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, 20202021
Commission file number 1-10312
 

syn-20210930_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

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $1.00 Par ValueSNVNew York Stock Exchange
Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series DSNV - PrDNew York Stock Exchange
Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series ESNV - PrENew York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by 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, 147,806,270October 31, 2021, 145,510,920 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, 20202021 and December 31, 20192020
1
Consolidated Statements of Income for the Three and Nine Months Ended September 30, 20202021 and 20192020
2
Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 20202021 and 20192020
3
Consolidated Statements of Changes in Shareholders' Equity for the Three and Nine Months Ended September 30, 20202021 and 20192020
4
Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 20202021 and 20192020
6
Notes to Unaudited Interim Consolidated Financial Statements
7
Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations
4336
Item 3.
7162
Item 4.Controls and Procedures
7162
Other Information
Item 1.Legal Proceedings
7263
Item 1A.Risk Factors
7263
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
7263
Item 3.Defaults Upon Senior Securities
7263
Item 4.Mine Safety Disclosures
7263
Item 5.Other Information
7263
Item 6.Exhibits
7364
Signatures
7465





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)
BSBY –Bloomberg Short-Term Bank Yield Index
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.in 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)
TJCATE – U.S. Tax Cuts and Jobs Act of 2017
TSR – Total shareholder return- Taxable equivalent
UPB – Unpaid principal balance
Visa – The Visa U.S.A., Inc. card association or its affiliates, collectively
Visa Class A shares – Class A shares of common stock issued by Visa are publicly traded shares which are not subject to restrictions on sale
Visa Class B shares – Class B shares of common stock issued by Visa which are subject to restrictions with respect to sale until all of the Covered Litigation has been settled. Class B shares will be convertible into Visa Class A shares using a then-current conversion ratio upon the lifting of restrictions with respect to sale of Visa Class B shares
Visa Derivativederivative – 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)September 30, 2020December 31, 2019
ASSETS
Cash and due from banks$578,026 $535,846 
Interest-bearing funds with Federal Reserve Bank1,266,313 553,390 
Interest earning deposits with banks20,929 20,635 
Federal funds sold and securities purchased under resale agreements120,095 77,047 
     Total cash, cash equivalents, restricted cash, and restricted cash equivalents1,985,363 1,186,918 
Investment securities available for sale, at fair value7,566,525 6,778,670 
Loans held for sale (includes $285,899 and $115,173 measured at fair value, respectively)745,160 115,173 
Loans, net of deferred fees and costs39,549,847 37,162,450 
Allowance for loan losses(603,800)(281,402)
Loans, net38,946,047 36,881,048 
Cash surrender value of bank-owned life insurance1,044,046 775,665 
Premises and equipment, net471,208 493,940 
Goodwill452,390 497,267 
Other intangible assets, net47,752 55,671 
Other assets1,782,047 1,418,930 
Total assets$53,040,538 $48,203,282 
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits:
Non-interest-bearing deposits$13,075,081 $9,439,485 
Interest-bearing deposits31,590,823 28,966,019 
Total deposits44,665,904 38,405,504 
Federal funds purchased and securities sold under repurchase agreements202,344 165,690 
Other short-term borrowings400,000 1,753,560 
Long-term debt1,628,385 2,153,897 
Other liabilities1,079,363 782,941 
Total liabilities47,975,996 43,261,592 
Shareholders' Equity
Preferred stock - no par value; authorized 100,000,000 shares; issued 22,000,000537,145 537,145 
Common stock - $1.00 par value; authorized 342,857,143 shares; issued 167,410,950 and 166,800,623; outstanding 147,317,923 and 147,157,596167,411 166,801 
Additional paid-in capital3,832,142 3,819,336 
Treasury stock, at cost; 20,093,027 and 19,643,027 shares(731,806)(715,560)
Accumulated other comprehensive income, net174,914 65,641 
Retained earnings1,084,736 1,068,327 
Total shareholders' equity5,064,542 4,941,690 
Total liabilities and shareholders' equity$53,040,538 $48,203,282 
(in thousands, except share and per share data)September 30, 2021December 31, 2020
ASSETS
Cash and due from banks$483,035 $531,579 
Interest-bearing funds with Federal Reserve Bank2,103,497 3,586,565 
Interest earning deposits with banks23,261 20,944 
Federal funds sold and securities purchased under resale agreements77,627 113,829 
     Total cash, cash equivalents, and restricted cash2,687,420 4,252,917 
Investment securities available for sale, at fair value10,481,071 7,962,438 
Loans held for sale (includes $152,258 and $216,647 measured at fair value, respectively)550,948 760,123 
Loans, net of deferred fees and costs38,341,030 38,252,984 
Allowance for loan losses(492,243)(605,736)
Loans, net37,848,787 37,647,248 
Cash surrender value of bank-owned life insurance1,065,256 1,049,373 
Premises, equipment, and software, net423,933 463,959 
Goodwill452,390 452,390 
Other intangible assets, net37,975 45,112 
Other assets1,961,349 1,760,599 
Total assets$55,509,129 $54,394,159 
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits:
Non-interest-bearing deposits$15,787,882 $13,477,854 
Interest-bearing deposits31,900,537 33,213,717 
Total deposits47,688,419 46,691,571 
Federal funds purchased and securities sold under repurchase agreements262,548 227,922 
Other short-term borrowings— 7,717 
Long-term debt1,203,761 1,202,494 
Other liabilities1,101,599 1,103,121 
Total liabilities50,256,327 49,232,825 
Shareholders' Equity
Preferred stock - no par value; authorized 100,000,000 shares; issued 22,000,000537,145 537,145 
Common stock - $1.00 par value; authorized 342,857,143 shares; issued 169,170,589 and 168,132,522; outstanding 145,483,994 and 148,039,495169,171 168,133 
Additional paid-in capital3,883,289 3,851,208 
Treasury stock, at cost; 23,686,595 and 20,093,027 shares(898,707)(731,806)
Accumulated other comprehensive (loss) income, net(5,462)158,635 
Retained earnings1,567,366 1,178,019 
Total shareholders' equity5,252,802 5,161,334 
Total liabilities and shareholders' equity$55,509,129 $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 September 30,Nine Months Ended September 30,
(in thousands, except per share data)2021202020212020
Interest income:
Loans, including fees$369,323 $384,275 $1,113,102 $1,213,609 
Investment securities available for sale35,876 43,196 98,631 139,784 
Loans held for sale5,540 6,341 18,611 9,047 
Federal Reserve Bank balances1,214 285 2,597 2,187 
Other earning assets551 1,453 2,123 6,389 
Total interest income412,504 435,550 1,235,064 1,371,016 
Interest expense:
Deposits16,086 43,194 60,475 185,670 
Federal funds purchased, securities sold under repurchase agreements, and other short-term borrowings36 176 104 7,885 
Long-term debt11,465 15,190 33,851 50,645 
Total interest expense27,587 58,560 94,430 244,200 
Net interest income384,917 376,990 1,140,634 1,126,816 
(Reversal of) provision for credit losses(7,868)43,383 (51,041)343,956 
Net interest income after (reversal of) provision for credit losses392,785 333,607 1,191,675 782,860 
Non-interest revenue:
Service charges on deposit accounts22,641 17,813 64,089 54,069 
Fiduciary and asset management fees19,786 15,885 56,545 46,009 
Card fees13,238 10,823 38,538 30,959 
Brokerage revenue14,745 10,604 41,644 32,987 
Mortgage banking income11,155 31,229 47,312 66,987 
Capital markets income8,089 5,690 18,929 22,984 
Income from bank-owned life insurance6,820 7,778 22,851 21,572 
Investment securities gains (losses), net962 (1,550)(1,028)76,594 
Other non-interest revenue17,519 16,139 44,117 39,591 
Total non-interest revenue114,955 114,411 332,997 391,752 
Non-interest expense:
Salaries and other personnel expense160,364 154,994 482,408 464,268 
Net occupancy, equipment, and software expense43,483 41,554 126,442 125,475 
Third-party processing and other services19,446 21,827 63,897 67,193 
Professional fees6,739 13,377 23,771 39,358 
FDIC insurance and other regulatory fees5,212 6,793 16,338 18,922 
Goodwill impairment— 44,877 — 44,877 
Other operating expenses31,788 33,233 91,841 116,983 
Total non-interest expense267,032 316,655 804,697 877,076 
Income before income taxes240,708 131,363 719,975 297,536 
Income tax expense53,935 39,789 159,910 74,250 
Net income186,773 91,574 560,065 223,286 
Less: Preferred stock dividends8,291 8,291 24,872 24,872 
Net income available to common shareholders$178,482 $83,283 $535,193 $198,414 
Net income per common share, basic$1.22 $0.57 $3.63 $1.35 
Net income per common share, diluted1.21 0.56 3.59 1.34 
Weighted average common shares outstanding, basic146,308 147,314 147,622 147,304 
Weighted average common shares outstanding, diluted147,701 147,976 149,069 148,037 
See accompanying notes to unaudited interim consolidated financial statements.
2


SYNOVUS FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited)
Three Months Ended September 30,
20212020
(in thousands)Before-tax AmountIncome TaxNet of Tax AmountBefore-tax AmountIncome TaxNet of Tax Amount
Net income$240,708 $(53,935)$186,773 $131,363 $(39,789)$91,574 
Unrealized gains (losses) on investment securities available for sale:
Net unrealized gains (losses) arising during the period(55,472)14,035 (41,437)(29,428)7,622 (21,806)
Reclassification adjustment for realized (gains) losses included in net income(962)243 (719)1,550 (401)1,149 
Net change(56,434)14,278 (42,156)(27,878)7,221 (20,657)
Unrealized gains (losses) on derivative instruments designated as cash flow hedges:
Net unrealized gains (losses) arising during the period(8,081)2,044 (6,037)(8,954)2,319 (6,635)
Reclassification adjustment for realized (gains) losses included in net income(4,009)1,014 (2,995)(1,031)267 (764)
Net change(12,090)3,058 (9,032)(9,985)2,586 (7,399)
Total other comprehensive income (loss)$(68,524)$17,336 $(51,188)$(37,863)$9,807 $(28,056)
Comprehensive income$135,585 $63,518 
Nine Months Ended September 30,
20212020
(in thousands)Before-tax AmountIncome TaxNet of Tax AmountBefore-tax AmountIncome TaxNet of Tax Amount
Net income$719,975 $(159,910)$560,065 $297,536 $(74,250)$223,286 
Unrealized gains (losses) on investment securities available for sale:
Net unrealized gains (losses) arising during the period(174,371)45,091 (129,280)116,975 (30,297)86,678 
Reclassification adjustment for realized (gains) losses included in net income1,028 (272)756 (76,594)19,838 (56,756)
Net change(173,343)44,819 (128,524)40,381 (10,459)29,922 
Unrealized gains (losses) on derivative instruments designated as cash flow hedges:
Net unrealized gains (losses) arising during the period(39,061)10,404 (28,657)108,508 (28,104)80,404 
Reclassification adjustment for realized (gains) losses included in net income(9,265)2,349 (6,916)(1,421)368 (1,053)
Net change(48,326)12,753 (35,573)107,087 (27,736)79,351 
Total other comprehensive income (loss)$(221,669)$57,572 $(164,097)$147,468 $(38,195)$109,273 
Comprehensive income$395,968 $332,559 

Three Months Ended September 30,
20202019
(in thousands)Before-tax AmountIncome TaxNet of Tax AmountBefore-tax AmountIncome TaxNet of Tax Amount
Net income$131,363 $(39,789)$91,574 $186,985 $(51,259)$135,726 
Unrealized gains (losses) on investment securities available for sale:
Net unrealized gains (losses) arising during the period(29,428)7,622 (21,806)33,919 (8,786)25,133 
Reclassification adjustment for realized (gains) losses included in net income1,550 (401)1,149 3,731 (966)2,765 
Net change(27,878)7,221 (20,657)37,650 (9,752)27,898 
Unrealized gains (losses) on derivative instruments designated as cash flow hedges:
Net unrealized gains (losses) arising during the period(8,954)2,319 (6,635)(1,182)306 (876)
Reclassification adjustment for realized (gains) losses included in net income(1,031)267 (764)0 0 0 
Net change(9,985)2,586 (7,399)(1,182)306 (876)
Post-retirement unfunded health benefit:
Actuarial gains (losses) arising during the period0 0 0 (510)132 (378)
Reclassification adjustment for realized (gains) losses included in net income0 0 0 0 0 0 
Net change0 0 0 (510)132 (378)
Total other comprehensive income (loss)$(37,863)$9,807 $(28,056)$35,958 $(9,314)$26,644 
Comprehensive income$63,518 $162,370 
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 
(in thousands, except per share data)Preferred StockCommon
Stock		Additional
Paid-in
Capital		Treasury
Stock		Accumulated
Other
Comprehensive
Income (Loss)		Retained EarningsTotal
Balance at June 30, 2021$537,145 $169,108 $3,872,949 $(824,197)$45,726 $1,436,983 $5,237,714 
Net income— — — — — 186,773 186,773 
Other comprehensive income (loss), net of income taxes— — — — (51,188)— (51,188)
Cash dividends declared on common stock - $0.33 per share— — — — — (48,099)(48,099)
Cash dividends declared on preferred stock(1)
— — — — — (8,291)(8,291)
Repurchases of common stock including costs to repurchase— — — (74,635)— — (74,635)
Issuance of common stock for earnout payment— — 4,955 125 — — 5,080 
Restricted share unit vesting and taxes paid related to net share settlement— 37 (650)— — — (613)
Stock options exercised, net— 26 520 — — — 546 
Share-based compensation expense— — 5,515 — — — 5,515 
Balance at September 30, 2021$537,145 $169,171 $3,883,289 $(898,707)$(5,462)$1,567,366 $5,252,802 
Balance at June 30, 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 income (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(1)
— — — — — (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 
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 at December 31, 2020$537,145 $168,133 $3,851,208 $(731,806)$158,635 $1,178,019 $5,161,334 
Net income— — — — — 560,065 560,065 
Other comprehensive income (loss), net of income taxes— — — — (164,097)— (164,097)
Cash dividends declared on common stock - $0.99 per share— — — — — (145,843)(145,843)
Cash dividends declared on preferred stock(2)
— — — — — (24,872)(24,872)
Repurchases of common stock including costs to repurchase— — — (167,142)— — (167,142)
Issuance of common stock for earnout payment— — 4,955 125 — — 5,080 
Restricted share unit vesting and taxes paid related to net share settlement— 343 (7,535)— — — (7,192)
Stock options exercised, net— 695 14,730 — — — 15,425 
Warrants exercised with net settlement and common stock reissued— — (113)116 — (3)— 
Share-based compensation expense— — 20,044 — — — 20,044 
Balance at September 30, 2021$537,145 $169,171 $3,883,289 $(898,707)$(5,462)$1,567,366 $5,252,802 
Balance at December 31, 2019$537,145 $166,801 $3,819,336 $(715,560)$65,641 $1,068,327 $4,941,690 
Cumulative-effect of change in accounting principle for credit losses (ASU 2016-13), net of tax— — — — — (35,721)(35,721)
Net income— — — — — 223,286 223,286 
Other comprehensive income (loss), 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(2)
— — — — — (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 
(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, 2020, dividends per share were $0.392021 and $0.37 for Series D and Series E Preferred Stock, respectively. For the three months ended September 30, 2019,2020, dividends per share were $0.39 and $0.37 for Series D and Series E Preferred Stock, respectively.
(3)(2)    For the nine months ended September 30, 2021 and 2020, dividends per share were $1.17$1.18 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$1.10 for Series D and Series E Preferred Stock, respectively.
See accompanying notes to unaudited interim consolidated financial statements.
5


SYNOVUS FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Nine Months Ended September 30,
(in thousands)20202019
Operating Activities
Net income$223,286 $412,096 
Adjustments to reconcile net income to net cash (used) provided by operating activities:
Provision for credit losses343,956 63,250 
Depreciation, amortization, and accretion, net77,385 8,969 
Deferred income tax (benefit) expense(60,433)42,594 
Originations of loans held for sale(2,221,302)(603,086)
Proceeds from sales of loans held for sale1,657,738 527,354 
Gain on sales of loans held for sale, net(50,001)(15,453)
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 
Share-based compensation expense13,873 21,396 
Net cash (used in) provided by operating activities(208,360)364,111 
Investing Activities
Net cash received in business combination, net of cash paid0 201,100 
Proceeds from maturities and principal collections of investment securities available for sale1,567,889 780,538 
Proceeds from sales of investment securities available for sale3,932,368 2,456,137 
Purchases of investment securities available for sale(6,180,812)(3,614,139)
Proceeds from sales of equity securities23,141 0 
Proceeds from sales of loans1,293,366 71,530 
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)
Net purchases of Federal Reserve Bank stock(454)(45,856)
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 cash used in investing activities(3,223,538)(1,514,325)
Financing Activities
Net increase in deposits6,259,108 (185,362)
Net increase in federal funds purchased and securities sold under repurchase agreements36,655 (69,412)
Net change in other short-term borrowings(1,353,560)1,582,000 
Repayments and redemption of long-term debt(1,776,913)(157,226)
Proceeds from issuance of long-term debt, net1,248,441 497,045 
Dividends paid to common shareholders(141,353)(123,446)
Dividends paid to preferred shareholders(24,872)(9,450)
Proceeds from issuance of Preferred stock0 341,410 
Stock options and warrants exercised6,511 11,162 
Repurchase of common stock(16,246)(688,860)
Taxes paid related to net share settlement of equity awards(7,428)(8,741)
Net cash provided by financing activities4,230,343 1,189,120 
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 
Supplemental Disclosures:
Income taxes paid$68,253 $88,480 
Interest paid268,046 350,388 
Non-cash Activities
Common stock issued, treasury stock reissued, equity awards/warrants exchanged to acquire FCB0 1,625,688 
Loans foreclosed and transferred to other real estate2,163 14,084 
Loans transferred to loans held for sale at fair value46,178 0 
Dividends declared on common stock during the period but paid after period-end48,614 44,476 
Dividends declared on preferred stock during the period but paid after period-end5,141 5,141 
Nine Months Ended September 30,
(in thousands)20212020
Operating Activities
Net income$560,065 $223,286 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
(Reversal of) provision for credit losses(51,041)343,956 
Depreciation, amortization, and accretion, net124,065 77,385 
Deferred income tax expense (benefit)36,213 (60,433)
Originations of loans held for sale(2,872,628)(2,221,302)
Proceeds from sales and payments on loans held for sale3,117,269 1,657,738 
Gain on sales of loans held for sale, net(36,930)(50,001)
Increase in other assets(27,443)(397,220)
(Decrease) increase in other liabilities(28,741)234,018 
Investment securities losses (gains), net1,028 (76,594)
Goodwill impairment— 44,877 
Share-based compensation expense21,485 13,873 
 Other— 2,057 
Net cash provided by (used in) operating activities843,342 (208,360)
Investing Activities
Proceeds from maturities and principal collections of investment securities available for sale2,279,073 1,567,889 
Proceeds from sales of investment securities available for sale223,977 2,529,722 
Purchases of investment securities available for sale(5,447,210)(4,778,166)
Proceeds from sales of loans105,753 1,293,366 
Purchases of loans(1,494,924)— 
Net decrease (increase) in loans1,238,658 (3,703,203)
Net (purchases) redemptions of Federal Home Loan Bank stock(1,200)96,772 
Net purchases of Federal Reserve Bank stock(1,210)(454)
Net proceeds from settlement (purchases) of bank-owned life insurance policies7,094 (248,023)
Net increase in premises, equipment and software(19,996)(22,786)
Other8,852 41,345 
Net cash used in investing activities(3,101,133)(3,223,538)
Financing Activities
Net increase in deposits996,848 6,259,108 
Net increase in federal funds purchased and securities sold under repurchase agreements34,626 36,655 
Net decrease in other short-term borrowings(7,717)(1,353,560)
Repayments and redemption of long-term debt— (1,776,913)
Proceeds from issuance of long-term debt, net— 1,248,441 
Dividends paid to common shareholders(146,578)(141,353)
Dividends paid to preferred shareholders(24,872)(24,872)
Repurchases of common stock(167,142)(16,246)
Issuances, net of taxes paid, under equity compensation plans8,233 (917)
Other(1,104)— 
Net cash provided by financing activities692,294 4,230,343 
(Decrease) increase in cash and cash equivalents including restricted cash(1,565,497)798,445 
Cash, cash equivalents, and restricted cash, at beginning of period4,252,917 1,186,918 
Cash, cash equivalents, and restricted cash at end of period$2,687,420 $1,985,363 
Supplemental Disclosures:
Income taxes paid$150,722 $68,253 
Interest paid108,889 267,582 
Non-cash Activities
Securities sold during the period but settled after period end196,289 — 
Premises and equipment transferred to other assets held for sale22,725 — 
Loans foreclosed and transferred to other real estate964 2,163 
Loans transferred (from) to other loans held for sale at fair value(1,462)46,178 
Dividends declared on common stock during the period but paid after period-end48,099 48,614 
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.
6


Notes to Unaudited Interim Consolidated Financial Statements
Note 1 - Basis of Presentation and Accounting Policies
General
The accompanying unaudited interim consolidated financial statements of Synovus Financial Corp. include the accounts of the Parent Company and its consolidated subsidiaries. Synovus Financial Corp. is a financial services company based in Columbus, Georgia. Through its wholly-owned subsidiary, Synovus Bank, a Georgia state-chartered bank that is a member of the Federal Reserve System, the Company provides commercial and 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 markets in the Southeast, with 292 285 branches and 389386 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.
Immaterial Correction of Prior Period Financial Statements
During the third quarter of 2021, the Company made corrections to proceeds and purchases of investment securities available for sale by adjusting for the impact of timing differences associated with unsettled trades that crossed certain reporting periods. The Company concluded that the corrections were not material to any prior or current periods from a combined qualitative and quantitative perspective.
A summary of corrections is presented below.
Corrected Consolidated Statement of Cash Flows
(unaudited)
Nine months ended September 30, 2020
(in thousands)As ReportedAdjustmentAs Corrected
Investing Activities
Proceeds from sales of investment securities available for sale$3,932,368 $(1,402,646)$2,529,722 
Purchases of investment securities available for sale(6,180,812)1,402,646 (4,778,166)
Net cash used in investing activities$(3,223,538)$— $(3,223,538)
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
10

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
7


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 is 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 completed2021 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.
ASU 2021-06, Presentation of Financial Statements (Topic 205), Financial Services - Depository and Lending (Topic 942), and Financial Services-Investment Companies (Topic 946). In August 2021, the FASB issued ASU 2021-06 which amends SEC paragraphs in the codification pursuant to SEC Final Rule Releases No. 33-10786 and No. 33-10835. These rule releases amend disclosure requirements applicable to acquisitions and dispositions of businesses and also amend statistical disclosures that banks and bank holding companies provide to investors. ASU 2021-06 eliminates disclosures that overlap with SEC rules or US GAAP. The amendments in this ASU were effective upon its acquisitionaddition to the FASB codification with no material effect to the unaudited financial statements.
Recently Issued Accounting Standards Not Yet Adopted
ASU 2021-01, Reference Rate Reform (Topic 848). 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 .Reference Rate Reform: Facilitation of the Effects of Reference Rate Reform on Financial Reporting The resultson October 1, 2020. While Synovus has not yet finalized the election of FCB's operations are included in Synovus' consolidatedoptional expedients for ASU 2021-01, we do not currently expect there to be a material 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"impact to the consolidated financial statementsCompany regardless of Synovus' 2019 Form 10-K for additional information on Synovus' acquisition of FCB.
Acquisition of Global Onewhich optional expedients the Company selects to replace LIBOR.
On October 1, 2016, Synovus completed its acquisition of all of the outstanding stock 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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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, 20202021 and December 31, 20192020 are summarized below.
September 30, 2020September 30, 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$120,212 $116 $(2,435)$117,893 
U.S. Government agency securitiesU.S. Government agency securities153,984 3,056 (426)156,614 U.S. Government agency securities53,213 1,776 — 54,989 
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 agencies879,188 1,441 (8,412)872,217 
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 enterprises7,280,571 65,605 (75,243)7,270,933 
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 enterprises1,060,803 7,736 (11,051)1,057,488 
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 enterprises431,569 11,358 (4,404)438,523 
State and municipal securities500 1 0 501 
Asset-backed securitiesAsset-backed securities650,000 — — 650,000 
Corporate debt securities and other debt securitiesCorporate debt securities and other debt securities20,186 141 (390)19,937 Corporate debt securities and other debt securities18,284 744 — 19,028 
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$10,493,840 $88,776 $(101,545)$10,481,071 
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 $— $— $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 — 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 — 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 — 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, 20202021 and December 31, 2019,2020, investment securities with a carrying value of $2.34$3.74 billion and $1.71$3.84 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, 20202021 and December 31, 20192020 are presented below.
September 30, 2020September 30, 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$47,398 $(2,435)$— $— $47,398 $(2,435)
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 agencies627,822 (6,566)162,587 (1,846)790,409 (8,412)
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 enterprises5,364,111 (75,243)— — 5,364,111 (75,243)
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 enterprises199,534 (1,572)573,494 (9,479)773,028 (11,051)
Corporate debt securities and other debt securities11,115 (390)0 0 11,115 (390)
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprisesCommercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises161,573 (4,404)— — 161,573 (4,404)
TotalTotal$1,651,051 $(11,393)$0 $0 $1,651,051 $(11,393)Total$6,400,438 $(90,220)$736,081 $(11,325)$7,136,519 $(101,545)
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 $(5,925)$— $— $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)— — 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)— — 9,337 (168)
TotalTotal$891,914 $(2,468)$5,309 $(38)$897,223 $(2,506)Total$1,379,662 $(16,669)$— $— $1,379,662 $(16,669)
As of September 30, 2020,2021, Synovus had 28135 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 515 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 September 30, 2021.
At September 30, 2020,2021, 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.
13

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, 20202021 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 
10
Proceeds from sales, gross

Distribution of Maturities at September 30, 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$20,350 $— $99,862 $— $120,212 
U.S. Government agency securities756 321 52,136 — 53,213 
Mortgage-backed securities issued by U.S. Government agencies— 952 140 878,096 879,188 
Mortgage-backed securities issued by U.S. Government sponsored enterprises59 — 71,559 7,208,953 7,280,571 
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises— — 165 1,060,638 1,060,803 
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises— 109,227 231,245 91,097 431,569 
Asset-backed securities650,000 — — — 650,000 
Corporate debt securities and other debt securities— 9,502 8,782 — 18,284 
Total amortized cost$671,165 $120,002 $463,889 $9,238,784 $10,493,840 
Fair Value
U.S. Treasury securities$20,350 $— $97,543 $— $117,893 
U.S. Government agency securities769 326 53,894 — 54,989 
Mortgage-backed securities issued by U.S. Government agencies— 989 146 871,082 872,217 
Mortgage-backed securities issued by U.S. Government sponsored enterprises60 — 74,540 7,196,333 7,270,933 
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises— — 172 1,057,316 1,057,488 
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises— 112,628 230,898 94,997 438,523 
Asset-backed securities650,000 — — — 650,000 
Corporate debt securities and other debt securities— 9,815 9,213 — 19,028 
Total fair value$671,179 $123,758 $466,406 $9,219,728 $10,481,071 
Gross gains and gross losses on sales of securities available for sale for the three and nine months ended September 30, 20202021 and 20192020 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 September 30,Nine Months Ended September 30,
(in thousands)(in thousands)2020201920202019(in thousands)2021202020212020
Proceeds from sales of investment securities available for sale$1,249,507 $709,464 $3,932,368 $2,456,137 
Gross realized gains on salesGross realized gains on sales0 140 83,840 9,270 Gross realized gains on sales$962 $— $962 $83,840 
Gross realized losses on sales(1)
(1,550)(3,871)(7,246)(14,772)
Gross realized losses on salesGross realized losses on sales— (1,550)(1,990)(7,246)
Investment securities gains (losses), netInvestment securities gains (losses), net$(1,550)$(3,731)$76,594 $(5,502)Investment securities gains (losses), net$962 $(1,550)$(1,028)$76,594 
(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.
1411


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, 20202021 and December 31, 2019.2020.
September 30, 2020September 30, 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$11,671,000 $21,115 $1,573 $22,688 $45,198 $32,151 $11,771,037 
Owner-occupiedOwner-occupied6,869,346 4,131 375 4,506 10,623 9,638 6,894,113 Owner-occupied7,147,006 2,923 688 3,611 6,792 6,342 7,163,751 
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 industrial18,818,006 24,038 2,261 26,299 51,990 38,493 18,934,788 
Investment propertiesInvestment properties9,628,029 5,620 538 6,158 28,260 0 9,662,447 Investment properties9,440,485 945 291 1,236 4,345 2,397 9,448,463 
1-4 family properties1-4 family properties649,225 2,092 350 2,442 2,135 1,236 655,038 1-4 family properties608,807 927 1,254 2,181 2,419 467 613,874 
Land and developmentLand and development645,148 583 268 851 2,126 265 648,390 Land and development475,911 62 14 76 1,936 — 477,923 
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 estate10,525,203 1,934 1,559 3,493 8,700 2,864 10,540,260 
Consumer mortgagesConsumer mortgages5,643,745 6,475 872 7,347 7,433 0 5,658,525 Consumer mortgages5,065,749 5,162 47 5,209 37,040 501 5,108,499 
Home equity linesHome equity lines1,601,705 3,176 29 3,205 10,297 0 1,615,207 Home equity lines1,293,685 5,549 332 5,881 8,688 — 1,308,254 
Credit cardsCredit cards259,262 1,894 3,673 5,567 0 0 264,829 Credit cards290,464 1,280 1,282 2,562 — — 293,026 
Other consumer loansOther consumer loans1,116,334 11,866 578 12,444 1,459 0 1,130,237 Other consumer loans2,131,641 16,894 479 17,373 7,189 — 2,156,203 
Total consumerTotal consumer8,621,046 23,411 5,152 28,563 19,189 0 8,668,798 Total consumer8,781,539 28,885 2,140 31,025 52,917 501 8,865,982 
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$38,124,748 $54,857 $5,960 $60,817 $113,607 $41,858 $38,341,030 

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 — 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 — 9,103,379 
1-4 family properties621,492 3,548 36 3,584 2,383 1,236 628,695 
Land and development591,048 422 — 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 — 5,513,491 
Home equity lines1,521,575 4,006 — 4,006 12,145 — 1,537,726 
Credit cards276,778 2,363 1,877 4,240 — — 281,018 
Other consumer loans1,062,899 9,122 477 9,599 2,376 — 1,074,874 
Total consumer8,356,667 24,342 2,839 27,181 23,261 — 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$4.1 million and $2.5$4.3 million for the three months ended September 30, 20202021 and 2019,2020, respectively, and $9.2$10.1 million and $8.0$9.2 million for the nine months ended September 30, 2021 and 2020, and 2019,
15

respectively. Of the interest income recognized during the three months ended September 30, 20202021 and 2019,2020, cash-basis interest income was $454 thousand and $1.3 million, and $363 thousand, respectively. Cash-basis interest income was $2.7$1.6 million and $2.0$2.7 million for the nine months ended September 30, 2021 and 2020, and 2019, respectively.
12


Pledged Loans
Loans with carrying values of $15.29$14.29 billion and $12.11$15.05 billion, respectively, were pledged as collateral for borrowings and capacity at September 30, 20202021 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 billion net of unearned fees$782.2 million at September 30, 20202021 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. The("other consumer loans"). Together, consumer mortgages and HELOCs comprise the majority of Synovus' consumer loans are consumer mortgages and HELOCsare 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 quarterlyannually 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 classifiedcategorized 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 family residential properties also consider available information on the payment status of any associated senior liens with other financial institutions.
13


The following table summarizestables summarize each loan portfolio class by risk grade and origination year as of September 30, 2021 and December 31, 2020 as required under CECL.
September 30, 2020September 30, 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$2,138,319 $1,487,509 $1,029,770 $688,243 $495,111 $1,022,111 $4,456,088 $44,065 $11,361,216 
Special MentionSpecial Mention49,283 39,929 21,599 33,376 8,404 7,986 63,455 506 224,538 Special Mention3,019 22,126 14,454 7,994 3,416 2,118 85,126 422 138,675 
Substandard(1)
Substandard(1)
27,247 12,646 14,879 36,007 12,373 40,342 102,364 516 246,374 
Substandard(1)
12,311 58,283 43,888 10,648 21,137 36,784 71,188 984 255,223 
Doubtful(2)
Doubtful(2)
0 3,721 19,778 186 915 91 4,032 0 28,723 
Doubtful(2)
447 — 2,449 13,015 — — 12 — 15,923 
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 agricultural2,154,096 1,567,918 1,090,561 719,900 519,664 1,061,013 4,612,414 45,471 11,771,037 
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 Pass1,124,258 1,302,576 1,169,910 898,921 793,353 1,265,310 419,099 — 6,973,427 
Special MentionSpecial Mention3,029 19,004 18,746 11,767 3,604 7,278 0 0 63,428 Special Mention647 1,646 10,783 12,780 6,693 23,689 — — 56,238 
Substandard(1)
Substandard(1)
1,788 14,686 36,319 29,794 6,521 32,286 0 0 121,394 
Substandard(1)
1,689 2,777 19,333 51,223 26,089 26,633 — — 127,744 
Doubtful(2)
Doubtful(2)
0 0 9,638 0 0 0 0 0 9,638 
Doubtful(2)
— — — 6,342 — — — — 6,342 
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-occupied1,126,594 1,306,999 1,200,026 969,266 826,135 1,315,632 419,099 — 7,163,751 
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 industrial3,280,690 2,874,917 2,290,587 1,689,166 1,345,799 2,376,645 5,031,513 45,471 18,934,788 
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 Pass1,591,349 1,536,934 2,046,139 1,217,911 782,607 1,466,183 289,154 — 8,930,277 
Special MentionSpecial Mention1,222 66,438 147,928 141,036 166,053 129,887 30,206 0 682,770 Special Mention6,127 228 59,292 124,165 77,438 95,525 54,635 — 417,410 
Substandard(1)
Substandard(1)
812 2,655 24,965 14,927 821 88,693 38 0 132,911 
Substandard(1)
1,453 330 8,780 48,755 13,516 27,851 91 — 100,776 
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 properties1,598,929 1,537,492 2,114,211 1,390,831 873,561 1,589,559 343,880 — 9,448,463 
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 Pass226,200 109,045 56,027 50,133 59,219 68,597 32,504 — 601,725 
Special MentionSpecial Mention419 0 524 111 800 120 0 0 1,974 Special Mention195 210 — — — 243 — — 648 
Substandard(1)
Substandard(1)
1,514 1,517 3,837 1,038 489 2,560 1,518 0 12,473 
Substandard(1)
1,600 — 832 4,996 917 2,643 513 — 11,501 
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 properties227,995 109,255 56,859 55,129 60,136 71,483 33,017 — 613,874 
1714


September 30, 2020September 30, 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 Pass80,340 50,844 105,188 66,822 61,539 64,609 36,134 — 465,476 
Special MentionSpecial Mention0 2,172 4,277 5,784 0 1,828 3,550 0 17,611 Special Mention— 815 1,926 839 17 343 — — 3,940 
Substandard(1)
Substandard(1)
1,627 1,104 4,675 1,085 527 1,564 0 0 10,582 
Substandard(1)
— 963 60 3,196 825 3,463 — — 8,507 
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 development80,340 52,622 107,174 70,857 62,381 68,415 36,134 — 477,923 
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 estate1,907,264 1,699,369 2,278,244 1,516,817 996,078 1,729,457 413,031 — 10,540,260 
Consumer mortgagesConsumer mortgagesConsumer mortgages
PassPass1,579,366 964,882 481,718 764,384 755,595 1,102,091 1,005 0 5,649,041 Pass938,232 1,660,740 646,572 257,873 445,631 1,104,999 655 — 5,054,702 
Substandard(1)
Substandard(1)
49 197 777 805 2,412 5,170 0 0 9,410 
Substandard(1)
527 3,663 4,796 12,501 5,747 26,342 — — 53,576 
Loss(3)
Loss(3)
0 0 0 0 0 74 0 0 74 
Loss(3)
— — — — — 221 — — 221 
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 mortgages938,759 1,664,403 651,368 270,374 451,378 1,131,562 655 — 5,108,499 
Home equity linesHome equity linesHome equity lines
PassPass0 0 0 0 0 0 1,513,600 86,404 1,600,004 Pass— — — — — — 1,222,184 70,330 1,292,514 
Substandard(1)
Substandard(1)
0 0 0 0 0 0 8,603 5,173 13,776 
Substandard(1)
— — — — — — 8,843 5,749 14,592 
Doubtful(2)
Doubtful(2)
0 0 0 0 0 0 0 19 19 
Doubtful(2)
— — — — — — — 18 18 
Loss(3)
Loss(3)
0 0 0 0 0 0 1,243 165 1,408 
Loss(3)
— — — — — — 989 141 1,130 
Total home equity linesTotal home equity lines0 0 0 0 0 0 1,523,446 91,761 1,615,207 Total home equity lines— — — — — — 1,232,016 76,238 1,308,254 
Credit cardsCredit cardsCredit cards
PassPass0 0 0 0 0 0 261,207 0 261,207 Pass— — — — — — 291,744 — 291,744 
Substandard(1)
Substandard(1)
0 0 0 0 0 0 828 0 828 
Substandard(1)
— — — — — — 469 — 469 
Loss(4)
Loss(4)
0 0 0 0 0 0 2,794 0 2,794 
Loss(4)
— — — — — — 813 — 813 
Total credit cardsTotal credit cards0 0 0 0 0 0 264,829 0 264,829 Total credit cards— — — — — — 293,026 — 293,026 
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 Pass599,241 801,239 153,525 58,391 83,428 108,650 343,651 — 2,148,125 
Substandard(1)
Substandard(1)
0 720 163 474 64 714 253 0 2,388 
Substandard(1)
368 825 1,936 1,438 2,412 901 176 — 8,056 
Loss(4)
Loss(4)
— — — — — 22 — — 22 
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 loans599,609 802,064 155,461 59,829 85,840 109,573 343,827 — 2,156,203 
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 consumer1,538,368 2,466,467 806,829 330,203 537,218 1,241,135 1,869,524 76,238 8,865,982 
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$6,726,322 $7,040,753 $5,375,660 $3,536,186 $2,879,095 $5,347,237 $7,314,068 $121,709 $38,341,030 
(1)    The majority of loans within Substandard risk grade are accruing loans at September 30, 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.
15


December 31, 2020
Term Loans Amortized Cost Basis by Origination YearRevolving Loans
(in thousands)20202019201820172016PriorAmortized Cost BasisConverted to Term LoansTotal
Commercial, financial and agricultural
Pass$3,819,048 $1,333,460 $847,283 $582,612 $551,413 $633,871 $4,102,751 $49,762 $11,920,200 
Special Mention63,307 40,618 12,723 22,070 1,665 5,545 60,741 489 207,158 
Substandard(1)
28,698 36,618 24,867 36,072 12,808 35,172 84,498 514 259,247 
Doubtful(2)
— 3,721 19,778 — — — 48 — 23,547 
Total commercial, financial and agricultural3,911,053 1,414,417 904,651 640,754 565,886 674,588 4,248,038 50,765 12,410,152 
Owner-occupied
Pass1,321,680 1,275,435 1,131,183 982,056 555,932 1,297,070 349,566 — 6,912,922 
Special Mention6,170 9,995 10,682 14,138 1,582 13,768 — — 56,335 
Substandard(1)
2,570 22,793 42,615 26,033 7,316 29,794 — — 131,121 
Doubtful(2)
— — 9,638 — — — — — 9,638 
Total owner-occupied1,330,420 1,308,223 1,194,118 1,022,227 564,830 1,340,632 349,566 — 7,110,016 
Total commercial and industrial5,241,473 2,722,640 2,098,769 1,662,981 1,130,716 2,015,220 4,597,604 50,765 19,520,168 
Investment properties
Pass1,055,440 2,126,667 1,999,345 1,091,880 483,780 1,301,088 229,044 — 8,287,244 
Special Mention1,482 66,160 176,794 136,004 138,362 129,401 55,440 — 703,643 
Substandard(1)
1,007 4,770 24,476 19,820 21,875 40,509 35 — 112,492 
Total investment properties1,057,929 2,197,597 2,200,615 1,247,704 644,017 1,470,998 284,519 — 9,103,379 
1-4 family properties
Pass197,320 95,145 70,267 88,454 38,729 97,374 27,657 — 614,946 
Special Mention402 — 508 109 786 118 — — 1,923 
Substandard(1)
1,527 653 4,312 1,141 554 2,299 1,340 — 11,826 
Total 1-4 family properties199,249 95,798 75,087 89,704 40,069 99,791 28,997 — 628,695 
Land and development
Pass84,985 173,302 83,734 92,911 12,249 76,380 53,250 — 576,811 
Special Mention857 1,995 2,866 282 — 1,332 636 — 7,968 
Substandard(1)
1,229 425 4,664 915 136 1,485 — — 8,854 
Total land and development87,071 175,722 91,264 94,108 12,385 79,197 53,886 — 593,633 
Total commercial real estate1,344,249 2,469,117 2,366,966 1,431,516 696,471 1,649,986 367,402 — 10,325,707 
16


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 — 5,502,479 
Substandard(1)
33 961 748 889 866 7,224 — — 10,721 
Loss(3)
— — — — — 291 — — 291 
Total consumer mortgages1,871,545 875,730 426,459 679,144 686,676 972,897 1,040 — 5,513,491 
Home equity lines
Pass— — — — — — 1,429,755 90,832 1,520,587 
Substandard(1)
— — — — — — 9,698 5,996 15,694 
Doubtful(2)
— — — — — — — 19 19 
Loss(3)
— — — — — — 1,283 143 1,426 
Total home equity lines— — — — — — 1,440,736 96,990 1,537,726 
Credit cards
Pass— — — — — — 279,142 — 279,142 
Substandard(1)
— — — — — — 595 — 595 
Loss(4)
— — — — — — 1,281 — 1,281 
Total credit cards— — — — — — 281,018 — 281,018 
Other consumer loans
Pass252,160 190,820 89,187 100,459 80,365 61,040 297,637 — 1,071,668 
Substandard(1)
19 762 262 1,195 121 585 227 — 3,171 
Loss(4)
— — — — — 35 — — 35 
Total other consumer loans252,179 191,582 89,449 101,654 80,486 61,660 297,864 — 1,074,874 
Total consumer2,123,724 1,067,312 515,908 780,798 767,162 1,034,557 2,020,658 96,990 8,407,109 
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, 2020.2021.
1917


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, 20202021 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, 2020As Of and For the Three Months Ended September 30, 2021
(in thousands)(in thousands)Commercial & IndustrialCommercial Real EstateConsumerTotal(in thousands)Commercial & IndustrialCommercial Real EstateConsumerTotal
Allowance for loan losses:Allowance for loan losses:Allowance for loan losses:
Beginning balance$229,915 $171,526 $187,207 $588,648 
Beginning balance at June 30, 2021Beginning balance at June 30, 2021$254,938 $92,113 $169,657 $516,708 
Charge-offsCharge-offs(19,367)(6,878)(9,101)(35,346)Charge-offs(20,230)(718)(8,933)(29,881)
RecoveriesRecoveries3,796 1,225 1,859 6,880 Recoveries1,760 4,535 3,070 9,365 
Provision for (reversal of) loan losses46,256 (22,068)19,430 43,618 
Ending balance$260,600 $143,805 $199,395 $603,800 
(Reversal of) provision for loan losses(Reversal of) provision for loan losses(5,961)(4,278)6,290 (3,949)
Ending balance at September 30, 2021Ending balance at September 30, 2021$230,507 $91,652 $170,084 $492,243 
As Of and For the Three Months Ended September 30, 2019As Of and For the Three Months Ended September 30, 2020
(in thousands)(in thousands)Commercial & IndustrialCommercial Real EstateConsumerTotal(in thousands)Commercial & IndustrialCommercial Real EstateConsumerTotal
Allowance for loan losses:Allowance for loan losses:Allowance for loan losses:
Beginning balance$138,004 $63,463 $55,909 $257,376 
Beginning balance at June 30, 2020Beginning balance at June 30, 2020$229,915 $171,526 $187,207 $588,648 
Charge-offsCharge-offs(15,425)(3,275)(6,026)(24,726)Charge-offs(19,367)(6,878)(9,101)(35,346)
RecoveriesRecoveries2,276 1,490 1,035 4,801 Recoveries3,796 1,225 1,859 6,880 
Provision for loan losses17,156 280 10,126 27,562 
Ending balance$142,011 $61,958 $61,044 $265,013 
Provision for (reversal of) loan lossesProvision for (reversal of) loan losses46,256 (22,068)19,430 43,618 
Ending balance at September 30, 2020Ending balance at September 30, 2020$260,600 $143,805 $199,395 $603,800 
As Of and For the Nine Months Ended September 30, 2020As Of and For the Nine Months Ended September 30, 2021
(in thousands)(in thousands)Commercial & IndustrialCommercial Real EstateConsumerTotal(in thousands)Commercial & IndustrialCommercial Real EstateConsumerTotal
Allowance for loan losses:Allowance for loan losses: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 
Beginning balance at December 31, 2020Beginning balance at December 31, 2020$229,555 $130,742 $245,439 $605,736 
Charge-offsCharge-offs(57,497)(8,585)(23,917)(89,999)Charge-offs(48,374)(14,877)(22,808)(86,059)
RecoveriesRecoveries8,798 2,160 6,468 17,426 Recoveries6,027 5,938 6,828 18,793 
Provision for loan losses165,827 83,451 62,699 311,977 
Ending balance$260,600 $143,805 $199,395 $603,800 
Provision for (reversal of) loan lossesProvision for (reversal of) loan losses43,299 (30,151)(59,375)(46,227)
Ending balance at September 30, 2021Ending balance at September 30, 2021$230,507 $91,652 $170,084 $492,243 
As Of and For the Nine Months Ended September 30, 2019As Of and For the Nine Months Ended September 30, 2020
(in thousands)(in thousands)Commercial & IndustrialCommercial Real EstateConsumerTotal(in thousands)Commercial & IndustrialCommercial Real EstateConsumerTotal
Allowance for loan losses:Allowance for loan losses:Allowance for loan losses:
Beginning balance$133,123 $68,796 $48,636 $250,555 
Beginning balance at December 31, 2019Beginning balance at December 31, 2019$145,782 $67,430 $68,190 $281,402 
Impact from adoption of ASC 326Impact from adoption of ASC 326(2,310)(651)85,955 82,994 
Beginning balance, after adoption of ASC 326, at January 1, 2020Beginning balance, after adoption of ASC 326, at January 1, 2020$143,472 $66,779 $154,145 $364,396 
Charge-offsCharge-offs(39,558)(5,369)(17,363)(62,290)Charge-offs(57,497)(8,585)(23,917)(89,999)
RecoveriesRecoveries6,087 3,788 3,623 13,498 Recoveries8,798 2,160 6,468 17,426 
Provision for (reversal of) loan losses42,359 (5,257)26,148 63,250 
Ending balance$142,011 $61,958 $61,044 $265,013 
Provision for loan lossesProvision for loan losses165,827 83,451 62,699 311,977 
Ending balance at September 30, 2020Ending balance at September 30, 2020$260,600 $143,805 $199,395 $603,800 




20

The ALL of $603.8$492.2 million and the reserve for unfunded commitments of $60.8$43.0 million, which is recorded in other liabilities, comprise the total ACL of $664.6$535.2 million at September 30, 2020.2021. The ACL increased duringdecreased $118.3 million from December 31, 2020, resulting in an ACL to loans coverage ratio of 1.40% at September 30, 2021.
The ACL is estimated using a two-year reasonable and supportable forecast period. To the thirdextent the lives of the loans in the portfolio extend beyond the period for which a reasonable and supportable forecast can be made, the Company reverts on a straight-line basis back to the historical rates over a one-year period. Synovus utilizes multiple economic forecast scenarios sourced from a reputable third-party provider and probability-weighted internally. The scenarios include a baseline forecast, an
18


upside scenario reflecting an accelerated recovery, a downside scenario that reflects adverse economic conditions, and an additional adverse scenario that assumes consistent slow growth that is less optimistic than the baseline. At September 30, 2021, economic scenario weights incorporated a 45% downside bias compared to 40% at June 30, 2021. The baseline outlook used in the September 30, 2021 estimate showed stable economic conditions with the unemployment rate at 4.6% by the end of 2021, compared to 4.5% used in the second quarter of 2020 by $14.9 million to $664.6 million as2021’s ACL estimate. The baseline economic scenario includes the impacts of September 30, 2020.Since the adoptionenacted and certain proposed government spending measures.
Reversal 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.Provisionprovision for credit losses (which includes the provisionreversals of provisions for loan losses and unfunded commitments)commitments. The reversal of $43.4provision for credit losses of $7.9 million and $51.0 million for the three months ended September 30, 2020 included net charge-offs of $28.5 million and the impact of downgrades largely concentrated in the hotel portfolio, which were mostly 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, resulted2021, respectively, included net charge-offs of $20.5 million and $67.3 million, respectively. The reversal of provision for credit losses and related reduction in the building ofACL primarily resulted from the ACL required under CECL primarilycontinued improvement in the credit outlook for the portfolio. This was partially offset by $10.0 million and $35.8 million in reserves added as a result of deterioration inpurchases of $453.3 million and $1.49 billion of third-party lending loans for the economic environment due to the impact of COVID-19.
Our modeling process incorporates quantitativethree and qualitative considerations that are used to inform CECL estimates. The internally developed economic forecast used to determine the ACL as ofnine months ended September 30, 2020 was approved late2021, respectively, as well as net growth 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.loans.

2119



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, 20202021 and 20192020 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 September 30, 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 agricultural44 $3,437 $2,642 $6,079 
Owner-occupiedOwner-occupied7 1,753 0 1,753 Owner-occupied10 2,488 469 2,957 
Total commercial and industrialTotal commercial and industrial49 5,088 670 5,758 Total commercial and industrial54 5,925 3,111 9,036 
Investment propertiesInvestment properties2 294 93 387 Investment properties2 637 — 637 
1-4 family properties1-4 family properties5 74 114 188 1-4 family properties3 — 84 84 
Land and developmentLand and development1 40 0 40 Land and development2 636 17 653 
Total commercial real estateTotal commercial real estate8 408 207 615 Total commercial real estate7 1,273 101 1,374 
Consumer mortgagesConsumer mortgages3 496 23 519 Consumer mortgages8 1,167 477 1,644 
Home equity linesHome equity lines17 471 648 1,119 Home equity lines16 2,655 — 2,655 
Other consumer loansOther consumer loans3 48 85 133 Other consumer loans7 44 476 520 
Total consumerTotal consumer23 1,015 756 1,771 Total consumer31 3,866 953 4,819 
Total TDRsTotal TDRs80 $6,511 $1,633 $8,144 (2)Total TDRs92 $11,064 $4,165 $15,229 (2)
Three Months Ended September 30, 2019Three Months Ended September 30, 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 agricultural42 $3,335 $670 $4,005 
Owner-occupiedOwner-occupied7 2,822 861 3,683 Owner-occupied7 1,753 — 1,753 
Total commercial and industrialTotal commercial and industrial34 5,399 2,778 8,177 Total commercial and industrial49 5,088 670 5,758 
Investment propertiesInvestment properties4 385 0 385 Investment properties2 294 93 387 
1-4 family properties1-4 family properties4 766 0 766 1-4 family properties5 74 114 188 
Land and developmentLand and development1 473 0 473 Land and development1 40 — 40 
Total commercial real estateTotal commercial real estate9 1,624 0 1,624 Total commercial real estate8 408 207 615 
Consumer mortgagesConsumer mortgages10 1,008 118 1,126 Consumer mortgages3 496 23 519 
Home equity linesHome equity lines25 364 1,635 1,999 Home equity lines17 471 648 1,119 
Other consumer loansOther consumer loans27 473 1,222 1,695 Other consumer loans3 48 85 133 
Total consumerTotal consumer62 1,845 2,975 4,820 Total consumer23 1,015 756 1,771 
Total TDRsTotal TDRs105 $8,868 $5,753 $14,621 (3)Total TDRs80 $6,511 $1,633 $8,144 (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, 20202021 and 2019.2020.
(2)    NaNNo net charge-offs were recorded during the three months ended September 30, 2021.
(3)    No net charge-offs were recorded during the three months ended September 30, 2020.
(3)    NaN net charge-offs were recorded during the three months ended September 30, 2019.
20


22

Nine Months Ended September 30, 2020Nine Months Ended September 30, 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 agricultural118 $8,562 $4,681 $13,243 Commercial, financial and agricultural102 $8,440 $6,379 $14,819 
Owner-occupiedOwner-occupied19 3,573 1,530 5,103 Owner-occupied20 4,897 867 5,764 
Total commercial and industrialTotal commercial and industrial137 12,135 6,211 18,346 Total commercial and industrial122 13,337 7,246 20,583 
Investment propertiesInvestment properties6 28,963 93 29,056 Investment properties8 3,040 — 3,040 
1-4 family properties1-4 family properties15 867 1,105 1,972 1-4 family properties10 621 123 744 
Land and developmentLand and development3 581 0 581 Land and development4 1,003 59 1,062 
Total commercial real estateTotal commercial real estate24 30,411 1,198 31,609 Total commercial real estate22 4,664 182 4,846 
Consumer mortgagesConsumer mortgages19 1,568 2,589 4,157 Consumer mortgages10 1,498 477 1,975 
Home equity linesHome equity lines50 926 2,530 3,456 Home equity lines43 4,142 258 4,400 
Other consumer loansOther consumer loans50 145 2,779 2,924 Other consumer loans93 360 5,340 5,700 
Total consumerTotal consumer119 2,639 7,898 10,537 Total consumer146 6,000 6,075 12,075 
Total TDRsTotal TDRs280 $45,185 $15,307 $60,492 (2)Total TDRs290 $24,001 $13,503 $37,504 (2)
Nine Months Ended September 30, 2019Nine Months Ended September 30, 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 agricultural61 $5,703 $4,404 $10,107 Commercial, financial and agricultural118 $8,562 $4,681 $13,243 
Owner-occupiedOwner-occupied13 4,854 861 5,715 Owner-occupied19 3,573 1,530 5,103 
Total commercial and industrialTotal commercial and industrial74 10,557 5,265 15,822 Total commercial and industrial137 12,135 6,211 18,346 
Investment propertiesInvestment properties6 1,048 0 1,048 Investment properties6 28,963 93 29,056 
1-4 family properties1-4 family properties14 2,072 0 2,072 1-4 family properties15 867 1,105 1,972 
Land and developmentLand and development3 641 0 641 Land and development3 581 — 581 
Total commercial real estateTotal commercial real estate23 3,761 0 3,761 Total commercial real estate24 30,411 1,198 31,609 
Consumer mortgagesConsumer mortgages15 1,245 1,332 2,577 Consumer mortgages19 1,568 2,589 4,157 
Home equity linesHome equity lines50 2,686 1,740 4,426 Home equity lines50 926 2,530 3,456 
Other consumer loansOther consumer loans79 1,167 3,599 4,766 Other consumer loans50 145 2,779 2,924 
Total consumerTotal consumer144 5,098 6,671 11,769 Total consumer119 2,639 7,898 10,537 
Total TDRsTotal TDRs241 $19,416 $11,936 $31,352 (3)Total TDRs280 $45,185 $15,307 $60,492 (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 nine months ending September 30, 20202021 and 2019.2020.
(2)    NaN net charge-offs were recorded during the nine months ended September 30, 20202021.
(3)    NaN net charge-offs were recorded during the nine months ended September 30, 20192020.
For the three and nine months ended September 30, 20202021 respectively, there was 1 default with a recorded investment of $21 thousand and 5were 2 defaults with a recorded investment of $666$536 thousand respectively,and 7 defaults with a recorded investment of $708 thousand on accruing TDRs restructured during the previous twelve months (defaults are defined as the earlier of the TDR being placed on non-accrual status or reaching 90 days past due with respect to principal and/or interest payments) compared to 31 default with a recorded investment of $21 thousand and 5 defaults with a recorded investment of $321$666 thousand, and 4 defaults with a recorded investment of $326 thousandrespectively, for the three and nine months ended September 30, 2019, respectively.2020. As of September 30, 20202021 and December 31, 2019,2020, there were0 no commitments to lend a material amount of additional funds to any customerclient whose loan was classified as a TDR.

2321



Note 54 - Goodwill and Other Intangible Assets
Goodwill allocated to each reporting unit at September 30, 20202021 and December 31, 20192020 is presented as follows (the FMS reportable segment includes 2 reporting unitsfollows:
(in thousands)September 30, 2021December 31, 2020
Community Banking Reporting Unit$256,323 $256,323 
Wholesale Banking Reporting Unit171,636 171,636 
Consumer Mortgage Reporting Unit— — 
Wealth Management Reporting Unit24,431 24,431 
Total Goodwill$452,390 $452,390 
The following table presents changes in the carrying amount of Consumer Mortgagegoodwill for the three and Wealth Management):nine months ended September 30, 2021 and 2020.
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)(in thousands)Community Banking Reporting UnitWholesale Banking Reporting UnitConsumer Mortgage Reporting UnitWealth Management Reporting UnitTotal(in thousands)2021202020212020
Balance as of December 31, 2019$256,323 $171,636 $44,877 $24,431 $497,267 
Balance at beginning of periodBalance at beginning of period$452,390 $497,267 $452,390 $497,267 
Changes during the period from:Changes during the period from:
Goodwill impairmentGoodwill impairment0 0 (44,877)0 (44,877)Goodwill impairment— (44,877)— (44,877)
Balance as of September 30, 2020$256,323 $171,636 $0 $24,431 $452,390 
Balance at end of periodBalance at end of period$452,390 $452,390 $452,390 $452,390 
Goodwill is evaluated for impairment on an annual basis or whenever an event occurs or circumstances change to indicate that it is more likely than not that an impairment loss has been incurred (i.e., a triggering event). Synovus 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 Approacheach year. During the three months ended September 30, 2020, Synovus recorded a $44.9 million non-cash goodwill impairment charge representing all of 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 concluded that goodwill was not impaired.the clarity around longer term policy actions designed to keep interest rates low. 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, 20202021 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, 20202021 was $2.6$2.4 million and $7.9$7.1 million, respectively. Aggregate other intangible assets amortization expense for the three and nine months ended September 30, 20192020 was $2.9$2.6 million and $8.7$7.9 million, respectively.
24

(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
CDI$57,400 $(10,436)$46,964 
Other12,500 (3,793)8,707 
Total other intangible assets$69,900 $(14,229)$55,671 

(in thousands)Gross Carrying AmountAccumulated AmortizationNet Carrying Value
September 30, 2021
CDI$57,400 $(26,091)$31,309 
Other12,500 (5,834)6,666 
Total other intangible assets$69,900 $(31,925)$37,975 
December 31, 2020
CDI$57,400 $(19,829)$37,571 
Other12,500 (4,959)7,541 
Total other intangible assets$69,900 $(24,788)$45,112 
Note 65 - Shareholders' Equity and Other Comprehensive Income (Loss)
Repurchases of Common Stock
Synovus announced on January 26, 2021 that its Board of Directors authorized share repurchases of up to $200 million in 2021. 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, 2020,2021, Synovus repurchased $16.2under this program a total of $74.6 million, or 450 thousand
22


1.8 million shares of its common stock, at an average price of $36.08$42.00 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 10 - Shareholders' Equity and Other Comprehensive Income" to the consolidated financial statements of Synovus' 2019 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 

Equity-Based Compensation Plans
The following tables summarize the status of Synovus' stock options, restricted share units, market restricted share units, and performance share units as of September 30, 2020 and activity forduring 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 
2021, Synovus repurchased a total of $167.1 million, or 3.7 million shares of its common stock, at an average price of $44.88 per share.
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, 20202021 and 2019.2020.
Changes in Accumulated Other Comprehensive Income (Loss) by Component (Net of Income Taxes)Changes in Accumulated Other Comprehensive Income (Loss) by Component (Net of Income Taxes)Changes in Accumulated Other Comprehensive Income (Loss) by Component (Net of Income Taxes)
(in thousands)(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(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 
Balance at June 30, 2021Balance at June 30, 2021$19,301 $26,425 $— $45,726 
Other comprehensive income (loss) before reclassificationsOther comprehensive income (loss) before reclassifications(41,437)(6,037)— (47,474)
Amounts reclassified from AOCIAmounts reclassified from AOCI(719)(2,995)— (3,714)
Net current period other comprehensive income (loss)Net current period other comprehensive income (loss)(42,156)(9,032)— (51,188)
Balance at September 30, 2021Balance at September 30, 2021$(22,855)$17,393 $— $(5,462)
Balance at June 30, 2020Balance at June 30, 2020$134,245 $68,263 $462 $202,970 
Other comprehensive income (loss) before reclassificationsOther comprehensive income (loss) before reclassifications(21,806)(6,635)0 (28,441)Other comprehensive income (loss) before reclassifications(21,806)(6,635)— (28,441)
Amounts reclassified from AOCIAmounts reclassified from AOCI1,149 (764)0 385 Amounts reclassified from AOCI1,149 (764)— 385 
Net current period other comprehensive income (loss)Net current period other comprehensive income (loss)(20,657)(7,399)0 (28,056)Net current period other comprehensive income (loss)(20,657)(7,399)— (28,056)
Balance at September 30, 2020Balance at September 30, 2020$113,588 $60,864 $462 $174,914 Balance at September 30, 2020$113,588 $60,864 $462 $174,914 
Balance, July 1, 2019$60,586 $(12,137)$840 $49,289 
Balance, December 31, 2020Balance, December 31, 2020$105,669 $52,966 $— $158,635 
Other comprehensive income (loss) before reclassificationsOther comprehensive income (loss) before reclassifications25,133 (876)(378)23,879 Other comprehensive income (loss) before reclassifications(129,280)(28,657)— (157,937)
Amounts reclassified from AOCIAmounts reclassified from AOCI2,765 0 0 2,765 Amounts reclassified from AOCI756 (6,916)— (6,160)
Net current period other comprehensive income (loss)Net current period other comprehensive income (loss)27,898 (876)(378)26,644 Net current period other comprehensive income (loss)(128,524)(35,573)— (164,097)
Balance at September 30, 2019$88,484 $(13,013)$462 $75,933 
Balance at September 30, 2021Balance at September 30, 2021$(22,855)$17,393 $— $(5,462)
Balance, January 1, 2020$83,666 $(18,487)$462 $65,641 
Balance, December 31, 2019Balance, December 31, 2019$83,666 $(18,487)$462 $65,641 
Other comprehensive income (loss) before reclassificationsOther comprehensive income (loss) before reclassifications86,678 80,404 0 167,082 Other comprehensive income (loss) before reclassifications86,678 80,404 — 167,082 
Amounts reclassified from AOCIAmounts reclassified from AOCI(56,756)(1,053)0 (57,809)Amounts reclassified from AOCI(56,756)(1,053)— (57,809)
Net current period other comprehensive income (loss)Net current period other comprehensive income (loss)29,922 79,351 0 109,273 Net current period other comprehensive income (loss)29,922 79,351 — 109,273 
Balance at September 30, 2020Balance at September 30, 2020$113,588 $60,864 $462 $174,914 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 
(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.
2623


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 $15,924 
Derivative liabilities0 178,508 1,460 179,968 
The following table presents assets and liabilities measured at estimated fair value on a recurring basis.
September 30, 2021December 31, 2020
(in thousands)Level 1Level 2Level 3Total Estimated Fair ValueLevel 1Level 2Level 3Total Estimated Fair Value
Assets
Trading securities:
Mortgage-backed securities issued by U.S. Government agencies$— $— $— $— $— $10,185 $— $10,185 
Collateralized mortgage obligations issued by U.S. Government sponsored enterprises— 1,660 — 1,660 — 158 — 158 
Other mortgage-backed securities— 94 — 94 — 178 — 178 
State and municipal securities— 1,007 — 1,007 — 176 — 176 
Asset-backed securities— 4,115 — 4,115 — 183 — 183 
Total trading securities$— $6,876 $— $6,876 $— $10,880 $— $10,880 
Investment securities available for sale:
U.S. Treasury securities$117,893 $— $— $117,893 $20,257 $— $— $20,257 
U.S. Government agency securities— 54,989 — 54,989 — 82,320 — 82,320 
Mortgage-backed securities issued by U.S. Government agencies— 872,217 — 872,217 — 1,218,017 — 1,218,017 
Mortgage-backed securities issued by U.S. Government sponsored enterprises— 7,270,933 — 7,270,933 — 5,000,046 — 5,000,046 
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises— 1,057,488 — 1,057,488 — 1,250,377 — 1,250,377 
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises— 438,523 — 438,523 — 370,921 — 370,921 
Asset-backed securities— 650,000 — 650,000 — — — — 
Corporate debt securities and other debt securities— 19,028 — 19,028 — 18,479 2,021 20,500 
Total investment securities available for sale$117,893 $10,363,178 $— $10,481,071 $20,257 $7,940,160 $2,021 $7,962,438 
Mortgage loans held for sale$— $152,258 $— $152,258 $— $216,647 $— $216,647 
Private equity investments— — 991 991 — — 1,021 1,021 
Other investments— — 10,000 10,000 — — — — 
Mutual funds and mutual funds held in rabbi trusts42,002 — — 42,002 37,650 — — 37,650 
GGL/SBA loans servicing asset— — 3,388 3,388 — — 3,258 3,258 
Derivative assets— 244,991 — 244,991 — 401,295 — 401,295 
Liabilities
Trading liability for short positions— — — — — 7,717 — 7,717 
Mutual funds held in rabbi trusts25,396 — — 25,396 20,752 — — 20,752 
Earnout liability— — — — — — 5,677 5,677 
Derivative liabilities— 109,320 1,171 110,491 — 155,119 2,048 157,167 


2724


December 31, 2019
(in thousands)Level 1Level 2Level 3Total Assets and Liabilities at Fair Value
Assets
Trading securities:
Collateralized mortgage obligations issued by U.S. Government sponsored enterprises$0 $2,486 $0 $2,486 
Other mortgage-backed securities0 1,284 0 1,284 
State and municipal securities0 65 0 65 
Asset-backed securities0 3,227 0 3,227 
Other investments0 150 0 150 
Total trading securities$0 $7,212 $0 $7,212 
Investment securities available for sale:
U.S. Treasury securities$19,855 $0 $0 $19,855 
U.S. Government agency securities0 36,541 0 36,541 
Mortgage-backed securities issued by U.S. Government agencies0 56,816 0 56,816 
Mortgage-backed securities issued by U.S. Government sponsored enterprises0 5,180,815 0 5,180,815 
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises0 636,851 0 636,851 
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises0 371,592 0 371,592 
State and municipal securities0 2,075 0 2,075 
Asset-backed securities0 327,400 0 327,400 
Corporate debt securities and other debt securities0 144,620 2,105 146,725 
Total investment securities available for sale$19,855 $6,756,710 $2,105 $6,778,670 
Mortgage loans held for sale0 115,173 0 115,173 
Private equity investments15,502 0 3,887 19,389 
Mutual funds and mutual funds held in rabbi trusts32,348 0 0 32,348 
GGL/SBA loans servicing asset0 0 3,040 3,040 
Derivative assets0 140,016 0 140,016 
Liabilities
Trading liability for short positions$1,560 $0 $0 $1,560 
Earnout liability0 0 11,016 11,016 
Derivative liabilities0 34,732 2,339 37,071 
Fair Value Option
Synovus has elected the fair value option for mortgage loans held for sale primarily to ease the operational burden required to maintain hedge accounting for these loans. Synovus is still able to achieve effective economic hedges on mortgage loans held for sale without the time and expense needed to manage a hedge accounting program.
The following table summarizes the difference between the fair value and the UPB of mortgage loans held for sale and the changes in fair value of these loans. An immaterial portion of these changes in fair value was attributable to changes in instrument-specific credit risk.
Mortgage Loans Held for 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 September 30, 2021As of December 31, 2020
Fair valueFair value$285,899 $115,173 Fair value$152,258 $216,647 
Unpaid principal balanceUnpaid principal balance276,709 112,218 Unpaid principal balance148,202 210,292 
Fair value less aggregate unpaid principal balanceFair value less aggregate unpaid principal balance$9,190 $2,955 Fair value less aggregate unpaid principal balance$4,056 $6,355 
Changes in Fair Value Included in Net IncomeThree Months Ended September 30,Nine Months Ended September 30,
(in thousands)2021202020212020
Mortgage loans held for sale$(1,761)$251 $(2,299)$6,235 
Activity for Level 3 Assets and Liabilities

Se
28

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, 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 September 30, 2021
(in thousands)Other InvestmentsPrivate Equity InvestmentsGGL / SBA
Loans Servicing Asset		Earnout
Liability		Visa Derivative
Beginning balance$— $1,026 $3,321 $(6,427)$(1,473)
Total gains (losses) realized/unrealized:
Included in earnings— (35)(467)243 — 
Additions10,000 — 534 — — 
Settlements— — — 6,184 302 
Ending balance$10,000 $991 $3,388 $— $(1,171)
Total net gains (losses) for the period included in earnings attributable to the change in unrealized gains/(losses) relating to assets/liabilities still held at September 30, 2021$— $(35)$— $— $— 
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$1,662 $698 $3,019 $(15,924)$(1,755)
Total gains (losses) realized/unrealized:
Included in earnings— 260 (187)— — 
Unrealized gains (losses) included in OCI138 — — — — 
Additions— — 268 — — 
Settlements— — — — 295 
Ending balance$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$— $260 $— $— $— 
25

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

Nine Months Ended September 30, 2021
(in thousands)Other InvestmentsInvestment 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 earnings— — (30)(897)(507)— 
Sales— (2,021)— — — — 
Additions10,000 — — 1,027 — — 
Settlements— — — — 6,184 877 
Ending balance$10,000 $— $991 $3,388 $— $(1,171)
Total net gains (losses) for the period included in earnings attributable to the change in unrealized gains/(losses) relating to assets/liabilities still held at September 30, 2021$— $— $(30)$— $— $— 
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$2,105 $3,887 $3,040 $(11,016)$(2,339)
Total (losses) gains realized/unrealized:
Included in earnings— (2,929)(742)(4,908)— 
Unrealized gains (losses) included in OCI(305)— — — — 
Additions— — 802 — — 
Settlements— — — — 879 
Ending balance$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$— $(2,929)$— $(4,908)$— 
(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, 2019September 30, 2021September 30, 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)
$— $— $11,123 $11,123 $— $— $27,440 $27,440 
Other real estateOther real estate0 0 1,750 1,750 0 0 8,023 8,023 Other real estate— — — — — — 1,750 1,750 
MPS receivableMPS receivable0 0 17,915 17,915 0 0 21,437 21,437 MPS receivable— — — — — — 17,915 17,915 
Other assets held for saleOther assets held for sale0 0 1,634 1,634 0 0 1,238 1,238 Other assets held for sale— — 806 806 — — 1,634 1,634 
(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, 20202021 and December 31, 20192020 was $5.4$1.6 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, 20202021 and 20192020 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,
(in thousands)2020201920202019
Loans(1)
$5,661 $4,170 $20,412 $4,718 
Other real estate107 74 138 569 
MPS receivable0 0 2,663 0 
Other assets held for sale0 0 2,120 91 
26


Three Months Ended September 30,Nine Months Ended September 30,Location in Consolidated Statements of Income
(in thousands)2021202020212020
Loans(1)
$13,933 $5,661 $14,823 $20,412 Provision for credit losses
Other real estate— 107 — 138 Other operating expenses
MPS receivable— — — 2,663 Other operating expenses
Other assets held for sale301 — 301 2,120 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.

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, 20202021 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, 2020September 30, 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$2,687,420 $2,687,420 $2,687,420 $— $— 
Trading securitiesTrading securities4,371 4,371 0 4,371 0 Trading securities6,876 6,876 — 6,876 — 
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 sale10,481,071 10,481,071 117,893 10,363,178 — 
Loans held for saleLoans held for sale745,160 744,615 0 285,899 458,716 Loans held for sale550,948 551,368 — 152,258 399,110 
Private equity investmentsPrivate equity investments958 958 0 0 958 Private equity investments991 991 — — 991 
Other investmentsOther investments10,000 10,000 — — 10,000 
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 trusts42,002 42,002 42,002 — — 
Loans, netLoans, net38,946,047 38,923,265 0 0 38,923,265 Loans, net37,848,787 38,054,067 — — 38,054,067 
GGL/SBA loans servicing assetGGL/SBA loans servicing asset3,100 3,100 0 0 3,100 GGL/SBA loans servicing asset3,388 3,388 — — 3,388 
FRB and FHLB stockFRB and FHLB stock159,930 159,930 — 159,930 — 
Derivative assetsDerivative assets463,028 463,028 0 463,028 0 Derivative assets244,991 244,991 — 244,991 — 
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$15,787,882 $15,787,882 $— $15,787,882 $— 
Non-time interest-bearing depositsNon-time interest-bearing deposits24,831,480 24,831,480 0 24,831,480 0 Non-time interest-bearing deposits27,701,975 27,701,975 — 27,701,975 — 
Time depositsTime deposits6,759,343 6,797,139 0 6,797,139 0 Time deposits4,198,562 4,214,960 — 4,214,960 — 
Total depositsTotal deposits$44,665,904 $44,703,700 $0 $44,703,700 $0 Total deposits$47,688,419 $47,704,817 $— $47,704,817 $— 
Federal funds purchased and securities sold under repurchase agreementsFederal funds purchased and securities sold under repurchase agreements202,344 202,344 202,344 0 0 Federal funds purchased and securities sold under repurchase agreements262,548 262,548 262,548 — — 
Other short-term borrowings400,000 400,000 0 400,000 0 
Long-term debtLong-term debt1,628,385 1,687,448 0 1,687,448 0 Long-term debt1,203,761 1,254,585 — 1,254,585 — 
Earnout liability15,924 15,924 0 0 15,924 
Mutual funds held in rabbi trustsMutual funds held in rabbi trusts25,396 25,396 25,396 — — 
Derivative liabilitiesDerivative liabilities179,968 179,968 0 178,508 1,460 Derivative liabilities110,491 110,491 — 109,320 1,171 
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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 $— $— 
Trading securitiesTrading securities7,212 7,212 0 7,212 0 Trading securities10,880 10,880 — 10,880 — 
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 — 216,647 544,292 
Private equity investmentsPrivate equity investments19,389 19,389 15,502 0 3,887 Private equity investments1,021 1,021 — — 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 — — 
Loans, netLoans, net36,881,048 36,931,256 0 0 36,931,256 Loans, net37,647,248 37,605,881 — — 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 — — 3,258 
FRB and FHLB stockFRB and FHLB stock157,520 157,520 — 157,520 — 
Derivative assetsDerivative assets140,016 140,016 0 140,016 0 Derivative assets401,295 401,295 — 401,295 — 
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 $— $13,477,854 $— 
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 — 27,265,521 — 
Time depositsTime deposits9,074,308 9,112,459 0 9,112,459 0 Time deposits5,948,196 5,970,146 — 5,970,146 — 
Total depositsTotal deposits$38,405,504 $38,443,655 $0 $38,443,655 $0 Total deposits$46,691,571 $46,713,521 $— $46,713,521 $— 
Federal funds purchased and securities sold under repurchase agreementsFederal funds purchased and securities sold under repurchase agreements165,690 165,690 165,690 0 0 Federal funds purchased and securities sold under repurchase agreements227,922 227,922 227,922 — — 
Trading liability for short positionsTrading liability for short positions1,560 1,560 1,560 0 0 Trading liability for short positions7,717 7,717 — 7,717 — 
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 — 1,266,825 — 
Earnout liabilityEarnout liability11,016 11,016 0 0 11,016 Earnout liability5,677 5,677 — — 5,677 
Mutual funds held in rabbi trustsMutual funds held in rabbi trusts20,752 20,752 20,752 — — 
Derivative liabilitiesDerivative liabilities37,071 37,071 0 34,732 2,339 Derivative liabilities157,167 157,167 — 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 customerclient 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,clients, commitments to sell fixed-rate mortgage loans, and foreign currency exchange forwards. Interest rate lock commitments represent derivative instruments since it is intended that such loans will be sold. Synovus 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 for the impacted cash flow hedges are immediately recognized in earnings.
Synovus recorded an unrealized gaingains of $9.8$488 thousand, or $364 thousand, after tax, in OCI during the third quarter of 2021 and $1.2 million, or $7.3 million,$930 thousand, after-tax, in OCI, during the first quarternine months of 2020,2021, related to terminated cash flow
28


hedges, which isare being recognized into earnings in conjunction with the effective terms of the original swaps through the thirdsecond quarter of 2025.2026. Synovus recognized pre-tax income of $1.0$4.0 million and $1.4$9.3 million respectively, during the three and nine months ended September 30, 20202021 related to the amortization of terminated cash flow hedges.
34

As of September 30, 2020,2021, Synovus expects to reclassify into earnings approximately $40$42 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$7 million in pre-tax gainsincome related to the amortization of terminated cash flow hedges. As of September 30, 2020,2021, the maximum length of time over which Synovus is hedging its exposure to the variability in future cash flows is through the firstthird 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 customerclient swap portfolio, which management deems to be of higher risk than dealer counterparties. Collateral is secured at origination and credit related fair value adjustments are recorded against the asset value of the derivative as deemed necessary based upon an analysis, which includes consideration of the current asset value of the swap, customerclient risk rating, collateral value, and customerclient standing with regards to its swap contractual obligations and other related matters. Such asset values fluctuate based upon changes in interest rates regardless of changes in notional amounts and changes in customerclient specific risk.
Collateral Requirements
Pursuant to the Dodd-Frank Act, certainCertain derivative transactions have collateral requirements, both at the inception of the trade and as the value of each derivative position changes. As of September 30, 20202021 and December 31, 2019,2020, collateral totaling $159.8$72.7 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, 20202021 and December 31, 2019,2020, Synovus had a variation margin of $187.0$92.7 million and $113.7$162.7 million respectively, each reducing the derivative liability.

3529



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, 2019September 30, 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$3,600,000 $44,294 $3,799 $3,000,000 $80,802 $— 
Total derivatives designated as hedging instruments Total derivatives designated as hedging instruments $90,116 $0 $54 $8,624 Total derivatives designated as hedging instruments $44,294 $3,799 $80,802 $— 
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)
$9,273,899 $197,018 $105,488 $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 commitments159,858 3,100 — 306,138 6,259 — 
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 loans155,500 579 — 230,500 — 1,611 
Other contracts(4)
Other contracts(4)
186,074 0 377 145,764 0 91 
Other contracts(4)
206,365 — 33 234,884 — 304 
Visa derivativeVisa derivative— 0 1,460 — 0 2,339 Visa derivative— — 1,171 — — 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 $200,697 $106,692 $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 customerclient 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$56.2 million and $3.0$2.6 million at September 30, 20202021 and December 31, 2019,2020, respectively.
Synovus also provides foreign currency exchange services, primarily forward contracts, with counterparties to allow commercial customersclients 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$16.1 million and $32.9$24.1 million at September 30, 20202021 and December 31, 2019,2020, respectively. The fair value of foreign currency exchange forwards was negligible at September 30, 20202021 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, 20202021 and 20192020.
Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)(in thousands)2020201920202019(in thousands)2021202020212020
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$7,266 $8,509 $23,213 $13,595 
  
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 loans4,009 1,031 9,265 1,421 
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$4,009 $1,031 $9,265 $1,421 
(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.

3630


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, 20202021 and 20192020 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 September 30,Nine Months Ended September 30,
(in thousands)(in thousands)Location in Consolidated Statements of Income2020201920202019(in thousands)Location in Consolidated Statements of Income2021202020212020
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$164 $176 $474 $225 
Other contracts(2)
Other contracts(2)
Capital markets income47 (144)(286)(144)
Other contracts(2)
Capital markets income90 47 272 (286)
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(1,388)2,532 (3,160)8,922 
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 income922 (396)2,190 (1,624)
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 $(621)Total derivatives not designated as hedging instruments$(212)$2,359 $(224)$7,237 
(1)    Gain (loss) represents net fair value adjustments (including credit related adjustments) for client swaps and offsetting positions. Additionally, losses related to termination of customerclient swaps of $2.5 million were recorded in other non-interest expense during the first quarter of 2020.
(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, 20202021 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.
As of
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands, except per share data)2021202020212020
Basic Net Income Per Common Share:
Net income available to common shareholders$178,482 $83,283 $535,193 $198,414 
Weighted average common shares outstanding146,308 147,314 147,622 147,304 
Net income per common share, basic$1.22 $0.57 $3.63 $1.35 
Diluted Net Income Per Common Share:
Net income available to common shareholders$178,482 $83,283 $535,193 $198,414 
Weighted average common shares outstanding146,308 147,314 147,622 147,304 
Effect of dilutive outstanding equity-based awards, warrants, and earnout payments1,393 662 1,447 733 
Weighted average diluted common shares147,701 147,976 149,069 148,037 
Net income per common share, diluted$1.21 $0.56 $3.59 $1.34 
For the three months ended September 30, 20202021 and 2019,2020, there were 75832 thousand and 40758 thousand, respectively, potentially dilutive shares related to stock options to purchase shares of common stock that were outstanding, during these quarters. Potentiallyand for the nine months ended September 30, 2021 and 2020, there were 21 thousand and 602 thousand, respectively, potentially dilutive shares arerelated to stock options to purchase shares of common stock that were outstanding. These potentially dilutive shares were not included in the computation of diluted net income per common share because the effect would be anti-dilutive.
Note 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.clients. 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 customerclient 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, new market, and CRA investments.
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The contractual amount of these financial instruments represents Synovus' maximum credit risk should the counterparty draw upon the commitment, and should the counterparty subsequently fail to perform according to the terms of the contract. Since many of the commitments are expected to expire without being drawn upon, total commitment amounts do not necessarily represent future cash requirements. Additionally, certain commitments (primarily consumer) can generally be canceled by providing notice to the borrower.
The ACL associated with unfunded commitments and letters of credit is recorded within other liabilities on the consolidated balance sheets. 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, 2020,2021, the ACL for unfunded commitments was $60.8$43.0 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 and certain new market tax credit partnerships pursuant to section 45D of the Code. Synovus typically acts as a limited partner in these investments and does not exert control over the operating or financial policies of the partnerships and as such, is not considered the primary beneficiary of the partnership. For certain of its LIHTC investments, Synovus 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)September 30, 2021December 31, 2020
Letters of credit*$177,000 $202,614 
Letters of credit(1)
Letters of credit(1)
$184,317 $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 loans8,893,056 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 loans3,490,875 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 credit1,738,063 1,602,831 
Unused credit card linesUnused credit card lines984,636 877,929 Unused credit card lines1,008,471 1,012,313 
Other loan commitmentsOther loan commitments458,509 485,371 Other loan commitments580,936 472,233 
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$15,895,718 $14,768,588 
LIHTC, solar energy tax credit, new market tax credit, and other CRA partnerships:
Carrying amount included in other assets$380,624 $262,855 
Amount of future funding commitments included in carrying amount213,791 133,946 
Permanent and short-term construction loans and letter of credit commitments(2)
172,285 82,786 
Funded portion of permanent and short-term loans and letters of credit(3)
69,823 9,528 

(1)    
Investments in low income housing, solar energy tax credit and other CRA partnerships:
Carrying amount included in other assets$214,615 $146,612 
Amount of future funding commitments included in carrying amount124,866 78,266 
Permanent and short-term construction loans and letter of credit commitments52,686 2,124 
Funded portion of permanent and short-term loans and letters of credit5,194 3,196 
*    Represent the contractual amount net of risk participations purchased of approximately $31$26.4 million and $33$30.2 million at September 30, 20202021 and December 31, 2019,2020, respectively.
(2)    Represent the contractual amount net of risk participations of $3.6 million and $1.8 million at September 30, 2021 and December 31, 2020.
(3)    Represent the contractual amount net of risk participations of $2.4 million and $234 thousand at September 30, 2021 December 31, 2020.
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 2020clients 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, 2020,2021, Synovus and the sponsored entities processed and settled $20.23$28.39 billion and $55.47$83.54 billion of transactions, respectively. For the three and nine months ended September 30, 2019,2020, Synovus and the sponsored entities processed and settled $19.13$20.23 billion and $55.72$55.54 billion of transactions, respectively.
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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, 2020,2021, 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 $15.3 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.
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, and 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, 20202021 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 0zero 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 customersclients 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 loans 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.
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The Community Banking business segment serves customersclients 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 customersclients with an array of comprehensive banking products and services including commercial, home equity, and other consumer loans, credit and debit cards, and deposit accounts.
The Wholesale Banking business segment serves primarily larger corporate customersclients 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 business segment serves its customersclients 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, 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, 2020
(in thousands)Community BankingWholesale BankingFinancial Management ServicesTreasury and Corporate OtherSynovus Consolidated
Net interest income$220,426 $139,080 $20,986 $(3,502)$376,990 
Non-interest revenue29,982 5,496 65,820 13,113 114,411 
Non-interest expense68,571 19,530 92,931 135,623 316,655 
Pre-provision net revenue$181,837 $125,046 $(6,125)$(126,012)$174,746 
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) 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.
Three Months Ended September 30, 2021
(in thousands)Community BankingWholesale BankingFinancial Management ServicesTreasury and Corporate OtherSynovus Consolidated
Net interest income$200,014 $138,662 $20,076 $26,165 $384,917 
Non-interest revenue33,721 10,739 51,248 19,247 114,955 
Non-interest expense73,789 22,486 45,027 125,730 267,032 
Pre-provision net revenue$159,946 $126,915 $26,297 $(80,318)$232,840 
Three Months Ended September 30, 2020
(in thousands)Community BankingWholesale BankingFinancial Management ServicesTreasury and Corporate OtherSynovus Consolidated
Net interest income$218,880 $139,079 $22,251 $(3,220)$376,990 
Non-interest revenue27,034 5,528 65,825 16,024 114,411 
Non-interest expense71,107 19,843 93,038 132,667 316,655 
Pre-provision net revenue$174,807 $124,764 $(4,962)$(119,863)$174,746 





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Three Months Ended September 30, 2019 ProformaNine Months Ended September 30, 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$203,197 $133,773 $26,582 $38,545 $402,097 Net interest income$609,137 $408,862 $60,006 $62,629 $1,140,634 
Non-interest revenueNon-interest revenue35,145 7,092 40,966 5,557 88,760 Non-interest revenue95,687 25,058 162,176 50,076 332,997 
Non-interest expenseNon-interest expense76,414 25,413 40,413 134,070 276,310 Non-interest expense215,716 64,499 139,474 385,008 804,697 
Pre-provision net revenuePre-provision net revenue$161,928 $115,452 $27,135 $(89,968)$214,547 Pre-provision net revenue$489,108 $369,421 $82,708 $(272,303)$668,934 
Nine Months Ended September 30, 2020
(in thousands)Community BankingWholesale BankingFinancial Management ServicesTreasury and Corporate OtherSynovus Consolidated
Net interest income$634,480 $407,265 $59,704 $25,367 $1,126,816 
Non-interest revenue81,105 20,537 166,185 123,925 391,752 
Non-interest expense226,674 64,117 184,824 401,461 877,076 
Pre-provision net revenue$488,911 $363,685 $41,065 $(252,169)$641,492 
September 30, 2021
(dollars in thousands)Community BankingWholesale BankingFinancial Management ServicesTreasury and Corporate OtherSynovus Consolidated
Loans, net of deferred fees and costs$10,623,206 $20,179,466 $4,989,708 $2,548,650 $38,341,030 
Total deposits$31,640,281 $11,249,829 $807,391 $3,990,918 $47,688,419 
Total full-time equivalent employees2,171 286 804 1,692 4,953 
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 employees2,299 285 832 1,718 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 
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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 risk that we may not realize the expected 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;
(2)the risk that competition in the financial services industry may adversely affect our future earnings and growth;
(3)our ability to attract and retain employees and the impact of senior leadership transitions that are key to our growth and efficiency strategies;
(4)the risks and uncertainties related to the impact of the COVID-19 pandemic, and its variants, on our assets, business, capital and liquidity, financial condition, prospects and results of operations;

(2)(5)the risk that the current and any furtheran 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 strength of the current economic contractionrecovery could last much longerbe weakened by the impact of COVID-19 and be much more severe if efforts to contain the pandemic are unsuccessfulits variants and restrictions on movement last longer than currently anticipated;by current supply chain challenges;

(3)(6)the impact of recent and proposed 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 recently enacted changes in monetary policy and in the regulation and taxation of banks and financial institutions, or the interpretation or application thereof and the uncertainty of future implementation and enforcement of these regulations, including the risk of inflationary pressure and interest rate increases;
(7)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)risks related to our implementation of core and transformational initiatives, including new lines of business, new products and services, and new technologies and an expansion of our existing business opportunities with a renewed focus on innovation;
(9)risks 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)(10)the impact of recent, 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 potential changes in the regulation and taxation of banks and financial institutions, or the interpretation or application thereof and the uncertainty of future implementation and enforcement of these regulations;

(5)changes in the cost and availability of funding due to changes in the deposit market and credit market;

(6)the risks that if economic conditions worsen further or regulatory capital rules are modified, we may be required to undertake initiatives to improve our capital position;

(7)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)changes in the interest rate environment, including changes to the federal funds rate to include a possible negative interest rate environment, 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;

(9)(11)the risk that competitionour current and future information technology system enhancements and operational initiatives may not be successfully implemented, which could negatively impact our operations;
(12)risks related to our business relationships with, and reliance upon, third parties that have strategic partnerships with us or that provide key components of our business infrastructure, including the costs of services and products provided to us by third parties, and risks related to disruptions in theservice or financial services industry may adversely affect our future earnings and growth;difficulties with a third-party vendor or business relationship;
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(10)(13)the risk that weour enterprise risk management framework, our compliance program, or our corporate governance and supervisory oversight functions may not realize the expected benefits from our efficiency and growth initiativesidentify or that weaddress risks adequately, which may not be able to realize those cost savings or revenue initiativesresult in the time period expected, which could negatively impact our future profitability;unexpected losses;

(11)(14)changes in the cost and availability of funding due to changes in the deposit market and credit market;
(15)risks related to the ability of our operational framework to identify and manage risks associated with our business such as credit risk, compliance risk, reputational risk, and operational risk, including by virtue of our relationships with third-party business partners, as well as our relationship with third-party vendors and other service providers;
(16)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 any alternate reference rate we may use;
(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)risks related to the continued use, availability and reliability of LIBOR and other "benchmark" rates;

(26)the risk that our concentrated operations in the Southeastern U.S. make us vulnerable to local economic conditions, local weather catastrophes, public health issues, and other external events;
(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;thereto;

44

(27)(28)risks related to the fluctuation in our stock price and general volatility in the stock market;
(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
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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 292285 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, 20202021 and financial condition as of September 30, 20202021 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.
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DISCUSSION OF RESULTS OF OPERATIONS
Table 1 - Consolidated Financial Highlights
Three Months Ended September 30,Nine Months Ended September 30,
(dollars in thousands, except per share data)20202019Change20202019Change
Net interest income$376,990 $402,097 (6)%$1,126,816 $1,196,535 (6)%
Provision for credit losses(1)
43,383 27,562 57 343,956 63,250 444 
Non-interest revenue114,411 88,760 29 391,752 257,945 52 
Adjusted non-interest revenue(2)
115,701 91,297 27 310,446 259,940 19 
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)
Non-interest expense316,655 276,310 15 877,076 832,847 5 
Adjusted non-interest expense(2)
268,742 258,474 4 816,310 757,834 8 
Income before income taxes131,363 186,985 (30)297,536 558,383 (47)
Net income91,574 135,726 (33)223,286 412,096 (46)
Net income available to common shareholders83,283 127,435 (35)198,414 397,505 (50)
Net income per common share, basic0.57 0.84 (32)1.35 2.53 (47)
Net income per common share, diluted0.56 0.83 (32)1.34 2.51 (47)
Adjusted net income per common share, diluted(2)
0.89 0.97 (9)1.32 2.96 (55)
Net interest margin(3)
3.10 %3.69 %(59)  bps3.20 %3.72 %(52)  bps
Net charge-off ratio(3)
0.29 0.22 7 0.25 0.18 7 
Return on average assets(3)
0.69 1.14 (45)0.58 1.18 (60)
Adjusted return on average assets(2)(3)
1.05 1.33 (28)0.57 1.39 (82)
Efficiency ratio-FTE64.31 56.20 811 57.66 57.17 49 
Adjusted tangible efficiency ratio(2)
53.91 51.71 220 56.14 51.36 478 
Table 1 - Consolidated Financial Highlights
Three Months Ended September 30,Nine Months Ended September 30,
(dollars in thousands, except per share data)20212020Change20212020Change
Net interest income$384,917 $376,990 2 %$1,140,634 $1,126,816 1 %
(Reversal of) provision for credit losses(7,868)43,383 (118)(51,041)343,956 (115)
Non-interest revenue114,955 114,411 — 332,997 391,752 (15)
Adjusted non-interest revenue(1)
114,090 114,905 (1)332,204 309,907 7 
Total TE revenue500,608 492,357 2 1,475,932 1,521,171 (3)
Adjusted total revenue(1)
499,743 492,851 1 1,475,139 1,439,326 2 
Non-interest expense267,032 316,655 (16)804,697 877,076 (8)
Adjusted non-interest expense(1)
267,053 267,946 — 801,104 815,771 (2)
Income before income taxes240,708 131,363 83 719,975 297,536 142 
Net income186,773 91,574 104 560,065 223,286 151 
Net income available to common shareholders178,482 83,283 114 535,193 198,414 170 
Net income per common share, basic1.22 0.57 114 3.63 1.35 169 
Net income per common share, diluted1.21 0.56 116 3.59 1.34 168 
Adjusted net income per common share, diluted(1)
1.20 0.89 35 3.61 1.32 173 
Net interest margin(2)
3.01 %3.10 %(9)  bps3.02 %3.20 %(18)  bps
Net charge-off ratio(2)
0.22 0.29 (7)0.24 0.25 (1)
Return on average assets(2)
1.34 0.69 65 1.37 0.58 79 
Adjusted return on average assets(1)(2)
1.33 1.05 28 1.37 0.57 80 
Efficiency ratio-TE53.34 64.31 (1,097)54.52 57.66 (314)
Adjusted tangible efficiency ratio(1)
52.96 53.83 (87)53.82 56.13 (231)
(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 ChangeSeptember 30, 2021June 30, 2021Sequential Quarter ChangeSeptember 30, 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$38,341,030 $38,236,018 $105,012 $39,549,847 $(1,208,817)
Total average loansTotal average loans39,762,572 40,136,090 (373,518)36,201,322 3,561,250 Total average loans37,534,133 38,496,477 (962,344)39,762,572 (2,228,439)
Total depositsTotal deposits44,665,904 44,194,580 471,324 37,433,070 7,232,834 Total deposits47,688,419 47,171,962 516,457 44,665,904 3,022,515 
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)44,907,718 44,203,000 704,718 40,756,645 4,151,073 
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)36,536,788 35,506,980 1,029,808 30,988,237 5,548,551 
Total average depositsTotal average deposits44,339,497 43,096,475 1,243,022 37,714,145 6,625,352 Total average deposits47,477,217 47,349,646 127,571 44,339,497 3,137,720 
Non-performing assets ratioNon-performing assets ratio0.49 %0.44 %5   bps0.42 %7 bpsNon-performing assets ratio0.45 %0.46 %(1)  bps0.49 %(4)bps
Non-performing loans ratioNon-performing loans ratio0.43 0.37 6 0.32 11 Non-performing loans ratio0.41 0.42 (1)0.43 (2)
Past due loans over 90 daysPast due loans over 90 days0.02 0.02 — 0.04 (2)Past due loans over 90 days0.02 0.01 1 0.02 — 
CET1 capitalCET1 capital$3,913,402 $3,827,229 $86,173 $3,660,078 $253,324 CET1 capital$4,276,765 $4,214,720 $62,045 $3,913,402 $363,363 
Tier 1 capitalTier 1 capital4,450,547 4,364,374 86,173 4,196,628 253,919 Tier 1 capital4,813,910 4,751,865 62,045 4,450,547 363,363 
Total risk-based capitalTotal risk-based capital5,536,918 5,459,568 77,350 5,023,138 513,780 Total risk-based capital5,765,528 5,725,176 40,352 5,536,918 228,610 
CET1 capital ratioCET1 capital ratio9.30 %8.90 %40   bps8.96 %34 bpsCET1 capital ratio9.58 %9.75 %(17)  bps9.30 %28 bps
Tier 1 capital ratioTier 1 capital ratio10.57 10.15 42 10.27 30 Tier 1 capital ratio10.79 11.00 (21)10.57 22 
Total risk-based capital ratioTotal risk-based capital ratio13.16 12.70 46 12.30 86 Total risk-based capital ratio12.92 13.25 (33)13.16 (24)
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 ratio9.46 9.53 (7)9.55 (9)
Tangible common equity ratio(1)
Tangible common equity ratio(1)
7.67 7.41 26 8.04 (37)
Tangible common equity ratio(1)
7.68 7.73 (5)7.67 1 
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)
14.96 15.40 (44)7.28 768 
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)
14.90 15.50 (60)11.48 342 
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)
16.79 17.52 (73)13.24 355 
(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
4639


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 third quarter of 20202021 was $178.5 million, or $1.21 per diluted common share ($1.20 on an adjusted basis(1)), compared to $83.3 million, or $0.56 per diluted common share a decline of 35% and 32%, respectively, compared to the third quarter of 2019 and($0.89 adjusted net income per common share, diluted(1) was $0.89, down 9% compared to $0.97), for the third quarter of 2019.2020. Net income available to common shareholders for the first nine months of 20202021 was $535.2 million, or $3.59 per diluted common share ($3.61 adjusted(1)), compared to $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($1.32 adjusted net income per common share, diluted(1) was $1.32, down 55% compared to $2.96), for the first nine months of 2019.2020. The year-over-year decline in adjusted net income per common shareincreases for all time periods waswere impacted by deteriorationsignificant improvement in the economic environment caused by the COVID-19 pandemic and driven by a significant increase in provision foroutlook impacting expected credit losses 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.compared to 2020.
Net interest income for the nine months ended September 30, 20202021 was $1.13$1.14 billion, down $69.7up $13.8 million or 6%, compared to the same period in 2019. The decrease2020, including $66.5 million in year-over-year net interest income was due to declines of $62.5PPP fees during 2021 and $21.1 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.2020. Net interest margin was down 5218 bps over the comparable nine-month periodsperiod to 3.20%3.02%, due primarily to the decline in market interest rates and average growth in addition to declines in PAA. On a sequential quarter basis, net interest income was up $424 thousandinvestment securities available for sale and netinterest-bearing funds held at the Federal Reserve Bank. Net interest margin for the third quarter was 3.10%stable at 3.01%, which was down 3 bps1 bp compared to the second quarter of 2020. The sequential quarter decline in net interest margin was primarily driven by2021 with continued pressure from the impact of bond repositioning and student loan sales executed in the second quarter of 2020, partially offset by further declines in deposit pricing and favorable deposit remixing trends.liquidity environment. We continue to expect modest downward pressure on NIM as the repricing within our fixed-rate asset portfolios is partially offset by continued declines in overall deposit costs. Excluding the potential impacts from PPP forgiveness, we expectthat net interest income and net interest margin to decrease modestlyexcluding PPP fees will increase in the fourth quarterremainder of 2020 as comparedthe year, driven by loan growth and deployment of liquidity, which are expected to offset headwinds from continued fixed-rate repricing and the third quarter of 2020.slight reduction in LIBOR.
Non-interest revenue for the third quarter of 20202021 was $114.4$115.0 million, up $25.7 million, or 29%,$544 thousand, and year-to-date was $391.8$333.0 million, up $133.8down $58.8 million, or 52%15%, compared to the same periods in 2019.2020. Gains on sales of investment securities of $76.6 million impacted the nine months ended September 30, 2020. Adjusted non-interest revenue(1)which excludes net investment securities gains/(losses) and gain on sale/fair value increase/(decrease) of private equity investments, for the third quarter of 20202021 was $115.7 million, up $24.4 million, or 27%,down 1% from the third quarter of 2019, and on a year-to-date basis was $310.4 million compared2020, primarily due to $259.9 million for the first nine months of 2019, up $50.5 million, or 19%. The increase in adjusted non-interest revenue was due primarily to strong growth inlower mortgage banking income with record production drivenpartially offset by higher core banking fees, brokerage revenue, fiduciary and asset management fees, and capital markets income. Year-to-date adjusted non-interest revenue(1) was up 7% compared to the current rate environment.same period in 2020, largely due to higher core banking fees, fiduciary and asset management fees, and brokerage revenue partially offset by lower mortgage banking income and capital markets income. In the fourth quarter of 2021, we expect adjusted non-interest revenue to see declines indecline as broad-based growth is more than offset by continued normalization of mortgage revenue, as compared to thebanking income, seasonality of our brokerage business, and third quarter of 2020.2021 gains that are not expected to repeat.
Non-interest expense for the third quarter of 20202021 was $316.7$267.0 million, up $40.3down $49.6 million, or 15%16%, and year-to-date was down $72.4 million, or 8%, compared to the third quartersame periods in 2020. Goodwill impairment expense of 2019$44.9 million impacted the three and adjusted non-interest expense(1) of $268.7 million was up $10.3 million, or 4%. On a year-to-date basis, non-interest expense was up $44.2 million, or 5%, and adjustednine months ended September 30, 2020. Adjusted non-interest expense(1) was up $58.5 million, or 8%. During the three months ended September 30,declined in 2021 primarily due to 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 drivenbeing impacted by mortgage production commissions,higher expense associated with Synovus' internal revenue growthSynovus Forward as well as a 5% reduction in headcount year-over-year, which primarily came from back-office support functions and efficiency initiatives, COVID-19 related expenses, and investments in talent and technology.offset other personnel expense increases. The efficiency ratio-FTEratio-TE for the first nine months of 20202021 was 57.66%54.52%, compared to 57.17%57.66% for the first nine months of 2019. The adjusted tangible efficiency ratio(1)2020. We remain committed to prudent expense management, enabling us to continue investing in areas that position us for the first nine months of 2020 was 56.14%, up 478 bps compared to the same periodgreater success, deliver a year ago. Excluding up-front expenses associated with Synovus Forward initiatives, we expect adjusted non-interest expense in the fourth quarter to be in-line with adjusted non-interest expense in the third quarter of 2020.superior client experience, and promote profitable growth.
At September 30, 2020, total2021, loans, net of deferred fees and costs, of $39.55$38.34 billion, increased $2.39 billion, or 6%,$88.0 million from December 31, 2019 led by2020. C&I loans declined $585.4 million, with net growth of $3.24offsetting a $1.41 billion including $2.71 billiondecline in PPP loans, net of unearned fees,CRE loans increased $214.6 million, and CRE growth of $472.1 million, partially offset by a $1.26 billion decline in consumer loans. The decline in consumer loans is the resultincreased $458.9 million, led by purchases of the strategic disposition of $1.28$1.49 billion in third-party single-servicelending loans, offset by declines in consumer mortgages and non-relationship consumer mortgageHELOCs. While payoff activity remains a significant headwind, recent production, client conversations, and our loan pipeline lead us to expect loan growth to be in the lower half of our initial 2021 guidance of 2%-4%, which excludes PPP and third-party lending loans.
Credit metrics remained stable and near historical lows as of September 30, 2021 with NPAs at 45 bps, NPLs at 41 bps, and total past dues at 16 bps, as a percentage of total loans, and YTD net charge-offs at 24 bps annualized. We expect net charge-offs to remain relatively stable and criticized and classified loans excluding the impact of PPP forgiveness, to be relatively flatcontinue to decline in the fourth quarter as compared toof 2021, assuming no material change in the third quarter of 2020.
economic environment. The ACL at September 30, 20202021 totaled $664.6$535.2 million, an increasea decrease of $381.8$118.3 million from December 31, 2019, reflecting a building of the ACL required under CECL primarily as a result of uncertainty and deterioration in the2020, resulting from an improving overall economic environment due to COVID-19.outlook. The ACL to loans coverage ratio was 1.68%, or 1.80%, excluding PPP loans, at September 30, 2020. Current credit metrics deteriorated slightly with NPAs at 49 bps, NPLs at 43 bps, and total past due loans at 14 bps; however, we have not experienced widespread deterioration in 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.2021 was 1.40%.
Total period-end deposits at September 30, 20202021 increased $6.26 billion,$996.8 million, or 16%2%, compared to December 31, 2019.2020. Core transaction deposits increased $6.82$3.78 billion, or 28%12%, compared to December 31, 2019. The significant increase in deposit balances compared2020, largely due to December 31, 2019 is due largely to the current economic environment as well as government stimulus programs including deposits associated with PPP loans. Total deposit costs continued their downward trend to 13 bps during the third quarter of 2021, due to repricing and intentional, strategic remixing to reduce higher cost deposits.
At September 30, 2020,2021, Synovus' CET1 ratio was 9.30%9.58%, well in excess of regulatory requirements including the capital conservation bufferrequirements. Synovus announced on January 26, 2021 that its Board of 2.5%. TheDirectors authorized share repurchases of up to $200 million in 2021. Through September 30, 2020 CET1 ratio improved 40 bps compared2021, Synovus has repurchased $167.1 million, or 3.7 million shares of its common stock, at an average price of $44.88 per share. Based on current conditions and economic outlook, we expect to June 30, 2020 and improved 35 bps compared to December 31, 2019 from a combinationcomplete the full authorization in the fourth quarter 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.2021.
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More detail on Synovus' financial results for the three and nine months ended September 30, 20202021 may be found in subsequent sections of "Item 2. – Management's Discussion and Analysis of Financial Condition and Results of Operations" of this Report. See also "Item 1A. -– Risk Factors" of this Report.
48

(1) See "Table 14 - Reconciliation of Non-GAAP Financial Measures” in this Report for applicable reconciliation to the most comparable GAAP measure.measure.
41


Changes in Financial Condition
During the nine months ended September 30, 2020,2021, total assets increased $4.84$1.11 billion from $48.20to $55.51 billion. We deployed excess liquidity as cash and cash equivalents decreased $1.57 billion, at December 31, 2019 to $53.04 billion. Loans increased $2.39 billion, including $2.71 billion in PPP loans net of unearned fees, and loans held for sale increased $630.0 million as Synovus transitioned certain third-party lending partnership consumer loans to held for sale. Investmentinvestment securities available for sale increased $787.9$2.52 billion, and total loans increased $88.0 million with C&I growth offset by PPP loan forgiveness, and cashelevated pay-offs in consumer mortgages and cash equivalents increased $798.4 million. Additional increasesHELOCs were more than offset by purchases of $1.49 billion in total assetsthird-party lending loans. The loan to deposit ratio was 80.4% at September 30, 2020,2021, lower as compared to 81.9% at December 31, 2019, included increases in BOLI investments of $268.4 million driven by additional investments in BOLI policies2020, and increases in other assets of $363.1 million primarily from an increase in the fair value of derivative assets of $323.0 million.
The growth in assets was primarily funded by increases of $6.26 billion in deposits. Other short-term borrowings declined $1.35 billion and long-term debt decreased $525.5 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 ended88.6% at September 30, 2020, primarily due to excess liquidity from various government stimulus efforts that have supported deposit growth while somewhat muting the demand for credit.
Total shareholders' equity at September 30, 2021 increased $91.5 million compared to December 31, 2020 and included net income of $223.3$560.1 million, increasespartially offset by dividends declared on common and preferred stock of $145.8 million and $24.9 million, respectively, net changes in unrealized gains of $29.9 millionlosses in investment securities available for sale and $79.4 million in cash flow hedges offset partially by dividends declared on common stock of $145.8$128.5 million and dividends declared on preferred stock$35.6 million, respectively, and share repurchases of $24.9$167.1 million.
Synovus adopted CECL on January 1, 2020 with an increase to the ALL of $83.0 million and an increase to the reserve on unfunded commitments of $27.4 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.
The loan to deposit ratio was 88.6% at September 30, 2020, compared to 96.8% at December 31, 2019, and 97.3% at September 30, 2019.
Loans
The following table compares the composition of the loan portfolio at September 30, 2020,2021, December 31, 2019,2020, and September 30, 2019.2020.
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 ChangeSeptember 30, 2021 vs. December 31, 2020 ChangeSeptember 30, 2021 vs. September 30, 2020 Change
(dollars in thousands)(dollars in thousands)September 30, 2020December 31, 2019September 30, 2019(dollars in thousands)September 30, 2021December 31, 2020September 30, 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$11,771,037 30.7 %$12,410,152 32.4 %$(639,115)(5)%$12,931,095 32.7 %$(1,160,058)(9)%
Owner-occupiedOwner-occupied6,894,113 17.4 6,529,811 17.6 364,302 6 6,571,485 18.1 322,628 5 Owner-occupied7,163,751 18.7 7,110,016 18.6 53,735 1 7,192,543 18.2 (28,792)— 
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 industrial18,934,788 49.4 19,520,168 51.0 (585,380)(3)20,123,638 50.9 (1,188,850)(6)
Investment propertiesInvestment properties9,662,447 24.4 9,004,327 24.2 658,120 7 8,843,545 24.3 818,902 9 Investment properties9,448,463 24.7 9,103,379 23.8 345,084 4 9,434,208 23.8 14,255 — 
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 properties613,874 1.6 628,695 1.6 (14,821)(2)654,750 1.7 (40,876)(6)
Land and developmentLand and development648,390 1.6 709,442 1.9 (61,052)(9)663,689 1.8 (15,299)(2)Land and development477,923 1.2 593,633 1.6 (115,710)(19)647,105 1.6 (169,182)(26)
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 estate10,540,260 27.5 10,325,707 27.0 214,553 2 10,736,063 27.1 (195,803)(2)
Consumer mortgagesConsumer mortgages5,658,525 14.3 5,546,368 14.9 112,157 2 5,470,730 15.0 187,795 3 Consumer mortgages5,108,499 13.3 5,513,491 14.4 (404,992)(7)5,664,686 14.3 (556,187)(10)
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 lines1,308,254 3.4 1,537,726 4.0 (229,472)(15)1,629,482 4.1 (321,228)(20)
Credit cardsCredit cards264,829 0.7 268,841 0.7 (4,012)(1)267,874 0.8 (3,045)(1)Credit cards293,026 0.8 281,018 0.7 12,008 4 264,829 0.7 28,197 11 
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 loans2,156,203 5.6 1,074,874 2.9 1,081,329 101 1,131,149 2.9 1,025,054 91 
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 consumer8,865,982 23.1 8,407,109 22.0 458,873 5 8,690,146 22.0 175,836 2 
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$38,341,030 100.0 %$38,252,984 100.0 %$88,046 — %$39,549,847 100.0 %$(1,208,817)(3)%
At September 30, 2020, total2021, loans, net of deferred fees and costs, of $39.55$38.34 billion, increased $2.39 billion, or 6%, from December 31, 2019 led by2020. C&I growth of $3.24loans declined but included a $1.41 billion including $2.71 billiondecline in PPP loans netprimarily from forgiveness, CRE increased, and consumer loans increased as well, led by other consumer growth primarily from purchases of unearned fees,third-party lending loans. Declines in consumer mortgages and CRE growthHELOCs, which were primarily the continued result of $472.1 million,excess consumer liquidity and accelerated prepayment activity, partially offset by a $1.26 billion declinethe growth in other consumer loans. The decline in consumer loans is the result of the strategic disposition of $1.28 billion in third-party single-service consumerWhile payoff activity remains a significant headwind, recent production, client conversations, and non-relationship consumer mortgage loans. Total loans at September 30, 2020 declined $364.5 million sequentially dueour loan pipeline lead us 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 netexpect 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 quarterlower half of 2020.our initial 2021 guidance of 2%-4%, which excludes PPP and third-party lending loans.
C&I loansloans remain the largest component of our loan portfolio, representing 50.6%49.4% of total loans, while CRE and consumer loans represent 27.7%27.5% and 22.0%23.1%, 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. The total balance of all PPP loans are forgivable, in whole or in part, if the proceeds are used for payrollwas $782.2 million as of September 30, 2021, compared to $2.19 billion as of December 31, 2020. The table below provides additional information on PPP loans.

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September 30, 2021
ApplicationsLoan Balances
(in millions, except count data )Approximate CountBalanceFundings3Q21 ForgivenessTotal Life-to-Date Forgiveness
End of Period, Net of Unearned Fees and Costs(1)
Phase 1- 2020 Originations19,000 $2,958 $2,886 $544 $2,676 $105 
Phase 2- 2021 Originations11,000 1,135 1,047 295 341 677
Total30,000 $4,093 $3,933 $839 $3,017 $782 
(1) Equals fundings less forgiveness, pay-downs/pay-offs, 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 guaraunearned net fees.nteed 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 PPP 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 October 2020, the SBA announced a streamlined forgiveness process for certain PPP loans of $50,000 or less and approximately 7% of our PPP balances fall within this threshold.
(dollars in millions)Total Net FeesPercent of Fundings3Q21 Recognized Net FeesTotal Recognized Net FeesTotal Unrecognized or Remaining Net FeesContractual Maturity
Phase 1- 2020 Originations$94.9 3.3 %$7.9 $94.3 $0.6 2 years
Phase 2- 2021 Originations43.6 4.2 13.4 18.2 25.4 5 years
Total$138.5 3.5 %$21.3 $112.5 $26.0 
Commercial Loans
Total commercial loans (which are comprised of C&I and CRE loans) at September 30, 20202021 were $30.98$29.48 billion, or 78.3%76.9%, of the total loan portfolio, compared to $27.26$29.85 billion, or 73.4%78.0%, at December 31, 2019 and $26.73 billion, or 73.4%, at September 30, 2019.
At September 30, 2020, Synovus had 6 commercial loan relationships with total commitments of $100 million or more (including amounts funded), with no single relationship exceeding $150 million in commitments.2020.
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% (93.7%2021, 90.7% (94.6% 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 at September 30, 2021 decreased from December 31, 2020, primarily due to PPP forgiveness. Excluding PPP loans, C&I loans grew $3.24 billion, or 19.3%, from December 31, 2019, driven primarily$825.6 million, propelled by$2.71 billion increased funded commercial loan production, particularly in PPP loans net of unearned fees at September 30, 2020.the finance and insurance and health care and social assistance industries.
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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, 2019September 30, 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$3,960,864 20.9 %$3,878,450 19.9 %
Finance and insuranceFinance and insurance1,531,747 7.7 1,263,521 7.5 Finance and insurance2,174,226 11.5 1,680,094 8.6 
Manufacturing1,384,392 6.9 1,208,688 7.2 
Retail tradeRetail trade1,364,773 6.8 1,202,958 7.2 Retail trade1,207,224 6.4 1,279,813 6.6 
Accommodation and food servicesAccommodation and food services1,310,059 6.5 921,515 5.5 Accommodation and food services1,182,462 6.2 1,213,524 6.2 
ManufacturingManufacturing1,170,113 6.2 1,243,290 6.4 
Wholesale tradeWholesale trade1,153,011 6.1 1,236,137 6.3 
Real estate and rental and leasingReal estate and rental and leasing1,108,166 5.9 1,134,023 5.8 
Other servicesOther services1,014,838 5.4 1,144,023 5.9 
ConstructionConstruction1,000,458 5.3 1,065,633 5.5 
Professional, scientific, and technical servicesProfessional, scientific, and technical services1,266,776 6.3 883,433 5.3 Professional, scientific, and technical services953,872 5.0 1,144,939 5.9 
Wholesale trade1,181,295 5.9 1,138,145 6.8 
Other services1,178,357 5.9 1,005,420 6.0 
Real estate and rental and leasing1,118,949 5.6 1,126,828 6.7 
Construction1,081,726 5.4 702,892 4.2 
Transportation and warehousingTransportation and warehousing953,810 4.8 854,954 5.1 Transportation and warehousing838,127 4.4 843,294 4.3 
Arts, entertainment and recreation854,972 4.3 771,846 4.6 
Real estate otherReal estate other686,309 3.4 615,441 3.7 Real estate other714,158 3.8 723,241 3.7 
Arts, entertainment, and recreationArts, entertainment, and recreation564,276 3.0 779,282 4.0 
Educational servicesEducational services606,981 3.0 409,639 2.4 Educational services430,652 2.3 398,949 2.0 
Public AdministrationPublic Administration421,655 2.1 342,329 2.0 Public Administration406,093 2.1 432,519 2.2 
Agriculture, forestry, fishing, and huntingAgriculture, forestry, fishing, and hunting306,096 1.6 385,337 2.0 
Administration, support, waste management, and remediationAdministration, support, waste management, and remediation404,894 2.0 302,711 1.8 Administration, support, waste management, and remediation257,444 1.4 352,812 1.8 
Agriculture, forestry, fishing, and hunting392,273 2.0 369,185 2.2 
Other industriesOther industries251,938 1.2 296,487 1.4 
InformationInformation377,391 1.9 314,740 1.9 Information240,770 1.3 288,321 1.5 
Other Industries218,599 1.1 251,770 1.5 
Total commercial and industrial loansTotal commercial and industrial loans$20,014,151 100.0 %$16,769,370 100.0 %Total commercial and industrial loans$18,934,788 100.0 %$19,520,168 100.0 %
(1)    Loan balance in each category expressed as a percentage of total C&I loans.
At September 30, 2020, $13.122021, $11.77 billion of C&I loans, or 33.2%30.7% of the total loan portfolio, (including PPP loans of $2.71 billion net of unearned fees), 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, $6.892021, $7.16 billion of C&I loans, or 17.4%18.7% 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.loans. Total CRE loans of $10.97$10.54 billion increased$472.1 million, or 4%, from December 31, 2019, driven primarily2020 as higher funded loan production drove the growth but was partially offset by growth in income-producing investment properties.elevated pay-off activity.
Investment properties loans consist of construction and mortgage loans for income-producingincome-producing properties and are primarily made to finance multi-family properties, hotels, office buildings, shopping centers, warehouses and other commercial development properties. Total investment properties loans as of September 30, 20202021 were $9.66$9.45 billion, or 88.1%,89.6% of the CRE loan portfolio, and increased $658.1 million, or 7%,from December 31, 20192020, with mostincreases in the other investment property and office buildings sub-categories, experiencing growth other thanpartially offset by a decline in shopping centers which were down $86.6 million, or 5%, from December 31, 2019.and warehouses.
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, 2020,2021, 1-4 family properties loans totaled $655.0$613.9 million, or 6.0%5.8% of the CRE loan portfolio, and decreased by $125.0 million, or 16%,slightly from December 31, 2019.2020.

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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$477.9 million at September 30, 2020 decreased $61.1 million, or 9%,2021 continued to decline from $709.4 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,both secured and personalunsecured loans from third-party lending partnerships. 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.lending. 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 December 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 790776 for HELOCsconsumer mortgages and 778791 for Consumer Mortgages.HELOCs.
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Consumer loans at September 30, 2021 of $8.87 billion increased compared to December 31, 2020. Consumer mortgages and HELOCs both decreased from December 31, 2020 as these reductions continue to result primarily from accelerated prepayment activity and excess consumer liquidity. Credit card loans of $293.0 million at September 30, 2021 increased slightly from $281.0 million at December 31, 2020. Other consumer loans, which primarily includes third-party lending, increased from December 31, 2020, and as of September 30, 2021, third-party lending balances totaled $1.72 billion, or 4.5%, of the total loan portfolio, and increased $1.04 billion, or 154%, compared to December 31, 2020, led by purchases of $1.49 billion of third-party lending loans, partially offset by payment activity. Growth in this portfolio is predicated on overall balance sheet dynamics including capital, liquidity, and client loan growth.

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 1011 - 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)September 30, 2021
%(1)
December 31, 2020
%(1)
September 30, 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)
$14,832,942 31.1 %$12,382,708 26.5 %$12,129,777 27.2 %
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)
6,055,984 12.7 5,674,416 12.2 5,291,135 11.8 
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)
14,267,443 29.9 13,541,236 29.0 12,441,340 27.8 
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)
1,380,419 2.9 1,156,249 2.5 1,125,985 2.5 
Public fundsPublic funds5,791,944 13.0 5,347,351 12.1 4,622,318 12.0 3,795,320 10.1 Public funds5,791,586 12.2 6,760,628 14.5 5,791,944 13.0 
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)
2,579,344 5.4 3,605,928 7.7 3,976,464 8.9 
Brokered depositsBrokered deposits3,909,259 8.8 4,290,302 9.7 3,429,993 8.9 3,195,495 8.5 Brokered deposits2,780,701 5.8 3,570,406 7.6 3,909,259 8.8 
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$47,688,419 100.0 %$46,691,571 100.0 %$44,665,904 100.0 %
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)
$44,907,718 94.2 %$43,121,165 92.4 %$40,756,645 91.2 %
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)
$36,536,788 76.6 %$32,754,609 70.2 %$30,988,237 69.4 %
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$3,252,537 6.8 %$4,748,029 10.2 %$5,478,221 12.3 %
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$951,868 2.0 %$1,590,096 3.4 %$1,996,133 4.5 %
(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.
Total period-end deposits at September 30, 20202021 increased $471.3$996.8 million, or 1%, compared to June 30, 2020, and increased $6.26 billion, or 16%2%, compared to December 31, 2019.2020. Core transaction deposits increased $1.56$3.78 billion, or 5%, sequentially, and increased $6.82 billion, or 28%12%, compared to December 31, 2019. The significant increase in deposit balances compared to December 31, 2019 is due largely to the current uncertain economic environment as well as government stimulus programs including deposits associated with PPP loans. The sequential quarter growth in lower cost core transaction accounts of $1.56 billion included growth in non-interest-bearing demand deposits of $299.1 million, money market accounts of $984.1 million, NOW accounts of $233.9 million, and savings balances of $45.9 million, and more than offset strategic declines of $1.16 billion and $381.0 million in time deposits and brokered deposits, respectively. Total deposit cost declined 14 bps during the third quarter of 2020, compared to the second quarter of 2020 due to pricing diligence and product remixing.
2020. On ana year-to-date average basis, the increase in total deposits was $1.24$4.06 billion, or 3%9%, compared to December 31, 2020. The increases in deposit balances on both a period-end and average basis compared to December 31, 2020 are due largely to government stimulus programs including deposits associated with the second phase of PPP loans. Total deposit costs of 13 bps during the third quarter of 2020.2021 declined 3 bps on a linked quarter basis and have steadily declined over the past 5 quarters as shown in Table 11 - Average Balances and Yields/Rates in this Report due to repricing and intentional, strategic remixing to reduce higher cost deposits.
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Non-interest Revenue
Non-interest revenue for the third quarter of 20202021 was $114.4$115.0 million, up $25.7 million, or 29%,$544 thousand, and year-to-date was $391.8$333.0 million, up $133.8down $58.8 million, or 52%15%, compared to the same periods in 2019.2020. Gains on sales of investment securities of $76.6 million impacted the nine months ended September 30, 2020. Adjusted non-interest revenue which excludes net investment securities gains/(losses) and gain on sale/fair value increase/(decrease) of private equity investments,(1) for the third quarter of 20202021 was $115.7$114.1 million, up $24.4 million,down $815 thousand, or 27%1%, from the third quarter of 2019, and on a year-to-date basis was $310.4 million compared2020 primarily due to $259.9 million for the first nine months of 2019, up $50.5 million, or 19%. The increase in adjusted non-interest revenue was due primarily to strong growth inlower mortgage banking income with record production drivenpartially offset by higher core banking fees, brokerage revenue, fiduciary and asset management fees, and capital markets income. Year-to-date adjusted non-interest revenue(1) was $332.2 million, up $22.3 million, or 7%, compared to the current rate environment.same period in 2020 largely due to higher core banking fees, fiduciary and asset management fees, and brokerage revenue partially offset by lower mortgage banking income and capital markets income. In the fourth quarter of 2021, we expect adjusted non-interest revenue to see declines indecline as broad-based growth is more than offset by continued normalization of mortgage revenue, as compared to thebanking income, seasonality of our brokerage business, and third quarter of 2020. 2021 gains that are not expected to repeat.
(1)    See "Table 14 - Reconciliation of Non-GAAP Financial Measures” in this Report for applicable reconciliation to GAAP measures.
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The following table shows the principal components of non-interest revenue.
Table 5 - Non-interest revenue
Table 5 - Non-interest RevenueTable 5 - Non-interest Revenue
Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended September 30,Nine Months Ended September 30,
(dollars in thousands)(dollars in thousands)20202019% Change20202019% Change(dollars in thousands)20212020$ Change% Change20212020$ Change% Change
Service charges on deposit accounts(1)Service charges on deposit accounts(1)$17,813 $22,952 (22)%$54,069 $65,805 (18)%Service charges on deposit accounts(1)$22,641 $17,813 $4,828 27 %$64,089 $54,069 $10,020 19 %
Fiduciary and asset management feesFiduciary and asset management fees15,885 14,686 8 46,009 42,743 8 Fiduciary and asset management fees19,786 15,885 3,901 25 56,545 46,009 10,536 23 
Card fees(1)Card fees(1)10,823 12,297 (12)30,959 34,334 (10)Card fees(1)13,238 10,823 2,415 22 38,538 30,959 7,579 24 
Brokerage revenueBrokerage revenue10,604 11,071 (4)32,987 30,502 8 Brokerage revenue14,745 10,604 4,141 39 41,644 32,987 8,657 26 
Mortgage banking incomeMortgage banking income31,229 10,351 202 66,987 23,313 187 Mortgage banking income11,155 31,229 (20,074)(64)47,312 66,987 (19,675)(29)
Capital markets incomeCapital markets income5,690 7,396 (23)22,984 21,557 7 Capital markets income8,089 5,690 2,399 42 18,929 22,984 (4,055)(18)
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 insurance6,820 7,778 (958)(12)22,851 21,572 1,279 6 
Investment securities (losses) gains, net(1,550)(3,731)nm76,594 (5,502)nm
Gain on sale and increase in fair value of private equity investments260 1,194 nm4,712 3,507 nm
Other non-interest revenue15,879 7,405 114 34,879 26,081 34 
Investment securities gains (losses), netInvestment securities gains (losses), net962 (1,550)2,512 nm(1,028)76,594 (77,622)nm
Other non-interest revenue(1)
Other non-interest revenue(1)
17,519 16,139 1,380 9 44,117 39,591 4,526 11 
Total non-interest revenueTotal non-interest revenue$114,411 $88,760 29 %$391,752 $257,945 52 %Total non-interest revenue$114,955 $114,411 $544 — %$332,997 $391,752 $(58,755)(15)%
Core banking fees (1)
Core banking fees (1)
$44,345 $34,338 $10,007 29 %$123,964 $100,917 $23,047 23 %
(1)    Service charges on deposit accounts, card fees, and other non-interest revenue components including letter of credit fees, ATM fees income, line of credit non-usage fees, gains from sales of government guaranteed loans, and miscellaneous other service charges.
Three and Nine Months Ended September 30, 20202021 compared to September 30, 20192020
Service charges on deposit accounts, for the three and nine months ended September 30, 2020 were down $5.1 million, or 22%, and $11.7 million, or 18%, respectively, due primarily to the impact of COVID-19, including fewer transactions and the impact of higher average balances due to stimulus funds. Service charges on deposit accounts consistconsisting of NSF fees, account analysis fees, and all other service charges. NSF fees were down $4.4 million, or 43%, and $9.3 million, or 33%,charges, for the three and nine months ended September 30, 2020, respectively. Account2021 were up due largely to higher account analysis fees, which were up $168 thousand,$2.6 million, or 2%35%, and down $283 thousand,$8.0 million, or 1%38%, respectively, following our pricing for value Synovus Forward initiative implemented during the first quarter of 2021. NSF fees for the three and nine months ended September 30, 2021 and 2020 respectively. Allcomprised 30% and 36%, respectively, of service charges on deposit accounts and 6% and 5%, respectively, of total non-interest revenue. All other service charges on deposit accounts, which consist primarily of monthly fees on retail demand deposits, saving accounts, and small business accounts, for the three and nine months ended September 30, 2020,2021, were down $882 thousand,up $1.0 million, or 16%22%, and $2.2$2.2 million, or 14%16%, respectively.
Fiduciary and asset management fees are derived from providing estate administration, personal trust, corporate trust, corporate bond, investment management, and financial planning, and family office services. FiduciaryThe increase in fiduciary and asset management fees increased $1.2 million, or 8%, and $3.3 million, or 8%, for the three and nine months ended September 30, 2020, respectivel2021 wasy. The increases were driven by growth in total assets under management which increased by 8% year-over-year to $17.54 billion.
Card fees for the three and nine months ended21% from September 30, 2020 were down $1.5 million, or 12%, and $3.4 million, or 10%, respectively, due to lower transaction volume as a result of the impact of COVID-19. $21.23 billion at September 30, 2021.
Card fees consist primarily of credit card interchange fees, debit card interchange fees, and merchant discounts. Card fees are reported net of certain associated expense items including customerclient loyalty program expenses and network expenses.
Brokerage revenue of $10.6 million Card fees for the three months ended September 30, 2020 was down $466 thousand, or 4%, and for the nine months ended September 30, 2020 was $33.0 million,2021 were up $2.5 million, or 8%. The year-over-year growth was driven by growthwith increased transaction volume in assets under management, increasing contributions from 2019 new hires, and higher transaction revenue from elevated market volatility. all card fee categories.
Brokerage revenue consists primarily of brokerage commissions as well as advisory fees earned from the management of customerclient assets. Brokerage revenue for the three and nine months ended September 30, 2021 increased over the prior year comparable periods and was driven by growth in assets under management and higher transaction revenue from favorable market conditions.
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Mortgage banking income was significantly higher inlower for the first ninethird quarter of 2021 compared to the three months ofended September 30, 2020 with increasesthe decline driven by lower gains on sale and lower secondary production. The year-to-date decline was largely a result of $20.9lower secondary revenue in addition to lower secondary production. Total secondary market mortgage loan production was $343.0 million, down $310.8 million, or 48%, and $43.7$1.34 billion, down $205.4 million, or 13%, for the three and nine months ended September 30, 2020, respectively. 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. Total secondary market mortgage loan production was $653.9 million, up $371.3 million, and $1.54 billion, up $916.9 million, for the three and nine months ended September 30, 2020,2021, respectively.
Capital markets income primarily includes fee income from customer derivativeclient 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 capital markets income was $1.7 million lowerThe increase for the three months ended September 30, 2020, capital markets income2021 primarily resulted from $1.4 million higher loan syndication arranger fees and $0.9 million higher fees on client derivative transactions. The decrease for the first nine months ended September 30, 2021 was primarily a result of 2020 was up $1.4a $6.1 million decrease in fees on client derivative transactions as commercial clients lockedclient activity to lock in lower rates on borrowings latewas elevated in the first quarter.2020, partially offset by a $1.6 million increase in loan syndication arranger fees.
Income from BOLI which includes increases in the cash surrender value of policies and proceeds from insurance benefits, increased $2.6 million, or 51%, and $6.0 million, or 38%,benefits. The decrease for the three andmonths ended September 30, 2021 primarily related to $557 thousand in proceeds from insurance benefits in the third quarter of 2020 while the year-to-date increase was driven by a $1.3 million increase in proceeds from insurance benefits.
Investment securities losses, net, of $1.0 million for the nine months ended September 30, 2020,
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respectively, due primarily to additional investments in BOLI policies during the first quarter2021 reflected strategic sales of 2020. The first nine months of 2020 included income on proceeds from insurance benefits of $1.3 million compared to $233 thousand in 2019.
mortgage-backed securities. Investment securities gains, (losses), net, of $(1.6) million and $76.6 million for the three and nine months ended September 30, 2020 respectively, reflected strategic repositioning 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 included2020 to respond to the dispositionimpact of Synovus' remaining $155.0 million in asset-backed securities.market rate declines.
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 commissionitems. The nine months ended September 30, 2021 included increases in income related to investments in LIHTC and solar energy tax credit partnerships of $2.7 million and $2.0 million, respectively, a $2.5 million increase in other service charges primarily from higher unused line of credit fees, and a $2.0 million increase in insurance revenue for the three andas compared to 2020. The nine months ended September 30, 2020 was up $1.6included $4.5 million and $1.7in realized gains from the sale of positions in two publicly-traded equity investments, a sale-leaseback gain of $2.4 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 of 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.
Non-interest Expense
Non-interest expense for the third quarter of 20202021 was $316.7$267.0 million up $40.3, down $49.6 million, or 15%16%, and year-to-date was down $72.4 million, or 8%, compared to the third quartersame periods in 2020. Goodwill impairment expense of 2019$44.9 million impacted the three and adjustednine months ended September 30, 2020. Adjusted non-interest expense of $268.7$267.1 million was up $10.3down $893 thousand, and year-to-date was down $14.7 million, or 4%2%. On a year-to-date basis, non-interest expense was up $44.2 million, or 5%, andThe decline in adjusted non-interest expense during 2021 was up $58.5 million, or 8%. During the three months ended September 30,primarily due to 2020 Synovus recognized a $44.9 million non-cash goodwill impairment charge representing the goodwill allocated to the Consumer Mortgage reporting unit. The increase in adjusted expense during the first nine months of 2020 was largely drivenbeing impacted by mortgage production commissions,higher expense associated with Synovus' internal revenue growthSynovus Forward as well as a 5% reduction in headcount year-over-year, which primarily came from back-office support functions and efficiency initiatives, COVID-19 related expenses, and investments in talent and technology. The efficiency ratio-FTE for the first nine months of 2020 was 57.66%, compared to 57.17% for the first nine months of 2019.offset other personnel expense increases. The adjusted tangible efficiency ratio for the first nine months of 20202021 was 56.14%53.82%, up 478down 231 bps compared to the same period a year ago. Excluding expenses associated with Synovus Forward initiatives, we expect adjusted non-interestWe remain committed to prudent expense management, enabling us to continue investing in the fourth quarter to be in-line with adjusted non-interest expense in the third quarter of 2020.areas that position us for greater success, deliver a superior client experience, and promote profitable growth. See "Table 14 - Reconciliation of Non-GAAP Financial Measures” in this Report for applicable reconciliation to GAAP measures.
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The following table summarizes the components of non-interest expense.
Table 6 - Non-interest ExpenseTable 6 - Non-interest ExpenseTable 6 - Non-interest Expense
Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended September 30,Nine Months Ended September 30,
(dollars in thousands)(dollars in thousands)20202019% Change20202019% Change(dollars in thousands)20212020$ Change% Change20212020$ Change% Change
Salaries and other personnel expenseSalaries and other personnel expense$154,994 $142,516 9 %$464,268 $424,952 9 %Salaries and other personnel expense$160,364 $154,994 $5,370 3 %$482,408 $464,268 $18,140 4 %
Net occupancy, equipment, and software expenseNet occupancy, equipment, and software expense41,554 41,017 1 125,475 119,262 5 Net occupancy, equipment, and software expense43,483 41,554 1,929 5 126,442 125,475 967 1 
Third-party processing and other servicesThird-party processing and other services20,620 18,528 11 63,466 55,403 15 Third-party processing and other services19,446 21,827 (2,381)(11)63,897 67,193 (3,296)(5)
Professional feesProfessional fees13,377 9,719 38 39,358 25,379 55 Professional fees6,739 13,377 (6,638)(50)23,771 39,358 (15,587)(40)
FDIC insurance and other regulatory feesFDIC insurance and other regulatory fees6,793 7,242 (6)18,922 21,872 (14)FDIC insurance and other regulatory fees5,212 6,793 (1,581)(23)16,338 18,922 (2,584)(14)
Amortization of intangibles2,640 2,901 (9)7,920 8,702 (9)
Goodwill impairmentGoodwill impairment44,877 — nm44,877 — nmGoodwill impairment— 44,877 (44,877)nm— 44,877 (44,877)nm
Earnout liability adjustmentsEarnout liability adjustments— 10,457 nm4,908 10,457 nmEarnout liability adjustments(243)— (243)nm507 4,908 (4,401)nm
Merger-related expense— 353 nm— 57,493 nm
Amortization of intangiblesAmortization of intangibles2,379 2,640 (261)(10)7,137 7,920 (783)(10)
Restructuring chargesRestructuring charges2,882 (66)nm8,924 (29)nmRestructuring charges319 2,882 (2,563)nm1,265 8,924 (7,659)nm
Loss on early extinguishment of debtLoss on early extinguishment of debt154 4,592 nm2,057 4,592 nmLoss on early extinguishment of debt— 154 (154)nm— 2,057 (2,057)nm
Valuation adjustment to Visa derivative— 2,500 nm— 2,500 nm
Other operating expensesOther operating expenses28,764 36,551 (21)96,901 102,264 (5)Other operating expenses29,333 27,557 1,776 6 82,932 93,174 (10,242)(11)
Total non-interest expenseTotal non-interest expense$316,655 $276,310 15 %$877,076 $832,847 5 %Total non-interest expense$267,032 $316,655 $(49,623)(16)%$804,697 $877,076 $(72,379)(8)%


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Three and Nine Months Ended September 30, 20202021 compared to September 30, 20192020
Salaries and other personnel expense increased $12.5 million, or 9%, and $39.3 million, or 9%, for the three and nine months ended September 30, 2020, respectively,2021 with the increase for the three months ended September 30, 2021 being mostly due to an increase in incentive compensation and bonus accruals due to higher than expected performance, higher employee insurance from increased claims, and higher temporary help, partially offset by lower salary expense. The increase for the nine months ended September 30, 2021 was due primarily to higher mortgage production-based commissions, COVID-19 relatedshare-based compensation expense largely due to timing with a higher level of retirement eligible expense acceleration, an increase in bonus paymentsaccruals due to certain front-linehigher than expected performance, higher employees, insurance from increased claims, and investments in talent.higher temporary help, partially offset by lower salary expense. Total headcount of 5,3475,059 declined 81 from June 30, 2020 and 57288, or 5%, from September 30, 2019.2020, 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%,on a quarter-over-quarter basis and $6.2 million, or 5%, during the three and nine months ended September 30, 2020, respectively,comparatively year-to-date due primarily due to continued investments in technology as well as increases in net rent expense. Synovus expects net rent expense to decline during the fourth quarter of 2020, as compared to expense during the third quarter of 2020, as Synovus optimizes its physical space withpartially offset by savings from branch and corporate real estate closures.
Third-party processing and other services includesinclude all third-party core operating system and processing charges as well as third-party loan servicing charges. Third-party processing expense increased $2.1 million, or 11%, and $8.1 million, or 15%,decreased for the three and nine months ended September 30, 2020, respectively.2021. The increase is primarily associated with loan growth fromquarter-over-quarter decrease was largely a result of lower information-technology related expense and 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 salesale. The decline for the nine months ended September 30, 2021 was primarily associated with the aforementioned restructure of certain of its third-party consumer-based lending partnership arrangements and thereby reducing future third-partylower information-technology related expense partially offset by expenses associated with PPP loan servicing expense.forgiveness.
Professional fees increased $3.7 million, or 38%, and $14.0 million, or 55%,decreased for the three and nine months ended September 30, 2020, respectively,2021 from increasesdecreases in consulting fees related to Synovus' internal revenue growth and efficiency initiative, "Synovus Forward".Synovus Forward.
FDIC insurance and other regulatory fees were down $449 thousand and $3.0 milliondecreased for the three and nine months ended September 30, 2020, respectively,2021, reflecting lower assessment rate primarily due primarily to strategic balance sheet management actions, aimed at reducing FDIC expense.overall elevated liquidity and subordinated debt issued by Synovus Bank in the fourth quarter of 2020.
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 in 2020 associated with the Global One acquisition arewere 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 endsended on June 30, 2021.
In connection with2021, and the FCB acquisition, Synovus incurred merger-related expense totaling $353 thousand and $57.5 million forfinal earnout payment occurred during 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.2021.
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During the three and nine months ended September 30, 2021 and 2020, Synovus recorded $2.9 million and $8.9 million, respectively, in restructuring charges primarily related to branch closures and restructuring of corporate real estate as part of the Synovus Forward initiative. Synovus Bank operated 292Twelve branches at September 30,were closed in 2020, and at November 2, 2020 Synovus Bank operated 288four branches comparedhave been closed year-to-date in 2021, in addition to 2984 additional branches at December 31, 2019, followingexpected to close during the closingfourth 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.2021.
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 million,up for the three months ended September 30, 2021 and were down for the nine months ended September 30, 2020, respectively. Advertising expense was down $3.3 million and $6.7 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.2021. Period over period fluctuations are primarily related to certain expenses or losses not expected to recur rather than changes in trends. Other operating expenses for the nine months ended September 30, 2020 includesalso included a $2.7 million valuation adjustment on a MPS receivable and a $2.5 million charge from termination of customer swaps, and a $1.0 million donation to the United Negro College Fund.client swaps.
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Income Tax Expense
Income tax expense was $39.8$159.9 million for the threenine months ended September 30, 2020,2021, representing an effective tax rate of 30.3%22.2%, compared to income tax expense of $51.3 million for the three months ended September 30, 2019, representing an effective tax rate of 27.4%. The increase in the effective tax rate for the three months ended September 30, 2020, as compared to the three months ended September 30, 2019, is primarily related to a non-deductible goodwill impairment charge of $44.9 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%, compared to income tax expense of $146.3 million for the nine months ended September 30, 2019, representing an effective tax rate of 26.2%. The effective tax rate for the nine months ended September 30, 2021 includes discrete benefits of $3.3 million related to changes in amounts taxable by jurisdictions and $2.6 million related to share-based compensation, partially offset by discrete expense of $3.8 million related to other accrual adjustments.The effective tax rate for the nine months ended September 30, 2020 includesreflected the impact of thea non-deductible goodwill impairment charge recognized during the third quarter of 2020, partlypartially offset by discrete tax benefits including aof $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 $1.4 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.
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.
WithOver the exceptioncourse of the net operating loss carryback deductions and certain state concessions, we do not expectpast year, the provisions of the CARES Act to have a significant impact on the Company’s current tax provision. With regardBiden Administration has publicly discussed numerous potential changes to the CARES Act payroll tax deferrals, Synovus estimatescode to fund its Build Back Better agenda, including changes in corporate taxation. We continue to monitor the payment of approximately $16.6 million of employer payroll taxes otherwise due in 2020 will be delayed, with 50% due by December 31, 2021legislative process and the remaining 50% by December 31, 2022.potential impact to the Company and its clients.
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 September 30, 2021, credit metrics deteriorated slightly during the third quarter of 2020remained stable and near historical lows with slight increases in NPAs at 45 bps, NPLs at 41 bps, and total past dues from June 30, 2020; however, these increases were primarily isolated to specific credits,at 16 bps, as a percentage of total loans. Net charge-offs remained low at $20.5 million, or 22 bps annualized, and we have not experienced widespread deterioration in$67.3 million, or 24 bps annualized, for the portfolio.
During the three and nine months ended September 30, 2020, loan downgrades2021, respectively. We expect net charge-offs to Special Mention and Substandard totaled $731.0 million and $137.5 million, respectively, primarily due to downgrades of $600.0 millionremain relatively stable in the hotel portfolio, onefourth quarter of 2021, assuming no material change in 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.economic environment.
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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 MetricsTable 7 - Credit Quality MetricsTable 7 - Credit Quality Metrics
(dollars in thousands)(dollars in thousands)September 30, 2020December 31, 2019September 30, 2019(dollars in thousands)September 30, 2021December 31, 2020September 30, 2020
Non-performing loansNon-performing loans$168,837 $101,636 $115,915 Non-performing loans$155,465 $151,079 $168,837 
Impaired loans held for saleImpaired loans held for sale— 23,590 — 
ORE and other assetsORE and other assets23,280 35,810 35,400 ORE and other assets16,883 17,394 23,280 
Non-performing assetsNon-performing assets$192,117 $137,446 $151,315 Non-performing assets$172,348 $192,063 $192,117 
Total loans Total loans$39,549,847 $37,162,450 $36,417,826 Total loans$38,341,030 $38,252,984 $39,549,847 
Non-performing loans as a % of total loans Non-performing loans as a % of total loans0.43 %0.27 %0.32 %Non-performing loans as a % of total loans0.41 %0.39 %0.43 %
Non-performing assets as a % of total loans, ORE, and specific other assetsNon-performing assets as a % of total loans, ORE, and specific other assets0.49 0.37 0.42 Non-performing assets as a % of total loans, ORE, and specific other assets0.45 0.50 0.49 
Loans 90 days past due and still accruingLoans 90 days past due and still accruing$7,512 $15,943 $15,660 Loans 90 days past due and still accruing$5,960 $4,117 $7,512 
As a % of total loansAs a % of total loans0.02 %0.04 %0.04 %As a % of total loans0.02 %0.01 %0.02 %
Total past due loans and still accruingTotal past due loans and still accruing$57,316 $123,793 $88,219 Total past due loans and still accruing$60,817 $47,349 $57,316 
As a % of total loansAs a % of total loans0.14 %0.33 %0.24 %As a % of total loans0.16 %0.12 %0.14 %
Net charge-offs, quarterNet charge-offs, quarter$28,466 $8,821 $19,925 Net charge-offs, quarter$20,516 $22,139 $28,466 
Net charge-offs/average loans, quarterNet charge-offs/average loans, quarter0.29 %0.10 %0.22 %Net charge-offs/average loans, quarter0.22 %0.23 %0.29 %
Net charge-offs, year-to-dateNet charge-offs, year-to-date$72,573 $57,612 $48,792 Net charge-offs, year-to-date$67,266 $94,712 $72,573 
Net charge-offs/average loans, year-to-dateNet charge-offs/average loans, year-to-date0.25 %0.16 %0.18 %Net charge-offs/average loans, year-to-date0.24 %0.24 %0.25 %
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 $27,562 
Provision for loan losses, year-to-date311,977 87,720 63,250 
Provision for unfunded commitments, year-to-date31,979 **
Provision for credit losses, year-to-date343,956 87,720 63,250 
(Reversal of) provision for loan losses, quarter(Reversal of) provision for loan losses, quarter$(3,949)$24,075 $43,618 
(Reversal of) provision for unfunded commitments, quarter(Reversal of) provision for unfunded commitments, quarter(3,919)(13,009)(235)
(Reversal of) provision for credit losses, quarter(Reversal of) provision for credit losses, quarter$(7,868)$11,066 $43,383 
(Reversal of) provision for loan losses, year-to-date(Reversal of) provision for loan losses, year-to-date(46,227)336,052 311,977 
(Reversal of) provision for unfunded commitments, year-to-date(Reversal of) provision for unfunded commitments, year-to-date(4,814)18,970 31,979 
(Reversal of) provision for credit losses, year-to-date(Reversal of) provision for credit losses, year-to-date(51,041)355,022 343,956 
Allowance for loan lossesAllowance for loan losses603,800 281,402 265,013 Allowance for loan losses$492,243 $605,736 $603,800 
Reserve for unfunded commitmentsReserve for unfunded commitments60,794 1,375 1,496 Reserve for unfunded commitments42,971 47,785 60,794 
Allowance for credit lossesAllowance for credit losses$664,594 $282,777 $266,509 Allowance for credit losses$535,214 $653,521 $664,594 
ACL to loans coverage ratioACL to loans coverage ratio1.68 %0.76 %0.73 %ACL to loans coverage ratio1.40 %1.71 %1.68 %
ALL to loans coverage ratioALL to loans coverage ratio1.53 0.76 0.73 ALL to loans coverage ratio1.28 1.58 1.53 
ACL/NPLsACL/NPLs393.63 278.23 229.92 ACL/NPLs344.27 432.57 393.63 
ALL/NPLsALL/NPLs357.62 276.87 228.63 ALL/NPLs316.63 400.94 357.62 
*    PriorCriticized and Classified Loans
Our loan ratings are aligned to CECL implementation on January 1, 2020, the provision for unfunded commitments was reflected within other non-interest expense.
Non-performing Assets
Total NPAsfederal 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 percentagesummary of totalcriticized and classified loans. Criticized and classified loans ORE, and specific other assets were 0.49% at September 30, 2020 compared to 0.37% at December 31, 2019 and 0.42% at September 30, 2019. Total NPAs were $192.12021 declined $345.2 million, at September 30, 2020 compared to $137.4 million at December 31, 2019 and $151.3 million at September 30, 2019. The increase in NPLs and NPAsor 22%, as compared to December 31, 2019 was mostly isolated to2020 primarily as a few larger commercial relationships being designatedresult of upgrades in the hotel industry. Further reductions are anticipated as non-performing.we progress through the remainder of 2021 as we expect continued improvement in financial performance in the hotel industry and other industries negatively impacted by COVID-19.
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Table 8 - Criticized and Classified Loans
(dollars in thousands)September 30, 2021December 31, 2020
Special mention$616,911 $977,028 
Substandard580,444 553,720 
Doubtful22,283 33,204 
Loss2,186 3,032 
Criticized and Classified loans$1,221,824 $1,566,984 
As a % of total loans3.2 %4.1 %
Reversal of Provision for Credit Losses and Allowance for Credit Losses
ProvisionReversal of provision for credit losses (which includes the provision for loan lossesof $7.9 million and unfunded commitments) of $43.4$51.0 million for the three months ended September 30, 2020 included net charge-offs of $28.5 million and the impact of downgrades largely concentrated in the hotel portfolio, which were mostly 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, 2020,2021, respectively, primarily resulted from the continued improvement in the building ofcredit outlook for the ACL required under CECL primarilyportfolio. This was partially offset by $10.0 million and $35.8 million in reserves added as a result of uncertaintypurchases of $453.3 million and deterioration$1.49 billion of third-party lending loans, including $271.6 million and $1.05 billion in prime auto purchases for the economic environment due to the impact of COVID-19. The amount of provision for credit losses going forward will continue to fluctuate based on a number of factors including economic outlook, loan growth, loan mix, risk grade migration,three and nine months ended September 30, 2021, respectively, as well as the timing and impact of any future government stimulus plans. net growth in loans.
The ACL, at September 30, 2020 totaled $664.6 million consisting of an ALL of $603.8$492.2 million and reserve for unfunded commitments of $60.8$43.0 million, totaled $535.2 million at September 30, 2021 and declined $118.3 million from December 31, 2020, resulting in an ACL to loans coverage ratio of 1.68%1.40% and an ACL to NPLs ratio of 394%344%. Excluding PPP loans, the ACL to loans coverage ratio was 1.80%1.42%.The ACL at September 30, 2021 incorporates an outlook of continuation of the recovery including the unemployment rate at 4.6% by the end of 2021, compared to 4.5% used in the second quarter of 2021’s ACL estimate.
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, 2019September 30, 2021December 31, 2020September 30, 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$61,604 48.8 %$72,463 53.7 %$69,433 42.5 %
Special mentionSpecial mention13,303 8.1 11,735 8.8 14,053 10.8 Special mention12,310 9.8 8,935 6.6 13,303 8.1 
Substandard accruingSubstandard accruing80,775 49.4 50,836 38.2 50,795 39.1 Substandard accruing52,141 41.4 53,574 39.7 80,775 49.4 
Total accruing TDRsTotal accruing TDRs$163,511 100.0 %$133,145 100.0 %$130,019 100.0 %Total accruing TDRs$126,055 100.0 %$134,972 100.0 %$163,511 100.0 %
Troubled Debt Restructurings
Accruing TDRs were $163.5$126.1 million at September 30, 2020,2021, compared to $133.1$135.0 million at December 31, 2019 and $130.02020. Non-accruing TDRs were $21.9 million at September 30, 2019. Accruing TDRs increased $30.4 million from December 31, 2019 and $33.5 million from September 30, 2019. The primary driver of the increase in accruing TDRs2021, compared to December 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. Non-accruing TDRs were $4.6 million at September 30, 2020, compared to $17.1$39.0 million at December 31, 2019 and $13.6 million at September 30, 2019.2020.
Accruing TDRs are considered performing because they are performing in accordance with the restructured terms. At September 30, 2020,2021 and December 31, 2019,2020, approximately 98% and September 30, 2019, 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 310-40. 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. Asas of September 30, 2020, approximately 1%2021, no loans were in a P&I deferral status as compared to 0.3% of the total loan portfolio was in a P&I deferral status, down significantly from approximately 15% of our 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 onlyinterest-only relief or amortization extensions on approximately 2% of total loans.loans, at both September 30, 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, 2020,2021, 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)September 30, 2021December 31, 2020
CET1 capitalCET1 capitalCET1 capital
Synovus Financial Corp.Synovus Financial Corp.$3,913,402 $3,743,459 Synovus Financial Corp.$4,276,765 $4,034,865 
Synovus BankSynovus Bank4,674,063 4,640,501 Synovus Bank4,905,396 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.4,813,910 4,572,010 
Synovus BankSynovus Bank4,674,063 4,640,501 Synovus Bank4,905,396 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.5,765,528 5,604,230 
Synovus BankSynovus Bank5,201,409 4,923,279 Synovus Bank5,544,573 5,361,611 
CET1 capital ratioCET1 capital ratioCET1 capital ratio
Synovus Financial Corp.Synovus Financial Corp.9.30 %8.95 %Synovus Financial Corp.9.58 %9.66 %
Synovus BankSynovus Bank11.08 11.10 Synovus Bank11.01 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.10.79 10.95 
Synovus BankSynovus Bank11.08 11.10 Synovus Bank11.01 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.12.92 13.42 
Synovus BankSynovus Bank12.33 11.78 Synovus Bank12.44 12.83 
Leverage ratioLeverage ratioLeverage ratio
Synovus Financial Corp.Synovus Financial Corp.8.48 9.16 Synovus Financial Corp.8.78 8.50 
Synovus BankSynovus Bank8.91 9.94 Synovus Bank8.95 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.7.68 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, 2020,2021, Synovus' CET1 ratio increased to 9.30%was 9.58%, well in excess of regulatory requirements including the capital conservation buffer of 2.5%2.5%. The September 30, 20202021 CET1 ratio improved 40 bps compared to June 30, 2020 and 35declined 8 bps compared to December 31, 2019 from2020, driven by growth in risk-weighted assets and return of capital through share repurchases and common stock shareholder dividends, which was a combinationresult 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.strong financial performance. 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.
AsSynovus announced on January 26, 2021 that its Board of Directors authorized share repurchases of up to $200 million in 2021. During the nine months ended September 30, 2021, Synovus repurchased a resulttotal of the greater economic uncertainty associated with the current pandemic, Synovus suspended its share repurchase activity beyond the $16.2$167.1 million, (450 thousand shares)or 3.7 million shares of its common stock, repurchased duringat an average price of $44.88 per share.
As of October 31, 2021, the first quarter.remaining authorization under this program was $31.8 million. Based on current conditions and economic outlook, we expect to complete the full authorization in the fourth quarter of 2021.
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On August 26, 2020, the federal banking regulators issued a final rule (following(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 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, 20202021 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 September 30, 2021, $69.9 million, or a cumulative 16 bps benefit to CET1, was deferred.
Dividends
Synovus has historically paid a quarterly cash dividend to the holders of its common stock. Management and the Board of Directors closely monitor current and projected capital levels, liquidity (including 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 million, or $0.99 per common share, forduring the nine months ended September 30, 2020, up from $138.9 million, or $0.90 per common share, for the nine months ended September 30, 2019, respectively.2021 and 2020. In addition, Synovus declared dividends on its preferred stock of $24.9 million and $14.6 million during the nine months ended September 30, 20202021 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,clients, 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 customerclient 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 fundingfunding and liquidity. Synovus Bank also has thethe 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, 2020,2021, based on currently pledged collateral, Synovus Bank had access to incremental FHLB funding of $4.57$6.20 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,but not limited to, Synovus Bank's future profits, asset quality, liquidity,liquidity, and overall condition. InIn 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.
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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.
Earning Assets and Sources of Funds
Average total assets for the nine months ended September 30, 20202021 increased $5.00$3.28 billion, or 11%6%, to $51.57$54.85 billion as compared to $46.57$51.57 billion for the first nine months of 2019.2020. Average earning assets increased $4.18$3.28 billion, or 10%7%, in the first
53


nine months of 20202021 compared to the same period in 2019 and represented 91.8% of average total assets at September 30, 2020, as compared to 92.7% at September 30, 2019.2020. The increase in average earning assets primarily resulted from a $3.17$2.33 billion, or 9%34%, increase in average loans, net, which included average PPP loans of $1.64 billion, as well asinvestment securities available for sale, a $578.3 million$1.75 billion, or 163%, increase in average interest-bearing funds held at the Federal Reserve Bank, and a $287.4$472.6 million increase in loans held for sale.sale, partially offset by a $1.09 billion, or 3%, decrease in average total loans, net of unearned.
Average interest-bearing liabilities increased $2.19 billion,decreased $493.8 million, or 7%1%, to $34.11$33.62 billion for the first nine months of 20202021 compared to the same period in 2019.2020. The increasedecrease in average interest-bearing liabilities resulted from a $3.08$3.38 billion, or 28%40%, decrease in average time deposits, a $1.38 billion, or 53%, decrease in average long-term debt, and a $658.1 million decrease in other short-term borrowings. These decreases were mostly offset by a $3.26 billion, or 23%, increase in average money market deposits (includes an increase of $863.7 million in other brokered deposits),and a $879.2 million$1.38 billion, or 19%, increase in average interest-bearing demand deposits. Average non-interest-bearing deposits and a $451.8 million increase in average long-term debt, including $400.0 million of senior notes issued in February 2020. These increases were partially offset by a $1.98increased $3.51 billion, or 19%, decrease in average time deposits (includes an increase of $230.2 million in brokered time deposits) and a $316.6 million decrease in other short-term borrowings. Average non-interest-bearing demand deposits increased $2.13 billion, or 23%31%, to $11.37$14.89 billion for the first nine months of 20202021 compared to the same period in 2019,2020, due largely to liquidity associated with PPP lending.various government stimulus efforts.
Net interest income for the nine months ended September 30, 20202021 was $1.13$1.14 billion, down $69.7up $13.8 million or 6%, compared to the same period in 2019. The decrease in year-over-year net interest income was due to declines of $62.52020, including $66.5 million in PAA (primarily comprised of declines of $27.0PPP fees during 2021 and $21.1 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.2020. Net interest margin was down 5218 bps over the comparable nine-month periodsnine-month period to 3.20%3.02%, due primarily to the decline in market interest rates and average growth in addition to declines in PAA.investment securities available for sale and interest-bearing funds held at the Federal Reserve Bank. For the nine months ended September 30, 2020,2021, the yield on earning assets was 3.88%3.27%, a decrease of 9161 bps compared to the nine months ended September 30, 2019,2020, while the effective cost of funds decreased 3943 bps to 0.68%0.25%. The yield on loans decreased 9623 bps to 4.20%3.97%, due primarily to the decline in market interest rates, while the yield on investment securities decreased 36129 bps to 2.72% over1.43%, due primarily to an acceleration in prepayments and increase in premium amortization, compared to the nine months ended September 30, 2019.2020.
On a sequential quarter basis, net interest income was up $424 thousand$3.1 million, or 1%, primarily due to continued asset growth, further declines in deposit costs, and neta higher day count. Net interest margin for the third quarter was 3.10%stable at 3.01%, which was down 1 bp compared to the second quarter of 2021 with continued pressure from the liquidity environment. The third quarter of 2021 included $21.3 million recognized for associated PPP fees versus $20.4 million in the second quarter of 2021 and average PPP loan balances of $1.19 billion versus $2.14 billion in the second quarter of 2021. For the third quarter of 2021, the yield on earning assets decreased 4 bps, while the effective cost of funds decreased 3 bps compared to the second quarter of 2020. The sequential quarter decline in net interest margin was primarily driven by the impact of bond repositioning and student loan sales executed in the second quarter of 2020, partially offset by further declines in deposit pricing and favorable deposit remixing trends. The third quarter included average PPP loan balances of $2.70 billion versus $2.21 billion in the second quarter and $11.9 million in accretion of associated PPP processing fees versus $9.2 million in the second quarter. For the third quarter of 2020, the yield on earning assets decreased 17 bps, while the effective cost of funds decreased 14 bps compared to the second quarter of 2020.2021.
We continue to expect modest downward pressure on NIM as the repricing within our fixed-rate asset portfolios is partially offset by continued declines in overall deposit costs. Excluding the potential impacts from PPP forgiveness, we expectthat net interest income and net interest margin to decrease modestlyexcluding PPP fees will increase in the fourth quarterremainder of 2020 as comparedthe year, driven by loan growth and deployment of liquidity, which are expected to offset headwinds from continued fixed-rate repricing and the third quarter of 2020.slight reduction in LIBOR. PPP fees are also expected to decline.
6254


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)Third QuarterSecond QuarterFirst QuarterFourth QuarterThird 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)
$9,876,651 9,184,691 8,437,563 7,493,822 7,227,400 
YieldYield2.39 %2.72 3.09 3.12 3.14 Yield1.45 %1.45 1.40 2.07 2.39 
Trading account assets(3)
Trading account assets(3)
$5,391 6,173 6,306 7,986 5,519 
Trading account assets(3)
$5,192 2,831 3,063 8,496 5,391 
YieldYield1.69 %2.19 2.70 2.69 4.01 Yield1.15 %1.15 2.81 1.03 1.69 
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)
$28,891,164 29,849,029 29,844,491 30,363,102 30,730,135 
YieldYield3.80 %3.95 4.57 4.82 5.09 Yield3.91 %3.86 3.95 3.96 3.80 
Consumer loans(4)
Consumer loans(4)
$9,032,437 9,899,172 9,985,702 9,809,832 9,633,603 
Consumer loans(4)
$8,642,969 8,647,448 8,367,776 8,521,449 9,032,437 
YieldYield4.08 %4.34 4.60 5.07 5.08 Yield3.93 %3.94 3.98 4.00 4.08 
Allowance for loan lossesAllowance for loan losses$(591,098)(498,545)(368,033)(269,052)(258,024)Allowance for loan losses$(514,828)(561,242)(599,872)(595,547)(591,098)
Loans, net(4)
Loans, net(4)
$39,171,474 39,637,546 37,225,012 36,238,982 35,943,298 
Loans, net(4)
$37,019,305 37,935,235 37,612,395 38,289,004 39,171,474 
YieldYield3.92 %4.08 4.62 4.93 5.13 Yield3.97 %3.93 4.02 4.03 3.92 
Mortgage loans held for saleMortgage loans held for sale$244,952 221,157 86,415 117,909 99,556 Mortgage loans held for sale$196,032 242,940 246,962 309,278 244,952 
YieldYield2.92 %3.09 3.67 3.77 3.93 Yield2.88 %3.06 2.68 2.74 2.92 
Other loans held for saleOther loans held for sale$493,940 19,246 — — 475 Other loans held for sale$527,736 615,301 660,753 544,301 493,940 
YieldYield3.61 %4.19 — — — Yield3.06 %3.05 2.91 2.81 3.61 
Other earning assets(5)
Other earning assets(5)
$1,265,880 1,709,086 652,130 514,635 513,160 
Other earning assets(5)
$3,271,501 2,705,819 2,838,063 2,716,645 1,265,880 
YieldYield0.11 %0.11 1.02 1.71 2.08 Yield0.15 %0.11 0.10 0.10 0.11 
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)
$159,741 159,340 157,657 162,537 200,923 
YieldYield2.73 %3.60 3.38 2.85 3.85 Yield1.26 %2.01 1.69 2.64 2.73 
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$51,056,158 50,846,157 49,956,456 49,524,083 48,609,960 
YieldYield3.58 %3.75 4.33 4.60 4.78 Yield3.22 %3.26 3.32 3.49 3.58 
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$8,463,325 8,601,262 8,570,753 8,531,415 7,789,095 
RateRate0.19 %0.21 0.51 0.60 0.69 Rate0.10 %0.11 0.14 0.16 0.19 
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$15,597,723 15,476,262 15,348,916 14,411,860 13,272,972 
RateRate0.36 %0.46 1.00 1.13 1.26 Rate0.15 %0.19 0.23 0.26 0.36 
Savings depositsSavings deposits$1,114,956 1,036,024 926,822 915,640 900,366 Savings deposits$1,377,089 1,333,297 1,219,288 1,147,667 1,114,956 
RateRate0.02 %0.02 0.05 0.05 0.05 Rate0.02 %0.02 0.02 0.01 0.02 
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$993,284 1,077,931 1,161,306 1,239,592 1,379,923 
RateRate1.03 %1.43 1.64 1.27 1.39 Rate0.33 %0.41 0.56 0.74 1.03 
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$2,430,744 2,714,451 2,993,996 3,302,959 3,863,821 
RateRate1.44 %1.80 2.04 1.51 1.69 Rate0.45 %0.56 0.74 1.03 1.44 
Other brokered depositsOther brokered deposits$1,912,114 1,998,571 1,376,669 1,156,131 993,078 Other brokered deposits$1,862,346 1,901,097 1,950,582 1,978,393 1,912,114 
RateRate0.23 %0.25 1.42 1.84 2.47 Rate0.21 %0.19 0.20 0.23 0.23 
Brokered time depositsBrokered time deposits$2,232,940 2,244,429 2,166,496 2,121,069 2,119,149 Brokered time deposits$996,777 1,156,510 1,418,751 1,795,982 2,232,940 
RateRate1.59 %1.86 2.11 2.16 2.27 Rate1.27 %1.35 1.50 1.60 1.59 
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$31,721,288 32,260,810 32,663,592 32,407,868 31,565,821 
RateRate0.54 %0.73 1.18 1.16 1.32 Rate0.20 %0.24 0.31 0.39 0.54 
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$202,525 204,053 209,448 174,316 180,342 
RateRate0.09 %0.12 0.30 0.24 0.22 Rate0.07 %0.07 0.07 0.07 0.09 
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 
RateRate1.12 %1.23 1.66 1.87 2.31 Rate— %— — — 1.12 
Long-term debtLong-term debt$2,234,665 2,834,188 2,678,651 2,153,983 2,286,221 Long-term debt$1,203,500 1,203,038 1,202,613 1,552,791 2,234,665 
RateRate2.71 %2.36 2.78 3.07 3.32 Rate3.81 %3.82 3.63 3.96 2.71 
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$33,127,313 33,667,901 34,075,653 34,134,975 34,027,567 
RateRate0.68 %0.86 1.30 1.30 1.47 Rate0.33 %0.36 0.42 0.55 0.68 
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$15,755,929 15,088,836 13,791,286 13,566,112 12,773,676 
Cost of fundsCost of funds0.50 %0.65 1.04 1.02 1.16 Cost of funds0.22 %0.25 0.30 0.40 0.50 
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)
0.21 %0.24 0.28 0.37 0.48 
Net interest marginNet interest margin3.10 %3.13 3.37 3.65 3.69 Net interest margin3.01 %3.02 3.04 3.12 3.10 
Taxable equivalent adjustment(2)
Taxable equivalent adjustment(2)
$956 861 786 769 819 
Taxable equivalent adjustment(2)
$736 791 774 821 956 
`(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.
6355


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 nine months ended September 30, 20202021 and 2019,2020, 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 2019Nine Months Ended September 30,2021 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$9,171,573 $6,843,400 $98,631 $139,791 1.43 %2.72 %$47,364 $(88,524)$(41,160)
Trading account assetsTrading account assets5,955 4,153 99 84 2.22 2.70 37 (22)15 Trading account assets3,703 5,955 44 99 1.60 2.22 (37)(18)(55)
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)
37,584,500 38,671,202 1,104,446 1,203,839 3.94 4.16 (33,812)(65,581)(99,393)
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)
493,975 494,885 10,957 12,366 2.97 3.34 (22)(1,387)(1,409)
Allowance for loan lossesAllowance for loan losses(486,276)(256,727)Allowance for loan losses(558,336)(486,276)
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, net37,520,139 38,679,811 1,115,403 1,216,205 3.97 4.20 (33,834)(66,968)(100,802)
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 sale228,458 184,396 4,926 4,291 2.87 3.10 1,022 (387)635 
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 sale600,776 172,241 13,685 4,756 3.00 3.63 11,635 (2,706)8,929 
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)
2,940,049 1,209,239 2,705 2,477 0.12 0.27 3,366 (3,138)228 
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 stock158,921 244,111 1,971 6,000 1.65 3.28 (2,090)(1,939)(4,029)
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 assets50,623,619 47,339,153 1,237,365 1,373,619 3.27 3.88 27,426 (163,680)(136,254)
Cash and due from banksCash and due from banks532,808 516,789 Cash and due from banks567,702 532,808 
Premises and equipment, netPremises and equipment, net485,790 486,141 Premises and equipment, net453,339 485,790 
Other real estateOther real estate11,709 14,803 Other real estate1,579 11,709 
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 insurance1,056,257 989,238 
Other assets(4)
Other assets(4)
2,209,923 1,621,335 
Other assets(4)
2,145,850 2,209,923 
Total assetsTotal assets$51,568,621 $46,566,994 Total assets$54,848,346 $51,568,621 
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$8,544,720 $7,167,617 $7,606 $15,561 0.12 %0.29 %$2,987 $(10,942)$(7,955)
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 accounts17,379,564 14,119,510 24,868 61,799 0.19 0.58 14,142 (51,073)(36,931)
Savings depositsSavings deposits1,026,259 901,867 204 371 0.03 0.05 46 (213)(167)Savings deposits1,310,470 1,026,259 164 204 0.02 0.03 64 (104)(40)
Time depositsTime deposits8,361,942 10,344,873 108,106 131,773 1.73 1.70 (25,236)1,569 (23,667)Time deposits4,977,025 8,361,942 27,837 108,106 0.75 1.73 (43,799)(36,470)(80,269)
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 agreements205,316 199,230 104 242 0.07 0.16 7 (145)(138)
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— 658,128 — 7,643 — 1.53 (7,531)(112)(7,643)
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 debt1,203,054 2,581,232 33,851 50,645 3.75 2.54 (26,183)9,389 (16,794)
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 liabilities33,620,149 34,113,918 94,430 244,200 0.37 0.94 (60,313)(89,457)(149,770)
Non-interest-bearing depositsNon-interest-bearing deposits11,374,121 9,242,993 Non-interest-bearing deposits14,885,880 11,374,121 
Other liabilitiesOther liabilities1,028,401 691,357 Other liabilities1,149,209 1,028,401 
Shareholders' equityShareholders' equity5,052,181 4,706,959 Shareholders' equity5,193,108 5,052,181 
Total liabilities and equityTotal liabilities and equity$51,568,621 $46,566,994 Total liabilities and equity$54,848,346 $51,568,621 
Interest rate spread:Interest rate spread:2.94 %3.35 %Interest rate spread:2.90 %2.94 %
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 - TE/margin(5)
Net interest income - TE/margin(5)
$1,142,935 $1,129,419 3.02 %3.20 %$87,739 $(74,223)$13,516 
Taxable equivalent adjustmentTaxable equivalent adjustment2,603 2,256 Taxable equivalent adjustment2,301 2,603 
Net interest income, actual Net interest income, actual$1,126,816 $1,196,535  Net interest income, actual$1,140,634 $1,126,816 
(1)     Average loans are shown net of unearned income. NPLs are included. Interest income includes fees as follows: 2021 - $90.8 million, 2020 - $42.8 million, 2019 - $26.4 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$73.1 million and $14.7$212.9 million for the nine months ended September 30, 20202021 and 2019,2020, respectively.
(5)    The net interest margin is calculated by dividing annualized net interest income - FTETE by average total interest earnings assets.
6456


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 simulationssimulations 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 characteristicscharacteristics as well as customerclient 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. A modest decline in sensitivity relative to the prior period-end is the result of a host of factors, including increased securities portfolio and the higher absolute level of long-term interest rates. The following table represents the estimated sensitivity of net interest income at September 30, 2020,2021, 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)September 30, 2021December 31, 2020
+200+2002.4%2.8%+2005.4%6.8%
+100+1001.0%2.0%+1002.5%3.5%
Flat—%—%
-25-25(0.2)%N/A-25(0.2)%(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).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, includingwhich include floating rate obligations, loans, deposits, derivatives and hedges, and other financial instruments but is not able to currently predict the associated financial impacts of the transition to an alternative reference rate.instruments. Synovus has established a cross-functional LIBOR transition working group with representation from all business lines, support and control functions, and legal counsel that 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; 3) formulated communications and iii) developinglearning activities to support clients and colleagues; and 4) developed a formal governance structure for the transition. Loan agreement provisions for new and renewed loans include LIBOR fallback language to ensure transition from LIBOR to the new benchmark when such transition occurs. All direct exposures resulting from existing financial contracts that mature after 2021 have been inventoried and are monitored on an ongoing basis. Based on regulatory guidance, the Company currently expects to cease originating loans indexed to LIBOR no later than December 31, 2021. Synovus has expanded its product offerings and currently offers multiple alternative reference rates including SOFR and BSBY indices. Other viable alternative reference rates are also
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being evaluated for use as potential replacements of LIBOR. We do not currently expect there to be a material financial impact to the Company or our clients regardless of which index or indices the Company offers as alternatives to LIBOR.
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, thereperformance. There have been no significant changes to the accounting policies, estimates and assumptions, or the judgments affecting the application of these estimates and assumptions from those disclosed in Synovus' 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;TE revenue; efficiency ratio-FTE;ratio-TE; 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 TE 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.net, and fair value adjustment on non-qualified deferred compensation. Adjusted non-interest expense and the adjusted tangible efficiency ratio are measures utilized by management to measure the success of expense management initiatives focused on reducing recurring controllable operating costs. 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.
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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 EndedNine Months Ended
(in thousands)(in thousands)September 30, 2020September 30, 2019September 30, 2020September 30, 2019(in thousands)September 30, 2021September 30, 2020September 30, 2021September 30, 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$114,955 $114,411 $332,997 $391,752 
Add/subtract: Investment securities losses (gains), net1,550 3,731 (76,594)5,502 
Subtract/add: Investment securities (gains) losses, netSubtract/add: Investment securities (gains) losses, net(962)1,550 1,028 (76,594)
Subtract: Gain on sale and increase in fair value of private equity investments, netSubtract: Gain on sale and increase in fair value of private equity investments, net(260)(1,194)(4,712)(3,507)Subtract: Gain on sale and increase in fair value of private equity investments, net— (260)— (4,712)
Add/subtract: Fair value adjustment on non-qualified deferred compensationAdd/subtract: Fair value adjustment on non-qualified deferred compensation97 (796)(1,821)(539)
Adjusted non-interest revenueAdjusted non-interest revenue$115,701 $91,297 $310,446 $259,940 Adjusted non-interest revenue$114,090 $114,905 $332,204 $309,907 
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$267,032 $316,655 $804,697 $877,076 
Subtract: Earnout liability adjustments— (10,457)(4,908)(10,457)
Add/subtract: Earnout liability adjustmentsAdd/subtract: Earnout liability adjustments243 — (507)(4,908)
Subtract: Goodwill impairmentSubtract: Goodwill impairment(44,877)— (44,877)— 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(319)(2,882)(1,265)(8,924)
Subtract: Loss on early extinguishment of debtSubtract: Loss on early extinguishment of debt— (154)— (2,057)
Add/subtract: Fair value adjustment on non-qualified deferred compensationAdd/subtract: Fair value adjustment on non-qualified deferred compensation97 (796)(1,821)(539)
Adjusted non-interest expenseAdjusted non-interest expense$268,742 $258,474 $816,310 $757,834 Adjusted non-interest expense$267,053 $267,946 $801,104 $815,771 
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Three Months EndedNine Months EndedThree Months EndedNine Months Ended
(in thousands, except per share data)(in thousands, except per share data)September 30, 2020September 30, 2019September 30, 2020September 30, 2019(in thousands, except per share data)September 30, 2021September 30, 2020September 30, 2021September 30, 2020
Adjusted total revenues and adjusted tangible efficiency ratio
Adjusted total revenue and adjusted tangible efficiency ratioAdjusted total revenue and adjusted tangible efficiency ratio
Adjusted non-interest expenseAdjusted non-interest expense$268,742 $258,474 $816,310 $757,834 Adjusted non-interest expense$267,053 $267,946 $801,104 $815,771 
Subtract: Amortization of intangiblesSubtract: Amortization of intangibles(2,640)(2,901)(7,920)(8,702)Subtract: Amortization of intangibles(2,379)(2,640)(7,137)(7,920)
Adjusted tangible non-interest expenseAdjusted tangible non-interest expense$266,102 $255,573 $808,390 $749,132 Adjusted tangible non-interest expense$264,674 $265,306 $793,967 $807,851 
Net interest incomeNet interest income$376,990 $402,097 $1,126,816 $1,196,535 Net interest income$384,917 $376,990 $1,140,634 $1,126,816 
Add: Tax equivalent adjustmentAdd: Tax equivalent adjustment956 819 2,603 2,256 Add: Tax equivalent adjustment736 956 2,301 2,603 
Add: Total non-interest revenueAdd: Total non-interest revenue114,411 88,760 391,752 257,945 Add: Total non-interest revenue114,955 114,411 332,997 391,752 
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 
Total TE revenueTotal TE revenue$500,608 $492,357 $1,475,932 $1,521,171 
Subtract/add: Investment securities (gains) losses, netSubtract/add: Investment securities (gains) losses, net(962)1,550 1,028 (76,594)
Subtract: Gain on sale and increase in fair value of private equity investments, netSubtract: Gain on sale and increase in fair value of private equity investments, net(260)(1,194)(4,712)(3,507)Subtract: Gain on sale and increase in fair value of private equity investments, net— (260)— (4,712)
Adjusted total revenues$493,647 $494,213 $1,439,865 $1,458,731 
Efficiency ratio-FTE64.31 %56.20 %57.66 %57.17 %
Add/subtract: Fair value adjustment on non-qualified deferred compensationAdd/subtract: Fair value adjustment on non-qualified deferred compensation97 (796)(1,821)(539)
Adjusted total revenueAdjusted total revenue$499,743 $492,851 $1,475,139 $1,439,326 
Efficiency ratio-TEEfficiency ratio-TE53.34 %64.31 %54.52 %57.66 %
Adjusted tangible efficiency ratio Adjusted tangible efficiency ratio53.91 51.71 56.14 51.36  Adjusted tangible efficiency ratio52.96 53.83 53.82 56.13 
Adjusted net income per common share, dilutedAdjusted net income per common share, dilutedAdjusted net income per common share, diluted
Net income available to common shareholdersNet income available to common shareholders$83,283 $127,435 $198,414 $397,505 Net income available to common shareholders$178,482 $83,283 $535,193 $198,414 
Add: Income tax expense, net related to State Tax Reform— 4,402 — 4,402 
Add: Earnout liability adjustments— 10,457 4,908 10,457 
Subtract/add: Earnout liability adjustmentsSubtract/add: Earnout liability adjustments(243)— 507 4,908 
Add: Goodwill impairmentAdd: Goodwill impairment44,877 — 44,877 — Add: Goodwill impairment— 44,877 — 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 
Add: Restructuring chargesAdd: Restructuring charges319 2,882 1,265 8,924 
Add: Loss on early extinguishment of debtAdd: Loss on early extinguishment of debt— 154 — 2,057 
Subtract/add: Investment securities (gains) losses, netSubtract/add: Investment securities (gains) losses, net(962)1,550 1,028 (76,594)
Subtract: Gain on sale and increase in fair value of private equity investments, netSubtract: Gain on sale and increase in fair value of private equity investments, net(260)(1,194)(4,712)(3,507)Subtract: Gain on sale and increase in fair value of private equity investments, net— (260)— (4,712)
Subtract/add: Tax effect of adjustments(1,122)(2,478)18,214 (10,137)
Add/subtract: Tax effect of adjustments (1)
Add/subtract: Tax effect of adjustments (1)
164 (1,122)(579)18,214 
Adjusted net income available to common shareholdersAdjusted net income available to common shareholders$131,364 $149,732 $196,088 $468,778 Adjusted net income available to common shareholders$177,760 $131,364 $537,414 $196,088 
Weighted average common shares outstanding, dilutedWeighted average common shares outstanding, diluted147,976 154,043 148,037 158,595 Weighted average common shares outstanding, diluted147,701 147,976 149,069 148,037 
Adjusted net income per common share, dilutedAdjusted net income per common share, diluted$0.89 $0.97 $1.32 $2.96 Adjusted net income per common share, diluted$1.20 $0.89 $3.61 $1.32 
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Table 14 - Reconciliation of Non-GAAP Financial Measures, continuedTable 14 - Reconciliation of Non-GAAP Financial Measures, continuedTable 14 - Reconciliation of Non-GAAP Financial Measures, continued
Three Months EndedNine Months EndedThree Months EndedNine Months Ended
(dollars in thousands)(dollars in thousands)September 30, 2020September 30, 2019September 30, 2020September 30, 2019(dollars in thousands)September 30, 2021September 30, 2020September 30, 2021September 30, 2020
Adjusted return on average assets (annualized)Adjusted return on average assets (annualized)Adjusted return on average assets (annualized)
Net incomeNet income$91,574 $135,726 $223,286 $412,096 Net income$186,773 $91,574 $560,065 $223,286 
Add: Income tax expense, net related to State Tax Reform— 4,402 — 4,402 
Add: Earnout liability adjustments— 10,457 4,908 10,457 
Subtract/add: Earnout liability adjustmentsSubtract/add: Earnout liability adjustments(243)— 507 4,908 
Add: Goodwill impairmentAdd: Goodwill impairment44,877 — 44,877 — Add: Goodwill impairment— 44,877 — 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 
Add: Restructuring chargesAdd: Restructuring charges319 2,882 1,265 8,924 
Add: Loss on early extinguishment of debtAdd: Loss on early extinguishment of debt— 154 — 2,057 
Subtract/add: Investment securities (gains) losses, netSubtract/add: Investment securities (gains) losses, net(962)1,550 1,028 (76,594)
Subtract: Gain on sale and increase in fair value of private equity investments, netSubtract: Gain on sale and increase in fair value of private equity investments, net(260)(1,194)(4,712)(3,507)Subtract: Gain on sale and increase in fair value of private equity investments, net— (260)— (4,712)
Subtract/add: Tax effect of adjustments(1,122)(2,478)18,214 (10,137)
Add/subtract: Tax effect of adjustments (1)
Add/subtract: Tax effect of adjustments (1)
164 (1,122)(579)18,214 
Adjusted net incomeAdjusted net income$139,655 $158,023 $220,960 $483,369 Adjusted net income$186,051 $139,655 $562,286 $220,960 
Net income annualizedNet income annualized364,305 538,478 298,258 550,971 Net income annualized741,002 364,305 748,805 298,258 
Adjusted net income annualizedAdjusted net income annualized555,584 626,939 295,151 646,263 Adjusted net income annualized738,137 555,584 751,774 295,151 
Total average assetsTotal average assets53,138,334 47,211,026 51,568,621 46,566,994 Total average assets55,326,260 53,138,334 54,848,346 51,568,621 
Return on average assets (annualized)Return on average assets (annualized)0.69 %1.14 %0.58 %1.18 %Return on average assets (annualized)1.34 %0.69 %1.37 %0.58 %
Adjusted return on average assets (annualized)Adjusted return on average assets (annualized)1.05 1.33 0.57 1.39 Adjusted return on average assets (annualized)1.33 1.05 1.37 0.57 
Three Months Ended
(dollars in thousands)September 30, 2021June 30, 2021September 30, 2020
Adjusted return on average common equity and adjusted return on average tangible common equity (annualized)
Net income available to common shareholders$178,482 $177,909 $83,283 
Subtract/add: Earnout liability adjustments(243)750 — 
Add: Goodwill impairment— — 44,877 
Add: Restructuring charges319 415 2,882 
Add: Loss on early extinguishment of debt— — 154 
Subtract/add: Investment securities (gains) losses, net(962)— 1,550 
Subtract: Increase in fair value of private equity investments— — (260)
Add/subtract: Tax effect of adjustments (1)
164 (105)(1,122)
Adjusted net income available to common shareholders$177,760 $178,969 $131,364 
Adjusted net income available to common shareholders' annualized$705,243 $717,843 $522,600 
Add: Amortization of intangibles, annualized net of tax7,050 7,128 7,782 
Adjusted net income available to common shareholders excluding amortization of intangibles annualized$712,293 $724,971 $530,382 
Net income available to common shareholders annualized$708,108 $713,591 $331,322 
Total average shareholders' equity less preferred stock$4,734,754 $4,632,568 $4,553,159 
Subtract: Goodwill(452,390)(452,390)(497,267)
Subtract: Other intangible assets, net(39,109)(41,399)(49,075)
Total average tangible shareholders' equity less preferred stock$4,243,255 $4,138,779 $4,006,817 
Return on average common equity (annualized)14.96 %15.40 %7.28 %
Adjusted return on average common equity (annualized)14.90 15.50 11.48 
Adjusted return on average tangible common equity (annualized)16.79 17.52 13.24 
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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 

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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)September 30, 2021June 30, 2021December 31, 2020September 30, 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$55,509,129 $54,938,659 $54,394,159 $53,040,538 
Subtract: GoodwillSubtract: Goodwill(452,390)(497,267)(487,865)Subtract: Goodwill(452,390)(452,390)(452,390)(452,390)
Subtract: Other intangible assets, netSubtract: Other intangible assets, net(47,752)(50,392)(58,572)Subtract: Other intangible assets, net(37,975)(40,354)(45,112)(47,752)
Tangible assetsTangible assets$52,540,396 $53,574,330 $47,114,745 Tangible assets$55,018,764 $54,445,915 $53,896,657 $52,540,396 
Total shareholders' equityTotal shareholders' equity$5,064,542 $5,052,968 $4,868,838 Total shareholders' equity$5,252,802 $5,237,714 $5,161,334 $5,064,542 
Subtract: GoodwillSubtract: Goodwill(452,390)(497,267)(487,865)Subtract: Goodwill(452,390)(452,390)(452,390)(452,390)
Subtract: Other intangible assets, netSubtract: Other intangible assets, net(47,752)(50,392)(58,572)Subtract: Other intangible assets, net(37,975)(40,354)(45,112)(47,752)
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)(537,145)
Tangible common equityTangible common equity$4,027,255 $3,968,164 $3,785,851 Tangible common equity$4,225,292 $4,207,825 $4,126,687 $4,027,255 
Total shareholders' equity to total assets ratioTotal shareholders' equity to total assets ratio9.55 %9.34 %10.22 %Total shareholders' equity to total assets ratio9.46 %9.53 %9.49 %9.55 %
Tangible common equity ratioTangible common equity ratio7.67 7.41 8.04 Tangible common equity ratio7.68 7.73 7.66 7.67 
(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, 2020,2021, 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, 20202021 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 at2021. As of October 31, 2021, the remaining authorization under this program was $31.8 million.
Share Repurchases
(in thousands, except per share data)Total Number of Shares Repurchased
Average Price Paid per Share(1)
Total Number
of Shares Repurchased as
Part of
Publicly Announced
Plans or Programs		Maximum Approximate
Dollar Value
of Shares
that May Yet Be
Purchased Under the
Plans or Programs
July 2021637 $42.53 637 $80,448 
August 2021429 43.05 429 61,972 
September 2021710 40.90 710 32,931 
Total1,776 $42.00 1,776 
(1)    The average price paid per share is calculated on a level that would be consistent with Synovus retaining a 9% CET1 ratio tartrade date basis for all open market transactions and excludes commissions and other transaction expenses.get. As a result of the greater economic uncertainty associated with the current pandemic, Synovus suspended its share repurchase activity beyond the $16.2 million (450 thousand shares) of its common stock repurchased
The foregoing repurchases during the first quarter.third quarter of 2021 were purchased through open market transactions, including under plans complying with Rule 10b5-1 under the Exchange Act.

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 
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.
November 6, 20203, 2021By:/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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