
Loss on early extinguishment of debt154 4,592 nm2,057 4,592 nm
Valuation adjustment to Visa derivative— 2,500 nm— 2,500 nm
Other operating expenses28,764 36,551 (21)96,901 102,264 (5)
Total non-interest expense$316,655 $276,310 15 %$877,076 $832,847 5 %


55

Table 6 - Non-interest Expense
Three Months Ended March 31,
(dollars in thousands)20212020% Change
Salaries and other personnel expense$161,477 $149,678 8 %
Net occupancy, equipment, and software expense41,134 42,194 (3)
Third-party processing and other services20,032 22,700 (12)
Professional fees9,084 10,675 (15)
FDIC insurance and other regulatory fees5,579 5,278 6 
Amortization of intangibles2,379 2,640 (10)
Restructuring charges531 3,220 nm
Loss on early extinguishment of debt— 1,904 nm
Other operating expenses26,918 37,990 (29)
Total non-interest expense$267,134 $276,279 (3)%
Three and Nine Months Ended September 30, 2020March 31, 2021 compared to September 30, 2019March 31, 2020
Salaries and other personnel expense increased $12.5$11.8 million, or 9%, and $39.3 million, or 9%8%, for the three and nine months ended September 30, 2020, respectively,March 31, 2021, due primarily to higher mortgage production-based commissions COVID-19 related bonus paymentswith commission expense up $2.3 million, higher share-based compensation expense of $4.1 million largely due to certain front-line employees,timing with higher level of retirement eligible expense acceleration, and investmentsvaluation expense of $3.5 million associated with deferred compensation from higher market valuations (offset with unrealized valuation gains in talent.other non-interest revenue). Total headcount of 5,3475,175 declined 8172 from June 30,December 31, 2020 and 57253 from September 30, 2019.
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March 31, 2020 led by Synovus' voluntary early retirement program offered during the fourth quarter of 2020 and branch closures.
Net occupancy, equipment, and software expense increased $537 thousand, or 1%, and $6.2decreased $1.1 million, or 5%3%, during the three and nine months ended September 30, 2020, respectively,March 31, 2021, due primarily due to investments in technology as well as increases in net rent expense. Synovus expects net rent expense to decline during the fourth quartera reduction of 2020,10 branches, as compared to expense during the third quarter of 2020, as Synovus optimizes its physical space with branch and corporate real estate closures.December 31, 2019.
Third-party processing and other services includes all third-party core operating system and processing charges as well as third-party loan servicing charges. Third-party processing expense increased $2.1decreased $2.7 million, or 11%, and $8.1 million, or 15%12%, for the three and nine months ended September 30, 2020, respectively.March 31, 2021. The increasedecline is primarily associated with loan growth from Synovus' consumer-based lending partnerships. However, during the second quarterrestructure of 2020, Synovus restructured certain of its third-party consumer-based lending partnership arrangements during the second quarter of 2020 with a shift of new originations to held for sale and thereby reducing future third-party loan servicing expense.
Professional fees increased $3.7decreased $1.6 million, or 38%, and $14.0 million, or 55%15%, for the three and nine months ended September 30, 2020, respectively,March 31, 2021, from increasesdecreases in consulting fees related to Synovus' internalSynovus Forward, our revenue growth and efficiency initiative, "Synovus Forward".initiatives.
FDIC insurance and other regulatory fees were down $449 thousand and $3.0 million for the three and nine months ended September 30,March 31, 2020 respectively, due primarily to strategic balance sheet management actions, aimed at reducing FDIC expense.included the benefit of a $1.5 million reversal of estimated additional expense accrued during the fourth quarter of 2019.
During the three months ended September 30, 2020, Synovus recognized a $44.9 million non-cash goodwill impairment charge representing the goodwill allocated to the Consumer Mortgage reporting unit resulting from a combination of 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.
Earnout liability fair value adjustments associated with the Global One acquisition are the result of higher than projected earnings and higher earnings estimates over the remaining contractual earnout period, reflecting the continued success of the Global One enterprise. The earnout period ends on June 30, 2021.
In connection with the FCB acquisition, Synovus incurred merger-related expense totaling $353 thousand and $57.5 million for the three and nine months ended September 30, 2019, respectively, primarily related to employment compensation agreements, severance, and professional services. See "Part I - Item 1. Financial Statements and Supplementary Data - Note 2 - Acquisitions" in this Report for more information on the acquisition of FCB.
During the three and nine months ended September 30, 2020,March 31, 2021, Synovus recorded $2.9 million and $8.9 million, respectively,$531 thousand in restructuring charges primarily related toassociated with two branch closures and restructuring of corporate real estatethat will occur in April 2021 as part of Synovus Forward. During the Synovus Forward initiative. Synovus Bank operated 292 branches at September 30, 2020 and at November 2,three months ended March 31, 2020, Synovus Bank operated 288recorded restructuring charges of $3.2 million from asset impairments, lease terminations, and severance related to seven branches compared to 298 branches at December 31, 2019, followingclosed in the closingfirst quarter of 12 branches and opening of two new branches during 2020. See "Part I - Item 1. Financial Statements and Supplementary Data - Note 12 - Subsequent Events", regarding Synovus' voluntary early retirement program and associated one-time termination benefit restructuring charge of approximately $14 million recorded in October, 2020.
On February 25, 2020, Synovus terminated a $250.0 million long-term FHLB obligation and incurred a $1.9 million loss on early extinguishment of debt and on September 15, 2020, Synovus terminated a $500 million long-term FHLB obligation and incurred a $154 thousand loss on early extinguishment of debt.
Other operating expenses includes advertising, travel, insurance, network and communication, other taxes, subscriptions and dues, other loan and ORE expense, postage and freight, training, business development, supplies, donations, and other miscellaneous expenses. Other operating expenses were down $7.8 million and $5.4$11.1 million for the three and nine months ended September 30, 2020, respectively. AdvertisingMarch 31, 2021 driven by declines in most all expense was down $3.3categories including declines of $3.0 million in advertising and $6.7$1.3 million for the three and nine months ended September 30, 2020, respectively, and travel expense was down $1.8 million and $4.8 million for the three and nine months ended September 30, 2020, respectively. Other operating expenses for the nine months ended September 30, 2020 includes a $2.7 million valuation adjustment on a MPS receivable, a $2.5 million charge from termination of customer swaps, and a $1.0 million donation to the United Negro College Fund.in travel.
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Income Tax Expense
Income tax expense was $39.8$49.2 million for the three months ended September 30, 2020,March 31, 2021, representing an effective tax rate of 30.3%20.8%, compared to income tax expense of $51.3$3.6 million for the three months ended September 30, 2019,March 31, 2020, representing an effective tax rate of 278.5.4%%. The increase in the effective tax rate for the three months ended September 30, 2020, as comparedMarch 31, 2021 is lower than the statutory tax rate primarily due to the three months ended September 30, 2019, is primarilydiscrete benefits of $6.2 million related to a non-deductible goodwill impairment charge of $44.9changes in amounts taxable by jurisdictions and $1.8 million recorded during the third quarter of 2020.
Income tax expense was $74.3 million for the nine months ended September 30, 2020, representing an effective tax rate of 25.0%, comparedrelated to income taxshare-based compensation, partly offset by discrete expense of $146.3$4.1 million for the nine months ended September 30, 2019, representing an effective tax rate of 26.2%.related to other accrual adjustments. The effective tax rate for the ninethree months ended September 30,March 31, 2020 includeswas lower than the impactstatutory tax rate primarily due to a one-time discrete benefit of the non-deductible goodwill impairment charge recognized during the third quarter of 2020, partly offset by discrete tax benefits including a $2.7 million benefit for carrying backthe carryback of net operating loss deductions to pre-TJCA tax periods, as allowedpermitted by the CARES Act, a $1.4and $3.4 million benefit for a state tax rate change, and $2.3 million inof other net discrete benefit items, including discrete items related to prior periods. The effective tax rate in the first nine months of 2019 was higher largely due to nondeductible merger-related expenses associated with the FCB acquisition.items.
Synovus’ effective tax rate considers many factors including, but not limited to, the level of pre-tax income, BOLI, tax-exempt interest, certain income tax credits, and nondeductible expenses. In addition, the effective tax rate is affected by items that may occur in any given period but are not consistent from period-to-period, such as tax benefits related to share-based compensation, jurisdiction statutory tax rate changes, valuation allowance changes, and changes to unrecognized tax benefits. Accordingly, the comparability of the effective tax rate between periods may be impacted.
WithOn March 31, 2021, the exceptionBiden Administration released the details of the net operating loss carryback deductionsMade in America Tax Plan which proposes an increase in the federal corporate income tax rate to 28%, up from the current 21%, among numerous other proposals. We continue to monitor the legislative process and certain state concessions, we do not expect the provisions of the CARES Act to have a significantpotential impact on the Company’s current tax provision. With regard to the CARES Act payroll tax deferrals, Synovus estimates the payment of approximately $16.6 million of employer payroll taxes otherwise due in 2020 will be delayed, with 50% due by December 31, 2021Company and the remaining 50% by December 31, 2022.its customers.
CREDIT QUALITY, CAPITAL RESOURCES AND LIQUIDITY
Credit Quality
Synovus continuously monitors the quality of its loan portfolio by industry, property type, geography, as well as credit quality metrics. CreditAt March 31, 2021, credit metrics deteriorated slightly during the third quarter of 2020remained stable with slight increases in NPAs, NPLs, and past dues from June 30, 2020; however, these increases were primarily isolatedall near historical lows, and net charge-offs remained low and declined $1.9 million on a sequential quarter basis to specific credits,$20.2 million, or 21 basis points. Given elevated levels of liquidity and we have not experienced widespread deteriorationcontinued economic recovery, particularly in the portfolio.
During the three months ended September 30, 2020, loan downgrades to Special Mention and Substandard totaled $731.0 million and $137.5 million, respectively, primarily due to downgrades of $600.0 millionSoutheast, we are not currently expecting a significant change in net charge-offs in the hotel portfolio, one of the hardest hit industries. Synovus' hotel loan portfolio totaled $1.41 billion at September 30, 2020 compared to $1.36 billion at June 30, 2020.near term.
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Synovus does expect some pressure on credit metrics over the next few quarters, which aligns with the reserve builds to-date during 2020 under CECL. We are continuously working with our customers to evaluate how the current economic conditions are impacting, and will continue to impact, their business operations.
The table below includes selected credit quality metrics.
Table 7 - Credit Quality Metrics
(dollars in thousands)September 30, 2020December 31, 2019September 30, 2019
Non-performing loans$168,837 $101,636 $115,915 
ORE and other assets23,280 35,810 35,400 
Non-performing assets$192,117 $137,446 $151,315 
 Total loans$39,549,847 $37,162,450 $36,417,826 
 Non-performing loans as a % of total loans0.43 %0.27 %0.32 %
Non-performing assets as a % of total loans, ORE, and specific other assets0.49 0.37 0.42 
Loans 90 days past due and still accruing$7,512 $15,943 $15,660 
As a % of total loans0.02 %0.04 %0.04 %
Total past due loans and still accruing$57,316 $123,793 $88,219 
As a % of total loans0.14 %0.33 %0.24 %
Net charge-offs, quarter$28,466 $8,821 $19,925 
Net charge-offs/average loans, quarter0.29 %0.10 %0.22 %
Net charge-offs, year-to-date$72,573 $57,612 $48,792 
Net charge-offs/average loans, year-to-date0.25 %0.16 %0.18 %
Provision for loan losses, quarter$43,618 $24,470 $27,562 
Provision for unfunded commitments, quarter(235)**
Provision for credit losses, quarter$43,383 $24,470 $27,562 
Provision for loan losses, year-to-date311,977 87,720 63,250 
Provision for unfunded commitments, year-to-date31,979 **
Provision for credit losses, year-to-date343,956 87,720 63,250 
Allowance for loan losses603,800 281,402 265,013 
Reserve for unfunded commitments60,794 1,375 1,496 
Allowance for credit losses$664,594 $282,777 $266,509 
ACL to loans coverage ratio1.68 %0.76 %0.73 %
ALL to loans coverage ratio1.53 0.76 0.73 
ACL/NPLs393.63 278.23 229.92 
ALL/NPLs357.62 276.87 228.63 
*    Prior to CECL implementation on January 1, 2020, the provision for unfunded commitments was reflected within other non-interest expense.
Table 7 - Credit Quality Metrics
(dollars in thousands)March 31, 2021December 31, 2020March 31, 2020
Non-performing loans$155,169 $151,079 $156,287 
Impaired loans held for sale23,590 23,590 — 
ORE and other assets16,849 17,394 33,679 
Non-performing assets$195,608 $192,063 $189,966 
Total loans$38,805,101 $38,252,984 $38,258,024 
Non-performing loans as a % of total loans0.40 %0.39 %0.41 %
Non-performing assets as a % of total loans, ORE, and specific other assets0.50 0.50 0.50 
Loans 90 days past due and still accruing$3,804 $4,117 $6,398 
As a % of total loans0.01 %0.01 %0.02 %
Total past due loans and still accruing$45,693 $47,349 $83,235 
As a % of total loans0.12 %0.12 %0.22 %
Net charge-offs, quarter$20,204 $22,139 $20,061 
Net charge-offs/average loans, quarter0.21 %0.23 %0.21 %
(Reversal of) provision for loan losses, quarter$(22,318)$24,075 $149,117 
Provision for (reversal of) unfunded commitments, quarter3,743 (13,009)9,605 
(Reversal of) provision for credit losses, quarter$(18,575)$11,066 $158,722 
Allowance for loan losses$563,214 $605,736 $493,452 
Reserve for unfunded commitments51,528 47,785 38,420 
Allowance for credit losses$614,742 $653,521 $531,872 
ACL to loans coverage ratio1.58 %1.71 %1.39 %
ALL to loans coverage ratio1.45 1.58 1.29 
ACL/NPLs396.18 432.57 340.32 
ALL/NPLs362.97 400.94 315.74 
Non-performing Assets
Total NPAs as a percentage of total loans, ORE, and specific other assets were 0.49%0.50% at September 30, 2020 compared to 0.37% atMarch 31, 2021, unchanged from both December 31, 20192020 and 0.42% at September 30, 2019.March 31, 2020. Total NPAs were $192.1$195.6 million at September 30, 2020March 31, 2021 compared to $137.4$192.1 million at December 31, 20192020 and $151.3$190.0 million at September 30, 2019.March 31, 2020.
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. The increase in NPLscriticized and NPAsclassified loans at March 31, 2021 compared to December 31, 20192020 was mostly isolatedprimarily hospitality-related with increases in special mention and substandard accruing loans in the hotel and full-service restaurant industry as a result of COVID-19. We expect the levels of criticized and classified loans to a few larger commercial relationships being designateddecline as non-performing.borrowers' reported financial statements begin to reflect the current monthly improvement we are seeing in borrowers' cash flows.

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Table 8 - Criticized and Classified Loans
(dollars in thousands)March 31, 2021December 31, 2020
Special mention loans$1,107,272 $977,028 
Substandard loans685,474 553,720 
Doubtful loans34,430 33,204 
Loss loans2,664 3,032 
Criticized and Classified loans$1,829,840 $1,566,984 
As a % of total loans4.7 %4.1 %
Provision for Credit Losses and Allowance for Credit Losses
Provision for credit losses (which includes the provisionprovisions for loan losses and unfunded commitments)commitments. The reversal of $43.4provision for credit losses of $18.6 million for the three months ended September 30, 2020March 31, 2021 included net charge-offs of $28.5$20.2 million and resulted from the impact of downgrades largely concentrated in the hotelimproved economic outlook and stable loan portfolio whichmetrics that were mostlypartially offset by improvement in the economic forecast which included adjustments for the estimated impact of currently enacted government stimulus plans, as well as reserve releases from loan dispositions. Provision for credit losses of $344.0 million for the nine months ended September 30, 2020, resulted in the buildingincreased size of the ACL required under CECL primarilyloan portfolio including $15.2 million in reserves added as a result of uncertainty and deterioration in the economic environment due to the impactpurchases of COVID-19. The amount$607.0 million of provision for credit losses going forward will continue to fluctuate based onthird-party lending loans, including a number of factors including economic outlook, loan growth, loan mix, risk grade migration, as well as the timing and impact of any future government stimulus plans. $476.2 million prime auto purchase.The ACL at September 30, 2020March 31, 2021 totaled $664.6$614.7 million consisting of an ALL of $603.8$563.2 million and reserve for unfunded commitments of $60.8$51.5 million, resulting in an ACL to loans coverage ratio of 1.68%1.58% and an ACL to NPLs ratio of 394%396%. Excluding PPP loans, the ACL to loans coverage ratio was 1.80%1.69%. The ACL at March 31, 2021 incorporates an outlook with moderate economic expansion and benefits from the estimated impact of government stimulus.
Table 8 - Accruing TDRs by Risk Grade
Table 9 - Accruing TDRs by Risk GradeTable 9 - Accruing TDRs by Risk Grade
September 30, 2020December 31, 2019September 30, 2019March 31, 2021December 31, 2020March 31, 2020
(dollars in thousands)(dollars in thousands)Amount%Amount%Amount%(dollars in thousands)Amount%Amount%Amount%
PassPass$69,433 42.5 %$70,574 53.0 %$65,171 50.1 %Pass$63,809 49.2 %$72,463 53.7 %$75,073 46.9 %
Special mentionSpecial mention13,303 8.1 11,735 8.8 14,053 10.8 Special mention8,560 6.6 8,935 6.6 10,925 6.8 
Substandard accruingSubstandard accruing80,775 49.4 50,836 38.2 50,795 39.1 Substandard accruing57,407 44.2 53,574 39.7 74,130 46.3 
Total accruing TDRsTotal accruing TDRs$163,511 100.0 %$133,145 100.0 %$130,019 100.0 %Total accruing TDRs$129,776 100.0 %$134,972 100.0 %$160,128 100.0 %
Troubled Debt Restructurings
Accruing TDRs were $163.5$129.8 million at September 30, 2020,March 31, 2021, compared to $133.1$135.0 million at December 31, 20192020 and $130.0$160.1 million at September 30, 2019.March 31, 2020. Accruing TDRs increased $30.4decreased $5.2 million from December 31, 20192020 and $33.5$30.4 million from September 30, 2019. The primary driver of the increase in accruing TDRs compared to DecemberMarch 31, 2019 is a result of a large relationship being designated as an accruing TDR in the first quarter of 2020 due to interest rate and term concessions.2020. Non-accruing TDRs were $4.6$36.1 million at September 30, 2020,March 31, 2021, compared to $17.1$39.0 million at December 31, 20192020 and $13.6$12.8 million at September 30, 2019.March 31, 2020.
Accruing TDRs are considered performing because they are performing in accordance with the restructured terms. At September 30, 2020,March 31, 2021, December 31, 2019,2020, and September 30, 2019,March 31, 2020, approximately 99%,, 99%, and 98%, respectively, of accruing TDRs were current. In addition, subsequent defaults on accruing TDRs (defaults defined as the earlier of the TDR being placed on non-accrual status or reaching 90 days past due with respect to principal and/or interest payments within twelve months of the TDR designation) have continued to remain at low levels.
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 ActAct. This allows banks to elect to not consider loan modifications related to COVID-19 that are made between March 1, 2020 and the earlier of December 31, 2020,January 1, 2022, or 60 days after the National Emergencynational 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 TDRsTDRs.
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.
Beginning in late MarchDuring 2020, Synovus provided reliefrelief programs consisting primarily of 90-day payment deferral relief to borrowers negatively impacted by COVID-19, and has primarily accounted for these loan modifications in accordance with ASC 310-40as of March 31, 2021, 0.2%. During the third quarter, upon evaluation of facts and circumstances, the CARES Act was elected for certain loan modifications that met the criteria of section 4013 of the CARES Act. The deferred payments along with interest accrued during the deferral period are generally due and payable on the maturity date of the existing loan. Based on the terms of the deferral relief program which did not provide for forgiveness of interest, Synovus has recognized interest income on loans during the deferral period. As of September 30, 2020, approximately 1% of the total loan portfolio was in a P&I deferral status down significantly from approximately 15%as compared to 0.3% of ourthe total loan portfolio that had been granted P&I deferral through our relief programs as of the filing of our first quarter 2020 10-Q.at December 31, 2020. In addition to our
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P&I deferment program, under the CARES Act, we have also provided borrowers who have been impacted during the current crisisby COVID-19 with other modifications such as interest only relief or amortization extensions on approximately 2% of total loans.loans, at both March 31, 2021 and December 31, 2020.
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 tounder Basel III. At September 30, 2020,March 31, 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 9 - Capital Ratios
Table 10 - Capital RatiosTable 10 - Capital Ratios
(dollars in thousands)(dollars in thousands)September 30, 2020December 31, 2019(dollars in thousands)March 31, 2021December 31, 2020
CET1 capitalCET1 capitalCET1 capital
Synovus Financial Corp.Synovus Financial Corp.$3,913,402 $3,743,459 Synovus Financial Corp.$4,184,715 $4,034,865 
Synovus BankSynovus Bank4,674,063 4,640,501 Synovus Bank4,746,560 4,641,711 
Tier 1 risk-based capitalTier 1 risk-based capitalTier 1 risk-based capital
Synovus Financial Corp.Synovus Financial Corp.4,450,547 4,280,604 Synovus Financial Corp.4,721,860 4,572,010 
Synovus BankSynovus Bank4,674,063 4,640,501 Synovus Bank4,746,560 4,641,711 
Total risk-based capitalTotal risk-based capitalTotal risk-based capital
Synovus Financial Corp.Synovus Financial Corp.5,536,918 5,123,381 Synovus Financial Corp.5,733,956 5,604,230 
Synovus BankSynovus Bank5,201,409 4,923,279 Synovus Bank5,446,080 5,361,611 
CET1 capital ratioCET1 capital ratioCET1 capital ratio
Synovus Financial Corp.Synovus Financial Corp.9.30 %8.95 %Synovus Financial Corp.9.74 %9.66 %
Synovus BankSynovus Bank11.08 11.10 Synovus Bank11.06 11.11 
Tier 1 risk-based capital ratioTier 1 risk-based capital ratioTier 1 risk-based capital ratio
Synovus Financial Corp.Synovus Financial Corp.10.57 10.23 Synovus Financial Corp.10.99 10.95 
Synovus BankSynovus Bank11.08 11.10 Synovus Bank11.06 11.11 
Total risk-based capital to risk-weighted assets ratioTotal risk-based capital to risk-weighted assets ratioTotal risk-based capital to risk-weighted assets ratio
Synovus Financial Corp.Synovus Financial Corp.13.16 12.25 Synovus Financial Corp.13.34 13.42 
Synovus BankSynovus Bank12.33 11.78 Synovus Bank12.69 12.83 
Leverage ratioLeverage ratioLeverage ratio
Synovus Financial Corp.Synovus Financial Corp.8.48 9.16 Synovus Financial Corp.8.80 8.50 
Synovus BankSynovus Bank8.91 9.94 Synovus Bank8.85 8.73 
Tangible common equity ratio(1)
Tangible common equity ratio(1)
Tangible common equity ratio(1)
Synovus Financial Corp.Synovus Financial Corp.7.67 8.08 Synovus Financial Corp.7.55 7.66 
(1)     See "Table 14 - Reconciliation of Non-GAAP Financial Measures” in this Report for the applicable reconciliation to the most comparable GAAP measure.
At September 30, 2020,March 31, 2021, Synovus' CET1 ratio increased to 9.30%9.74%, well in excess of regulatory requirements including the capital conservation buffer of 2.5%2.5%. The September 30, 2020March 31, 2021 CET1 ratio improved 40 bps compared to June 30, 2020 and 358 bps compared to December 31, 2019 from a combination of earnings and balance sheet activities. These balance sheet activities included the settlement of our second quarter bond repositioning and our on-going efforts to manage non-relationship loan portfolios as we prioritize our balance sheet for core, client relationships. We remain focused on supporting our overall capital position and are targeting the higher end of our CET1 operating range of 9.0% to 9.5%, given the heightened uncertainty in the current economic environment.2020 driven by earnings. For additional information on regulatory capital requirements, see "Part II - Item 8. Financial Statements and Supplementary Data - Note 1112 - Regulatory Capital" to the consolidated financial statements of Synovus' 20192020 Form 10-K. Management reviews the Company's capital position on an on-going basis and believes, based on internal capital analyses and earnings projections, that Synovus is well positioned to meet relevant regulatory capital standards.
As a resultSynovus announced on January 26, 2021 that its Board of Directors authorized share repurchases of up to $200 million in 2021. During the greater economic uncertainty associated withfirst quarter of 2021, the current pandemic,Company did not complete any share repurchases. During the second quarter of 2021, Synovus suspended its share repurchase activity beyond the $16.2had repurchased $23.2 million, (450or 499 thousand shares)shares of its common stock, repurchased during the first quarter.at an average price of $46.52 per share, as of May 5, 2021.
On August 26, 2020, the federal banking regulators issued a final rule (following an interim final rule issued on March 27, 2020) that allowsallowed electing banking organizations that adopt CECL during 2020 to mitigate the estimated effects of CECL on
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regulatory capital for two years, followed by a three-year phase-in transition period. Synovus adopted CECL on January 1, 2020 and the September 30, 2020March 31, 2021 regulatory capital ratios reflect Synovus' election of the five-year transition provision. For
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additional information on Synovus' adoption of CECL, see "Part I - Item 1. Financial Statements and Supplementary Data - Note 1 - Basis of Presentation and Accounting Policies" in this Report.At March 31, 2021, $84 million, or a cumulative 20 basis points benefit to CET1, was deferred.
Dividends
Synovus has historically paid a quarterly cash dividend to the holders of its common stock. Management and the Board of Directors closely monitor current and projected capital levels, liquidity (including dividendsdividends from subsidiaries), financial markets and other economic trends, as well as regulatory requirements regarding the payment of dividends.As Synovus navigates through the current recession and regulatory guidelines, the approach to common stock dividends will be continually evaluated based on an assessment of long-term earnings, capital projections, and liquidity.
Synovus' ability to pay dividends on its common stock and preferred stock is primarily dependent upon dividends and distributions that it receives from its bank and non-banking subsidiaries,subsidiaries, which are restricted by various regulations administered by federal and state bank regulatory authorities.
Synovus declared common stock dividends of $145.8$49.1 million, or $0.99$0.33 per common share, for the ninethree months ended September 30, 2020, up from $138.9March 31, 2021, compared to $48.6 million, or $0.90$0.33 per common share, for the ninethree months ended September 30, 2019, respectively.March 31, 2020. In addition, Synovus declared dividends on its preferred stock of $24.9 million and $14.6$8.3 million during both the ninethree months ended September 30, 2020March 31, 2021 and 2019, respectively.2020.
Liquidity
Liquidity represents the extent to which Synovus has readily available sources of funding to meet the needs of depositors, borrowers and creditors, to support asset growth, and to otherwise sustain operations of Synovus and its subsidiaries, at a reasonable cost, on a timely basis, and without adverse consequences. ALCO monitors Synovus' economic, competitive, and regulatory environment and is responsible for measuring, monitoring, and reporting on liquidity and funding risk as well as market risk.
In accordance with Synovus policies and regulatory guidance, ALCO evaluates contractual and anticipated cash flows under normal and stressed conditions to properly manage the Company’s liquidity profile. Synovus places an emphasis on maintaining numerous sources of current and contingent liquidity to meet its obligations to depositors, borrowers, and creditors on a timely basis. Liquidity is generated through various sources, including, but not limited to, maturities and repayments of loans by customers, maturities and sales of investment securities, and growth in core or wholesale 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 other funding demands.
Synovus Bank also generates liquidity through the issuance of brokered certificates of deposit and money market accounts. Synovus Bank accesses these funds from a broad geographic base to diversify its sources of funding and liquidity. Synovus Bank also has the capacity to access funding through its membership in the FHLB system and through the Federal Reserve discount window. During the first quarter of 2020, Synovus increased its FHLB availability by over $2.0 billion through expanding pledged collateral. At September 30, 2020,March 31, 2021, based on currently pledged collateral, Synovus Bank had access to incremental FHLB funding of $4.57 $6.38 billion, subject to FHLB credit policies.
In addition to bank level liquidity management, Synovus must manage liquidity at the parent company level for various operating needs including the servicing of debt, the payment of dividends on our common stock and preferred stock, share repurchases, payment of general corporate expenses and potential capital infusions into subsidiaries. The primary source of liquidity for Synovus consists of dividends from Synovus Bank, which is governed by certain rules and regulations of the GA DBF and the Federal Reserve Bank. Synovus' ability to receive dividends from Synovus Bank in future periods will depend on a number of factors, including, without limitation, Synovus Bank's future profits, asset quality, liquidity, and overall condition. In addition, both the GA DBF and Federal Reserve Bank may require approval to pay dividends, based on certain regulatory statutes and limitations.
On February 12, 2020, Synovus Bank issued $400.0 million aggregate principal amount of 2.289% Fixed-to-Floating Rate Senior Bank Notes due 2023. From and including the original issue date to, but excluding, February 10, 2022, the Notes bear interest at a fixed rate of 2.289% per annum, payable semi-annually in arrears on each February 10 and August 10, beginning on August 10, 2020. Unless redeemed, from and including February 10, 2022 to but excluding the Maturity Date, the interest rate on the Notes is computed quarterly using an interest rate based on the SOFR with a daily index maturity plus a spread of 94.5 bps per annum, payable quarterly in arrears. Synovus Bank may redeem the Notes, at its option, on February 10, 2022 (which is the date that is one year prior to the Maturity Date) upon not less than 10 nor more than 60 days’ prior notice given to holders of the Notes. The redemption price for any redemption is 100% of the principal amount of the Notes, plus accrued and unpaid interest thereon to but excluding the date of redemption. The Notes are not redeemable at the option or election of holders.
61

On February 25, 2020, Synovus terminated a $250.0 million long-term FHLB obligation and incurred a $1.9 million loss on early extinguishment of debt and on September 15, 2020, Synovus terminated a $500 million long-term FHLB obligation and incurred a $154 thousand loss on early extinguishment of debt.
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 - the COVID-19 pandemic has resulted in significant market volatility and lower interest rates that could materially affect Synovus’ results of operations and access to capital" of this Report and "Part I – Item 1A. Risk Factors - Changes in the cost and availability of funding due to changes in the deposit market and credit market may adversely affect our capital resources, liquidity and financial results" of Synovus' 20192020 Form 10-K. Furthermore, Synovus may, from time to time, take advantage of attractive market opportunities to refinance its existing debt, redeem its preferred stock, or strengthen its liquidity or capital position.
47


Earning Assets and Sources of Funds
Average total assets for the ninethree months ended September 30, 2020March 31, 2021 increased $5.00$5.49 billion, or 11%, to $51.57$54.19 billion as compared to $46.57$48.70 billion for the first ninethree months of 2019.2020. Average earning assets increased $4.18$5.02 billion, or 10%11%, in the first ninethree months of 20202021 compared to the same period in 20192020 and represented 91.8%92.2% of average total assets at September 30, 2020,March 31, 2021, as compared to 92.7%92.3% at September 30, 2019.March 31, 2020. The increase in average earning assets primarily resulted from a $3.17$2.16 billion or 9%, increase in average loans, net, which included average PPP loans of $1.64 billion, as well as a $578.3 million increase in average interest-bearing funds held at the Federal Reserve Bank, and a $287.4$1.76 billion increase in average investment securities available for sale, an $821.3 million increase in loans held for sale.sale, and a $619.2 million, or 2%, increase in average total loans, net of unearned, which included average PPP loans of $2.24 billion.
Average interest-bearing liabilities increased $2.19 billion,$567.9 million, or 7%2%, to $34.11$34.08 billion for the first ninethree months of 20202021 compared to the same period in 2019.2020. The increase in average interest-bearing liabilities resulted from a $3.08$4.37 billion, or 28%34%, increase in average money market deposits (includes an increase of $863.7$573.9 million in average other brokered deposits), and a $879.2 million$2.12 billion, or 33%, increase in average interest-bearing demand deposits, and a $451.8 million increase in average long-term debt, including $400.0 million of senior notes issued in February 2020.deposits. These increases were partially offset by a $1.98$3.41 billion, or 19%38%, decrease in average time deposits (includes an increasea decrease of $230.2 million$747.7 million in brokered time deposits) a $1.48 billion decrease in average long-term debt, including redemption of $250.0 million in subordinated debt in the fourth quarter of 2020, and a $316.6 million$1.38 billion decrease in other short-term borrowings. Average non-interest-bearing demand deposits increased $2.13$4.38 billion, or 23%47%, to $11.37$13.79 billion for the first ninethree months of 20202021 compared to the same period in 2019,2020, due largely to liquidity associated with PPP lending.
Net interest income for the ninethree months ended September 30, 2020March 31, 2021 was $1.13 billion, down $69.7$373.9 million, or 6%,up $597 thousand compared to the same period in 2019. The decrease in year-over-year net interest income was due to declines of $62.52020 including $24.9 million in PAA (primarily comprisedPPP processing fees during the first quarter of declines of $27.0 million of loan accretion and $32.9 million of deposit premium amortization) associated with the FCB acquisition and declines in market interest rates, which were somewhat offset by higher average earning assets.2021. Net interest margin was down 5233 bps over the comparable nine-month periodsthree-month period to 3.20%3.04%, due primarily to the decline in market interest rates in addition to declines in PAA.and accelerated prepayment activity. For the ninethree months ended September 30, 2020,March 31, 2021, the yield on earning assets was 3.88%3.32%, a decrease of 91101 bps compared to the ninethree months ended September 30, 2019,March 31, 2020, while the effective cost of funds decreased 3968 bps to 0.68%0.28%. The yield on loans decreased 9660 bps to 4.20%4.02% while the yield on investment securities decreased 36169 bps to 2.72%1.40% over the ninethree months ended September 30, 2019.March 31, 2020.
On a sequential quarter basis, net interest income was up $424 thousanddown $12.1 million and net interest margin for the thirdfirst quarter was 3.10%3.04%, which was down 38 bps compared to the secondfourth quarter of 2020. The sequential quarter decline in net interest marginincome was primarily driven by the impactdue to a lower day count and a continuation of bond repositioning and student loan sales executed in the second quarter of 2020,low-rate pressure, partially offset by further declines in deposit pricing and favorable deposit remixing trends.continued deployment of excess liquidity. The thirdfirst quarter of 2021 included average PPP loan balances of $2.70$2.24 billion versus $2.21$2.55 billion in the secondfourth quarter of 2020 and $11.9$24.9 million in accretion ofrecognized for associated PPP processing fees versus $9.2$24.8 million in the second quarter.fourth quarter of 2020. For the thirdfirst quarter of 2020,2021, the yield on earning assets decreased 17 bps, while the effective cost of funds decreased 149 bps compared to the secondfourth quarter of 2020.
We continueAs we progress through the year, we expect to expect modest downward pressure on NIM as the repricing within our fixed-rate asset portfolios is partially offset by continued declinessee increases in overall deposit costs. Excluding the potential impacts from PPP forgiveness, we expect net interest income, excluding PPP fees, driven by loan growth, deployment of liquidity, a deceleration of prepayments, and net interest margin to decrease modestly in the fourth quarter of 2020 as compared to the third quarter of 2020.further deposit cost reductions.
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Quarterly yields earned on average interest-earning assets and rates paid on average interest-bearing liabilities for the five most recent quarters are presented below.
Table 10 - Average Balances and Yields/Rates20202019
Table 11 - Average Balances and Yields/RatesTable 11 - Average Balances and Yields/Rates20212020
(dollars in thousands) (yields and rates annualized)(dollars in thousands) (yields and rates annualized)Third QuarterSecond QuarterFirst QuarterFourth QuarterThird Quarter(dollars in thousands) (yields and rates annualized)First QuarterFourth QuarterThird QuarterSecond QuarterFirst Quarter
Interest Earning Assets:Interest Earning Assets:Interest Earning Assets:
Investment securities(1)(2)
Investment securities(1)(2)
$7,227,400 6,618,533 6,680,047 6,696,768 6,831,036 
Investment securities(1)(2)
$8,437,563 7,493,822 7,227,400 6,618,533 6,680,047 
YieldYield2.39 %2.72 3.09 3.12 3.14 Yield1.40 %2.07 2.39 2.72 3.09 
Trading account assets(3)
Trading account assets(3)
$5,391 6,173 6,306 7,986 5,519 
Trading account assets(3)
$3,063 8,496 5,391 6,173 6,306 
YieldYield1.69 %2.19 2.70 2.69 4.01 Yield2.81 %1.03 1.69 2.19 2.70 
Commercial loans(2)(4)
Commercial loans(2)(4)
$30,730,135 30,236,919 27,607,343 26,698,202 26,567,719 
Commercial loans(2)(4)
$29,844,491 30,363,102 30,730,135 30,236,919 27,607,343 
YieldYield3.80 %3.95 4.57 4.82 5.09 Yield3.95 %3.96 3.80 3.95 4.57 
Consumer loans(4)
Consumer loans(4)
$9,032,437 9,899,172 9,985,702 9,809,832 9,633,603 
Consumer loans(4)
$8,367,776 8,521,449 9,032,437 9,899,172 9,985,702 
YieldYield4.08 %4.34 4.60 5.07 5.08 Yield3.98 %4.00 4.08 4.34 4.60 
Allowance for loan lossesAllowance for loan losses$(591,098)(498,545)(368,033)(269,052)(258,024)Allowance for loan losses$(599,872)(595,547)(591,098)(498,545)(368,033)
Loans, net(4)
Loans, net(4)
$39,171,474 39,637,546 37,225,012 36,238,982 35,943,298 
Loans, net(4)
$37,612,395 38,289,004 39,171,474 39,637,546 37,225,012 
YieldYield3.92 %4.08 4.62 4.93 5.13 Yield4.02 %4.03 3.92 4.08 4.62 
Mortgage loans held for saleMortgage loans held for sale$244,952 221,157 86,415 117,909 99,556 Mortgage loans held for sale$246,962 309,278 244,952 221,157 86,415 
YieldYield2.92 %3.09 3.67 3.77 3.93 Yield2.68 %2.74 2.92 3.09 3.67 
Other loans held for saleOther loans held for sale$493,940 19,246 — — 475 Other loans held for sale$660,753 544,301 493,940 19,246 — 
YieldYield3.61 %4.19 — — — Yield2.91 %2.81 3.61 4.19 — 
Other earning assets(5)
Other earning assets(5)
$1,265,880 1,709,086 652,130 514,635 513,160 
Other earning assets(5)
$2,838,021 2,716,645 1,265,880 1,709,086 652,130 
YieldYield0.11 %0.11 1.02 1.71 2.08 Yield0.10 %0.10 0.11 0.11 1.02 
Federal Home Loan Bank and Federal Reserve Bank Stock(3)
Federal Home Loan Bank and Federal Reserve Bank Stock(3)
$200,923 247,801 284,082 278,586 254,994 
Federal Home Loan Bank and Federal Reserve Bank Stock(3)
$157,657 162,537 200,923 247,801 284,082 
YieldYield2.73 %3.60 3.38 2.85 3.85 Yield1.69 %2.64 2.73 3.60 3.38 
Total interest earning assetsTotal interest earning assets$48,609,960 48,459,542 44,933,992 43,854,866 43,648,038 Total interest earning assets$49,956,414 49,524,083 48,609,960 48,459,542 44,933,992 
YieldYield3.58 %3.75 4.33 4.60 4.78 Yield3.32 %3.49 3.58 3.75 4.33 
Interest-Bearing Liabilities:Interest-Bearing Liabilities:Interest-Bearing Liabilities:
Interest-bearing demand depositsInterest-bearing demand deposits$7,789,095 7,260,940 6,445,986 6,381,282 6,138,810 Interest-bearing demand deposits$8,570,753 8,531,415 7,789,095 7,260,940 6,445,986 
RateRate0.19 %0.21 0.51 0.60 0.69 Rate0.14 %0.16 0.19 0.21 0.51 
Money market accounts, excluding brokered depositsMoney market accounts, excluding brokered deposits$13,272,972 12,238,479 11,548,014 10,526,296 10,138,783 Money market accounts, excluding brokered deposits$15,348,916 14,411,860 13,272,972 12,238,479 11,548,014 
RateRate0.36 %0.46 1.00 1.13 1.26 Rate0.23 %0.26 0.36 0.46 1.00 
Savings depositsSavings deposits$1,114,956 1,036,024 926,822 915,640 900,366 Savings deposits$1,219,288 1,147,667 1,114,956 1,036,024 926,822 
RateRate0.02 %0.02 0.05 0.05 0.05 Rate0.02 %0.01 0.02 0.02 0.05 
Time deposits under $100,000Time deposits under $100,000$1,379,923 1,621,943 1,761,741 1,873,350 2,100,492 Time deposits under $100,000$1,161,306 1,239,592 1,379,923 1,621,943 1,761,741 
RateRate1.03 %1.43 1.64 1.27 1.39 Rate0.56 %0.74 1.03 1.43 1.64 
Time deposits over $100,000Time deposits over $100,000$3,863,821 4,772,555 5,051,705 5,198,266 5,957,691 Time deposits over $100,000$2,993,996 3,302,959 3,863,821 4,772,555 5,051,705 
RateRate1.44 %1.80 2.04 1.51 1.69 Rate0.74 %1.03 1.44 1.80 2.04 
Other brokered depositsOther brokered deposits$1,912,114 1,998,571 1,376,669 1,156,131 993,078 Other brokered deposits$1,950,582 1,978,393 1,912,114 1,998,571 1,376,669 
RateRate0.23 %0.25 1.42 1.84 2.47 Rate0.20 %0.23 0.23 0.25 1.42 
Brokered time depositsBrokered time deposits$2,232,940 2,244,429 2,166,496 2,121,069 2,119,149 Brokered time deposits$1,418,751 1,795,982 2,232,940 2,244,429 2,166,496 
RateRate1.59 %1.86 2.11 2.16 2.27 Rate1.50 %1.60 1.59 1.86 2.11 
Total interest-bearing deposits Total interest-bearing deposits$31,565,821 31,172,941 29,277,433 28,172,034 28,348,369  Total interest-bearing deposits$32,663,592 32,407,868 31,565,821 31,172,941 29,277,433 
RateRate0.54 %0.73 1.18 1.16 1.32 Rate0.31 %0.39 0.54 0.73 1.18 
Federal funds purchased and securities sold under repurchase agreementsFederal funds purchased and securities sold under repurchase agreements$180,342 250,232 167,324 192,731 221,045 Federal funds purchased and securities sold under repurchase agreements$209,448 174,316 180,342 250,232 167,324 
RateRate0.09 %0.12 0.30 0.24 0.22 Rate0.07 %0.07 0.09 0.12 0.30 
Other short-term borrowingsOther short-term borrowings$46,739 550,000 1,384,362 1,565,507 1,307,370 Other short-term borrowings$— — 46,739 550,000 1,384,362 
RateRate1.12 %1.23 1.66 1.87 2.31 Rate— %— 1.12 1.23 1.66 
Long-term debtLong-term debt$2,234,665 2,834,188 2,678,651 2,153,983 2,286,221 Long-term debt$1,202,613 1,552,791 2,234,665 2,834,188 2,678,651 
RateRate2.71 %2.36 2.78 3.07 3.32 Rate3.63 %3.96 2.71 2.36 2.78 
Total interest-bearing liabilitiesTotal interest-bearing liabilities$34,027,567 34,807,361 33,507,770 32,084,255 32,163,005 Total interest-bearing liabilities$34,075,653 34,134,975 34,027,567 34,807,361 33,507,770 
RateRate0.68 %0.86 1.30 1.30 1.47 Rate0.42 %0.55 0.68 0.86 1.30 
Non-interest-bearing demand depositsNon-interest-bearing demand deposits$12,773,676 11,923,534 9,409,774 9,706,784 9,365,776 Non-interest-bearing demand deposits$13,791,286 13,566,112 12,773,676 11,923,534 9,409,774 
Cost of fundsCost of funds0.50 %0.65 1.04 1.02 1.16 Cost of funds0.30 %0.40 0.50 0.65 1.04 
Effective cost of funds(6)
Effective cost of funds(6)
0.48 %0.62 0.96 0.95 1.09 
Effective cost of funds(6)
0.28 %0.37 0.48 0.62 0.96 
Net interest marginNet interest margin3.10 %3.13 3.37 3.65 3.69 Net interest margin3.04 %3.12 3.10 3.13 3.37 
Taxable equivalent adjustment(2)
Taxable equivalent adjustment(2)
$956 861 786 769 819 
Taxable equivalent adjustment(2)
$774 821 956 861 786 
`(1)    Excludes net unrealized gains (losses).
(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.
(3)    Included as a component of other assets on the consolidated balance sheets.
(4)    Average loans are shown net of deferred fees and costs. NPLs are included.
(5)    Includes interest-bearing funds with Federal Reserve Bank, interest earning deposits with banks, and federal funds sold and securities purchased under resale agreements.
(6)    Includes the impact of non-interest-bearing capital funding sources.
6349


Net Interest Income and Rate/Volume Analysis
    The following table sets forth the major components of net interest income and the related annualized yields and rates for the ninethree months ended September 30,March 31, 2021 and 2020, and 2019, as well as the variances between the periods caused by changes in interest rates versus changes in volume.
Table 11 - Net Interest Income and Rate/Volume Analysis
Table 12 - Net Interest Income and Rate/Volume AnalysisTable 12 - Net Interest Income and Rate/Volume Analysis
Nine Months Ended September 30,2020 Compared to 2019Three Months Ended March 31,2021 Compared to 2020
Average BalancesInterestAnnualized Yield/RateChange due toIncrease (Decrease)Average BalancesInterestAnnualized Yield/RateChange due toIncrease (Decrease)
(dollars in thousands)(dollars in thousands)202020192020201920202019VolumeRate(dollars in thousands)202120202021202020212020VolumeRate
AssetsAssetsAssets
Interest earning assets:Interest earning assets:Interest earning assets:
Investment securitiesInvestment securities$6,843,400 $6,775,287 $139,791 $156,554 2.72 %3.08 %$1,571 $(18,334)$(16,763)Investment securities$8,437,563 $6,680,047 $29,458 $51,655 1.40 %3.09 %$13,391 $(35,588)$(22,197)
Trading account assetsTrading account assets5,955 4,153 99 84 2.22 2.70 37 (22)15 Trading account assets3,063 6,306 22 43 2.81 2.70 (22)1 (21)
Taxable loans, net(1)
Taxable loans, net(1)
38,671,202 35,421,137 1,203,839 1,360,511 4.16 5.14 125,062 (281,734)(156,672)
Taxable loans, net(1)
37,715,121 37,177,611 369,579 424,387 3.96 4.59 6,084 (60,892)(54,808)
Tax-exempt loans, net(1)(2)
Tax-exempt loans, net(1)(2)
494,885 348,246 12,366 10,453 3.34 4.01 4,402 (2,489)1,913 
Tax-exempt loans, net(1)(2)
497,146 415,434 3,686 3,734 3.01 3.61 727 (775)(48)
Allowance for loan lossesAllowance for loan losses(486,276)(256,727)Allowance for loan losses(599,872)(368,033)
Loans, netLoans, net38,679,811 35,512,656 1,216,205 1,370,964 4.20 5.16 129,464 (284,223)(154,759)Loans, net37,612,395 37,225,012 373,265 428,121 4.02 4.62 6,811 (61,667)(54,856)
Mortgage loans held for saleMortgage loans held for sale184,396 68,558 4,291 2,122 3.10 4.13 3,581 (1,412)2,169 Mortgage loans held for sale246,962 86,415 1,657 792 2.68 3.67 1,453 (588)865 
Other loans held for saleOther loans held for sale172,241 692 4,756 22 3.63 4.11 5,279 (545)4,734 Other loans held for sale660,753 — 4,805 — 2.91 — — 4,805 4,805 
Other earning assets(3)
Other earning assets(3)
1,209,239 567,433 2,477 9,964 0.27 2.32 11,099 (18,586)(7,487)
Other earning assets(3)
2,838,021 652,130 716 1,675 0.10 1.02 5,444 (6,403)(959)
Federal Home Loan Bank and Federal Reserve Bank stockFederal Home Loan Bank and Federal Reserve Bank stock244,111 233,943 6,000 6,931 3.28 3.95 301 (1,232)(931)Federal Home Loan Bank and Federal Reserve Bank stock157,657 284,082 668 2,397 1.69 3.38 (1,054)(675)(1,729)
Total interest earning assetsTotal interest earning assets47,339,153 43,162,722 1,373,619 1,546,641 3.88 4.79 151,332 (324,354)(173,022)Total interest earning assets49,956,414 44,933,992 410,591 484,683 3.32 4.33 26,023 (100,115)(74,092)
Cash and due from banksCash and due from banks532,808 516,789 Cash and due from banks518,780 515,153 
Premises and equipment, netPremises and equipment, net485,790 486,141 Premises and equipment, net460,466 491,244 
Other real estateOther real estate11,709 14,803 Other real estate1,823 13,395 
Cash surrender value of bank-owned life insuranceCash surrender value of bank-owned life insurance989,238 765,204 Cash surrender value of bank-owned life insurance1,051,520 892,861 
Other assets(4)
Other assets(4)
2,209,923 1,621,335 
Other assets(4)
2,199,501 1,849,950 
Total assetsTotal assets$51,568,621 $46,566,994 Total assets$54,188,504 $48,696,595 
Liabilities and Shareholders' EquityLiabilities and Shareholders' EquityLiabilities and Shareholders' Equity
Interest-bearing liabilities:Interest-bearing liabilities:Interest-bearing liabilities:
Interest-bearing demand depositsInterest-bearing demand deposits$7,167,617 $6,288,424 $15,561 $32,611 0.29 %0.69 %$4,541 $(21,591)$(17,050)Interest-bearing demand deposits$8,570,753 $6,445,986 $2,973 $8,109 0.14 %0.51 %$2,672 $(7,808)$(5,136)
Money market accountsMoney market accounts14,119,510 11,035,016 61,799 109,711 0.58 1.33 30,712 (78,624)(47,912)Money market accounts17,299,498 12,924,683 9,706 33,625 0.23 1.05 11,327 (35,246)(23,919)
Savings depositsSavings deposits1,026,259 901,867 204 371 0.03 0.05 46 (213)(167)Savings deposits1,219,288 926,822 49 110 0.02 0.05 36 (97)(61)
Time depositsTime deposits8,361,942 10,344,873 108,106 131,773 1.73 1.70 (25,236)1,569 (23,667)Time deposits5,574,053 8,979,942 12,290 44,158 0.89 1.98 (16,628)(15,240)(31,868)
Federal funds purchased and securities sold under repurchase agreementsFederal funds purchased and securities sold under repurchase agreements199,230 251,385 242 404 0.16 0.21 (82)(80)(162)Federal funds purchased and securities sold under repurchase agreements209,448 167,324 34 127 0.07 0.30 31 (124)(93)
Other short-term borrowingsOther short-term borrowings658,128 974,696 7,643 18,195 1.53 2.46 (5,830)(4,722)(10,552)Other short-term borrowings— 1,384,362 — 5,805 — 1.66 (5,666)(139)(5,805)
Long-term debtLong-term debt2,581,232 2,129,424 50,645 54,785 2.54 3.39 11,466 (15,606)(4,140)Long-term debt1,202,613 2,678,651 10,908 18,703 3.63 2.78 (10,118)2,323 (7,795)
Total interest-bearing liabilitiesTotal interest-bearing liabilities34,113,918 31,925,685 244,200 347,850 0.94 1.44 15,617 (119,267)(103,650)Total interest-bearing liabilities34,075,653 33,507,770 35,960 110,637 0.42 1.30 (18,346)(56,331)(74,677)
Non-interest-bearing depositsNon-interest-bearing deposits11,374,121 9,242,993 Non-interest-bearing deposits13,791,286 9,409,774 
Other liabilitiesOther liabilities1,028,401 691,357 Other liabilities1,185,344 817,627 
Shareholders' equityShareholders' equity5,052,181 4,706,959 Shareholders' equity5,136,221 4,961,424 
Total liabilities and equityTotal liabilities and equity$51,568,621 $46,566,994 Total liabilities and equity$54,188,504 $48,696,595 
Interest rate spread:Interest rate spread:2.94 %3.35 %Interest rate spread:2.90 %3.03 %
Net interest income - FTE/margin(5)
Net interest income - FTE/margin(5)
$1,129,419 $1,198,791 3.20 %3.72 %$135,715 $(205,087)$(69,372)
Net interest income - FTE/margin(5)
$374,631 $374,046 3.04 %3.37 %$44,369 $(43,784)$585 
Taxable equivalent adjustmentTaxable equivalent adjustment2,603 2,256 Taxable equivalent adjustment774 786 
Net interest income, actual Net interest income, actual$1,126,816 $1,196,535  Net interest income, actual$373,857 $373,260 
(1)     Average loans are shown net of unearned income. NPLs are included. Interest income includes fees as follows: 2021 - $31.9 million, 2020 - $42.8 million, 2019 - $26.4$7.9 million.
(2)    Reflects taxable-equivalent adjustments, using the statutory federal income tax rate of 21%, in adjusting interest on tax-exempt loans to a taxable-equivalent basis.
(3)    Includes interest-bearing funds with Federal Reserve Bank, interest earning deposits with banks, and federal funds sold and securities purchased under resale agreements.
(4)    Includes average net unrealized gains (losses) on investment securities available for sale of $212.9$116.1 million and $14.7$166.8 million for the ninethree months ended September 30,March 31, 2021 and 2020, and 2019, respectively.
(5)    The net interest margin is calculated by dividing annualized net interest income - FTE by average total interest earnings assets.
6450


Market Risk Analysis
Interest rate risk is the primary market risk to which Synovus is potentially exposed. Synovus measures its sensitivity to changes in market interest rates through the use of a simulation model which incorporates all of Synovus’ earning assets and liabilities. These simulations are used to determine a baseline net interest income projection and the sensitivity of the income profile based on changes in interest rates. These simulations incorporate assumptions and factors, including, but not limited to, changes in market rates, in the size or composition of the balance sheet, and in repricing characteristics as well as customer behaviors. This process is reviewed and updated on an on-going basis in a manner consistent with Synovus’ ALCO governance framework.
Synovus has modeled its baseline net interest income projection assuming a flat interest rate environment with the federal funds rate at the Federal Reserve’s current targeted range of 0% to 0.25% and the current prime rate of 3.25%. Synovus has modeled the impact of a gradual increase in market interest rates across the yield curve of 100 and 200 bps and a gradual decline of 25 bps to determine the sensitivity of net interest income for the next twelve months. The lesser decline of the downrate scenario presented was selected in light of the low absolute level of monetary policy rates and generally incorporates an assumption that rates are floored at the zero-lower-bound. Synovus' current rate risk position is considered asset-sensitive and would be expected to benefit net interest income in a rising interest rate environment and reduce net interest income in a declining interest rate environment. The decline in sensitivity relative to the prior period-end is the result of a host of factors, including a reduction in reserve balances held with the Federal Reserve and the higher absolute level of long-term interest rates. The following table represents the estimated sensitivity of net interest income at September 30, 2020,March 31, 2021, with comparable information for December 31, 2019.2020.
Table 12 - Twelve Month Net Interest Income Sensitivity
Table 13 - Twelve Month Net Interest Income SensitivityTable 13 - Twelve Month Net Interest Income Sensitivity
Estimated % Change in Net Interest Income as Compared to Unchanged Rates (for the next twelve months)Estimated % Change in Net Interest Income as Compared to Unchanged Rates (for the next twelve months)
Estimated % Change in Net Interest Income as Compared to Unchanged Rates (for the next twelve months)
Change in Short-term Interest Rates (in bps)Change in Short-term Interest Rates (in bps)September 30, 2020December 31, 2019Change in Short-term Interest Rates (in bps)March 31, 2021December 31, 2020
+200+2002.4%2.8%+2004.9%6.8%
+100+1001.0%2.0%+1002.4%3.5%
FlatFlat—%—%Flat—%—%
-25-25(0.2)%N/A-25(0.3)%(0.5)%
The net interest income simulation model is the primary tool utilized to evaluate potential interest rate risks over a shorter-term time horizon. Synovus also evaluates potential longer-term interest rate risk through modeling and evaluation of the sensitivity of the Company's Economic Value of Equity (EVE). The EVE measurement process estimates the net fair value of assets, liabilities, and off-balance sheet financial instruments under various interest rate scenarios. Management uses EVE sensitivity analyses as an additional means of measuring interest rate risk and incorporates this form of analysis within its governance and limits framework.
LIBOR Transition
In July 2017, the Financial Conduct Authority (FCA), which regulates LIBOR, announced that it intends to stop persuading or compelling banks to submit rates for the calculation of LIBOR afterat the end of 2021. On March 5, 2021, confirming the continuation of LIBOR will not be guaranteed beyond that date. However, due to the COVID-19 pandemic, the FCA has since softened its stance onconfirmed that all LIBOR settings will either cease to be provided by any administrator or no longer be representative immediately after December 31, 2021 for the pre-cessation end dates scheduled in 20201-week and early 2021 on the issuance of instruments tied to LIBOR. 2-month US dollar settings and immediately after June 30, 2023 for all remaining US dollar settings.
The ARRC has proposed SOFR as its preferred rate as an alternative to LIBOR and has proposed a paced market transition plan to SOFR from LIBOR. The ISDA recently recommended a spread adjustment methodology for derivative products based on historical differences between LIBOR and SOFR. Organizations are currently working on industry-wide and company-specific transition plans as it relatesrelated to derivatives and cash markets exposed to LIBOR. As noted within our"Part I - Item 1A. Risk Factors" of Synovus' 2020 Form 10-K, Risk Factors, Synovus holds instruments that may be impacted by the discontinuance of LIBOR including floating rate obligations, loans, deposits, derivatives and hedges, and other financial instruments but is not able to currently predict the associated financial impactsimpact of the transition to an alternative reference rate. Synovus has established a cross-functional LIBOR transition working group that is in the process of i) assessinghas 1) assessed the Company's current exposure to LIBOR indexed instruments and the data, systems and processes that may alsowill be impacted; ii) establishing an2) established a detailed implementation plan; and iii) developing3) developed a formal governance structure for the transition.
6551


Critical Accounting Policies
The accounting and financial reporting policies of Synovus are in accordance with GAAP and conform to the accounting and reporting guidelines prescribed by bank regulatory authorities. Synovus has identified certain of its accounting policies as “critical accounting policies,” consisting of those related to the allowance for 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’ unaudited interim consolidated financial statements. Synovus’ financial results could differ significantly if different judgments or estimates are used in the application of these policies. All accounting policies described in "Part II - Item 8. Financial Statements and Supplementary Data - Note 1 - Summary of Significant Accounting Policies" in Synovus' 20192020 Form 10-K should be reviewed for a greater understanding of how we record and report our financial performance. Excluding the adoption of ASU 2016-13, Financial Instruments-Credit Losses (CECL) on January 1, 2020 as disclosed in "Part I - Item 1. Financial Statements and Supplementary Data - Note 1 - Basis of Presentation and Accounting Policies" in this Report, thereThere have been no significant changes to the accounting policies, estimates and assumptions, or the judgments affecting the application of these estimates and assumptions from those disclosed in Synovus' 20192020 Form 10-K.
Goodwill
Goodwill assessments are highly sensitive to economic projections and10-K other than the related assumptions and estimates used by management. Synovus includesexclusion of goodwill impairment analysis and reporting unit valuations as part of itsa critical accounting policy for fair value measurements. For additional information, see "Part II - Item 8. Financial Statements and Supplementary Data - Note 1 - Summaryestimate due to lack of Significant Accounting Policies" in Synovus' 2019 Form 10-K and "Part I - Item 1. Financial Statements and Supplementary Data - Note 5 - Goodwill and Other Intangible Assets" in this Report.impairment indicators.
Non-GAAP Financial Measures
The measures entitled adjusted non-interest revenue; adjusted non-interest expense; adjusted total revenues;revenue; adjusted tangible efficiency ratio; adjusted net income per common share, diluted; adjusted return on average assets; adjusted return on average common equity; return on average tangible common equity, adjusted return on average tangible common equity; and tangible common equity ratio are not measures recognized under GAAP and therefore are considered non-GAAP financial measures. The most comparable GAAP measures to these measures are total non-interest revenue; total non-interest expense; total revenues;FTE revenue; efficiency ratio-FTE; net income per common share, diluted; return on average assets; return on average common equity; and the ratio of total shareholders' equity to total assets, respectively.
Management believes that these non-GAAP financial measures provide meaningful additional information about Synovus to assist management and investors in evaluating Synovus’ operating results, financial strength, the performance of its business, and the strength of its capital position. However, these non-GAAP financial measures have inherent limitations as analytical tools and should not be considered in isolation or as a substitute for analyses of operating results or capital position as reported under GAAP. The non-GAAP financial measures should be considered as additional views of the way our financial measures are affected by significant items and other factors, and since they are not required to be uniformly applied, they may not be comparable to other similarly titled measures at other companies. Adjusted total revenuesrevenue and adjusted non-interest revenue are measures used by management to evaluate total FTE revenue and non-interest revenue exclusive of net investment securities gains (losses) and gains on sale and changes in fair value of private equity investments, net. Adjusted non-interest expense and the adjusted tangible efficiency ratio are measures utilized by management to measure the success of expense management initiatives focused on reducing recurring controllable operating costs. Adjusted net income per common share, diluted, adjusted return on average assets, and adjusted return on average common equity are measurements used by management to evaluate operating results exclusive of items that management believes are not indicative of ongoing operations and impact period-to-period comparisons. Return on average tangible common equity and adjustedAdjusted return on average tangible common equity are measuresis a measure used by management to compare Synovus' performance with other financial institutions because it calculates the return available to common shareholders without the impact of intangible assets and their related amortization, thereby allowing management to evaluate the performance of the business consistently. The tangible common equity ratio is used by management to assess the strength of our capital position. The computations of these measures are set forth in the tables below.
6652


Table 14 - Reconciliation of Non-GAAP Financial MeasuresTable 14 - Reconciliation of Non-GAAP Financial MeasuresTable 14 - Reconciliation of Non-GAAP Financial Measures
Three Months EndedNine Months EndedThree Months Ended
(in thousands)(in thousands)September 30, 2020September 30, 2019September 30, 2020September 30, 2019(in thousands)March 31, 2021March 31, 2020
Adjusted non-interest revenueAdjusted non-interest revenueAdjusted non-interest revenue
Total non-interest revenueTotal non-interest revenue$114,411 $88,760 $391,752 $257,945 Total non-interest revenue$110,956 $103,857 
Add/subtract: Investment securities losses (gains), netAdd/subtract: Investment securities losses (gains), net1,550 3,731 (76,594)5,502 Add/subtract: Investment securities losses (gains), net1,990 (8,734)
Subtract: Gain on sale and increase in fair value of private equity investments, net(260)(1,194)(4,712)(3,507)
Add: Decrease in fair value of private equity investments, netAdd: Decrease in fair value of private equity investments, net— 4,255 
Adjusted non-interest revenueAdjusted non-interest revenue$115,701 $91,297 $310,446 $259,940 Adjusted non-interest revenue$112,946 $99,378 
Adjusted non-interest expenseAdjusted non-interest expenseAdjusted non-interest expense
Total non-interest expenseTotal non-interest expense$316,655 $276,310 $877,076 $832,847 Total non-interest expense$267,134 $276,279 
Subtract: Earnout liability adjustments— (10,457)(4,908)(10,457)
Subtract: Goodwill impairment(44,877)— (44,877)— 
Subtract: Merger-related expense— (353)— (57,493)
Subtract/add: Restructuring charges, net(2,882)66 (8,924)29 
Subtract: Valuation adjustment to Visa derivative— (2,500)— (2,500)
Subtract: Loss on early extinguishment of debt, net(154)(4,592)(2,057)(4,592)
Subtract: Restructuring chargesSubtract: Restructuring charges(531)(3,220)
Subtract: Loss on early extinguishment of debtSubtract: Loss on early extinguishment of debt— (1,904)
Adjusted non-interest expenseAdjusted non-interest expense$268,742 $258,474 $816,310 $757,834 Adjusted non-interest expense$266,603 $271,155 

Three Months Ended
(in thousands, except per share data)March 31, 2021March 31, 2020
Adjusted total revenue and adjusted tangible efficiency ratio
Adjusted non-interest expense$266,603 $271,155 
Subtract: Amortization of intangibles(2,379)(2,640)
Adjusted tangible non-interest expense$264,224 $268,515 
Net interest income$373,857 $373,260 
Add: Tax equivalent adjustment774 786 
Add: Total non-interest revenue110,956 103,857 
Total FTE revenue$485,587 $477,903 
Add/subtract: Investment securities losses (gains), net1,990 (8,734)
Add: Decrease in fair value of private equity investments, net— 4,255 
Adjusted total revenue$487,577 $473,424 
Efficiency ratio-FTE55.01 %57.81 %
 Adjusted tangible efficiency ratio54.19 56.72 
Adjusted net income per common share, diluted
Net income available to common shareholders$178,802 $30,230 
Add: Restructuring charges531 3,220 
Add: Loss on early extinguishment of debt— 1,904 
Add/subtract: Investment securities losses (gains), net1,990 (8,734)
Add: Decrease in fair value of private equity investments, net— 4,255 
Subtract: Tax effect of adjustments (1)
(638)(167)
Adjusted net income available to common shareholders$180,685 $30,708 
Weighted average common shares outstanding, diluted149,780 148,401 
Adjusted net income per common share, diluted$1.21 $0.21 

6753


Three Months EndedNine Months Ended
(in thousands, except per share data)September 30, 2020September 30, 2019September 30, 2020September 30, 2019
Adjusted total revenues and adjusted tangible efficiency ratio
Adjusted non-interest expense$268,742 $258,474 $816,310 $757,834 
Subtract: Amortization of intangibles(2,640)(2,901)(7,920)(8,702)
Adjusted tangible non-interest expense$266,102 $255,573 $808,390 $749,132 
Net interest income$376,990 $402,097 $1,126,816 $1,196,535 
Add: Tax equivalent adjustment956 819 2,603 2,256 
Add: Total non-interest revenue114,411 88,760 391,752 257,945 
Total FTE revenues$492,357 $491,676 $1,521,171 $1,456,736 
Add/subtract: Investment securities losses (gains), net1,550 3,731 (76,594)5,502 
Subtract: Gain on sale and increase in fair value of private equity investments, net(260)(1,194)(4,712)(3,507)
Adjusted total revenues$493,647 $494,213 $1,439,865 $1,458,731 
Efficiency ratio-FTE64.31 %56.20 %57.66 %57.17 %
 Adjusted tangible efficiency ratio53.91 51.71 56.14 51.36 
Adjusted net income per common share, diluted
Net income available to common shareholders$83,283 $127,435 $198,414 $397,505 
Add: Income tax expense, net related to State Tax Reform— 4,402 — 4,402 
Add: Earnout liability adjustments— 10,457 4,908 10,457 
Add: Goodwill impairment44,877 — 44,877 — 
Add: Merger-related expense— 353 — 57,493 
Add/subtract: Restructuring charges, net2,882 (66)8,924 (29)
Add: Valuation adjustment to Visa derivative— 2,500 — 2,500 
Add: Loss on early extinguishment of debt, net154 4,592 2,057 4,592 
Add/subtract: Investment securities losses (gains), net1,550 3,731 (76,594)5,502 
Subtract: Gain on sale and increase in fair value of private equity investments, net(260)(1,194)(4,712)(3,507)
Subtract/add: Tax effect of adjustments(1,122)(2,478)18,214 (10,137)
Adjusted net income available to common shareholders$131,364 $149,732 $196,088 $468,778 
Weighted average common shares outstanding, diluted147,976 154,043 148,037 158,595 
Adjusted net income per common share, diluted$0.89 $0.97 $1.32 $2.96 
Table 14 - Reconciliation of Non-GAAP Financial Measures, continued
Three Months Ended
(dollars in thousands)March 31, 2021March 31, 2020
Adjusted return on average assets (annualized)
Net income$187,093 $38,521 
Add: Restructuring charges531 3,220 
Add: Loss on early extinguishment of debt— 1,904 
Add/subtract: Investment securities losses (gains), net1,990 (8,734)
Add: Decrease in fair value of private equity investments, net— 4,255 
Subtract: Tax effect of adjustments (1)
(638)(167)
Adjusted net income$188,976 $38,999 
Net income annualized758,766 154,931 
Adjusted net income annualized766,403 156,853 
Total average assets54,188,504 48,696,595 
Return on average assets (annualized)1.40 %0.32 %
Adjusted return on average assets (annualized)1.41 0.32 

Three Months Ended
(dollars in thousands)March 31, 2021December 31, 2020March 31, 2020
Adjusted return on average common equity and adjusted return on average tangible common equity (annualized)
Net income available to common shareholders$178,802 $142,118 $30,230 
Add: Restructuring charges531 18,068 3,220 
Add: Valuation adjustment to Visa derivative— 890 — 
Add: Loss on early extinguishment of debt— 8,409 1,904 
Add/subtract: Investment securities losses (gains), net1,990 (2,337)(8,734)
Subtract/add: (Increase) decrease in fair value of private equity investments— (63)4,255 
Subtract: Tax effect of adjustments (1)
(638)(6,467)(167)
Net income available to common shareholders$180,685 $160,618 $30,708 
Adjusted net income available to common shareholders' annualized$732,778 $638,980 $123,507 
Add: Amortization of intangibles, annualized net of tax7,207 7,782 7,868 
Adjusted net income available to common shareholders excluding amortization of intangibles annualized$739,985 $646,762 $131,375 
Net income available to common shareholders annualized$725,141 $565,382 $121,584 
Total average shareholders' equity less preferred stock$4,599,076 $4,594,199 $4,424,278 
Subtract: Goodwill(452,390)(452,390)(497,267)
Subtract: Other intangible assets, net(44,005)(46,511)(54,514)
Total average tangible shareholders' equity less preferred stock$4,102,681 $4,095,298 $3,872,497 
Return on average common equity (annualized)15.77 %12.31 %2.75 %
Adjusted return on average common equity (annualized)15.93 13.91 2.79 
Adjusted return on average tangible common equity (annualized)18.04 15.79 3.39 

6854


Table 14 - Reconciliation of Non-GAAP Financial Measures, continued
Three Months EndedNine Months Ended
(dollars in thousands)September 30, 2020September 30, 2019September 30, 2020September 30, 2019
Adjusted return on average assets (annualized)
Net income$91,574 $135,726 $223,286 $412,096 
Add: Income tax expense, net related to State Tax Reform— 4,402 — 4,402 
Add: Earnout liability adjustments— 10,457 4,908 10,457 
Add: Goodwill impairment44,877 — 44,877 — 
Add: Merger-related expense— 353 — 57,493 
Add/subtract: Restructuring charges, net2,882 (66)8,924 (29)
Subtract: Valuation adjustment to Visa derivative— 2,500 — 2,500 
Add: Loss on early extinguishment of debt, net154 4,592 2,057 4,592 
Add/subtract: Investment securities losses (gains), net1,550 3,731 (76,594)5,502 
Subtract: Gain on sale and increase in fair value of private equity investments, net(260)(1,194)(4,712)(3,507)
Subtract/add: Tax effect of adjustments(1,122)(2,478)18,214 (10,137)
Adjusted net income$139,655 $158,023 $220,960 $483,369 
Net income annualized364,305 538,478 298,258 550,971 
Adjusted net income annualized555,584 626,939 295,151 646,263 
Total average assets53,138,334 47,211,026 51,568,621 46,566,994 
Return on average assets (annualized)0.69 %1.14 %0.58 %1.18 %
Adjusted return on average assets (annualized)1.05 1.33 0.57 1.39 

69

Table 14 - Reconciliation of Non-GAAP Financial Measures, continued
Three Months Ended
(dollars in thousands)September 30, 2020June 30, 2020September 30, 2019
Adjusted return on average common equity, return on average tangible common equity, and adjusted return on average tangible common equity (annualized)
Net income available to common shareholders$83,283 $84,901 $127,435 
Add: Income tax expense, net related to State Tax Reform— — 4,402 
Add: Earnout liability adjustments— 4,908 10,457 
Add: Goodwill impairment44,877 — — 
Add: Merger-related expense— — 353 
Add/subtract: Restructuring charges, net2,882 2,822 (66)
Add: Valuation adjustment to Visa derivative— — 2,500 
Add: Loss on early extinguishment of debt, net154 — 4,592 
Add/subtract: Investment securities losses (gains), net1,550 (69,409)3,731 
Subtract: Gain on sale and increase in fair value of private equity investments(260)(8,707)(1,194)
Subtract/add: Tax effect of adjustments(1,122)19,500 (2,478)
Net income available to common shareholders$131,364 $34,015 $149,732 
Adjusted net income available to common shareholders' annualized$522,600 $136,808 $594,045 
Add: Amortization of intangibles7,782 7,868 8,632 
Adjusted net income available to common shareholders excluding amortization of intangibles annualized$530,382 $144,676 $602,677 
Net income available to common shareholders annualized$331,322 $341,470 $505,585 
Add: Amortization of intangibles7,782 7,868 8,632 
Net income available to common shareholders excluding amortization of intangibles$339,104 $349,338 $514,217 
Total average shareholders' equity less preferred stock$4,553,159 $4,567,254 $4,450,301 
Subtract: Goodwill(497,267)(497,267)(492,320)
Subtract: Other intangible assets, net(49,075)(51,667)(60,278)
Total average tangible shareholders' equity less preferred stock$4,006,817 $4,018,320 $3,897,703 
Return on average common equity (annualized)7.28 %7.48 %11.36 %
Adjusted return on average common equity (annualized)11.48 3.00 13.35 
Return on average tangible common equity (annualized)8.46 8.69 13.19 
Adjusted return on average tangible common equity (annualized)13.24 3.60 15.46 

70

Table 14 - Reconciliation of Non-GAAP Financial Measures, continuedTable 14 - Reconciliation of Non-GAAP Financial Measures, continued
(dollars in thousands)(dollars in thousands)September 30, 2020June 30,
2020		September 30, 2019(dollars in thousands)March 31, 2021December 31,
2020		March 31, 2020
Tangible common equity ratioTangible common equity ratioTangible common equity ratio
Total assetsTotal assets$53,040,538 $54,121,989 $47,661,182 Total assets$55,159,011 $54,394,159 $50,619,585 
Subtract: GoodwillSubtract: Goodwill(452,390)(497,267)(487,865)Subtract: Goodwill(452,390)(452,390)(497,267)
Subtract: Other intangible assets, netSubtract: Other intangible assets, net(47,752)(50,392)(58,572)Subtract: Other intangible assets, net(42,733)(45,112)(53,032)
Tangible assetsTangible assets$52,540,396 $53,574,330 $47,114,745 Tangible assets$54,663,888 $53,896,657 $50,069,286 
Total shareholders' equityTotal shareholders' equity$5,064,542 $5,052,968 $4,868,838 Total shareholders' equity$5,161,717 $5,161,334 $5,065,205 
Subtract: GoodwillSubtract: Goodwill(452,390)(497,267)(487,865)Subtract: Goodwill(452,390)(452,390)(497,267)
Subtract: Other intangible assets, netSubtract: Other intangible assets, net(47,752)(50,392)(58,572)Subtract: Other intangible assets, net(42,733)(45,112)(53,032)
Subtract: Preferred Stock, no par value(537,145)(537,145)(536,550)
Subtract: Preferred stock, no par valueSubtract: Preferred stock, no par value(537,145)(537,145)(537,145)
Tangible common equityTangible common equity$4,027,255 $3,968,164 $3,785,851 Tangible common equity$4,129,449 $4,126,687 $3,977,761 
Total shareholders' equity to total assets ratioTotal shareholders' equity to total assets ratio9.55 %9.34 %10.22 %Total shareholders' equity to total assets ratio9.36 %9.49 %10.01 %
Tangible common equity ratioTangible common equity ratio7.67 7.41 8.04 Tangible common equity ratio7.55 7.66 7.94 
(1) An assumed marginal tax rate of 25.3% for 2021 and 25.9% for 2020 was applied.
(1) An assumed marginal tax rate of 25.3% for 2021 and 25.9% for 2020 was applied.

ITEM 3. – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    The information presented in the Market Risk Analysis section of the Management's Discussion and Analysis of Financial Condition and Results of Operations section of this Report is incorporated herein by reference.
ITEM 4. – CONTROLS AND PROCEDURES
In connection with the preparation of this Quarterly Report on Form 10-Q, an evaluation was carried out by Synovus' management, with the participation of Synovus' Chief Executive Officer and Chief Financial Officer, of the effectiveness of Synovus' disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures. Based on that evaluation, Synovus' Chief Executive Officer and Chief Financial Officer have concluded that, as of September 30, 2020,March 31, 2021, Synovus' disclosure controls and procedures were effective.
There have been no material changes in Synovus' internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the quarter ended September 30, 2020March 31, 2021 that have materially affected, or are reasonably likely to materially affect, Synovus' internal control over financial reporting.

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PART II. – OTHER INFORMATION
ITEM 1. – LEGAL PROCEEDINGS
Synovus and its subsidiaries are subject to various legal proceedings, claims and disputes that arise in the ordinary course of its business. Additionally, in the ordinary course of its business, Synovus and its subsidiaries are subject to regulatory examinations, information gathering requests, inquiries and investigations. Synovus, like many other financial institutions, has been the target of legal actions and other proceedings asserting claims for damages and related relief for losses. These actions include mortgage loan and other loan put-back claims, claims and counterclaims asserted by individual borrowers related to their loans, allegations of violations of state and federal laws and regulations relating to banking practices, and allegations related to Synovus' participation in government stimulus programs, including putative class action matters. In addition to actual damages, if Synovus does not prevail in such asserted legal actions, credit-related litigation could result in additional write-downs or charge-offs of assets, which could adversely affect Synovus' results of operations during the period in which the write-down or charge-off were to occur.
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 of 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 and financial condition for any particular period. For additional information, seeSee "Part I - Item 1. Financial Statements and Supplementary Data - Note 109 - Commitments and Contingencies" of this Report, which Note is incorporated herein by this reference.Report.
ITEM 1A. – RISK FACTORS
In addition to the other information set forth in this Report, you should carefully consider the factors discussed in "Part I - Item IA - Risk Factors” of Synovus' 20192020 Form 10-K and "Item 1A. - Risk Factors" of Synovus' Form 10-Q for the period ended March 31, 2020 ("1Q 2020 Form 10-Q"), which could materially affect its business, financial position, results of operations, cash flows, or future results. Please be aware that these risks may change over time and other risks may prove to be important in the future. In addition, these risks may be heightened by the disruption and uncertainty resulting from COVID-19. New risks may emerge at any time, and we cannot predict such risks or estimate the extent to which they may affect our business, financial condition or results of operations, or the trading price of our securities.
There are no material changes during the period covered by this Report to the risk factors previously disclosed in Synovus' 2019 Form 10-K and 1Q 2020 Form 10-Q.10-K.
ITEM 2. – UNREGISTERED SALES OF SECURITIES AND USE OF PROCEEDS
    (a) None.
    (b) None.
    (c) Issuer Purchases of Equity Securities:
The Company announced on January 24, 202026, 2021 that its Board of Directors authorized share repurchases of up to $200 million in 2020 at a level that would be consistent with2021. During the first quarter of 2021, the Company did not complete any share repurchases. Synovus retaining a 9% CET1 ratio target. As a result of the greater economic uncertainty associated with the current pandemic, Synovus suspended its share repurchase activity beyond the $16.2had repurchased $23.2 million, (450or 499 thousand shares)shares of its common stock, repurchased during the first quarter.at an average price of $46.52 per share, as of May 5, 2021.
ITEM 3. – DEFAULTS UPON SENIOR SECURITIES
    None.
ITEM 4. – MINE SAFETY DISCLOSURES
    None.
ITEM 5. – OTHER INFORMATION
    None.
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ITEM 6. – EXHIBITS  
Exhibit
Number		Description
3.1 
Restated Articles of Incorporation of Synovus, incorporated by reference to Exhibit 3.1 of Synovus’ Current Report on Form 8-K dated April 22, 2020, as filed with the SEC on April 24, 2020.
3.2 
Restated Bylaws of Synovus, incorporated by reference to Exhibit 3.2 of Synovus' Current Report on Form 8-K dated April 22, 2020, as filed with the SEC on April 24, 2020.
4.110.1 
10.2 
10.3 
10.4 
10.5 
31.1 
31.2 
32 
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101 Interactive Data File
104 Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101).

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

 
SYNOVUS FINANCIAL CORP.
NovemberMay 6, 20202021By:/s/ Andrew J. Gregory, Jr.
DateAndrew J. Gregory, Jr.
Executive Vice President and Chief Financial Officer
(Duly Authorized Officer and Principal Financial Officer)

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