Business Wire | Jul 21, 2020 06:30AM EDT

Synovus Announces Earnings for the Second Quarter 2020

Jul. 21, 2020

COLUMBUS, Ga.--(BUSINESS WIRE)--Jul. 21, 2020--Synovus Financial Corp. (NYSE: SNV) today reported financial results for the quarter ended June 30, 2020.

Second Quarter 2020 Highlights

* Diluted EPS of $0.57; adjusted diluted EPS of $0.23. * Period-end loan growth of $1.66 billion or 4.3% sequentially; funded approximately $2.9 billion in Paycheck Protection Program (PPP) loans, supporting more than 19,000 customers. * Core transaction deposits (non-interest bearing, NOW/savings, and money market deposits excluding public and brokered funds) increased $4.63 billion or 18.7% sequentially. * Interest-bearing deposit (NOW/savings, money market, and time deposit) costs down 45 bps from the first quarter. * Net interest income growth of $3.3 million sequentially; net interest margin of 3.13% vs. 3.37% in 1Q20. * Non-interest revenue increased $69.6 million sequentially and $83.7 million compared to prior year, largely due to investment gains of $78.1 million. * Provision for credit losses of $141.9 million reflected significant economic stress due to the COVID-19 healthcare crisis; allowance for credit losses coverage ratio (to loans) of 1.63%, or 1.74% excluding PPP loans. * Credit quality metrics remain stable, with the non-performing loan ratio and net charge-off ratio of 0.37% and 0.24%, respectively. * CET1 ratio improved 20 bps to 8.90% and Total Risk Based Capital ratio increased 41 bps to 12.70%.

Second Quarter Summary

Reported Adjusted

(dollars in 2Q20 1Q20 2Q19 2Q20 1Q20 2Q19thousands)

Net incomeavailable to $ 84,901 $ 30,230 $ 153,034 $34,015 $ 30,708 $ 158,892 common shareholders

Dilutedearnings per 0.57 0.20 0.96 0.23 0.21 1.00 share

Total loans 39,914,297 38,258,024 36,138,561 N/A N/A N/A

Total 44,194,580 39,826,585 37,966,722 N/A N/A N/A deposits

Total 550,911 477,903 487,880 472,795 473,424 488,270 revenues

Return on 0.71 % 0.32 % 1.34 % 0.32 % 0.32 % 1.39 %avg assets

Return onavg common 7.48 2.75 13.90 3.00 2.79 14.43 equity

Return onavg tangible 8.69 3.34 16.09 3.60 3.39 16.70 common equity

Net interest 3.13 3.37 3.69 3.11 3.35 3.48 margin

Efficiency 51.58 57.81 54.14 57.91 56.72 52.08 ratio

NCO ratio 0.24 0.21 0.13 N/A N/A N/A

NPA ratio 0.44 0.50 0.39 N/A N/A N/A



"Our performance in the second quarter demonstrates the key role we play as a financial resource and community partner in the markets we serve," said Kessel D. Stelling, Synovus Chairman and CEO. "We delivered approximately $3 billion in Paycheck Protection Program loans to more than 19,000 customers and originated a record $1.4 billion in consumer mortgages. Through strong operating performance and effective balance sheet management, we further improved both our capital and liquidity levels during the quarter. As we navigate an uncertain economic environment, we continue to invest in the future while accelerating many Synovus Forward initiatives focused on efficiencies, digital enhancements, and customer experience. And as our communities manage through the challenges of the pandemic and longstanding racial inequalities, we are fully committed to do our part to bring strength and positive change."

Balance Sheet

Loans^*



Linked Linked Year/(dollars in 2Q20 1Q20 Quarter Quarter 2Q19 Year/Year Yearmillions) Change % Change % Change Change

Commercial & $ 19,938.3 $ 17,661.4 $ 2,276.8 12.9 % $ 16,228.7 $ 3,709.5 22.9 %industrial

Commercial real 10,827.5 10,671.2 156.3 1.5 10,367.2 460.3 4.4 estate

Consumer 9,246.7 9,950.9 (704.2 ) (7.1 ) 9,566.1 (319.5 ) (3.3 )

Unearned income (98.2 ) (25.5 ) (72.7 ) nm (23.6 ) (74.6 ) 316.8

Total loans $ 39,914.3 $ 38,258.0 $ 1,656.3 4.3 % $ 36,138.6 $ 3,775.7 10.4 %

^*Amounts may not total due to roundingnm = not meaningful



* Total loans ended the quarter at $39.91 billion, up $1.66 billion or 4.3% sequentially. * Commercial and industrial (C&I) loans sequential growth of $2.28 billion led by net growth of $2.71 billion in PPP loans, offsetting C&I line utilization of 41% compared to 50% in the prior quarter. * Consumer loans decreased by $704.2 million sequentially, primarily as a result of transitioning lending partnership assets to held-for-sale, partially offset by record portfolio mortgage production of $800.5 million, up $510.5 million sequentially.

Deposits^*



Linked Linked Year/(dollars in millions) 2Q20 1Q20 Quarter Quarter 2Q19 Year/Year Year Change % Change % Change Change

Non-interest-bearing $ 11,830.7 $ 8,968.8 $ 2,861.9 31.9 % $ 8,577.6 $ 3,253.1 37.9 %DDA

Interest-bearing DDA 5,057.2 4,617.4 439.9 9.5 4,847.2 210.0 4.3

Money market 11,457.2 10,255.0 1,202.2 11.7 8,952.9 2,504.3 28.0

Savings 1,080.1 949.5 130.6 13.8 891.2 188.9 21.2

Public funds 5,347.4 5,261.4 86.0 1.6 4,351.3 996.0 22.9

Time deposits 5,131.7 5,786.6 (655.0 ) (11.3 ) 7,343.0 (2,211.3 ) (30.1 )

Brokered deposits 4,290.3 3,987.9 302.4 7.6 3,003.5 1,286.8 42.8

Total deposits $ 44,194.6 $ 39,826.6 $ 4,368.0 11.0 % $ 37,966.7 $ 6,227.9 16.4 %

^*Amounts may not total due to rounding



* Total deposits ended the quarter at $44.19 billion, up $4.37 billion or 11.0% sequentially. * Core transaction deposits increased $4.63 billion or 18.7% sequentially, led by non-interest-bearing DDA growth of $2.86 billion. * Broad-based growth in NOW, MMA, and savings deposits more than offset a $655.0 million decline in time deposits. * 2Q20 interest-bearing deposit costs declined 45 bps from 1Q20.

Income Statement Summary^**



(in Linked Linked Year/thousands, 2Q20 1Q20 Quarter Quarter 2Q19 Year/Year Yearexcept per Change % Change %share data) Change Change

Net interest $ 376,566 $ 373,260 $ 3,306 0.9 % $ 397,262 $ (20,696 ) (5.2 )income %

Non-interest 173,484 103,857 69,627 67.0 89,807 83,677 93.2 revenue

Non-interest 284,141 276,279 7,862 2.8 264,126 20,015 7.6 expense

Provisionfor credit 141,851 158,722 (16,871 ) (10.6 ) 12,119 129,732 nm losses

Income $ 124,058 $ 42,116 $ 81,942 194.6 % $ 210,824 $ (86,766 ) (41.2 )before taxes %

Income tax 30,866 3,595 27,271 nm 54,640 (23,774 ) (43.5 )expense

Preferredstock 8,291 8,291 - - 3,150 5,141 163.2 dividends

Net incomeavailable to $ 84,901 $ 30,230 $ 54,671 180.9 % $ 153,034 $ (68,133 ) (44.5 )common %shareholders

Weightedaveragecommon 147,733 148,401 (668 ) (0.5 ) 159,077 (11,344 ) (7.1 )shares % %outstanding,diluted

Dilutedearnings per $ 0.57 $ 0.20 $ 0.37 182.1 $ 0.96 $ (0.39 ) (40.3 )share

Adjusteddiluted 0.23 0.21 0.02 11.3 1.00 (0.77 ) (77.0 )earnings per share

^** Amounts may not total due to roundingnm - not meaningful



Core Performance

* Total revenues were $550.9 million in the second quarter, up $73.0 million sequentially. * Net interest income increased $3.3 million, or 0.9% sequentially, benefiting from prudent deposit pricing, growth in PPP loan balances, and $9.2 million of PPP fees recognized in the quarter. * Net interest margin was 3.13%, down 24 bps from the prior quarter. * Non-interest revenue increased $69.6 million, or 67.0% sequentially, and increased $83.7 million, or 93.2% year-over-year. The sequential increase was largely attributable to $69.4 million of securities gains as a result of repositioning the investment portfolio. * Adjusted non-interest revenue decreased $4.0 million, or 4.0% sequentially, and increased $5.2 million, or 5.7% year-over-year. Mortgage revenue increased $11.3 million compared to the prior quarter on record production. * Non-interest expense increased $7.9 million, or 2.8% sequentially. Adjusted non-interest expense increased $5.3 million, or 1.9% sequentially. The increase in expenses reflected a $7.1 million increase in mortgage commissions. Additionally, the second quarter included $6.7 million of professional fees associated with the implementation of Synovus Forward initiatives and $6.6 million of COVID-19 related expenses, partially offset by a $6.9 million reduction in benefits and payroll tax expense. * Provision for credit losses of $141.9 million reflected significant economic stress due to the COVID-19 healthcare crisis; allowance for credit losses coverage ratio (to loans) of 1.63%, or 1.74% excluding PPP loans. * Tax expense was $30.9 million, an increase of $27.3 million driven by higher pre-tax income and favorable discrete items in the first quarter; year-to-date effective tax rate of 20.74%.

Capital Ratios



2Q20 1Q20 2Q19

Common equity Tier 1 capital (CET1) ratio 8.90 % ^* 8.70 % 9.61 %

Tier 1 capital ratio 10.15 ^* 9.95 10.09

Total risk-based capital ratio 12.70 ^* 12.29 12.11

Tier 1 leverage ratio 8.38 ^* 8.92 8.89

Tangible common equity ratio 7.41 7.94 8.56

* Ratios are preliminary.



Capital

* CET1 ratio increased 20 bps during the quarter to 8.90%, benefiting from higher net income and a reduction of $68.9 million in risk-weighted assets sequentially. * Total risk-based capital of 12.70% is the highest since 2Q18 and reflects continued allowance build.

Second Quarter Earnings Conference Call

Synovus will host an earnings highlights conference call at 8:30 a.m. EDT on July 21, 2020. The earnings call will be accompanied by a slide presentation. Shareholders and other interested parties may listen to this conference call via simultaneous Internet broadcast. For a link to the webcast, go to investor.synovus.com/event. The replay will be archived for 12 months and will be available 30-45 minutes after the call.

Synovus Financial Corp. is a financial services company based in Columbus, Georgia, with approximately $54 billion in assets. Synovus provides commercial and retail banking, investment, and mortgage services through 294 branches in Alabama, Florida, Georgia, South Carolina, and Tennessee. Synovus Bank, a wholly owned subsidiary of Synovus, has been recognized as one of the country's "Most Reputable Banks" by American Banker and the Reputation Institute. Synovus is on the web at synovus.com, and on Twitter, Facebook, LinkedIn, and Instagram.

Forward-Looking Statements

This press release and certain of our other filings with the Securities and Exchange Commission contain statements that constitute "forward-looking statements" within the meaning of, and subject to the protections of, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are forward-looking statements. You can identify these forward-looking statements through Synovus' use of words such as "believes," "anticipates," "expects," "may," "will," "assumes," "should," "predicts," "could," "would," "intends," "targets," "estimates," "projects," "plans," "potential" and other similar words and expressions of the future or otherwise regarding the outlook for Synovus' future business and financial performance and/or the performance of the banking industry and economy in general. These forward-looking statements include, among others, our expectations regarding our future operating and financial performance, our expectations regarding net interest income and net interest margin; expectations on our growth strategy, expense and revenue initiatives, capital management, liquidity and funding, and future profitability; expectations on credit quality and performance; and the assumptions underlying our expectations. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve known and unknown risks and uncertainties which may cause the actual results, performance or achievements of Synovus to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are based on the information known to, and current beliefs and expectations of, Synovus' management and are subject to significant risks and uncertainties. Actual results may differ materially from those contemplated by such forward-looking statements. A number of factors could cause actual results to differ materially from those contemplated by the forward-looking statements in this press release. Many of these factors are beyond Synovus' ability to control or predict.

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

Non-GAAP Financial Measures

The measures entitled adjusted non-interest revenue; adjusted non-interest expense; adjusted total revenues; adjusted tangible efficiency ratio; adjusted net income available to common shareholders; adjusted earnings per diluted share; adjusted return on average assets; adjusted return on average common equity; return on average tangible common equity; adjusted return on average tangible common equity; and tangible common equity ratio are not measures recognized under GAAP and therefore are considered non-GAAP financial measures. The most comparable GAAP measures to these measures are total non-interest revenue; total non-interest expense; total revenues; efficiency ratio-FTE; net income available to common shareholders; earnings per diluted common share; return on average assets; return on average common equity; and the ratio of total shareholders' equity to total assets, respectively.

Management believes that these non-GAAP financial measures provide meaningful additional information about Synovus to assist management and investors in evaluating Synovus' operating results, financial strength, the performance of its business, and the strength of its capital position. However, these non-GAAP financial measures have inherent limitations as analytical tools and should not be considered in isolation or as a substitute for analyses of operating results or capital position as reported under GAAP. The non-GAAP financial measures should be considered as additional views of the way our financial measures are affected by significant items and other factors, and since they are not required to be uniformly applied, they may not be comparable to other similarly titled measures at other companies. Adjusted total revenues and adjusted non-interest revenue are measures used by management to evaluate total revenues and non-interest revenue exclusive of net investment securities gains (losses) and gains on sales and changes in the fair value of private equity investments, net. Adjusted non-interest expense and the adjusted tangible efficiency ratio are measures utilized by management to measure the success of expense management initiatives focused on reducing recurring controllable operating costs. Adjusted net income available to common shareholders, adjusted earnings per diluted share, adjusted return on average assets, and adjusted return on average common equity are measures used by management to evaluate operating results exclusive of items that are not indicative of ongoing operations and impact period-to-period comparisons. Return on average tangible common equity and adjusted return on average tangible common equity are measures used by management to compare Synovus' performance with other financial institutions because it calculates the return available to common shareholders without the impact of intangible assets and their related amortization, thereby allowing management to evaluate the performance of the business consistently. The tangible common equity ratio is used by management to assess the strength of our capital position. The computations of these measures are set forth in the tables below.

Reconciliation of Non-GAAP Financial Measures



(dollars in thousands) 2Q20 1Q20 2Q19

Adjusted non-interest revenue

Total non-interest revenue $ 173,484 $ 103,857 $ 89,807

Subtract/add: Investment securities (69,409 ) (8,734 ) 1,845 (gains) losses, net

Subtract/add: Gain on sale and fairvalue (increase) decrease of private (8,707 ) 4,255 (1,455 )equity investments

Adjusted non-interest revenue $ 95,368 $ 99,378 $ 90,197



Adjusted non-interest expense

Total non-interest expense $ 284,141 $ 276,279 $ 264,126

Subtract: Earnout liability (4,908 ) - - adjustments

Subtract: Merger-related expense - - (7,401 )

Subtract: Restructuring charges, net (2,822 ) (3,220 ) (18 )

Subtract: Loss on early - (1,904 ) - extinguishment of debt, net

Adjusted non-interest expense $ 276,411 $ 271,155 $ 256,707





Reconciliation of Non-GAAP Financial Measures, continued



(dollars in thousands) 2Q20 1Q20 2Q19

Adjusted total revenues and adjusted tangible efficiency ratio

Adjusted non-interest expense $ 276,411 $ 271,155 $ 256,707

Subtract: Amortization of intangibles (2,640 ) (2,640 ) (2,410 )

Adjusted tangible non-interest $ 273,771 $ 268,515 $ 254,297 expense



Net interest income $ 376,566 $ 373,260 $ 397,262

Add: Tax equivalent adjustment 861 786 811

Add: Total non-interest revenue 173,484 103,857 89,807

Total FTE revenues 550,911 477,903 487,880

Subtract/add: Investment securities (69,409 ) (8,734 ) 1,845 (gains)/losses, net

Subtract/add: Gain on sale and fairvalue (increase) decrease of private (8,707 ) 4,255 (1,455 )equity investments

Adjusted total revenues $ 472,795 $ 473,424 $ 488,270

Efficiency ratio-FTE 51.58 % 57.81 % 54.14 %

Adjusted tangible efficiency ratio 57.91 56.72 52.08

Adjusted return on average assets

Net income $ 93,192 $ 38,521 $ 156,184

Add: Earnout liability 4,908 - - adjustments

Add: Merger-related expense - - 7,401

Add: Restructuring charges, 2,822 3,220 18 net

Add: Loss on early - 1,904 - extinguishment of debt, net

Subtract/add: Investmentsecurities (gains) losses, (69,409 ) (8,734 ) 1,845 net

Subtract/add: Gain on saleand fair value (increase) (8,707 ) 4,255 (1,455 )decrease of private equity investments

Add/subtract: Tax effect of 19,500 (167 ) (1,951 )adjustments

Adjusted net income $ 42,306 $ 38,999 $ 162,042

Net income annualized $ 374,816 $ 154,931 $ 626,452

Adjusted net income $ 170,154 $ 156,853 $ 649,949 annualized

Total average assets $ 52,853,685 $ 48,696,595 $ 46,679,769

Return on average assets 0.71 % 0.32 % 1.34 %

Adjusted return on average 0.32 0.32 1.39 assets



Adjusted net incomeavailable to commonshareholders and adjusted net income per common share,diluted

Net income available to $ 84,901 $ 30,230 $ 153,034 common shareholders

Add: Earnout liability 4,908 - - adjustments

Add: Merger-related expense - - 7,401

Add: Restructuring charges, 2,822 3,220 18 net

Add: Loss on early - 1,904 - extinguishment of debt, net

Subtract/add: Investmentsecurities (gains) losses, (69,409 ) (8,734 ) 1,845 net

Subtract/add: Gain on saleand fair value (increase) (8,707 ) 4,255 (1,455 )decrease of private equity investments

Add/subtract: Tax effect of 19,500 (167 ) (1,951 )adjustments

Adjusted net incomeavailable to common $ 34,015 $ 30,708 $ 158,892 shareholders

Weighted average common 147,733 148,401 159,077 shares outstanding, diluted

Net income per common share, $ 0.57 $ 0.20 $ 0.96 diluted

Adjusted net income per 0.23 0.21 1.00 common share, diluted



Reconciliation of Non-GAAP Financial Measures, continued



(dollars in thousands) 2Q20 1Q20 2Q19



Adjusted return on averagecommon equity, return onaverage tangible common equity, and adjusted return on averagetangible common equity

Net income available to common $ 84,901 $ 30,230 $ 153,034 shareholders

Add: Earnout liability 4,908 - - adjustments

Add: Merger-related expense - - 7,401

Add: Restructuring charges, net 2,822 3,220 18

Add: Loss on early - 1,904 - extinguishment of debt, net

Subtract/add: Investment (69,409 ) (8,734 ) 1,845 securities (gains) losses, net

Subtract/add: Gain on sale andfair value (increase) decrease (8,707 ) 4,255 (1,455 )of private equity investments

Add/subtract: Tax effect of 19,500 (167 ) (1,951 )adjustments

Adjusted net income available $ 34,015 $ 30,708 $ 158,892 to common shareholders



Adjusted net income availableto common shareholders $ 136,808 $ 123,507 $ 637,314 annualized

Add: Amortization of 7,868 7,868 7,250 intangibles

Adjusted net income availableto common shareholders $ 144,676 $ 131,375 $ 644,564 excluding amortization of intangibles annualized



Net income available to common $ 341,470 $ 121,584 $ 613,818 shareholders annualized

Add: Amortization of 7,868 7,868 7,250 intangibles

Net income available to commonshareholders excluding $ 349,338 $ 129,452 $ 621,068 amortization of intangibles annualized



Total average shareholders' $ 4,567,254 $ 4,424,278 $ 4,416,705 equity less preferred stock

Subtract: Goodwill (497,267 ) (497,267 ) (487,601 )

Subtract: Other intangible (51,667 ) (54,514 ) (69,853 )assets, net

Total average tangibleshareholders' equity less $ 4,018,320 $ 3,872,497 $ 3,859,251 preferred stock

Return on average common equity 7.48 % 2.75 % 13.90 %

Adjusted return on average 3.00 2.79 14.43 common equity

Return on average tangible 8.69 3.34 16.09 common equity

Adjusted return on average 3.60 3.39 16.70 tangible common equity



June 30, March 31, June 30, 2020 2020 2019

Tangible common equity ratio

Total assets $ 54,121,989 $ 50,619,585 $ 47,318,203

Subtract: Goodwill (497,267 ) (497,267 ) (492,390 )

Subtract: Other intangible (50,392 ) (53,032 ) (61,473 )assets, net

Tangible assets $ 53,574,330 $ 50,069,286 $ 46,764,340



Total shareholders' equity $ 5,052,968 $ 5,065,205 $ 4,753,816

Subtract: Goodwill (497,267 ) (497,267 ) (492,390 )

Subtract: Other intangible (50,392 ) (53,032 ) (61,473 )assets, net

Subtract: Preferred Stock, (537,145 ) (537,145 ) (195,140 )no par value

Tangible common equity $ 3,968,164 $ 3,977,761 $ 4,004,813

Total shareholders' equity 9.34 % 10.01 % 10.05 %to total assets ratio

Tangible common equity ratio 7.41 7.94 8.56





INCOME STATEMENT DATA

(Unaudited)



(Dollars in thousands, except per Secondshare data) Quarter



20 vs '19 2020 2019 % Change



Interest income $ 935,466 $ 1,020,970 (8.4 )%

Interest expense 185,640 226,532 (18.1 )



Net interest income 749,826 794,438 (5.6 )

Provision for credit losses 300,573 35,688 742.2



Net interest income after provision 449,253 758,750 (40.8 )for credit losses



Non-interest revenue:

Service charges on deposit accounts 36,255 42,853 (15.4 )

Fiduciary and asset management fees 30,124 28,057 7.4

Card fees 20,136 22,037 (8.6 )

Brokerage revenue 22,383 19,431 15.2

Mortgage banking income 35,757 12,962 175.9

Capital markets income 17,294 14,161 22.1

Income from bank-owned life insurance 13,794 10,466 31.8

Investment securities gains/(losses), 78,144 (1,771 ) nm net

Gain on sale and fair value increase, 4,452 2,313 nm net, of private equity investments

Other non-interest revenue 19,002 18,676 1.7



Total non-interest revenue 277,341 169,185 63.9



Non-interest expense:

Salaries and other personnel expense 309,274 282,436 9.5

Net occupancy, equipment, and 83,921 78,245 7.3 software expense

Third-party processing and other 42,846 36,875 16.2 services

Professional fees 25,980 15,660 65.9

FDIC insurance and other regulatory 12,129 14,629 (17.1 )fees

Amortization of intangibles 5,280 5,802 (9.0 )

Merger-related expense - 57,140 nm

Earnout liability adjustments 4,908 - nm

Loss on early extinguishment of debt, 1,904 - nm net

Restructuring charges 6,042 37 nm

Other operating expenses 68,137 65,713 3.7



Total non-interest expense 560,421 556,537 0.7



Income before income taxes 166,173 371,398 (55.3 )

Income tax expense 34,461 95,028 (63.7 )



Net income 131,712 276,370 (52.3 )



Less: Preferred stock dividends 16,581 6,300 163.2



Net income available to common $ 115,131 $ 270,070 (57.4 )%shareholders



Net income per common share, basic $ 0.78 $ 1.70 (53.9 )%



Net income per common share, diluted 0.78 1.68 (53.7 )



Cash dividends declared per common 0.66 0.60 10.0 share



Return on average assets * 0.52 % 1.21 % (69 ) bps

Return on average common equity * 5.15 12.46 (731 )



Weighted average common shares 147,300 159,148 (7.4 )%outstanding, basic

Weighted average common shares 148,067 160,908 (8.0 )outstanding, diluted



nm - not meaningful

bps - basis points

* - ratios are annualized



Synovus



INCOME STATEMENT DATA

(Unaudited)



(Dollars in thousands, 2020 2019 Second except per Quarter share data)



Second First Fourth Third Second 20 vs '19 Quarter Quarter Quarter Quarter Quarter % Change



Interest $ 451,569 483,897 506,253 523,415 516,131 (12.5 )% income

Interest 75,003 110,637 106,985 121,318 118,869 (36.9 ) expense



Net interest 376,566 373,260 399,268 402,097 397,262 (5.2 ) income

Provision for 141,851 158,722 24,470 27,562 12,119 nm credit losses



Net interest income after 234,715 214,538 374,798 374,535 385,143 (39.1 ) provision for credit losses



Non-interest revenue:

Service charges on 15,567 20,689 22,385 22,952 21,994 (29.2 ) deposit accounts

Fiduciary and asset 14,950 15,174 15,645 14,686 14,478 3.3 management fees

Card fees 9,186 10,950 11,325 12,297 11,161 (17.7 )

Brokerage 9,984 12,398 11,106 11,071 10,052 (0.7 ) revenue

Mortgage 23,530 12,227 9,287 10,351 7,907 197.6 banking income

Capital 6,050 11,243 8,972 7,396 8,916 (32.1 ) markets income

Income from bank-owned 7,756 6,038 5,620 5,139 5,176 49.8 life insurance

Investment securities 69,409 8,734 (2,157 ) (3,731 ) (1,845 ) nm gains/ (losses), net

Gain on sale and fair value increase/ 8,707 (4,255 ) 8,100 1,194 1,455 nm (decrease) of private equity investments

Other non-interest 8,345 10,659 7,672 7,405 10,513 (20.6 ) revenue



Total non-interest 173,484 103,857 97,955 88,760 89,807 93.2 revenue



Non-interest expense:

Salaries and other 159,597 149,678 145,084 142,516 143,009 11.6 personnel expense

Net occupancy, equipment, and 41,727 42,194 42,644 41,017 39,851 4.7 software expense

Third-party processing and 21,366 21,480 20,293 18,528 19,118 11.8 other services

Professional 15,305 10,675 9,921 9,719 9,312 64.4 fees

FDIC insurance and other 6,851 5,278 9,825 7,242 7,867 (12.9 ) regulatory fees

Amortization 2,640 2,640 2,901 2,901 2,410 9.5 of intangibles

Merger-related - - (913 ) 353 7,401 nm expense

Earnout liability 4,908 - - 10,457 - nm adjustments

Loss on early extinguishment - 1,904 - 4,592 - nm of debt, net

Valuation adjustment to - - 1,111 2,500 - nm Visa derivative

Restructuring 2,822 3,220 1,259 (66 ) 18 nm charges

Other operating 28,925 39,210 33,996 36,551 35,140 (17.7 ) expenses



Total non-interest 284,141 276,279 266,121 276,310 264,126 7.6 expense



Income before 124,058 42,116 206,632 186,985 210,824 (41.2 ) income taxes

Income tax 30,866 3,595 54,948 51,259 54,640 (43.5 ) expense



Net income 93,192 38,521 151,684 135,726 156,184 (40.3 )



Less: Preferred 8,291 8,291 8,291 8,291 3,150 163.2 stock dividends



Net income available to $ 84,901 30,230 143,393 127,435 153,034 (44.5 )% common shareholders



Net income per common share, $ 0.58 0.21 0.98 0.84 0.97 (40.7 )% basic



Net income per common share, 0.57 0.20 0.97 0.83 0.96 (40.3 ) diluted



Cash dividends declared per 0.33 0.33 0.30 0.30 0.30 10.0 common share



Return on ) average assets 0.71 % 0.32 1.27 1.14 1.34 (63 bps *

Return on average common 7.48 2.75 13.08 11.36 13.90 (642 ) equity *



Weighted average common shares 147,288 147,311 146,948 152,238 157,389 (6.4 )% outstanding, basic

Weighted average common shares 147,733 148,401 148,529 154,043 159,077 (7.1 ) outstanding, diluted



nm - not meaningful

bps - basis points

* - ratios are annualized

Synovus





BALANCE SHEET DATA June 30, December 31, June 30, 2020 2019 2019



(Unaudited)



(In thousands, except share data)



ASSETS

Cash and due from banks $ 572,169 $ 535,846 $ 549,616

Interest-bearing funds 860,289 553,390 531,488 with Federal Reserve Bank

Interest earning deposits 20,719 20,635 20,271 with banks

Federal funds sold and securities purchased under 118,048 77,047 49,946 resale agreements

Cash and cash equivalents 1,571,225 1,186,918 1,151,321



Investment securities available for sale, at 7,197,493 6,778,670 7,007,012 fair value

Loans held for sale ($266,306, $115,173, 900,936 115,173 86,716 $81,855 measured at fair value, respectively)



Loans, net of deferred 39,914,297 37,162,450 36,138,561 fees and costs

Allowance for loan losses (588,648 ) (281,402 ) (257,376 )

Loans, net 39,325,649 36,881,048 35,881,185



Cash surrender value of 1,038,049 775,665 766,287 bank-owned life insurance

Premises and equipment, 481,716 493,940 490,644 net

Goodwill 497,267 497,267 492,390

Other intangible assets, 50,392 55,671 61,473 net

Receivable on unsettled 1,289,116 - - securities sales

Other assets 1,770,146 1,418,930 1,381,175

Total assets $ 54,121,989 $ 48,203,282 $ 47,318,203



LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:

Deposits:

Non-interest-bearing $ 12,555,714 $ 9,439,485 $ 9,205,066 deposits

Interest-bearing deposits 31,638,866 28,966,019 28,761,656



Total deposits 44,194,580 38,405,504 37,966,722



Federal funds purchased and securities sold under 225,576 165,690 273,481 repurchase agreements

Other short-term 300,000 1,753,560 1,330,000 borrowings

Long-term debt 2,327,921 2,153,897 2,306,072

Due on unsettled 922,952 - - securities purchases

Other liabilities 1,097,992 782,941 688,112

Total liabilities 49,069,021 43,261,592 42,564,387



Shareholders' equity:

Preferred stock - no par value. Authorized 100,000,000 shares; issued 537,145 537,145 195,140 22,000,000, 22,000,000, and 8,000,000

Common stock - $1.00 par value. Authorized 342,857,143 shares; issued 167,405,730, 166,800,623, 167,406 166,801 166,080 and 166,079,543; outstanding 147,312,703, 147,157,596, and 156,872,026

Additional paid-in capital 3,826,726 3,819,336 3,801,748

Treasury stock, at cost - 20,093,027, 19,643,027, (731,806 ) (715,560 ) (344,901 ) and 9,207,517 shares

Accumulated other 202,970 65,641 49,289 comprehensive income, net

Retained earnings 1,050,527 1,068,327 886,460

Total shareholders' equity 5,052,968 4,941,690 4,753,816

Total liabilities and $ 54,121,989 $ 48,203,282 $ 47,318,203 shareholders' equity

Synovus

AVERAGE BALANCES AND YIELDS/RATES^ (1)

(Unaudited) (Dollars in 2019 thousands)

2020

Second First Fourth Third Second

Quarter Quarter Quarter Quarter Quarter

Interest Earning Assets

Investment $ 6,618,533 6,680,047 6,696,768 6,831,036 6,955,386 securities^ (2) (4)

Yield 2.72 % 3.09 3.12 3.14 3.03

Trading account $ 6,173 6,306 7,986 5,519 4,853 assets ^(5)

Yield 2.19 % 2.70 2.69 4.01 1.83

Commercial loans ^ $ 30,236,919 27,607,343 26,698,202 26,567,719 26,353,701 (3) (4)

Yield 3.95 % 4.57 4.82 5.09 5.13

Consumer loans ^(3) $ 9,899,172 9,985,702 9,809,832 9,633,603 9,423,427

Yield 4.34 % 4.60 5.07 5.08 5.17

Allowance for loan $ (498,545 ) (368,033 ) (269,052 ) (258,024 ) (259,284 ) losses

Loans, net ^(3) $ 39,637,546 37,225,012 36,238,982 35,943,298 35,517,844

Yield 4.08 % 4.62 4.93 5.13 5.17

Mortgage loans held $ 221,157 86,415 117,909 99,556 70,497 for sale

Yield 3.09 % 3.67 3.77 3.93 4.27

Other loans held for $ 19,246 - - 475 272 sale

Yield 4.19 % - - - -

Federal funds sold, due from Federal Reserve Bank, and $ 1,709,086 652,130 514,635 513,160 511,488 other short-term investments

Yield 0.11 % 1.02 1.71 2.08 2.37

Federal Home Loan Bank and Federal $ 247,801 284,082 278,586 254,994 234,949 Reserve Bank Stock ^ (5)

Yield 3.60 % 3.38 2.85 3.85 3.29

Total interest $ 48,459,542 44,933,992 43,854,866 43,648,038 43,295,289 earning assets

Yield 3.75 % 4.33 4.60 4.78 4.79

Interest-Bearing Liabilities

Interest-bearing $ 7,260,940 6,445,986 6,381,282 6,138,810 6,335,953 demand deposits

Rate 0.21 % 0.51 0.60 0.69 0.71

Money Market $ 12,238,479 11,548,014 10,526,296 10,138,783 10,024,836 accounts

Rate 0.46 % 1.00 1.13 1.26 1.23

Savings deposits $ 1,036,024 926,822 915,640 900,366 904,183

Rate 0.02 % 0.05 0.05 0.05 0.05

Time deposits under $ 1,621,943 1,761,741 1,873,350 2,100,492 2,245,878 $100,000

Rate 1.43 % 1.64 1.27 1.39 1.39

Time deposits over $ 4,772,555 5,051,705 5,198,266 5,957,691 6,331,665 $100,000

Rate 1.80 % 2.04 1.51 1.69 1.70

Other brokered $ 1,998,571 1,376,669 1,156,131 993,078 766,718 deposits

Rate 0.25 % 1.42 1.84 2.47 2.46

Brokered time $ 2,244,429 2,166,496 2,121,069 2,119,149 1,985,589 deposits

Rate 1.86 % 2.11 2.16 2.27 2.28

Total interest-bearing $ 31,172,941 29,277,433 28,172,034 28,348,369 28,594,822 deposits

Rate 0.73 % 1.18 1.16 1.32 1.30

Federal funds purchased and securities sold $ 250,232 167,324 192,731 221,045 300,168 under repurchase agreements

Rate 0.12 % 0.30 0.24 0.22 0.20

Other short-term $ 550,000 1,384,362 1,565,507 1,307,370 1,090,581 borrowings

Rate 1.23 % 1.66 1.87 2.31 2.59

Long-term debt $ 2,834,188 2,678,651 2,153,983 2,286,221 2,114,819

Rate 2.36 % 2.78 3.07 3.32 3.53

Total interest-bearing $ 34,807,361 33,507,770 32,084,255 32,163,005 32,100,390 liabilities

Rate 0.86 % 1.30 1.30 1.47 1.48

Non-interest-bearing $ 11,923,534 9,409,774 9,706,784 9,365,776 9,304,839 demand deposits

Cost of funds 0.65 % 1.04 1.02 1.16 1.15

Net interest margin 3.13 % 3.37 3.65 3.69 3.69

Taxable equivalent $ 861 786 769 819 811 adjustment^ (4)

^(1) Yields and rates are annualized.

^(2) Excludes net unrealized gains and losses.

^(3) Average loans are shown net of unearned income. Non-performing loans are included.

^(4) Reflects taxable-equivalent adjustments, using the statutory federal income tax rate of 21%, in adjusting interest on tax-exempt loans and investment securities to a taxable-equivalent basis.

^(5) Included as a component of other assets on the consolidated balance sheet.

Synovus

LOANSOUTSTANDING BY TYPE

(Unaudited)

(Dollars in Linked thousands)

Total Loans Total Loans Quarter Total Loans Year/ Year

Loan Type June 30, 2020 March 31, 2020 % Change June 30, 2019 % Change

Commercial,Financial, and $ 13,136,696 $ 11,018,155 19.2 % $ 9,716,939 35.2 %Agricultural

Owner-Occupied 6,801,580 6,643,287 2.4 6,511,805 4.4

TotalCommercial & 19,938,276 17,661,442 12.9 16,228,744 22.9 Industrial

Multi-Family 2,252,820 2,108,360 6.9 2,023,061 11.4

Hotels 1,364,511 1,314,053 3.8 1,244,519 9.6

Office 2,297,721 2,264,844 1.5 2,297,515 - Buildings

Shopping 1,738,504 1,741,557 (0.2 ) 1,682,283 3.3 Centers

Warehouses 781,252 761,863 2.5 686,827 13.7

OtherInvestment 1,012,392 1,027,757 (1.5 ) 980,787 3.2 Property

TotalInvestment 9,447,200 9,218,434 2.5 8,914,992 6.0 Properties

1-4 Family 229,999 255,005 (9.8 ) 276,068 (16.7 )Construction

1-4 FamilyInvestment 466,809 482,773 (3.3 ) 528,358 (11.6 )Mortgage

Total 1-4Family 696,808 737,778 (5.6 ) 804,426 (13.4 )Properties

Commercial 112,539 107,351 4.8 138,840 (18.9 )Development

Residential 270,952 303,459 (10.7 ) 213,823 26.7 Development

Land 300,036 304,179 (1.4 ) 295,165 1.7 Acquisition

Land and 683,527 714,989 (4.4 ) 647,828 5.5 Development

TotalCommercial 10,827,535 10,671,201 1.5 10,367,246 4.4 Real Estate

Consumer 5,811,376 5,608,121 3.6 5,407,762 7.5 Mortgages

Home Equity 1,710,264 1,778,862 (3.9 ) 1,650,745 3.6 Lines

Credit Cards 250,448 261,581 (4.3 ) 258,283 (3.0 )

Other Consumer 1,474,583 2,302,349 (36.0 ) 2,249,337 (34.4 )Loans

Total Consumer 9,246,671 9,950,913 (7.1 ) 9,566,127 (3.3 )

Unearned (98,185 ) (25,532 ) 284.6 (23,556 ) 316.8 Income

Total $ 39,914,297 $ 38,258,024 4.3 % $ 36,138,561 10.4 %



NON-PERFORMING LOANS COMPOSITION

(Unaudited) Total Total Total(Dollars in Non-performing Non-performing Linked Non-performing Year/thousands) Loans Loans Quarter Loans Year



Loan Type June 30, 2020 March 31, 2020 % Change June 30, 2019 % Change

Commercial, )Financial, and $ 83,000 $ 99,287 (16.4 % $ 72,934 13.8 %Agricultural

Owner-Occupied 19,605 17,357 13.0 13,465 45.6

TotalCommercial & 102,605 116,644 (12.0 ) 86,399 18.8 Industrial

Multi-Family - 356 (100.0 ) - nm

Hotels - - nm - nm

Office 836 836 - 300 178.7 Buildings

Shopping 409 712 (42.6 ) 671 (39.0 )Centers

OtherInvestment 393 308 27.6 7 nm Property

TotalInvestment 1,638 2,212 (25.9 ) 978 67.5 Properties

1-4 Family 2,593 278 832.7 208 nm Construction

1-4 FamilyInvestment 1,844 2,047 (9.9 ) 1,637 12.6 Mortgage

Total 1-4Family 4,437 2,325 90.8 1,845 140.5 Properties

Commercial 840 596 40.9 - nm Development

Residential 685 561 22.1 1,253 (45.3 )Development

Land 1,042 1,043 (0.1 ) 1,482 (29.7 )Acquisition

Land and 2,567 2,200 16.7 2,735 (6.1 )Development

TotalCommercial 8,642 6,737 28.3 5,558 55.5 Real Estate

Consumer 17,438 13,571 28.5 13,628 28.0 Mortgages

Home Equity 14,200 12,475 13.8 13,830 2.7 Lines

Other Consumer 4,552 6,860 (33.6 ) 4,667 (2.5 )Loans

Total Consumer 36,190 32,906 10.0 32,125 12.7

Total $ 147,437 $ 156,287 (5.7 ) $ 124,082 18.8 % %

Synovus



CREDIT QUALITY DATA

(Unaudited)

(Dollars in 2020 2019 Second thousands) Quarter



Second First Fourth Third Second 20 vs '19

Quarter Quarter Quarter Quarter Quarter % Change



Non-performing $ 147,437 156,287 101,636 115,915 124,083 18.8 % Loans (NPLs)

Other Real Estate and 30,242 33,679 35,810 35,400 15,479 95.4 Other Assets



Non-performing 177,679 189,966 137,446 151,315 139,562 27.3 Assets (NPAs)



Allowance for Loan Losses 588,648 493,452 281,402 265,013 257,376 128.7 (ALL)

Reserve for Unfunded 61,029 38,420 1,375 1,496 995 nm Commitments



Allowance for Credit Losses 649,677 531,872 282,777 266,509 258,371 151.5 (ACL)



Net Charge-Offs - 24,045 20,061 8,821 19,925 11,779 Quarter

Net Charge-Offs - 44,106 20,061 57,612 48,791 28,867 YTD

Net Charge-Offs / 0.24 % 0.21 0.10 0.22 0.13 Average Loans - Quarter ^(1)

Net Charge-Offs / 0.23 0.21 0.16 0.18 0.16 Average Loans - YTD ^(1)

NPLs / Loans 0.37 0.41 0.27 0.32 0.34

NPAs / Loans, ORE and 0.44 0.50 0.37 0.42 0.39 specific other assets

ACL/Loans 1.63 1.39 0.76 0.73 0.71

ALL/Loans 1.47 1.29 0.76 0.73 0.71



ACL/NPLs 440.65 340.32 278.23 229.92 208.22

ALL/NPLs 399.25 315.74 276.87 228.63 207.42



Past Due Loans over 90 days $ 8,391 6,398 15,943 15,660 5,851 43.4 and Still Accruing

As a Percentage of 0.02 % 0.02 0.04 0.04 0.02 Loans Outstanding



Total Past Due Loans and $ 46,390 83,235 123,793 88,219 80,792 (42.6 ) Still Accruing

As a Percentage of 0.12 % 0.22 0.33 0.24 0.22 Loans Outstanding



Accruing Troubled Debt $ 166,461 160,128 133,145 130,019 126,369 31.7 Restructurings (TDRs)



^(1) Ratio is annualized.









SELECTED CAPITAL INFORMATION ^ (1)

(Unaudited)

(Dollars in thousands)

December June 30, June 30, 2020 31, 2019 2019





Tier 1 Capital $ 4,364,077 4,280,604 4,094,672

Total Risk-Based 5,459,271 5,123,381 4,913,043 Capital

Common Equity Tier 1 Capital 8.90 % 8.95 9.61 Ratio

Tier 1 Capital 10.15 10.23 10.09 Ratio

Total Risk-Based 12.70 12.25 12.11 Capital Ratio

Tier 1 8.38 9.16 8.89 Leverage Ratio

Common Equity as a Percentage of 8.34 9.14 9.63 Total Assets ^ (2)

Tangible Common Equity 7.41 8.08 8.56 Ratio ^(3) (5)

Book Value Per Common Share^ $ 30.65 29.93 29.06 (4)

Tangible Book Value Per 26.94 26.17 25.53 Common Share ^ (3)



^(1) Current quarter regulatory capital information is preliminary.

^(2) Common equity consists of Total Shareholders' Equity less Preferred Stock.

^(3) Excludes the carrying value of goodwill and other intangible assets from common equity and total assets.

^(4) Book Value Per Common Share consists of Total Shareholders' Equity less Preferred Stock divided by total common shares outstanding.

^(5) See "Non-GAAP Financial Measures" of this report for applicable reconciliation.

View source version on businesswire.com: https://www.businesswire.com/news/home/20200721005328/en/

CONTACT: Media Contact Lee Underwood Media Relations (706) 644-0528

CONTACT: Investor Contact Kevin Brown Investor Relations (706) 644-0948