Synovus announces earnings for the second quarter 2023

Diluted earnings per share of $1.13 vs. $1.16 in 2Q22

Adjusted diluted earnings per share of $1.16 vs. $1.17 in 2Q22

COLUMBUS, Ga.--(BUSINESS WIRE)--Synovus Financial Corp. (NYSE: SNV) today reported financial results for the quarter ended June 30, 2023. “Our second quarter financial performance reflects the strength and resiliency of our team, with pre-provision net revenue growing 8% year over year and adjusted return on tangible common equity at 18%,” said Synovus Chairman, CEO and President Kevin Blair. “Strong deposit production, increased capital levels and stability in credit metrics, as we saw during the second quarter, all serve as mitigants to the risks of an environment with heightened levels of volatility and uncertainty. And as we position the company for sustainable, long-term growth, we’re proactively optimizing the balance sheet, we’ve adjusted revenue expectations in response to slower economic growth trends and deposit remixing, and we’ve significantly reduced expense growth. Even as we execute amid lingering challenging market conditions, we remain fully dedicated to providing reliable and innovative financial solutions to our clients. Their trust and confidence in our institution have been paramount to our growth and sustained performance.”

Second Quarter 2023 Highlights

• Total revenue of $567.8 million increased $45.2 million, or 9%, compared to the second quarter 2022, driven by net interest income growth of 7%, in addition to growth in core client fee income, excluding mortgage, of 7% year-over-year.
• Pre-provision net revenue of $260.6 million increased $20.0 million, or 8%, compared to the second quarter 2022.
• Period-end loans increased $308.6 million sequentially, primarily driven by fundings of existing CRE commitments and growth in consumer loans, somewhat offset by lower utilization from C&I commitments.
• Total deposits increased $126.5 million sequentially and included remixing due to the rate environment.
• Credit quality metrics at solid levels with a net charge-off ratio of 0.24%, a modest increase in the ACL ratio to 1.19%, and broader stable performance across the loan portfolio, asset types, and industries.
• Preliminary CET1 ratio of 9.85% increased 8 bps sequentially as capital generation continued to support client loan growth while also buffering capital levels given economic uncertainty.

   

Second Quarter Summary

	Reported									Adjusted
(dollars in thousands)		2Q23			1Q23			2Q22			2Q23			1Q23			2Q22
Net income available to common shareholders	$	165,819		$	193,868		$	169,761		$	169,526		$	195,276		$	171,018
Diluted earnings per share		1.13			1.32			1.16			1.16			1.33			1.17
Total revenue		567,807			613,877			522,654			567,347			599,469			526,854
Total loans		44,353,537			44,044,939			41,204,780			N/A			N/A			N/A
Total deposits		50,080,392			49,953,936			49,034,700			N/A			N/A			N/A
Return on avg assets		1.15	%		1.36	%		1.26	%		1.18	%		1.37	%		1.27	%
Return on avg common equity		15.5			19.2			16.5			15.8			19.4			16.6
Return on avg tangible common equity		17.7			21.9			18.8			18.1			22.1			19.0
Net interest margin		3.20			3.43			3.22			N/A			N/A			N/A
Efficiency ratio-TE^(1)(2)		53.99			52.33			53.87			52.57			50.48			53.43
NCO ratio-QTD		0.24			0.17			0.16			N/A			N/A			N/A
NPA ratio		0.59			0.41			0.33			N/A			N/A			N/A

^(1)	Taxable equivalent
^(2)	Adjusted tangible efficiency ratio

Balance Sheet

Loans^*
(dollars in millions)		2Q23		1Q23	Linked Quarter Change			Linked Quarter % Change			2Q22	Year/Year Change			Year/Year % Change
Commercial & industrial	$	22,531.2	$	22,600.2	$	(68.9	)	—	%	$	20,778.3	$	1,752.9		8	%
Commercial real estate		13,293.9		12,996.8		297.1		2			11,503.4		1,790.5		16
Consumer		8,528.4		8,448.0		80.4		1			8,923.0		(394.6	)	(4	)
Total loans	$	44,353.5	$	44,044.9	$	308.6		1	%	$	41,204.8	$	3,148.8		8	%
^*Amounts may not total due to rounding

• Total loans ended the quarter at $44.35 billion, up $308.6 million sequentially.
• Commercial and industrial (C&I) loans decreased $68.9 million sequentially, primarily driven by lower utilization from existing commitments and a strategic decline in syndicated loans.
• CRE loans increased $297.1 million sequentially, mostly due to draws on existing multi-family commitments and continued low levels of pay-offs.
• Consumer loans increased $80.4 million sequentially, largely a result of growth in portfolio mortgages somewhat offset by continued third-party decline from runoff.

Deposits^*
(dollars in millions)		2Q23		1Q23	Linked Quarter Change			Linked Quarter % Change			2Q22	Year/Year Change			Year/Year % Change
Non-interest-bearing DDA	$	12,945.5	$	13,827.6	$	(882.0	)	(6	)%	$	15,781.1	$	(2,835.6	)	(18	)%
Interest-bearing DDA		6,255.3		5,841.0		414.3		7			6,327.1		(71.7	)	(1	)
Money market		10,803.7		11,776.0		(972.3	)	(8	)		13,793.0		(2,989.3	)	(22	)
Savings		1,222.9		1,312.7		(89.8	)	(7	)		1,498.7		(275.9	)	(18	)
Public funds		7,031.4		6,888.2		143.2		2			5,863.9		1,167.5		20
Time deposits		5,291.8		4,060.3		1,231.5		30			2,147.8		3,144.1		146
Brokered deposits		6,529.8		6,248.3		281.5		5			3,623.1		2,906.7		80
Total deposits	$	50,080.4	$	49,953.9	$	126.5		—	%	$	49,034.7	$	1,045.7		2	%
^*Amounts may not total due to rounding

• Total deposits ended the quarter at $50.08 billion, up $126.5 million sequentially
  • Money market deposits were primarily impacted by the continued shifting to time deposits.
  • Non-interest-bearing DDAs were impacted by pressures from seasonal cash deployment of excess funds and continued pressures from the higher rate environment.
• Total deposit costs increased 51 bps sequentially to 1.95% and were impacted by the anticipated pricing lags on core interest-bearing deposits (excludes brokered deposits) as well as the decline in non-interest-bearing DDAs.

Income Statement Summary^**
(in thousands, except per share data)		2Q23			1Q23		Linked Quarter Change			Linked Quarter % Change			2Q22		Year/Year Change			Year/Year % Change
Net interest income	$	455,531		$	480,751		$	(25,220	)	(5	)%	$	425,388		$	30,143		7	%
Non-interest revenue		112,276			133,126			(20,850	)	(16	)		97,266			15,010		15
Non-interest expense		307,181			321,852			(14,671	)	(5	)		282,051			25,130		9
Provision for (reversal of) credit losses		38,881			32,154			6,727		21			12,688			26,193		206
Income before taxes	$	221,745		$	259,871		$	(38,126	)	(15	)%	$	227,915		$	(6,170	)	(3	)%
Income tax expense		47,801			57,712			(9,911	)	(17	)		49,863			(2,062	)	(4	)
Net income		173,944			202,159			(28,215	)	(14	)		178,052			(4,108	)	(2	)
Less: Net income (loss) attributable to noncontrolling interest		(166	)		—			(166	)	NM			—			(166	)	NM
Net income attributable to Synovus Financial Corp.		174,110			202,159			(28,049	)	(14	)		178,052			(3,942	)	(2	)
Less: Preferred stock dividends		8,291			8,291			—		—			8,291			—		—
Net income available to common shareholders	$	165,819		$	193,868		$	(28,049	)	(14	)%	$	169,761		$	(3,942	)	(2	)%
Weighted average common shares outstanding, diluted		146,550			146,727			(177	)	—	%		146,315			235		—	%
Diluted earnings per share	$	1.13		$	1.32		$	(0.19	)	(14	)	$	1.16		$	(0.03	)	(3	)
Adjusted diluted earnings per share		1.16			1.33			(0.17	)	(13	)		1.17			(0.01	)	(1	)
Effective tax rate		21.56	%		22.21	%							21.88	%
^**Amounts may not total due to rounding

Core Performance

• Net interest income of $455.5 million was down $25.2 million sequentially, or 5%, and increased $30.1 million, or 7%, compared to the second quarter 2022.
  • The quarter-over-quarter decline was largely driven by increases in deposit costs and negative re- mixing in non-interest-bearing DDA deposits partially offset by higher asset yields and earning asset growth.
    • Net interest margin was 3.20%, down 23 bps sequentially, impacted by the same factors mentioned above.
  • The year-over-year increase resulted primarily from loan growth and interest rate increases somewhat offset by higher deposit costs and negative remixing from non-interest DDA deposits.
• Non-interest revenue decreased $20.9 million, or 16%, sequentially and increased $15.0 million, or 15%, compared to the second quarter 2022. Adjusted non-interest revenue decreased $6.9 million, or 6%, sequentially and increased $10.2 million, or 10%, compared to the second quarter 2022.
  • The quarter-over-quarter decrease was impacted by the prior quarter's $13.1 million one-time benefit from the recovery of a non-performing asset related to the regulatory approval of our Qualpay investment and strong growth in capital markets income in the first quarter 2023, which normalized this quarter.
  • The year-over-year increase primarily related to higher wealth revenue from diverse sources including fees from short-term liquidity management products and a $7 million write-down in the second quarter 2022 on a minority tech investment.
• Non-interest expense decreased $14.7 million, or 5%, sequentially and increased $25.1 million, or 9%, compared to the second quarter 2022. Adjusted non-interest expense decreased $3.8 million, or 1%, sequentially and increased $17.0 million, or 6%, compared to the second quarter 2022.
  • The quarter-over-quarter decrease was largely due to the previous quarter's $16.8 million loss associated with the move of third-party consumer loans to held for sale in addition to seasonally elevated personnel expense in the first quarter 2023.
  • The year-over-year increase primarily resulted from new business initiatives and infrastructure investments as well as investments in our workforce and higher FDIC insurance and healthcare costs.
• Overall credit performance and the credit quality of our recent originations was solid. The non-performing loan and asset ratios both moved to 0.59%; the net charge-off ratio for the quarter was 0.24%, and total past dues were 0.19% of total loans outstanding.
• Provision for credit losses of $38.9 million increased $6.7 million sequentially and increased $26.2 million compared to the second quarter 2022.
  • Drivers of the quarter-over-quarter increase included higher net charge-offs and a modest increase of 2 bps in the allowance for credit losses coverage ratio (to loans).
  • Drivers of the year-over-year increase largely included an 8 bps increase in the allowance for credit losses coverage ratio (to loans), which resulted from deterioration in forecasted economic scenarios mostly offset by continued solid loan portfolio performance, and higher net charge-offs.

Capital Ratios
	2Q23			1Q23		2Q22
Common equity Tier 1 capital (CET1) ratio	9.85	%	^*	9.77	%	9.46	%
Tier 1 capital ratio	10.88		^*	10.81		10.56
Total risk-based capital ratio	12.79		^*	12.72		12.43
Tier 1 leverage ratio	9.23		^*	9.14		9.03
Tangible common equity ratio	6.17			6.12		6.26
^* Ratios are preliminary.

Capital

• Preliminary CET1 ratio improved 8 bps during the quarter to 9.85%, and the preliminary total risk-based capital ratio of 12.79% increased 7 bps from the previous quarter as core earnings continued to support capital generation.

Second Quarter Earnings Conference Call

Synovus will host an earnings highlights conference call at 8:30 a.m. ET on July 20, 2023. The earnings call will be accompanied by a slide presentation. Shareholders and other interested parties may listen to this conference call via simultaneous internet broadcast. For a link to the webcast, go to investor.synovus.com/event. The replay will be archived for 12 months and will be available 30-45 minutes after the call.

Synovus Financial Corp. is a financial services company based in Columbus, Georgia, with approximately $61 billion in assets. Synovus provides commercial and consumer banking and a full suite of specialized products and services, including private banking, treasury management, wealth management, mortgage services, premium finance, asset-based lending, structured lending, capital markets and international banking. Synovus has 246 branches in Georgia, Alabama, South Carolina, Florida and Tennessee. Synovus is a Great Place to Work-Certified Company and is on the web at synovus.com and on Twitter, Facebook, LinkedIn and Instagram.

Forward-Looking Statements

This press release and certain of our other filings with the Securities and Exchange Commission contain statements that constitute “forward-looking statements” within the meaning of, and subject to the protections of, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.

All statements other than statements of historical fact are forward-looking statements. You can identify these forward-looking statements through Synovus’ use of words such as “believes,” “anticipates,” “expects,” “may,” “will,” “assumes,” “should,” “predicts,” “could,” “would,” “intends,” “targets,” “estimates,” “projects,” “plans,” “potential” and other similar words and expressions of the future or otherwise regarding the outlook for Synovus’ future business and financial performance and/or the performance of the banking industry and economy in general. These forward-looking statements include, among others, our expectations regarding our future operating and financial performance; expectations on our growth strategy, expense and revenue initiatives, capital management, balance sheet management, and future profitability; expectations on credit quality and performance; and the assumptions underlying our expectations. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve known and unknown risks and uncertainties which may cause the actual results, performance or achievements of Synovus to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are based on the information known to, and current beliefs and expectations of, Synovus’ management and are subject to significant risks and uncertainties. Actual results may differ materially from those contemplated by such forward-looking statements. A number of factors could cause actual results to differ materially from those contemplated by the forward-looking statements in this press release. Many of these factors are beyond Synovus’ ability to control or predict.

These forward-looking statements are based upon information presently known to Synovus’ management and are inherently subjective, uncertain and subject to change due to any number of risks and uncertainties, including, without limitation, the risks and other factors set forth in Synovus’ filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2022, under the captions “Cautionary Notice Regarding Forward-Looking Statements” and “Risk Factors” and in Synovus’ quarterly reports on Form 10-Q and current reports on Form 8-K. We believe these forward-looking statements are reasonable; however, undue reliance should not be placed on any forward-looking statements, which are based on current expectations and speak only as of the date that they are made. We do not assume any obligation to update any forward-looking statements as a result of new information, future developments or otherwise, except as otherwise may be required by law.

Non-GAAP Financial Measures

The measures entitled adjusted non-interest revenue, non-interest expense; adjusted revenue; adjusted tangible efficiency ratio; adjusted net income available to common shareholders; adjusted diluted earnings per share; adjusted return on average assets; adjusted return on average common equity; return on average tangible common equity; adjusted return on average tangible common equity; and tangible common equity ratio are not measures recognized under GAAP and therefore are considered non-GAAP financial measures. The most comparable GAAP measures to these measures are total non-interest revenue; total non-interest expense; total revenue; efficiency ratio- TE; net income available to common shareholders; diluted earnings per share; return on average assets; return on average common equity; and the ratio of total Synovus Financial Corp. 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 non-interest revenue and adjusted revenue are measures used by management to evaluate non-interest revenue and total revenue revenue exclusive of net investment securities gains (losses), fair value adjustment on non-qualified deferred compensation, and other items not indicative of ongoing operations that could impact period-to-period comparisons. Adjusted non-interest expense and the adjusted tangible efficiency ratio are measures utilized by management to measure the success of expense management initiatives focused on reducing recurring controllable operating costs. Adjusted net income available to common shareholders, adjusted diluted earnings per share, adjusted return on average assets, and adjusted return on average common equity are measures used by management to evaluate operating results exclusive of items that are not indicative of ongoing operations and impact period-to-period comparisons. Return on average tangible common equity and adjusted return on average tangible common equity are measures used by management to compare Synovus’ performance with other financial institutions because it calculates the return available to common shareholders without the impact of intangible assets and their related amortization, thereby allowing management to evaluate the performance of the business consistently. The tangible common equity ratio is used by management to assess the strength of our capital position. The computations of these measures are set forth in the tables below.

Reconciliation of Non-GAAP Financial Measures
(dollars in thousands)		2Q23			1Q23			2Q22
Adjusted non-interest revenue
Total non-interest revenue	$	112,276		$	133,126		$	97,266
Investment securities (gains) losses, net		—			(1,030	)		—
Recovery of NPA		—			(13,126	)		—
Fair value adjustment on non-qualified deferred compensation		(1,598	)		(1,371	)		3,240
Adjusted non-interest revenue	$	110,678		$	117,599		$	100,506
Adjusted non-interest expense
Total non-interest expense	$	307,181		$	321,852		$	282,051
(Loss) gain on other loans held for sale		(2,360	)		(16,750	)		—
Gain (loss) on early extinguishment of debt		377			—			—
Restructuring (charges) reversals		110			733			1,850
Valuation adjustment to Visa derivative		(3,027	)		—			(3,500	)
Fair value adjustment on non-qualified deferred compensation		(1,598	)		(1,371	)		3,240
Adjusted non-interest expense	$	300,683		$	304,464		$	283,641
Reconciliation of Non-GAAP Financial Measures, continued
(dollars in thousands)		2Q23			1Q23			2Q22
Adjusted revenue and tangible efficiency ratio
Adjusted non-interest expense	$	300,683		$	304,464		$	283,641
Amortization of intangibles		(2,420	)		(1,857	)		(2,118	)
Adjusted tangible non-interest expense	$	298,263		$	302,607		$	281,523
Net interest income	$	455,531		$	480,751		$	425,388
Total non-interest revenue		112,276			133,126			97,266
Total revenue	$	567,807		$	613,877		$	522,654
Tax equivalent adjustment		1,138			1,119			960
Total TE revenue		568,945			614,996			523,614
Recovery of NPA		—			(13,126	)		—
Investment securities losses (gains), net		—			(1,030	)		—
Fair value adjustment on non-qualified deferred compensation		(1,598	)		(1,371	)		3,240
Adjusted revenue	$	567,347		$	599,469		$	526,854
Efficiency ratio-TE		53.99	%		52.33	%		53.87	%
Adjusted tangible efficiency ratio		52.57			50.48			53.43

Adjusted return on average assets
Net income	$	173,944		$	202,159		$	178,052
Recovery of NPA		—			(13,126	)		—
Loss (gain) on other loans held for sale		2,360			16,750			—
(Gain) loss on early extinguishment of debt		(377	)		—			—
Restructuring charges (reversals)		(110	)		(733	)		(1,850	)
Valuation adjustment to Visa derivative		3,027			—			3,500
Investment securities losses (gains), net		—			(1,030	)		—
Tax effect of adjustments^(1)		(1,193	)		(453	)		(393	)
Adjusted net income	$	177,651		$	203,567		$	179,309
Net income annualized	$	697,687		$	819,867		$	714,165
Adjusted net income annualized	$	712,556		$	825,577		$	719,206
Total average assets	$	60,515,077		$	60,133,561		$	56,536,940
Return on average assets		1.15	%		1.36	%		1.26	%
Adjusted return on average assets		1.18			1.37			1.27
Adjusted net income available to common shareholders and adjusted diluted earnings per share
Net income available to common shareholders	$	165,819		$	193,868		$	169,761
Recovery of NPA		—			(13,126	)		—
Loss (gain) on other loans held for sale		2,360			16,750			—
(Gain) loss on early extinguishment of debt		(377	)		—			—
Restructuring charges (reversals)		(110	)		(733	)		(1,850	)
Valuation adjustment to Visa derivative		3,027			—			3,500
Investment securities losses (gains), net		—			(1,030	)		—
Tax effect of adjustments^(1)		(1,193	)		(453	)		(393	)
Adjusted net income available to common shareholders	$	169,526		$	195,276		$	171,018
Weighted average common shares outstanding, diluted		146,550			146,727			146,315
Diluted earnings per share	$	1.13		$	1.32		$	1.16
Adjusted diluted earnings per share		1.16			1.33			1.17

Reconciliation of Non-GAAP Financial Measures, continued
(dollars in thousands)		2Q23			1Q23			2Q22
Adjusted return on average common equity, return on average tangible common equity, and adjusted return on average tangible common equity
Net income available to common shareholders	$	165,819		$	193,868		$	169,761
Recovery of NPA		—			(13,126	)		—
Loss (gain) on other loans held for sale		2,360			16,750			—
(Gain) loss on early extinguishment of debt		(377	)		—			—
Restructuring charges (reversals)		(110	)		(733	)		(1,850	)
Valuation adjustment to Visa derivative		3,027			—			3,500
Investment securities losses (gains), net		—			(1,030	)		—
Tax effect of adjustments^(1)		(1,193	)		(453	)		(393	)
Adjusted net income available to common shareholders	$	169,526		$	195,276		$	171,018
Adjusted net income available to common shareholders annualized	$	679,967		$	791,953		$	685,951
Amortization of intangibles, tax effected, annualized		7,344			5,699			6,471
Adjusted net income available to common shareholders excluding amortization of intangibles annualized	$	687,311		$	797,652		$	692,422
Net income available to common shareholders annualized	$	665,098		$	786,242		$	680,910
Amortization of intangibles, tax effected, annualized		7,344			5,699			6,471
Net income available to common shareholders excluding amortization of intangibles annualized	$	672,442		$	791,941		$	687,381
Total average Synovus Financial Corp. shareholders' equity less preferred stock	$	4,303,722		$	4,088,777		$	4,132,536
Average goodwill		(460,118	)		(452,390	)		(452,390	)
Average other intangible assets, net		(36,738	)		(26,245	)		(32,387	)
Total average Synovus Financial Corp. tangible shareholders' equity less preferred stock	$	3,806,866		$	3,610,142		$	3,647,759
Return on average common equity		15.5	%		19.2	%		16.5	%
Adjusted return on average common equity		15.8			19.4			16.6
Return on average tangible common equity		17.7			21.9			18.8
Adjusted return on average tangible common equity		18.1			22.1			19.0

(dollars in thousands)	June 30, 2023			December 31, 2022			June 30, 2022
Tangible common equity ratio
Total assets	$	60,655,591		$	59,731,378		$	57,382,745
Goodwill		(475,573	)		(452,390	)		(452,390	)
Other intangible assets, net		(61,538	)		(27,124	)		(31,360	)
Tangible assets	$	60,118,480		$	59,251,864		$	56,898,995
Total Synovus Financial Corp. shareholders’ equity	$	4,782,528		$	4,475,801		$	4,584,438
Goodwill		(475,573	)		(452,390	)		(452,390	)
Other intangible assets, net		(61,538	)		(27,124	)		(31,360	)
Preferred Stock, no par value		(537,145	)		(537,145	)		(537,145	)
Tangible common equity	$	3,708,272		$	3,459,142		$	3,563,543
Total Synovus Financial Corp. shareholders’ equity to total assets ratio		7.88	%		7.49	%		7.99	%
Tangible common equity ratio		6.17			5.84			6.26
^(1) An assumed marginal tax rate of 24.3% for 2Q23 and 1Q23 and 23.8% for 2Q22 was applied.
Amounts may not total due to rounding

Synovus
INCOME STATEMENT DATA
(Unaudited)
(Dollars in thousands, except per share data)	Six Months Ended June 30,
		2023			2022		23 vs '22
							% Change
Interest income	$	1,476,022		$	869,834		70	%
Interest expense		539,739			52,199		934
Net interest income		936,283			817,635		15
Provision for (reversal of) credit losses		71,035			24,088		195
Net interest income after provision for credit losses		865,248			793,547		9
Non-interest revenue:
Service charges on deposit accounts		46,451			46,030		1
Fiduciary and asset management fees		39,723			40,377		(2	)
Card fees		32,884			30,846		7
Brokerage revenue		43,466			29,898		45
Mortgage banking income		8,467			9,857		(14	)
Capital markets income		20,700			12,864		61
Income from bank-owned life insurance		14,140			15,722		(10	)
Investment securities gains (losses), net		1,030			—		nm
Recovery of NPA		13,126			—		nm
Other non-interest revenue		25,415			17,006		49
Total non-interest revenue		245,402			202,600		21
Non-interest expense:
Salaries and other personnel expense		371,926			325,747		14
Net occupancy, equipment, and software expense		85,645			86,076		(1	)
Third-party processing and other services		43,493			42,947		1
Professional fees		18,560			19,338		(4	)
FDIC insurance and other regulatory fees		21,429			13,144		63
Restructuring charges (reversals)		(843	)		(8,274	)	nm
Loss on other loans held for sale		19,110			—		nm
Other operating expenses		69,714			75,523		(8	)
Total non-interest expense		629,034			554,501		13
Income before income taxes		481,616			441,646		9
Income tax expense		105,513			92,558		14
Net income		376,103			349,088		8
Less: Net income attributable to noncontrolling interest		(166	)		—		nm
Net income attributable to Synovus Financial Corp.		376,269			349,088		8
Less: Preferred stock dividends		16,581			16,581		—
Net income available to common shareholders	$	359,688		$	332,507		8	%
Net income per common share, basic	$	2.46		$	2.29		8	%
Net income per common share, diluted		2.45			2.27		8
Cash dividends declared per common share		0.76			0.68		12
Return on average assets *		1.26	%		1.24	%	2 bps
Return on average common equity *		17.28			15.28		200
Weighted average common shares outstanding, basic		145,957			145,301		—	%
Weighted average common shares outstanding, diluted		146,644			146,489		—
nm - not meaningful
bps - basis points
* - ratios are annualized
Amounts may not total due to rounding

Synovus
INCOME STATEMENT DATA
(Unaudited)
(Dollars in thousands, except per share data)	2023					2022					Second Quarter
	Second Quarter			First Quarter		Fourth Quarter		Third Quarter	Second Quarter		'23 vs '22
											% Change
Interest income	$	759,143		716,879		654,654		551,299	453,772		67	%
Interest expense		303,612		236,128		153,308		73,380	28,384		970
Net interest income		455,531		480,751		501,346		477,919	425,388		7
Provision for (reversal of) credit losses		38,881		32,154		34,884		25,581	12,688		206
Net interest income after provision for credit losses		416,650		448,597		466,462		452,338	412,700		1
Non-interest revenue:
Service charges on deposit accounts		23,477		22,974		23,639		23,398	23,491		—
Fiduciary and asset management fees		20,027		19,696		18,836		19,201	20,100		—
Card fees		17,059		15,824		15,887		15,101	16,089		6
Brokerage revenue		20,908		22,558		19,996		17,140	15,243		37
Mortgage banking income		4,609		3,858		2,554		5,065	3,904		18
Capital markets income		6,975		13,725		6,998		6,839	7,393		(6	)
Income from bank-owned life insurance		6,878		7,262		7,206		6,792	9,165		(25	)
Investment securities gains (losses), net		—		1,030		—		—	—		nm
Recovery of NPA		—		13,126		—		—	—		nm
Other non-interest revenue		12,343		13,073		7,323		10,762	1,881		556
Total non-interest revenue		112,276		133,126		102,439		104,298	97,266		15
Non-interest expense:
Salaries and other personnel expense		183,001		188,924		182,629		173,334	161,063		14
Net occupancy, equipment, and software expense		42,785		42,860		45,192		43,462	43,199		(1	)
Third-party processing and other services		21,659		21,833		23,130		22,539	21,952		(1	)
Professional fees		9,597		8,963		11,096		6,755	10,865		(12	)
FDIC insurance and other regulatory fees		11,162		10,268		8,232		7,707	6,894		62
Restructuring charges (reversals)		(110	)	(733	)	(2,372	)	956	(1,850	)	(94	)
Loss on other loans held for sale		2,360		16,750		—		—	—		nm
Other operating expenses		36,727		32,987		41,089		39,257	39,928		(8	)
Total non-interest expense		307,181		321,852		308,996		294,010	282,051		9
Income before income taxes		221,745		259,871		259,905		262,626	227,915		(3	)
Income tax expense		47,801		57,712		54,135		59,582	49,863		(4	)
Net income		173,944		202,159		205,770		203,044	178,052		(2	)
Less: Net income attributable to noncontrolling interest		(166	)	—		—		—	—		nm
Net income attributable to Synovus Financial Corp.		174,110		202,159		205,770		203,044	178,052		(2	)
Less: Preferred stock dividends		8,291		8,291		8,291		8,291	8,291		—
Net income available to common shareholders	$	165,819		193,868		197,479		194,753	169,761		(2	)%
Net income per common share, basic	$	1.13		1.33		1.36		1.34	1.17		(3	)%
Net income per common share, diluted		1.13		1.32		1.35		1.33	1.16		(3	)
Cash dividends declared per common share		0.38		0.38		0.34		0.34	0.34		12
Return on average assets *		1.15	%	1.36		1.38		1.39	1.26		(11) bps
Return on average common equity *		15.45		19.23		20.93		18.66	16.48		(103	)
Weighted average common shares outstanding, basic		146,113		145,799		145,467		145,386	145,328		1	%
Weighted average common shares outstanding, diluted		146,550		146,727		146,528		146,418	146,315		—
nm - not meaningful
bps - basis points
* - ratios are annualized
Amounts may not total due to rounding

Synovus
BALANCE SHEET DATA	June 30, 2023			December 31, 2022			June 30, 2022
(Unaudited)
(In thousands, except share data)
ASSETS
Cash and due from banks	$	576,148		$	624,097		$	583,323
Interest-bearing funds with Federal Reserve Bank		1,391,961			1,280,684			1,023,030
Interest earning deposits with banks		50,254			34,632			29,139
Federal funds sold and securities purchased under resale agreements		35,788			38,367			29,568
Cash, cash equivalents, and restricted cash		2,054,151			1,977,780			1,665,060
Investment securities available for sale, at fair value		9,621,175			9,678,103			9,889,850
Loans held for sale (includes $62,616, $51,136 and $76,864 measured at fair value, respectively)		514,450			391,502			917,679
Loans, net of deferred fees and costs		44,353,537			43,716,353			41,204,780
Allowance for loan losses		(471,238	)		(443,424	)		(407,837	)
Loans, net		43,882,299			43,272,929			40,796,943
Cash surrender value of bank-owned life insurance		1,100,114			1,089,280			1,078,703
Premises, equipment, and software, net		365,443			370,632			383,060
Goodwill		475,573			452,390			452,390
Other intangible assets, net		61,538			27,124			31,360
Other assets		2,580,848			2,471,638			2,167,700
Total assets	$	60,655,591		$	59,731,378		$	57,382,745
LIABILITIES AND EQUITY
Liabilities:
Deposits:
Non-interest-bearing deposits	$	13,565,602		$	15,639,899		$	16,876,710
Interest-bearing deposits		36,514,790			33,231,660			32,157,990
Total deposits		50,080,392			48,871,559			49,034,700
Federal funds purchased and securities sold under repurchase agreements		83,384			146,588			345,242
Other short-term borrowings		1,461			603,384			255,018
Long-term debt		4,021,411			4,109,597			1,804,104
Other liabilities		1,661,175			1,524,449			1,359,243
Total liabilities		55,847,823			55,255,577			52,798,307
Equity:
Shareholders' equity:
Preferred stock - no par value. Authorized 100,000,000 shares; issued 22,000,000		537,145			537,145			537,145
Common stock - $1.00 par value. Authorized 342,857,143 shares; issued 170,808,134, 170,141,492 and 170,012,527 respectively; outstanding 146,153,276, 145,486,634 and 145,357,669 respectively		170,808			170,141			170,013
Additional paid-in capital		3,933,548			3,920,346			3,908,118
Treasury stock, at cost; 24,654,858 shares		(944,484	)		(944,484	)		(944,484	)
Accumulated other comprehensive income (loss), net		(1,395,175	)		(1,442,117	)		(1,026,705	)
Retained earnings		2,480,686			2,234,770			1,940,351
Total Synovus Financial Corp. shareholders’ equity		4,782,528			4,475,801			4,584,438
Noncontrolling interest in subsidiary		25,240			—			—
Total equity		4,807,768			4,475,801			4,584,438
Total liabilities and equity	$	60,655,591		$	59,731,378		$	57,382,745

Synovus
AVERAGE BALANCES, INTEREST, AND YIELDS/RATES
(Unaudited)
	Second Quarter 2023							First Quarter 2023							Second Quarter 2022
(dollars in thousands)	Average Balance			Interest		Yield/ Rate		Average Balance			Interest		Yield/ Rate		Average Balance			Interest		Yield/ Rate
Assets
Interest earning assets:
Commercial loans ^(1) (2) (3)	$	35,628,637		$	566,823	6.38	%	$	35,030,809		$	526,529	6.10	%	$	31,870,387		$	308,442	3.88	%
Consumer loans ^(1) (2)		8,470,478			104,545	4.94			8,762,631			104,147	4.78			8,720,488			83,826	3.86
Less: Allowance for loan losses		(466,700	)		—	—			(445,192	)		—	—			(415,372	)		—	—
Loans, net		43,632,415			671,368	6.17			43,348,248			630,676	5.89			40,175,503			392,268	3.92
Investment securities available for sale		11,200,717			60,421	2.16			11,293,958			61,054	2.16			11,153,091			50,312	1.81
Trading account assets		21,328			309	5.80			11,338			124	4.39			11,987			73	2.44
Other earning assets^(4)		1,446,425			18,081	4.95			1,513,800			17,212	4.55			813,028			1,660	0.81
FHLB and Federal Reserve Bank stock		280,248			4,301	6.14			306,935			3,355	4.37			179,837			1,820	4.05
Mortgage loans held for sale		54,603			852	6.24			36,497			566	6.20			85,299			921	4.32
Other loans held for sale		546,224			4,949	3.58			443,690			5,011	4.52			725,762			7,678	4.19
Total interest earning assets		57,181,960		$	760,281	5.33	%		56,954,466		$	717,998	5.11	%		53,144,507		$	454,732	3.43	%
Cash and due from banks		646,066							643,502							538,647
Premises and equipment		369,039							370,275							385,457
Other real estate		—							—							11,439
Cash surrender value of bank-owned life insurance		1,095,866							1,091,080							1,077,231
Other assets^(5)		1,222,146							1,074,238							1,379,659
Total assets	$	60,515,077						$	60,133,561						$	56,536,940
Liabilities and Equity
Interest-bearing liabilities:
Interest-bearing demand deposits	$	9,891,375		$	41,803	1.70	%	$	9,091,166		$	23,221	1.04	%	$	9,513,334		$	3,598	0.15	%
Money market accounts		13,468,210			85,397	2.54			14,395,050			72,615	2.05			15,328,395			6,850	0.18
Savings deposits		1,276,040			281	0.09			1,370,173			211	0.06			1,506,195			72	0.02
Time deposits		4,866,221			39,551	3.26			3,601,288			21,496	2.42			2,829,684			1,688	0.24
Brokered deposits		6,342,751			74,748	4.73			5,553,970			56,392	4.12			2,878,536			6,293	0.88
Federal funds purchased and securities sold under repurchase agreements		88,591			351	1.57			133,360			670	2.01			246,737			219	0.35
Other short-term borrowings		455,050			5,566	4.84			1,677,519			18,994	4.53			480,999			896	0.74
Long-term debt		3,821,126			55,915	5.82			3,148,062			42,529	5.41			878,413			8,768	3.99
Total interest-bearing liabilities		40,209,364		$	303,612	3.03	%		38,970,588		$	236,128	2.46	%		33,662,293		$	28,384	0.33	%
Non-interest-bearing demand deposits		13,874,482							15,014,224							16,959,850
Other liabilities		1,556,863							1,522,827							1,245,116
Total equity		4,874,368							4,625,922							4,669,681
Total liabilities and equity	$	60,515,077						$	60,133,561						$	56,536,940
Net interest income and net interest margin, taxable equivalent^(6)				$	456,669	3.20	%				$	481,870	3.43	%				$	426,348	3.22	%
Less: taxable-equivalent adjustment					1,138							1,119							960
Net interest income				$	455,531						$	480,751						$	425,388

^(1)	Average loans are shown net of deferred fees and costs. NPLs are included.
^(2)	Interest income includes net loan fees as follows: Second Quarter 2023 — $11.3 million, First Quarter 2023 — $11.5 million, and Second Quarter 2022 — $13.0 million.
^(3)	Reflects taxable-equivalent adjustments, using the statutory federal tax rate of 21%, in adjusting interest on tax-exempt loans to a taxable-equivalent basis.
^(4)	Includes interest-bearing funds with Federal Reserve Bank, interest earning deposits with banks, and federal funds sold and securities purchased under resale agreements.
^(5)	Includes average net unrealized gains/(losses) on investment securities available for sale of $(1.46) billion, $(1.52) billion, and $(923.1) million for the Second Quarter 2023, First Quarter 2023, and Second Quarter 2022, respectively.
^(6)	The net interest margin is calculated by dividing annualized net interest income-taxable equivalent by average total interest earning assets.

Synovus
AVERAGE BALANCES, INTEREST, AND YIELDS/RATES
(Unaudited)
	Six Months Ended June 30,
	2023							2022
(dollars in thousands)	Average Balance			Interest		Yield/ Rate		Average Balance			Interest		Yield/ Rate
Assets
Interest earning assets:
Commercial loans ^(1) (2) (3)	$	35,331,375		$	1,093,352	6.24	%	$	31,316,646		$	589,029	3.79	%
Consumer loans ^(1) (2)		8,615,748			208,693	4.87			8,657,598			165,194	3.83
Less: Allowance for loan losses		(456,005	)						(419,639	)
Loans, net		43,491,118			1,302,045	6.03			39,554,605			754,223	3.84
Investment securities available for sale		11,247,080			121,475	2.16			11,206,150			97,562	1.74
Trading account assets		16,360			434	5.30			10,540			112	2.13
Other earning assets^(4)		1,479,926			35,292	4.74			1,363,223			2,475	0.36
FHLB and Federal Reserve Bank stock		293,518			7,656	5.22			170,006			2,505	2.95
Mortgage loans held for sale		45,600			1,418	6.22			94,542			1,803	3.81
Other loans held for sale		495,240			9,960	4.00			661,768			12,978	3.90
Total interest earning assets		57,068,842		$	1,478,280	5.22	%		53,060,834		$	871,658	3.31	%
Cash and due from banks		644,791							543,638
Premises and equipment		369,654							392,079
Other real estate		—							11,598
Cash surrender value of bank-owned life insurance		1,093,486							1,074,076
Other assets^(5)		1,148,600							1,613,313
Total assets	$	60,325,373						$	56,695,538
Liabilities and Equity
Interest-bearing liabilities:
Interest-bearing demand deposits	$	9,493,481		$	65,024	1.38	%	$	9,531,330		$	5,970	0.13	%
Money market accounts		13,929,069			158,012	2.29			15,685,030			12,199	0.16
Savings deposits		1,322,846			491	0.07			1,483,547			139	0.02
Time deposits		4,237,249			61,047	2.91			2,919,242			3,826	0.26
Brokered deposits		5,950,539			131,141	4.44			2,833,580			10,026	0.71
Federal funds purchased and securities sold under repurchase agreements		110,852			1,021	1.83			220,689			230	0.21
Other short-term borrowings		1,062,908			24,559	4.60			244,202			896	0.73
Long-term debt		3,486,453			98,444	5.63			930,131			18,913	4.07
Total interest-bearing liabilities		39,593,397		$	539,739	2.75	%		33,847,751		$	52,199	0.31	%
Non-interest-bearing demand deposits		14,441,205							16,727,040
Other liabilities		1,539,939							1,195,043
Total equity		4,750,832							4,925,704
Total liabilities and equity	$	60,325,373						$	56,695,538
Net interest income, taxable equivalent net interest margin ^(6)				$	938,541	3.32	%				$	819,459	3.11	%
Less: taxable-equivalent adjustment					2,258							1,824
Net interest income				$	936,283						$	817,635

^(1)	Average loans are shown net of deferred fees and costs. NPLs are included.
^(2)	Interest income includes net loan fees as follows: 2023 — $22.8 million and 2022 — $33.7 million.
^(3)	Reflects taxable-equivalent adjustments, using the statutory federal tax rate of 21%, in adjusting interest on tax-exempt loans to a taxable-equivalent basis.
^(4)	Includes interest-bearing funds with Federal Reserve Bank, interest earning deposits with banks, and federal funds sold and securities purchased under resale agreements.
^(5)	Includes average net unrealized gains/(losses) on investment securities available for sale of $(1.49) billion and $(587.1) million for the six months ended June 30, 2023 and 2022, respectively.
^(6)	The net interest margin is calculated by dividing annualized net interest income-taxable equivalent by average total interest earning assets.

Synovus
LOANS OUTSTANDING BY TYPE
(Unaudited)	Total Loans		Total Loans		Linked Quarter		Total Loans		Year/Year
(Dollars in thousands)
Loan Type	June 30, 2023		March 31, 2023		% Change		June 30, 2022		% Change
Commercial, Financial, and Agricultural	$	14,166,890	$	14,201,398	—	%	$	13,018,089	9	%
Owner-Occupied		8,364,342		8,398,778	—			7,760,236	8
Total Commercial & Industrial		22,531,232		22,600,176	—			20,778,325	8
Multi-Family		3,597,497		3,374,129	7			2,547,706	41
Hotels		1,771,381		1,737,163	2			1,597,930	11
Office Buildings		3,031,806		3,071,236	(1	)		2,680,399	13
Shopping Centers		1,329,492		1,332,078	—			1,458,902	(9	)
Warehouses		1,068,734		1,020,921	5			811,738	32
Other Investment Property		1,471,356		1,441,303	2			1,311,373	12
Total Investment Properties		12,270,266		11,976,830	2			10,408,048	18
1-4 Family Construction		205,459		201,896	2			234,379	(12	)
1-4 Family Investment Mortgage		410,267		394,754	4			407,476	1
Total 1-4 Family Properties		615,726		596,650	3			641,855	(4	)
Commercial Development		60,910		63,004	(3	)		109,764	(45	)
Residential Development		98,229		106,872	(8	)		156,816	(37	)
Land Acquisition		248,767		253,399	(2	)		186,934	33
Land and Development		407,906		423,275	(4	)		453,514	(10	)
Total Commercial Real Estate		13,293,898		12,996,755	2			11,503,417	16
Consumer Mortgages		5,379,284		5,246,640	3			5,124,523	5
Home Equity		1,773,987		1,757,250	1			1,579,218	12
Credit Cards		187,677		184,595	2			194,290	(3	)
Other Consumer Loans		1,187,459		1,259,523	(6	)		2,025,007	(41	)
Total Consumer		8,528,407		8,448,008	1			8,923,038	(4	)
Total	$	44,353,537	$	44,044,939	1	%	$	41,204,780	8	%
NON-PERFORMING LOANS COMPOSITION
(Unaudited)	Total Non-performing Loans		Total Non-performing Loans		Linked Quarter		Total Non-performing Loans		Year/Year
(Dollars in thousands)
Loan Type	June 30, 2023		March 31, 2023		% Change		June 30, 2022		% Change
Commercial, Financial, and Agricultural	$	144,415	$	94,196	53	%	$	48,601	197	%
Owner-Occupied		22,197		25,591	(13	)		11,398	95
Total Commercial & Industrial		166,612		119,787	39			59,999	178
Multi-Family		1,748		1,806	(3	)		2,598	(33	)
Office Buildings		28,024		190	nm			1,796	nm
Shopping Centers		699		727	(4	)		750	(7	)
Warehouses		218		222	(2	)		924	(76	)
Other Investment Property		664		668	(1	)		1,302	(49	)
Total Investment Properties		31,353		3,613	768			7,370	325
1-4 Family Construction		632		—	nm			55	nm
1-4 Family Investment Mortgage		3,525		3,515	—			3,063	15
Total 1-4 Family Properties		4,157		3,515	18			3,118	33
Commercial Development		—		—	nm			432	(100	)
Residential Development		267		267	—			399	(33	)
Land Acquisition		871		886	(2	)		1,093	(20	)
Land and Development		1,138		1,153	(1	)		1,924	(41	)
Total Commercial Real Estate		36,648		8,281	343			12,412	195
Consumer Mortgages		41,877		39,536	6			22,857	83
Home Equity		9,936		7,967	25			8,100	23
Other Consumer Loans		6,433		6,889	(7	)		5,656	14
Total Consumer		58,246		54,392	7			36,613	59
Total	$	261,506	$	182,460	43	%	$	109,024	140	%

Synovus
CREDIT QUALITY DATA
(Unaudited)
(Dollars in thousands)				2023	2022			Second Quarter
	Second			First	Fourth	Third	Second	'23 vs '22
	Quarter			Quarter	Quarter	Quarter	Quarter	% Change
Non-performing Loans (NPLs)	$	261,506		182,460	128,061	122,094	109,024	140	%
Impaired Loans Held for Sale		—		—	—	447	—	nm
Other Real Estate and Other Assets		—		—	15,320	15,320	26,759	(100	)
Non-performing Assets (NPAs)		261,506		182,460	143,381	137,861	135,783	93
Allowance for Loan Losses (ALL)		471,238		457,010	443,424	421,359	407,837	16
Reserve for Unfunded Commitments		55,729		57,473	57,455	57,936	50,559	10
Allowance for Credit Losses (ACL)		526,967		514,483	500,879	479,295	458,396	15
Net Charge-Offs - Quarter		26,396		18,550	13,300	4,682	16,565
Net Charge-Offs - YTD		44,947		18,550	53,156	39,856	35,174
Net Charge-Offs / Average Loans - Quarter ^(1)		0.24	%	0.17	0.12	0.04	0.16
Net Charge-Offs / Average Loans - YTD ^(1)		0.20		0.17	0.13	0.13	0.18
NPLs / Loans		0.59		0.41	0.29	0.29	0.26
NPAs / Loans, ORE and specific other assets		0.59		0.41	0.33	0.32	0.33
ACL/Loans		1.19		1.17	1.15	1.13	1.11
ALL/Loans		1.06		1.04	1.01	0.99	0.99
ACL/NPLs		201.51		281.97	391.13	392.56	420.45
ALL/NPLs		180.20		250.47	346.26	345.11	374.08
Past Due Loans over 90 days and Still Accruing	$	3,643		3,529	3,373	3,443	2,251	62
As a Percentage of Loans Outstanding		0.01	%	0.01	0.01	0.01	0.01
Total Past Due Loans and Still Accruing	$	84,946		55,053	65,568	63,545	56,160	51
As a Percentage of Loans Outstanding		0.19	%	0.12	0.15	0.15	0.14
^(1) Ratio is annualized.
SELECTED CAPITAL INFORMATION ^(1)
(Unaudited)
(Dollars in thousands)
	June 30, 2023			December 31, 2022	June 30, 2022
Common Equity Tier 1 Capital Ratio		9.85	%	9.63	9.46
Tier 1 Capital Ratio		10.88		10.68	10.56
Total Risk-Based Capital Ratio		12.79		12.54	12.43
Tier 1 Leverage Ratio		9.23		9.07	9.03
Total Synovus Financial Corp. shareholders' equity as a Percentage of Total Assets		7.88		7.49	7.99
Tangible Common Equity Ratio ^(2) (4)		6.17		5.84	6.26
Book Value Per Common Share^(3)	$	29.05		27.07	27.84
Tangible Book Value Per Common Share ^(2)		25.37		23.78	24.52
^(1)Current quarter regulatory capital information is preliminary.
^(2)Excludes the carrying value of goodwill and other intangible assets from common equity and total assets.
^(3)Book Value Per Common Share consists of Total Synovus Financial Corp. shareholders’ equity less Preferred stock divided by total common shares outstanding.
^(4)See "Non-GAAP Financial Measures" for applicable reconciliation.