• Capital build and preservation is near-term priority given the uncertain economic outlook 12.45% 10.59% 10.89% 9.52% 9.63% 9.77% 9.86% 10.13% 3Q22 4Q22 1Q23 2Q23 3Q23 (1) 12.80% 13.12% 11.18% Common Equity Tier 1 Tier 1 Tier 2 | --- | --- | |---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------| | | NTM PPNR Impact | | Third Party Auto Loan Sale • Benefit to liquid ...

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 June 30, 2023 Commission file number 1-10312 ______________________________ UNITED STATES SECURITIES AND EXCHANGE COMMISSION SYNOVUS FINANCIAL CORP. (Exact name of registrant as specified in its charter) ______________________________ Georgia 58-1134883 (State or other jurisdiction of incorporat ...

Synovus Financial Corp. (NYSE:SNV) Q2 2023 Earnings Conference Call July 20, 2023 8:30 AM ET Company Participants Cal Evans - Head, Investor Relations Kevin Blair - Chairman, President and CEO Jamie Gregory - Chief Financial Officer Bob Derrick - Chief Credit Officer Conference Call Participants Steven Alexopoulos - J.P. Morgan Brady Gailey - KBW Stephen Scouten - Piper Sandler Kevin Fitzsimmons - D.A. Davidson Jared Shaw - Wells Fargo Manan Gosalia - Morgan Stanley Brandon King - Truist Securities Brody Pr ...

• YoY expense increase drivers include new initiative and infrastructure investments as well as investments in our workforce and FDIC/healthcare costs • Continue to move forward with key strategic investments while rationalizing overall spend in light of the current environment ◦ Headcount reduction of 86 in mortgage, technology and operations in 2Q23 ◦ Voluntary early retirement program to be completed in 3Q23, expected to impact ~125 team members ◦ Expect to receive long-term net benefit after role reallo ...

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 March 31, 2023 Commission file number 1-10312 ______________________________ SYNOVUS FINANCIAL CORP. (Exact name of registrant as specified in its charter) ______________________________ Georgia 58-1134883 (State or other jurisdiction of incorpora ...

Synovus Financial Corp. (NYSE:SNV) Q1 2023 Earnings Conference Call April 20, 2023 8:30 AM ET Company Participants Cal Evans - Senior Director, IR Kevin Blair - Chairman, President, and CEO Jamie Gregory - CFO Robert Derrick - CCO Conference Call Participants Bradley Milsaps - Piper Sandler Ebrahim Poonawala - Bank of America Securities Anthony Elian - J.P. Morgan Brady Gailey - Keefe, Bruyette, & Woods Michael Rose - Raymond James Jared Shaw - Wells Fargo Kevin Fitzsimmons - D.A. Davidson Christopher Marin ...

First Quarter 2023 Results 2 This slide presentation contains certain non-GAAP financial measures determined by methods other than in accordance with generally accepted accounting principles. Such non-GAAP financial measures include the following: adjusted net income available to common shareholders; adjusted diluted earnings per share; adjusted return on average assets; return on average tangible common equity; adjusted return on average tangible common equity; adjusted non-interest revenue; adjusted reven ...

Synovus Financial (SNV) FY Conference March 07, 2023 09:50 AM ET Speaker0 Good morning, everyone. My name is Michael Rose, and, I'm pleased to introduce Synovus Financial as our next presenter with nearly $60,000,000,000 in assets. The company is based in Columbus, Georgia and has operations across five Southeastern states. With us today from the company is Chairman and CEO, Kevin Blair CFO, Jamie Gregory and Director of IR, Cal Evans. And with that, I will turn it over to Kevin. Speaker1 Thank you, Michael ...

Part I [Business](index=9&type=section&id=Item%201.%20Business) Synovus Financial Corp., a Georgia-based financial services and bank holding company, reported $59.73 billion in assets and $48.87 billion in deposits as of December 31, 2022, providing comprehensive banking services and achieving $180 million in pre-tax benefits from strategic initiatives | Metric | Amount (as of Dec 31, 2022) | | :--- | :--- | | Total Consolidated Assets | $59.73 billion | | Total Consolidated Deposits | $48.87 billion | | Branches | 246 | | ATMs | 365 | - Synovus provides commercial and consumer banking, private banking, treasury management, wealth management, and mortgage services through its subsidiary, Synovus Bank, across Alabama, Florida, Georgia, South Carolina, and Tennessee[23](index=23&type=chunk) - The 'Synovus Forward' initiative achieved a cumulative pre-tax run-rate benefit of approximately **$180 million** as of December 31, 2022, through expense reductions and revenue-generating activities[27](index=27&type=chunk) - The 2022 strategic plan centered on four pillars: repositioning for advantage, simplifying processes, adopting a 'high-tech meets high-touch' approach, and enhancing talent and culture[28](index=28&type=chunk) [Competition](index=10&type=section&id=Competition) Synovus operates in a highly competitive financial services industry, facing diverse competitors from traditional banks to Fintechs, yet has maintained and grown its market share in key markets - The company competes with a wide range of financial institutions, including national and state banks, savings and loan associations, credit unions, and nonbank intermediaries like securities brokers, mortgage companies, and Fintech firms[30](index=30&type=chunk) - Competition is intensifying due to legislative, regulatory, and technological changes, as well as industry consolidation. Non-banking financial institutions often have greater flexibility and lower cost structures due to fewer regulatory restrictions[30](index=30&type=chunk) - As of December 31, 2022, Synovus was the **largest bank holding company** headquartered in Georgia based on assets and has continued to grow market share despite rationalizing its branch network[30](index=30&type=chunk) [Human Capital Resources](index=10&type=section&id=Human%20Capital%20Resources) Synovus's human capital strategy focuses on attracting and retaining a skilled workforce, adapting to a competitive labor market by increasing minimum wage to $20/hour and enhancing benefits, while prioritizing talent development and DEI | Metric | 2022 Status | | :--- | :--- | | Total Employees (Dec 31) | 5,114 (up from 4,988 in 2021) | | Minimum Wage | Increased to $20 per hour | | Internal Hires | 34% of 1,711 open positions filled | | Promotions | ~18% of workforce (70% women, 38% people of color) | | Average Employee Tenure | 8 years | - The company is focused on improving representation of women and people of color in senior leadership, with goals of **40% female** and **18% people of color** representation by the end of 2024. As of year-end 2022, women represented **39%** and people of color **16%** of senior leadership[41](index=41&type=chunk) - Synovus launched two senior leadership programs in 2022: the Connect Leadership Program for executive readiness and Catalyst On-Demand for transformational capabilities[38](index=38&type=chunk) [Supervision, Regulation, and Other Factors](index=12&type=section&id=Supervision%2C%20Regulation%2C%20and%20Other%20Factors) Synovus is extensively regulated by federal and state authorities, including the Federal Reserve and GA DBF, with its financial holding company status subjecting it to comprehensive supervision, activity limitations, and capital requirements across all operations - Synovus is a registered bank holding company and has elected to be a financial holding company, subjecting it to supervision by the Federal Reserve and the GA DBF[48](index=48&type=chunk) - Synovus Bank's deposits are insured by the FDIC, and it is subject to FDIC regulations and assessments. The FDIC increased the initial base deposit insurance assessment rate by **2 bps**, effective in the first quarter of 2023[82](index=82&type=chunk)[83](index=83&type=chunk) - The company and its bank are subject to regulations concerning anti-money laundering (USA PATRIOT Act), economic sanctions (OFAC), consumer protection (CFPB), and data security, requiring robust compliance programs[86](index=86&type=chunk)[88](index=88&type=chunk)[94](index=94&type=chunk)[98](index=98&type=chunk) - The transition from LIBOR to alternative reference rates like SOFR is being managed through a cross-functional working group. As of December 31, 2022, the company had approximately **$10 billion** in loans tied to LIBOR maturing after June 30, 2023[101](index=101&type=chunk)[356](index=356&type=chunk) [Risk Factors](index=22&type=section&id=Item%201A.%20Risk%20Factors) Synovus faces significant strategic, operational, credit, liquidity, compliance, regulatory, and market risks, including intense competition, cybersecurity threats, interest rate fluctuations, and geographic concentration in the Southeastern U.S [Strategic Risk](index=22&type=section&id=Strategic%20Risk) Synovus faces strategic risks from intense competition and the potential failure to realize benefits from strategic initiatives, including technology modernization and new business lines, alongside acquisition integration challenges - The company operates in a highly competitive environment against larger banks with more resources and non-bank competitors (Fintechs) that have lower regulatory burdens[108](index=108&type=chunk) - There is a risk that strategic initiatives, including building out the Maast digital banking solution and growing the corporate and investment banking division, may not be successful or achieve anticipated savings and revenue[110](index=110&type=chunk) - Implementing new lines of business and technologies introduces substantial risks, including failure to meet timetables, profitability targets, and increased reliance on third-party providers[113](index=113&type=chunk) [Operational Risk](index=23&type=section&id=Operational%20Risk) Synovus faces operational risks from talent retention challenges, rapid technological changes, IT system interruptions, cybersecurity threats, increasing fraud, and heavy reliance on third-party vendors - The company's success depends on its ability to attract and retain qualified personnel in a competitive market, with recent senior leadership transitions adding to this risk[115](index=115&type=chunk)[118](index=118&type=chunk) - Synovus faces continuous threats from sophisticated cyber-attacks, including e-fraud and data breaches, with risks heightened by remote working environments[122](index=122&type=chunk)[124](index=124&type=chunk) - The company relies on third-party vendors for key infrastructure, creating risks of service disruptions, security breaches, and operational failures that could adversely affect business[131](index=131&type=chunk) - Fraud risk, including deposit and card fraud, increased significantly in 2022, requiring continuous investment in anti-fraud systems and processes[126](index=126&type=chunk) [Credit and Liquidity Risk](index=27&type=section&id=Credit%20and%20Liquidity%20Risk) Synovus faces credit and liquidity risks from interest rate changes impacting net interest income and funding costs, reliance on core deposits for liquidity, and the inherent estimation uncertainty of the Allowance for Credit Losses - Changes in interest rates directly affect net interest income. The Federal Reserve's rapid rate increases in 2022 could increase funding costs and negatively impact borrowers' repayment ability[138](index=138&type=chunk)[139](index=139&type=chunk) - The company depends on various funding sources, including core deposits, FHLB borrowings, and brokered deposits. A downgrade in credit ratings or market disruptions could make funding more expensive or unavailable[143](index=143&type=chunk) - The allowance for credit losses (ACL) is a critical estimate requiring subjective judgment. Changes in economic conditions or borrower performance could render the allowance inadequate, requiring increases that would reduce net income and capital[147](index=147&type=chunk)[149](index=149&type=chunk) - The Parent Company's liquidity relies on dividends from Synovus Bank, which are subject to regulatory restrictions. An inability to receive these dividends could affect the Parent Company's ability to service debt and pay its own dividends[144](index=144&type=chunk) [Compliance and Regulatory Risk](index=30&type=section&id=Compliance%20and%20Regulatory%20Risk) Synovus faces significant compliance and regulatory risks due to extensive industry regulation, potential impacts from federal fiscal and monetary policy changes, and the possibility of supervisory actions or capital conservation requirements - The banking industry is extensively regulated, with laws governing lending, deposits, capital, liquidity, and consumer protection. Failure to comply could result in sanctions and civil money penalties[157](index=157&type=chunk) - Federal Reserve monetary policies significantly impact the cost of funds and return on assets, affecting net interest margin. Future policy changes are unpredictable and could adversely affect operating results[156](index=156&type=chunk) - Regulators have the authority to compel or restrict actions if they deem operations to be inconsistent with safe and sound banking practices, which could lead to supervisory agreements or orders that negatively affect the business[159](index=159&type=chunk)[160](index=160&type=chunk) [Market and Other General Risk](index=31&type=section&id=Market%20and%20Other%20General%20Risk) Synovus faces market risks from high inflation, global economic instability, and geographic concentration in the Southeastern U.S., alongside increasing scrutiny on Environmental, Social, and Governance (ESG) issues - Prolonged high inflation could negatively impact profitability by increasing operating costs and funding expenses, and could lead to higher default rates and credit losses[163](index=163&type=chunk) - The company's operations are concentrated in the Southeastern U.S., making it vulnerable to local economic conditions, weather catastrophes like hurricanes, and public health issues[178](index=178&type=chunk)[180](index=180&type=chunk) - Increasing public and investor scrutiny related to Environmental, Social, and Governance (ESG) activities poses a risk to the company's brand and reputation if it fails to act responsibly[169](index=169&type=chunk)[171](index=171&type=chunk) - The transition away from LIBOR to alternative rates like SOFR is complex and could adversely affect interest rates on financial instruments, potentially leading to disputes or litigation[176](index=176&type=chunk)[177](index=177&type=chunk) [Properties](index=35&type=section&id=Item%202.%20Properties) As of December 31, 2022, Synovus owned 151 facilities (1.45 million sq ft) and leased 118 facilities (1.21 million sq ft), primarily office spaces suitable for business operations | Property Status (as of Dec 31, 2022) | Number of Facilities | Square Footage (sq ft) | | :--- | :--- | :--- | | Owned | 151 | 1,445,947 | | Leased | 118 | 1,207,333 | Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Repurchases of Equity Securities](index=36&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Repurchases%20of%20Equity%20Securities) Synovus common stock (SNV) trades on the NYSE, with 146,045,164 shares outstanding as of February 21, 2023, and the company authorized $300 million in share repurchases for both 2022 and 2023 - Synovus common stock (SNV) and preferred stock (SNV-PrD, SNV-PrE) are traded on the New York Stock Exchange[3](index=3&type=chunk)[190](index=190&type=chunk) - The Board of Directors authorized share repurchases of up to **$300 million** in 2022 and another **$300 million** in 2023. No repurchases were made in the three months ended December 31, 2022[194](index=194&type=chunk) | Index | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Synovus | $100.00 | $68.26 | $86.44 | $76.18 | $115.97 | $94.08 | | S&P 500 Index | $100.00 | $95.61 | $125.70 | $148.81 | $191.48 | $156.77 | | KBW Regional Bank Index | $100.00 | $82.51 | $102.20 | $93.33 | $127.53 | $118.71 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2022, Synovus's net interest income increased 17% to $1.80 billion, driven by rising rates and 11% loan growth to $43.72 billion, while deposits decreased 1% to $48.87 billion, with strong credit quality and a positive 2023 outlook | Metric | 2022 | 2021 | Change (%) | | :--- | :--- | :--- | :--- | | Net Income Available to Common Shareholders | $724.7 million | $727.3 million | 0% | | Diluted EPS | $4.95 | $4.90 | +1% | | Net Interest Income | $1.80 billion | $1.53 billion | +17% | | Non-interest Revenue | $409.3 million | $450.1 million | -9% | | Non-interest Expense | $1.16 billion | $1.10 billion | +5% | | Total Loans (period-end) | $43.72 billion | $39.31 billion | +11% | | Total Deposits (period-end) | $48.87 billion | $49.43 billion | -1% | - The 2023 outlook projects period-end loan growth of **5-9%**, adjusted revenue growth of **8-12%**, and adjusted non-interest expense growth of **5-9%**[210](index=210&type=chunk) - The net interest margin for 2022 was **3.34%**, an increase of **33 basis points** from **3.01%** in 2021, driven by higher loan yields from increased market interest rates[202](index=202&type=chunk) [Critical Accounting Policies](index=40&type=section&id=Critical%20Accounting%20Policies) Synovus identifies Allowance for Credit Losses (ACL) and Income Taxes as critical accounting policies, both requiring significant subjective judgments and estimates, with a downside scenario hypothetically increasing ACL by $296 million - The Allowance for Credit Losses (ACL) is a critical accounting estimate requiring significant judgment, based on the Current Expected Credit Losses (CECL) methodology[214](index=214&type=chunk)[215](index=215&type=chunk) - A sensitivity analysis showed that using only the downside economic forecast scenario would hypothetically increase the reported ACL by approximately **$296 million** at December 31, 2022[216](index=216&type=chunk) - Accounting for income taxes is also critical, involving complex estimates for deferred tax assets/liabilities, realizability of tax credits and NOLs, and uncertain tax positions[218](index=218&type=chunk) [Investment Securities Available for Sale](index=41&type=section&id=Investment%20Securities%20Available%20for%20Sale) Synovus's investment securities portfolio, primarily high-quality liquid debt, grew to an average balance of $11.21 billion in 2022, but rising rates led to net unrealized losses of $1.60 billion and an extended duration of 5.3 years | Metric | Dec 31, 2022 ($) | Dec 31, 2021 ($) | | :--- | :--- | :--- | | Average Balance | $11.21 billion | $9.60 billion | | Taxable-Equivalent Yield | 1.87% | 1.46% | | Net Unrealized Losses | $1.60 billion | $73.2 million | | Weighted Average Duration | 5.3 years | 3.7 years | - The increase in net unrealized losses was primarily due to increases in market interest rates[220](index=220&type=chunk) [Loans](index=43&type=section&id=Loans) Total loans increased 11% to $43.72 billion at year-end 2022, primarily driven by 12% growth in C&I loans to $22.07 billion and 15% growth in CRE loans to $12.65 billion, while PPP loans significantly declined | Loan Portfolio Class | Dec 31, 2022 ($B) | Dec 31, 2021 ($B) | % Change | | :--- | :--- | :--- | :--- | | Commercial and Industrial | 22.07 | 19.62 | 12% | | Commercial Real Estate | 12.65 | 11.02 | 15% | | Consumer | 9.00 | 8.67 | 4% | | **Total Loans** | **43.72** | **39.31** | **11%** | - The balance of PPP loans, net of fees, decreased **96%** from **$399.6 million** at year-end 2021 to **$14.7 million** at year-end 2022, largely due to **$378 million** in forgiveness[228](index=228&type=chunk)[229](index=229&type=chunk) - C&I loan growth was driven by diverse growth in Wholesale Banking sub-businesses and a slowdown in pay-off activity[231](index=231&type=chunk) - CRE loan growth was primarily due to funded loan production and construction line utilization, particularly in the multi-family and medical office sectors[235](index=235&type=chunk) [Deposits](index=48&type=section&id=Deposits) Total deposits decreased 1% to $48.87 billion at year-end 2022, with core deposits falling 6% to $43.57 billion and brokered deposits increasing to $5.30 billion, while the cost of deposits rose to 38 basis points | Deposit Category | Dec 31, 2022 ($B) | Dec 31, 2021 ($B) | % Change | | :--- | :--- | :--- | :--- | | Non-interest-bearing | 14.57 | 15.24 | -4% | | Core Deposits (excl. brokered) | 43.57 | 46.59 | -6% | | Brokered Deposits | 5.30 | 2.84 | +87% | | **Total Deposits** | **48.87** | **49.43** | **-1%** | - The overall cost of deposits for 2022 was **38 bps**, up **22 bps** from **16 bps** in 2021, impacted by FOMC rate hikes[247](index=247&type=chunk) - As of December 31, 2022, an estimated **$25.08 billion** of the deposit portfolio was uninsured[248](index=248&type=chunk) [Net Interest Income and Margin](index=49&type=section&id=Net%20Interest%20Income%20and%20Margin) Net interest income increased 17% to $1.80 billion in 2022, with net interest margin expanding 33 basis points to 3.34%, driven by rising rates and growth in earning assets | Metric | 2022 | 2021 | | :--- | :--- | :--- | | Net Interest Income (Taxable-equivalent) | $1.80 billion | $1.54 billion | | Net Interest Margin | 3.34% | 3.01% | | Yield on Earning Assets | 3.84% | 3.24% | | Effective Cost of Funds | 0.50% | 0.23% | - The increase in net interest margin was primarily due to the company's asset-sensitive position benefiting from the rising rate environment[254](index=254&type=chunk) - Average interest earning assets increased by **6%** to **$54.22 billion** in 2022, driven by a **$3.07 billion** increase in average loans and a **$1.61 billion** increase in average investment securities[257](index=257&type=chunk)[260](index=260&type=chunk) [Non-interest Revenue](index=52&type=section&id=Non-interest%20Revenue) Non-interest revenue decreased 9% to $409.3 million in 2022, primarily due to a 68% drop in mortgage banking income and a 43% decrease in other non-interest revenue, partially offset by growth in core banking and wealth fees | Revenue Component | 2022 ($M) | 2021 ($M) | % Change | | :--- | :--- | :--- | :--- | | Service charges on deposit accounts | 93.1 | 86.3 | +8% | | Card fees | 61.8 | 51.4 | +20% | | Brokerage revenue | 67.0 | 56.4 | +19% | | Mortgage banking income | 17.5 | 54.4 | -68% | | Other non-interest revenue | 35.1 | 61.1 | -43% | | **Total Non-interest Revenue** | **409.3** | **450.1** | **-9%** | - The significant decrease in mortgage banking income was driven by a depressed residential mortgage environment with rising rates reducing refinancing and purchase volumes[269](index=269&type=chunk) - The decline in other non-interest revenue included a **$7.0 million** write-down on a Fintech investment and an **$8.5 million** decrease from unfavorable valuation adjustments on tax-related equity partnerships[272](index=272&type=chunk) [Non-interest Expense](index=53&type=section&id=Non-interest%20Expense) Non-interest expense increased 5% to $1.16 billion in 2022, primarily due to higher salaries and personnel costs, investments in new initiatives, and professional fees, partially offset by a $9.7 million net reversal of restructuring charges | Expense Component | 2022 ($M) | 2021 ($M) | % Change | | :--- | :--- | :--- | :--- | | Salaries and other personnel expense | 681.7 | 649.4 | +5% | | Net occupancy, equipment, and software | 174.7 | 169.2 | +3% | | Professional fees | 37.2 | 32.8 | +13% | | FDIC insurance and other regulatory fees | 29.1 | 22.4 | +30% | | Restructuring charges (reversals) | (9.7) | 7.2 | nm | | **Total Non-interest Expense** | **1,157.5** | **1,099.9** | **+5%** | - The increase in salaries was due to elevated performance incentives, merit and inflationary wage increases, and a **3%** increase in headcount to **5,114** employees[275](index=275&type=chunk) - Restructuring charges included a net reversal of **$9.7 million**, reflecting **$15.4 million** in gains on sales of real estate facilities, which offset lease termination and asset impairment charges[280](index=280&type=chunk) [Credit Quality](index=55&type=section&id=Credit%20Quality) Synovus's credit quality remained strong in 2022, with NPA ratio improving to 0.33% and net charge-off ratio decreasing to 0.13%, despite recording an $84.6 million provision for credit losses due to loan growth and a weaker economic outlook | Credit Quality Metric | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Non-performing Assets (NPA) Ratio | 0.33% | 0.40% | | Non-performing Loans (NPL) Ratio | 0.29% | 0.33% | | Net Charge-off Ratio | 0.13% | 0.20% | | ACL to Loans Coverage Ratio | 1.15% | 1.19% | - The provision for credit losses was **$84.6 million** in 2022, a significant shift from a provision reversal of **$106.3 million** in 2021, driven by loan growth and a weaker economic forecast[308](index=308&type=chunk) - Total non-performing assets decreased by **9%** to **$143.4 million** at year-end 2022, primarily due to ORE dispositions[290](index=290&type=chunk) - Criticized and classified loans declined by **8%** to **$942.1 million** at year-end 2022, representing **2.2%** of total loans[304](index=304&type=chunk)[305](index=305&type=chunk) [Capital Resources](index=60&type=section&id=Capital%20Resources) Synovus's capital levels remained strong at year-end 2022, with the CET1 ratio increasing 13 basis points to 9.63%, exceeding well-capitalized requirements, and the 2023 capital plan includes a dividend increase and $300 million in share repurchases | Capital Ratio | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | CET1 Capital Ratio | 9.63% | 9.50% | | Tier 1 Risk-based Capital Ratio | 10.68% | 10.66% | | Total Risk-based Capital Ratio | 12.54% | 12.61% | | Leverage Ratio | 9.07% | 8.72% | - The Board approved a capital plan for 2023 that includes a **$0.04** increase in the quarterly common stock dividend to **$0.38** per share and authorized up to **$300 million** in share repurchases[317](index=317&type=chunk) - The company's capital ratios reflect its election of the five-year transition provision to mitigate the effects of CECL adoption on regulatory capital[319](index=319&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=68&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Synovus's primary market risk is interest rate risk, managed by ALCO, with its asset-sensitive balance sheet projecting a 3.1% increase in net interest income from a +100 basis point rate shift, utilizing derivatives to hedge exposure | Change in Interest Rates (bps) | Estimated Change in Net Interest Income (as of Dec 31, 2022) | | :--- | :--- | | +200 | +6.4% | | +100 | +3.1% | | -100 | -3.5% | | -200 | -7.5% | - The company has an asset-sensitive balance sheet, which benefits net interest income in a rising rate environment[346](index=346&type=chunk) - Synovus utilizes derivative instruments, including cash flow hedges (notional **$5.25 billion**) and fair value hedges (notional **$2.23 billion**) as of year-end 2022, to manage interest rate risk[353](index=353&type=chunk)[354](index=354&type=chunk) [Financial Statements and Supplementary Data](index=69&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents Synovus's consolidated financial statements for fiscal year 2022, including balance sheets, income statements, and cash flows, along with KPMG LLP's unqualified opinion on financial statements and internal controls, and detailed notes on accounting policies and financial instruments - The independent auditor, KPMG LLP, issued an **unqualified opinion** on the consolidated financial statements and the effectiveness of the company's internal control over financial reporting as of December 31, 2022[360](index=360&type=chunk)[361](index=361&type=chunk) - The critical audit matter identified was the assessment of the allowance for loan losses for loans evaluated on a collective basis, due to the high degree of subjective and complex judgment involved in the methodology and assumptions[365](index=365&type=chunk)[366](index=366&type=chunk) [Note 1 - Summary of Significant Accounting Policies](index=78&type=section&id=Note%201%20-%20Summary%20of%20Significant%20Accounting%20Policies) This note details Synovus's significant accounting policies, including principles of consolidation, use of estimates for ACL and income taxes, and the adoption of the CECL methodology for estimating credit losses over the full expected life of financial instruments - The company calculates its Allowance for Credit Losses (ACL) using the CECL methodology, which estimates credit losses over the full remaining expected life of financial instruments[409](index=409&type=chunk) - The ACL estimation process uses a discounted cash flow model for loan pools, incorporating forecasted Probability of Default (PD) and Loss Given Default (LGD) adjusted for macroeconomic factors over a two-year reasonable and supportable forecast period[413](index=413&type=chunk)[415](index=415&type=chunk) - All derivative instruments are recorded at fair value on the balance sheet, with accounting for changes in fair value dependent on whether the derivative is designated as a fair value hedge, a cash flow hedge, or is non-designated[437](index=437&type=chunk) [Note 3 - Loans and Allowance for Loan Losses](index=93&type=section&id=Note%203%20-%20Loans%20and%20Allowance%20for%20Loan%20Losses) This note details Synovus's loan portfolio and allowance for loan losses (ALL), showing a $69.0 million provision in 2022, resulting in an ALL of $443.4 million and a total ACL of $500.9 million at year-end 2022 | Allowance for Loan Losses (in millions) | 2022 ($M) | 2021 ($M) | | :--- | :--- | :--- | | Beginning Balance | $427.6 | $605.7 | | Charge-offs | ($83.7) | ($105.2) | | Recoveries | $30.6 | $27.4 | | Provision for (reversal of) loan losses | $69.0 | ($100.4) | | **Ending Balance** | **$443.4** | **$427.6** | - The total ACL, which includes the ALL and a **$57.5 million** reserve for unfunded commitments, was **$500.9 million** at December 31, 2022[523](index=523&type=chunk) - Total Troubled Debt Restructurings (TDRs) were **$156.7 million** at year-end 2022, an increase of **10%** from 2021, with **99%** of accruing TDRs being current on payments[294](index=294&type=chunk)[295](index=295&type=chunk) [Note 10 - Regulatory Capital](index=109&type=section&id=Note%2010%20-%20Regulatory%20Capital) This note details Synovus Financial Corp. and Synovus Bank's regulatory capital positions, both exceeding minimum requirements and considered well-capitalized as of December 31, 2022, with CET1 ratios of 9.63% and 10.66% respectively | Ratio (as of Dec 31, 2022) | Synovus Financial Corp. | Synovus Bank | Minimum for Capital Adequacy | To Be Well-Capitalized (Bank only) | | :--- | :--- | :--- | :--- | :--- | | CET1 Capital Ratio | 9.63% | 10.66% | 4.50% | 6.50% | | Tier 1 Risk-based Capital Ratio | 10.68% | 10.66% | 6.00% | 8.00% | | Total Risk-based Capital Ratio | 12.54% | 11.89% | 8.00% | 10.00% | | Leverage Ratio | 9.07% | 9.06% | 4.00% | 5.00% | - Both Synovus and Synovus Bank's capital positions are adequate to meet regulatory minimums, inclusive of the **2.5%** capital conservation buffer[559](index=559&type=chunk) [Note 17 - Segment Reporting](index=129&type=section&id=Note%2017%20-%20Segment%20Reporting) Synovus reports results across four segments: Wholesale Banking, Community Banking, Consumer Banking, and FMS, with Wholesale Banking being the largest by loans ($25.9 billion) and Community Banking holding the largest deposit base ($18.6 billion) | Segment (2022) | Net Interest Income ($M) | Non-interest Revenue ($M) | Pre-provision Net Revenue ($M) | Total Loans ($B) | Total Deposits ($B) | | :--- | :--- | :--- | :--- | :--- | :--- | | Wholesale Banking | 691.5 | 39.3 | 616.6 | 25.9 | 13.0 | | Community Banking | 412.7 | 50.1 | 332.3 | 8.1 | 18.6 | | Consumer Banking | 465.8 | 86.6 | 362.6 | 2.9 | 10.8 | | Financial Management Services | 69.5 | 182.9 | 81.1 | 5.2 | 0.1 | | Treasury & Corporate Other | 157.3 | 50.6 | (343.8) | 1.6 | 6.5 | - In Q1 2022, the company reorganized its reporting structure, splitting the Community Banking segment into two distinct segments: Community Banking and Consumer Banking[642](index=642&type=chunk) [Controls and Procedures](index=134&type=section&id=Item%209A.%20Controls%20and%20Procedures) Synovus's management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2022, a conclusion supported by KPMG LLP's unqualified opinion - Management, including the CEO and CFO, concluded that as of December 31, 2022, the company's disclosure controls and procedures were **effective**[661](index=661&type=chunk) - Management concluded that internal control over financial reporting was **effective** as of December 31, 2022, a conclusion supported by an **unqualified opinion** from the independent auditor, KPMG LLP[663](index=663&type=chunk)[664](index=664&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=135&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) This section incorporates by reference information from Synovus's Proxy Statement regarding directors, executive officers, and corporate governance matters, including the Audit Committee - Information regarding directors, executive officers, and corporate governance is incorporated by reference from the company's Proxy Statement[669](index=669&type=chunk) [Executive Compensation](index=135&type=section&id=Item%2011.%20Executive%20Compensation) This section incorporates by reference executive and director compensation information from Synovus's Proxy Statement, including the Compensation Discussion and Analysis - Details on executive compensation are incorporated by reference from the company's Proxy Statement[671](index=671&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=135&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section incorporates by reference information from Synovus's Proxy Statement regarding security ownership by beneficial owners and management, and related stockholder matters - Information on security ownership is incorporated by reference from the company's Proxy Statement[672](index=672&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=135&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) This section incorporates by reference information from Synovus's Proxy Statement concerning certain relationships, related party transactions, and director independence - Details on related transactions and director independence are incorporated by reference from the company's Proxy Statement[673](index=673&type=chunk) [Principal Accountant Fees and Services](index=136&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) This section identifies KPMG LLP as Synovus's independent registered public accounting firm and incorporates by reference information from the Proxy Statement regarding accountant fees and services - The company's independent registered public accounting firm is KPMG LLP. Information on fees and services is incorporated by reference from the Proxy Statement[676](index=676&type=chunk)[677](index=677&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=137&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the financial statements, schedules, and exhibits filed with the Annual Report, with consolidated financial statements incorporated by reference from Item 8 and a comprehensive list of other exhibits provided - The consolidated financial statements are incorporated by reference from Item 8 of this report[679](index=679&type=chunk) - A list of all exhibits filed with the report is provided, including governance documents, debt instruments, and compensatory plans[681](index=681&type=chunk)

Synovus Financial Corp. (NYSE:SNV) Q4 2022 Earnings Conference Call January 19, 2023 8:30 AM ET Company Participants Cal Evans - Senior Director, Investor Relations Kevin Blair - President, Chief Executive Officer Jamie Gregory - Chief Financial Officer Robert Derrick - Chief Credit Officer Conference Call Participants Steven Alexopoulos - J.P. Morgan Brady Gailey - KBW Michael Rose - Raymond James Jared Shaw - Wells Fargo Securities Brad Milsaps - Piper Sandler Kevin Fitzsimmons - D.A. Davidson Christophe ...