0000018349 syn:FCBFinancialHoldingsInc.Member syn:FinancingReceivables90to149DaysPatDueMember 2019-09-30
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 
FORM 10-Q
 

☒Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended September 30, 20182019
Commission file number 1-10312
 

financialappendix930a89.jpg
SYNOVUS FINANCIAL CORP.CORP.
(Exact name of registrant as specified in its charter)

 
Georgia 58-1134883
(State or other jurisdiction ofincorporation or organization)
 
   (I.R.S. EmployerIdentification No.)
1111 Bay Avenue
Suite 500,Columbus,Georgia 31901
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (706) (706) 649-2311
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $1.00 Par Value
Series B Participating Cumulative Preferred
SNVNew York Stock Purchase Rights
Exchange
Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series D
SNV - PrD
New York Stock Exchange
Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series ESNV - PrENew York Stock Exchange
New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: NONE

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    YES x  NO ¨Yes☒  No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   YES x  NO ¨Yes☒  No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” and, “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check One):
Large accelerated filerx☒Accelerated filer¨☐
    
Non-accelerated filer¨☐Smaller reporting company¨☐
    
  Emerging growth company¨☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to section 7(a)2(B)Section 13(a) of the SecuritiesExchange Act.  ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ¨    NO xYes ☐    No ☒
Indicate the numberAs of October 31, 2019, 146,544,786 shares outstanding of each of the issuer’s class ofregistrant's common stock, as of the latest practicable date.$1.00 par value, were outstanding.

ClassNovember 5, 2018
Common Stock, $1.00 Par Value116,376,039





Table of Contents
 
    Page
Part I.
Financial Information 
  Index of Defined Terms
i
 Item 1.Financial Statements (Unaudited) 
  Consolidated Balance Sheets as of September 30, 20182019 and December 31, 20172018
1
  Consolidated Statements of Income for the Three and Nine Months Ended September 30, 20182019 and 20172018
2
  Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 20182019 and 20172018
3
  Consolidated Statements of Changes in Shareholders' Equity for the Three and Nine Months Ended September 30, 20182019 and 20172018
4
  Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 20182019 and 20172018
56
  Notes to Unaudited Interim Consolidated Financial Statements
67
 Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations
3945
 Item 3.
Quantitative and Qualitative Disclosures About Market Risk
6871
 Item 4.Controls and Procedures
6871
     
Part II.
Other Information 
 Item 1.Legal Proceedings
6972
 Item 1A.Risk Factors
6972
 Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
6972
 Item 3.Defaults Upon Senior Securities
6973
 Item 4.Mine Safety Disclosures
6973
 Item 5.Other Information
6973
 Item 6.Exhibits
7074
 Signatures
7175
     







SYNOVUS FINANCIAL CORP.
INDEX OF DEFINED TERMS
ACL – Allowance for credit losses
AICPA – American Institute of Certified Public Accountants
ALCO – Synovus' Asset Liability Management Committee
ALL – Allowance for loan losses
AOCI -– Accumulated other comprehensive income
Acquisition Date – Effective January 1, 2019, Synovus completed its acquisition of FCB Financial Holdings, Inc.
ARRC – Alternative Reference Rates Committee
ASC – Accounting Standards Codification
ASC 310-30 loans – Loans accounted for in accordance with ASC 310 – 30, Loans and Debt Securities Acquired with Deteriorated Credit Quality
ASU – Accounting Standards Update
ATM – Automatic teller machine
Azalea Merger Sub – Azalea Merger Sub Corp., a wholly-owned subsidiary of Synovus which was formed for the express and limited purpose of the Merger
Basel III – The third Basel Accord developed by the Basel Committee on Banking Supervision to strengthen existing regulatory capital requirements
BOLI – Bank-owned life insurance
BOV – Broker’s opinion of value
bp(s) – Basis point(s)
C&I – Commercial and industrial loans
CECL –Current expected credit losses
CET1 – Common Equity Tier 1 Capital defined by Basel III capital rules
CME – Chicago Mercantile Exchange
CMO – Collateralized Mortgage Obligation
Cabela’s Transaction – The transaction completed on September 25, 2017 whereby Synovus Bank acquired certain assets and assumed certain liabilities of World's Foremost Bank ("WFB") and then immediately thereafter sold WFB’s credit card assets and certain related liabilities to Capital One Bank (USA), National Association.  As a part of this transaction, Synovus Bank retained WFB’s $1.10 billion brokered time deposit portfolio and received a $75.0 million fee from Cabela’s Incorporated and Capital One.  Throughout this Report, we refer to this transaction as the “Cabela’s Transaction” and the associated $75.0 million fee received from Cabela’s and Capital One as the “Cabela’s Transaction Fee”
Code – Internal Revenue Code
Company – Synovus Financial Corp. and its wholly-owned subsidiaries, except where the context requires otherwise
Covered Litigation – Certain Visa litigation for which Visa is indemnified by Visa USA members
CRE – Commercial real estate
DIF – Deposit Insurance Fund
Dodd-Frank Act – The Dodd-Frank Wall Street Reform and Consumer Protection Act
EVE – Economic value of equity
Exchange Act – Securities Exchange Act of 1934, as amended
FASB – Financial Accounting Standards Board
FCB - – FCB Financial Holdings, Inc. and its wholly-owned subsidiaries, except where the context requires otherwise
FDIC – Federal Deposit Insurance Corporation
Federal Reserve Bank – The 12 banks that are the operating arms of the U.S. central bank. They implement the policies of the Federal Reserve Board and also conduct economic research
Federal Reserve Board – The 7-member Board of Governors that oversees the Federal Reserve System, establishes monetary policy (interest rates, credit, etc.), and monitors the economic health of the country. Its members are appointed by the President subject to Senate confirmation, and serve 14-year terms
Federal Reserve System – The 12 Federal Reserve Banks, with each one serving member banks in its own district. This system, supervised by the Federal Reserve Board, has broad regulatory powers over the money supply and the credit structure
Federal Tax Reform – Enactment of H.R. 1, formerly known as the Tax Cuts and Jobs Act, on December 22, 2017, legislation in which a number of changes were made under the Internal Revenue Code, including a reduction of the corporate income tax rate, significant limitations on the deductibility of interest, allowance of the expensing of capital expenditures, limitation on


i
Table of Contents


deductibility of FDIC insurance premiums, and limitation of the deductibility of certain performance-based compensation, among others
FFIEC – Federal Financial Institutions Examination Council
FFIEC Retail Credit Classification Policy – FFIEC Uniform Retail Credit Classification and Account Management Policy
FHLB – Federal Home Loan Bank
FICO – Fair Isaac Corporation
FTE – Fully taxable-equivalent
GA DBF – Georgia Department of Banking and Finance
GAAP – Generally Accepted Accounting Principles in the United States of America
GGL – Government guaranteed loans
Global One – Entaire Global Companies, Inc., the parent company of Global One Financial, Inc., as acquired by Synovus on October 1, 2016. Throughout this Report, we refer to this acquisitionacquired entity as "Global One"
GSE – Government sponsored enterprise
HELOC – Home equity line of credit
Interagency Supervisory Guidance – Interagency Supervisory Guidance on Allowance for Loan and Lease Losses Estimation Practices for Loans and Lines of Credit Secured by Junior Liens on 1-4 Family Residential Properties
LIBOR – London Interbank Offered Rate
LIHTC – Low Income Housing Tax Credit
LTV – Loan-to-collateral value ratio
Merger Agreement – Agreement and Plan of Merger by and among Synovus, FCB and Azalea Merger Sub Corp. dated as of July 23, 2018
Merger – The proposedJanuary 1, 2019 merger of Azalea Merger Sub Corp. with and into FCB pursuant toand immediately thereafter, the terms and conditionsmerger of the Merger Agreement, with FCB continuing as the surviving entity. Immediately thereafter, FCB will merge with and into Synovus, with Synovus continuing as the surviving entity pursuant to the terms and conditions of the Merger Agreement
MPS – Merchant processing servicer(s)
NAICS – North American Industry Classification System
nm – not meaningful
NPA – Non-performing assets
NPL – Non-performing loans
NSF – Non-sufficient funds
OCI – Other comprehensive income
ORE – Other real estate
OTC– Over-the-counter
OTTI – Other-than-temporary impairment
Parent Company – Synovus Financial Corp.
PCD – Purchased Credit Deteriorated
PCI – Purchased Credit Impaired
ROU – Right-of-use
SBA – Small Business Administration
SEC – U.S. Securities and Exchange Commission
Securities Act – Securities Act of 1933, as amended
Series C Preferred Stock – Synovus' Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series C, $25 liquidation preference
Series D Preferred Stock – Synovus' Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series D, $25 liquidation preference

ii

Series E Preferred Stock – Synovus' Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series E, $25 liquidation preference
SOFR – Secured Overnight Financing Rate
Synovus – Synovus Financial Corp.
Synovus Bank – A Georgia state-chartered bank and wholly-owned subsidiary of Synovus, through which Synovus conducts its banking operations
Synovus' 20172018 Form 10-K – Synovus' Annual Report on Form 10-K for the year ended December 31, 20172018
Synovus Mortgage – Synovus Mortgage Corp., a wholly-owned subsidiary of Synovus Bank
Synovus Securities – Synovus Securities, Inc., a wholly-owned subsidiary of Synovus

ii
Table of Contents

Synovus Trust – Synovus Trust Company, N.A., a wholly-owned subsidiary of Synovus Bank
TARP Warrant – A warrant issued to the Treasury by Synovus to purchase up to 2,215,820 shares of Synovus common stock at a per share exercise price of $65.52 expiring on December 19, 2018, as was issued by Synovus to Treasury in 2008 in connection with the Capital Purchase Program, promulgated under the Emergency Stabilization Act of 2008
TDR – Troubled debt restructuring (as defined in ASC 310-40)
the Treasury – United States Department of the Treasury
VIEUPB – Variable interest entity, as defined in ASC 810-10Unpaid principal balance
Visa – The Visa U.S.A., Inc. card association or its affiliates, collectively
Visa Class A shares – Class A shares of common stock issued by Visa are publicly traded shares which are not subject to restrictions on sale
Visa Class B shares – Class B shares of common stock issued by Visa which are subject to restrictions with respect to sale until all of the Covered Litigation has been settled. Class B shares will be convertible into Visa Class A shares using a then-current conversion ratio upon the lifting of restrictions with respect to sale of Visa Class B shares
Visa Derivative – A derivative contract with the purchaser of Visa Class B shares which provides for settlements between the purchaser and Synovus based upon a change in the ratio for conversion of Visa Class B shares into Visa Class A shares
Warrant – A warrant issued to the Treasury by Synovus to purchase up to 2,215,820 shares of Synovus common stock at a per share exercise price of $65.52 expiring on December 19, 2018, as was issued by Synovus to Treasury in 2008 in connection with the Capital Purchase Program, promulgated under the Emergency Stabilization Act of 2008
WFB – World's Foremost Bank, a wholly-owned subsidiary of Cabela's Incorporated


iii
Table of Contents




PART I. FINANCIAL INFORMATION
ITEM 1. - FINANCIAL STATEMENTS
SYNOVUS FINANCIAL CORP.
CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands, except share and per share data)September 30, 2018 December 31, 2017September 30, 2019 December 31, 2018
ASSETS      
Cash and due from banks$436,540
 $397,848
$611,496
 $468,426
Interest-bearing funds with Federal Reserve Bank515,493
 460,928
480,913
 641,476
Interest earning deposits with banks34,470
 26,311
20,086
 19,841
Federal funds sold and securities purchased under resale agreements25,430
 47,846
69,975
 13,821
Total cash, cash equivalents, restricted cash, and restricted cash equivalents(1)
1,011,933
 932,933
1,182,470
 1,143,564
Investment securities available for sale, at fair value6,892,162
 3,991,632
Mortgage loans held for sale, at fair value37,276
 48,024
129,415
 37,129
Investment securities available for sale, at fair value3,883,574
 3,987,069
Loans, net of deferred fees and costs25,577,116
 24,787,464
Loans36,417,826
 25,946,573
Allowance for loan losses(251,450) (249,268)(265,013) (250,555)
Loans, net25,325,666
 24,538,196
36,152,813
 25,696,018
Cash surrender value of bank-owned life insurance551,061
 540,958
771,458
 554,134
Premises and equipment, net431,012
 426,813
487,053
 434,307
Goodwill57,315
 57,315
487,865
 57,315
Other intangible assets10,166
 11,254
58,572
 9,875
Deferred tax asset, net185,116
 165,788
Other assets582,001
 513,487
1,499,374
 745,218
Total assets$32,075,120
 $31,221,837
$47,661,182
 $32,669,192
LIABILITIES AND SHAREHOLDERS' EQUITY      
Liabilities      
Deposits:      
Non-interest-bearing deposits$7,628,736
 $7,686,339
$9,586,148
 $7,650,967
Interest-bearing deposits18,804,922
 18,461,561
27,846,922
 19,069,355
Total deposits26,433,658
 26,147,900
37,433,070
 26,720,322
Federal funds purchased and securities sold under repurchase agreements191,145
 161,190
197,419
 237,692
Other short-term borrowings478,540
 100,000
2,233,593
 650,000
Long-term debt1,656,909
 1,606,138
2,153,600
 1,657,157
Other liabilities274,795
 245,043
774,662
 270,419
Total liabilities29,035,047
 28,260,271
42,792,344
 29,535,590
Shareholders' Equity      
Series D Preferred Stock – no par value. Authorized 100,000,000 shares; 8,000,000 shares issued and outstanding at September 30, 2018195,138
 —
Series C Preferred Stock - no par value. 5,200,000 shares outstanding at December 31, 2017—
 125,980
Common stock - $1.00 par value. Authorized 342,857,143 shares; 143,093,317 issued at September 30, 2018 and 142,677,449 issued at December 31, 2017; 116,714,463 outstanding at September 30, 2018 and 118,897,295 outstanding at December 31, 2017143,093
 142,678
Preferred stock - no par value. Authorized 100,000,000 shares;
22,000,000 shares issued and outstanding at September 30, 2019, 8,000,000 shares issued and outstanding at December 31, 2018		536,550
 195,140
Common stock - $1.00 par value. Authorized 342,857,143 shares; 166,201,048 issued at September 30, 2019 and 143,300,449 issued at December 31, 2018; 147,594,000 outstanding at September 30, 2019 and 115,865,510 outstanding at December 31, 2018166,201
 143,300
Additional paid-in capital3,049,233
 3,043,129
3,801,158
 3,060,561
Treasury stock, at cost – 26,378,854 shares at September 30, 2018 and 23,780,154 shares at December 31, 2017(974,478) (839,674)
Accumulated other comprehensive loss(143,720) (54,754)
Treasury stock, at cost – 18,607,048 shares at September 30, 2019 and 27,434,939 shares at December 31, 2018(680,081) (1,014,746)
Accumulated other comprehensive income (loss), net75,933
 (94,420)
Retained earnings770,807
 544,207
969,077
 843,767
Total shareholders’ equity3,040,073
 2,961,566
4,868,838
 3,133,602
Total liabilities and shareholders' equity$32,075,120
 $31,221,837
$47,661,182
 $32,669,192
      
See accompanying notes to unaudited interim consolidated financial statements.
(1) See "Note 1 - Basis of Presentation" of this Report for information on Synovus' change in presentation of cash and cash equivalents.


SYNOVUS FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
Three Months Ended September 30, Nine Months Ended September 30,Three Months Ended September 30, Nine Months Ended September 30,
(in thousands, except per share data)2018 2017 2018 20172019 2018 2019 2018
Interest income:              
Loans, including fees$314,639
 $273,847
 $900,035
 $785,166
$463,437
 $314,639
 $1,368,769
 $900,035
Investment securities available for sale24,164
 20,014
 71,976
 60,112
53,761
 24,164
 156,493
 71,976
Mortgage loans held for sale578
 506
 1,514
 1,478
978
 578
 2,122
 1,514
Federal Reserve Bank balances2,376
 1,569
 6,944
 4,084
2,288
 2,376
 8,659
 6,944
Other earning assets2,185
 1,716
 6,442
 4,723
2,951
 2,185
 8,342
 6,442
Total interest income343,942
 297,652
 986,911
 855,563
523,415
 343,942
 1,544,385
 986,911
Interest expense:              
Deposits39,219
 20,798
 98,195
 55,874
94,082
 39,219
 274,466
 98,195
Federal funds purchased, securities sold under repurchase agreements, and other short-term borrowings940
 347
 2,744
 865
7,843
 940
 18,599
 2,744
Long-term debt12,164
 13,935
 35,492
 45,227
19,393
 12,164
 54,785
 35,492
Total interest expense52,323
 35,080
 136,431
 101,966
121,318
 52,323
 347,850
 136,431
Net interest income291,619
 262,572
 850,480
 753,597
402,097
 291,619
 1,196,535
 850,480
Provision for loan losses14,982
 39,686
 39,548
 58,620
27,562
 14,982
 63,250
 39,548
Net interest income after provision for loan losses276,637
 222,886
 810,932
 694,977
374,535
 276,637
 1,133,285
 810,932
Non-interest income:              
Service charges on deposit accounts20,582
 20,678
 60,521
 61,048
22,952
 20,582
 65,805
 60,521
Fiduciary and asset management fees13,462
 12,615
 40,881
 37,290
14,686
 13,462
 42,743
 40,881
Card fees10,608
 9,729
 31,640
 29,614
12,297
 10,608
 34,334
 31,640
Brokerage revenue9,329
 7,511
 26,924
 21,947
11,071
 9,041
 30,502
 26,125
Mortgage banking income5,290
 5,603
 15,177
 17,151
10,351
 5,290
 23,313
 15,177
Capital markets income7,396
 1,155
 21,557
 3,826
Income from bank-owned life insurance3,771
 3,232
 11,720
 9,560
5,139
 3,771
 15,605
 11,720
Cabela's Transaction Fee—
 75,000
 —
 75,000
Investment securities losses, net—
 (7,956) (1,296) (289)(3,731) —
 (5,502) (1,296)
Other fee income4,510
 5,094
 14,387
 16,127
Other non-interest income4,116
 3,929
 12,147
 8,526
8,599
 7,759
 29,588
 23,507
Total non-interest income71,668
 135,435
 212,101
 275,974
88,760
 71,668
 257,945
 212,101
Non-interest expense:              
Salaries and other personnel expense114,341
 109,675
 339,924
 322,079
142,516
 114,341
 424,952
 339,924
Net occupancy and equipment expense32,088
 30,573
 96,222
 89,837
41,017
 32,088
 119,262
 96,222
Third-party processing expense14,810
 13,659
 43,822
 39,882
18,528
 14,810
 55,403
 43,822
Professional fees9,719
 6,298
 25,379
 18,087
FDIC insurance and other regulatory fees6,430
 7,078
 19,765
 20,723
7,242
 6,430
 21,872
 19,765
Professional fees6,298
 7,141
 18,087
 20,048
Advertising expense3,735
 3,610
 14,046
 14,868
5,950
 3,735
 16,996
 14,046
Foreclosed real estate expense, net360
 7,265
 1,110
 10,847
Amortization of intangibles2,901
 292
 8,702
 875
Merger-related expense353
 6,684
 57,493
 6,684
Earnout liability adjustments11,652
 2,059
 11,652
 3,766
10,457
 11,652
 10,457
 11,652
Merger-related expense6,684
 23
 6,684
 110
Restructuring charges, net21
 519
 (191) 7,043
Loss on early extinguishment of debt, net4,592
 —
 4,592
 —
Other operating expenses23,878
 24,044
 68,410
 65,577
33,035
 23,967
 87,739
 68,454
Total non-interest expense220,297
 205,646
 619,531
 594,780
276,310
 220,297
 832,847
 619,531
Income before income taxes128,008
 152,675
 403,502
 376,171
186,985
 128,008
 558,383
 403,502
Income tax expense18,949
 54,668
 80,095
 130,303
51,259
 18,949
 146,287
 80,095
Net income109,059
 98,007
 323,407
 245,868
135,726
 109,059
 412,096
 323,407
Less: Preferred stock dividends and redemption charge9,729
 2,559
 14,848
 7,678
8,291
 9,729
 14,591
 14,848
Net income available to common shareholders$99,330
 $95,448
 $308,559
 $238,190
$127,435
 $99,330
 $397,505
 $308,559
Net income per common share, basic$0.85
 $0.79
 $2.61
 $1.96
$0.84
 $0.85
 $2.53
 $2.61
Net income per common share, diluted0.84
 0.78
 2.60
 1.94
0.83
 0.84
 2.51
 2.60
Weighted average common shares outstanding, basic117,241
 120,900
 118,096
 121,796
152,238
 117,241
 156,819
 118,096
Weighted average common shares outstanding, diluted118,095
 121,814
 118,847
 122,628
154,043
 118,095
 158,595
 118,847
              
See accompanying notes to unaudited interim consolidated financial statements.


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


 Three Months Ended September 30,
 2018 2017
(in thousands)Before-tax Amount Tax (Expense) Benefit Net of Tax Amount Before-tax Amount Tax (Expense) Benefit Net of Tax Amount
Net income$128,008
 $(18,949) $109,059
 $152,675
 $(54,668) $98,007
Net unrealized (losses) gains on investment securities available for sale:           
Reclassification adjustment for net losses realized in net income—
 —
 —
 7,956
 (3,063) 4,893
Net unrealized (losses) gains arising during the period(24,210) 6,270
 (17,940) 5,465
 (2,106) 3,359
Net unrealized (losses) gains(24,210) 6,270
 (17,940) 13,421
 (5,169) 8,252
Post-retirement unfunded health benefit:           
Reclassification adjustment for gains realized in net income(35) 9
 (26) (34) 13
 (21)
Actuarial (losses) gains arising during the period(46) 12
 (34) 61
 (23) 38
Net increase (decrease) in unrealized gains, net(81) 21
 (60) 27
 (10) 17
Other comprehensive (loss) income$(24,291) $6,291
 $(18,000) $13,448
 $(5,179) $8,269
Comprehensive income    $91,059
     $106,276
            
 Nine Months Ended September 30,
 2018 2017
(in thousands)Before-tax Amount Tax (Expense) Benefit Net of Tax Amount Before-tax Amount Tax (Expense) Benefit Net of Tax Amount
Net income$403,502
 $(80,095) $323,407
 $376,171
 $(130,303) $245,868
Net change related to cash flow hedges:           
  Reclassification adjustment for losses realized in net income—
 —
 —
 130
 (50) 80
Net unrealized (losses) gains on investment securities available for sale:           
Reclassification adjustment for net losses realized in net income1,296
 (336) 960
 289
 (111) 178
Net unrealized (losses) gains arising during the period(111,131) 28,782
 (82,349) 25,715
 (9,903) 15,812
Net unrealized (losses) gains(109,835) 28,446
 (81,389) 26,004
 (10,014) 15,990
Post-retirement unfunded health benefit:           
Reclassification adjustment for gains realized in net income(103) 31
 (72) (74) 29
 (45)
Actuarial (losses) gains arising during the period(46) 12
 (34) 61
 (23) 38
Net increase (decrease) in unrealized gains, net(149) 43
 (106) (13) 6
 (7)
Other comprehensive (loss) income$(109,984) $28,489
 $(81,495) $26,121
 $(10,058) $16,063
Comprehensive income    $241,912
     $261,931
            
 Three Months Ended September 30,
 2019 2018
(in thousands)Before-tax Amount Tax Effect Net of Tax Amount Before-tax Amount Tax Effect Net of Tax Amount
Net income$186,985
 $(51,259) $135,726
 $128,008
 $(18,949) $109,059
Net unrealized gains (losses) on investment securities available for sale:           
Reclassification adjustment for net losses realized in net income3,731
 (966) 2,765
 —
 —
 —
Net unrealized holding gains (losses) arising during the period33,919
 (8,786) 25,133
 (24,210) 6,270
 (17,940)
Net unrealized gains (losses)37,650
 (9,752) 27,898
 (24,210) 6,270
 (17,940)
Unrealized gains (losses) on derivative instruments designated as cash flow hedges:           
Unrealized holding gains (losses), net arising during the period(1,182) 306
 (876) —
 —
 —
Post-retirement unfunded health benefit:           
Reclassification adjustment for gains realized in net income—
 —
 —
 (35) 9
 (26)
Actuarial losses arising during the period(510) 132
 (378) (46) 12
 (34)
Net decrease in unrealized gains(510) 132
 (378) (81) 21
 (60)
Other comprehensive income (loss)$35,958
 $(9,314) $26,644
 $(24,291) $6,291
 $(18,000)
Comprehensive income    $162,370
     $91,059
            
 Nine Months Ended September 30,
 2019 2018
(in thousands)Before-tax Amount Tax Effect Net of Tax Amount Before-tax Amount Tax Effect Net of Tax Amount
Net income$558,383
 $(146,287) $412,096
 $403,502
 $(80,095) $323,407
Net unrealized gains (losses) on investment securities available for sale:           
Reclassification adjustment for net losses realized in net income5,502
 (1,425) 4,077
 1,296
 (336) 960
Net unrealized holding gains (losses) arising during the period226,160
 (58,574) 167,586
 (111,131) 28,782
 (82,349)
Net unrealized gains (losses)231,662
 (59,999) 171,663
 (109,835) 28,446
 (81,389)
Unrealized gains (losses) on derivative instruments designated as cash flow hedges:           
Unrealized holding gains (losses), net arising during the period(1,182) 306
 (876) —
 —
 —
Post-retirement unfunded health benefit:           
Reclassification adjustment for net gains realized in net income(70) 14
 (56) (103) 31
 (72)
Actuarial losses arising during the period(510) 132
 (378) (46) 12
 (34)
Net decrease in unrealized gains(580) 146
 (434) (149) 43
 (106)
Other comprehensive income (loss)$229,900
 $(59,547) $170,353
 $(109,984) $28,489
 $(81,495)
Comprehensive income    $582,449
     $241,912
            
See accompanying notes to unaudited interim consolidated financial statements.








SYNOVUS FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(unaudited)
(in thousands, except per share data)Series D Preferred Stock Series C Preferred Stock Common
Stock		 Additional
Paid-in
Capital		 Treasury
Stock		 Accumulated
Other
Comprehensive
Income (Loss)		 Retained Earnings Total
Balance at December 31, 2016$—
 $125,980
 $142,026
 $3,028,405
 $(664,595) $(55,659) $351,767
 $2,927,924
Net income—
 —
 —
 —
 —
 —
 245,868
 245,868
Other comprehensive income, net of income taxes—
 —
 —
 —
 —
 16,063
 —
 16,063
Cash dividends declared on common stock - $0.45 per share—
 —
 —
 —
 —
 —
 (54,671) (54,671)
Cash dividends paid on Series C Preferred Stock—
 —
 —
 —
 —
 —
 (7,678) (7,678)
Repurchases of common stock—
 —
 —
 —
 (135,914) —
 —
 (135,914)
Restricted share unit activity—
 —
 335
 (8,007) —
 —
 (290) (7,962)
Stock options exercised—
 —
 164
 2,708
 —
 —
 —
 2,872
Share-based compensation expense—
 —
 —
 10,576
 —
 —
 —
 10,576
Balance at September 30, 2017$—
 $125,980
 $142,525
 $3,033,682
 $(800,509) $(39,596) $534,996
 $2,997,078
                
Balance at December 31, 2017$—
 $125,980
 $142,678
 $3,043,129
 $(839,674) $(54,754) $544,207
 $2,961,566
Cumulative-effect adjustment from adoption of ASU 2014-09—
 —
 —
 —
 —
 —
 (685) (685)
Reclassification from adoption of ASU 2018-02—
 —
 —
 —
 —
 (7,588) 7,588
 —
Cumulative-effect adjustment from adoption of ASU 2016-01—
 —
 —
 —
 —
 117
 (117) —
Net income—
 —
 —
 —
 —
 —
 323,407
 323,407
Other comprehensive loss, net of income taxes—
 —
 —
 —
 —
 (81,495) —
 (81,495)
Cash dividends declared on common stock - $0.75 per share—
 —
 —
 —
 —
 —
 (88,396) (88,396)
Cash dividends paid on Series C Preferred Stock—
 —
 —
 —
 —
 —
 (7,678) (7,678)
Redemption of Series C Preferred Stock—
 (125,980) —
 —
 —
 —
 (4,020) (130,000)
Issuance of Series D Preferred Stock, net of issuance costs195,138
 —
 —
 —
 —
 —
 —
 195,138
Cash dividends paid on Series D Preferred Stock—
 —
 —
 —
 —
 —
 (3,150) (3,150)
Repurchases of common stock—
 —
 —
 —
 (134,804) —
 —
 (134,804)
Restricted share unit vesting and taxes paid related to net share settlement—
 —
 293
 (8,355) —
 —
 (349) (8,411)
Stock options exercised—
 —
 122
 1,955
 —
 —
 —
 2,077
Share-based compensation expense—
 —
 —
 12,504
 —
 —
 —
 12,504
Balance at September 30, 2018$195,138
 $—
 $143,093
 $3,049,233
 $(974,478) $(143,720) $770,807
 $3,040,073
                
(in thousands, except per share data)Preferred Stock Common
Stock		 Additional
Paid-in
Capital		 Treasury
Stock		 Accumulated
Other
Comprehensive
Income (Loss)		 Retained Earnings Total
Balance, July 1, 2019$195,140
 $166,080
 $3,801,748
 $(344,901) $49,289
 $886,460
 $4,753,816
Net income—
 —
 —
 —
 —
 135,726
 135,726
Other comprehensive income (loss), net of income taxes—
 —
 —
 —
 26,644
 —
 26,644
Cash dividends declared on common stock - $0.30 per share—
 —
 —
 —
 —
 (44,476) (44,476)
Cash dividends declared on preferred stock(1)
—
 —
 —
 —
 —
 (8,291) (8,291)
Issuance of Series E Preferred Stock, net of issuance costs341,410
 —
 —
 —
 —
 —
 341,410
Repurchases of common stock including costs to repurchase—
 —
 —
 (343,690) —
 —
 (343,690)
Restricted share unit vesting and taxes paid related to net share settlement—
 9
 219
 —
 —
 (326) (98)
Stock options exercised—
 112
 2,514
 —
 —
 —
 2,626
Warrants exercised with net settlement and common stock reissued—
 —
 (8,494) 8,510
 —
 (16) —
Share-based compensation expense—
 —
 5,171
 —
 —
 —
 5,171
Balance, September 30, 2019$536,550
 $166,201
 $3,801,158
 $(680,081) $75,933
 $969,077
 $4,868,838
              
Balance, July 1, 2018$321,118
 $143,078
 $3,045,014
 $(916,484) $(125,720) $700,688
 $3,167,694
Net income—
 —
 —
 —
 —
 109,059
 109,059
Other comprehensive income (loss), net of income taxes—
 —
 —
 —
 (18,000) —
 (18,000)
Cash dividends declared on common stock - $0.25 per share—
 —
 —
 —
 —
 (29,211) (29,211)
Cash dividends declared on preferred stock(1)
—
 —
 —
 —
 —
 (5,709) (5,709)
Redemption of Series C Preferred Stock(125,980) —
 —
 —
 —
 (4,020) (130,000)
Repurchases of common stock including costs to repurchase—
 —
 —
 (57,994) —
 —
 (57,994)
Restricted share unit vesting and taxes paid related to net share settlement—
 4
 (135) —
 —
 —
 (131)
Stock options exercised—
 11
 170
 —
 —
 —
 181
Share-based compensation expense—
 —
 4,184
 —
 —
 —
 4,184
Balance, September 30, 2018$195,138
 $143,093
 $3,049,233
 $(974,478) $(143,720) $770,807
 $3,040,073
              
(1) For the three months ended September 30, 2019, dividends per share were $0.39 and $0.37 for Series D and Series E Preferred Stock, respectively. For the three months ended September 30, 2018, dividends per share were $0.49 and $0.39 for Series C and Series D Preferred Stock, respectively.

(in thousands, except per share data)Preferred Stock Common
Stock		 Additional
Paid-in
Capital		 Treasury
Stock		 Accumulated
Other
Comprehensive
Income (Loss)		 Retained Earnings Total
Balance, December 31, 2018$195,140
 $143,300
 $3,060,561
 $(1,014,746) $(94,420) $843,767
 $3,133,602
Cumulative-effect adjustment from adoption of ASU 2016-02—
 —
 —
 —
 —
 4,270
 4,270
Net income—
 —
 —
 —
 —
 412,096
 412,096
Other comprehensive income (loss), net of income taxes—
 —
 —
 —
 170,353
 —
 170,353
FCB Acquisition:             
Issuance of common stock, net of issuance costs—
 22,043
 682,103
 —
 —
 —
 704,146
Common stock reissued—
 —
 —
 1,014,746
 —
 (137,176) 877,570
Fair value of exchanged equity awards and warrants attributed to purchase price—
 —
 43,972
 —
 —
 —
 43,972
Cash dividends declared on common stock - $0.90 per share—
 —
 —
 —
 —
 (138,947) (138,947)
Cash dividends declared on preferred stock(1)
—
 —
 —
 —
 —
 (14,591) (14,591)
Issuance of Series E Preferred Stock, net of issuance costs341,410
 —
 —
 —
 —
 —
 341,410
Repurchases of common stock including costs to repurchase—
 —
 —
 (688,860) —
 —
 (688,860)
Restricted share unit vesting and taxes paid related to net share settlement—
 294
 (8,709) —
 —
 (326) (8,741)
Stock options exercised—
 564
 10,598
 —
 —
 —
 11,162
Warrants exercised with net settlement and common stock reissued—
 —
 (8,763) 8,779
 —
 (16) —
Share-based compensation expense—
 —
 21,396
 —
 —
 —
 21,396
Balance, September 30, 2019$536,550
 $166,201
 $3,801,158
 $(680,081) $75,933
 $969,077
 $4,868,838
              
Balance, December 31, 2017$125,980
 $142,678
 $3,043,129
 $(839,674) $(54,754) $544,207
 $2,961,566
Cumulative-effect adjustment from adoption of ASU 2014-09—
 —
 —
 —
 —
 (685) (685)
Reclassification from adoption of ASU 2018-02—
 —
 —
 —
 (7,588) 7,588
 —
Cumulative-effect adjustment from adoption of ASU 2016-01—
 —
 —
 —
 117
 (117) —
Net income—
 —
 —
 —
 —
 323,407
 323,407
Other comprehensive income (loss), net of income taxes—
 —
 —
 —
 (81,495) —
 (81,495)
Cash dividends declared on common stock - $0.75 per share—
 —
 —
 —
 —
 (88,396) (88,396)
Cash dividends declared on preferred stock(1)
—
 —
 —
 —
 —
 (10,828) (10,828)
Redemption of Series C Preferred Stock(125,980) —
 —
 —
 —
 (4,020) (130,000)
Issuance of Series D Preferred Stock, net of issuance costs195,138
 —
 —
 —
 —
 —
 195,138
Repurchases of common stock including costs to repurchase—
 —
 —
 (134,804) —
 —
 (134,804)
Restricted share unit vesting and taxes paid related to net share settlement—
 293
 (8,355) —
 —
 (349) (8,411)
Stock options exercised—
 122
 1,955
 —
 —
 —
 2,077
Share-based compensation expense—
 —
 12,504
 —
 —
 —
 12,504
Balance, September 30, 2018$195,138
 $143,093
 $3,049,233
 $(974,478) $(143,720) $770,807
 $3,040,073
              
(1) For the nine months ended September 30, 2019, dividends per share were $1.17 and $0.37 for Series D and Series E Preferred Stock, respectively. For the nine months ended September 30, 2018, dividends per share were $1.47 and $0.39 for Series C and Series D Preferred Stock, respectively.
See accompanying notes to unaudited interim consolidated financial statements.





SYNOVUS FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
 Nine Months Ended September 30,
(in thousands)
2019(1)
 2018
Operating Activities   
Net income$412,096
 $323,407
Adjustments to reconcile net income to net cash provided by operating activities:   
Provision for loan losses63,250
 39,548
Depreciation, amortization, and accretion, net8,969
 41,716
Deferred income tax expense42,594
 9,360
Originations of mortgage loans held for sale(603,086) (429,531)
Proceeds from sales of mortgage loans held for sale527,354
 449,651
Gain on sales of mortgage loans held for sale, net(15,453) (9,886)
Increase in other assets(135,448) (64,765)
  Increase in other liabilities32,345
 17,690
Investment securities losses, net5,502
 1,296
Loss on early extinguishment of debt, net4,592
 —
Share-based compensation expense21,396
 12,504
Net cash provided by operating activities364,111
 390,990
Investing Activities   
Net cash received in business combination, net of cash paid201,100
 —
Proceeds from maturities and principal collections of investment securities available for sale780,538
 457,151
Proceeds from sales of investment securities available for sale2,002,137
 35,066
Purchases of investment securities available for sale(3,160,139) (510,797)
Proceeds from sales of loans71,530
 15,454
Proceeds from sales of other real estate and other assets15,859
 8,676
Net increase in loans excluding loans acquired in business combination(1,278,772) (842,383)
Net (purchases) redemptions of Federal Home Loan Bank stock(75,735) (26,343)
Net (purchases) redemptions of Federal Reserve Bank stock(45,856) 8,500
Proceeds from settlements of bank-owned life insurance policies15,208
 1,783
Net increase in premises and equipment(40,195) (39,034)
Net cash used in investing activities(1,514,325) (891,927)
Financing Activities   
Net (decrease) increase in deposits(185,362) 285,342
Net (decrease) increase in federal funds purchased and securities sold under repurchase agreements(69,412) 29,955
Net change in other short-term borrowings1,582,000
 378,540
Repayments and redemption of long-term debt(157,226) (2,230,052)
Proceeds from issuance of long-term debt, net497,045
 2,280,000
Dividends paid to common shareholders(123,446) (77,020)
Dividends paid to preferred shareholders(9,450) (10,828)
Proceeds from issuance of preferred stock341,410
 195,138
Redemption of preferred stock—
 (130,000)
Stock options and warrants exercised11,162
 2,077
Repurchase of common stock(688,860) (134,804)
Taxes paid related to net share settlement of equity awards(8,741) (8,411)
Net cash provided by financing activities1,189,120
 579,937
Increase in cash and cash equivalents including restricted cash38,906
 79,000
Cash, cash equivalents, restricted cash, and restricted cash equivalents at beginning of period1,143,564
 932,933
Cash, cash equivalents, restricted cash, and restricted cash equivalents at end of period$1,182,470
 $1,011,933
    
Supplemental Disclosures:   
Income taxes paid$88,480
 $40,340
Interest paid350,388
 122,182
Non-cash Activities   
Common stock issued, treasury stock reissued, equity awards/warrants exchanged to acquire FCB1,625,688
 —
Premises and equipment transferred to other assets held for sale—
 785
Loans foreclosed and transferred to other real estate14,084
 11,280
Subtopic 825-10 equity investment securities available for sale transferred to other assets—
 3,162
   Dividends declared on common stock during the period but paid after period-end44,476
 29,211
   Dividends declared on preferred stock during the period but paid after period-end5,141
 —

 Nine Months Ended September 30,
(in thousands)2018 2017
Operating Activities   
Net income$323,407
 $245,868
Adjustments to reconcile net income to net cash provided by operating activities:   
Provision for loan losses39,548
 58,620
Depreciation, amortization, and accretion, net41,716
 44,786
Deferred income tax expense9,360
 114,205
Originations of mortgage loans held for sale(429,531) (490,202)
Proceeds from sales of mortgage loans held for sale449,651
 500,786
Gain on sales of mortgage loans held for sale, net(9,886) (10,587)
Increase in other assets(82,608) (6,678)
Increase in other liabilities17,690
 17,718
Investment securities losses, net1,296
 289
Share-based compensation expense12,504
 10,576
Net cash provided by operating activities373,147
 485,381
    
Investing Activities   
Proceeds from maturities and principal collections of investment securities available for sale457,151
 483,307
Proceeds from sales of investment securities available for sale35,066
 812,293
Purchases of investment securities available for sale(510,797) (1,195,302)
Proceeds from sales of loans15,454
 26,386
Proceeds from sales of other real estate and other assets8,676
 11,517
Net increase in loans including purchases of loans(842,383) (755,231)
Purchases of bank-owned life insurance policies, net of settlements1,783
 (150,000)
Net increase in premises and equipment(39,034) (34,717)
Net cash used in investing activities(874,084) (801,747)
    
Financing Activities   
Net (decrease) increase in demand and savings deposits(152,313) 335,438
Net increase in certificates of deposit437,655
 1,202,926
Net increase (decrease) in federal funds purchased and securities sold under repurchase agreements29,955
 (18,160)
Net change in other short-term borrowings378,540
 —
Repayments and redemption of long-term debt(2,230,052) (1,653,613)
Proceeds from issuance of long-term debt2,280,000
 1,375,000
Dividends paid to common shareholders(77,020) (36,681)
Dividends paid to preferred shareholders(10,828) (7,678)
Proceeds from issuance of Series D Preferred Stock195,138
 —
Redemption of Series C Preferred Stock(130,000) —
Stock options exercised2,077
 2,872
Repurchase of common stock(134,804) (135,914)
Taxes paid related to net share settlement of equity awards(8,411) (7,962)
Net cash provided by financing activities579,937
 1,056,228
Increase in cash and cash equivalents including restricted cash79,000
 739,862
Cash, cash equivalents, restricted cash, and restricted cash equivalents at beginning of period(1)
932,933
 999,045
Cash, cash equivalents, restricted cash, and restricted cash equivalents at end of period(1)
$1,011,933
 $1,738,907
    
Supplemental Cash Flow Information   
Cash paid during the period for:   
Income tax payments, net$40,340
 $11,195
Interest paid122,182
 101,632
Non-cash Activities   
Premises and equipment transferred to/(from) other assets785
 (3,387)
Loans foreclosed and transferred to other real estate11,280
 6,571
Loans transferred to/(from) other loans held for sale at fair value4,088
 77,774
   Topic 606 cumulative-effect adjustment to opening balance of retained earnings(685) —
   Equity investment securities available for sale transferred to other assets at fair value3,162
 —
   Securities purchased during the period but settled after period-end—
 193,286
   Dividends declared on common stock during the period but paid after period-end29,211
 17,990
    
(1) Where applicable, changes for balances as of September 30, 2019, compared to December 31, 2018, exclude amounts acquired on the Acquisition Date.
See accompanying notes to unaudited interim consolidated financial statements.
(1) See "Note 1 - Basis of Presentation" of this Report for information on Synovus' change in presentation of cash and cash equivalents.


Notes to Unaudited Interim Consolidated Financial Statements
Note 1 - Basis of Presentation
General
The accompanying unaudited interim consolidated financial statements of Synovus Financial Corp. include the accounts of the Parent Company and its consolidated subsidiaries. Synovus Financial Corp. is a financial services company based in Columbus, Georgia. Through its wholly-owned subsidiary, Synovus Bank, a Georgia state-chartered bank that is a member of the Federal Reserve System, the companyCompany provides commercial and retail banking in addition to a full suite of specialized products and services including private banking, treasury management, wealth management, premium finance, asset-based lending, structured lending, and international banking. Synovus Bank is positioned in markets in the Southeast, with 249298 branches and 334386 ATMs in Alabama, Florida, Georgia, Alabama, South Carolina, Florida, and Tennessee.
The accompanying unaudited interim consolidated financial statements have been prepared in accordance with the instructions to the SEC Form 10-Q and Article 10 of Regulation S-X; therefore, they do not include all information and footnotes necessary for a fair presentation of financial position, results of operations, comprehensive income, and cash flows in conformity with GAAP. All adjustments consisting of normally recurring accruals that, in the opinion of management, are necessary for a fair presentation of the consolidated financial position and results of operations for the periods covered by this Report have been included. The accompanying unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes appearing in Synovus' 20172018 Form 10-K.
Reclassifications
In connection with the adoption of ASU 2016-18, Statement of Cash Flows-Restricted Cash, Synovus changed its presentation of cash and cash equivalents, effective January 1, 2018, to include cash and due from banks as well as interest-bearing funds with Federal Reserve Bank, interest earning deposits with banks, and federal funds sold and securities purchased under resale agreements, which are inclusive of any restricted cash and restricted cash equivalents. Prior to 2018, cash and cash equivalents only included cash and due from banks. Prior periods have been revised to maintain comparability. Excluding the aforementioned presentation change and the recently adopted accounting standards listed below, there have been no significant changes to the accounting policies as disclosed in Synovus' 2017 Form 10-K.
Prior periods' consolidated financial statements are reclassified whenever necessary to conform to the current periods' presentation.
Use of Estimates in the Preparation of Financial Statements
In preparing the unaudited interim consolidated financial statements in accordance with GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the respective consolidated balance sheets and the reported amounts of revenues and expenses for the periods presented. Actual results could differ significantly from those estimates.
Material estimates that are particularly susceptible to significant change relate to the determination of the allowanceALL; estimates of fair value; income taxes; and contingent liabilities including legal matters, among others.
Purchased loans
Purchased loans are recorded at fair value in accordance with ASC Topic 820, Fair Value Measurement, consistent with the exit price concept on the date of acquisition. Credit risk assumptions and resulting credit discounts are included in the determination of fair value; therefore, no ALL is recorded at the acquisition date. 
Pursuant to an AICPA letter dated December 18, 2009, the AICPA summarized the SEC staff's view regarding the accounting in subsequent periods for discount accretion associated with loan lossesreceivables acquired in a business combination or asset purchase. Regarding the accounting for such loan receivables, in the absence of further standard setting, the AICPA understands the SEC staff would not object to an accounting policy based on contractual cash flows (ASC Topic 310-20, Nonrefundable Fees and Other Costs) or an accounting policy based on expected cash flows (ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality). Synovus analogizes to ASC Topic 310-30 to account for the fair value discount.
Purchased loans are evaluated upon acquisition as following the ASC 310-30 approach or ASC 310-20. Loans meeting the scope exception of ASC 310-30 (e.g. loans with revolving components) are not permitted to be analogized and will be accounted for in accordance with ASC 310-20.  For ASC 310-30 loans, expected cash flows at the acquisition date in excess of the fair value of investment securities.loans are recorded as interest income over the life of the loans using a level yield method if the timing and amount of the future cash flows is reasonably estimable. Subsequent to the acquisition date, increases in cash flows over those expected at the acquisition date are recognized prospectively as interest income. Decreases in expected cash flows due to credit deterioration are recognized by recording an ALL. Loan removals from pools due to pay-off or charge-off are removed at their carrying amount.  The difference between the carrying amount and the amount received to satisfy the loan is recorded in interest income. For ASC 310-20 loans, the difference between the fair value and UPB of the loan at the acquisition date is amortized or accreted to interest income over the contractual life of the loans using the effective interest method. In the event of prepayment, the remaining unamortized amount is recognized in interest income in the quarter of prepayment.
Recently Adopted Accounting StandardsDue to the significant difference in accounting for ASC 310-30 loans, Synovus believes inclusion of these loans in certain asset quality ratios that reflect NPAs in the numerator or denominator (or both) results in significant distortion to these ratios. In addition, because loan level charge-offs related to ASC 310-30 loans are not recognized in the financial statements until the cumulative amounts exceed the original loss projections on a pool basis, the net charge-off ratio is inconsistent with the net charge-off ratio for other loan portfolios. The inclusion of ASC 310-30 loans in certain asset quality ratios could result in a lack of
ASU 2014-09,
comparability across quarters or years, and could impact comparability with other portfolios that were not impacted by ASC 310-30 accounting. Synovus believes that presenting certain loan and asset quality disclosures separately for ASC 310-20 and ASC 310-30 loans, and/or excluding ASC 310-30 loans, where appropriate and indicated within each table, provides better perspective into underlying trends related to the quality of its loan portfolio.
Non-interest Income - Revenue from Contracts with Customers (Topic 606)issued bywithin the FASB in May 2014, and all subsequent ASUsscope of ASC Topic 606
Synovus' contracts with customers generally do not contain terms that modifiedrequire significant judgment to determine the amount of revenue to recognize. Synovus' policies for recognizing non-interest income within the scope of ASC Topic 606. ASU 2014-09 implements a common revenue standard that establishes principles for reporting information about606, including the nature amount,and timing of such revenue streams, are included below.
Service Charges on Deposit Accounts: Revenue from service charges on deposit accounts is earned through cash management, wire transfer, and uncertainty of revenue and cash flows arising from contracts to provide goods orother deposit-related services, to customers. The core principle of the revenue model is that a company will recognize revenue when it transfers control of goods or services to customers at an amount that reflects the consideration to which it expects to be entitled in exchange for those goods or services. The scope of the guidance explicitly excludes net interest income as well as manyoverdraft, NSF, account management and other revenuesdeposit-related fees. Revenue is recognized for these services either over time, corresponding with deposit accounts' monthly cycle, or at a point in time for transaction-related services and fees. Payment for service charges on deposit accounts is primarily received immediately or in the following month through a direct charge to customers' accounts.
Fiduciary and Asset Management Fees: Fiduciary and asset management fees are primarily comprised of fees earned from financialthe management and administration of trusts and other customer assets. Management reviewed its revenue streamsSynovus' performance obligation is generally satisfied over time and contracts with customersthe resulting fees are recognized monthly, based upon the month-end market value of the assets under management and didthe applicable fee rate. Payment is generally received a few days after month-end through a direct charge to customers' accounts. Synovus does not identify material changes to the timing or amountearn performance-based incentives.
Card Fees: Card fees consist primarily of revenue recognition. Synovus adopted these ASUs on the required effective date of January 1, 2018 utilizing the modified retrospective method of adoption.  The adoption resulted in a cumulative effect adjustment of ($685) thousand to the opening balance of retained earnings.  Beginning January 1, 2018, in connection with the adoption of this standard, Synovus began includinginterchange fees from consumer credit and debit cards processed by card association networks, as well as merchant discounts, and other card-related services. Interchange rates are generally set by the credit card associations and based on purchase volumes and other factors. Interchange fees and merchant discounts are recognized concurrently with the delivery of service on a daily basis as transactions occur. Payment is typically received immediately or in cardthe following month. Card fees are reported net of certain associated expense items including loyalty program expenses and network expenses.
Brokerage Revenue: Brokerage revenue consists primarily of commissions. Additionally, brokerage revenue includes advisory fees earned from the management of customer assets. Transactional revenues are based on the size and number of transactions executed at the client's direction and are generally recognized on the trade date with payment received on the settlement date. Advisory fees for brokerage services are recognized and collected monthly and are based upon the month-end market value of the assets under management at a rate predetermined in the contract.
Capital Markets Income: Investment banking income, a component of capital markets income, is comprised primarily of securities underwriting fees and remarketing fees. ForSynovus assists corporate clients in raising capital by offering equity or debt securities to potential investors. The transaction fees are based on a percentage of the total transaction amount. The underwriting and remarketing fees are recognized on the trade date when the securities are sold to third-party investors with payment received on the settlement date.
Insurance Revenue (included in other non-interest income on the consolidated statements of income): Insurance revenue primarily consists of commissions received on annuity and life product sales. The commissions are recognized as revenue when the customer executes an insurance policy with the insurance carrier. In some cases, Synovus receives payment of trailing commissions each year when the customer pays its annual premium.
Other Fees (included in other non-interest income on the consolidated statements of income): Other fees within the scope of ASC Topic 606 primarily consist of revenues generated from safe deposit box rental fees and lockbox services. Fees are recognized over time, on a monthly basis, as Synovus' performance obligation for services is satisfied. Payment is received upfront for safe deposit box rentals and in the following month for lockbox services.
Recently Adopted Accounting Standards
ASU 2016-02, Leases (ASC 842). Synovus adopted ASC 842 prospectively as of January 1, 2019 for existing leasing arrangements. As such, financial information was not updated and the disclosures required under the new standard are not presented for dates and periods prior to January 1, 2019.Refer to the 2018 these10-K for lease disclosures surrounding prior period information reported under ASC 840, Leases. For leases that commenced prior to the effective date of ASC 842, Synovus elected the package of practical expedients not to reassess (a) whether existing contracts contain leases, (b) lease classification for existing leases, and (c) initial direct cost for any existing leases as well as the short-term lease recognition exemption for all leases that qualify. Additionally, Synovus did not elect the practical expedient to combine lease and non-lease components for all of our leases.
Adoption of the new standard resulted in the recording of ROU assets and lease liabilities of $381.1 million and $391.0 million, respectively, as of January 1, 2019. These amounts were based on the present value of the remaining rental payments for existing leases and include consideration for renewal and termination options available that we were reasonably certain of exercising. The difference between the asset and liability balance is primarily the result of lease liabilities that existed prior to adoption of the new guidance. The adoption of the standard also resulted in a cumulative-effect adjustment, net of income taxes, to the beginning

balance of retained earnings of $4.3 million ($3.9 million of which consisted of deferred gains associated with sale-leaseback transactions that previously presenteddid not qualify for recognition). The ROU assets are included in other non-interestassets (other than $4.0 million of finance leases included in premises and equipment) on the consolidated balance sheet and the lease liabilities are included in other liabilities. Adoption of the standard did not materially impact our consolidated statements of income and have been reclassified for comparability. See "Part I - Item 1. Financial Statements and Supplementary Data - Note 12 - Non-interest Income" for the required disclosureshad no impact on cash flows.
Synovus determines if an arrangement is a lease at inception in accordance with this ASU.ASC 842-10-15-3 and classifies leases as either operating or financing from a lessee perspective and operating or direct financing and sales-type from a lessor perspective based on criteria that are largely similar to those applied under ASC 840, Leases, but without explicit bright lines.

ROU assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. The determination of future minimum lease payments includes consideration for extension or termination options when it is reasonably certain Synovus will exercise that option as well as rent escalation clauses (including market or index-based escalations) and abatements, capital improvement funding or other lease concessions. As most leases in Synovus' portfolio do not provide an implicit rate, Synovus utilizes a collateralized incremental borrowing rate, referenced to the Federal Home Loan Bank rates for borrowings of similar terms, based on the information available at lease commencement date in determining the present value of future payments. Additionally, for all real estate leases, Synovus applies a portfolio approach (based on lease term) in the application of the discount rate. Determination of the ROU asset also includes prepaid lease payments and amounts recognized relating to favorable or unfavorable lease terms from leases acquired through business combinations.
For operating leases, minimum rental expense is recognized on a straight-line basis based on the fixed components of leasing arrangements. Variable lease components represent amounts that are not fixed in nature and are not tied to an index or rate, and are recognized as expense when incurred. For financing leases, rent expense is recognized as amortization expense on a straight-line basis and interest expense using the effective interest method.Additionally, leases with an initial term of 12 months or less are not recorded on the balance sheet; lease expense for these leases is recognized on a straight-line basis over the lease term. Net lease cost is recorded net of sublease income. For leases beginning in 2019 and later, lease components (e.g., base rent) are accounted for separately from non-lease components (e.g., common-area maintenance costs, real estate taxes and insurance costs).
ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated2017-04, Intangibles-Goodwill and Other, Comprehensive Income.Simplifying the Test for Goodwill Impairment: In February 2018,January 2017, the FASB issued final guidance on reclassificationASU 2017- 04, which simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Therefore, any carrying amount which exceeds the reporting unit’s fair value (up to the amount of tax effects stranded in other comprehensive income due to Federal Tax Reform.goodwill recorded) will be recognized as an impairment loss. The guidance provides entities the option to reclassify the tax effects that are stranded in accumulated other comprehensive income, or AOCI, as a result of Federal Tax Reform to retained earnings. The guidanceASU is effective for fiscal yearsannual reporting periods beginning after December 15, 2018; early2019, including interim periods within those periods. Early adoption is permitted.permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. Synovus elected to early adopt ASU 2018-02the guidance, effective January 1, 2019. Synovus performed a qualitative assessment as allowed under ASC 350-20-35 during its annual impairment test as of January 1, 2018June 30, 2019 and elected to reclassify the income tax effects of Federal Tax Reform from AOCI to retained earnings. For Synovus, tax effects stranded in AOCI due to Federal Tax Reform totaled $7.6 million at December 31, 2017 and primarily related to unrealized lossesbased on the available-for-sale investment securities portfolio. The reclassification adjustment resulted in an increase to retained earnings as of January 1, 2018 of $7.6 million and a corresponding decrease to AOCI forassessment performed, management concluded goodwill was not impaired. As such, the same amount.
ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. In January 2016, the FASB issued ASU 2016-01, which included targeted amendments to accounting guidance for recognition, measurement, presentation, and disclosure of financial instruments. ASU 2016-01 requires equity investments (except those accounted for under the equity method of accounting or those that are consolidated) to be measured at fair value with changes in fair value recognized in net income. This ASU requires a cumulative-effect adjustment to retained earnings as of the beginning of the reporting period of adoption to reclassify the cumulative change in fair value of equity securities previously recognized in AOCI. ASU 2016-01 became effective for Synovus on January 1, 2018. The adoption of the guidance resulted in a transfer of investments in mutual funds of $3.2 million, at fair value, from investment securities available for sale to other assets and a $117 thousand cumulative-effect adjustment that decreased retained earnings, with offsetting related adjustments to deferred taxes and AOCI. ASU 2016-01 also emphasizes the existing requirement to use an exit price concept to measure fair value for disclosure purposes in determining the fair value of loans. Determination of the fair value under the exit price method requires judgment because substantially all of the loans within the loan portfolio do not have observable market prices. The adoption of this guidance did not have a significant impact on Synovus' fair value disclosures.
ASU 2018-13,Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. In August 2018, the FASB issued ASU 2018-13, which changes the fair value measurement disclosure requirements of ASC 820. The amendments in this ASU remove, modify, and add certain required disclosures on fair value measurements. The guidance is effective for fiscal years beginning after December 15, 2019; early adoption is permitted. Synovus elected to early adopt ASU 2018-13 for eliminated and modified disclosures upon issuance of this ASU. Synovus will delay adoption of the additional disclosures until their effective date. The adoption of this guidance did not have a significant impact on Synovus' fair value disclosures.
ASU 2018-15,Intangibles - Goodwill and Other - Internal Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract.In August 2018, the FASB issued ASU 2018-15, which amends ASC 350-40. The ASU aligns the requirements for capitalizing implementation costs for a hosting arrangement that is a service contract with those incurred for hosting arrangements that contain a software license as well as those incurred to develop or implement software for internal use. This guidance is effective for fiscal years beginning after December 15, 2019; early adoption is permitted. Synovus elected to early adopt ASU 2018-15, on a prospective basis, upon issuance of this ASU. As of September 30, 2018,had no implementation costs have been capitalized under this ASU. Synovus expects to capitalize certain qualifying implementation, set-up, and other upfront costs related to hosting arrangements under a service contract during the fourth quarter of 2018.impact.
Recently Issued Accounting Standards Not Yet Adopted
ASU 2016-13,Financial Instruments--CreditInstruments-Credit Losses (CECL).In June 2016, the FASB issued new guidance (CECL) related to credit losses. The new guidanceCECL (and all subsequent ASUs on this topic) replaces the existing incurred loss impairment guidance with an expected credit loss methodology. The new guidanceCECL will require management’s estimate of credit losses over the full remaining expected life of loans and other financial instruments. For Synovus, the standardCECL will apply to loans, unfunded loan commitments, and debt securities available for sale. The standard is effective for fiscal years beginning after December 15, 2019sale and interim periods within those fiscal years with early adoption permitted on January 1, 2019.  Synovus will adopt the guidancebe adopted on January 1, 2020. Upon adoption, for non-PCI (non-PCD under CECL) assets, Synovus will record a cumulative-effect adjustment to beginning retained earnings asearnings. In addition, CECL provides for a simplified accounting model for purchased financial assets with a more-than-insignificant amount of credit deterioration since their origination (PCD assets). The initial estimate of expected credit losses on PCD assets will be recognized through the ACL with an offset to the cost basis of the beginning of the reporting period ofrelated financial asset at adoption.  

Synovus has begunis continuing its implementation efforts which are led by a cross-functional steering committee. Management expectsThe committee meets periodically to discuss the latest developments and ensure progress compared to the planned timeline. Synovus shifted from limited to more comprehensive parallel testing during the third quarter of 2019.  The results continue to be utilized to refine our models and estimation techniques.  Documentation of new methodologies and internal controls that the allowance for loan losses will be higherimplemented as part of CECL as well as model validation is also in process. Implementation status updates are provided quarterly to executive management and the Audit Committee of Synovus' Board of Directors.
Upon adoption of CECL, Synovus expects the ACL (allowance for credit losses which will apply to debt securities as well as loans and unfunded loan commitments) may increase by 40% to 60% compared to the incurred loss method. The increase is primarily driven by two factors:
the establishment of reserves for acquired loans independent of the fair value discount; and
longer duration consumer loans, due to the difference between loss emergence periods currently used versus the remaining life of the asset required under CECL.

We expect the new standard; however, managementadoption impact of classifying PCI assets as PCD assets to represent approximately half of the ACL increase but, as previously noted, is not expected to impact equity. Additionally, the regulatory transition rules allow for a three-year phase-in of the day-one regulatory capital effects. Due to the combination of these factors, Synovus does not expect CECL adoption to have a material impact on regulatory capital ratios. However, Synovus is still in the process of determining the magnitude of the impact on its financial statementsrefining estimates and regulatory capital ratios.  Additionally, the extent of the expected increase on the allowance for loan lossesthese estimates involve significant judgment. The estimates provided above are subject to substantial change and will ultimately depend upon the composition of the loan portfolio, upon adoption of the standard, as well as economic conditions and forecasts at that time.the time of CECL adoption.


ASU 2016-02, Leases (ASC 842).  In February 2016, the FASB issued ASU 2016-02, its new standard on lease accounting.  ASU 2016-02 introduces a lessee model that brings most leases on the balance sheet.  Under the new standard, all lessees will


recognize a right-of-use asset and a lease liability, including operating leases, with a lease term greater than 12 months.  From a lessor perspective, the accounting model is largely unchanged from existing GAAP.  Additional amendments include, but are not limited to, the elimination
Note 2 - Acquisitions
Acquisition of leveraged leases; modification to the definition of a lease; amendments on sale and leaseback transactions; and disclosure of additional qualitative and quantitative information.FCB Financial Holdings, Inc.

In July 2018, the FASB issued ASU 2018-11, Leases (ASC 842), Targeted Improvements. The ASU 2018-11 amendments include an optional transition method to apply ASU 2016-02 on a prospective basis as of the effective date, with a cumulative- effect adjustment to retained earnings in the period of adoption, instead of applying the guidance using the modified retrospective approach as originally required under ASU 2016-02. ASU 2018-11 also provides lessors with a practical expedient, by class of underlying asset, to not separate lease and non-lease components under certain circumstances, and clarifies which guidance (ASC 842 or ASC 606) to apply to the combined lease and non-lease components.

Synovus will elect the optional transition method provided through ASU 2018-11 and will adopt ASU 2016-02 prospectively onEffective January 1, 2019.2019 (the "Acquisition Date"), Synovus will elect the packagecompleted its acquisition of practical expedients to not reassess (a) whether existing contracts contain leases, (b) lease classification for existing leases, and (c) initial direct cost for any existing leases. Synovus currently expects to recognize lease liabilities and corresponding right-of-use assets (at their present value) related to substantially all of the $230 millionoutstanding stock of future minimum lease commitments as disclosedFCB, a bank holding company based in Note 7Weston, Florida, for total consideration of Synovus' 2017 Form 10-K.  Additionally, Synovus expects to recognize a cumulative-effect adjustment upon adoption to increase the beginning balance of retained earnings as of$1.63 billion. Effective January 1, 2019, for any remaining deferred gains on sale-leaseback transactions thatFCB's wholly-owned banking subsidiary, Florida Community Bank, National Association, merged into Synovus Bank. On the Acquisition Date, the preliminary estimated fair values of FCB included approximately $12.4 billion of identifiable assets, $9.3 billion in loans, and $10.9 billion in deposits. With the addition of FCB and its 51 full service banking centers, Synovus expanded its deposit base in the Southeast. The addition of FCB elevated Synovus' growth profile through a deepened presence in high-growth Florida markets. Conversion of FCB systems occurred priorduring the second quarter of 2019. The results of FCB's operations are included in Synovus' consolidated financial statements since the Acquisition Date.
Under the terms of the Merger Agreement, each outstanding share of FCB common stock was converted into the right to receive 1.055 Synovus common shares and cash in lieu of fractional shares. Additionally, under the dateterms of initial application. Synovus had approximately $5.2the Merger Agreement, certain outstanding FCB non-vested equity awards with a fair value of $7.5 million of such deferred gains recorded as of September 30, 2018. Synovus does not expect this ASU to have a material impact on the timingAcquisition Date accelerated vesting and converted automatically into the right to receive merger consideration at the merger exchange ratio of expense recognition1.055, or an equivalent amount in its consolidated statementscash, of income.





Note 2 - Acquisitions
Cabela's Transaction
On September 25, 2017, Synovus' wholly owned subsidiary,which $3.5 million was allocated to purchase price and the remaining to merger-related compensation expense. In the aggregate, on the Acquisition Date, FCB stockholders received 49.5 million shares of Synovus Bank, completedcommon stock valued at $1.58 billion and $601 thousand in cash. Also, under the acquisitionterms of certain assetsthe Merger Agreement, FCB employee and assumption of certain liabilities of WFB. Immediately following the closing of this transaction,non-employee director outstanding stock options and non-vested restricted share units as well as outstanding FCB warrants were converted into options, restricted share units, and warrants, respectively, to purchase and receive Synovus Bank sold WFB’s credit card assetscommon stock. The converted options and related liabilities to Capital One Bank (USA), National Association, a bank subsidiary of Capital One Financial Corporation.
Synovus retained WFB’s $1.10 billion brokered time deposits portfolio, whichrestricted share units had a weighted averagefair value of $41.5 million on the Acquisition Date, of which $37.3 million was allocated to purchase price and the remaining maturityto compensation expense and the converted warrants had a fair value of approximately 2.53 years$6.7 million attributed to purchase price. The estimated fair value of the converted restricted share units was based on Synovus' closing stock price on December 31, 2018 of $31.99, and a weighted average rate of 1.83% as of September 25, 2017. The transaction was accounted for as an assumption of a liability (accounted for under the asset acquisition model). In accordance with ASC 820, Fair Value Measurements and Disclosures, the brokered time deposit portfolio was recorded at $1.10 billion, which was the amount of cash received for the deposits and represented the estimated fair value of the depositsconverted stock options was determined using a Hull-White model in a binomial lattice option pricing framework. The estimated fair value of the converted warrants was determined using the Black-Scholes-Merton model.
The acquisition of FCB constituted a business combination and was accounted for under the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations. Accordingly, assets acquired, liabilities assumed, and consideration exchanged were recorded at their estimated fair value on the transaction date. Additionally,Acquisition Date. The determination of estimated fair values requires management to make certain estimates about discount rates, future expected cash flows, market conditions, and other future events that are highly subjective in nature and may require adjustments. Upon receipt of final fair value estimates during the measurement period, which must be within one year of the acquisition date, Synovus receivedwill record any adjustments to the preliminary fair value estimates in the reporting period in which the adjustments are determined. Fair value adjustments based on updated estimates could materially affect the goodwill recorded on the acquisition. Synovus may incur losses on the acquired loans that are materially different from losses Synovus originally projected.
Preliminary goodwill of $430.6 million was recorded as a $75.0 million transaction fee from Cabela’s Incorporated and Capital One, which was recognized into earnings on September 25, 2017 upon closingresult of the transaction and is not-deductible for tax purposes. FCB's $19.6 million of merger-based success fees payable to third-party advisors and investment bankers were accounted for as part of the business combination and an assumed liability. Since the success fees payable by FCB were contingent upon the consummation of the merger, the expense was recognized as an "on the line" expense with no expense recognition in either the pre- or post-acquisition financials of FCB or Synovus. The following table reflects the consideration transferred for FCB's net assets and the identifiable assets purchased and liabilities assumed at their estimated fair values as of January 1, 2019. These fair value measurement estimates are based on having achievedthird-party and internal valuations and reflect immaterial measurement period adjustments to the recognition criteria outlinedamounts reported as of March 31, 2019 (the income statement impact of such adjustments was immaterial).


(in thousands)  
Consideration transferred:  
     Synovus common stock issued and reissued from treasury attributed to purchase price(1)
$1,582,133
     Cash payments to FCB stockholders attributed to purchase price(2)
 173
     Fair value of exchanged employee and director equity awards and FCB warrants attributed to purchase price(1)
 43,972
       Total purchase price $1,626,278
   
Statement of Net Assets Acquired at Fair Value (Preliminary): 
Assets 
  Cash and cash equivalents$201,689
 
  Investment securities available for sale2,301,001
 
  Loans9,292,991
 
  Cash surrender value of bank-owned life insurance216,848
 
  Premises and equipment45,412
 
  Core deposit intangible57,400
 
  Other assets269,304
 
     Total Assets$12,384,645
 
   
Liabilities

  Deposits$10,930,724
 
  Federal funds purchased and securities sold under repurchase agreements29,139
 
  Long-term debt153,236
 
  Other liabilities75,818
 
     Total Liabilities$11,188,917
 
   
Fair value of net identifiable assets acquired 1,195,728
Preliminary goodwill $430,550
   
(1)
Based on Synovus' closing stock price of $31.99 on December 31, 2018.
(2) $173 thousand of cash payment of $601 thousand attributed to purchase price with remaining allocated to compensation expense.

The following is a description of the methods used to determine the fair values of significant assets acquired and liabilities assumed presented above.

Investment Securities Available for Sale: Fair values of securities were based on quoted market prices from multiple third-party pricing services as well as realized proceeds upon sale of certain corporate bonds.

Loans: The Income Approach was utilized in SEC SABaccordance with ASC Topic 13.A, Revenue Recognition820 to estimate the fair value of the loans as of the Acquisition Date. The Income Approach utilizes a discounted cash flow method, to present value the expected cash flows using a market-based discount rate. The discounted cash flow model utilized the contractual loan data and market-based assumptions for prepayment rates, loss rates, and servicing fee, at the loan group level, to project expected loan cash flows as of the Acquisition Date. The acquired loans were grouped together based on the terms of the loans, variable or fixed interest rate, variable index rate, interest or principal only loans, payment plans and amortizing or non-amortizing loans. Total measurement period adjustments to date amounted to an increase in the fair value of loans of $5.2 million based on new information about facts and circumstances that existed prior to the Acquisition Date obtained during a subsequent sale of certain FCB acquired loans (primarily NPLs).

Core Deposit Intangible (CDI): This intangible asset represents the value of the relationships with deposit customers. The fair value of the core deposit intangible asset was estimated based on a discounted cash flow methodology that gave appropriate consideration to expected customer attrition rates, net maintenance cost of the deposit base, alternative costs of funds, and the interest costs associated with the customer deposits. The CDI is being amortized over its estimated useful life of approximately ten years utilizing an accelerated method. Since the Acquisition Date, Synovus made one measurement period adjustment to decrease the value of the CDI by $10.8 million, resulting in a CDI asset of $57.4 million.

Deposits: Certificates of deposit were valued by projecting out the expected cash flows based on the contractual terms of the certificates of deposit. These cash flows were discounted based on a market rate for a certificate of deposit with a corresponding

maturity. The fair values for demand and savings deposits were assumed to approximate the carrying value as these accounts have no stated maturity and are payable on demand.

Long-term Debt: Fair values for FHLB borrowings were based on market values and market rates provided by the FHLB.

The following table presents consolidated financial information included in Synovus' unaudited consolidated statements of income from the Acquisition Date through September 30, 2019 under the column "Actual from Acquisition Date." Synovus does not provide separate summary financial information of FCB from the Acquisition Date since it would be impracticable to do so as certain systems and processes were integrated during the second quarter of 2019. The following table also presents unaudited pro forma information as if the acquisition occurred on January 1, 2018 under the "Pro Forma" column. The unaudited pro forma results include the estimated impact of amortizing and accreting certain estimated purchase accounting adjustments such as intangible assets as well as fair value adjustments to loans and deposits. Merger-related expenses that occurred at the effective time of the Merger, or subsequent to the Merger are not reflected in the unaudited pro forma amounts. Cost savings are also not reflected in the unaudited pro forma amounts for the nine months ended September 30, 2018. The pro forma information does not necessarily reflect the results of operations that would have occurred had Synovus merged with FCB at the beginning of 2018.
(in thousands)
Actual from Acquisition Date (January 1, 2019) through September 30, 2019(1)
 Pro Forma for Nine Months Ended September 30, 2018
Net interest income$1,196,535
 $1,162,146
Non-interest income257,945
 236,042
Income before income taxes(1)
558,383
 604,101
Net income available to common shareholders(1)
397,505
 463,984
    
(1) Actual results for the nine months ended September 30, 2019 include pre-tax merger-related expense of $57.5 million.
In connection with the FCB acquisition, Synovus incurred merger-related expense totaling $0.4 million and $57.5 million for the three and nine months ended September 30, 2019, primarily related to employment compensation agreements, severance, professional services, and contract termination charges, including the payment of $21.8 million related to employment agreements of certain FCB executives. Merger-related expense for the three and nine months ended September 30, 2019 is presented in the table below:
(in thousands)Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019
Employment compensation agreements, severance, and other employee benefit costs$—
 $34,762
Professional fees131
 17,122
All other expense(1)
222
 5,609
  Total merger-related expense$353
 $57,493
    

(1) Primarily relates to fees associated with lease exit accruals, asset impairments related to the integration, and contract termination charges.
Acquisition of Global One
On October 1, 2016, Synovus completed its acquisition of all of the outstanding stock of Global One. Prior to its acquisition, Global One was an Atlanta-based private specialty financial services company that provided financing primarily to commercial entities, with all loans fully collateralized by cash value life insurance policies and/or annuities issued by investment grade life insurance companies. Under the terms of the merger agreement, Synovus acquired Global One for an up-front payment of $30 million, consisting of the issuance of 821 thousand shares of Synovus common stock valued at $26.6 million and $3.4 million in cash, with additional payments to Global One's former shareholders over a three to five year period based on earnings from the Global One business, as further discussed below.
The acquisition of Global One constituted a business combination. Accordingly, the assets acquired and liabilities assumed were recorded at their estimated fair values on October 1, 2016. The determination of fair value required management to make estimates about discount rates, future expected earnings and cash flows, market conditions, future loan growth, and other future events that are highly subjective in nature and subject to change. During the three months ended September 30, 2017, Synovus completed the determination of the final allocation of the purchase price with respect to the assets acquired and liabilities assumed.
Under the terms of the merger agreement, the purchase price includesincluded additional annual payments ("Earnout Payments") to Global One's former shareholders over a three to five yearfive-year period, with amounts based on a percentage of "Global One Earnings," as defined in the merger agreement. The Earnout Payments consist of shares of Synovus common stock as well as a smaller cash consideration component. The first annual Earnout Payment of stock and cash valued at $6.4 million was made during November 2017. During the quarterthree and nine months ended September 30, 2019 and 2018, Synovus recorded an$10.5 million and $11.7 million, increaserespectively, in increases to the earnout liability driven bydue to increased earnings projections of Global One. The total fair value of the earnout liability at September 30, 2019 was $24.8 million. During the fourth quarter of 2018, was $23.0Synovus issued the second annual Earnout Payment of 199 thousand shares of Synovus common stock valued at $7.4 million based on the estimated fair value of the remaining Earnout Payments.and $1.2 million in cash.


Note 3 - Investment Securities Available for Sale
The amortized cost, gross unrealized gains and losses, and estimated fair values of investment securities available for sale at September 30, 20182019 and December 31, 20172018 are summarized below.
 September 30, 2019
(in thousands)Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value
U.S. Treasury securities$19,782
 $—
 $—
 $19,782
U.S. Government agency securities35,497
 1,388
 (8) 36,877
Mortgage-backed securities issued by U.S. Government agencies69,141
 730
 (190) 69,681
Mortgage-backed securities issued by U.S. Government sponsored enterprises4,970,420
 99,289
 (4,208) 5,065,501
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises656,311
 9,612
 (1) 665,922
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises360,065
 19,606
 —
 379,671
State and municipal securities2,079
 10
 —
 2,089
Asset-backed securities497,045
 9,442
 (156) 506,331
Corporate debt securities144,441
 1,876
 (9) 146,308
Total investment securities available for sale$6,754,781
 $141,953
 $(4,572) $6,892,162
        
 December 31, 2018
(in thousands)Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value
U.S. Treasury securities$123,436
 $—
 $(1,359) $122,077
U.S. Government agency securities38,021
 361
 —
 38,382
Mortgage-backed securities issued by U.S. Government agencies100,060
 172
 (3,027) 97,205
Mortgage-backed securities issued by U.S. Government sponsored enterprises2,460,498
 1,981
 (63,829) 2,398,650
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises1,215,406
 2,997
 (29,885) 1,188,518
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises131,492
 613
 (2,240) 129,865
Corporate debt securities17,000
 150
 (215) 16,935
Total investment securities available for sale$4,085,913
 $6,274
 $(100,555) $3,991,632
        

  September 30, 2018
(in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value
U.S. Treasury securities $123,265
 $—
 $(2,626) $120,639
U.S. Government agency securities 38,020
 102
 (258) 37,864
Mortgage-backed securities issued by U.S. Government agencies 104,933
 75
 (4,125) 100,883
Mortgage-backed securities issued by U.S. Government sponsored enterprises 2,592,827
 70
 (103,532) 2,489,365
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises 1,168,378
 —
 (50,675) 1,117,703
Corporate debt and other debt securities 17,000
 155
 (35) 17,120
Total investment securities available for sale $4,044,423
 $402
 $(161,251) $3,883,574
         
  December 31, 2017
(in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value
U.S. Treasury securities $83,608
 $—
 $(934) $82,674
U.S. Government agency securities 10,771
 91
 —
 10,862
Mortgage-backed securities issued by U.S. Government agencies 121,283
 519
 (1,362) 120,440
Mortgage-backed securities issued by U.S. Government sponsored enterprises 2,666,818
 5,059
 (31,354) 2,640,523
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises 1,135,259
 144
 (23,404) 1,111,999
State and municipal securities 180
 —
 —
 180
Corporate debt and other securities 20,320
 294
 (223) 20,391
Total investment securities available for sale $4,038,239
 $6,107
 $(57,277) $3,987,069
         
At September 30, 20182019 and December 31, 2017,2018, investment securities with a carrying value of $1.291.46 billion and $2.00$1.56 billion, respectively, were pledged to secure certain deposits and securities sold under repurchase agreements as required by law and contractual agreements.
Synovus has reviewedevaluated investment securities that are in an unrealized loss position as of September 30, 20182019 and December 31, 20172018 for OTTI and does not consider any securities in an unrealized loss position to be other-than-temporarily impaired. If Synovus intended to sell a security in an unrealized loss position, the entire unrealized loss would be reflected in earnings. Synovus does not intend to sell investment securities in an unrealized loss position prior to the recovery of the unrealized loss, which may not be until maturity, and has the ability and intent to hold those securities for that period of time. Additionally, Synovus is not currently aware of any circumstances which will require it to sell any of the securities that are in an unrealized loss position prior to the respective securities' recovery of all such unrealized losses.
For investment securities that Synovus does not expect to sell, or it is not more likely than not it will be required to sell prior to recovery of its amortized cost basis, the credit component of an OTTI would be recognized in earnings and the non-credit component would be recognized in OCI. Currently, unrealized losses on debt securities are attributable to increases in interest rates on comparable securities from the date of purchase. Synovus regularly evaluates its investment securities portfolio to ensure that there are no conditions that would indicate that unrealized losses represent OTTI. These factors include the length of time the

security has been in a loss position, the extent that the fair value is below amortized cost, and the credit standing of the issuer. As of September 30, 2018,2019, Synovus had 4327 investment securities in a loss position for less than twelve months and 1008 investment securities in a loss position for twelve months or longer. At December 31, 2018, Synovus had 9 investment securities in a loss position for less than twelve months and 123 investment securities in a loss position for twelve months or longer.

Asset-backed securities and corporate bonds and other debt securities acquired as part of the FCB acquisition were generally underwritten in accordance with Synovus' credit extension standards, without relying on a bond issuer's guarantee in making the investment decision. These investments are investment grade and will continue to be monitored as part of Synovus' ongoing impairment analysis, but are expected to perform in accordance with their terms.
Gross unrealized losses on investment securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at September 30, 20182019 and December 31, 20172018 are presented below.
 September 30, 2019
 Less than 12 Months 12 Months or Longer Total
(in thousands)Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses
U.S. Government agency securities$1,046
 $(8) $—
 $—
 $1,046
 $(8)
Mortgage-backed securities issued by U.S. Government agencies3,381
 (4) 11,333
 (186) 14,714
 (190)
Mortgage-backed securities issued by U.S. Government sponsored enterprises869,064
 (2,271) 188,440
 (1,937) 1,057,504
 (4,208)
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises527
 (1) —
 —
 527
 (1)
Asset-backed securities64,235
 (156) —
 —
 64,235
 (156)
Corporate debt securities1,991
 (9) —
 —
 1,991
 (9)
Total$940,244
 $(2,449) $199,773
 $(2,123) $1,140,017
 $(4,572)
            
 December 31, 2018
 Less than 12 Months 12 Months or Longer Total
(in thousands)Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses
U.S. Treasury securities$39,031
 $(118) $63,570
 $(1,241) $102,601
 $(1,359)
Mortgage-backed securities issued by U.S. Government agencies2,059
 (2) 79,736
 (3,025) 81,795
 (3,027)
Mortgage-backed securities issued by U.S. Government sponsored enterprises130,432
 (700) 2,105,358
 (63,129) 2,235,790
 (63,829)
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises—
 —
 964,732
 (29,885) 964,732
 (29,885)
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises58,998
 (1,298) 44,220
 (942) 103,218
 (2,240)
Corporate debt securities—
 —
 1,785
 (215) 1,785
 (215)
Total$230,520
 $(2,118) $3,259,401
 $(98,437) $3,489,921
 $(100,555)
            
 September 30, 2018
 Less than 12 Months 12 Months or Longer Total
(in thousands)Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses
U.S. Treasury securities$38,352
 $739
 $62,905
 $1,887
 $101,257
 $2,626
U.S. Government agency securities29,727
 258
 —
 —
 29,727
 258
Mortgage-backed securities issued by U.S. Government agencies15,655
 364
 73,555
 3,761
 89,210
 4,125
Mortgage-backed securities issued by U.S. Government sponsored enterprises830,455
 24,765
 1,618,843
 78,767
 2,449,298
 103,532
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises214,420
 3,406
 903,283
 47,269
 1,117,703
 50,675
Corporate debt and other debt securities—
 —
 1,965
 35
 1,965
 35
Total$1,128,609
 $29,532
 $2,660,551
 $131,719
 $3,789,160
 $161,251
            
 December 31, 2017
 Less than 12 Months 12 Months or Longer Total
(in thousands)Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses
U.S. Treasury securities$34,243
 $443
 $29,562
 $491
 $63,805
 $934
Mortgage-backed securities issued by U.S. Government agencies36,810
 357
 55,740
 1,005
 92,550
 1,362
Mortgage-backed securities issued by U.S. Government sponsored enterprises1,271,012
 10,263
 929,223
 21,091
 2,200,235
 31,354
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises653,781
 9,497
 426,237
 13,907
 1,080,018
 23,404
Corporate debt and other securities—
 —
 5,097
 223
 5,097
 223
Total$1,995,846
 $20,560
 $1,445,859
 $36,717
 $3,441,705
 $57,277
            


The amortized cost and fair value by contractual maturity of investment securities available for sale at September 30, 20182019 are shown below. The expected life of mortgage-backed securities or CMOs may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. For purposes of the maturity table, mortgage-backed securities and CMOs, which are not due at a single maturity date, have been classified based on the final contractual maturity date.
 Distribution of Maturities at September 30, 2019
(in thousands)Within One
Year		 1 to 5
Years		 5 to 10
Years		 More Than
10 Years		 Total
Amortized Cost         
U.S. Treasury securities$19,782
 $—
 $—
 $—
 $19,782
U.S. Government agency securities585
 4,926
 29,986
 —
 35,497
Mortgage-backed securities issued by U.S. Government agencies—
 821
 2,037
 66,283
 69,141
Mortgage-backed securities issued by U.S. Government sponsored enterprises—
 5,807
 132,548
 4,832,065
 4,970,420
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises—
 —
 345
 655,966
 656,311
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises—
 22,632
 250,321
 87,112
 360,065
State and municipal securities—
 —
 1,066
 1,013
 2,079
Asset-backed securities—
 —
 377,474
 119,571
 497,045
Corporate debt securities24,280
 84,864
 33,297
 2,000
 144,441
Total amortized cost$44,647
 $119,050
 $827,074
 $5,764,010
 $6,754,781
          
Fair Value         
U.S. Treasury securities$19,782
 $—
 $—
 $—
 $19,782
U.S. Government agency securities592
 4,954
 31,331
 —
 36,877
Mortgage-backed securities issued by U.S. Government agencies—
 825
 2,077
 66,779
 69,681
Mortgage-backed securities issued by U.S. Government sponsored enterprises—
 5,811
 135,778
 4,923,912
 5,065,501
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises—
 —
 353
 665,569
 665,922
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises—
 23,152
 264,048
 92,471
 379,671
State and municipal securities—
 —
 1,069
 1,020
 2,089
Asset-backed securities—
 —
 385,587
 120,744
 506,331
Corporate debt securities24,421
 85,851
 34,045
 1,991
 146,308
Total fair value$44,795
 $120,593
 $854,288
 $5,872,486
 $6,892,162
          
 Distribution of Maturities at September 30, 2018
(in thousands)Within One
Year		 1 to 5
Years		 5 to 10
Years		 More Than
10 Years		 Total
Amortized Cost         
U.S. Treasury securities$19,382
 $103,883
 $—
 $—
 $123,265
U.S. Government agency securities1,917
 6,118
 29,985
 —
 38,020
Mortgage-backed securities issued by U.S. Government agencies—
 —
 25,659
 79,274
 104,933
Mortgage-backed securities issued by U.S. Government sponsored enterprises—
 43,496
 556,115
 1,993,216
 2,592,827
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises—
 —
 28,367
 1,140,011
 1,168,378
Corporate debt and other debt securities—
 —
 15,000
 2,000
 17,000
Total amortized cost$21,299
 $153,497
 $655,126
 $3,214,501
 $4,044,423
          
Fair Value         
U.S. Treasury securities$19,382
 $101,257
 $—
 $—
 $120,639
U.S. Government agency securities1,937
 6,200
 29,727
 —
 37,864
Mortgage-backed securities issued by U.S. Government agencies—
 —
 25,154
 75,729
 100,883
Mortgage-backed securities issued by U.S. Government sponsored enterprises—
 42,630
 534,881
 1,911,854
 2,489,365
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises—
 —
 27,198
 1,090,505
 1,117,703
Corporate debt and other debt securities—
 —
 15,155
 1,965
 17,120
Total fair value$21,319
 $150,087
 $632,115
 $3,080,053
 $3,883,574
          

Proceeds from sales, gross gains, and gross losses on sales of securities available for sale for the three and nine months ended September 30, 20182019 and 20172018 are presented below. The specific identification method is used to reclassify gains and losses out of other comprehensive income at the time of sale. On January 1, 2018, Synovus transferred $3.2 million, at fair value, from investment securities available for sale to other assets upon adoption of ASU 2016-01.
 Three Months Ended September 30, Nine Months Ended September 30,
(in thousands)2019 2018 2019 2018
Proceeds from sales of investment securities available for sale$709,464
 $—
 $2,002,137
 $35,066
Gross realized gains on sales140
 —
 9,270
 —
Gross realized losses on sales(3,871) —
 (14,772) (1,296)
Investment securities losses, net$(3,731) $—
 $(5,502) $(1,296)
        

  Three Months Ended September 30, Nine Months Ended September 30,
(in thousands) 2018 2017 2018 2017
Proceeds from sales of investment securities available for sale $—
 $473,912
 $35,066
 $812,293
Gross realized gains on sales —
 —
 —
 7,942
Gross realized losses on sales —
 (7,956) (1,296) (8,231)
Investment securities losses, net $—
 $(7,956) $(1,296) $(289)
         


Note 4 - Loans and Allowance for Loan Losses
The following istables provide a summary of current, accruing past due, and non-accrual loans separately reported by originated (loans originated, renewed, refinanced, modified, or otherwise underwritten by Synovus) and acquired loans from business combinations by portfolio class as of September 30, 20182019 and December 31, 2017.
2018. See "Part I - Item 1. Financial Statements and Supplementary Data - Note 1 - Basis of Presentation" in this Report for more information on Synovus' accounting for purchased loans.
Current, Accruing Past Due, and Non-accrual Loans 
Current, Accruing Past Due, and Non-accrual Originated LoansCurrent, Accruing Past Due, and Non-accrual Originated Loans 
September 30, 2018 September 30, 2019 
(in thousands)Current Accruing 30-89 Days Past Due Accruing 90 Days or Greater Past Due Total Accruing Past Due Non-accrual Total Current Accruing 30-89 Days Past Due Accruing 90 Days or Greater Past Due Total Accruing Past Due Non-accrual Total 
Commercial, financial and agricultural$7,185,447
 $25,850
 $1,159
 $27,009
 $69,010
 $7,281,466
 $8,003,162
 $15,997
 $989
 $16,986
 $64,912
 $8,085,060
 
Owner-occupied5,206,192
 8,879
 1,049
 9,928
 5,708
 5,221,828
 5,572,063
 6,068
 1,617
 7,685
 9,222
 5,588,970
 
Total commercial and industrial12,391,639
 34,729
 2,208
 36,937
 74,718
 12,503,294
 13,575,225
 22,065
 2,606
 24,671
 74,134
 13,674,030
 
Investment properties5,661,605
 1,930
 —
 1,930
 2,155
 5,665,690
 6,055,365
 1,714
 902
 2,616
 378
 6,058,359
 
1-4 family properties701,406
 2,651
 —
 2,651
 3,139
 707,196
 634,144
 2,928
 834
 3,762
 2,218
 640,124
 
Land and development333,709
 765
 217
 982
 4,829
 339,520
 401,491
 3,311
 —
 3,311
 3,032
 407,834
 
Total commercial real estate6,696,720
 5,346
 217
 5,563
 10,123
 6,712,406
 7,091,000
 7,953
 1,736
 9,689
 5,628
 7,106,317
 
Consumer mortgages3,382,636
 6,069
 —
 6,069
 10,015
 3,398,720
 
Home equity lines1,442,451
 7,819
 651
 8,470
 14,498
 1,465,419
 1,596,081
 7,354
 38
 7,392
 12,590
 1,616,063
 
Consumer mortgages2,832,971
 4,960
 —
 4,960
 5,313
 2,843,244
 
Credit cards241,334
 2,170
 1,645
 3,815
 —
 245,149
 262,724
 2,657
 2,493
 5,150
 —
 267,874
 
Other consumer loans1,809,033
 18,444
 135
 18,579
 3,773
 1,831,385
 2,261,276
 18,527
 780
 19,307
 4,736
 2,285,319
 
Total consumer6,325,789
 33,393
 2,431
 35,824
 23,584
 6,385,197
 7,502,717
 34,607
 3,311
 37,918
 27,341
 7,567,976
 
Total loans$25,414,148
 $73,468
 $4,856
 $78,324
 $108,425
 $25,600,897
(1 
) 
$28,168,942
 $64,625
 $7,653
 $72,278
 $107,103
 $28,348,323
(1) 
                        
December 31, 2017 
(in thousands)Current Accruing 30-89 Days Past Due Accruing 90 Days or Greater Past Due Total Accruing Past Due Non-accrual Total 
Commercial, financial and agricultural$7,097,127
 $11,214
 $1,016
 $12,230
 $70,130
 $7,179,487
 
Owner-occupied4,830,150
 6,880
 479
 7,359
 6,654
 4,844,163
 
Total commercial and industrial11,927,277
 18,094
 1,495
 19,589
 76,784
 12,023,650
 
Investment properties5,663,665
 2,506
 90
 2,596
 3,804
 5,670,065
 
1-4 family properties775,023
 3,545
 202
 3,747
 2,849
 781,619
 
Land and development476,131
 1,609
 67
 1,676
 5,797
 483,604
 
Total commercial real estate6,914,819
 7,660
 359
 8,019
 12,450
 6,935,288
 
Home equity lines1,490,808
 5,629
 335
 5,964
 17,455
 1,514,227
 
Consumer mortgages2,622,061
 3,971
 268
 4,239
 7,203
 2,633,503
 
Credit cards229,015
 1,930
 1,731
 3,661
 —
 232,676
 
Other consumer loans1,461,223
 10,333
 226
 10,559
 1,669
 1,473,451
 
Total consumer5,803,107
 21,863
 2,560
 24,423
 26,327
 5,853,857
 
Total loans$24,645,203
 $47,617
 $4,414
 $52,031
 $115,561
 $24,812,795
(2 
) 
            

(1) Total before net deferred fees and costs of $23.8 million.
(2) Total before net deferred fees and costs of $25.3 million.
Current, Accruing Past Due, and Non-accrual Acquired Loans 
 September 30, 2019 
(in thousands)Current 
Accruing 30-89 Days Past Due(2)
 
Accruing 90 Days or Greater Past Due(2)
 
Total Accruing Past Due(2)
 
Non-accrual(2)
 ASC 310-30 Loans Discount/Premium Total 
Commercial, financial and agricultural$658,014
 $648
 $—
 $648
 $5,000
 $1,120,805
 $(13,646) $1,770,821
 
Owner-occupied91,651
 —
 —
 —
 —
 913,716
 (4,946) 1,000,421
 
Total commercial and industrial749,665
 648
 —
 648
 5,000
 2,034,521
 (18,592) 2,771,242
 
Investment properties917,663
 —
 —
 —
 —
 1,973,932
 (15,191) 2,876,404
 
1-4 family properties55,674
 —
 —
 —
 —
 43,208
 (242) 98,640
 
Land and development114,642
 —
 —
 —
 —
 92,829
 (2,799) 204,672
 
Total commercial real estate1,087,979
 —
 —
 —
 —
 2,109,969
 (18,232) 3,179,716
 
Consumer mortgages97,107
 —
 —
 —
 —
 2,045,872
 (70,969) 2,072,010
 
Home equity lines60,565
 201
 —
 201
 —
 2,377
 (4,114) 59,029
 
Other consumer loans311
 —
 —
 —
 —
 10,790
 (934) 10,167
 
Total consumer157,983
 201
 —
 201
 —
 2,059,039
 (76,017) 2,141,206
 
Total loans$1,995,627
 $849
 $—
 $849
 $5,000
 $6,203,529
 $(112,841) $8,092,164
(3) 
                 






Current, Accruing Past Due, and Non-accrual Loans 
 December 31, 2018 
(in thousands)Current Accruing 30-89 Days Past Due Accruing 90 Days or Greater Past Due Total Accruing Past Due Non-accrual Total 
Commercial, financial and agricultural$7,372,301
 $7,988
 $114
 $8,102
 $69,295
 $7,449,698
 
Owner-occupied5,317,023
 5,433
 81
 5,514
 8,971
 5,331,508
 
Total commercial and industrial12,689,324
 13,421
 195
 13,616
 78,266
 12,781,206
 
Investment properties5,557,224
 1,312
 34
 1,346
 2,381
 5,560,951
 
1-4 family properties674,648
 2,745
 96
 2,841
 2,381
 679,870
 
Land and development319,978
 739
 —
 739
 2,953
 323,670
 
Total commercial real estate6,551,850
 4,796
 130
 4,926
 7,715
 6,564,491
 
Consumer mortgages2,922,136
 7,150
 —
 7,150
 4,949
 2,934,235
 
Home equity lines1,496,562
 7,092
 28
 7,120
 12,114
 1,515,796
 
Credit cards252,832
 3,066
 2,347
 5,413
 —
 258,245
 
Other consumer loans1,894,352
 17,604
 1,098
 18,702
 3,689
 1,916,743
 
Total consumer6,565,882
 34,912
 3,473
 38,385
 20,752
 6,625,019
 
Total loans$25,807,056
 $53,129
 $3,798
 $56,927
 $106,733
 $25,970,716
(4) 
             
(1)
Total before net deferred fees and costs of $22.7 million.
(2)
For purposes of this table, non-performing and past due loans exclude acquired loans accounted for under ASC 310-30.
(3)
Represents $9.29 billion (at fair value) of loans acquired from FCB, net of paydowns and payoffs including maturities since Acquisition Date.
(4)
Total before net deferred fees and costs of $24.1 million.







Loans with carrying values of $8.11$11.77 billion and $7.93$8.40 billion were pledged as collateral for borrowings and potential borrowingscapacity at September 30, 20182019 and December 31, 2017,2018, respectively, to the FHLB and Federal Reserve Bank.
The credit quality of the loan portfolio is reviewed and updated no less frequently than quarterly using the standard asset classification system utilized by the federal banking agencies. These classifications are divided into three groups – Not Criticized (Pass), Special Mention, and Classified or Adverse rating (Substandard, Doubtful, and Loss) and are defined as follows:
Pass - loans which are well protected by the current net worth and paying capacity of the obligor (or guarantors, if any) or by the fair value, less cost to acquire and sell in a timely manner, of any underlying collateral.
Special Mention - loans which have potential weaknesses that deserve management's close attention. These loans are not adversely classified and do not expose an institution to sufficient risk to warrant an adverse classification.
Substandard - loans which are inadequately protected by the current net worth and paying capacity of the obligor or by the collateral pledged, if any. Loans with this classification are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.
Doubtful - loans which have all the weaknesses inherent in loans classified as Substandard with the added characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable on the basis of currently known facts, conditions, and values.
Loss - loans which are considered by management to be uncollectible and of such little value that their continuance on the institution's books as an asset, without establishment of a specific valuation allowance or charge-off, is not warranted. Synovus fully reserves for any loans rated as Loss.
In the following tables, consumer loans are generally assigned a risk grade similar to the classifications described above; however, upon reaching 90 days and 120 days past due, they are generally downgraded to Substandard and Loss, respectively, in accordance with the FFIEC Uniform Retail Credit Classification and Account Management Policy. Additionally, in accordance with the Interagency Supervisory Guidance, on Allowance for Loan and Lease Losses Estimation Practices for Loans and Lines of Credit Secured by Junior Liens on 1-4 Family Residential Properties, the risk grade classifications of home equity linesconsumer loans (consumer mortgages and consumer mortgagesHELOCs) secured by junior liens on 1-4 family residential properties also consider available information on the payment status of any associated senior liens with other financial institutions.




Loan Portfolio Credit Exposure by Risk Grade 
Originated Loan Portfolio Credit Exposure by Risk GradeOriginated Loan Portfolio Credit Exposure by Risk Grade 
September 30, 2018 September 30, 2019 
(in thousands)Pass Special
Mention		 
Substandard(1)
 
Doubtful(2)
 Loss Total Pass Special Mention 
Substandard(1)
 
Doubtful(2)
 
Loss(3)
 Total 
Commercial, financial and agricultural$6,986,930
 $135,359
 $157,922
 $1,251
 $4
(3) 
$7,281,466
 $7,816,114
 $104,214
 $156,919
 $7,813
 $—
 $8,085,060
 
Owner-occupied5,077,397
 79,967
 64,038
 426
 —
 5,221,828
 5,493,248
 19,647
 76,002
 73
 —
 5,588,970
 
Total commercial and industrial12,064,327
 215,326
 221,960
 1,677
 4
 12,503,294
 13,309,362
 123,861
 232,921
 7,886
 —
 13,674,030
 
Investment properties5,587,389
 47,667
 30,634
 —
 —
 5,665,690
 6,007,116
 20,549
 30,694
 —
 —
 6,058,359
 
1-4 family properties687,775
 7,943
 11,478
 —
 —
 707,196
 628,631
 3,558
 7,935
 —
 —
 640,124
 
Land and development298,696
 24,661
 12,689
 3,129
 345
(3) 
339,520
 386,163
 9,878
 11,793
 —
 —
 407,834
 
Total commercial real estate6,573,860
 80,271
 54,801
 3,129
 345
 6,712,406
 7,021,910
 33,985
 50,422
 —
 —
 7,106,317
 
Consumer mortgages3,388,412
 —
 9,859
 373
 76

3,398,720
 
Home equity lines1,446,606
 —
 17,513
 175
 1,125
(3) 
1,465,419
 1,600,061
 —
 14,683
 21
 1,298

1,616,063
 
Consumer mortgages2,836,972
 —
 6,171
 101
 —

2,843,244
 
Credit cards243,503
 —
 570
 —
 1,076
(4) 
245,149
 265,382
 —
 822
 —
 1,670
(4) 
267,874
 
Other consumer loans1,827,487
 —
 3,640
 257
 1
(3) 
1,831,385
 2,280,305
 —
 5,014
 —
 —

2,285,319
 
Total consumer6,354,568
 —
 27,894
 533
 2,202
 6,385,197
 7,534,160
 —
 30,378
 394
 3,044
 7,567,976
 
Total loans$24,992,755
 $295,597
 $304,655
 $5,339
 $2,551
 $25,600,897
(5 
) 
$27,865,432
 $157,846
 $313,721
 $8,280
 $3,044
 $28,348,323
(5) 
                        
            
Acquired Loan Portfolio Credit Exposure by Risk GradeAcquired Loan Portfolio Credit Exposure by Risk Grade 
December 31, 2017 September 30, 2019 
(in thousands)Pass Special
Mention		 
Substandard(1)
 
Doubtful(2)
 Loss Total Pass Special Mention 
Substandard(1)
 Doubtful Loss Total 
Commercial, financial and agricultural$6,929,506
 $115,912
 $132,818
 $1,251
 $—
 $7,179,487
 $1,701,326
 $48,615
 $20,880
 $—
 $—
 $1,770,821
 
Owner-occupied4,713,877
 50,140
 80,073
 73
 —
 4,844,163
 971,075
 24,039
 5,307
 —
 —
 1,000,421
 
Total commercial and industrial11,643,383
 166,052
 212,891
 1,324
 —
 12,023,650
 2,672,401
 72,654
 26,187
 —
 —
 2,771,242
 
Investment properties5,586,792
 64,628
 18,645
 —
 —
 5,670,065
 2,842,820
 27,488
 6,096
 —
 —
 2,876,404
 
1-4 family properties745,299
 19,419
 16,901
 —
 —
 781,619
 98,316
 —
 324
 —
 —
 98,640
 
Land and development431,759
 33,766
 14,950
 3,129
 —
 483,604
 197,957
 6,588
 127
 —
 —
 204,672
 
Total commercial real estate6,763,850
 117,813
 50,496
 3,129
 —

6,935,288
 3,139,093
 34,076
 6,547
 —
 —
 3,179,716
 
Consumer mortgages2,064,108
 —
 7,902
 —
 —
 2,072,010
 
Home equity lines1,491,105
 —
 21,079
 285
 1,758
(3) 
1,514,227
 58,983
 —
 46
 —
 —
 59,029
 
Consumer mortgages2,622,499
 —
 10,607
 291
 106
(3) 
2,633,503
 
Credit cards230,945
 —
 399
 —
 1,332
(4) 
232,676
 
Other consumer loans1,470,944
 —
 2,168
 329
 10
(3) 
1,473,451
 10,167
 —
 —
 —
 —
 10,167
 
Total consumer5,815,493
 —
 34,253
 905
 3,206
 5,853,857
 2,133,258
 —
 7,948
 —
 —
 2,141,206
 
Total loans$24,222,726
 $283,865
 $297,640
 $5,358
 $3,206
 $24,812,795
(6 
) 
$7,944,752
 $106,730
 $40,682
 $—
 $—
 $8,092,164
(6) 
                        
            
(1) Includes $204.1 million and $190.6 million of Substandard accruing loans at September 30, 2018 and December 31, 2017, respectively.
(2) The loans within this risk grade are on non-accrual status. Commercial loans generally have an allowance for loan losses in accordance with ASC 310, and retail loans generally have an allowance for loan losses
Loan Portfolio Credit Exposure by Risk Grade 
 December 31, 2018 
(in thousands)Pass Special Mention 
Substandard(1)
 
Doubtful(2)
 
Loss(3)
 Total 
Commercial, financial and agricultural$7,190,517
 $118,188
 $140,218
 $775
 $—
 $7,449,698
 
Owner-occupied5,212,473
 55,038
 63,572
 425
 —
 5,331,508
 
Total commercial and industrial12,402,990
 173,226
 203,790
 1,200
 —
 12,781,206
 
Investment properties5,497,344
 40,516
 23,091
 —
 —
 5,560,951
 
1-4 family properties663,692
 6,424
 9,754
 —
 —
 679,870
 
Land and development297,855
 12,786
 13,029
 —
 —
 323,670
 
Total commercial real estate6,458,891
 59,726
 45,874
 —
 —

6,564,491
 
Consumer mortgages2,926,712
 —
 7,425
 98
 —

2,934,235
 
Home equity lines1,501,316
 —
 13,130
 174
 1,176

1,515,796
 
Credit cards255,904
 —
 858
 —
 1,483
(4) 
258,245
 
Other consumer loans1,912,902
 —
 3,841
 —
 —

1,916,743
 
Total consumer6,596,834
 —
 25,254
 272
 2,659
 6,625,019
 
Total loans$25,458,715
 $232,952
 $274,918
 $1,472
 $2,659
 $25,970,716
(7) 
             
(1)
Includes $249.8 million and $172.3 million of Substandard accruing loans at September 30, 2019 and December 31, 2018, respectively.
(2)
The loans within this risk grade are on non-accrual status and generally have an ALL equal to 50% of the loan amount.
(3)
The loans within this risk grade are on non-accrual status and have an ALL equal to the full loan amount.
(4)
Represent amounts that were 120 days past due. These credits are downgraded to the Loss category with an ALL equal to the full loan amount and are generally charged off upon reaching 181 days past due in accordance with the FFIEC Retail Credit Classification Policy.
(5)
Total before net deferred fees and costs of $22.7 million.
(6)
Represents $9.29 billion (at fair value) of loans acquired from FCB, net of paydowns and payoffs including maturities since Acquisition Date.
(7)
Total before net deferred fees and costs of $24.1 million.

Acquired loans
As discussed in "Part I - Item 1. Financial Statements and Supplementary Data - Note 2 - Acquisitions", on January 1, 2019, Synovus acquired loans from FCB with fair values of $9.29 billion net of total discount of $164.2 million.
At the Acquisition Date, the contractual required payments receivable on the purchased loans accounted for under ASC 310-20 totaled $2.45 billion, with a corresponding fair value of $2.15 billion. The estimated cash flows not expected to be collected at the Acquisition Date were $39.5 million.
Information about the acquired FCB loan portfolio accounted for under ASC 310-30 as of the loan amount.Acquisition Date is in the following table.
(3) The loans within this risk grade are on non-accrual status and have an allowance for loan losses equal to the full loan amount.
(in thousands)ASC 310-30 Loans
Contractually required principal and interest at acquisition$8,377,942
Non-accretable difference (expected losses and foregone interest)(163,147)
    Cash flows expected to be collected at acquisition8,214,795
Accretable yield(1,066,689)
    Basis in ASC 310-30 loans at acquisition$7,148,106
  

(4) Represent amounts that were 120 days past due. These credits are downgraded to the Loss category with an allowance for loan losses equal to the full loan amount and are generally charged off upon reaching 181 days past due in accordance with the FFIEC Uniform Retail Credit Classification and Account Management Policy.
(5) Total before net deferred fees and costs of $23.8 million.
(6) Total before net deferred fees and costs of $25.3 million.




The following table detailsis a summary of changes in the accretable yield for all loans accounted for under ASC 310-30 for the nine months ended September 30, 2019.
(in thousands)Nine Months Ended September 30, 2019
Beginning balance$—
Additions1,066,689
Transfers from non-accretable difference to accretable yield(1)
13,516
Accretion(273,231)
Changes in expected cash flows not affecting non-accretable differences(2)
24,929
Ending balance$831,903
  
(1) Represents improvement in the credit component of expected cash flows.
(2) Includes changes in cash flows expected to be collected due to the impact of changes in actual or expected timing of liquidation events, modifications, changes in interest rates and changes in prepayment assumptions.

The following tables detail the changes in the allowance for loan lossesALL by loan segment for the three and nine months ended September 30, 20182019 and 2017.2018.
Allowance for Loan Losses and Recorded Investment in Loans

Allowance for Loan Losses and Recorded Investment in Loans

Allowance for Loan Losses and Recorded Investment in Loans

As Of and For The Three Months Ended September 30, 2018As Of and For the Three Months Ended September 30, 2019
(in thousands)Commercial & Industrial Commercial Real Estate Consumer TotalCommercial & Industrial Commercial Real Estate Consumer Total
Allowance for loan losses:              
Beginning balance$130,335
 $75,205
 $46,185
 $251,725
$138,004
 $63,463
 $55,909
 $257,376
Charge-offs(13,526) (1,077) (3,993) (18,596)(15,425) (3,275) (6,026) (24,726)
Recoveries1,091
 591
 1,657
 3,339
2,276
 1,490
 1,035
 4,801
Provision for loan losses11,417
 (1,447) 5,012
 14,982
Provision for (reversal of) loan losses17,156
 280
 10,126
 27,562
Ending balance(1)
$129,317
 $73,272
 $48,861
 $251,450
$142,011
 $61,958
 $61,044
 $265,013
Ending balance: individually evaluated for impairment$9,108
 $3,317
 $970
 $13,395
$14,139
 $1,184
 $881
 $16,204
Ending balance: collectively evaluated for impairment$120,209
 $69,955
 $47,891
 $238,055
$127,872
 $60,774
 $60,163
 $248,809
Loans:              
Ending balance: total loans(1)(2)
$12,503,294
 $6,712,406
 $6,385,197
 $25,600,897
Ending balance: total loans(2)
$16,445,272
 $10,286,033
 $9,709,182
 $36,440,487
Ending balance: individually evaluated for impairment $102,671
 $37,988
 $28,963
 $169,622
$139,160
 $28,797
 $31,459
 $199,416
Ending balance: collectively evaluated for impairment$12,400,623
 $6,674,418
 $6,356,234
 $25,431,275
Ending balance: collectively evaluated for impairment(3)
$14,292,323
 $8,163,218
 $7,687,835
 $30,143,376
Ending balance: acquired loans accounted for under ASC 310-30(4)
$2,013,789
 $2,094,018
 $1,989,888
 $6,097,695
              
As Of and For The Three Months Ended September 30, 2017As Of and For the Three Months Ended September 30, 2018
(in thousands)Commercial & Industrial Commercial Real Estate Consumer TotalCommercial & Industrial Commercial Real Estate Consumer Total
Allowance for loan losses:              
Beginning balance$123,437
 $77,527
 $47,131
 $248,095
$130,335
 $75,205
 $46,185
 $251,725
Charge-offs(21,855) (8,129) (14,367) (44,351)(13,526) (1,077) (3,993) (18,596)
Recoveries1,899
 2,543
 1,811
 6,253
1,091
 591
 1,657
 3,339
Provision for loan losses23,022
 6,019
 10,645
 39,686
11,417
 (1,447) 5,012
 14,982
Ending balance(1)
$126,503
 $77,960
 $45,220
 $249,683
Ending balance$129,317
 $73,272
 $48,861
 $251,450
Ending balance: individually evaluated for impairment$7,360
 $4,108
 $783
 $12,251
$9,108
 $3,317
 $970
 $13,395
Ending balance: collectively evaluated for impairment$119,143
 $73,852
 $44,437
 $237,432
$120,209
 $69,955
 $47,891
 $238,055
Loans:              
Ending balance: total loans(1)(3)
$11,727,142
 $7,226,924
 $5,557,572
 $24,511,638
Ending balance: total loans(5)(6)
$12,503,294
 $6,712,406
 $6,385,197
 $25,600,897
Ending balance: individually evaluated for impairment$109,434
 $64,909
 $30,132
 $204,475
$102,671
 $37,988
 $28,963
 $169,622
Ending balance: collectively evaluated for impairment$11,617,708
 $7,162,015
 $5,527,440
 $24,307,163
$12,400,623
 $6,674,418
 $6,356,234
 $25,431,275
              
(1)
As of and for the three months ended September 30, 2019, there was 0 ALL for acquired loans accounted for under ASC 310-30.
(2)
Total before net deferred fees and costs of $22.7 million.
(3)
These loans are presented net of the remaining fair value discount of $7.0 million at September 30, 2019.
(4)
These loans are presented net of the remaining fair value discount of $105.8 million at September 30, 2019.
(5)
Total before net deferred fees and costs of $23.8 million.
(6)
As of and for the three months ended September 30, 2018, there were 0 PCI loans and 0 ALL for PCI loans.
(1) As of and for the three months ended September 30, 2018 and 2017, there were no purchased credit-impaired loans and no allowance for loan losses for purchased credit-impaired loans.
(2) Total before net deferred fees and costs of $23.8 million.
(3) Total before net deferred fees and costs of $24.3 million.

Allowance for Loan Losses and Recorded Investment in Loans

Allowance for Loan Losses and Recorded Investment in Loans

Allowance for Loan Losses and Recorded Investment in Loans

As Of and For The Nine Months Ended September 30, 2018As Of and For the Nine Months Ended September 30, 2019
(in thousands)Commercial & Industrial Commercial Real Estate Consumer TotalCommercial & Industrial Commercial Real Estate Consumer Total
Allowance for loan losses:              
Beginning balance$126,803
 $74,998
 $47,467
 $249,268
$133,123
 $68,796
 $48,636
 $250,555
Charge-offs(37,312) (3,523) (13,888) (54,723)(39,558) (5,369) (17,363) (62,290)
Recoveries5,086
 7,555
 4,716
 17,357
6,087
 3,788
 3,623
 13,498
Provision for loan losses34,740
 (5,758) 10,566
 39,548
Provision for (reversal of) loan losses42,359
 (5,257) 26,148
 63,250
Ending balance(1)
$129,317
 $73,272
 $48,861
 $251,450
$142,011
 $61,958
 $61,044
 $265,013
Ending balance: individually evaluated for impairment$9,108
 $3,317
 $970
 $13,395
$14,139
 $1,184
 $881
 $16,204
Ending balance: collectively evaluated for impairment$120,209
 $69,955
 $47,891
 $238,055
$127,872
 $60,774
 $60,163
 $248,809
Loans:              
Ending balance: total loans(1)(2)
$12,503,294
 $6,712,406
 $6,385,197
 $25,600,897
Ending balance: total loans(2)
$16,445,272
 $10,286,033
 $9,709,182
 $36,440,487
Ending balance: individually evaluated for impairment $102,671
 $37,988
 $28,963
 $169,622
$139,160
 $28,797
 $31,459
 $199,416
Ending balance: collectively evaluated for impairment$12,400,623
 $6,674,418
 $6,356,234
 $25,431,275
Ending balance: collectively evaluated for impairment(3)
$14,292,323
 $8,163,218
 $7,687,835
 $30,143,376
Ending balance: acquired loans accounted for under ASC 310-30(4)
$2,013,789
 $2,094,018
 $1,989,888
 $6,097,695
              
As Of and For The Nine Months Ended September 30, 2017As Of and For the Nine Months Ended September 30, 2018
(in thousands)Commercial & Industrial Commercial Real Estate Consumer TotalCommercial & Industrial Commercial Real Estate Consumer Total
Allowance for loan losses:              
Beginning balance$125,778
 $81,816
 $44,164
 $251,758
$126,803
 $74,998
 $47,467
 $249,268
Charge-offs(41,390) (11,336) (24,023) (76,749)(37,312) (3,523) (13,888) (54,723)
Recoveries5,181
 6,191
 4,682
 16,054
5,086
 7,555
 4,716
 17,357
Provision for loan losses36,934
 1,289
 20,397
 58,620
Ending balance(1)
$126,503
 $77,960
 $45,220
 $249,683
Provision for (reversal of) loan losses34,740
 (5,758) 10,566
 39,548
Ending balance$129,317
 $73,272
 $48,861
 $251,450
Ending balance: individually evaluated for impairment$7,360
 $4,108
 $783
 $12,251
$9,108
 $3,317
 $970
 $13,395
Ending balance: collectively evaluated for impairment$119,143
 $73,852
 $44,437
 $237,432
$120,209
 $69,955
 $47,891
 $238,055
Loans:              
Ending balance: total loans(1)(3)
$11,727,142
 $7,226,924
 $5,557,572
 $24,511,638
Ending balance: total loans(5)(6)
$12,503,294
 $6,712,406
 $6,385,197
 $25,600,897
Ending balance: individually evaluated for impairment$109,434
 $64,909
 $30,132
 $204,475
$102,671
 $37,988
 $28,963
 $169,622
Ending balance: collectively evaluated for impairment$11,617,708
 $7,162,015
 $5,527,440
 $24,307,163
$12,400,623
 $6,674,418
 $6,356,234
 $25,431,275
              
(1)
As of and for the nine months ended September 30, 2019, there was 0 ALL for acquired loans accounted for under ASC 310-30.
(2)
Total before net deferred fees and costs of $22.7 million.
(3)
These loans are presented net of the remaining fair value discount of $7.0 million at September 30, 2019.
(4)
These loans are presented net of the remaining fair value discount of $105.8 million at September 30, 2019.
(5)
Total before net deferred fees and costs of $23.8 million.
(6)
As of and for the nine months ended September 30, 2018, there were 0 PCI loans and 0 ALL for PCI loans.

(1) AsBelow is a detailed summary of and for the nine months ended September 30, 2018 and 2017, there were no purchased credit-impaired loans and no allowance for loan losses for purchased credit-impaired loans.
(2) Total before net deferred fees and costs of $23.8 million.
(3) Total before net deferred fees and costs of $24.3 million.
















The tables below summarize impaired loans (including accruing TDRs) by class as of September 30, 20182019 and December 31, 2017.
Impaired Loans (including accruing TDRs)    
 September 30, 2018 Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018
(in thousands)Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized
With no related allowance recorded             
Commercial, financial and agricultural$20,884
 $26,878
 $—
 $21,118
 $—
 $14,458
 $—
Owner-occupied—
 —
 —
 —
 —
 —
 —
Total commercial and industrial20,884
 26,878
 —
 21,118
 —
 14,458
 —
Investment properties—
 —
 —
 —
 —
 —
 —
1-4 family properties—
 —
 —
 —
 —
 —
 —
Land and development265
 1,110
 —
 88
 —
 42
 —
Total commercial real estate265
 1,110
 —
 88
 —
 42
 —
Home equity lines—
 —
 —
 —
 —
 949
 —
Consumer mortgages33
 60
 —
 42
 —
 901
 —
Credit cards—
 —
 —
 —
 —
 —
 —
Other consumer loans—
 —
 —
 —
 —
 —
 —
Total consumer33
 60
 —
 42
 —
 1,850
 —
Total impaired loans with no
related allowance recorded
$21,182
 $28,048
 $—
 $21,248
 $—
 $16,350
 $—
With allowance recorded             
Commercial, financial and agricultural$35,181
 $36,127
 $6,024
 $40,136
 $143
 $55,088
 $571
Owner-occupied46,606
 47,292
 3,084
 44,366
 435
 40,171
 1,165
Total commercial and industrial81,787
 83,419
 9,108
 84,502
 578
 95,259
 1,736
Investment properties13,846
 13,846
 1,566
 14,103
 179
 20,437
 597
1-4 family properties8,307
 8,307
 191
 9,697
 176
 10,876
 619
Land and development15,570
 17,311
 1,560
 16,734
 61
 17,765
 211
Total commercial real estate37,723
 39,464
 3,317
 40,534
 416
 49,078
 1,427
Home equity lines3,209
 3,223
 236
 3,433
 20
 3,693
 96
Consumer mortgages20,201
 20,201
 575
 19,924
 225
 19,496
 618
Credit cards—
 —
 —
 —
 —
 —
 —
Other consumer loans5,520
 5,520
 159
 5,284
 69
 5,220
 212
Total consumer28,930
 28,944
 970
 28,641
 314
 28,409
 926
Total impaired loans with
allowance recorded
$148,440
 $151,827
 $13,395
 $153,677
 $1,308
 $172,746
 $4,089
Total impaired loans             
Commercial, financial and agricultural$56,065
 $63,005
 $6,024
 $61,254
 $143
 $69,546
 $571
Owner-occupied46,606
 47,292
 3,084
 44,366
 435
 40,171
 1,165
Total commercial and industrial102,671
 110,297
 9,108
 105,620
 578
 109,717
 1,736
Investment properties13,846
 13,846

1,566
 14,103
 179
 20,437
 597
1-4 family properties8,307
 8,307

191
 9,697
 176
 10,876
 619
Land and development15,835
 18,421

1,560
 16,822
 61
 17,807
 211
Total commercial real estate37,988
 40,574

3,317
 40,622
 416
 49,120
 1,427
Home equity lines3,209
 3,223

236
 3,433
 20
 4,642
 96
Consumer mortgages20,234
 20,261

575
 19,966
 225
 20,397
 618
Credit cards—
 —

—
 —
 —
 —
 —
Other consumer loans5,520
 5,520

159
 5,284
 69
 5,220
 212
Total consumer28,963
 29,004

970
 28,683
 314
 30,259
 926
Total impaired loans$169,622
 $179,875

$13,395
 $174,925
 $1,308
 $189,096
 $4,089
              

Impaired Loans (including accruing TDRs)
 December 31, 2017 Year Ended December 31, 2017
(in thousands)Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized
With no related allowance recorded         
Commercial, financial and agricultural$8,220
 $9,576
 $—
 $21,686
 $—
Owner-occupied—
 —
 —
 6,665
 —
Total commercial and industrial8,220
 9,576
 —
 28,351
 —
Investment properties—
 —
 —
 123
 —
1-4 family properties—
 —
 —
 323
 —
Land and development56
 1,740
 —
 1,816
 —
Total commercial real estate56
 1,740
 —
 2,262
 —
Home equity lines2,746
 2,943
 —
 1,205
 —
Consumer mortgages—
 —
 —
 496
 —
Credit cards—
 —
 —
 —
 —
Other consumer loans—
 —
 —
 —
 —
Total consumer2,746
 2,943
 —
 1,701
 —
Total impaired loans with no
related allowance recorded
$11,022
 $14,259
 $—
 $32,314
 $—
With allowance recorded         
Commercial, financial and agricultural$65,715
 $65,851
 $7,406
 $50,468
 $1,610
Owner-occupied37,399
 37,441
 2,109
 40,498
 1,382
Total commercial and industrial103,114
 103,292
 9,515
 90,966
 2,992
Investment properties23,364
 23,364
 1,100
 28,749
 1,144
1-4 family properties15,056
 15,056
 504
 16,257
 925
Land and development18,420
 18,476
 2,636
 23,338
 404
Total commercial real estate56,840
 56,896
 4,240
 68,344
 2,473
Home equity lines5,096
 5,096
 114
 7,476
 334
Consumer mortgages18,668
 18,668
 569
 19,144
 896
Credit cards—
 —
 —
 —
 —
Other consumer loans5,546
 5,546
 470
 4,765
 266
Total consumer29,310
 29,310
 1,153
 31,385
 1,496
Total impaired loans with
allowance recorded
$189,264
 $189,498
 $14,908
 $190,695
 $6,961
Total impaired loans         
Commercial, financial and agricultural$73,935
 $75,427
 $7,406
 $72,154
 $1,610
Owner-occupied37,399
 37,441
 2,109
 47,163
 1,382
Total commercial and industrial111,334
 112,868
 9,515
 119,317
 2,992
Investment properties23,364
 23,364
 1,100
 28,872
 1,144
1-4 family properties15,056
 15,056
 504
 16,580
 925
Land and development18,476
 20,216
 2,636
 25,154
 404
Total commercial real estate56,896
 58,636
 4,240
 70,606
 2,473
Home equity lines7,842
 8,039
 114
 8,681
 334
Consumer mortgages18,668
 18,668
 569
 19,640
 896
Credit cards—
 —
 —
 —
 —
Other consumer loans5,546
 5,546
 470
 4,765
 266
Total consumer32,056
 32,253
 1,153
 33,086
 1,496
Total impaired loans$200,286
 $203,757
 $14,908
 $223,009
 $6,961
          

The average recorded investment in impaired loans was $218.7 million2018 and $228.9 million respectively for the three and nine months ended September 30, 2017. Excluding accruing TDRs, there was no interest income recognized for the investment in impaired loans for the three2019 and nine months ended September 30, 2017. Interest income recognized for accruing TDRs was $1.7 million and $5.2 million respectively for the three and nine months ended September 30, 2017.2018. At September 30, 20182019 and December 31, 2017,2018, impaired loans of $54.9$69.4 million and $49.0$51.3 million, respectively, were on non-accrual status.
Concessions provided
Impaired Loans (including accruing TDRs)
 September 30, 2019 December 31, 2018
  Recorded Investment   Recorded Investment 
(in thousands)Unpaid Principal BalanceWithout an ALLWith an ALLRelated Allowance Unpaid Principal BalanceWithout an ALLWith an ALLRelated Allowance
Commercial, financial and agricultural$104,229
$33,534
$55,413
$11,267
 $65,150
$22,298
$34,222
$7,133
Owner-occupied50,493
—
50,213
2,872
 49,588
—
48,902
3,074
Total commercial and industrial154,722
33,534
105,626
14,139
 114,738
22,298
83,124
10,207
Investment properties12,307
—
12,307
555
 13,916
—
13,916
1,523
1-4 family properties5,064
—
5,005
117
 5,586
—
5,586
131
Land and development12,752
1,055
10,430
512
 16,283
265
13,431
944
Total commercial real estate30,123
1,055
27,742
1,184
 35,785
265
32,933
2,598
Consumer mortgages18,881
874
17,707
372
 19,506
—
19,506
343
Home equity lines6,360
—
6,282
278
 3,264
—
3,235
224
Other consumer loans6,596
—
6,596
231
 5,565
—
5,565
177
Total consumer31,837
874
30,585
881
 28,335
—
28,306
744
Total loans$216,682
$35,463
$163,953
$16,204
 $178,858
$22,563
$144,363
$13,549
          

 Three Months Ended September 30, 2019 Three Months Ended September 30, 2018
(in thousands)Average Recorded Investment 
Interest Income Recognized(1)
 Average Recorded Investment 
Interest Income Recognized(1)
Commercial, financial and agricultural$85,487
 $620
 $61,254
 $379
Owner-occupied50,929
 504
 44,366
 574
Total commercial and industrial136,416
 1,124
 105,620
 953
Investment properties12,518
 156
 14,103
 179
1-4 family properties5,277
 125
 9,697
 176
Land and development11,375
 32
 16,822
 62
Total commercial real estate29,170
 313
 40,622
 417
Consumer mortgages19,278
 206
 19,966
 226
Home equity lines5,705
 47
 3,433
 34
Other consumer loans6,221
 99
 5,284
 69
Total consumer31,204
 352
 28,683
 329
 Total loans$196,790
 $1,789
 $174,925
 $1,699
        
(1)
Of the interest income recognized during the three months ended September 30, 2019 and 2018, cash-basis interest income was $310 thousand and $391 thousand, respectively.


 Nine Months Ended September 30, 2019 Nine Months Ended September 30, 2018
(in thousands)Average Recorded Investment 
Interest Income Recognized(1)
 Average Recorded Investment 
Interest Income Recognized(1)
Commercial, financial and agricultural$82,745
 $1,558
 $69,546
 $1,230
Owner-occupied50,839
 1,644
 40,171
 1,388
Total commercial and industrial133,584
 3,202
 109,717
 2,618
Investment properties12,829
 453
 20,437
 597
1-4 family properties5,294
 391
 10,876
 619
Land and development11,166
 101
 17,807
 212
Total commercial real estate29,289
 945
 49,120
 1,428
Consumer mortgages19,627
 635
 20,397
 621
Home equity lines4,619
 119
 4,642
 136
Other consumer loans5,874
 259
 5,220
 212
Total consumer30,120
 1,013
 30,259
 969
 Total loans$192,993
 $5,160
 $189,096
 $5,015
        
(1)
Of the interest income recognized during the nine months ended September 30, 2019 and 2018, cash-basis interest income was $1.0 million and $926 thousand, respectively.
Information about Synovus' TDRs is presented in the following tables. Modifications of loans that are accounted for within a pool under ASC Topic 310-30 are excluded as TDRs. Accordingly, such modifications do not result in the removal of those loans from the pool, even if the modification of those loans would otherwise be considered a TDR. As a result, all such acquired loans that would otherwise meet the criteria for classification as a TDR are primarily inexcluded from the form of providing a below market interest rate given the borrower's credit risk, a period of time generally less than one year with a reduction of required principal and/or interest payments (e.g., interest only for a period of time), or an extension of the maturity of the loan generally for less than one year. Insignificant periods of reduction of principal and/or interest payments, or one-time deferrals of 3 months or less, are generally not considered to be financial concessions.
As of September 30, 2018 and December 31, 2017, there were no commitments to lend a material amount of additional funds to any customer whose loan was classified as a troubled debt restructuring.
tables below. The following tables represent, by concession type, the post-modification balance for loans modified or renewed during the three and nine months ended September 30, 20182019 and 20172018 that were reported as accruing or non-accruing TDRs.

TDRs by Concession Type  
 Three Months Ended September 30, 2018 
(in thousands, except contract data)Number of Contracts Principal Forgiveness Below Market Interest Rate Term Extensions and/or Other Concessions Total 
Commercial, financial and agricultural7
 $—
 $—
 $565
 $565
 
Owner-occupied3
 —
 727
 4,839
 5,566
 
Total commercial and industrial10
 —
 727
 5,404
 6,131
 
Investment properties1
 —
 42
 —
 42
 
1-4 family properties5
 —
 445
 766
 1,211
 
Land and development1
 —
 —
 71
 71
 
Total commercial real estate7
 —
 487
 837
 1,324
 
Home equity lines1
 —
 —
 191
 191
 
Consumer mortgages2
 —
 670
 —
 670
 
Credit cards—
 —
 —
 —
 —
 
Other consumer loans44
 —
 695
 2,784
 3,479
 
Total consumer47
 —
 1,365
 2,975
 4,340
 
Total TDRs64
 $—
 $2,579
 $9,216
 $11,795
(1 
) 
   
 Nine Months Ended September 30, 2018 
(in thousands, except contract data)Number of Contracts Principal Forgiveness Below Market Interest Rate Term Extensions and/or Other Concessions Total 
Commercial, financial and agricultural21
 $—
 $—
 $2,130
 $2,130
 
Owner-occupied9
 —
 5,526
 5,523
 11,049
 
Total commercial and industrial30
 —
 5,526
 7,653
 13,179
 
Investment properties4
 —
 6,053
 2,215
 8,268
 
1-4 family properties12
 —
 1,408
 1,259
 2,667
 
Land and development4
 —
 —
 1,856
 1,856
 
Total commercial real estate20
 —
 7,461
 5,330
 12,791
 
Home equity lines4
 —
 172
 339
 511
 
Consumer mortgages16
 —
 5,365
 87
 5,452
 
Credit cards—
 —
 —
 —
 —
 
Other consumer loans75
 —
 1,621
 3,606
 5,227
 
Total consumer95
 —
 7,158
 4,032
 11,190
 
Total TDRs145
 $—
 $20,145
 $17,015
 $37,160
(1 
) 
           
TDRs by Concession Type  
 Three Months Ended September 30, 2019 
(in thousands, except contract data)Number of Contracts Below Market Interest Rate 
Other Concessions(1)
 Total 
Commercial, financial and agricultural27
 $2,577
 $1,917
 $4,494
 
Owner-occupied7
 2,822
 861
 3,683
 
Total commercial and industrial34
 5,399
 2,778
 8,177
 
Investment properties4
 385
 —
 385
 
1-4 family properties4
 766
 —
 766
 
Land and development1
 473
 —
 473
 
Total commercial real estate9
 1,624
 —
 1,624
 
Consumer mortgages10
 1,008
 118
 1,126
 
Home equity lines25
 364
 1,635
 1,999
 
Other consumer loans27
 473
 1,222
 1,695
 
Total consumer62
 1,845
 2,975
 4,820
 
Total TDRs105
 $8,868
 $5,753
 $14,621
(2) 
   
 Three Months Ended September 30, 2018 
(in thousands, except contract data)Number of Contracts Below Market Interest Rate 
Other Concessions(1)
 Total 
Commercial, financial and agricultural7
 $—
 $565
 $565
 
Owner-occupied3
 727
 4,839
 5,566
 
Total commercial and industrial10
 727
 5,404
 6,131
 
Investment properties1
 42
 —
 42
 
1-4 family properties5
 445
 766
 1,211
 
Land and development1
 —
 71
 71
 
Total commercial real estate7
 487
 837
 1,324
 
Consumer mortgages2
 670
 —
 670
 
Home equity lines1
 —
 191
 191
 
Other consumer loans44
 695
 2,784
 3,479
 
Total consumer47
 1,365
 2,975
 4,340
 
Total TDRs64
 $2,579
 $9,216
 $11,795
(3) 
   
(1)
Other concessions generally include term extensions, interest only payments for a period of time, or principal forgiveness, but there was no principal forgiveness for each of the three months ended September 30, 2019 and 2018.
(1)(2)    NaN net charge-offs were recorded during the three months ended September 30, 2019 upon restructuring of these loans.
(3)    Net charge-offs of $88 thousand were recorded during both the three and nine months ended September 30, 2018 upon restructuring of these loans.

TDRs by Concession TypeNine Months Ended September 30, 2019 
(in thousands, except contract data)Number of Contracts Below Market Interest Rate 
Other Concessions(1)
 Total 
Commercial, financial and agricultural61
 $5,703
 $4,404
 $10,107
 
Owner-occupied13
 4,854
 861
 5,715
 
Total commercial and industrial74
 10,557
 5,265
 15,822
 
Investment properties6
 1,048
 —
 1,048
 
1-4 family properties14
 2,072
 —
 2,072
 
Land and development3
 641
 —
 641
 
Total commercial real estate23
 3,761
 —
 3,761
 
Consumer mortgages15
 1,245
 1,332
 2,577
 
Home equity lines50
 2,686
 1,740
 4,426
 
Other consumer loans79
 1,167
 3,599
 4,766
 
Total consumer144
 5,098
 6,671
 11,769
 
Total TDRs241
 $19,416
 $11,936
 $31,352
(2 
) 
   
 Nine Months Ended September 30, 2018 
(in thousands, except contract data)Number of Contracts Below Market Interest Rate 
Other Concessions(1)
 Total 
Commercial, financial and agricultural21
 $—
 $2,130
 $2,130
 
Owner-occupied9
 5,526
 5,523
 11,049
 
Total commercial and industrial30
 5,526
 7,653
 13,179
 
Investment properties4
 6,053
 2,215
 8,268
 
1-4 family properties12
 1,408
 1,259
 2,667
 
Land and development4
 —
 1,856
 1,856
 
Total commercial real estate20
 7,461
 5,330
 12,791
 
Consumer mortgages16
 5,365
 87
 5,452
 
Home equity lines4
 172
 339
 511
 
Other consumer loans75
 1,621
 3,606
 5,227
 
Total consumer95
 7,158
 4,032
 11,190
 
Total TDRs145
 $20,145
 $17,015
 $37,160
(3) 
         

TDRs by Concession Type  
 Three Months Ended September 30, 2017 
(in thousands, except contract data)Number of Contracts Principal Forgiveness Below Market Interest Rate Term Extensions and/or Other Concessions Total 
Commercial, financial and agricultural22
 $—
 $2,943
 $5,866
 $8,809
 
Owner-occupied3
 —
 35
 1,683
 1,718
 
Total commercial and industrial25
 —
 2,978
 7,549
 10,527
 
Investment properties—
 —
 —
 —
 —
 
1-4 family properties5
 —
 —
 964
 964
 
Land and development3
 —
 157
 760
 917
 
Total commercial real estate8
 —
 157
 1,724
 1,881
 
Home equity lines—
 —
 —
 —
 —
 
Consumer mortgages7
 —
 248
 1,181
 1,429
 
Credit cards—
 —
 —
 —
 —
 
Other consumer loans17
 —
 682
 388
 1,070
 
Total consumer24
 —
 930
 1,569
 2,499
 
Total TDRs57
 $—
 $4,065
 $10,842
 $14,907
(2 
) 
   
 Nine Months Ended September 30, 2017 
(in thousands, except contract data)Number of Contracts Principal Forgiveness Below Market Interest Rate Term Extensions and/or Other Concessions Total 
Commercial, financial and agricultural50
 $—
 $8,703
 $12,145
 $20,848
 
Owner-occupied4
 —
 35
 1,705
 1,740
 
Total commercial and industrial54
 —
 8,738
 13,850
 22,588
 
Investment properties—
 —
 —
 —
 —
 
1-4 family properties21
 —
 2,090
 1,477
 3,567
 
Land and development4
 —
 157
 895
 1,052
 
Total commercial real estate25
 —
 2,247
 2,372
 4,619
 
Home equity lines—
 —
 —
 —
 —
 
Consumer mortgages8
 —
 248
 1,190
 1,438
 
Credit cards—
 —
 —
 —
 —
 
Other consumer loans25
 —
 682
 958
 1,640
 
Total consumer33
 —
 930
 2,148
 3,078
 
Total TDRs112
 $—
 $11,915
 $18,370
 $30,285
(2 
) 
           
(2) No
(1)
Other concessions generally include term extensions, interest only payments for a period of time, or principal forgiveness, but there was no principal forgiveness for each of the nine months ended September 30, 2019 and 2018.
(2)
NaN net charge-offs were recorded during the nine months ended September 30, 2019 upon restructuring of these loans.
(3)
Net charge-offs of $88 thousand were recorded during the nine months ended September 30, 2018 upon restructuring of these loans.
For the three and nine months ended September 30, 2017 upon restructuring of these loans.

For the three months ended September 30, 20182019 there were no defaults, and for the nine months ended September 30, 2018, there were eight3 defaults with a recorded investment of $10.5 million$321 thousand and 4 defaults with a recorded investment of $326 thousand, respectively, on accruing TDRs restructured during the previous twelve months (defaults are defined as the earlier of the TDR being placed on non-accrual status or reaching 90 days past due with respect to principal and/or interest payments) compared to one default with a recorded investment of $206 thousand. There were 0 defaults for the three months ended September 30, 2018 and four8 defaults with a recorded investment of $498 thousand$10.5 million for the three and nine months ended September 30, 2017, respectively.2018.
If, at the time a loan was designated as a TDR, the loan was not already impaired, the measurement of impairment that resulted from the TDR designation closely approximates the reserve derived through specific loan measurement of impairment in accordance with ASC 310-10-35. Generally, the change in the allowance for loan lossesALL resulting from such TDR designation is not significant. At September 30, 2018,2019, the allowance for loan lossesALL allocated to accruing TDRs totaling $114.7$130.0 million was $6.9$5.8 million compared to accruing TDRs of $151.3$115.6 million with an allocated allowance for loan lossesALL of $8.7$6.1 million at December 31, 2017. 2018.Non-accrual, non-homogeneous loans (commercial-type impaired loans greater than $1 million) that are designated as TDRs are individually measured for the amount of impairment, if any, both before and after the TDR designation. As of September 30, 2019and December 31, 2018, there were 0 commitments to lend a material amount of additional funds to any customer whose loan was classified as a TDR.

Note 5 - Goodwill and Other Intangible Assets
Changes to the carrying amount of goodwill by reporting unit for the nine months ended September 30, 2019 are provided in the following table. There were no changes to the carrying amount of goodwill during the year ended December 31, 2018.
(in thousands)Synovus Bank Reporting Unit Trust Services Reporting Unit Total
Balance as of December 31, 2018$32,884
 $24,431
 $57,315
Goodwill acquired during the year (preliminary allocation) and adjustments430,550
 —
 430,550
Balance as of September 30, 2019$463,434
 $24,431
 $487,865
      

Effective January 1, 2019, Synovus acquired FCB. In connection with the acquisition, Synovus recorded $430.6 million of goodwill based on Acquisition Date preliminary fair value estimates of the assets acquired and liabilities assumed in the business combination, including measurement period adjustments. Additionally, Synovus recorded a $57.4 million core deposit intangible asset on the Acquisition Date, including a measurement period adjustment. See "Part I - Item 1. Financial Statements and Supplementary Data - Note 2 - Acquisitions" in this Report for additional information on the FCB acquisition.
As of June 30, 2019, Synovus completed its annual goodwill impairment evaluation applying ASC 350-20-35-3A, Goodwill Subsequent Measurement - Qualitative Assessment Approach based on the preliminary allocation of goodwill to the reporting units shown above and concluded that goodwill was not impaired. No events or circumstances have occurred since that date to warrant a subsequent interim evaluation.
The following table shows the gross carrying amount and accumulated amortization of other intangible assets as of September 30, 2019 and December 31, 2018, which primarily consist of core deposit intangible assets acquired in the FCB acquisition. Core deposit intangible assets were $49.6 million at September 30, 2019. The CDI is being amortized over its estimated useful life of approximately ten years utilizing an accelerated method. Amortization expense recognized on intangible assets for the three and nine months ended September 30, 2019, was $2.9 million and $8.7 million, respectively. Amortization expense recognized on intangible assets for the three and nine months ended September 30, 2018 was $292 thousand and $875 thousand, respectively.
(in thousands)September 30, 2019 December 31, 2018
Other intangible assets, gross carrying amount$70,328
 $12,928
Other intangible assets, accumulated amortization(11,756) (3,053)
Other intangible assets, net carrying amount$58,572
 $9,875
    

Note 6 - Shareholders' Equity and Other Comprehensive Income (Loss)

Stock issued for acquisition of FCB
On January 1, 2019, as part of the FCB acquisition, Synovus issued 22.0 million shares of common stock and reissued 27.4 million shares of treasury stock and incurred $417 thousand in costs related to the issuance. FCB stockholders received 1.055 shares of Synovus common stock for each outstanding share of FCB common stock. Also, under the terms of the Merger Agreement, outstanding stock options, non-vested restricted share units, and warrants were converted into options, restricted share units, and warrants, respectively, to purchase and receive Synovus common stock. The total value of the acquisition consideration transferred by Synovus was $1.63 billion. See "Part I - Item 1. Financial Statements and Supplementary Data - Note 2 - Acquisitions" in this Report for more information on the FCB acquisition.
Repurchases of Common Stock
On June 17, 2019, Synovus announced that the Board of Directors increased its prior $400 million share repurchase authorization to $725 million for the year 2019. As of September 30, 2019, Synovus had repurchased under this program a total of $688.5 million, or 18.8 million shares of its common stock, at an average price of $36.55 per share.
Issuance of Series E Preferred Stock
On July 1, 2019, Synovus completed a $350 million public offering of Series E Preferred Stock. The offering generated net proceeds of $341.4 million. Dividends on the shares are non-cumulative and, if declared, will accrue and be payable, in arrears, quarterly at a rate per annum equal to 5.875% for each dividend period from the original issue date to, but excluding, July 1, 2024. From and including July 1, 2024, the dividend rate will change and reset every five years on July 1 at a rate equal to the five-year

Note 5 -U.S. Treasury Rate plus 4.127% per annum. The Series E Preferred Stock is redeemable at Synovus' option in whole or in part, from time to time, on July 1, 2024 or any subsequent reset date, or in whole but not in part, at any time within 90 days following a regulatory capital treatment event, in each case at a redemption price equal to $25.00 per share, plus any declared and unpaid dividends, without accumulation of any undeclared dividends. The Series E Preferred Stock has no preemptive or conversion rights. Except in limited circumstances, the Series E Preferred Stock does not have any voting rights.
Series D Preferred Stock
Synovus' outstanding $200 million Series D Preferred Stock, $25.00 per share liquidation preference, is reflected net of issuance costs at $195.1 million. Dividends on the shares are non-cumulative and, if declared, will accrue and be payable, in arrears, quarterly at a rate per annum equal to 6.300% for each dividend period from the original issue date to, but excluding, June 21, 2023. From and including June 21, 2023, the dividend rate will change to a floating rate equal to the three-month LIBOR plus a spread of 3.352% per annum. The Series D Preferred Stock is redeemable at Synovus' option in whole or in part, from time to time, on any dividend payment date on or after June 21, 2023, or in whole, but not in part, at any time within 90 days following a regulatory capital treatment event at a redemption price equal to $25.00 per share, plus any declared and unpaid dividends, without accumulation of any undeclared dividends. The Series D Preferred Stock has no preemptive or conversion rights. Except in limited circumstances, the Series D Preferred Stock does not have any voting rights.

Changes in Accumulated Other Comprehensive Income (Loss) by Component (Net of Income Taxes)
The following tables illustrate activity within the balances in accumulated other comprehensive income (loss) by component for the three and nine months ended September 30, 20182019 and 2017.2018.
Changes in Accumulated Other Comprehensive Income (Loss) by Component (Net of Income Taxes)
(in thousands) 
Net unrealized gains (losses) on investment securities available for sale(1)
 
Net unrealized gains (losses) on cash flow hedges(1)
 Post-retirement unfunded health benefit Total
Balance, July 1, 2019 $60,586
 $(12,137) $840
 $49,289
Other comprehensive income (loss) before reclassifications 25,133
 (876) (378) 23,879
Amounts reclassified from AOCI 2,765
 —
 —
 2,765
Net current period other comprehensive income (loss) 27,898
 (876) (378) 26,644
Balance, September 30, 2019 $88,484
 $(13,013) $462
 $75,933
         
Balance, July 1, 2018 $(114,565) $(12,137) $982
 $(125,720)
Other comprehensive income (loss) before reclassifications (17,940) —
 (34) (17,974)
Amounts reclassified from AOCI —
 —
 (26) (26)
Net current period other comprehensive income (loss) (17,940) —
 (60) (18,000)
Balance, September 30, 2018 $(132,505) $(12,137) $922
 $(143,720)
         
Balance, January 1, 2019 $(83,179) $(12,137) $896
 $(94,420)
Other comprehensive income (loss) before reclassifications 167,586
 (876) (378) 166,332
Amounts reclassified from AOCI 4,077
 —
 (56) 4,021
Net current period other comprehensive income (loss) 171,663
 (876) (434) 170,353
Balance, September 30, 2019 $88,484
 $(13,013) $462
 $75,933
         
Balance, December 31, 2017 $(43,470) $(12,137) $853
 $(54,754)
Reclassification from adoption of ASU 2018-02 (7,763) —
 175
 (7,588)
Cumulative-effect adjustment from adoption of ASU 2016-01 117
 —
 —
 117
Other comprehensive income (loss) before reclassifications (82,349) —
 (34) (82,383)
Amounts reclassified from AOCI 960
 —
 (72) 888
Net current period other comprehensive income (loss) (81,389) —
 (106) (81,495)
Balance, September 30, 2018 $(132,505) $(12,137) $922
 $(143,720)
         

(1)
In accordance with ASC 740-20-45-11(b), in 2010 and 2011, Synovus recorded a deferred tax asset valuation allowance associated with net unrealized losses not recognized in income directly to other comprehensive income (loss) by applying the portfolio approach which treats derivative instruments and available for sale securities as a single portfolio. For all periods presented, the ending balance in net unrealized gains (losses) on cash flow hedges and investment securities available for sale includes unrealized losses of $12.1 million and $13.3 million, respectively, related to the residual tax effects remaining in OCI due to the previously established deferred tax asset valuation allowance. Under the portfolio approach, these unrealized losses are realized at the time the entire portfolio is sold or disposed.
Changes in Accumulated Other Comprehensive Income (Loss) by Component (Net of Income Taxes)
(in thousands)Net unrealized losses on cash flow hedges Net unrealized gains (losses) on investment securities available for sale Post-retirement unfunded health benefit Total
Balance as of July 1, 2018$(12,137) $(114,565) $982
 $(125,720)
Other comprehensive loss before reclassifications—
 (17,940) (34) (17,974)
Amounts reclassified from accumulated other comprehensive income (loss)—
 —
 (26) (26)
Net current period other comprehensive loss—
 (17,940) (60) (18,000)
Balance as of September 30, 2018$(12,137) $(132,505) $922
 $(143,720)
        
Balance as of July 1, 2017$(12,137) $(36,586) $858
 $(47,865)
Other comprehensive income before reclassifications—
 3,359
 38
 3,397
Amounts reclassified from accumulated other comprehensive income (loss)—
 4,893
 (21) 4,872
Net current period other comprehensive income—
 8,252
 17
 8,269
Balance as of September 30, 2017$(12,137) $(28,334) $875
 $(39,596)
        

(in thousands)Net unrealized gains (losses) on cash flow hedges Net unrealized gains (losses) on investment securities available for sale Post-retirement unfunded health benefit Total
Balance at December 31, 2017$(12,137) $(43,470) $853
 $(54,754)
Other comprehensive loss before reclassifications—
 (82,349) (34) (82,383)
Amounts reclassified from accumulated other comprehensive income (loss)—
 960
 (72) 888
Net current period other comprehensive loss—
 (81,389) (106) (81,495)
Reclassification from adoption of ASU 2018-02—
 (7,763) 175
 (7,588)
Cumulative-effect adjustment from adoption of ASU 2016-01—
 117
 —
 117
Balance as of September 30, 2018$(12,137) $(132,505) $922
 $(143,720)
        
Balance at December 31, 2016$(12,217) $(44,324) $882
 $(55,659)
Other comprehensive income before reclassifications—
 15,812
 38
 15,850
Amounts reclassified from accumulated other comprehensive income (loss)80
 178
 (45) 213
Net current period other comprehensive income80
 15,990
 (7) 16,063
Balance as of September 30, 2017$(12,137) $(28,334) $875
 $(39,596)
        
In accordance with ASC 740-20-45-11(b), a deferred tax asset valuation allowance associated with unrealized gains and losses not recognized in income is charged directly to other comprehensive income (loss). During the years 2010 and 2011, Synovus recorded a deferred tax asset valuation allowance associated with net unrealized losses not recognized in income directly to other comprehensive income (loss) by applying the portfolio approach for allocation of the valuation allowance. Synovus has consistently applied the portfolio approach which treats derivative instruments and available for sale securities as a single portfolio. As of September 30, 2018, the ending balance in net unrealized gains (losses) on cash flow hedges and net unrealized gains (losses) on investment securities available for sale includes unrealized losses of $12.1 million and $13.3 million, respectively, related to the residual tax effects remaining in OCI due to the previously established deferred tax asset valuation allowance. Under the portfolio approach, these unrealized losses are realized at the time the entire portfolio is sold or disposed.



Note 67 - Fair Value Accounting
See "Part II - Item 8. Financial Statements and Supplementary Data - Note 151 - Fair Value Accounting"Summary of Significant Accounting Policies" to the consolidated financial statements of Synovus' 20172018 Form 10-K for a description of the fair value hierarchy and valuation methodologies for assets and liabilities measured at fair value on a recurring and non-recurring basis.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following tables present all financial instruments measured at fair value on a recurring basis as of September 30, 20182019 and December 31, 2017.2018.
 September 30, 2019
(in thousands)Level 1 Level 2 Level 3 Total Assets and Liabilities at Fair Value
Assets       
Trading securities:       
U.S. Government agency securities$—
 $30
 $—
 $30
Collateralized mortgage obligations issued by
U.S. Government sponsored enterprises    
—
 1,686
 —
 1,686
Other mortgage-backed securities


 1,799
 


 1,799
State and municipal securities—
 485
 —
 485
Total trading securities$—
 $4,000
 $—
 $4,000
Investment securities available for sale:       
U.S. Treasury securities$19,782
 $—
 $—
 $19,782
U.S. Government agency securities—
 36,877
 —
 36,877
Mortgage-backed securities issued by U.S. Government agencies—
 69,681
 —
 69,681
Mortgage-backed securities issued by U.S. Government sponsored enterprises—
 5,065,501
 —
 5,065,501
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises—
 665,922
 —
 665,922
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises—
 379,671
 —
 379,671
State and municipal securities—
 2,089
 —
 2,089
 Asset-backed securities—
 506,331
 —
 506,331
 Corporate debt securities    —
 144,317
 1,991
 146,308
Total investment securities available for sale$19,782
 $6,870,389
 $1,991
 $6,892,162
Mortgage loans held for sale—
 129,415
 —
 129,415
Private equity investments—
 —
 11,289
 11,289
Mutual funds and mutual funds held in rabbi trusts31,429
 —
 —
 31,429
GGL/SBA loans servicing asset—
 —
 3,350
 3,350
Derivative assets—
 181,805
 —
 181,805
Liabilities       
Trading account liabilities—
 1,593
 —
 1,593
Earnout liability(1)
—
 —
 24,810
 24,810
Derivative liabilities—
 41,350
 3,335
 44,685
        
 September 30, 2018
(in thousands)Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Assets and Liabilities at Fair Value
Assets       
Trading securities:       
U.S. Government agency securities$—
 $6,532
 $—
 $6,532
Mortgage-backed securities issued by U.S. Government agencies—
 921
 —
 921
Collateralized mortgage obligations issued by
U.S. Government sponsored enterprises    
—
 183
 —
 183
State and municipal securities—
 177
 —
 177
Other investments998
 38
 —
 1,036
Total trading securities$998
 $7,851
 $—
 $8,849
Mortgage loans held for sale—
 37,276
 —
 37,276
Investment securities available for sale:       
U.S. Treasury securities$120,639
 $—
 $—
 $120,639
U.S. Government agency securities—
 37,864
 —
 37,864
Mortgage-backed securities issued by U.S. Government agencies—
 100,883
 —
 100,883
Mortgage-backed securities issued by U.S. Government sponsored enterprises—
 2,489,365
 —
 2,489,365
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises—
 1,117,703
 —
 1,117,703
 Corporate debt and other debt securities    —
 15,155
 1,965
 17,120
Total investment securities available for sale$120,639
 $3,760,970
 $1,965
 $3,883,574
Private equity investments—
 —
 13,112
 13,112
Mutual funds3,118
 —
 —
 3,118
Mutual funds held in rabbi trusts14,100
 —
 —
 14,100
GGL/SBA loans servicing asset—
 —
 3,761
 3,761
Derivative assets:       
Interest rate contracts$—
 $8,892
 $—
 $8,892
Mortgage derivatives(1)
—
 1,122
 —
 1,122
Total derivative assets$—
 $10,014
 $—
 $10,014
Liabilities       
Trading account liabilities—
 3,540
 —
 3,540
Earnout liability(2)
—
 —
 23,000
 23,000
Derivative liabilities:       
Interest rate contracts$—
 $20,822
 $—
 20,822
Visa derivative—
 —
 1,990
 1,990
Total derivative liabilities$—
 $20,822
 $1,990
 $22,812
        


 December 31, 2018
(in thousands)Level 1 Level 2 Level 3 Total Assets and Liabilities at Fair Value
Assets       
Trading securities:       
U.S. Government agency securities$—
 $44
 $—
 $44
State and municipal securities—
 1,064
 —
 1,064
 Other investments1,128
 894
 —
 2,022
Total trading securities$1,128
 $2,002
 $—
 $3,130
Investment securities available for sale:       
     U.S. Treasury securities$122,077
 $—
 $—
 $122,077
U.S. Government agency securities—
 38,382
 —
 38,382
Mortgage-backed securities issued by U.S. Government agencies—
 97,205
 —
 97,205
Mortgage-backed securities issued by U.S. Government sponsored enterprises—
 2,398,650
 —
 2,398,650
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises—
 1,188,518
 —
 1,188,518
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises—
 129,865
 —
 129,865
 Corporate debt securities    —
 15,150
 1,785
 16,935
Total investment securities available for sale$122,077
 $3,867,770
 $1,785
 $3,991,632
Mortgage loans held for sale—
 37,129
 —
 37,129
Private equity investments—
 —
 11,028
 11,028
Mutual funds and mutual funds held in rabbi trusts16,012
 —
 —
 16,012
GGL/SBA loans servicing asset—
 —
 3,729
 3,729
Derivative assets—
 19,332
 —
 19,332
Liabilities       
Earnout liability(1) 
—
 —
 14,353
 14,353
Derivative liabilities—
 16,535
 1,673
 18,208
        

(1)
Earnout liability consists of contingent consideration obligation related to the Global One acquisition.
Fair Value Option
 December 31, 2017
(in thousands)Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Assets and Liabilities at Fair Value
Assets       
Trading securities:       
Mortgage-backed securities issued by U.S. Government agencies$—
 $3,002
 $—
 $3,002
Collateralized mortgage obligations issued by U.S. Government sponsored enterprises—
 296
 —
 296
 Other investments522
 —
 —
 522
Total trading securities$522
 $3,298
 $—
 $3,820
Mortgage loans held for sale—
 48,024
 —
 48,024
Investment securities available for sale:       
     U.S. Treasury securities$82,674
 $—
 $—
 $82,674
U.S. Government agency securities—
 10,862
 —
 10,862
Mortgage-backed securities issued by U.S. Government agencies—
 120,440
 —
 120,440
Mortgage-backed securities issued by U.S. Government sponsored enterprises—
 2,640,523
 —
 2,640,523
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises—
 1,111,999
 —
 1,111,999
State and municipal securities—
 180
 —
 180
 Corporate debt and other securities    3,162
 15,294
 1,935
 20,391
Total investment securities available for sale$85,836
 $3,899,298
 $1,935
 $3,987,069
Private equity investments—
 —
 15,771
 15,771
Mutual funds held in rabbi trusts14,140
 —
 —
 14,140
GGL/SBA loan servicing asset—
 —
 4,101
 4,101
Derivative assets:       
Interest rate contracts$—
 $10,786
 $—
 $10,786
Mortgage derivatives(1)
—
 936
 —
 936
Total derivative assets$—
 $11,722
 $—
 $11,722
Liabilities       
Trading account liabilities—
 1,000
 —
 1,000
Earnout liability(2) 
—
 —
 11,348
 11,348
Derivative liabilities:       
Interest rate contracts$—
 $12,638
 $—
 $12,638
Mortgage derivatives(1)
—
 129
 —
 129
Visa derivative—
 —
 4,330
 4,330
Total derivative liabilities$—
 $12,767
 $4,330
 $17,097
        
(1) Mortgage derivatives consist of customer interest rate lock commitments that relate toSynovus has elected the potential origination offair value option for mortgage loans which would be classified as held for sale primarily to ease the operational burden required to maintain hedge accounting for these loans. Synovus is still able to achieve effective economic hedges on mortgage loans held for sale without the time and forward loan sales commitments with third-party investors.
(2) Earnout liability consists of contingent consideration obligation relatedexpense needed to the Global One acquisition.

Fair Value Optionmanage a hedge accounting program.
The following table summarizes the difference between the fair value and the unpaid principal balanceUPB of mortgage loans held for sale measured at fair value and the changes in fair value of these loans. Mortgage loans held for sale are initially measured at fair value with subsequent changes in fair value recognized in earnings. Changes in fair value are recorded as a component of mortgage banking income in the consolidated statements of income. An immaterial portion of these changes in fair value was attributable to changes in instrument-specific credit risk.
Mortgage Loans Held for Sale 
(in thousands)As of September 30, 2019 As of December 31, 2018
Fair value$129,415
 $37,129
Unpaid principal balance126,541
 35,848
Fair value less aggregate unpaid principal balance$2,874
 $1,281
    
Changes in Fair Value Included in Net Income       
 For the Three Months Ended September 30, For the Nine Months Ended September 30,
(in thousands)2018 2017 2018 2017
Mortgage loans held for sale$(569) $(104) $(414) $850
        

Changes in Fair Value Included in Net Income       
 Three Months Ended September 30, Nine Months Ended September 30,
(in thousands)2019 2018 2019 2018
Mortgage loans held for sale$892
 $(569) $1,593
 $(414)
        
Mortgage Loans Held for Sale 
(in thousands)As of September 30, 2018 As of December 31, 2017
Fair value$37,276
 $48,024
Unpaid principal balance36,505
 46,839
Fair value less aggregate unpaid principal balance$771
 $1,185
    


Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

During the three and nine months ended September 30, 20182019 and 2017,2018, Synovus did not have any transfers in or out of Level 3 in the fair value hierarchy. For the three and nine months ended September 30, 2018,2019, total net lossesgains/(losses) included in earnings attributable to the change in unrealized lossesgains/(losses) relating to assets/liabilities still held at September 30, 2019 was a $12.2 million loss and a $9.9 million loss, respectively. For the three and nine months ended September 30, 2018, total net gains/(losses) included in earnings attributable to the change in unrealized gains/(losses) relating to assets/liabilities still held at September 30, 2018 was $11.8an $11.2 million loss and $17.9a $16.6 million loss, respectively. For the three and nine months ended September 30, 2017, total net losses included in earnings attributable to the change in unrealized losses relating to assets/liabilities still held at September 30, 2017 was $2.1 million and $7.7 million, respectively.
 Three Months Ended September 30, 2019
(in thousands)Investment Securities Available for Sale Private Equity Investments 
GGL / SBA
Loans Servicing Asset
 Earnout
Liability		 Visa Derivative
Beginning balance, July 1, 2019$2,017
 $13,341
 $3,326
 $(14,353) $(1,049)
Total gains (losses) realized/unrealized:         
Included in earnings—
 1,194
 (298) (10,457) (2,500)
Unrealized gains (losses) included in OCI(26) —
 —
 —
 —
Additions—
 —
 322
 —
 —
Settlements—
 (3,246) —
 —
 214
Ending balance, September 30, 2019$1,991
 $11,289
 $3,350
 $(24,810) $(3,335)
Total net gains (losses) for the period included in earnings attributable to the change in unrealized gains/(losses) relating to assets/liabilities still held at September 30, 2019    $—
 $777
 $—
 $(10,457) $(2,500)
  
 Three Months Ended September 30, 2018
(in thousands)Investment Securities Available for Sale Private Equity Investments GGL / SBA
Loans Servicing Asset		 Earnout
Liability		 Visa Derivative
Beginning balance, July 1, 2018$1,857
 $12,678
 $4,186
 $(11,348) $(5,943)
Total gains (losses) realized/unrealized:         
Included in earnings—
 434
 (561) (11,652) —
Unrealized gains (losses) included in OCI108
 —
 —
 —
 —
Additions—
 —
 136
 —
 —
Settlements—
 —
 —
 —
 3,953
Ending balance, September 30, 2018$1,965
 $13,112
 $3,761
 $(23,000) $(1,990)
Total net gains (losses) for the period included in earnings attributable to the change in unrealized gains/(losses) relating to assets/liabilities still held at September 30, 2018$—
 $434
 $—
 $(11,652) $—
          
 Three Months Ended September 30, 2018
(in thousands)Investment Securities Available for Sale Private Equity Investments 
GGL / SBA
Loans Servicing Asset
 Earnout
Liability		 Visa Derivative
Beginning balance, July 1, 2018$1,857
 $12,678
 $4,186
 $(11,348) $(5,943)
Total (losses) gains realized/unrealized:         
Included in earnings—
 434
 (561) (11,652) —
Unrealized gains (losses) included in OCI108
 —
 —
 —
 —
Additions—
 —
 136
 —
 —
Settlements—
 —
 —
 —
 3,953
Ending balance, September 30, 2018$1,965
 $13,112
 $3,761
 $(23,000) $(1,990)
Total net losses for the period included in earnings attributable to the change in unrealized losses relating to assets/liabilities still held at September 30, 2018    $—
 $434
 $(561) $(11,652) $—
  
 Three Months Ended September 30, 2017
(in thousands)Investment Securities Available for Sale Private Equity Investments GGL / SBA
Loans Servicing Asset		 Earnout
Liability		 Visa Derivative
Beginning balance, July 1, 2017$1,927
 $15,698
 $4,297
 $(13,941) $(5,053)
Total (losses) gains realized/unrealized:         
Included in earnings—
 (27) (27) (2,059) —
Unrealized gains (losses) included in OCI(9) —
 —
 —
 —
Settlements—
 —
 —
 —
 360
Ending balance, September 30, 2017$1,918
 $15,671
 $4,270
 $(16,000) $(4,693)
Total net losses for the period included in earnings attributable to the change in unrealized losses relating to assets/liabilities still held at September 30, 2017    $—
 $(27) $(27) $(2,059) $—
          


 Nine Months Ended September 30, 2019
(in thousands)Investment Securities Available for Sale Private Equity Investments GGL / SBA
Loans Servicing Asset		 Earnout
Liability		 Visa Derivative
Beginning balance, January 1, 2019$1,785
 $11,028
 $3,729
 $(14,353) $(1,673)
Total gains (losses) realized/unrealized:         
Included in earnings—
 3,507
 (1,091) (10,457) (2,500)
Unrealized gains (losses) included in OCI206
 —
 —
 —
 —
Additions—
 —
 712
 —
 —
Settlements—
 (3,246) —
 —
 838
Ending balance, September 30, 2019$1,991
 $11,289
 $3,350
 $(24,810) $(3,335)
Total net gains (losses) for the period included in earnings attributable to the change in unrealized gains/(losses) relating to assets/liabilities still held at September 30, 2019    $—
 $3,090
 $—
 $(10,457) $(2,500)
          
 Nine Months Ended September 30, 2018
(in thousands)Investment Securities Available for Sale Private Equity Investments GGL / SBA
Loans Servicing Asset		 Earnout
Liability		 Visa Derivative
Beginning balance, January 1, 2018$1,935
 $15,771
 $4,101
 $(11,348) $(4,330)
Total (losses) gains realized/unrealized:         
Included in earnings—
 (2,659) (1,295) (11,652) (2,328)
Unrealized gains (losses) included in OCI30
 —
 —
 —
 —
Additions—
 —
 955
 —
 —
Sales and settlements—
 —
 —
 —
 4,668
Ending balance, September 30, 2018$1,965
 $13,112
 $3,761
 $(23,000) $(1,990)
Total net gains (losses) for the period included in earnings attributable to the change in unrealized losses relating to assets/liabilities still held at September 30, 2018$—
 $(2,659) $—
 $(11,652) $(2,328)
          

 Nine Months Ended September 30, 2018
(in thousands)Investment Securities Available for Sale Private Equity Investments GGL / SBA
Loans Servicing Asset		 Earnout
Liability		 Visa Derivative
Beginning balance, January 1, 2018$1,935
 $15,771
 $4,101
 $(11,348) $(4,330)
Total (losses) gains realized/unrealized:         
Included in earnings—
 (2,659) (1,295) (11,652) (2,328)
Unrealized gains (losses) included in OCI30
 —
 —
 —
 —
Additions—
 —
 955
 —
 —
Settlements—
 —
 —
 —
 4,668
Ending balance, September 30, 2018$1,965
 $13,112
 $3,761
 $(23,000) $(1,990)
Total net losses for the period included in earnings attributable to the change in unrealized losses relating to assets/liabilities still held at September 30, 2018    $—
 $(2,659) $(1,295) $(11,652) $(2,328)
          
 Nine Months Ended September 30, 2017
(in thousands)Investment Securities Available for Sale Private Equity Investments 
GGL / SBA
Loans Servicing Asset
 
Earnout
Liability
 Visa Derivative
Beginning balance, January 1, 2017$1,796
 $25,493
 $—
 $(14,000) $(5,768)
Total (losses) gains realized/unrealized:         
Included in earnings—
 (3,193) (721) (3,766) —
Unrealized gains (losses) included in OCI122
 —
 —
 —
 —
Additions—
 —
 539
 —
 —
Sales and settlements—
 (6,629) —
 —
 1,075
Transfer from amortization method to fair value—
 —
 4,452
 —
 —
Measurement period adjustments related to Global One—
 —
 —
 1,766
 —
Ending balance, September 30, 2017$1,918
 $15,671
 $4,270
 $(16,000) $(4,693)
Total net losses for the period included in earnings attributable to the change in unrealized losses relating to assets/liabilities still held at September 30, 2017    $—
 $(3,193) $(721) $(3,766) $—
          

Quantitative Information about Level 3 Fair Value Measurements

September 30, 2018 December 31, 2017
Assets and liabilities
measured at fair value
on a recurring basis
 Valuation TechniqueSignificant Unobservable Input
Level 3
Fair Value
 Range or Weighted Average 
Level 3
Fair Value
 Range or Weighted Average
           
Investment Securities Available for Sale - Other Investments: Trust preferred securities Discounted cash flow analysisCredit spread embedded in discount rate$1,965 389 bps $1,935 398 bps
           
Private equity investments Individual analysis of each investee companyMultiple factors, including but not limited to, current operations, financial condition, cash flows, evaluation of business management and financial plans, and recently executed financing transactions related to the investee companies13,112 N/A 15,771 N/A
           
GGL/SBA loans servicing asset Discounted cash flow analysisDiscount rate Prepayment speeds3,761 13.40% 8.64% 4,101 13.16% 7.50%
           
Earnout liability Option pricing methods and Monte Carlo simulationEarning projections of Global One23,000 N/A 11,348 N/A
           
Visa derivative liability Discounted cash flow analysisEstimated timing of resolution of covered litigation, future cumulative deposits to the litigation escrow for settlement of the covered litigation, and estimated future monthly fees payable to the derivative counterparty1,990 1-2 years 4,330 1-4 years
           



Assets Measured at Fair Value on a Non-recurring Basis

Certain assets are recorded at fair value on a non-recurring basis. Non-recurring fair value adjustments typically are a result of the application of lower of cost or fair value accounting occurring during the period recorded as a charge-off with associated provision expense or a write-down occurring during the period.in non-interest expense. For example, if the fair value of an asset in these categories falls below its cost basis, it is considered to be at fair value at the end of the period of the adjustment. The following table presents assets measured at fair value on a non-recurring basis as of the dates indicated for which there was a fair value adjustment during the nine months ended September 30, 2018 and year ended December 31, 2017.period.


September 30, 2019 December 31, 2018
(in thousands)Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Impaired loans(1)
$—
 $—
 $10,477
 $10,477
 $—
 $—
 $21,742
 $21,742
Other loans held for sale—
 —
 —
 —
 —
 —
 1,494
 1,494
Other real estate—
 —
 1,523
 1,523
 —
 —
 3,827
 3,827
Other assets held for sale—
 —
 350
 350
 —
 —
 1,104
 1,104
                



September 30, 2018 December 31, 2017
(in thousands)Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Impaired loans(1)
$—
 $—
 $17,270
 $17,270
 $—
 $—
 $3,603
 $3,603
Other loans held for sale—
 —
 —
 —
 —
 —
 10,197
 10,197
Other real estate—
 —
 507
 507
 —
 —
 3,363
 3,363
Other assets held for sale—
 —
 302
 302
 —
 —
 5,334
 5,334
                

(1)
Collateral-dependent impaired loans that were written down to fair value during the period.
(1) Collateral-dependent impaired loans that were written down to fair value during the period.
    Other real estate (ORE)ORE properties are included in other assets on the consolidated balance sheets. The carrying value of ORE at September 30, 20182019 and December 31, 20172018 was $8.5$13.7 million and $3.8$6.2 million, respectively.
The following table presents fair value adjustments recognized in earnings for the three and nine months ended September 30, 20182019 and 20172018 for assets measured at fair value on a non-recurring basis still held at period-end.
Three Months Ended September 30, Nine Months Ended September 30,Three Months Ended September 30, Nine Months Ended September 30,
(in thousands)2018 2017 2018 20172019 2018 2019 2018
Impaired loans(1)
$1,223
 $83
 $4,594
 $1,075
$4,170
 $1,223
 $4,718
 $4,594
Other loans held for sale—
 25,051
 —
 25,051
Other real estate61
 5,165
 61
 5,165
74
 61
 569
 61
Other assets held for sale—
 1,683
 499
 1,683
—
 —
 91
 499
              
(1) Collateral-dependent impaired loans that were written down to fair value during the period.


Quantitative Information about Level 3 Fair Value Measurements
September 30, 2018December 31, 2017
Assets measured at fair
value on a non-recurring basis(1)
Valuation TechniqueSignificant Unobservable Input
Range
(Weighted Average)(1)
Range
(Weighted Average)(1)
Collateral dependentCollateral-dependent impaired loansThird-party appraised that were written down to fair value of collateral less estimated selling costs
Discount to appraised value
Estimated selling costs
0% - 68% (25%)
0% - 10% (7%)
0%-50% (15%)
0%-10% (7%)
Other loans held for saleThird-party appraised value of collateral less estimated selling costs
Discount to appraised value
Estimated selling costs
N/A
N/A
5% - 99% (54%)
0% - 10% (2%)
Other real estateThird-party appraised value of real estate less estimated selling costs
Discount to appraised value
Estimated selling costs
0% - 7% (4%)
0% - 10% (7%)
0%-85% (35%)
0%-10% (7%)
Other assets held for saleThird-party appraised value less estimated selling costs or BOV
Discount to appraised value
Estimated selling costs
0%-42% (42%)
0%-10% (7%)
21%-52% (25%)
0%-10% (7%)
during the period.
(1) The range represents management's estimate of the high and low of the value that would be assigned to a particular input. For assets measured at fair value on a non-recurring basis, the weighted average is the measure of central tendencies; it is not the value that management is using for the asset or liability.
Fair Value of Financial Instruments
The following tables present the carrying and fair values of financial instruments as well as the level within the fair value value hierarchy, at September 30, 20182019 and December 31, 2017.2018. The fair values represent management’s estimates based on various methodologies and assumptions. ForSee "Part II - Item 8. Financial Statements and Supplementary Data - Note 1 - Summary of Significant Accounting Policies" to the consolidated financial instruments that are not recorded atstatements of Synovus' 2018 Form 10-K for a description of how fair value on the balance sheet, such as loans held for investment, interest-bearing deposits, and long-term debt, the fair value amounts should not be taken as an estimate of the amount that would be realized if all such financial instruments were to be settled immediately.measurements are determined.
 September 30, 2019
(in thousands)Carrying Value Fair Value Level 1 Level 2 Level 3
Financial assets         
Total cash, cash equivalents, restricted cash, and restricted cash equivalents$1,182,470
 $1,182,470
 $1,182,470
 $—
 $—
Trading securities4,000
 4,000
 —
 4,000
 —
Investment securities available for sale6,892,162
 6,892,162
 19,782
 6,870,389
 1,991
Mortgage loans held for sale129,415
 129,415
 —
 129,415
 —
Private equity investments11,289
 11,289
 —
 —
 11,289
Mutual funds and mutual funds held in rabbi trusts31,429
 31,429
 31,429
 —
 —
Loans, net36,152,813
 36,154,866
 —
 —
 36,154,866
GGL/SBA loans servicing asset3,350
 3,350
 —
 —
 3,350
Derivative assets181,805
 181,805
 —
 181,805
 —
          
Financial liabilities
 
 
 
  
Non-interest-bearing deposits$9,586,148
 $9,586,148
 $—
 $9,586,148
 $—
Non-time interest-bearing deposits18,313,513
 18,313,513
 —
 18,313,513
 —
Time deposits9,533,409
 9,578,012
 —
 9,578,012
 —
     Total deposits$37,433,070
 $37,477,673
 $—
 $37,477,673
 $—
Federal funds purchased and securities sold under repurchase agreements197,419
 197,419
 197,419
 —
 —
Other short-term borrowings2,233,593
 2,233,593
 —
 2,233,593
 —
Long-term debt2,153,600
 2,176,073
 —
 2,176,073
 —
Earnout liability24,810
 24,810
 —
 —
 24,810
Derivative liabilities44,685
 44,685
 —
 41,350
 3,335
          


 December 31, 2018
(in thousands)Carrying Value Fair Value Level 1 Level 2 Level 3
Financial assets         
Total cash, cash equivalents, restricted cash, and restricted cash equivalents$1,143,564
 $1,143,564
 $1,143,564
 $—
 $—
Trading securities3,130
 3,130
 1,128
 2,002
 —
Investment securities available for sale3,991,632
 3,991,632
 122,077
 3,867,770
 1,785
Mortgage loans held for sale37,129
 37,129
 —
 37,129
 —
Other loans for sale1,506
 1,506
 —
 —
 1,506
Private equity investments11,028
 11,028
 —
 —
 11,028
Mutual funds and mutual funds held in rabbi trusts16,012
 16,012
 16,012
 —
 —
Loans, net25,696,018
 25,438,890
 —
 —
 25,438,890
GGL/SBA loans servicing asset3,729
 3,729
 —
 —
 3,729
Derivative assets19,332
 19,332
 —
 19,332
 —
          
Financial liabilities         
Non-interest-bearing deposits$7,650,967
 $7,650,967
 $—
 $7,650,967
 $—
Non-time interest-bearing deposits14,065,959
 14,065,959
 —
 14,065,959
 —
Time deposits5,003,396
 4,989,570
 —
 4,989,570
 —
     Total deposits$26,720,322
 $26,706,496
 $—
 $26,706,496
 $—
Federal funds purchased and securities sold under repurchase agreements237,692
 237,692
 237,692
 —
 —
Other short-term borrowings650,000
 650,000
 —
 650,000
 —
Long-term debt1,657,157
 1,649,642
 —
 1,649,642
 —
Earnout liability14,353
 14,353
 —
 —
 14,353
Derivative liabilities18,208
 18,208
 —
 16,535
 1,673
          
 September 30, 2018
(in thousands)Carrying Value Fair Value Level 1 Level 2 Level 3
Financial assets         
Total cash, cash equivalents, restricted cash, and restricted cash equivalents$1,011,933
 $1,011,933
 $1,011,933
 $—
 $—
Trading account assets8,849
 8,849
 998
 7,851
 —
Mortgage loans held for sale37,276
 37,276
 —
 37,276
 —
Other loans held for sale12
 12
 —
 —
 12
Investment securities available for sale3,883,574
 3,883,574
 120,639
 3,760,970
 1,965
Private equity investments13,112
 13,112
 —
 —
 13,112
Mutual funds3,118
 3,118
 3,118
 —
 —
Mutual funds held in rabbi trusts14,100
 14,100
 14,100
 —
 —
Loans, net25,325,666
 25,138,896
 —
 —
 25,138,896
GGL/SBA loans servicing asset3,761
 3,761
 —
 —
 3,761
Derivative assets10,014
 10,014
 —
 10,014
 —
          
Financial liabilities
 
 
 
  
Trading account liabilities3,540
 3,540
 —
 3,540
 —
Non-interest bearing deposits$7,628,736
 $7,628,736
 $—
 $7,628,736
 $—
Non-time interest-bearing deposits13,847,104
 13,847,104
 —
 13,847,104
 —
Time deposits4,957,818
 4,937,216
 —
 4,937,216
 —
     Total deposits$26,433,658
 $26,413,056
 $—
 $26,413,056
 $—
Federal funds purchased and securities sold under repurchase agreements191,145
 191,145
 191,145
 —
 —
Other short-term borrowings475,000
 475,000
 —
 475,000
 —
Long-term debt1,656,909
 1,654,002
 —
 1,654,002
 —
Earnout liabilities23,000
 23,000
 —
 —
 23,000
Derivative liabilities$22,812
 $22,812
 $—
 $20,822
 $1,990
          

 December 31, 2017
(in thousands)Carrying Value Fair Value Level 1 Level 2 Level 3
Financial assets         
Total cash, cash equivalents, restricted cash, and restricted cash equivalents$932,933
 $932,933
 $932,933
 $—
 $—
Trading account assets3,820
 3,820
 522
 3,298
 —
Mortgage loans held for sale48,024
 48,024
 —
 48,024
 —
Other loans for sale11,356
 11,356
 
 
 11,356
Investment securities available for sale3,987,069
 3,987,069
 85,836
 3,899,298
 1,935
Private equity investments15,771
 15,771
 —
 —
 15,771
Mutual funds held in rabbi trusts14,140
 14,140
 14,140
 —
 —
Loans, net24,538,196
 24,507,141
 —
 —
 24,507,141
GGL/SBA loans servicing asset4,101
 4,101
 —
 —
 4,101
Derivative assets11,722
 11,722
 —
 11,722
 —
          
Financial liabilities         
Trading account liabilities1,000
 1,000
 —
 1,000
 —
Non-interest-bearing deposits$7,686,339
 $7,686,339
 $—
 $7,686,339
 $—
Non-time interest-bearing deposits13,941,814
 13,941,814
 —
 13,941,814
 —
Time deposits4,519,747
 4,523,661
 —
 4,523,661
 —
     Total deposits$26,147,900
 $26,151,814
 $—
 $26,151,814
 $—
Federal funds purchased and securities sold under repurchase agreements161,190
 161,190
 161,190
 —
 —
Other short-term borrowings100,000
 100,000
 —
 100,000
 —
Long-term debt1,606,138
 1,621,814
 —
 1,621,814
 —
Earnout liabilities11,348
 11,348
 —
 —
 11,348
Derivative liabilities$17,097
 $17,097
 $—
 $12,767
 $4,330
          

Note 78 - Derivative Instruments and Hedging Activities
As part of its overall interest rate risk management activities, Synovus utilizes derivative instruments to manage its exposure to various types of interest rate risk. Theserisk, exposures related to liquidity and credit risk, and to facilitate customer transactions. The primary types of derivative instruments generallyutilized by Synovus consist of interest rate swaps, interest rate lock commitments made to prospective mortgage loan customers, and commitments to sell fixed-rate mortgage loans.loans, and foreign currency exchange forwards. Interest rate lock commitments represent derivative instruments since it is intended that such loans will be sold. Synovus may also utilize interest rate swaps to manage interest rate risks primarily arising from its core banking activities. As of September 30, 2018 and December 31, 2017, Synovus had no outstanding interest rate swap contracts utilized to manage interest rate risk related to core banking activities. Synovus is party to master netting arrangements with its dealer counterparties; however, Synovus does not offset assets and liabilities under these arrangements for financial statement presentation purposes. See "Part II - Item 8. Financial Statements
Hedging Derivatives
Cash flow hedge relationships mitigate exposure to the variability of future cash flows or other forecasted transactions. Synovus has entered into interest rate swap contracts to manage overall cash flow changes related to interest rate risk exposure on index-based variable rate loans. The contracts effectively modify Synovus' exposure to interest rate risk by utilizing receive fixed/pay index-based variable rate interest rate swaps. At September 30, 2019, Synovus' cash flow hedges are all forward-starting with effective start dates during the second quarter of 2020.
For cash flow hedges, the effective and Supplementary Data - Note 16 - Derivative Instruments"ineffective portions of Synovus' 2017 Form 10-K for additional informationthe gain or loss related to the derivative instrument is initially reported as a component of other comprehensive income and subsequently reclassified into earnings when the forecasted transaction affects earnings or when the hedge is terminated. As of September 30, 2019, the maximum length of time over which Synovus is hedging its exposure to the variability in future cash flows is through the second quarter of 2023. Synovus does not expect to reclassify amounts from accumulated other comprehensive income (loss) into interest income on Synovus'cash flow hedges over the next twelve months.
For derivative instruments.instruments that are not designated as hedging instruments, changes in the fair value of the derivatives are recognized in earnings immediately.
Counterparty Credit Risk and Collateral
Entering into derivative contracts potentially exposes Synovus to the risk of counterparties’ failure to fulfill their legal obligations, including, but not limited to, potential amounts due or payable under each derivative contract. Notional principal amounts are often used to express the volume of these transactions, but the amounts potentially subject to credit risk are much smaller. Synovus assesses the credit risk of its dealer counterparties by regularly monitoring publicly available credit rating

information, evaluating other market indicators, and periodically reviewing detailed financials. Dealer collateral requirements are determined via risk-based policies and procedures and in accordance with existing agreements. Synovus seeks to minimize dealer credit risk by dealing with highly rated counterparties and by obtaining collateral for exposures above certain predetermined limits. Management closely monitors credit conditions within the customer swap portfolio, which management deems to be of higher risk than dealer counterparties. Collateral is secured at origination and credit relatedcredit-related fair value adjustments are recorded against the asset value of the derivative as deemed necessary based upon an analysis, which includes consideration of the current asset value of the swap, customer credit rating, collateral value, and customer standing with regards to its swap contractual obligations and other related matters. Such asset values fluctuate based upon changes in interest rates regardless of changes in notional amounts and changes in customer specific risk.

Collateral Requirements
Pursuant to the Dodd-Frank Act, certain derivative transactions have collateral requirements, both at the inception of the trade and as the value of each derivative position changes. As of September 30, 2018,2019, collateral totaling $31.1$105.5 million was pledged to the derivative counterparties to comply with collateral requirements. For derivatives cleared through central clearing houses, the variation margin payments made are legally characterized as settlements of the derivatives. As a result, these variation margin payments are netted against the fair value of the respective derivative contracts in the balance sheet and related disclosures. At September 30, 20182019 and December 31, 2017,2018, Synovus had a variation margin of $11.6$141.1 million and $1.5$3.1 million respectively, each reducing the derivative asset.liability.
The following table reflects the notional amount and fair value of derivative instruments included on the consolidated balance sheets.
 September 30, 2019 December 31, 2018
   Fair Value   Fair Value
(in thousands)Notional Amount 
Derivative Assets (1)
 
Derivative Liabilities (2)
 Notional Amount 
Derivative Assets (1)
 
Derivative Liabilities (2)
Derivatives in cash flow hedging relationships:           
Interest rate contracts$1,000,000
 $915
 $2,097
 —
 $—
 $—
Total derivatives designated as hedging instruments      $915
 $2,097
   $—
 $—
            
Derivatives not designated
as hedging instruments:		           
Interest rate contracts(3)
$6,402,871
 $178,976
 $38,702
 $1,840,288
 $18,388
 $15,716
Mortgage derivatives - interest rate lock commitments125,023
 1,914
 —
 52,420
 944
 —
Mortgage derivatives - forward commitments to sell fixed-rate mortgage loans161,500
 —
 407
 65,500
 —
 819
Other contracts(4)
139,167
 —
 144
 69,902
 —
 —
Visa derivative—
 —
 3,335
 —
 —
 1,673
Total derivatives not designated as hedging instruments      $180,890
 $42,588
   $19,332
 $18,208
            
 September 30, 2018 December 31, 2017
   Fair Value   Fair Value
(in thousands)Notional Amount 
Derivative Assets (1)
 
Derivative Liabilities (2)
 Notional Amount 
Derivative Assets (1)
 
Derivative Liabilities (2)
Derivatives not designated
as hedging instruments:		           
Interest rate contracts (3)
$1,667,397
 $8,892
 $20,822
 $1,466,059
 10,786
 $12,638
Mortgage derivatives - interest rate lock commitments59,289
 875
 —
 49,304
 936
 —
Mortgage derivatives - forward commitments to sell fixed-rate mortgage loans85,500
 247
 —
 72,500
 —
 129
Visa derivative—
 —
 1,990
 —
 —
 4,330
 Total derivatives not designated as hedging instruments      $10,014
 $22,812
   $11,722
 $17,097
            
(1)Derivative assets are recorded in other assets on the consolidated balance sheets.
(2)
(2)
Derivative liabilities are recorded in other liabilities on the consolidated balance sheets.
(3)
Includes interest rate contracts for customer swaps and offsetting positions, net of variation margin payments.
(4)
Includes risk participation agreements sold.
Synovus has entered into risk participation agreements with counterparties to transfer or assume credit exposures related to interest rate derivatives. The notional amounts of risk participation agreements sold were $139.2 million and $69.9 million at September 30, 2019 and December 31, 2018, respectively. The notional amount of risk participation agreements purchased was $3.1 million at September 30, 2019. Assuming all underlying third-party customers referenced in the swap contracts defaulted at September 30, 2019 and December 31, 2018, the exposure from these agreements would not be material based on the consolidated balance sheets.fair value of the underlying swaps.
(3) Includes interestSynovus also provides foreign currency exchange services, primarily forward contracts, with counterparties to allow commercial customers to mitigate exchange rate contracts for customer swapsrisk. Synovus covers its risk by entering into an offsetting foreign currency exchange forward contract. The notional amounts of foreign currency exchange forwards were $37.4 million and offsetting positions, net$28.8 million at

September 30, 2019 and December 31, 2018, respectively. The fair value of variation margin payments.foreign currency exchange forwards was negligible at September 30, 2019 and December 31, 2018 due to the very short duration of these contracts.
The pre-tax effect of changes in fair value from derivative instruments not designated as hedging instruments on the consolidated statements of income for the three and nine months ended September 30, 20182019 and 20172018 is presented below.
 Gain (Loss) Recognized in Consolidated Statements of Income Gain (Loss) Recognized in Consolidated Statements of Income
 Three Months Ended September 30, Nine Months Ended September 30, Three Months Ended September 30, Nine Months Ended September 30,
(in thousands) Location in Consolidated Statements of Income 2018 2017 2018 2017 Location in Consolidated Statements of Income 2019 2018 2019 2018
Derivatives not designated as hedging instruments:                    
Interest rate contracts(1)
 Other non-interest income $1
 $(4) $(8) $(5) Capital markets income $549
 $1
 $640
 $(8)
Other contracts(2)
 Capital markets income (144) —
 (144) —
Mortgage derivatives - interest rate lock commitments Mortgage banking income (427) (180) (61) (595) Mortgage banking income 22
 (427) 970
 (61)
Mortgage derivatives - forward commitments to sell fixed-rate mortgage loans Mortgage banking income 495
 (271) 376
 (1,929) Mortgage banking income 642
 495
 413
 376
Visa derivative Other non-interest expense —
 —
 (2,328) —
 Other non-interest expense (2,500) —
 (2,500) (2,328)
Total $69
 $(455) $(2,021) $(2,529)
Total derivatives not designated as hedging instruments $(1,431) $69
 $(621) $(2,021)
                
(1) Gain (loss) represents net fair value adjustments (including credit-related adjustments) for customer swaps and offsetting positions.

Note 8 - Shareholders' Equity

Issuance of Series D Preferred Stock
On June 21, 2018, Synovus completed a $200 million public offering of Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series D, $25.00 per share liquidation preference. The offering generated net proceeds of $195.1 million. Dividends on the shares are non-cumulative and, if declared, will accrue and be payable, in arrears, quarterly at a rate per annum equal to 6.300% for each dividend period from the original issue date to, but excluding, June 21, 2023. From and including June 21, 2023, the dividend rate will change to a floating rate equal to the three-month LIBOR plus a spread of 3.352% per annum. The Series D Preferred Stock is perpetual and has no maturity date. The Series D Preferred Stock is redeemable at Synovus' option in whole or in part, from time to time, on any dividend payment date on or after June 21, 2023, or in whole, but not in part, at any time within 90 days following a regulatory capital treatment event at a redemption price equal to $25.00 per share, plus any declared and unpaid dividends, without accumulation of any undeclared dividends. The Series D Preferred Stock has no preemptive or conversion rights. Except in limited circumstances, the Series D Preferred Stock does not have any voting rights.
Redemption of Series C Preferred Stock

On August 1, 2018, Synovus redeemed all 5,200,000 outstanding shares of Series C Preferred Stock for a cash price of $25.00 per share, without interest, for an aggregate redemption price of $130.0 million and paid a dividend of $2.6 million on the Series C Preferred Stock. The redemption of the Series C Preferred Stock was funded primarily with proceeds from Synovus' public offering of $200 million of Series D Preferred Stock completed in June 2018. Concurrent with the redemption, Synovus recognized a one-time, non-cash redemption charge of $4.0 million.

Repurchases of Common Stock
On January 23, 2018, Synovus announced a share repurchase program of up to $150 million to be completed during 2018. As of September 30, 2018, Synovus had repurchased under this program a total of $134.8 million, or 2.6 million shares of its common stock, at an average price of $51.85 per share. As of September 30, 2018, the remaining authorization under this program was $15.2 million. During October 2018, the program was concluded with the remaining $15.2 million, or 345 thousand shares, repurchased. In total, 2.9 million shares were repurchased during 2018 at an average price of $50.96 per share.
(1)
Gain (loss) represents net fair value adjustments (including credit-related adjustments and interest settlements on variation margin payments) for customer swaps and offsetting positions.
(2)
Includes risk participation agreements sold.

Note 9 - Net Income Per Common Share
The following table displays a reconciliation of the information used in calculating basic and diluted earnings per common share for the three and nine months ended September 30, 20182019 and 2017.2018.

Three Months Ended September 30, Nine Months Ended September 30,
(in thousands, except per share data)2019 2018 2019 2018
Basic Net Income Per Common Share:       
Net income available to common shareholders$127,435
 $99,330
 $397,505
 $308,559
Weighted average common shares outstanding152,238
 117,241
 156,819
 118,096
Net income per common share, basic$0.84
 $0.85
 $2.53
 $2.61
Diluted Net Income Per Common Share:       
Net income available to common shareholders$127,435
 $99,330
 $397,505
 $308,559
Weighted average common shares outstanding152,238
 117,241
 156,819
 118,096
Effect of dilutive outstanding equity-based awards, warrants, and earnout payments1,805
 854
 1,776
 751
Weighted average diluted common shares154,043
 118,095
 158,595
 118,847
Net income per common share, diluted$0.83
 $0.84
 $2.51
 $2.60
        

Three Months Ended September 30, Nine Months Ended September 30,
(in thousands, except per share data)2018 2017 2018 2017
Basic Net Income Per Common Share:       
Net income available to common shareholders$99,330
 $95,448
 $308,559
 $238,190
Weighted average common shares outstanding117,241
 120,900
 118,096
 121,796
Net income per common share, basic$0.85
 $0.79
 $2.61
 $1.96
Diluted Net Income Per Common Share:       
Net income available to common shareholders$99,330
 $95,448
 $308,559
 $238,190
Weighted average common shares outstanding117,241
 120,900
 118,096
 121,796
Potentially dilutive shares from outstanding equity-based awards and earnout payments854
 914
 751
 832
Weighted average diluted common shares118,095
 121,814
 118,847
 122,628
Net income per common share, diluted$0.84
 $0.78
 $2.60
 $1.94
        

Basic net income per common share is computed by dividing net income available to common shareholders by the average common shares outstanding for the period. Diluted net income per common share reflects the dilution that could occur if securities or other contracts to issue common stock were exercised or converted. The dilutive effect of outstanding stock options, and restricted share units, and warrants is reflected in diluted net income per common share, unless the impact is anti-dilutive, by application of the treasury stock method.
As of September 30, 20182019, there were 40 thousand potentially dilutive shares related to stock options to purchase shares of common stock that were outstanding during 2019, and 2017,as of September 30, 2018, there were 2.2 million potentially dilutive shares related to the TARP Warrant to purchase shares of common stock that were outstanding during 2018 and 2017 but were not included in the computation of diluted net income per common share because the effect would have been anti-dilutive.


Note 10 - Share-based Compensation
General Description of Share-based Plans
Synovus hasAs a long-term incentive plan under which the Compensation Committeeresult of the BoardMerger on January 1, 2019, Synovus assumed 3.2 million outstanding FCB stock option awards and 136 thousand outstanding FCB restricted stock unit awards. Pursuant to the Merger Agreement, each stock option and restricted share unit outstanding on the Acquisition Date was assumed and converted into a stock option or restricted stock unit award relating to shares of Directors hasSynovus common stock, with the authoritysame terms and conditions as were applicable under such award prior to grant share-based awards to Synovus employees.the acquisition. The 2013 Omnibus Plan authorizes 8.6 million common share equivalents available for grant, where grants ofconverted options count as one share equivalent and grants of full value awards (e.g., restricted share units markethad a fair value of $41.5 million on the Acquisition Date, of which $4.2 million was allocated to compensation expense and the remaining to purchase price. The estimated fair value of the converted restricted share units was based on Synovus' closing stock price on December 31, 2018, and performance share units) count as two share equivalents. Any restricted share units that are forfeited andthe estimated fair value of the converted stock options that expire unexercised will again become available for issuancewas determined using a Hull-White model in a binomial lattice option pricing framework. Additionally, under the Plan. At September 30, 2018, Synovus hadterms of the Merger Agreement, certain outstanding FCB non-vested equity awards with a totalfair value of 4.9$7.5 million shareson the Acquisition Date, accelerated vesting and converted automatically into the right to receive merger consideration at the merger exchange ratio of its authorized but unissued common stock reserved for future grants under1.055, or an equivalent amount in cash, of which $3.9 million was allocated to merger-related compensation expense consisting of $3.5 million settled in equity and $400 thousand settled in cash with the 2013 Omnibus Plan. remaining $3.5 million allocated to purchase price.
The Plan permits grantsfollowing tables summarize the status of share-based compensation includingSynovus' stock options, restricted share units, market restricted share units, and performance share units. The grants generally include vesting periods ranging from three to five yearsunits as of September 30, 2019, and contractual terms of ten years. Vestingactivity for grants made in 2018 accelerates upon retirement for plan participants who have reached age 65 and who also have no less than 10 years of service at the date of their election to retire. Market restricted share units and performance share units are granted at a defined target level and are compared annually to required market and performance metrics to determine actual units vested and compensation expense. Synovus has historically issued new shares to satisfy share option exercises and share unit conversions. Dividend equivalents are paid on outstanding restricted share units, market restricted share units, and performance share units in the form of additional restricted share units that vest over the same vesting period or the vesting period left on the original restricted share unit grant.nine months ended September 30, 2019.
Share-based Compensation Expense
  Stock Options
(in thousands, except per share amounts) Quantity Weighted-Average Exercise Price Per Share
Outstanding at January 1, 2019 640
 $16.93
Assumed 3,230
 23.22
Exercised (585) 20.10
Outstanding at September 30, 2019 3,285
 $22.55
     

  
Restricted Share
 Units
 Market Restricted Share Units 
Performance Share
 Units
(in thousands, except per share amounts) Quantity Weighted-Average Grant Date Fair Value Per Share Quantity Weighted-Average Grant Date Fair Value Per Share Quantity Weighted-Average Grant Date Fair Value Per Share
Non-vested at January 1, 2019 526
 $41.18
 144
 $41.91
 248
 $38.29
Granted 541
 36.26
 151
 36.96
 140
 37.34
Assumed 136
 31.99
 —
 —
 —
 —
Quantity change by TSR factor —
 —
 (19) 37.76
 —
 —
Dividend equivalents granted 17
 36.26
 4
 36.96
 13
 37.34
Vested (298) 36.78
 (58) 37.76
 (93) 26.35
Forfeited (100) 36.43
 (19) 40.94
 (31) 40.34
Non-vested at September 30, 2019 822
 $38.49
 203
 $39.80
 277
 $41.56
             

Total share-based compensation expense was $4.2 million and $12.5 millionrecognized for the three and nine months ended September 30, 2019 and 2018 respectively, and $3.7 million and $10.6 million foris presented in the three and nine months ended September 30, 2017, respectively.following table by its classification within total non-interest expense.
Stock Options
 Three Months Ended September 30, Nine Months Ended September 30,
(in thousands)2019 2018 2019 2018
Salaries and other personnel expense$4,992
 $3,976
 $16,705
 $11,725
Merger-related expense—
 —
 4,219
 —
Other operating expenses179
 208
 472
 779
  Total share-based compensation expense included in non-interest expense$5,171
 $4,184
 $21,396
 $12,504
        

No stock option grants were made during the nine months ended September 30, 2018. At September 30, 2018, there were 643 thousand outstanding stock options to purchase shares of common stock with a weighted average exercise price of $16.94 per share.
Restricted Share Units, Performance Share Units, and Market Restricted Share Units
During the nine months ended September 30, 2018, Synovus awarded 236 thousand restricted share units that have a service-based vesting period of three years and awarded 87 thousand performance share units that vest upon service and performance conditions. Synovus also granted 58 thousand market restricted share units during the nine months ended September 30, 2018. The weighted average grant-date fair value of the awarded restricted share units, performance share units and market restricted share units was $47.69 per share. Market restricted share units and performance share units are granted at target and are compared annually to required market and performance metrics. The performance share units vest upon meeting certain service and performance conditions. Return on average assets (ROAA) and return on average tangible common equity (ROATCE) performance is evaluated each year over a three-year performance period, with share distribution determined at the end of the three years. The number of performance share units that will ultimately vest ranges from 0% to 150% of target based on Synovus' three-year weighted average ROAA (as defined) and ROATCE (as defined). The market restricted share units have a three-year service-based vesting component as well as a total shareholder return multiplier. The number of market restricted share units that will ultimately vest ranges from 75% to 125% of target based on Synovus' total shareholder return. At September 30, 2018, including dividend equivalents granted, there were 909 thousand restricted share units, performance share units and market restricted share units outstanding with a weighted average grant-date fair value of $40.86 per share.

Note 11 - Income TaxesLeases


Synovus' provisionSynovus’ leasing activities are primarily comprised of real estate leases used for income taxesretail branch locations and office space for core administrative and operating activities of Synovus’ banking and financial services business, and to a significantly lesser extent, certain equipment. The majority of these leases provide for fixed lease payments, including periodic escalators which are fixed at lease inception, however, a number of leases provide for variable lease payments where periodic increases in payment amounts are indexed to a consumer price index. Many leases include 1 or more options to renew which generally range from one to five years. Optional extension periods which are reasonably certain to be exercised in the threefuture were included in the measurement of ROU assets and nine months ended September 30, 2018 and 2017 is based on the estimated annual effective tax rate, plus discrete items.

lease liabilities. Synovus’ leasing arrangements do not contain any material residual value guarantees, material restrictive covenants, or material end of lease purchase options.
The following table presents the provisionlease balances within the consolidated balance sheet as of September 30, 2019. The difference between the asset and liability balance is primarily the result of lease liabilities that existed prior to the January 1, 2019 adoption of the new accounting guidance for income taxes and the effective tax rates for the periods indicated.leases.
 Three Months Ended September 30, Nine Months Ended September 30,
(dollars in thousands)2018 2017 2018 2017
Income before income tax expense$128,008
 $152,675
 $403,502
 $376,171
Income tax expense18,949
 54,668
 80,095
 130,303
Effective tax rate14.8% 35.8% 19.8% 34.6%
        
Leases   
(in thousands)Classification September 30, 2019
Assets   
OperatingOther Assets $379,456
Finance
Premises and Equipment, net(1)
 3,011
Total leased assets  $382,467
Liabilities   
OperatingOther Liabilities $387,898
FinanceOther Liabilities 2,767
Total lease liabilities  $390,665
    
(1)
Finance lease assets are recorded net of accumulated amortization of $671 thousand as of September 30, 2019.


The difference between Synovus' effective tax rate for the three and nine months ended September 30, 2018 and the U.S. statutory tax rate of 21%, primarily relates to third quarter 2018 discrete tax benefits of $12.7 million, which included a $3.9 million tax benefit for the refinement of provisional amounts previously reported under SEC Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (SAB 118), a $5.5 million return to provision benefit associated with the preparation of the 2017 tax return and a $3.3 million benefit associated with insignificant adjustments to tax returns from several prior years. In addition, the effective income tax rate for the nine months ended September 30, 2018 included a net discrete income tax benefit of $2.8 million resulting from tax benefits associated with the exercise and vesting of employee equity awards. Other items impacting the difference between Synovus' effective tax rates for the three and nine months ended September 30, 2018 and 2017 and the U.S. statutory tax rates of 21% and 35%, respectively, primarily relate to, but are not limited to, the level of pre-tax income, bank-owned life insurance, state income taxes (net of federal income tax benefit), tax-exempt interest and nondeductible expenses. In addition, the effective tax rate is affected by items that may occur in any given period but are not consistent from period-to-period, such as tax benefits related to share-based compensation, jurisdiction statutory tax rate changes, valuation allowance changes and changes to unrecognized tax benefits. Accordingly, the comparability of the effective tax rate between periods may be impacted.

Impact of Tax Reform
On December 22, 2017, Federal Tax Reform was enacted into law. The new legislation included a decrease in the U.S. statutory tax rate from 35% to 21% effective January 1, 2018. Under ASC 740, the effects of the changes in tax rates and laws are recognized in the period in which the new legislation is enacted. Therefore, Synovus was required to remeasure its deferred tax assets and liabilities and record the adjustment to income tax expense effective December 22, 2017. In December 2017, the SEC issued SAB 118, which allowed companies to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. Since Federal Tax Reform was enacted late in 2017, Synovus expected that certain deferred tax assets and liabilities would continue to be evaluated in the context of Federal Tax Reform through the date of the filing of the 2017 federal income tax return, and that changes might result from evolving internal interpretations, elections, and assumptions, as well as new guidance that may be issued by the Internal Revenue Service.  Accordingly, the federal income tax expense of $47.2 million recorded in 2017 relating to the effects from Federal Tax Reform was considered provisional. During the third quarter of 2018, Synovus completed its 2017 federal income tax return and recorded a $3.9 million tax benefit for the refinement of provisional amounts previously reported under SAB 118; thus, the accounting under SAB 118 for Federal Tax Reform is now complete.

Note 12 - Non-interest Income

The following table reflects revenue disaggregated by revenue type and line of business for the three and nine months ended September 30, 2018 and 2017.

Non-interest Income by Line of Business

 For the Three Months Ended September 30, 2018
(in thousands)Community Banking Corporate Banking Retail Banking Financial Management Services Other Total
Service charges on deposit accounts$5,660
 $475
 $13,792
 $—
 $655
 $20,582
Fiduciary and asset management fees—
 —
 —
 13,462
 —
 13,462
Card fees208
 —
 10,400
 —
 —
 10,608
Brokerage revenue—
 —
 —
 9,329
 —
 9,329
Insurance revenue—
 —
 —
 1,148
 —
 1,148
Other fees—
 —
 454
 —
 266
 720
 $5,868
 $475
 $24,646
 $23,939
 $921
 $55,849
            
Other revenues(1)
1,142
 1,836
 1,645
 5,994
 5,202
 15,819
Total non-interest income$7,010
 $2,311
 $26,291
 $29,933
 $6,123
 $71,668
            
 For the Three Months Ended September 30, 2017
(in thousands)Community Banking Corporate Banking Retail Banking Financial Management Services Other Total
Service charges on deposit accounts$5,613
 $432
 $14,024
 $—
 $609
 $20,678
Fiduciary and asset management fees—
 —
 —
 12,615
 —
 12,615
Card fees210
 —
 9,519
 —
 —
 9,729
Brokerage revenue—
 —
 —
 7,511
 —
 7,511
Insurance revenue—
 —
 —
 1,059
 —
 1,059
Other fees—
 —
 463
 —
 265
 728
 $5,823
 $432
 $24,006
 $21,185
 $874
 $52,320
            
Other revenues(1)
2,642
 1,460
 1,574
 6,558
 70,881
 83,115
Total non-interest income$8,465
 $1,892
 $25,580
 $27,743
 $71,755
 $135,435
            
(1) Other revenues primarily relate to revenues not derived from contracts with customers.

Non-interest Income by Line of Business

 For the Nine Months Ended September 30, 2018
(in thousands)Community Banking Corporate Banking Retail Banking Financial Management Services Other Total
Service charges on deposit accounts$17,064
 $1,460
 $40,310
 $—
 $1,687
 $60,521
Fiduciary and asset management fees—
 —
 —
 40,881
 —
 40,881
Card fees628
 —
 31,012
 —
 —
 31,640
Brokerage revenue—
 —
 —
 26,924
 —
 26,924
Insurance revenue—
 —
 —
 4,240
 —
 4,240
Other fees—
 —
 1,487
 —
 821
 2,308
 $17,692
 $1,460
 $72,809
 $72,045
 $2,508
 $166,514
            
Other revenues(1)
6,983
 5,417
 4,887
 17,402
 10,898
 45,587
Total non-interest income$24,675
 $6,877
 $77,696
 $89,447
 $13,406
 $212,101
            
 For the Nine Months Ended September 30, 2017
(in thousands)Community Banking Corporate Banking Retail Banking Financial Management Services Other Total
Service charges on deposit accounts$17,028
 $1,319
 $40,994
 $—
 $1,707
 $61,048
Fiduciary and asset management fees—
 —
 —
 37,290
 —
 37,290
Card fees647
 —
 28,967
 —
 —
 29,614
Brokerage revenue—
 —
 —
 21,947
 —
 21,947
Insurance revenue—
 —
 —
 3,424
 —
 3,424
Other fees—
 —
 1,525
 —
 795
 2,320
 $17,675
 $1,319
 $71,486
 $62,661
 $2,502
 $155,643
            
Other revenues(1)
7,283
 5,836
 4,756
 19,971
 82,485
 120,331
Total non-interest income$24,958
 $7,155
 $76,242
 $82,632
 $84,987
 $275,974
            
(1) Other revenues primarily relate to revenues not derived from contracts with customers.

Following is a discussion of key revenues within the scope of Topic 606:

Service Charges on Deposit Accounts: Revenue from service charges on deposit accounts is earned through cash management, wire transfer, and other deposit-related services, as well as overdraft, non-sufficient funds, account management and other deposit-related fees. Revenue is recognized for these services either over time, corresponding with deposit accounts' monthly cycle, or at a point in time for transaction-related services and fees. Payment for service charges on deposit accounts is primarily received immediately or in the following month through a direct charge to customers' accounts.

Fiduciary and Asset Management Fees: Fiduciary and asset management fees are primarily comprised of fees earned from the management and administration of trusts and other customer assets. Synovus' performance obligation is generally satisfied over time and the resulting fees are recognized monthly, based upon the month-end market value of the assets under management and the applicable fee rate. Payment is generally received a few days after month-end through a direct charge to customers' accounts. Synovus does not earn performance-based incentives.

Card Fees: Card fees consist primarily of interchange fees from consumer credit and debit cards processed by card association networks, as well as merchant discounts, and other card-related services. Interchange rates are generally set by the credit card associations and based on purchase volumes and other factors. Interchange fees and merchant discounts are recognized concurrently with the delivery of service on a daily basis as transactions occur. Payment is typically received immediately or in the following month. Card fees are reported net of certain associated expense items including loyalty program expenses and network expenses.

Brokerage Revenue: Brokerage revenue consists primarily of commissions. Additionally, brokerage revenue includes advisory fees earned from the management of customer assets. Advisory fees for brokerage services are recognized and collected monthly and are based upon the month-end market value of the assets under management at a rate predetermined in the contract. Transactional

revenues are based on the size and number of transactions executed at the client's direction and are generally recognized on the trade date with payment received on the settlement date.

Insurance Revenue: Insurance revenue primarily consists of commissions received on annuity and life product sales. The commissions are recognized as revenue when the customer executes an insurance policy with the insurance carrier. In some cases, Synovus receives payment of trailing commissions each year when the customer pays its annual premium. For the three and nine months ended September 30, 2018, Synovus recognized an immaterial amount2019, the components of insurance trailing commissions.lease expense were as follows:
Lease Cost     
(in thousands)Classification Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019
Operating lease cost, net(1)
Net occupancy and equipment expense $8,199
 $24,508
Finance lease cost     
Amortization of leased assetsNet occupancy and equipment expense 223
 671
Interest on lease liabilitiesNet occupancy and equipment expense 18
 57
Sublease income(2)
Net occupancy and equipment expense (157) (479)
Net lease cost  $8,283
 $24,757
      
(1)
Excludes variable and short-term lease costs, which are not material.
(2)
Sublease income excludes rental income from owned properties of $631 thousand and $1.9 million, respectively, for the three and nine months ended September 30, 2019, which is also included in net occupancy and equipment expenses.

The following table presents the weighted average remaining lease term and weighted average discount rates related to Synovus' leases as of September 30, 2019:
Lease Term and Discount Rate   
 Weighted-average remaining lease term (years) Weighted-average discount rate (percentage)
Operating leases21.2 3.54%
Finance leases4.03 2.42
    






Other Fees: Other fees primarily consistSupplemental cash flow information related to the Company's leasing activities for the nine months ended September 30, 2019 are as follows:
Other Information 
(in thousands)Nine Months Ended September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities(1)

Operating cash flows from operating leases$(22,318)
Operating cash flows from finance leases(57)
Financing cash flows from finance leases(639)
  

(1) Excludes sublease income which is not material.

The following table presents the maturity of revenues generated from safe deposit box rental fees and lockbox services. Fees are recognized over time, on a monthly basis,Synovus' lease liabilities as Synovus' performance obligation for services is satisfied. Payment is received upfront for safe deposit box rentals and in the following month for lockbox services.of September 30, 2019:
Maturity of Lease Liabilities     
(in thousands)Operating Leases Finance Leases Total
2019$7,541
 $193
 $7,734
202030,164
 871
 31,035
202128,975
 839
 29,814
202228,235
 465
 28,700
202326,426
 180
 26,606
After 2023443,238
 343
 443,581
Total lease payments$564,579
 $2,891
 $567,470
Less: Imputed interest176,681
 124
 176,805
Present value of lease liabilities$387,898
 $2,767
 $390,665
      


As of September 30, 2019, minimum lease payments related to operating leases that had not yet commenced were $11.2 million.
Note 1312 - Commitments and Contingencies
In the normal course of business, Synovus enters into commitments to extend credit such as loan commitments and letters of credit to meet the financing needs of its customers. Synovus uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Synovus also has commitments to fund certain low-income housing investments.
The contractual amount of these financial instruments represents Synovus' maximum credit risk should the counterparty draw upon the commitment, and should the counterparty subsequently fail to perform according to the terms of the contract. Since many of the commitments are expected to expire without being drawn upon, total commitment amounts do not necessarily represent future cash requirements. Additionally, certain commitments (primarily consumer) maycan generally be canceled by providing notice to the borrower.
The allowance for credit lossesACL associated with unfunded commitments and letters of credit is a component of the unfunded commitments reserve recorded within other liabilities on the consolidated balance sheets. Additionally, unearned fees relating to letters of credit are recorded within other liabilities on the consolidated balance sheets. These amounts are not material to Synovus' consolidated balance sheets.
Unfunded lettersSynovus invests in certain LIHTC partnerships which are engaged in the development and operation of creditaffordable multi-family housing utilizing the LIHTC pursuant to Section 42 of the Code. Synovus typically acts as a limited partner in these investments and lending commitmentsdoes not exert control over the operating or financial policies of the partnerships and as such, is not considered the primary beneficiary of the partnership. Synovus typically provides financing during the construction and development of the properties and is at September 30, 2018risk for the amount of its equity investment plus the outstanding amount of any construction loans in excess of the fair value of the collateral for the loan but has no obligation to fund the operations or working capital of the partnerships and December 31, 2017is not exposed to losses beyond Synovus’ investment. Synovus receives tax credits related to these investments which are presented below.subject to recapture by taxing authorities based on compliance features required to be met at the project level.

(in thousands)September 30, 2018 December 31, 2017September 30, 2019 December 31, 2018
Letters of credit*$167,969
 $153,372
$203,224
 $157,675
Commitments to fund commercial and industrial loans5,688,192
 5,090,827
6,702,472
 5,527,017
Commitments to fund commercial real estate, construction, and land development loans1,763,006
 1,567,583
2,734,852
 2,034,223
Commitments under home equity lines of credit1,211,861
 1,137,714
1,464,720
 1,258,657
Unused credit card lines766,521
 779,254
899,379
 775,003
Other loan commitments394,428
 351,358
487,698
 400,983
Total unfunded lending commitments and letters of credit$9,991,977
 $9,080,108
$12,492,345
 $10,153,558
   
Investments in low income housing tax credit partnerships:   
Carrying amount included in other assets$108,025
 $83,736
Amount of future funding commitments included in carrying amount49,179
 47,123
Short-term construction loans and letter of credit commitments259
 1,585
Funded portion of short-term loans and letters of credit2,822
 5,595
    
* Represent the contractual amount net of risk participations of approximately $70$33 million and $77$46 million at September 30, 20182019 and December 31, 2017,2018, respectively.


Merchant Services

In accordance with credit and debit card association rules, Synovus sponsors merchant processing servicersvarious MPS businesses that process credit and debit card transactions on behalf of various merchants. In connection with these services, a liability may arise in the event of a billing dispute between the merchant and a cardholder that is ultimately resolved in the cardholder's favor. If the merchant defaults on its obligation to reimburse the cardholder,obligations, the cardholder, through its issuing bank, generally has until six months after the date of the transaction to present a chargeback to the merchant processor,MPS, which is primarily liable for any losses on covered transactions. However, if the merchant processorMPS fails to meet its obligation to reimburse the cardholder for disputed transactions,obligations, then Synovus, as the sponsor, could be held liable for the disputed amount. Synovus seeks to mitigate this risk through its contractual arrangements with the merchant processing servicersMPS and the merchants and by withholding future settlements, by retaining cash reserve accounts and/or by obtaining other security. For the three and nine months ended September 30, 2019, the sponsored entities processed and settled $19.13 billion and $55.72 billion of transactions, respectively. For the three and nine months ended September 30, 2018, the sponsored entities processed and settled $17.69 billion and $52.04 billion of transactions, respectively. For the three and nine months ended September 30, 2017, the sponsored entities processed and settled $15.84 billion and $46.26 billion of transactions, respectively.
Synovus began covering and may continuehas continued to cover chargebacks related to a merchant processing servicerparticular MPS during the third quarter of2019 and 2018 where the merchant processing servicer’sMPS’s cash reserve account was unavailable to support the chargebacks. Synovus expectsAs of September 30, 2019, the remaining amount due to recover these amountsSynovus from the servicer under the termsMPS is $21.7 million, which is included in other assets and classified in NPAs, compared to $22.9 million at December 31, 2018. While Synovus has contractual protections to mitigate against loss, repayment of the contract; however, any inability by Synovus to fully recover these amounts would result in lossesowed to Synovus will depend in future periods.large part upon the continued financial viability and/or valuation of the MPS and the availability of any cash reserve accounts.
Legal Proceedings
Synovus and its subsidiaries are subject to various legal proceedings and claims that arise in the ordinary course of its business. Additionally, in the ordinary course of business, Synovus and its subsidiaries are subject to regulatory examinations, information gathering requests, tax matters, inquiries and investigations. Synovus, like many other financial institutions, has been the target of numerous legal actions and other proceedings asserting claims for damages and related relief for losses. These actions include claims and counterclaims asserted by individual borrowersindividuals related to their loans and allegations of violations of state and federal laws and regulations relating to banking practices, including putative class action matters.matters and also claims asserted by shareholders or purported shareholders against Synovus, members of Synovus' Board of Directors, and members of Synovus' management team. In addition to actual damages, if Synovus does not prevail in asserted legal actions, credit-related litigation could result in additional write-downs or charge-offs of loans, which could adversely affect Synovus' results of operations during the period in which the write-down or charge-off were to occur.
Synovus carefully examines and considers each legal matter, and, in those situations where Synovus determines that a particular legal matter presents loss contingencies that are both probable and reasonably estimable, Synovus establishes an appropriate reserve. An event is considered to be probable if the future event is likely to occur. While the final outcome of any legal proceeding is inherently uncertain, based on the information currently available, advice of counsel and available insurance coverage, management believes that the amounts accrued with respect to legal matters as of September 30, 20182019 are adequate. The actual costs of resolving legal claims may be higher or lower than the amounts accrued.

In addition, where Synovus determines that there is a reasonable possibility of a loss in respect of legal matters, Synovus considers whether it is able to estimate the total reasonably possible loss or range of loss. An event is “reasonably possible” if “the chance of the future event or events occurring is more than remote but less than likely.” An event is “remote” if “the chance of the future event or events occurring is more than slight but less than reasonably possible." In many situations, Synovus may be unable to estimate reasonably possible losses due to the preliminary nature of the legal matters, as well as a variety of other factors and uncertainties. For those legal matters where Synovus is able to estimate a range of reasonably possible losses, management currently estimates the aggregate range from our outstanding litigation is from zero0 to $5 million in excess of the amounts accrued, if any, related to those matters. This estimated aggregate range is based upon information currently available to Synovus, and the actual losses could prove to be lower or higher. As there are further developments in these legal matters, Synovus will reassess these matters, and the estimated range of reasonably possible losses may change as a result of this assessment. Based on Synovus' current knowledge and advice of counsel, management presently does not believe that the liabilities arising from these legal matters will have a material adverse effect on Synovus' consolidated financial condition, results of operations or cash flows. However, it is possible that the ultimate resolution of these legal matters could have a material adverse effect on Synovus' results of operations for any particular period.
Synovus intends to vigorously pursue all available defenses to these legal matters, but will also consider other alternatives, including settlement, in situations where there is an opportunity to resolve such legal matters on terms that Synovus considers to be favorable, including in light of the continued expense and distraction of defending such legal matters. Synovus maintains insurance coverage, which may be available to cover legal fees, or potential losses that might be incurred in connection with such legal matters. The above-noted estimated range of reasonably possible losses does not take into consideration insurance coverage which may or may not be available for the respective legal matters.


Note 14 - Pending Acquisition and Pending Branch Sales

Pending Acquisition of FCB Financial Holdings, Inc.

On July 23, 2018, Synovus entered into the Merger Agreement by and among Synovus, FCB and Azalea Merger Sub Corp.  pursuant to which Synovus will acquire FCB in a reverse triangular merger. FCB is headquartered in Weston, Florida with reported assets of $12.19 billion as of June 30, 2018. At the effective time of the Merger, each outstanding share of FCB Class A common stock, par value $0.001 per share, will be converted into the right to receive, without interest, 1.055 shares of Synovus common stock, par value $1.00 per share.  The Merger Agreement has been unanimously approved by both companies’ Board of Directors.  The transaction is subject to customary closing conditions, including approval of Synovus and FCB shareholders and approval of state and federal regulators, and is expected to close by the first quarter of 2019. 

FCB operates 50 full service banking centers through its wholly-owned banking subsidiary, Florida Community Bank.  Following closing, Florida Community Bank will merge with and into Synovus Bank and operate under the Synovus brand.   

Pending Branch Sales
On August 28, 2018, Synovus Bank entered into a purchase and assumption agreement with Jefferson Financial Federal Credit Union pursuant to which Jefferson Financial Federal Credit Union will acquire certain assets, including selected loans, and assume substantially all of the deposits associated with two branches in Mobile, Alabama, and one branch in Daphne, Alabama. The agreement provides for the transfer of approximately $138 million in loans, approximately $107 million in deposits, and other assets associated with the three branches in exchange for a deposit premium of $14.5 million. The transaction is subject to regulatory approval and satisfaction of customary closing conditions and is expected to be completed in the first quarter of 2019.








ITEM 2. – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
In this Report, the words “Synovus,” “the Company,” “we,” “us,” and “our” refer to Synovus Financial Corp. together with Synovus Bank and Synovus' other wholly-owned subsidiaries, except where the context requires otherwise.
FORWARD-LOOKING STATEMENTS
Certain statements made or incorporated by reference in this Report which are not statements of historical fact, including those under "Management's“Management's Discussion and Analysis of Financial Condition and Results of Operations,"” and elsewhere in this Report, constitute forward-looking statements within the meaning of, and subject to the protections of, Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements include statements with respect to Synovus' beliefs, plans, objectives, goals, targets, expectations, anticipations, assumptions, estimates, intentions and future performance and involve known and unknown risks, many of which are beyond Synovus' control and which may cause Synovus' actual results, performance or achievements or the commercial bankingfinancial services industry or economy generally, to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements.
All statements other than statements of historical fact are forward-looking statements. You can identify these forward-looking statements through Synovus' use of words such as “believes,” “anticipates,” “expects,” “may,” “will,” “assumes,” “predicts,” “could,” “should,” “would,” “intends,” “targets,” “estimates,” “projects,” “plans,” “potential” and other similar words and expressions of the future or otherwise regarding the outlook for Synovus' future business and financial performance and/or the performance of the commercial bankingfinancial services industry and economy in general. Forward-looking statements are based on the current beliefs and expectations of Synovus' management and are subject to significant risks and uncertainties. Actual results may differ materially from those contemplated by such forward-looking statements. A number of factors could cause actual results to differ materially from those contemplated by the forward-looking statements in this document. Many of these factors are beyond Synovus' ability to control or predict. These factors include, but are not limited to:
(1) the risk that competition in the financial services industry may adversely affect our future earnings and growth;
(2) the risk that any future economic downturn could have a material adverse effect on our capital, financial condition, credit quality, results of operations and future growth;
(3)changes in interest rate environment, including changes to the federal funds rate, and competition in our primary market area may result in increased funding costs or reduced earning assets yields, thus reducing margins and net interest income;
(4)the risk that we may not realize the expected benefits from our efficiency and growth initiatives, which could negatively impact our future profitability;
(3)(5) the risk that our current and future information technology system enhancements and operational initiatives may not be successfully implemented, which could negatively impact our operations;
(4)(6) the risk that our enterprise risk management framework, our compliance program, or our corporate governance and supervisory oversight functions may not identify or address risks adequately, which may result in unexpected losses;
(5)(7) the risk that our asset quality may deteriorate, our allowance for loan losses may prove to be inadequate or may be negatively affected by credit risk exposures, and the risk that we may be unable to obtain full payment in respect of any trade or other receivables;
(6)the risk that any future economic downturn could have a material adverse effect on our capital, financial condition, results of operations and future growth;
(7)changes in the interest rate environment, including changes to the federal funds rate, and competition in our primary market area may result in increased funding costs or reduced earning assets yields, thus reducing margins and net interest income;
(8) our ability to attract and retain key employees;
(9) the risk that we may be required to make substantial expenditures to keep pace with regulatory initiatives and the rapid technological changes in the financial services market;
(10) risks related to our business relationships with, and reliance onupon, third parties tothat have strategic partnerships with us or that provide key components of our business infrastructure, including the costs of services and products provided to us by third parties, and risks related to disruptions in service or financial difficulties ofwith a third-party vendor;vendor or business relationship;
(11) risks related to the ability of our operational framework to identify and manage risks associated with our business such as credit risk, compliance risk, reputational risk, and operational risk, including third-party vendors and other service providers, which could among other things, result in a breach of operating or security systems as a result of cyber attacks or similar acts;providers;

(12) our ability to identify and address cyber-security risks such as data security breaches, malware, "denial of service" attacks, "ransomware", "hacking" and identity theft, a failure of which could disrupt our business and result in the disclosure of and/or misuse or misappropriation of confidential or proprietary information, disruption or damage of our systems, increased costs, significant losses, or adverse effects to our reputation;
(13) the risk related to our implementation of new lines of business or new products and services;
(14)the impact of recent and proposed changes in governmental policy, laws and regulations, including proposed and recently enacted changes in the regulation and taxation of banks and financial institutions, or the interpretation or application thereof and the uncertainty of future implementation and enforcement of these regulations;
(14)the risk that Federal Tax Reform could have an adverse impact on our business or our customers, including with respect to demand and pricing for our loan products;
(15)the risk that we could realize losses if we sell non-performing assets and the proceeds we receive are lower than the carrying value of such assets;
(16) the risk that we may be exposed to potential losses in the event of fraud and/or theft, or in the event that a third-party vendor, obligor, or obligorbusiness partner fails to pay amounts due to us under that relationship or under any arrangement that we enter into with them;
(16)that we may fail to realize all of the anticipated benefits of the Merger, or those benefits may take longer to realize than expected, and that we may encounter significant difficulties in integrating and managing FCB and its businesses;
(17) the risk that we may not be able to identify suitable bank and non-bank acquisition targets or strategic partnersopportunities as part of our growth strategy and even if we are able to identify suitableattractive acquisition counterparties,opportunities, we may not be able to complete such transactions on favorable terms if at all, or successfully integrate acquired bank or nonbank operations into our existing operations or realize anticipated benefits from such transactions;
(18) the impact on our financial results, reputation, and business if we are unable to comply with all applicable federal and state regulations or other supervisory actions or directives and any necessary capital initiatives;
(19) changes in the cost and availability of funding due to changes in the deposit market and credit market;
(20)the risks that if economic conditions worsen or regulatory capital rules are modified, we may be required to undertake initiatives to improve our capital position;
(20)changes in the cost and availability of funding due to changes in the deposit market and credit market;
(21) restrictions or limitations on access to funds from historical and alternative sources of liquidity could adversely affect our overall liquidity, which could restrict our ability to make payments on our obligations and our ability to support asset growth and sustain our operations and the operations of Synovus Bank;
(22) the risk that we could realize losses if we sell non-performing assets and the proceeds we receive are lower than the carrying value of such assets;
(23)our ability to receive dividends from our subsidiaries could affect our liquidity, including our ability to pay dividends or take other capital actions;
(23)(24) risks related to regulatory approval to take certain actions, including any dividends on our common stock or Series D Preferred Stock,preferred stock, any repurchases of common stock or any issuance or redemption of any other regulatory capital instruments, as well as any applications in respect of expansionary initiatives;
(24)(25) risks related to recentthe continued use, availability and proposed changes in the mortgage banking industry, including the risk that we may be required to repurchase mortgage loans sold to third partiesreliability of LIBOR and the impact of the “ability to pay” and “qualified mortgage” rules on our loan origination process and foreclosure proceedings;other "benchmark" rates;
(25)(26) the costs and effects of litigation, investigations, inquiries or similar matters, or adverse facts and developments related thereto;
(26)(27) risks related to the fluctuation in our stock price;price and general volatility in the stock market;
(27)(28) the effects of any damages to our reputation resulting from developments related to any of the items identified above;
(28)the risk that the required shareholder approvals of the Merger with FCB may not be obtained; and
(29)the risk that Synovus or FCB may be unable to obtain all of the regulatory approvals required to complete the Merger;
(30)the risk that the other conditions to closing the Merger with FCB may not be satisfied;

(31)the risk that the length of time necessary to consummate the Merger with FCB may be longer than anticipated for various reasons;
(32)the risk that the businesses of Synovus and FCB will not be integrated successfully or that the integration may take longer than expected;
(33)the risk that the cost savings, synergies, growth, and other benefits from the Merger with FCB may not be fully realized or may take longer to realize than expected;
(34)the risk that management’s time and attention will be diverted to issues associated with the Merger with FCB rather than our ongoing businesses;
(35)the risk that costs associated with the integration of the businesses of Synovus and FCB will be higher than anticipated;
(36)the risk of litigation in connection with the Merger and that could cause the transaction to be more costly than expected or delay its completion;
(37)the risk that events could lead to the termination of the Merger Agreement (or otherwise result in payment of termination fee);
(38)the risk of business disruption following the Merger; and
(39) other factors and other information contained in this Report and in other reports and filings that we make with the SEC under the Exchange Act, including, without limitation, those found in "Part III - Item 1A. Risk Factors" of this Report.

For a discussion of these and other risks that may cause actual results to differ from expectations, refer to “Part I-Item 1A. Risk Factors” and other information contained in Synovus' 20172018 Form 10-K and our other periodic filings, including quarterly reports on Form 10-Q and current reports on Form 8-K, that we file from time to time with the SEC. All written or oral forward-looking statements that are made by or are attributable to Synovus are expressly qualified by this cautionary notice. You should

not place undue reliance on any forward-looking statements since those statements speak only as of the date on which the statements are made. Synovus undertakes no obligation to update any forward-looking information and statements, whether writtenoral or oral,written, to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of new information or unanticipated events, except as may otherwise be required by law.

INTRODUCTION AND CORPORATE PROFILE
Synovus Financial Corp. is a financial services company and a registered bank holding company headquartered in Columbus, Georgia. Through its wholly-owned subsidiary, Synovus Bank, a Georgia state-chartered bank that is a member of the Federal Reserve System, the companyCompany provides commercial and retail banking in addition to a full suite of specialized products and services including private banking, treasury management, wealth management, premium finance, asset-based lending, structured lending, and international banking. Synovus also provides mortgage services, financial planning, and investment advisory services through its wholly-owned subsidiaries, Synovus Mortgage, Synovus Trust, and Synovus Securities, as well as its GLOBALT and Creative Financial Group divisions.
Synovus Bank is positioned in some of the highest growth markets in the Southeast, with 249298 branches in Alabama, Florida, Georgia, Alabama, South Carolina, Florida, and Tennessee.
The following financial review summarizes the significant trends, changes in our business, transactions, and other matters affecting Synovus’ results of operations for the three and nine months ended September 30, 20182019 and financial condition as of September 30, 20182019 and December 31, 2017.2018. This discussion supplements, and should be read in conjunction with, the unaudited interim consolidated financial statements and notes thereto contained elsewhere in this Report and the consolidated financial statements of Synovus, the notes thereto, and management’s discussion and analysis contained in Synovus’ 20172018 Form 10-K.
Management's Discussion and Analysis of Financial Condition and Results of Operations consists of:
ŸDiscussion of Results of Operations - Reviews Synovus' financial performance, as well as selected balance sheet items, items from the statements of income, significant transactions, and certain key ratios that illustrate Synovus' performance.

Discussion of Results of Operations - Reviews Synovus' financial performance, as well as selected balance sheet items, items from the statements of income, significant transactions, and certain key ratios that illustrate Synovus' performance.
ŸCredit Quality, Capital Resources and Liquidity - Discusses credit quality, market risk, capital resources, and liquidity, as well as performance trends. It also includes a discussion of liquidity policies, how Synovus obtains funding, and related performance.


ŸAdditional Disclosures - Discusses additional important matters including critical accounting policies and non-GAAP financial measures used within this Report.
Credit Quality, Capital Resources and Liquidity - Discusses credit quality, market risk, capital resources, and liquidity, as well as performance trends. It also includes a discussion of liquidity policies, how Synovus obtains funding, and related performance.

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


DISCUSSION OF RESULTS OF OPERATIONS
Consolidated Financial Highlights
Table 1 - Consolidated Financial Highlights           
Three Months Ended September 30, Nine Months Ended September 30,Three Months Ended September 30, Nine Months Ended September 30,
(dollars in thousands, except per share data)2018 2017 Change 2018 2017 Change2019 2018 Change 2019 2018 Change
Net interest income$291,619
 $262,572
 11.1 % $850,480
 $753,597
 12.9 %$402,097
 $291,619
 37.9 % $1,196,535
 $850,480
 40.7 %
Provision for loan losses14,982
 39,686
 (62.2) 39,548
 58,620
 (32.5)27,562
 14,982
 84.0
 63,250
 39,548
 59.9
Non-interest income71,668
 135,435
 (47.1) 212,101
 275,974
 (23.1)88,760
 71,668
 23.8
 257,945
 212,101
 21.6
Adjusted non-interest income(1)
71,234
 68,418
 4.1
 216,056
 204,456
 5.7
91,297
 71,234
 28.2
 259,940
 216,056
 20.3
Total revenues363,287
 398,007
 (8.7) 1,062,581
 1,029,571
 3.2
Total FTE revenues491,676
 363,423
 35.3
 1,456,736
 1,062,953
 37.0
Adjusted total revenues (1)
362,989
 331,273
 9.6
 1,066,908
 958,943
 11.3
494,213
 362,989
 36.2
 1,458,731
 1,066,908
 36.7
Non-interest expense220,297
 205,646
 7.1
 619,531
 594,780
 4.2
276,310
 220,297
 25.4
 832,847
 619,531
 34.4
Adjusted non-interest expense(1)
201,648
 194,102
 3.9
 602,209
 576,150
 4.5
258,474
 201,940
 28.0
 757,834
 603,084
 25.7
Income before income taxes128,008
 152,675
 (16.2) 403,502
 376,171
 7.3
186,985
 128,008
 46.1
 558,383
 403,502
 38.4
Net income109,059
 98,007
 11.3
 323,407
 245,868
 31.5
135,726
 109,059
 24.5
 412,096
 323,407
 27.4
Net income available to common shareholders99,330
 95,448
 4.1
 308,559
 238,190
 29.5
127,435
 99,330
 28.3
 397,505
 308,559
 28.8
Net income per common share, basic0.85
 0.79
 7.3
 2.61
 1.96
 33.6
0.84
 0.85
 (1.2) 2.53
 2.61
 (3.0)
Net income per common share, diluted0.84
 0.78
 7.3
 2.60
 1.94
 33.7
0.83
 0.84
 (1.6) 2.51
 2.60
 (3.5)
Adjusted net income per common share, diluted(1)
0.95
 0.65
 46.4
 2.73
 1.82
 49.9
0.97
 0.94
 2.9
 2.96
 2.72
 8.6
Net interest margin(2)
3.89% 3.63% 26  bps 3.84% 3.52% 32  bps3.69% 3.89% (20) bps 3.72% 3.84% (12) bps
Net charge-off ratio(2)
0.24
 0.62
 (38) 0.20
 0.33
 (13)0.22
 0.24
 (2) 0.18
 0.20
 (2)
Return on average assets(2)
1.36
 1.27
 9
 1.37
 1.07
 30
1.14
 1.36
 (22) 1.18
 1.37
 (19)
Adjusted return on average assets(1)(2)
1.47
 1.05
 42
 1.42
 1.01
 41
1.33
 1.47
 (14) 1.39
 1.42
 (3)
Efficiency ratio60.62
 50.62
 nm 58.21
 57.70
 51
Adjusted efficiency ratio(1)
55.55
 58.59
 (304) 56.44
 60.08
 (364)
Efficiency ratio-FTE56.20
 60.62
 (442) 57.17
 58.28
 (111)
Adjusted tangible efficiency ratio(1)
51.71
 55.55
 (384) 51.36
 56.44
 (508)
                      
(1) See “Non-GAAP"Table 14 - Reconciliation of Non-GAAP Financial Measures” in this Report for the applicable reconciliation to the most comparable GAAP measure.
(2) Annualized
September 30, 2018 June 30, 2018 Sequential Quarter Change September 30, 2017 Year-Over-Year ChangeSeptember 30, 2019 June 30, 2019 Sequential Quarter Change September 30, 2018 Year-Over-Year Change
(dollars in thousands, except per share data)
(dollars in thousands)September 30, 2019 June 30, 2019 Sequential Quarter Change September 30, 2018 Year-Over-Year Change
Loans, net of deferred fees and costs$25,577,116
 $25,134,056
 $443,060
 $24,487,360
 $1,089,756
Total average loans25,322,582
 24,946,307
 376,275
 24,499,923
 822,659
36,201,322
 35,777,127
 424,195
 25,322,582
 10,878,740
Total deposits26,433,658
 26,442,688
 (9,030) 26,186,228
 247,430
37,433,070
 37,966,722
 (533,652) 26,433,658
 10,999,412
Core deposits(1)
34,237,575
 34,963,178
 (725,603) 24,749,886
 9,487,689
Core transaction deposits(1)
23,794,467
 23,268,923
 525,544
 19,232,685
 4,561,782
Total average deposits26,387,312
 26,268,074
 119,238
 25,286,919
 1,100,393
37,714,145
 37,899,662
 (185,517) 26,387,312
 11,326,833
Average core deposits (1)
24,614,335
 24,345,157
 269,178
 23,756,030
 858,305
         
Non-performing assets ratio(3)0.46% 0.50% (4) bps 0.57% (11) bps0.42% 0.39% 3  bps 0.46% (4) bps
Non-performing loans ratio(3)0.42
 0.47
 (5) 0.40
 2
0.32
 0.34
 (2) 0.42
 (10)
Past due loans over 90 days0.02
 0.01
 1
 0.02
 —
0.04
 0.02
 2
 0.02
 2
         
Common equity Tier 1 capital (transitional)$2,846,416
 $2,838,616
 $7,800
 $2,749,304
 $97,112
CET1 capital (transitional)$3,660,078
 $3,899,532
 $(239,454) $2,846,416
 $813,662
Tier 1 capital3,038,768
 3,156,805
 (118,037) 2,849,580
 189,188
4,196,628
 4,094,672
 101,956
 3,038,768
 1,157,860
Total risk-based capital3,550,686
 3,668,904
 (118,218) 3,362,125
 188,561
5,023,138
 4,913,043
 110,095
 3,550,686
 1,472,452
Common equity Tier 1 capital ratio (transitional)9.90% 10.12% (22) bps 10.06% (16) bps
CET1 capital ratio (transitional)8.96% 9.61% (65) bps 9.90% (94) bps
Tier 1 capital ratio10.57
 11.25
 (68) 10.43
 14
10.27
 10.09
 18
 10.57
 (30)
Total risk-based capital ratio12.36
 13.08
 (72) 12.30
 6
12.29
 12.11
 18
 12.36
 (7)
Total shareholders’ equity to total assets ratio9.48
 9.98
 (50) 9.47
 1
10.22
 10.05
 17
 9.48
 74
Tangible common equity ratio(1)
8.68
 8.77
 (9) 8.88
 (20)8.04
 8.56
 (52) 8.68
 (64)
Return on average common equity(2)
13.95
 15.39
 (144) 13.24
 71
11.36
 13.90
 (254) 13.95
 (259)
Adjusted return on average common equity(1)(2)
15.69
 15.59
 10
 10.92
 477
13.35
 14.43
 (108) 15.66
 (231)
Adjusted return on average tangible common equity(1)(2)
16.08
 15.97
 11
 11.19
 489
15.46
 16.70
 (124) 16.08
 (62)
                  
(1)
See "Table 14 - Reconciliation of Non-GAAP Financial Measures” in this Report for the applicable reconciliation to the most comparable GAAP measure.
(2)
Quarter annualized
(3)
For purposes of this table, 2019 non-performing loans exclude acquired loans accounted for under ASC 310-30 that are currently accruing income.

(1) See “Non-GAAP Financial Measures” in this Report for the applicable reconciliation to the most comparable GAAP measure.
(2) Quarter annualized



Executive Summary
Net income available to common shareholders for the third quarter of 20182019 was $99.3$127.4 million, or $0.84$0.83 per diluted common share, an increase of 4.1%28.3% and 7.3%a decrease of 1.6%, respectively, compared to the third quarter of 2017.2018. Adjusted net income per common share, diluted(1) was $0.95$0.97 for the third quarter of 2018,2019, up 46.4%2.9% compared to $0.65$0.94 for the third quarter of 2017. Third quarter 2018 adjustments to net income available to common shareholders included merger-related expense of $6.7 million associated with Synovus' pending acquisition of FCB, an $11.7 million increase in the earnout liability related to the Global One acquisition, a $4.0 million one-time, non-cash charge associated with the Series C Preferred Stock redemption, partially offset by $9.9 million in discrete (non-core) tax benefits. The third quarter of 2018 results were positively impacted by strong loan growth, continued expansion of the net interest margin, fee income growth, and a lower effective tax rate. Third quarter of 2017 results included the $75.0 million Cabela's Transaction Fee, partially offset by certain balance sheet restructuring actions totaling $44.5 million.2018. Net income available to common shareholders for the first nine months of 20182019 was $308.6$397.5 million, or $2.60$2.51 per diluted common share, an increase of 29.5%28.8% and 33.7%a decrease of 3.5%, respectively, compared to the first nine months of 2017.2018. Adjusted net income per common share, diluted(1) was $2.96 for the first nine months of 2019, up 8.6% compared to $2.72 for the first nine months of 2018. Results for 2019 include the impact of the Merger with FCB, which closed on January 1, 2019. Synovus incurred $353 thousand and $57.5 million in merger-related expense associated with the FCB acquisition for the third quarter and year-to-date 2019, respectively. On the Acquisition Date, the preliminary estimated fair values of FCB included approximately $12.4 billion of identifiable assets, $9.3 billion in loans, and $10.9 billion in deposits. Return on average assets for the third quarterfirst nine months of 20182019 was 1.36%1.18%, up 9down 19 basis points from the third quarterfirst nine months of 20172018, and the adjusted return on average assets(1)was 1.37%1.39% for the first nine months of 2019, down 3 basis points from the first nine months of 2018.
Net interest income was $402.1 million for the three months ended September 30, 2019, and $1.20 billion for the nine months ended September 30, 2018,2019, up 3037.9% and 40.7%, respectively, over the comparable periods of 2018. Both quarter-over-quarter and year-over-year increases were driven primarily by the FCB acquisition. Net interest margin was down 20 basis points from the same period of 2017.
On a sequential quarter basis, net interest income increased $7.0 million, driven by a $380.6 million increase in average loans, net, as well as net margin expansion of 3and 12 basis points over the comparable three and nine-month periods to 3.89%. Compared3.69% and 3.72%, respectively, impacted primarily by the FCB acquisition, the deposit shift to the same quarter in 2017, net interest income increased $29.0 million, driven by a $821.3 million increase in average loans, net, as well as net margin expansion of 26 basis points. The net interest margin increase compared to the prior quartertime deposits, and the third quarterissuance of 2017 was primarily driven by federal funds rate increases. Thesubordinated debt. Year-to-date September 30, 2019, the yield on earning assets was 4.58%4.79%, an increase of 11 basis points from the second quarter of 2018, and an increase of 47 basis points from the third quarter of 2017. This increase was driven by an increase in loan yields. The effective cost of funds was 0.69% for the third quarter of 2018, up 8 basis points from the second quarter of 2018, and up 21 basis points from the third quarter of 2017. Net interest income for the first nine months of 2018 was $850.5 million, an increase of $96.9 million, or 12.9%, compared to $753.6 million for the same period in 2017. Net interest margin increased 32 basis points to 3.84% over the comparable nine-month periods, primarily driven by federal funds rate increases and our asset-sensitive balance sheet. Since September 30, 2017, there have been four 25 basis points federal funds rate increases. The yield on earning assets was 4.45%, an increase of 4634 basis points compared to the nine months ended September 30, 2017,2018, while the effectivetotal cost of funds increased 14 basis points to 0.61%. The yield on loans increased 49 basis points to 4.86%, and the yield on investment securities increased 25 basis points to 2.35% over the nine months ended September 30, 2017.1.13%.
Non-interest income for the third quarter of 20182019 was $71.7$88.8 million, down $63.8up $17.1 million, or 47.1%23.8%, compared to the third quarter of 2017.2018. On a year-to-date basis, non-interest income was $212.1$257.9 million compared to $276.0$212.1 million for the first nine months of 2017. Adjusted non-interest2018, up $45.8 million, or 21.6%. These increases were primarily driven by the FCB acquisition, led by strong growth in capital markets income(1), which excludes investment securities losses, net, increase (decrease) as well as expansion in fair value of private equity investments, and the Cabela's Transaction Fee,all other revenue categories. Additionally, mortgage banking income was up $2.8 million, or 4.1%, for the third quarter of 2018significantly compared to the third quartersame periods in 2018 due to the interest rate environment as well as the addition of 2017 and up $11.6 million, or 5.7%, for the first nine months of 2018 compared to 2017.mortgage originators.
Non-interest expense for the third quarter of 2018 increased $14.72019 was $276.3 million, up $56.0 million, or 7.1%25.4%, compared to the third quarter of 2017,2018. On a year-to-date basis, non-interest expense was up $213.3 million, or 34.4%, versus the same period a year ago. Comparisons to prior year are impacted by the FCB acquisition and non-interest expensemerger-related expense. The efficiency ratio-FTE for the first nine months of 2018 increased $24.8 million, or 4.2%2019 was 57.17%, compared to the first nine months of 2017. The efficiency ratio58.28% for the first nine months of 2018 was 58.21%, compared to 57.70%2018. The adjusted tangible efficiency ratio(1) for the first nine months of 2017. The adjusted efficiency ratio(1) for the first nine months of 20182019 was 56.44%51.36%, down 364508 basis points fromcompared to the same period a year ago.
Synovus continued to benefit from a relatively stableSynovus' credit environmentquality metrics remained solid with the non-performing assetsNPA ratio improving further to 0.46%, a fourat 42 basis point improvement from the previous quarter,points, NPL ratio at 32 basis points, and an 11total past due loans at 24 basis point improvement from a year ago.points. Net charge-offs for the third quarter of 20182019 were 2422 basis points, annualized, downup from 2913 basis points in the prior quarter.second quarter of 2019. Year-to-date, net charge-offs are 2018 basis points, well within Synovus' guidancepoints. For the third quarter of 15-25 basis points.2019, the provision for loan losses was $27.6 million, an increase of $15.4 million, or 127.4%, compared to the second quarter of 2019, primarily due to higher net charge-offs and gross funded loan production. The ALL at September 30, 2019 was $265.0 million, or 0.73% of total loans, compared to $250.6 million, or 0.97% of total loans, at December 31, 2018, reflecting a lower ratio at September 30, 2019 due to the impact of acquisition date accounting for acquired loans.
Sequential quarter loan growth of $279.3 million, or 3.1% annualized, included C&I loan growth of $197.7 million, consumer loan growth of $143.1 million, and a decline in CRE loans of $62.4 million. At September 30, 2018,2019, total loans were $25.58$36.42 billion, an increase of $789.7 million, or 4.3% annualized, and $1.09$10.47 billion, or 4.5%40.4%, compared to December 31, 2017 and September 30, 2017, respectively. Year-over-year2018, including acquired loan balances from FCB of $9.29 billion. On a year-to-date basis, organic loan growth was driven by a $776.2$1.18 billion, or 4.5% annualized, with growth of $602.8 million or 6.6% increasein consumer loans, $390.2 million in C&I loans, and a $827.6$176.3 million in CRE loans.
Total deposits of $37.43 billion at September 30, 2019 declined $533.7 million, or 14.9% increase in consumer loans, with our lending partnerships growing $569.6 million and mortgage loans growing $285.6 million. This growth was partially offset by a $514.5 million or 7.1% decline in CRE loans.
During the third quarter of 2018, total average deposits increased $119.2 million, or 1.8%5.6% annualized, compared to the second quarter of 2018,2019, from decreases in public funds and increased $1.10 billion, or 4.4%,other time deposits of $556.0 million and $695.2 million, respectively. Core transaction deposit(1) growth, however, was very strong, up $525.5 million compared to the thirdsecond quarter of 2017. Average core2019. Compared to December 31, 2018, total period-end deposits(1) increased $10.71 billion, or 40.1%, duringdriven by the third quarteracquisition of 2018, increased $269.2FCB which contributed $10.93 billion in total deposits, on the Acquisition Date. Excluding the acquired balances, total deposits decreased $218.0 million or 4.4% annualized, compared to the prior quarter, and increased $858.3 million, or 3.6%, compared to the third quarter of 2017.December 31, 2018.
On June 21, 2018, Synovus completed a public offering17, 2019, the Company announced that the Board of $200Directors increased its prior $400 million of Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series D. The offering generated net proceeds of $195.1 million, which were largely used to fund the redemption of all of the outstanding shares of Series C Preferred Stock on August 1, 2018 for an aggregate redemption price of $130.0 million.

Concurrent with the redemption of the Series C Preferred Stock, Synovus recognized a one-time, non-cash redemption charge of $4.0 million.
On January 23, 2018, Synovus announced a share repurchase programauthorization to $725 million for the year 2019, of up to $150which $688.5 million to be completedwas repurchased during 2018.the first nine months of 2019. As of September 30, 2018, Synovus had repurchased under this program a total of $134.8 million, or 2.6 million shares of its common stock, at an average price of $51.85 per share. As of September 30, 2018,October 24, 2019, the remaining authorization under this program was $15.2 million. During October 2018, the program was concludedcomplete with the remaining $15.2total repurchases of $725 million, or 345 thousand shares, repurchased. In total, 2.919.9 million shares of common stock. On July 1, 2019, Synovus completed a $350 million public offering of Series E Preferred Stock. Proceeds from the preferred stock offering were repurchased during 2018 at an average price of $50.96 per share. Additionally, during the first quarter of 2018, Synovus increased the quarterlyprimarily used to repurchase common stock dividend by 67%under the share repurchase authorization. At September 30, 2019, Synovus' regulatory capital levels continue to $0.25 per share effective with the quarterly dividend declared during the first quarter of 2018.be well above regulatory capital requirements.


More detail on Synovus' financial results for the three and nine months ended September 30, 2018 can2019 may be found in subsequent sections of "Item 2. – Management's Discussion and Analysis of Financial Condition and Results of Operations" of this Report.
2018 Expectations2019 Outlook
For the full year 2018 as2019, compared to the full year 2017, management expectations are noted below:
Period-end2018(2), previously stated guidance is included below. From a balance sheet perspective, Synovus expects loan growth to fall slightly below our previously guided range and expects deposit growth to fall below the low-end of our range. Additionally, Synovus expects adjusted tangible non-interest expense growth to be at the top or slightly outside of our 2 to 4% to 5%guidance for the year.
Average total deposits growth of 4% to 6%
Net interest income growth of 11% to 13%
•Previous Outlook (as provided in April 2019 and updated in July 2019)
Adjusted non-interest income(1)
October 2019 Update
  * Loan growth of 4%5.5% to 6%7.5%Current outlook slightly below range
  * Deposit growth of 3.0% to 5.0%Current outlook below range
  * Revenue growth of 5.5% to 7.5%No change
  * Adjusted tangible non-interest expense growth of 2% to 4%Current outlook at top of range or slightly above
  * Effective income tax rate of 24% to 25%No change
  * Net charge-off ratio of 15 to 20 basis pointsNo change
Total non-interest expense growth of 0% to 3%
Effective income tax rate of 21% to 22%
Net charge-off ratio of 15 to 25 bps
Common share repurchases of up to $150 million (completed as of October 2018)

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

(2) 2018 results are on a pro forma combined basis for Synovus and FCB.
Changes in Financial Condition
During the nine months ended September 30, 2018,2019, total assets increased $853.3 million$14.99 billion from $31.22$32.67 billion at December 31, 20172018 to $32.08 billion. The principal component$47.66 billion, due primarily to the acquisition of this increase was an increaseFCB on January 1, 2019. On the Acquisition Date, the fair value of FCB acquired balances included $12.4 billion of identifiable assets, $9.3 billion in loans, netand $10.9 billion in deposits. Additionally, based on preliminary purchase price allocations, Synovus recorded goodwill of deferred fees$430.6 million. Excluding the acquired balances of FCB, loans increased $1.18 billion, investment securities available for sale increased $599.5 million, mortgage loans held for sale increased $91.2 million, and costs,cash and cash equivalents declined $162.8 million. The growth in assets and decline in deposits of $789.7 million. Short-term$218.0 million, excluding acquired balances of FCB, was funded by increases of $1.58 billion in other short-term borrowings and deposits provided the primary funding source for the growth$343.2 million in assets.long-term debt. The net loan to deposit ratio was 97.3% at September 30, 2019, compared to 97.1% at December 31, 2018, and 96.8% at September 30, 2018 compared to 94.8% at December 31, 2017.2018.


Loans
The following table compares the composition of the loan portfolio at September 30, 2018,2019, December 31, 2017,2018, and September 30, 2017.2018.
Table 2 - Loans by Portfolio ClassTable 2 - Loans by Portfolio Class          
September 30, 2019 December 31, 2018 September 30, 2019 vs. December 31, 2018 % Change September 30, 2018 September 30, 2019 vs. September 30, 2018 % Change
(dollars in thousands)September 30, 2018 December 31, 2017 
September 30, 2018 vs.
December 31, 2017 % Change(1)
 September 30, 2017 
September 30, 2018 vs.
September 30, 2017 % Change
Total Loans Total Originated Loans 
Total Acquired(1) Loans
 Total Loans Total Loans 
Commercial, financial and agricultural$7,281,466
 $7,179,487
 1.9 % $6,961,709
 4.6 %$9,855,881
 $8,085,060
 $1,770,821
 $7,449,698
 32.3 % $7,281,466
 35.4 %
Owner-occupied5,221,828
 4,844,163
 10.4
 4,765,433
 9.6
6,589,391
 5,588,970
 1,000,421
 5,331,508
 23.6
 5,221,828
 26.2
Total commercial and industrial12,503,294
 12,023,650
 5.3
 11,727,142
 6.6
16,445,272
 13,674,030
 2,771,242
 12,781,206
 28.7
 12,503,294
 31.5
Investment properties5,665,690
 5,670,065
 (0.1) 5,925,096
 (4.4)%8,934,763
 6,058,359
 2,876,404
 5,560,951
 60.7
 5,665,690
 57.7
1-4 family properties707,196
 781,619
 (12.7) 794,616
 (11.0)738,764
 640,124
 98,640
 679,870
 8.7
 707,196
 4.5
Land and development339,520
 483,604
 (39.8) 507,212
 (33.1)612,506
 407,834
 204,672
 323,670
 89.2
 339,520
 80.4
Total commercial real estate6,712,406
 6,935,288
 (4.3) 7,226,924
 (7.1)10,286,033
 7,106,317
 3,179,716
 6,564,491
 56.7
 6,712,406
 53.2
Consumer mortgages5,470,730
 3,398,720
 2,072,010
 2,934,235
 86.4
 2,843,244
 92.4
Home equity lines1,465,419
 1,514,227
 (4.3) 1,528,889
 (4.2)1,675,092
 1,616,063
 59,029
 1,515,796
 10.5
 1,465,419
 14.3
Consumer mortgages2,843,244
 2,633,503
 10.6
 2,557,680
 11.2
Credit cards245,149
 232,676
 7.2
 225,725
 8.6
267,874
 267,874
 —
 258,245
 3.7
 245,149
 9.3
Other consumer loans1,831,385
 1,473,451
 32.5
 1,245,278
 47.1
2,295,486
 2,285,319
 10,167
 1,916,743
 19.8
 1,831,385
 25.3
Total consumer6,385,197
 5,853,857
 12.1
 5,557,572
 14.9
9,709,182
 7,567,976
 2,141,206
 6,625,019
 46.6
 6,385,197
 52.1
Deferred fees and costs, net(22,661) (22,661) —
 (24,143) (6.1) (23,781) (4.7)
Total loans25,600,897
 24,812,795
 4.2
 24,511,638
 4.4
$36,417,826
 $28,325,662
 $8,092,164
 $25,946,573
 40.4 % $25,577,116
 42.4 %
Deferred fees and costs, net(23,781) (25,331) (8.2) (24,278) (2.0)
Total loans, net of deferred fees and costs$25,577,116
 $24,787,464
 4.3 % $24,487,360
 4.5 %
                      
(1) Percentage changes are annualizedRepresents $9.29 billion (at fair value) of loans acquired from FCB, net of paydowns and payoffs including maturities since acquisition date.
At September 30, 2018,2019, total loans were $25.58$36.42 billion, an increase of $789.7 million, or 4.3% annualized, and $1.09$10.47 billion, or 4.5%40.4%, and $10.84 billion, or 42.4%, compared to December 31, 20172018 and September 30, 2017, respectively. Year-over-year2018, respectively, including acquired loan balances from FCB of $9.29 billion.Excluding acquired FCB balances, period-end loans increased $1.18 billion, or 4.5% annualized, compared to December 31, 2018, with growth was driven by a $776.2of $602.8 million, or 6.6% increase8.9% annualized, in consumer loans, $390.2 million, or 3.2% annualized, in C&I loans, and a $827.6$176.3 million, or 14.9% increase2.3% annualized, in CRE loans. The mix remains in-line with Synovus' targeted portfolio mix. C&I loans remain the largest component of our balance sheet representing 45.1% of total loans, while CRE and consumer loans with our lending partnerships growing $569.6 millionrepresent 28.2%, and mortgage loans growing $285.6 million. This growth was partially offset by a $514.5 million or 7.1% decrease in CRE loans.26.7%, respectively.
Commercial Loans
Total commercial loans (which are comprised of C&I and CRE loans) at September 30, 20182019 were $19.22$26.73 billion, or 75.1%73.3% of the total loan portfolio, compared to $18.96$19.35 billion, or 76.5%74.5%, at December 31, 20172018 and $18.95$19.22 billion, or 77.4%75.1%, at September 30, 2017.2018.
At September 30, 2018 and December 31, 2017,2019, Synovus had 29and 25, respectively,six commercial loan relationships with total commitments of $50$100 million or more (including amounts funded).The average funded balance of these relationships was approximately$34, with no single relationship exceeding $150 million and $35 million at September 30, 2018 and December 31, 2017, respectively.in commitments.
Commercial and Industrial Loans
The C&I loan portfolio represents the largest category of Synovus' total loan portfolio.portfolio and is primarily comprised of general middle market and commercial banking clients across a diverse set of industries. The following table shows the composition of the C&I loan portfolio aggregated by NAICS code. The portfolio is relationship focused and, as a result, Synovus' lenders have in-depth knowledge of the borrowers, most of which have guaranty arrangements. C&I loans are originated through Synovus' local markets and the Corporate Banking Group to commercial customers primarily to finance capital expenditures, including real property, plant and equipment, or as a source of working capital. In accordance with Synovus' lending policy, each loan undergoes a detailed underwriting process which incorporates uniform underwriting standards and oversight in proportion to the size and complexity of the lending relationship.As of September 30, 2018, approximately 93% 2019, 92.6%of Synovus' C&I loans are secured by real estate, business equipment, inventory, and other types of collateral.C&I loans of $12.50$16.45 billion, representing 48.9%45.1% of the total loan portfolio, grew $479.6 million,$3.66 billion, or 5.3% annualized,28.7%, from December 31, 2017 and $776.22018 including acquired loan balances from FCB of $3.27 billion.Excluding acquired FCB

balances, growth was $390.2 million, or 6.6%, from September 30, 2017. The growth in C&I loans3.2% annualized, compared to December 31, 2018 and was broad-based, driven by continued strong contributions from our middle market banking, senior housing, healthcare, and premium finance and small business.

teams.
Commercial and Industrial Loans by IndustrySeptember 30, 2018 December 31, 2017
Table 3 - Commercial and Industrial Loans by IndustryTable 3 - Commercial and Industrial Loans by Industry
September 30, 2019 December 31, 2018
(dollars in thousands)Amount 
%(1)
 Amount 
%(1)
Amount 
%(1)
 Amount 
%(1)
Health care and social assistance$3,022,719
 24.2% $2,764,907
 23.0%$3,031,739
 18.4% $3,060,089
 23.9%
Retail trade1,241,737
 7.6
 910,852
 7.1
Manufacturing983,941
 7.9
 930,751
 7.7
1,206,514
 7.3
 1,082,799
 8.5
Finance and insurance1,172,077
 7.1
 910,688
 7.1
Wholesale trade1,136,719
 6.9
 700,843
 5.5
Other services992,970
 6.0
 799,442
 6.3
Real estate and rental and leasing854,598
 6.8
 851,303
 7.1
961,149
 5.8
 606,475
 4.7
Retail trade852,775
 6.8
 857,348
 7.1
Finance and insurance778,414
 6.2
 780,279
 6.5
Other services769,741
 6.2
 761,916
 6.3
Accommodation and food services893,926
 5.4
 669,750
 5.2
Professional, scientific, and technical services764,037
 6.1
 771,809
 6.4
886,082
 5.4
 857,947
 6.7
Wholesale trade689,388
 5.5
 675,741
 5.6
Accommodation and food services618,603
 4.9
 562,877
 4.7
Transportation and warehousing878,561
 5.3
 479,584
 3.8
Arts, entertainment and recreation825,696
 5.0
 237,712
 1.9
Construction728,846
 4.4
 631,169
 4.9
Other industries577,631
 3.6
 234,052
 1.9
Real estate other582,872
 4.7
 586,707
 4.9
501,157
 3.1
 432,114
 3.4
Construction535,408
 4.3
 500,091
 4.2
Transportation and warehousing472,537
 3.8
 427,608
 3.6
Other industries469,805
 3.8
 438,312
 3.6
Educational services387,012
 2.4
 284,858
 2.2
Agriculture, forestry, fishing, and hunting326,819
 2.6
 349,181
 2.9
381,702
 2.3
 345,580
 2.7
Information321,569
 2.0
 252,552
 2.0
Administration, support, waste management, and remediation278,362
 2.2
 273,189
 2.3
320,185
 2.0
 284,700
 2.2
Educational services265,934
 2.1
 259,367
 2.2
Information237,341
 1.9
 232,264
 1.9
Total commercial and industrial loans$12,503,294
 100.0% $12,023,650
 100.0%$16,445,272
 100.0% $12,781,206
 100.0%
              
(1)
Loan balance in each category expressed as a percentage of total C&I loans.
(1) Loan balance in each category expressed as a percentage of total C&I loans.
At September 30, 2018, $7.282019, $9.86 billion of C&I loans, or 28.5%27.0% of the total loan portfolio, represented loans originated for the purpose of financing commercial, financial, and agricultural business activities. The primary source of repayment on these loans is revenue generated from products or services offered by the business or organization. The secondary source of repayment is the collateral, which consists primarily of equipment, inventory, accounts receivable, time deposits, cash surrender value of life insurance, and other business assets.
At September 30, 2018, $5.222019, $6.59 billion of C&I loans, or 20.4%18.1% of the total loan portfolio, represented loans originated for the purpose of financing owner-occupied properties. The financing of owner-occupied facilities is considered a C&I loan even though there is improved real estate as collateral. This treatment is a result of the credit decision process, which focuses on cash flow from operations of the business to repay the debt. The secondary source of repayment on these loans is the underlying real estate. These loans are predominately secured by owner-occupied and other real estate, and to a lesser extent, other types of collateral.
Commercial Real Estate Loans
Total CRE loans consist primarily of income-producing investment properties loans. Additionally, CRE loans include 1-4 family properties loans as well as land and development loans. These loans are subject to the same uniform lending policies referenced above.Total CRE loans of $6.71were $10.29 billion, representing 26.2%28.2% of the total loan portfolio, decreased $222.9 million,and increased $3.72 billion, or 4.3% annualized,56.7%, from December 31, 2017 and decreased $514.52018, driven by the FCB acquisition, which included $3.55 billion of CRE loans on the Acquisition Date. Excludingthe acquisition, CRE loans grew $176.3 million, or 7.1%, from September 30, 2017. The $222.9 million decline was driven2.3% annualized, as compared to December 31, 2018, led primarily by a $144.1 million decreasegrowth in the non-strategic Land and Development portfolio and a $74.4 million decrease in 1-4 familyinvestment properties. The decline in CRE has largely been the result of the continued higher velocity of pay-off activity across the portfolio which began to moderate in the third quarter, resulting in sequential quarter growth of $68.2 million or 4.1% annualized.
Investment Properties Loans
Investment properties loans consist of construction and mortgage loans for income-producing properties and are primarily made to finance multi-family properties, hotels, office buildings, shopping centers, warehouses and other commercial development properties. Total investment properties loans as of September 30, 20182019 were $5.67$8.93 billion, or 84.4%86.9% of the total CRE loan portfolio and 22.1%24.5% of the total loan portfolio, compared to $5.67$5.56 billion, or 81.8%84.7% of the total CRE loan portfolio and 22.9%21.4% of the total loan portfolio, at December 31, 2017. Synovus'2018. The increase in investment properties portfolio is well diversifiedwas primarily driven by property type, geography (primarily within Synovus' primary market areasFCB which included $3.15 billion of Georgia, Alabama, South Carolina, Florida, and Tennessee), and tenants. Theacquired investment properties loans. Excluding the acquisition, investment properties loans are primarily securedgrew $221.4 million, or 3.4% annualized, compared to December 31, 2018, driven by the property being financed by the loans; however, these loans may also be secured by real estate or other assets beyond the property being financed.increases in most sub-categories including multi-family and hotels.

1-4 Family Properties Loans
1-4 family properties loans include construction loans to homebuilders and commercial mortgage loans to real estate investors and are almost always secured by the underlying property being financed by such loans. These properties are primarily located in the markets served by Synovus. Construction loans are generally interest-only loans and typically have maturities of three years

or less, and commercial mortgage loans generally have maturities of three to five years, with amortization periods of up to fifteen to twenty years. At September 30, 2018,2019, 1-4 family properties loans totaled $707.2$738.8 million, or 10.5%7.2% of the total CRE loan portfolio and 2.8%2.0% of the total loan portfolio, compared to $781.6$679.9 million, or 11.3%10.4% of the total CRE loan portfolio and 3.2%2.6% of the total loan portfolio, at December 31, 2017.2018. Outside of $112.0 million loans acquired from FCB, 1-4 family properties loans declined by $53.1 million, or 9.0% annualized, compared to December 31, 2018.
Land and Development Loans
Land and development loans include commercial and residential development as well as land acquisition loans and are secured by land held for future development, typically in excess of one year. These loans have short-term maturities and are typically unamortized. Properties securing these loans are substantially within themarkets served by Synovus, footprint, and loan terms generally include personal guarantees from the principals. Loans in this portfolio are underwritten based on the LTV of the collateral and the capacity of the guarantor(s). Total land and development loans were $339.5$612.5 million at September 30, 2018,2019, or 1.3%1.7% of the total loan portfolio, a declinean increase of $144.1$288.8 million, or 39.8% annualized,89.2% from December 31, 2017. Synovus continues2018, which was driven by $280.9 million of loans acquired from FCB. Outside of the acquisition, land and development loans increased slightly by $8.0 million, or 1.8% annualized, compared to strategically reduce its exposure to these types of loans.December 31, 2018.
Consumer Loans
The consumer loan portfolio consists of a wide variety of loan products offered through Synovus' banking network as well as third-party lending partnerships, including first and second residential mortgages, home equity lines,HELOCs, credit card loans, home improvement loans, student loans, and other consumer loans.loans which primarily include third-party lending partnerships. The majority of Synovus' consumer loans are consumer mortgages and home equity linesHELOCs secured by first and second liens on residential real estate primarily located in the markets served by Synovus.
Consumer loans at September 30, 20182019 totaled $6.39$9.71 billion, representing 24.9%26.7% of the total loan portfolio, compared to $5.85$6.63 billion, or 23.6%25.5% of the total loan portfolio, at December 31, 2017, and $5.56 billion, or 22.7% of the total loan portfolio at September 30, 2017.2018. Consumer loans increased $531.3 million,$3.08 billion, or 12.1% annualized,46.6%, from December 31, 2017 and $827.62018, primarily driven by $2.48 billion of loans acquired from FCB. Excluding the acquisition, consumer loans grew $602.8 million, or 14.9%, from September 30, 2017. 8.9% annualized, compared to December 31, 2018.
Consumer mortgages grew $209.7 million$2.54 billion, or 10.6% annualized,86.4%, from December 31, 2017, and $285.62018. Excluding the $2.40 billion in consumer mortgages acquired in the FCB acquisition, year-to-date growth of $138.1 million, or 11.2%, from September 30, 2017 given3.5% annualized, was the result of solid production in the private wealth, managementphysician and physician categories as well asaffordable mortgage products driven by disciplined talent acquisition and the continued addition of mortgage loan originators.interest rate environment. HELOCs decreased $48.8increased $159.3 million, or 4.3%10.5%, annualized, from December 31, 2017.2018, driven by the FCB acquisition and organic growth. Excluding FCB acquired loans, HELOCs increased $91.4 million, or 7.7% annualized, compared to December 31, 2018. Credit card loans totaled $245.1$267.9 million at September 30, 2018,2019, including $70.5$70.4 million of commercial credit card loans.
loans, and increased slightly compared to $258.2 million at December 31, 2018. Other consumer loans increased $357.9$378.7 million, or 32.5% annualized,19.8%, from December 31, 2017, and $586.1 million, or 47.1%, from September 30, 20172018, primarily due to our two consumer-based lending partnerships.partnerships. As of September 30, 2018,2019, these partnerships had combined balances of $1.48$1.95 billion, or 5.8%5.4% of the total loan portfolio.
Consumer loans including those through our lending partnerships, are subject to uniform lending policies and consist primarily of loans with strong borrower credit scores. Synovus makes consumer lending decisions based upon a number of key credit risk determinants including FICO scores as well as loan-to-value and debt-to-income ratios. Risk levels 1-6 (descending) are assigned to consumer loans based upon a risk score matrix. At least annually, the consumer loan portfolio data is sent to a consumer credit reporting agency for a refresh of customers' credit scores so that management can evaluate ongoing consistency or negative migration in the quality of the portfolio, which impacts the allowance for loan losses. The most recent credit score refresh was completed as of June 30, 2018.ALL. Revolving lines of credit wereare reviewed for any material change in financial circumstances, and when appropriate, the line of credit may be suspended for further advances. FICO scores within the residential real estate portfolio have generally remained stable over the last several years.
As of the most recent FICO score refresh on JuneSeptember 30, 2018,2019, weighted-average FICO scores within the residential real estate portfolio based on committed balances were 774786 for both HELOCs andconsumer mortgages. HELOC utilization rates (total amount outstanding as a percentage of total available lines) were 53.1% and 55.6% at September 30, 2018 and December 31, 2017, respectively. Additionally, we maintained loan-to-value ratios based upon prudent guidelines to ensure consistency with Synovus' overall risk philosophy.At September 30, 2018, 35% of home equity line balances were secured by a first lien, and 65% were secured by a second lien. Apart from credit card loans and unsecured loans, Synovus does not originate loans with LTV ratios greater than 100% at origination except 777 for infrequent situations provided that certain underwriting requirements are met. Additionally, at origination, loan maturities are determined based on the borrower's ability to repay (cash flow or earning power that represents the primary source of repayment) and the collateralization of the loan, including the economic life of the asset being pledged. Collateral securing these loans provides a secondary source of repayment in that the collateral may be liquidated. Synovus determines the need for collateral on a case-by-case basis. Factors considered include the purpose of the loan, current and prospective credit-worthiness of the customer, terms of the loan, and economic conditions.
Higher-risk consumer loans as defined by the FDIC are consumer loans (excluding consumer loans defined as nontraditional mortgage loans) where, as of the origination date or, if the loan has been refinanced, as of the refinance date, the probability ofdefault within two years is greater than 20%, as determined using a defined historical stress period. These loans are not a part of Synovus' consumer lending strategy, and Synovus does not currently develop or offer specific sub-prime, alt-A, no documentation or stated income residential real estate loan products. Synovus estimates that, as of September 30, 2018, it had $79.4 million of

higher-risk consumer loans (1.2% of the consumer portfolio and 0.3% of the total loan portfolio) compared to $87.0 million as of September 30, 2017. Included in these amounts as of September 30, 2018 and 2017 are approximately$9 million and $11 million, respectively, of accruing TDRs.Consumer Mortgages.

Deposits
Deposits provide the most significant funding source for interest earning assets. The following table shows the relative composition of average deposits foras of the time periodsdates indicated.
 Composition of Average Deposits
 
 (dollars in thousands)September 30, 2018 
%(1)
 June 30, 2018 
%(1)
 December 31, 2017 
%(1)
 September 30, 2017 
%(1)
 Non-interest bearing demand deposits$7,672,006
 29.1% $7,539,451
 28.7% $7,621,147
 29.0% $7,305,508
 28.9%
 Interest-bearing demand deposits4,701,204
 17.8
 5,001,825
 19.0
 4,976,239
 18.9
 4,868,372
 19.2
 Money market accounts, excluding brokered deposits7,936,621
 30.1
 7,791,107
 29.7
 7,514,992
 28.6
 7,528,036
 29.8
 Savings deposits824,935
 3.1
 829,800
 3.2
 804,853
 3.0
 803,185
 3.2
 Time deposits, excluding brokered deposits3,479,569
 13.2
 3,182,974
 12.1
 3,170,445
 12.1
 3,250,929
 12.8
 Brokered deposits1,772,977
 6.7
 1,922,917
 7.3
 2,198,333
 8.4
 1,530,889
 6.1
 Total average deposits$26,387,312
 100.0% $26,268,074
 100.0% $26,286,009
 100.0% $25,286,919
 100.0%
 
Average core deposits (2)    
$24,614,335
 93.3% $24,345,157
 92.7% $24,087,676
 91.6% $23,756,030
 93.9%
                 
 Time deposits greater than $100,000$3,688,282
 14.0% $3,681,025
 14.0% $3,655,952
 13.9% $3,050,770
 12.1%
                 
 Brokered time deposits$1,414,700
 5.4% $1,659,941
 6.3% $1,651,920
 6.3% $983,423
 3.9%
                 
Table 4 - Composition of Period-end Deposits          
(dollars in thousands)September 30, 2019 
%(1)
 June 30, 2019 
%(1)
 December 31, 2018 
%(1)
 September 30, 2018 
%(1)
Non-interest-bearing demand deposits(2)
$8,970,218
 24.0% $8,577,612
 22.6% $6,926,513
 25.9% $6,936,714
 26.2%
Interest-bearing demand deposits(2)
4,714,817
 12.6
 4,847,242
 12.8
 3,690,689
 13.9
 3,943,225
 14.9
Money market accounts(2)
9,212,140
 24.6
 8,952,875
 23.6
 7,681,836
 28.7
 7,536,234
 28.5
Savings deposits(2)
897,292
 2.4
 891,194
 2.3
 812,495
 3.0
 816,512
 3.1
Public funds3,795,320
 10.1
 4,351,304
 11.5
 2,374,892
 8.9
 2,024,697
 7.7
Time deposits(2)
6,647,788
 17.8
 7,342,951
 19.3
 3,685,867
 13.8
 3,492,504
 13.2
Brokered deposits3,195,495
 8.5
 3,003,544
 7.9
 1,548,030
 5.8
 1,683,772
 6.4
Total deposits$37,433,070
 100.0% $37,966,722
 100.0% $26,720,322
 100.0% $26,433,658
 100.0%
Core deposits(3)    
$34,237,575
 91.5% $34,963,178
 92.1% $25,172,292
 94.2% $24,749,886
 93.6%
Core transaction deposits(4)    
$23,794,467
 63.6% $23,268,923
 61.3% $19,111,533
 71.5% $19,232,685
 72.7%
                
Time deposits greater than $100,000, including brokered and public funds$7,574,038
 20.2% $8,290,297
 21.8% $3,749,928
 14.0% $3,729,856
 14.1%
Brokered time deposits$2,098,643
 5.6% $2,095,240
 5.5% $1,199,670
 4.5% $1,347,954
 5.1%
                
(1) Deposits balance in each category expressed as percentage of total deposits.
(2) See “Non-GAAP Financial Measures” in this Report for the applicable reconciliation Excluding any public funds or brokered deposits
(3) Core deposits exclude brokered deposits.
(4) Core transaction deposits consist of non-interest-bearing demand deposits, interest-bearing demand deposits, money market accounts, and savings deposits excluding public funds and brokered deposits.
Total period-end deposits decreased $533.7 million, or 1.4%, compared to the most comparable GAAP measure.
During the thirdsecond quarter of 2019. Core transaction deposit growth, however, was very strong, up $525.5 million compared to the second quarter of 2019. Within the core transaction deposit category, non-interest-bearing deposits increased $392.6 million and money market accounts increased $259.3 million. Synovus continues to remix the deposit base by allowing higher cost time deposits and public funds to run off, while taking advantage of other short-term funding vehicles including brokered deposits and FHLB advances which carry variable rates and reduce Synovus' overall asset sensitivity headed into a period of declining rates. As a result of this approach, public funds and other time deposits both declined by $556.0 million and $695.2 million, respectively, compared to the second quarter of 2019. Compared to December 31, 2018, total averageperiod-end deposits increased $119.2$10.71 billion, or 40.1%, driven by the acquisition of FCB which contributed $10.93 billion in total deposits, including $9.67 billion in core deposits, on the Acquisition Date. Excluding the acquired balances, total deposits decreased $218.0 million compared to December 31, 2018.
On an average basis, the decline in total deposits was $185.5 million, or 1.8%1.9% annualized, compared to the second quarter of 2018, and increased $1.10 billion, or 4.4%, compared to the third quarter of 2017. Average core deposits, during the third quarter of 2018, increased $269.2 million, or 4.4% annualized, compared to the prior quarter, and increased $858.3 million, or 3.6%, compared to the third quarter of 2017. Average brokered deposits decreased $149.9 million compared to the prior quarter as Synovus reduced its overall level of brokered deposits due to the growth in core deposits during the third quarter. During the first quarter of 2018, Synovus obtained FDIC approval to report deposits related to our sweep money market product, offered by Synovus Securities, as a component of core deposits. This product was reported as a brokered deposit through February of 2018. The third quarter 2018 average balance in these accounts was $316.7 million, compared to an average balance of $310.0 million in the second quarter of 2018. See “Non-GAAP Financial Measures” in this Report for the applicable reconciliation to the most comparable GAAP measure.
Average non-interest bearing demand deposits as a percentage of total average deposits increased during the third quarter of 2018 and were 29.1%, 28.7%, and 28.9% for the three months ended September 30, 2018, June 30, 2018, and September 30, 2017, respectively.2019.
Non-interest Income
Non-interest income for the third quarter of 20182019 was $71.7$88.8 million, down $63.8up $17.1 million, or 47.1%23.8%, compared to the third quarter of 2017.2018 including the impact of the acquisition of FCB. On a year-to-date basis, non-interest income was $212.1$257.9 million compared to $276.0$212.1 million for the first nine months of 2017.2018. The third quarter of 2017 included$45.8 million, or 21.6%, increase is impacted by the $75.0 million Cabela's Transaction Fee, partially offset by $8.0 million in investment securities losses.FCB acquisition. Adjusted non-interest income, which excludes net investment securities losses and net increase (decrease)changes in fair value of private equity investments, and the Cabela's Transaction Fee, was up $2.8$20.1 million, or 4.1%28.2%, for the third quarter of 20182019 compared to the third quarter of 20172018, and year-to-date, adjusted non-interest income was up $11.6$43.9 million, or 5.7%20.3%, forcompared to the first nine months of 2018, compared to 2017. Synovus experiencedled by strong growth in multiple categories during the first nine monthscapital markets income and mortgage banking income as well as expansion in all other revenue categories. See "Table 14 - Reconciliation of 2018 compared to the same time period in 2017 including an increase of $9.4 million or 15.0%, in combined fiduciary and asset management fees, brokerage, and insurance revenues. See "Part II - Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Non-GAAP Financial Measures" ofMeasures” in this Report for applicable reconciliation to GAAP measure.measures.

The following table shows the principal components of non-interest income.
Non-interest incomeThree Months Ended September 30, Nine Months Ended September 30,
(in thousands)2018 2017 % Change 2018 2017 % Change
Table 5 - Non-interest income           
Three Months Ended September 30, Nine Months Ended September 30,
(dollars in thousands)2019 2018 % Change 2019 2018 % Change
Service charges on deposit accounts$20,582
 $20,678
 (0.5)% $60,521
 $61,048
 (0.9)%$22,952
 $20,582
 11.5% $65,805
 $60,521
 8.7 %
Fiduciary and asset management fees13,462
 12,615
 6.7
 40,881
 37,290
 9.6
14,686
 13,462
 9.1
 42,743
 40,881
 4.6
Card fees10,608
 9,729
 9.0
 31,640
 29,614
 6.8
12,297
 10,608
 15.9
 34,334
 31,640
 8.5
Brokerage revenue9,329
 7,511
 24.2
 26,924
 21,947
 22.7
11,071
 9,041
 22.5
 30,502
 26,125
 16.8
Mortgage banking income5,290
 5,603
 (5.6) 15,177
 17,151
 (11.5)10,351
 5,290
 95.7
 23,313
 15,177
 53.6
Capital markets income7,396
 1,155
 540.3
 21,557
 3,826
 463.4
Income from bank-owned life insurance3,771
 3,232
 16.7
 11,720
 9,560
 22.6
5,139
 3,771
 36.3
 15,605
 11,720
 33.1
Cabela's Transaction Fee—
 75,000
 nm
 —
 75,000
 nm
Investment securities losses, net—
 (7,956) nm
 (1,296) (289) nm
(3,731) —
 nm
 (5,502) (1,296) nm
Other fee income4,510
 5,094
 (11.5) 14,387
 16,127
 (10.8)
Gain on sale and increase (decrease) in fair value of private equity investments1,194
 434
 nm
 3,507
 (2,659) nm
Other non-interest income4,116
 3,929
 4.8
 12,147
 8,526
 42.5
7,405
 7,325
 1.1
 26,081
 26,166
 (0.3)
Total non-interest income$71,668
 $135,435
 (47.1)% $212,101
 $275,974
 (23.1)%$88,760
 $71,668
 23.8% $257,945
 $212,101
 21.6 %
                      
Three and Nine Month Periods EndingMonths Ended September 30, 20182019 compared to September 30, 2017:2018
Service charges on deposit accounts for the three and nine months ended September 30, 20182019 were down $96 thousandup $2.4 million, or 11.5%, and $527 thousand, respectively.$5.3 million, or 8.7%, respectively, including the impact of FCB. Service charges on deposit accounts consist of NSF fees, account analysis fees, and all other service charges. NSF fees were down slightly,up $1.1 million, or 11.8%, and offset by slight increases in account analysis fees$1.7 million, or 6.5%, for the three and nine months ended September 30, 2018.2019, respectively, primarily due to the FCB acquisition. Account analysis fees were up $896 thousand, or 13.9%, and $2.7 million, or 14.3%, for the three and nine months ended September 30, 2019, respectively, due primarily to the FCB acquisition. All other service charges on deposit accounts, which consist primarily of monthly fees on retail demand depositdeposits, saving accounts, and savingsmall business accounts, for the three and nine months ended September 30, 20182019, were essentially flat compared to the same periods in 2017.up $390 thousand and $831 thousand, respectively.
Fiduciary and asset management fees are derived from providing estate administration, personal trust, corporate trust, corporate bond, investment management, and financial planning services. Fiduciary and asset management fees increased $847 thousand,$1.2 million, or 6.7%9.1%, and $3.6$1.9 million, or 9.6%4.6%, for the three and nine months ended September 30, 2018,2019, respectively. The increase wasincreases were driven by growth in assets under management. Totaltotal assets under management which increased by 8.0% year-over-year to $16.21 billion (including growth in brokerage assets under management) increased by 15.5% year-over-year to approximately $15.0 billion, due to overall market conditions, increased productivity, as well as the addition of new talent..
Card fees for the three and nine months ended September 30, 2018,2019, increased $879 thousand or 9.0% and $2.0$1.7 million, or 6.8%15.9%, respectively.and $2.7 million, or 8.5%, respectively, including growth in transaction volume and the impact of FCB. Card fees consist primarily of credit card interchange fees, debit card interchange fees, and merchant discounts. Card fees are reported net of certain associated expense items including customer loyalty program expenses and network expenses. The increase in 2018 from 2017 was driven by growth in transaction volume for both credit and debit card transactions as well as growth in revenue from sponsored merchant processing service providers.
Brokerage revenue was $9.3$11.1 million and $26.9$30.5 million for the three and nine months ended September 30, 2018,2019, respectively, up $1.8$2.0 million, or 24.2%22.5%, and up $5.0$4.4 million, or 22.7%16.8%, forcompared to the three and nine months ended September 30, 2018, respectively. Brokerage revenue consists primarily of brokerage commissions as well as advisory fees earned from the management of customer assets. The increase in 2018 from 2017 was largely driven by growth in brokerageBrokerage assets under management due primarily to new talent additions.were $3.41 billion at September 30, 2019, an increase of 14.8% from $2.97 billion at September 30, 2018.
Mortgage banking income decreased $313 thousand,increased $5.1 million and $8.1 million for the three and nine months ended September 30, 2019, respectively. Mortgage banking income was driven by higher overall production, including an increase in refinance volume during the third quarter of 2019, driven by disciplined talent acquisition and the interest rate environment. Total secondary market mortgage loan production was $278.0 million and $603.1 million for the three and nine months ended September 30, 2019, respectively, up $134.5 million, or 5.6%93.8%, and $2.0up $173.6 million, or 11.5%40.4%, compared to the three and nine months ended September 30, 2018, respectively.
Capital markets income primarily includes fee income from customer derivative transactions. Additionally, capital markets income includes fee income from capital raising investment banking transactions and foreign exchange as well as other miscellaneous income from capital market transactions. Capital markets income increased $6.2 million and $17.7 million for the three and nine months ended September 30, 2019, respectively, driven by contributions from newly acquired Florida markets.

Income from BOLI, which includes increases in the cash surrender value of policies and proceeds from insurance benefits, increased $1.4 million, or 36.3%, and $3.9 million, or 33.1%, for the three and nine months ended September 30, 2018, respectively, reflecting softer production volume2019, primarily driven by the impact of acquired FCB policies. The first nine months of 2019 included income on proceeds from insurance benefits of $234 thousand compared to $561 thousand in a rising interest rate environment.2018.
Income from bank-owned life insurance increased $539 thousand, or 16.7%,Investment securities losses, net, of $3.7 million and $2.2$5.5 million or 22.6%, for the three and nine months ended September 30, 2018,2019, respectively, included net losses due to additional investments in bank-owned life insurance policies during 2017, increases instrategic repositioning of the cash surrender value of these policies, and death benefits.
On September 25, 2017, Synovus Bank completed the Cabela's Transaction and received the Cabela's Transaction Fee.
portfolio to improve portfolio performance. Investment securities losses net,of $1.3 million, for the nine months ended September 30, 2018, included a loss of $1.3 million from a strategic sale to improve portfolio performance. Investment securities losses, net, were $8.0 million
Gain on sale and $289increase/(decrease) in the fair value of private equity investments included $417 thousand forof realized gains from sales of investments during the three and nine months ended September 30, 2017,2019 and $777 thousand and $3.1 million of unrealized increases in fair value during the three and nine months ended September 30, 2019, respectively. During the third quarter
The main components of 2017, as part of its balance sheet restructuring actions, Synovus repositioned the available for sale securities portfolio and recorded a net loss of $8.0 million. The first quarter of 2017 included a $3.4 million gain on the sale of an equity position and a $4.3 million gain from the repositioning of the investment securities portfolio.

Other feeother non-interest income includesare fees for letters of credit and unused lines of credit, safe deposit box fees, access fees for automated teller machineATM use, customer swap dealer fees, and other service charges. Other fee income decreased $584 thousand, or 11.5%, and $1.7 million, or 10.8%, for the three and nine months ended September 30, 2018, respectively, due primarily to higher customer swap dealer fees and a large syndication arranger fee in 2017.
The main components of other non-interest income arecharges, income from insurance commissions, gains from sales of GGL/SBA loans, changes in fair value of private equity investments, and other miscellaneous items. Other non-interest income was up $187 thousand, or 4.8%, and $3.6 million, or 42.5%, for the three and nine months ended September 30, 2018, respectively, due primarily to higher insurance commissions and miscellaneous items.
Non-interest Expense
Non-interest expense for the third quarter of 2018 increased $14.72019 was $276.3 million, up $56.0 million, or 7.1%25.4%, compared to the third quarter of 2017,2018. On a year-to-date basis, non-interest expense was up $213.3 million, or 34.4%, versus the same period a year ago. Comparisons to prior year are impacted by the FCB acquisition and merger-related expense. Adjusted non-interest expense, which excludes merger-related expense, earnout liability adjustments, loss on early extinguishment of debt, valuation adjustment to Visa derivative, and certain other items, for the third quarter of 2019 was up $56.5 million, or 28.0%, versus the same period a year ago. On a year-to-date basis, adjusted non-interest expense increased $154.7 million, or 25.7%. The efficiency ratio-FTE for the first nine months of 2018 increased $24.8 million, or 4.2%2019 was 57.17%, compared to 58.28% for the first nine months of 2017.2018. The third quarter of 2018 included an $11.7 million expense to record an increase in the fair value of the earnout liability associated with the Global One acquisition and $6.7 million in FCB merger-related charges. Theadjusted tangible efficiency ratio for the first nine months of 20182019 was 58.21%, compared to 57.70% for the first nine months of 2017. The adjusted efficiency ratio for the first nine months of 2018 was 56.44%51.36%, down 364508 basis points fromcompared to the same period a year ago. Synovus remains disciplined in managing its expense base, while continuing to make appropriate investments that drive sustainable growth, enhanced customer experience, and back-office efficiency. See "Part II"Table 14 - Item 7. Management's Discussion and AnalysisReconciliation of Financial Condition and Results of Operations - Non-GAAP Financial Measures" ofMeasures” in this Report for applicable reconciliation to GAAP measures.
The following table summarizes the components of non-interest expense.
Non-interest Expense

           
Table 6 - Non-interest Expense           
Three Months Ended September 30, Nine Months Ended September 30,Three Months Ended September 30, Nine Months Ended September 30,
(in thousands)2018 2017 % Change 2018 2017 % Change
(dollars in thousands)2019 2018 % Change 2019 2018 % Change
Salaries and other personnel expense$114,341
 $109,675
 4.3 % $339,924
 $322,079
 5.5 %$142,516
 $114,341
 24.6 % $424,952
 $339,924
 25.0 %
Net occupancy and equipment expense32,088
 30,573
 5.0
 96,222
 89,837
 7.1
41,017
 32,088
 27.8
 119,262
 96,222
 23.9
Third-party processing expense14,810
 13,659
 8.4
 43,822
 39,882
 9.9
18,528
 14,810
 25.1
 55,403
 43,822
 26.4
Professional fees9,719
 6,298
 54.3
 25,379
 18,087
 40.3
FDIC insurance and other regulatory fees6,430
 7,078
 (9.2) 19,765
 20,723
 (4.6)7,242
 6,430
 12.6
 21,872
 19,765
 10.7
Professional fees6,298
 7,141
 (11.8) 18,087
 20,048
 (9.8)
Advertising expense3,735
 3,610
 3.5
 14,046
 14,868
 (5.5)5,950
 3,735
 59.3
 16,996
 14,046
 21.0
Foreclosed real estate expense, net360
 7,265
 (95.0) 1,110
 10,847
 (89.8)
Amortization of intangibles2,901
 292
 nm
 8,702
 875
 nm
Merger-related expense353
 6,684
 nm
 57,493
 6,684
 nm
Earnout liability adjustments11,652
 2,059
 nm
 11,652
 3,766
 nm
10,457
 11,652
 (10.3) 10,457
 11,652
 (10.3)
Merger-related expense6,684
 23
 nm
 6,684
 110
 nm
Restructuring charges, net21
 519
 nm
 (191) 7,043
 nm
Loss on early extinguishment of debt, net4,592
 —
 nm
 4,592
 —
 nm
Valuation adjustment to Visa derivative2,500
 —
 nm
 2,500
 2,328
 7.4
Other operating expenses23,878
 24,044
 (0.7) 68,410
 65,577
 4.3
30,535
 23,967
 27.4
 85,239
 66,126
 28.9
Total non-interest expense$220,297
 $205,646
 7.1 % $619,531
 $594,780
 4.2 %$276,310
 $220,297
 25.4 % $832,847
 $619,531
 34.4 %
                      
Three and Nine Month Periods EndingMonths Ended September 30, 20182019 compared to September 30, 2017:2018
Salaries and other personnel expensesexpense increased $4.7$28.2 million, or 4.3%24.6%, and $17.8$85.0 million, or 5.5%25.0%, for the three and nine months ended September 30, 2018,2019, respectively, primarily due toincluding the impact of FCB, talent additions, higher production-based commission and incentive compensation expense, and annual merit increases, offset somewhat by decreases in employee health insurance expense and temporary help expense.increases.
Net occupancy and equipment expense increased $1.5$8.9 million, or 5.0%27.8%, and $6.4$23.0 million, or 7.1%23.9%, during the three and nine months ended September 30, 2018,2019, respectively, driven primarily by costs associated withdue to additional investments in technology as well as higher rent expense.branches from the acquisition of FCB.

Third-party processing expense includes all third-party core operating system and processing charges as well as third-party loan servicing charges. Third-party processing expense increased $1.2$3.7 million, or 8.4%25.1%, and $3.9$11.6 million, or 9.9%26.4%, duringfor the three and nine months ended September 30, 2018,2019, respectively. The increase is primarily associated with loan growth from Synovus' consumer-based lending partnerships and the acquisition of FCB.
Professional fees increased $3.4 million, or 54.3%, and $7.3 million, or 40.3%, for the three and nine months ended September 30, 2019, respectively, primarily due to an increase of $983from increases in both consulting and legal fees.
FDIC insurance and other regulatory fees were up $812 thousand and $3.5$2.1 million for the three and nine months ended September 30, 2018,2019, respectively, from servicingprimarily due to the acquisition of FCB, somewhat offset by the FDIC's elimination of the assessment surcharge for all large banks in the fourth quarter of 2018.
Advertising expense associated with loan growth from Synovus' two consumer-based lending partnerships.
FDIC insurancewas up $2.2 million and other regulatory fees declined $648 thousand, or 9.2%, and $957 thousand, or 4.6%,$2.9 million for the three and nine months ended September 30, 2018,2019, respectively, largely driven by lower assessment rates, somewhat offset by growthadditional advertising in average balances.Florida markets as well as direct mail campaigns.

Professional fees declined $843 thousand, or 11.8%,Amortization of intangibles was up $2.6 million and $2.0$7.8 million or 9.8%, for the three and nine months ended September 30, 2018,2019, respectively, due primarily to lower consulting fees.amortization of the core deposit intangible asset created from the FCB acquisition, which will be amortized using an accelerated method over an estimated life of 10 years.
AdvertisingIn connection with the FCB acquisition, Synovus incurred merger-related expense increased slightlytotaling $353 thousand and $57.5 million for the three months ended September 30, 2018 and was lower by $821 thousand, or 5.5%, for the nine months ended September 30, 2018. Advertising spend during 2018 has continued with Synovus' brand awareness activities2019, primarily related to our transition to a single-brand during 2018.
Foreclosed real estate expense duringemployment compensation agreements, severance, and professional services. See "Part I - Item 1. Financial Statements and Supplementary Data - Note 2 - Acquisitions" in this Report for more information on the third quarteracquisition of 2017 included balance sheet restructuring actions with $7.1 million recorded for discounts to fair value for ORE accelerated dispositions.FCB.
Earnout liability fair value adjustments associated with the 2016 Global One acquisition increased due to higher than projected earnings through September 30, 2019 and higher earnings estimates over the remaining contractual earnout period.
Merger-related expense of $6.7 million recorded duringDuring the three and nine months ended September 30, 2018 was associated with2019, Synovus repositioned certain assets and liabilities to improve portfolio performance and lower funding costs and incurred a $4.6 million net loss on early extinguishment of debt from the pending acquisitiontermination of FCB. See "Note 14 - Pending Acquisitionan assumed $150 million long-term FHLB obligation from the FCB acquisition.
During the three and Pending Branch Sales" in this Report for more information on the pending acquisition of FCB.
Restructuring charges of $7.0 million were recorded duringnine months ended September 30, 2019 and the nine months ended September 30, 2017 consisting primarily of severance charges for termination benefits incurred2018, Synovus recorded $2.5 million and $2.3 million, respectively, in conjunction with a voluntary early retirement program offered duringvaluation adjustments to the first quarter of 2017.Visa derivative following Visa's announcements to fund its litigation escrow account.
Other operating expenses includes travel, insurance, network and communication, other taxes, subscriptions and dues, other loan and ORE expense, postage and freight, training, business development, supplies, donations, and other miscellaneous expenses. Other operating expenses were down slightlyup $6.6 million and $19.1 million, respectively, for the three and nine months ended September 30, 2018 and up $2.8 million, or 4.3%,2019, primarily due to the acquisition of FCB. Additionally, other operating expenses for the nine months ended September 30, 2018 driven byincluded a valuation adjustment to the Visa derivativebenefit of $2.3$4.0 million from recoveries and reductions in second quarter 2018 and additional fixed asset impairment charges of $1.0 million, somewhat offset by additionallitigation contingency recoveries of $1.2 million.accruals.
Income Tax Expense
Income tax expense was $51.3 million and $146.3 million for the three and nine months ended September 30, 2019, respectively, representing an effective tax rate of 27.4% and 26.2% for the respective periods. Income tax expense was $18.9 million and $80.1 million for the three and nine months ended September 30, 2018, respectively, representing an effective tax rate of 14.8% and 19.8% for the respective periods. IncomeThe increase in the effective tax expense was $54.7 million and $130.3 millionrate for the three and nine months ended September 30, 2017, respectively, representing an effective tax rate of 35.8% and 34.6% for the respective periods. The lower effective tax rates for2019, as compared to the three and nine months ended September 30, 2018, were primarilywas largely due to the FCB acquisition, including non-deductible merger-related expenses and an increase in state tax expense resulting from a reductionshift of earnings into higher tax jurisdictions. Other increases in tax expense resulted from the write-down of net deferred tax assets to reflect the enactment of a reduced Florida statutory income tax rate, the recording of an additional valuation allowance for state credits expected to expire unused and a decrease in the federal statutorybenefit recognized as a result of employee share-based award vesting. Additionally, the 2018 effective tax rate from 35% to 21% resulting from Tax Reform, certain provision to return adjustments and the finalization of the provisional amounts recorded for the year ended December 31, 2017 related to Tax Reform.
During the third quarter of 2018, Synovus recognized aincluded discrete tax benefit of $12.7 million, which included a $3.9 million tax benefitbenefits for the refinement of provisional amounts previously reported under SAB 118, a $5.5 millionalong with return to provision benefit associated with the preparation of the 2017 tax return and a $3.3 million benefit associated with insignificant adjustments to tax returns from several prior years.  In addition, the effective income tax rate for the nine months ended September 30, 2018 included a net discrete income tax benefit of $2.8 million resultingbenefits from tax benefits associated with the exercisefilings for 2017 and vesting of employee equity awards.

prior periods.
The effective tax rate is affected by many factors including, but not limited to, the level of pre-tax income, bank-owned life insurance,BOLI, tax-exempt interest, and nondeductible expenses. In addition, the effective tax rate is affected by items that may occur in any given period but are not consistent from period-to-period, such as tax benefits related to share-based compensation, jurisdiction statutory tax rate changes, valuation allowance changes, income tax credits earned, and changes to unrecognized tax benefits. Accordingly, the comparability of the effective tax rate between periods may be impacted.



CREDIT QUALITY, CAPITAL RESOURCES AND LIQUIDITY
Credit Quality
Synovus continuously monitors the quality of its loan portfolio by industry, property type, geography, as well as credit quality metrics and maintains an allowance for loan lossesALL that management believes is sufficient to absorb probable losses inherent in its loan portfolio. Credit quality metrics have remained favorableSynovus continued to benefit from a relatively stable credit environment during the first nine months of 2018.
Two major hurricanes over the last six weeks have caused devastation to areas within the Synovus footprint, with Hurricane Florence impacting much of the Carolinas and Hurricane Michael impacting the eastern Florida panhandle and much of Southwest Georgia. Following each storm, Synovus deployed its bankers to check on customers in the affected areas, to assess any impact, and to develop a plan. With Hurricane Florence, there was no material impact to Synovus’ loan portfolio, and very few customers have requested payment relief at this time. With Hurricane Michael, we are still in the process of compiling and analyzing information. We do know that Synovus’ total exposure in the FEMA-designated areas of impact in Florida and Georgia is approximately $500 million, which is only about 2% of total loans. Thus far, we believe that the losses experienced by our customers are fully-covered by insurance, leading us to believe that Synovus will not experience a material impact to its loan portfolio from Hurricane Michael.2019.
The table below includes selected credit quality metrics.
Credit Quality Metrics 
Table 7 - Credit Quality Metrics 
(dollars in thousands)September 30, 2018 December 31, 2017 September 30, 2017September 30, 2019 December 31, 2018 September 30, 2018
Non-performing loans (1)$108,425
 $115,561
 $97,838
$115,915
 $106,733
 $108,425
Impaired loans held for sale(1)
12
 11,278
 30,197
Other real estate8,542
 3,758
 10,551
Non-performing assets $116,979
 $130,597
 $138,586
ORE and other assets35,400
 7,726
 8,554
Non-performing assets(1)
$151,315
 $114,459
 $116,979
Total loans$36,417,826
 $25,946,573
 $25,577,116
Non-performing loans as a % of total loans0.42% 0.47% 0.40%0.32% 0.41% 0.42%
Non-performing assets as a % of total loans, other loans held for sale, and ORE0.46
 0.53
 0.57
Non-performing assets as a % of total loans, ORE, and specific other assets0.42
 0.44
 0.46
Loans 90 days past due and still accruing(2)$4,856
 $4,414
 $5,685
$15,660
 $3,798
 $4,856
As a % of total loans0.02% 0.02% 0.02%0.04% 0.01% 0.02%
Total past due loans and still accruing(2)$78,324
 $52,031
 $84,853
$88,219
 $56,927
 $78,323
As a % of total loans0.31% 0.21% 0.35%0.24% 0.22% 0.31%
Net charge-offs, quarter$15,257
 $8,979
 $38,098
$19,925
 $13,044
 $15,257
Net charge-offs/average loans, quarter0.24% 0.15% 0.62%
Net charge-offs annualized/average loans, quarter0.22% 0.20% 0.24%
Net charge-offs, year-to-date$37,366
 69,675
 60,695
$48,792
 $50,410
 $37,366
Net charge-offs/average loans, year-to-date0.20% 0.29% 0.33%
Net charge-offs annualized/average loans, year-to-date0.18% 0.20% 0.20%
Provision for loan losses, quarter$14,982
 $8,564
 $39,686
$27,562
 $12,148
 $14,982
Provision for loan losses, year-to-date39,548
 67,185
 58,620
63,250
 51,697
 39,548
Allowance for loan losses251,450
 249,268
 249,683
265,013
 250,555
 251,450
Allowance for loan losses as a % of total loans0.98% 1.01% 1.02%0.73% 0.97% 0.98%
          
(1) Represent only impairedFor purposes of this table, September 30, 2019 NPLs exclude acquired loans accounted for under ASC 310-30 that have been specifically identified to be sold. Impairedare currently accruing income.
(2) For purposes of this table, September 30, 2019 total past due loans heldand still accruing include acquired loans accounted for saleunder ASC 310-30 that are carried at the lower of cost or fair value, less costs to sell, based primarily on estimated sales proceeds net of selling costs.contractually past due.
Non-performing Assets
Total NPAs as a percentage of total loans, ORE, and specific other assets improved 2 basis points and 4 basis points, respectively, to 0.42% at September 30, 2019 compared to 0.44% at December 31, 2018 and 0.46% at September 30, 2018. Total NPAs were $151.3 million at September 30, 2019, a $36.9 million, or 32.2%, increase from $114.5 million at December 31, 2018 and a $34.3 million, or 29.4%, increase from $117.0 million at September 30, 2018, including an increase of $21.7 million from the classification of an other asset related to an amount due from a $13.6 million, or 10.4%, decrease from $130.6 million at December 31, 2017 and a $21.6 million, or 15.6%, decrease from $138.6 millionMPS as non-performing at September 30, 2017. The year-over-year decrease2019 (See "Part I - Item 1. Financial Statements and Supplementary Data - Note 12 - Commitments and Contingencies" in non-performing assets was driven bythis Report for more information). During the continued resolutionnine months ended September 30, 2019, $19.0 million of problem assets. Total non-performing assetsthe $23.5 million FCB acquired NPLs were sold at a net price that exceeded the preliminary fair value recorded at the Acquisition Date, resulting in an increase in the fair value of the acquired loans of $5.2 million during the measurement period.
Net Charge-offs
Net charge-offs for the nine months ended September 30, 2019 were $48.8 million, or 0.18% annualized, as a percentage of average loans, compared to $37.4 million, or 0.20% annualized, as a percentage of average loans, for the nine months ended September 30, 2018. The increase in charge-offs from 2018 is primarily due to a few commercial loan charge-offs in the $1-4 million range as well as a higher level of recoveries in the previous year. Year-to-date net charge-offs of 18 basis points (annualized) remain within Synovus' previous guidance of 15-20 basis points. Net charge-offs for the third quarter of 2019 were 22 basis points annualized, down from 24 basis points annualized in the third quarter of 2018.

Provision for Loan Losses and Allowance for Loan Losses
For the nine months ended September 30, 2019, the provision for loan losses was $63.3 million, an increase of $23.7 million, or 59.9%, compared to the nine months ended September 30, 2018. The year-over-year increase in provision expense was driven by gross organic loan growth including renewal of maturing FCB loans (i.e., provisioning for acquired loans subsequent to the acquisition date) as well as an increased level of net charge-offs including lower recoveries. The provision for loan losses covered 130% of net charge-offs for the nine months ended September 30, 2019 compared to 106% for the nine months ended September 30, 2018. For the third quarter of 2019, provision expense was $27.6 million, an increase of $15.4 million compared to the second quarter of 2019, primarily due to higher net charge-offs and gross funded loan production.
The ALL at September 30, 2019 was $265.0 million, or 0.73% of total loans, othercompared to $250.6 million, or 0.97% of total loans, held for sale,at December 31, 2018 and other real estate were 0.46%$251.5 million, or 0.98% of total loans, at September 30, 2018, reflecting a lower ratio at September 30, 2019 due to the impact of acquisition date accounting for acquired loans.The allowance to NPLs (excluding acquired NPLs with no reserve) at September 30, 2019 remained strong at 238%, compared to 0.53%235% at December 31, 20172018 and 0.57%232% at September 30, 2017.2018.
Table 8 - Accruing TDRs by Risk Grade           
 September 30, 2019 December 31, 2018 September 30, 2018
(dollars in thousands)Amount % Amount % Amount %
Pass$65,171
 50.1% $50,668
 43.9% $44,226
 38.5%
Special Mention14,053
 10.8
 14,480
 12.5
 20,091
 17.5
Substandard accruing50,795
 39.1
 50,440
 43.6
 50,423
 44.0
  Total accruing TDRs$130,019
 100.0% $115,588
 100.0% $114,740
 100.0%
            
Troubled Debt Restructurings
Accruing TDRs were $130.0 million at September 30, 2019, compared to $115.6 million at December 31, 2018 and $114.7 million at September 30, 2018. Accruing TDRs increased $14.4 million from December 31, 2018 and $15.3 million from September 30, 2018. Non-accruing TDRs were $13.6 million at September 30, 2019, compared to $151.3$26.2 million at December 31, 20172018 and $166.9$28.9 million at September 30, 2017. Accruing2018, a decrease of $12.6 million and $15.3 million, respectively. The primary driver of the increase in accruing TDRs decreased $36.5 million, or 24.1%, fromand decline in non-accruing TDRs compared to December 31, 20172018 and $52.1 million, or, 31.3% from a year ago primarily due to a continued decline in TDR inflows, more loans qualifying for removal of TDR designation upon subsequent renewal, refinance, or modification, and pay-offs.

At September 30, 2018 is a result of a large TDR relationship being upgraded in the allowance for loan losses allocatedsecond quarter of 2019 from non-accruing to these accruing TDRs was $6.9 million compared to $8.7 million at December 31, 2017status based on the extent of its payment performance and $8.5 million at September 30, 2017. the expectation of the collectability of all contractual amounts.
Accruing TDRs are considered performing because they are performing in accordance with the restructured terms.At bothSeptember 30, 2019, December 31, 2018, and September 30, 2018, approximately 98%, 98%, and December 31, 2017, 99%, respectively, of accruing TDRs were current. In addition, subsequent defaults on accruing TDRs (defaults defined as the earlier of the TDR being placed on non-accrual status or reaching 90 days past due with respect to principal and/or interest payments within twelve months of the TDR designation) have remainedcontinued to remain at low levels. There were eight defaults for the nine months ended September 30, 2018 and four defaults for the nine months ended September 30, 2017.

Accruing TDRs by Risk GradeSeptember 30, 2018 December 31, 2017 September 30, 2017
(dollars in thousands)Amount % Amount % Amount %
Pass$44,226
 38.5% $57,136
 37.8% $65,018
 39.0%
Special Mention20,091
 17.5
 15,879
 10.5
 17,759
 10.6
Substandard accruing50,423
 44.0
 78,256
 51.7
 84,141
 50.4
  Total accruing TDRs$114,740
 100.0% $151,271
 100.0% $166,918
 100.0%
            
Non-accruing TDRs were $28.9 million at September 30, 2018 compared to $11.8 million at December 31, 2017. Non-accruing TDRs generally may be returned to accrual status if there has been a period of performance, consisting usually of at least a six month sustained period of repayment performance in accordance with the terms of the agreement.
Net Charge-offs
Net charge-offs for the nine months ended September 30, 2018 were $37.4 million, or 0.20% as a percentage of average loans annualized, compared to $60.7 million, or 0.33%, as a percentage of average loans annualized for the nine months ended September 30, 2017. The decrease from 2017 is primarily due to $34.2 million in net charge-offs recorded for loans transferred to held for sale in conjunction with balance sheet restructuring actions in the third quarter of 2017.
Provision for Loan Losses and Allowance for Loan Losses
For the nine months ended September 30, 2018, the provision for loan losses was $39.5 million, a decrease of $19.1 million, or 32.5%, compared to the nine months ended September 30, 2017. The decrease in provision expense for the comparable nine-month periods is primarily due to $27.7 million in provision expense incurred in connection with the aforementioned transfers to held for sale completed during the third quarter of 2017.
The allowance for loan losses at September 30, 2018 was $251.5 million, or 0.98% of total loans, compared to $249.3 million, or 1.01% of total loans, at December 31, 2017 and $249.7 million, or 1.02% of total loans, at September 30, 2017. The allowance to non-performing loans ratio at September 30, 2018 remained strong at 231.91% compared to 215.70% at December 31, 2017 and 255.20% at September 30, 2017.


Capital Resources
Synovus and Synovus Bank are required to comply with capital adequacy standards established by their primary federal regulator, the Federal Reserve. Synovus and Synovus Bank measure capital adequacy using the standardized approach to the Basel III Final Rule. Synovus has always placed great emphasis on maintaining a solid capital base and continues to satisfy applicable regulatory capital requirements.
At September 30, 2018,2019, Synovus and Synovus Bank's capital levels remained strong and exceeded well-capitalized requirements currently in effect. The following table presents certain ratios used to measure Synovus and Synovus Bank's capitalization.
Capital Ratios   
Table 9 - Capital Ratios   
(dollars in thousands)September 30, 2018 December 31, 2017September 30, 2019 December 31, 2018
Common equity Tier 1 capital (transitional)   
CET1 capital (transitional)   
Synovus Financial Corp.$2,846,416
 $2,763,168
$3,660,078
 $2,897,997
Synovus Bank3,345,622
 3,155,163
4,577,972
 3,382,497
Tier 1 capital   
Tier 1 risk-based capital   
Synovus Financial Corp.3,038,768
 2,872,001
4,196,628
 3,090,416
Synovus Bank3,345,622
 3,155,163
4,577,972
 3,382,497
Total risk-based capital      
Synovus Financial Corp.3,550,686
 3,383,081
5,023,138
 3,601,376
Synovus Bank3,597,540
 3,406,243
4,844,482
 3,633,457
Common equity Tier 1 capital ratio (transitional)   
CET1 capital ratio (transitional)   
Synovus Financial Corp.9.90% 9.99%8.96% 9.95%
Synovus Bank11.64
 11.43
11.21
 11.62
Tier 1 capital ratio   
Tier 1 risk-based capital ratio   
Synovus Financial Corp.10.57
 10.38
10.27
 10.61
Synovus Bank11.64
 11.43
11.21
 11.62
Total risk-based capital to risk-weighted assets ratio      
Synovus Financial Corp.12.36
 12.23
12.29
 12.37
Synovus Bank12.52
 12.33
11.87
 12.49
Leverage ratio      
Synovus Financial Corp.9.58
 9.19
9.02
 9.60
Synovus Bank10.56
 10.12
9.85
 10.51
Tangible common equity to tangible assets ratio (1)
   
Tangible common equity ratio(1)
   
Synovus Financial Corp.8.68
 8.88
8.04
 8.81
      
(1)See ""Table 14 - Reconciliation of Non-GAAP Financial Measures"Measures” in this Report for the applicable reconciliation to the most comparable GAAP measure.
The Basel III capital rules became effective January 1, 2015 for Synovus and Synovus Bank, subject to a transition period for several aspects, including the capital conservation buffer and certain regulatory capital adjustments and deductions, as described below. Under the Basel III capital rules, the minimum capital requirements for Synovus and Synovus Bank include a common equity Tier 1 (CET1) ratio of 4.5%; Tier 1 capital ratio of 6%; total capital ratio of 8%; and leverage ratio of 4%. When fully phased-in on January 1, 2019, the Basel III capital rules include a capital conservation buffer of 2.5% that is added on top of each of the minimum risk-based capital ratios (the capital conservation buffer in effect in 2018 is 1.9%). As a financial holding company, Synovus and its subsidiary bank, Synovus Bank, are required to maintain capital levels required for a well-capitalized institution as defined by federal banking regulations. Under the Basel III capital rules, Synovus and Synovus Bank are well-capitalized if each has a CET1 ratio of 6.5% or greater, a Tier 1 risk-based capital ratio of 8% or greater, a total risk-based capital ratio of 10% or greater, a leverage ratio of 5% or greater, and are not subject to any written agreement, order, capital directive, or prompt corrective action directive from a federal and/or state banking regulatory agency to meet and maintain a specific capital level for any capital measure.
At September 30, 2018,2019, Synovus' CET1 ratio was 9.90%8.96% under the Basel III transitional provisions, and the estimated fully phased-in CET1 ratio was 9.86%8.94%(1), consistent with the lower end of Synovus' target operating range, and both of which are well in excess of regulatory requirements including the capital conservation buffer. On November 21, 2017, federal banking regulators adopted a final rulebuffer of 2.5%. See "Part II - Item 8. Financial Statements and Supplementary Data - Note 11 - Regulatory Capital" to extend the consolidated financial statements of Synovus' 2018 Form 10-K for additional information on regulatory capital transition for certain items applicable during 2017 to future periods for banking organizations (such as Synovus) that are not subject to the advanced approaches capital rule. This reduced the capital impact to Synovus in 2018 from the fully phased-in implementation of Basel III that was originally required. See "Non-GAAP Financial Measures" in this Report for the applicable reconciliation to the most comparable GAAP measure.requirements. Management currently believes, based on internal capital analyses and earnings projections, that

Synovus' capital position is adequate to meet current and future regulatory minimum capital requirements inclusive of the capital conservation buffer.
On June 17, 2019, Synovus announced that the Board of Directors increased its prior $400 million share repurchase authorization to $725 million for the year 2019. As of September 30, 2019, Synovus had repurchased under this program a total of $688.5 million, or 18.8 million shares of its common stock, at an average price of $36.55 per share, and reduced common shares outstanding by 10.7% from January 1, 2019. As of October 24, 2019, the authorization under this program was complete with total repurchases of $725 million, or 19.9 million shares of common stock.
On July 1, 2019, Synovus completed a $350 million public offering of Tier 1 qualifying Series E Preferred Stock. The preferred stock offering generated net proceeds of $341.4 million which were largely used to repurchase common stock under the share repurchase authorization.
In AprilDecember 2018, the federal banking regulators proposedadopted as final the transitional arrangements to permit banking organizations to phase-in the day-one impact of the adoption of ASU 2016-13, referred to as the current expected credit loss model,CECL, on regulatory capital over a period of three

years. Synovus expects to elect the phase-in option upon adoption of CECL. For additional information on ASU 2016-13,CECL, see ""Part I - Item 1. Financial Statements and Supplementary Data - Note 1 - Basis of Presentation"Presentation" in this Report.
On June 21, 2018, Synovus completed a public offering of $200 million of Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series D. The offering generated net proceeds of $195.1 million, which were largely used to fund the redemption of all of the outstanding shares of Series C Preferred Stock on August 1, 2018 for an aggregate redemption price of $130 million.
On January 23, 2018, Synovus announced a share repurchase program of up to $150 million to be completed during 2018. As of September 30, 2018, Synovus had repurchased under this program a total of $134.8 million, or 2.6 million shares of its common stock, at an average price of $51.85 per share. As of September 30, 2018, the remaining authorization under this program was $15.2 million. During October 2018, the program was concluded with the remaining $15.2 million, or 345 thousand shares, repurchased. In total, 2.9 million shares were repurchased during 2018 at an average price of $50.96, per share.    
Dividends
Synovus has historically paid a quarterly cash dividend to the holders of its common stock. Management and the Board of Directors closely monitor current and projected capital levels, liquidity (including dividends from subsidiaries), financial markets and other economic trends, as well as regulatory requirements regarding the payment of dividends. During the first quarter of 2018, Synovus increased the quarterly common stock dividend by 67%20% to $0.25$0.30 per share effective with the quarterly dividend declared during the first quarter of 2018.2019 dividend paid in April 2019.
Synovus' ability to pay dividends on its capital stock, consisting of the common stock and the preferred stock is primarily dependent upon dividends and distributions that it receives from its bank and non-banking subsidiaries, which are restricted by various regulations administered by federal and state bank regulatory authorities. During the nine months ended September 30, 2018,
Synovus Bank paid upstream cash dividends to Synovus totaling $180.0 million. Additionally, during the nine months ended September 30, 2018, non-banking subsidiaries returned $8.0 million in capital to Synovus. For the year ended December 31, 2017, Synovus Bank and non-bank subsidiaries made upstream cash distributions to the Parent Company totaling $451.0 million including cashdeclared common stock dividends of $283.2 million.
    Synovus declared dividends of $0.75 and $0.45$138.9 million, or $0.90 per common share, for the nine months ended September 30, 2018 and2019, compared to $88.4 million, or $0.75 per common share, for the nine months ended September 30, 2017, respectively.2018. In addition to dividends paid on its common stock, Synovus paiddeclared dividends of$7.7 million on its Series C Preferred Stockpreferred stock of $14.6 million and $3.1 million on its Series D Preferred Stock, totaling $10.8 million during the nine months ended September 30, 2018. Synovus paid dividends of $7.7 million on its Series C Preferred Stock during the nine months ended September 30, 2017.2019 and 2018, respectively.
Liquidity
Liquidity represents the extent to which Synovus has readily available sources of funding needed to meet the needs of depositors, borrowers and creditors, to support asset growth, and to otherwise sustain operations of Synovus and its subsidiaries, at a reasonable cost, on a timely basis, and without adverse consequences. ALCO monitors Synovus' economic, competitive, and regulatory environment and is responsible for measuring, monitoring, and reporting on liquidity and funding risk, interest rate risk, and market risk and has the authority to establish policies relative to these risks. ALCO, operating under liquidity and funding policies approved by the Board of Directors, actively analyzes contractual and anticipated cash flows in order to properly manage Synovus’ liquidity position.
Contractual and anticipated cash flows are analyzed under normal and stressed conditions to determine forward lookingforward-looking liquidity needs and sources. Synovus analyzes liquidity needs under various scenarios of market conditions and operating performance. This analysis includes stress testing and measures expected sources and uses of funds under each scenario. Emphasis is placed on maintaining numerous sources of current and potential liquidity to allow Synovus to meet its obligations to depositors, borrowers, and creditors on a timely basis.
Liquidity is generated primarily through maturities and repayments of loans by customers, maturities and sales of investment securities, core deposit growth, and access to sources of funds other than deposits. Management continuously monitors and maintains appropriate levels of liquidity so as to provide adequate funding sources to manage customer deposit withdrawals, loan requests, and funding maturities. Liquidity is also enhanced by the acquisition of new deposits. Each of the local markets monitors deposit flows and evaluates local market conditions in an effort to retain and grow deposits.
Synovus Bank also generates liquidity through the issuance of brokered certificates of deposit and money market accounts. Synovus Bank accesses these funds from a broad geographic base to diversify its sources of funding and liquidity. On September 25, 2017, Synovus Bank completed the Cabela's Transaction and thereby retained WFB's $1.10 billion brokered time deposit

portfolio with a weighted average remaining maturity of approximately 2.53 years and a weighted average rate of 1.83 percent (the balance of these deposits at September 30, 2018 was $742.2 million).In addition, Synovus Bank has the capacity to access funding through its membership in the FHLB system. At September 30, 2018,2019, based on currently pledged collateral, Synovus Bank had access to incremental funding of $831.5 million,$1.08 billion, subject to FHLB credit policies, through utilization of FHLB advances.
In addition to bank level liquidity management, Synovus must manage liquidity at the parent company level for various operating needs including the servicing of debt, the payment of dividends on our common stock and preferred stock, share repurchases, payment of general corporate expenses and potential capital infusions into subsidiaries. The primary source of liquidity for Synovus consists of dividends from Synovus Bank, which is governed by certain rules and regulations of the GA DBF and the Federal Reserve Bank. Synovus' ability to receive dividends from Synovus Bank in future periods will depend on a number of factors, including, without limitation, Synovus Bank's future profits, asset quality, liquidity, and overall condition. In addition, GA DBF rules and related statutes contain limitations on payments of dividends by Synovus without the approval of the GA DBF.
On June 21, 2018,February 7, 2019, Synovus completed a public offering of $200$300.0 million aggregate principal amount of Fixed-to-Floating5.900% Fixed-to-Fixed Rate Non-Cumulative PerpetualSubordinated Notes due in 2029.  Subject to any redemption prior to February 7, 2029, the notes will bear interest at the rate of 5.900% per annum for the first five years and, thereafter, at a fixed rate which will be 3.379% above the 5-Year Mid-Swap Rate as of the reset date. Interest on the notes will be payable semi-annually in arrears. The notes will mature on February 7, 2029. Proceeds from these notes were primarily used to repurchase common stock under the share repurchase authorization.
On July 1, 2019, Synovus completed a $350 million public offering of Series E Preferred Stock, Series D.Stock. The offering generated net proceeds of $195.1 million, which$341.4 million. Dividends on the shares are non-cumulative and, if declared, will accrue and be payable, in arrears, quarterly at a rate per annum equal to 5.875% for each dividend period from the original issue date to, but excluding, July 1, 2024. From and including July 1, 2024, the dividend rate will change and reset every five years on July 1 at a rate equal to the five-year

U.S. Treasury Rate plus 4.127% per annum. The Series E Preferred Stock is redeemable at Synovus' option in whole or in part, from time to time, on July 1, 2024 or any subsequent reset date, or in whole but not in part, at any time within 90 days following a regulatory capital treatment event, in each case, at a redemption price equal to $25.00 per share, plus any declared and unpaid dividends, without accumulation of any undeclared dividends. The Series E Preferred Stock has no preemptive or conversion rights. Except in limited circumstances, the Series E Preferred Stock does not have any voting rights. Proceeds from the preferred stock offering were largelyprimarily used to fundrepurchase common stock under the redemption of all of the outstanding shares of Series C Preferred Stock on August 1, 2018 for an aggregate redemption price of $130 million. Concurrent with the redemption of the Series C Preferred Stock, Synovus recognized a one-time, non-cash redemption charge of $4.0 million.share repurchase authorization.
On November 1, 2017,September 19, 2019, Synovus issued $300.0terminated an assumed $150 million aggregate principal amountlong-term FHLB obligation from the FCB acquisition primarily through utilization of 3.125% senior notes maturing in 2022 inshort-term FHLB advances and incurred a public offering with aggregate proceeds of $296.9$4.6 million net loss on early extinguishment of discount and debt issuance costs. On November 9, 2017, Synovus redeemed all of the $300.0 million aggregate principal amount of its 7.875% senior notes due 2019 at a "make whole" premium. Additionally, during 2017, Synovus paid off the remaining balance of $278.6 million of its subordinated notes at their maturity date of June 15, 2017.debt.
Synovus presently believes that the sources of liquidity discussed above, including existing liquid funds on hand, are sufficient to meet its anticipated funding needs. However, if economic conditions were to significantly deteriorate, regulatory capital requirements for Synovus or Synovus Bank were to increase as the result of regulatory directives or otherwise, or Synovus believes it is prudent to enhance current liquidity levels, then Synovus may seek additional liquidity from external sources. See "Part I – Item 1A. Risk Factors - Changes in the cost and availability of funding due to changes in the deposit market and credit market may adversely affect our capital resources, liquidity and financial results.results" ofSynovus' 20172018 Form 10-K. Furthermore, Synovus may, from time to time, take advantage of attractive market opportunities to refinance its existing debt, redeem its preferred stock, or strengthen its liquidity or capital position.
Earning Assets and Sources of Funds
Average total assets for the nine months ended September 30, 20182019 increased $908.5 million$15.07 billion, or 3.0%47.9%, to $31.49$46.57 billion as compared to $30.58$31.49 billion for the first nine months of 2017.2018. Average earning assets increased $1.01$13.46 billion, or 3.5%45.3%, in the first nine months of 20182019 compared to the same period in 20172018 and represented 94.3%92.7% of average total assets at September 30, 2018,2019, as compared to 93.8%94.3% at September 30, 2017.2018. The increase in average earning assets resulted from a $746.8 million$10.72 billion increase in average loans, net, and a $254.5 million$2.70 billion increase in average taxable investment securities. securities primarily attributable to the FCB acquisition.
Average interest-bearing liabilities increased $618.8 million,$11.17 billion, or 3.1%53.8%, to $20.76$31.93 billion for the first nine months of 20182019 compared to the same period in 2017.2018. The increase in average interest-bearing liabilities was driven byprimarily related to the $10.93 billion in deposits acquired from FCB, on the Acquisition Date, of which $9.42 billion were interest-bearing. Additionally, average other short-term borrowings increased $794.3 million and average long-term debt increased $382.1 million, primarily due to the $300.0 million aggregate principal amount of fixed-to-fixed rate subordinated notes issued in February 2019.
The year-over-year increase in average interest-bearing deposits of $9.96 billion included a $668.5 million$5.58 billion increase in average time deposits, an $85.3 million increase in average other short-term borrowings, an $80.2 million increase in average interest-bearing demand deposits, and a $75.4 million$2.92 billion increase in average money market deposit accounts. These increases were partially offset byaccounts, and a $303.5 million decrease$1.38 billion increase in average long-term debt.interest-bearing demand deposits. Average non-interest bearingnon-interest-bearing demand deposits increased $275.4 million,$1.71 billion, or 3.8%22.7%, to $7.54$9.24 billion for the first nine months of 20182019 compared to the same period in 2017.2018, due primarily to the FCB acquisition.
Net interest income was $402.1 million for the three months ended September 30, 2019, and $1.20 billion for the nine months ended September 30, 2018 was $850.5 million, an increase2019, up 37.9% and 40.7%, respectively, over the comparable periods of $96.9 million, or 12.9%, compared to $753.6 million for2018. Both quarter-over-quarter and year-over-year increases were driven primarily by the nine months ended September 30, 2017.
FCB acquisition. Net interest margin increased 32was down 20 basis points to 3.84%and 12 basis points over the comparable three and nine-month periods to 3.69% and 3.72%, respectively, impacted primarily driven by federal funds rate increasesthe FCB acquisition, the deposit shift to time deposits, and our asset-sensitive balance sheet. Sincethe issuance of subordinated debt. Year-to-date September 30, 2017, there have been four 25 basis points federal funds rate increases. The2019, the yield on earning assets was 4.45%4.79%, an increase of 4634 basis points compared to the nine months ended September 30, 2017,2018, while the effectivetotal cost of funds increased 1449 basis points to 0.61%1.13%. The yield on loans increased 4930 basis points to 4.86%5.16%, and the yield on investment securities increased 2573 basis points to 2.35%3.08% over the nine months ended September 30, 2017.2018.
On a sequential quarter basis, net interest income increased $7.0was up $4.8 million, driven by a $380.6 million increase in average loans, net, as well as net margin expansion of 3 basis points to 3.89%or 1.2%. The net interest margin increasefor the third quarter was primarily driven by the June federal funds rate increase. The yield on earning assets3.69%, which was 4.58%, an increase of 11 basis points fromflat compared to the second quarter of 2018.

This increase was driven by an 11 basis point increase in loan yields. The effective cost of funds was 0.69%2019. Net interest income and margin for the third quarter of 2018, up 82019 were favorably impacted by $28.9 million, or 27 basis points, fromof purchase accounting adjustments primarily comprised of $16.1 million of loan accretion (excess over contractual interest), $1.7 million of investment securities accretion, and $11.0 million of deposit premium amortization compared to a favorable impact of $21.0 million, or 21 basis points, including $9.8 million of loan accretion (excess over contractual interest) and $11.0 million of deposit premium amortization, in the second quarter of 2018.2019. The net interest margin, excluding the impact of purchase accounting adjustments, was down 6 basis points sequentially to 3.42% for the third quarter of 2019, driven by an 8 basis point decrease in the yield on earning assets and a 2 basis point decrease in the effective cost of funds due to the two 25 basis points federal funds rate declines in July and September.



Quarterly yields earned on average interest-earning assets and rates paid on average interest-bearing liabilities for the five most recent quarters are presented below.
Average Balances and Yields/Rates2018 2017
Table 10 - Average Balances and Yields/Rates2019 2018
(dollars in thousands) (yields and rates annualized)Third Quarter Second Quarter 
First
Quarter
 Fourth Quarter Third QuarterThird Quarter Second Quarter First Quarter Fourth Quarter Third Quarter
Interest Earning Assets:                  
Taxable investment securities (1)
$4,061,239
 4,077,564
 4,097,162
 3,937,278
 3,786,436
Investment securities(1)(2)
$6,831,036
 6,955,386
 6,536,199
 4,073,685
 4,061,328
Yield2.38% 2.34
 2.34
 2.29
 2.11
3.14% 3.03
 3.06
 2.45
 2.39
Tax-exempt investment securities(1)(3)
$89
 115
 140
 180
 259
Yield (taxable equivalent) (3)
5.91% 6.87
 6.57
 7.97
 7.86
Trading account assets(4)
$16,646
 23,772
 8,167
 7,360
 7,823
Trading account assets(3)
$5,519
 4,853
 2,049
 7,493
 16,646
Yield2.52% 2.79
 2.66
 2.78
 2.09
4.01% 1.83
 1.30
 1.90
 2.52
Commercial loans(2)(3)
$19,025,830
 18,857,271
 18,963,515
 18,935,774
 19,059,936
Commercial loans(2)(4)
$26,568,194
 26,353,973
 26,140,672
 19,150,252
 19,025,830
Yield4.98% 4.85
 4.64
 4.49
 4.41
5.09% 5.13
 5.16
 5.13
 4.98
Consumer loans(2)
$6,298,643
 6,092,899
 5,899,015
 5,704,629
 5,440,765
Consumer loans(4)
$9,633,603
 9,423,427
 9,180,679
 6,476,026
 6,298,643
Yield4.80% 4.76
 4.71
 4.54
 4.55
5.08% 5.17
 5.10
 4.85
 4.80
Allowance for loan losses$(251,684) (257,966) (251,635) (252,319) (249,248)$(258,024) (259,284) (252,815) (251,098) (251,684)
Loans, net (2)
$25,072,789
 24,692,204
 24,610,895
 24,388,084
 24,251,453
Loans, net(4)
$35,943,773
 35,518,116
 35,068,536
 25,375,180
 25,072,789
Yield4.99% 4.88
 4.70
 4.55
 4.49
5.13% 5.17
 5.17
 5.11
 4.99
Mortgage loans held for sale$49,030
 50,366
 38,360
 45,353
 52,177
$99,556
 70,497
 34,913
 36,477
 49,030
Yield4.71% 4.42
 3.95
 3.96
 3.88
3.93% 4.27
 4.48
 4.79
 4.71
Other earning assets (5)
$544,704
 724,537
 516,575
 922,296
 543,556
$513,160
 511,488
 679,477
 641,832
 544,704
Yield1.90% 1.77
 1.48
 1.31
 1.23
2.08% 2.37
 2.45
 2.20
 1.90
Federal Home Loan Bank and Federal Reserve Bank Stock(4)
$163,568
 165,845
 177,381
 159,455
 175,263
Federal Home Loan Bank and Federal Reserve Bank Stock(3)
$254,994
 234,949
 211,408
 162,369
 163,568
Yield4.41% 4.63
 3.39
 4.03
 3.50
3.85% 3.29
 4.82
 4.31
 4.41
Total interest earning assets$29,908,065
 29,734,403
 29,448,680
 29,460,006
 28,816,967
$43,648,038

43,295,289

42,532,582

30,297,036

29,908,065
Yield4.58% 4.47
 4.31
 4.15
 4.11
4.78% 4.79
 4.80
 4.69
 4.58
Interest-Bearing Liabilities:                  
Interest-bearing demand deposits$4,701,204
 5,001,826
 5,032,000
 4,976,239
 4,868,372
$6,138,810
 6,335,953
 6,393,304
 4,692,804
 4,701,204
Rate0.38% 0.35
 0.31
 0.28
 0.27
0.69% 0.71
 0.68
 0.41
 0.38
Money Market accounts, excluding brokered deposits$7,936,621
 7,791,107
 7,561,554
 7,514,992
 7,528,036
Money market accounts, excluding brokered deposits$10,138,783
 10,024,836
 10,244,556
 8,050,732
 7,936,621
Rate0.72% 0.55
 0.43
 0.36
 0.34
1.26% 1.23
 1.18
 0.89
 0.72
Savings deposits$824,935
 829,800
 811,587
 804,853
 803,184
$900,366
 904,183
 901,059
 815,588
 824,935
Rate0.03% 0.03
 0.03
 0.03
 0.03
0.05% 0.05
 0.06
 0.04
 0.03
Time deposits under $100,000$1,205,987
 1,161,890
 1,143,780
 1,166,413
 1,183,582
$2,100,492
 2,245,878
 2,238,568
 1,242,811
 1,205,987
Rate0.99% 0.82
 0.71
 0.70
 0.68
1.39% 1.39
 1.24
 1.16
 0.99
Time deposits over $100,000$2,273,582
 2,021,084
 1,895,545
 2,004,031
 2,067,347
$5,957,691
 6,331,665
 6,211,067
 2,478,649
 2,273,582
Rate1.46% 1.22
 1.02
 0.99
 0.97
1.69% 1.70
 1.60
 1.67
 1.46
Non-maturing brokered deposits$358,277
 262,976
 424,118
 546,413
 547,466
$993,078
 766,718
 937,629
 349,480
 358,277
Rate2.10% 1.94
 1.14
 0.81
 0.73
2.47% 2.46
 2.60
 2.46
 2.10
Brokered time deposits$1,414,700
 1,659,941
 1,527,793
 1,651,920
 983,423
$2,119,149
 1,985,589
 1,845,819
 1,275,276
 1,414,700
Rate1.94% 1.85
 1.75
 1.63
 1.16
2.27% 2.28
 2.13
 2.03
 1.94
Total interest-bearing deposits$18,715,306
 18,728,624
 18,396,377
 18,664,861
 17,981,410
$28,348,369
 28,594,822
 28,772,002
 18,905,340
 18,715,306
Rate0.83% 0.70
 0.58
 0.54
 0.46
1.32% 1.30
 1.24
 0.96
 0.83
Federal funds purchased and securities sold under repurchase agreements$230,504
 207,655
 202,226
 184,369
 191,585
$221,045
 300,168
 233,076
 194,370
 230,504
Rate0.25% 0.35
 0.21
 0.15
 0.08
0.22% 0.20
 0.22
 0.18
 0.25
Other short-term borrowings$146,794
 3,024
 394,056
 3,261
 102,717
$1,307,370
 1,090,581
 517,456
 112,228
 146,794
Rate2.12% 2.84
 1.52
 1.42
 1.16
2.31% 2.59
 2.58
 2.51
 2.12
Long-term debt$1,656,743
 1,852,094
 1,733,938
 1,710,721
 1,882,458
$2,286,221
 2,114,819
 1,983,910
 1,657,022
 1,656,743
Rate2.87% 2.66
 2.51
 2.67
 2.90
3.32% 3.53
 3.33
 3.06
 2.87
Total interest-bearing liabilities$20,749,347
 20,791,397

20,726,597

20,563,212

20,158,170
$32,163,005
 32,100,390

31,506,444

20,868,960

20,749,347
Rate0.99% 0.87
 0.76
 0.72
 0.69
1.47% 1.48
 1.38
 1.12
 0.99
Non-interest bearing demand deposits$7,672,006
 7,539,451
 7,391,695
 7,621,147
 7,305,508
Effective cost of funds0.69% 0.61
 0.53
 0.50
 0.48
Non-interest-bearing demand deposits$9,365,776
 9,304,839
 9,054,949
 8,014,761
 7,672,006
Cost of funds1.16% 1.15
 1.07
 0.81
 0.73
Effective cost of funds(6)
1.09% 1.10
 1.02
 0.77
 0.69
Net interest margin3.89% 3.86
 3.78
 3.65
 3.63
3.69% 3.69
 3.78
 3.92
 3.89
Taxable equivalent adjustment (3)
$136
 120
 116
 234
 283
Taxable equivalent adjustment(2)
$819
 811
 630
 181
 136
                  
(1)
Excludes net unrealized gains (losses).
(2) Average loans are shown net of deferred fees and costs. Non-performing loans are included.
(3) (2) 
Reflects taxable-equivalent adjustments, using the statutory federal income tax rate of 21% beginning in 2018, and 35% for prior years,, in adjusting interest on tax-exempt loans and investment securities to a taxable-equivalent basis.
(4) (3) 
Included as a component of other assets on the consolidated balance sheets.
(4)
Average loans are shown net of deferred fees and costs. NPLs are included.
(5)
Includes interest-bearing funds with Federal Reserve Bank, interest earning deposits with banks, and federal funds sold and securities purchased under resale agreements.
(6)
Includes the impact of non-interest-bearing capital funding sources.
(5)     Includes interest-bearing funds with Federal Reserve Bank, interest earning deposits with banks, and federal funds sold and securities purchased under resale agreements.


Net Interest Income and Rate/Volume Analysis
The following tables settable sets forth the major components of net interest income and the related annualized yields and rates for the nine months ended September 30, 20182019 and 2017,2018, as well as the variances between the periods caused by changes in interest rates versus changes in volume.
Net Interest Income and Rate/Volume Analysis
Table 11 - Net Interest Income and Rate/Volume AnalysisTable 11 - Net Interest Income and Rate/Volume Analysis
Nine Months Ended September 30, 2018 Compared to 2017Nine Months Ended September 30, 2019 Compared to 2018
Average Balances Interest Annualized Yield/Rate Change due to Increase (Decrease)Average Balances Interest Annualized Yield/Rate Change due to Increase (Decrease)
(dollars in thousands)2018 2017 2018 2017 2018 2017 Volume Rate 2019 2018 2019 2018 2019 2018 Volume Rate 
Assets                                  
Interest earning assets:                                  
Taxable investment securities$4,078,523
 $3,824,025
 $71,974
 $60,079
 2.35% 2.09% $3,978
 $7,917
 $11,895
Tax-exempt investment securities(2)
114
 1,101
 6
 51
 6.51
 6.13
 (46) 1
 (45)
Total investment securities4,078,637
 3,825,126
 71,980
 60,130
 2.35
 2.10
 3,932
 7,918
 11,850
Investment securities$6,775,287
 $4,078,637
 $156,554
 $71,980
 3.08% 2.35% $47,650
 $36,924
 $84,574
Trading account assets16,226
 5,983
 325
 90
 2.67
 1.99
 153
 82
 235
4,153
 16,226
 84
 325
 2.70
 2.67
 (241) —
 (241)
Taxable loans, net(1)
24,993,328
 24,227,567
 898,671
 783,546
 4.81
 4.32
 24,743
 90,382
 115,125
35,421,829
 24,993,328
 1,360,533
 898,671
 5.14
 4.81
 375,178
 86,684
 461,862
Tax-exempt loans, net(1)(2)
54,088
 70,721
 1,767
 2,492
 4.37
 4.71
 (586) (139) (725)348,246
 54,088
 10,453
 1,767
 4.01
 4.37
 9,615
 (929) 8,686
Allowance for loan losses(253,762) (251,448)              (256,727) (253,762)              
Loans, net24,793,654
 24,046,840
 900,438
 786,038
 4.86
 4.37
 24,157
 90,243
 114,400
35,513,348
 24,793,654
 1,370,986
 900,438
 5.16
 4.86
 384,793

85,755
 470,548
Mortgage loans held for sale45,958
 50,339
 1,514
 1,478
 4.39
 3.91
 (128) 164
 36
68,558
 45,958
 2,122
 1,514
 4.13
 4.39
 742
 (134) 608
Other earning assets(3)
595,376
 586,055
 7,799
 4,396
 1.73
 0.99
 68
 3,335
 3,403
567,433
 595,376
 9,964
 7,799
 2.32
 1.73
 (360) 2,525
 2,165
Federal Home Loan Bank and Federal Reserve Bank stock168,881
 174,493
 5,227
 4,321
 4.13
 3.30
 (138) 1,044
 906
233,943
 168,881
 6,931
 5,227
 3.95
 4.13
 2,010
 (306) 1,704
Total interest earning assets29,698,732
 28,688,836
 987,283
 856,453
 4.45
 3.99
 28,044
 102,786
 130,830
43,162,722

29,698,732
 1,546,641

987,283
 4.79
 4.45
 434,594

124,764

559,358
Cash and due from banks390,288
 391,829
              516,789
 390,288
              
Premises and equipment, net428,456
 416,835
              486,141
 428,456
              
Other real estate5,005
 20,246
              14,803
 5,005
              
Cash surrender value of bank-owned life insurance765,204
 545,046
              
Other assets(4)
970,634
 1,066,863
              1,621,335
 425,588
              
Total assets$31,493,115
 $30,584,609
              $46,566,994

$31,493,115
              
                                  
Liabilities and Shareholders' EquityLiabilities and Shareholders' Equity                Liabilities and Shareholders' Equity                
Interest-bearing liabilities:                                  
Interest-bearing demand deposits$4,910,465
 $4,830,226
 $12,650
 $8,366
 0.34% 0.23% $138
 $4,146
 $4,284
$6,288,424
 $4,910,465
 $32,611
 $12,650
 0.69% 0.34% $3,504
 $16,457
 $19,961
Money market accounts8,112,684
 8,037,235
 37,587
 20,268
 0.62
 0.34
 192
 17,127
 17,319
11,035,016
 8,112,684
 109,711
 37,587
 1.33
 0.62
 13,551
 58,573
 72,124
Savings deposits822,156
 838,898
 177
 394
 0.03
 0.06
 (7) (210) (217)901,867
 822,156
 371
 177
 0.05
 0.03
 18
 176
 194
Time deposits4,769,299
 4,100,836
 47,781
 26,846
 1.34
 0.88
 4,399
 16,536
 20,935
10,344,873
 4,769,299
 131,773
 47,781
 1.70
 1.34
 55,881
 28,111
 83,992
Federal funds purchased and securities sold under repurchase agreements213,565
 184,000
 434
 125
 0.27
 0.09
 20
 289
 309
251,385
 213,565
 404
 434
 0.21
 0.27
 76
 (106) (30)
Other short-term borrowings180,385
 95,055
 2,310
 740
 1.69
 1.03
 657
 913
 1,570
974,696
 180,385
 18,195
 2,310
 2.46
 1.69
 10,040
 5,845
 15,885
Long-term debt1,747,309
 2,050,783
 35,492
 45,227
 2.68
 2.94
 (6,673) (3,062) (9,735)2,129,424
 1,747,309
 54,785
 35,492
 3.39
 2.68
 7,660
 11,633
 19,293
Total interest-bearing liabilities20,755,863
 20,137,033
 136,431
 101,966
 0.87
 0.68
 (1,274) 35,739
 34,465
31,925,685

20,755,863
 347,850
 136,431
 1.44
 0.87
 90,730

120,689

211,419
Non-interest bearing deposits7,535,411
 7,259,981
              
Non-interest-bearing deposits9,242,993
 7,535,411
              
Other liabilities215,327
 219,388
              691,357
 215,327
              
Shareholders' equity2,986,514
 2,968,207
              4,706,959
 2,986,514
              
Total liabilities and equity$31,493,115
 $30,584,609
              $46,566,994

$31,493,115
              
Interest rate spread:        3.58% 3.31%              3.35% 3.58%      
Net interest income - FTE/margin(5)
    $850,852
 $754,487
 3.84% 3.52% $29,318
 $67,047
 $96,365
    $1,198,791
 $850,852
 3.72% 3.84% $343,864

$4,075

$347,939
Taxable equivalent adjustment    372
 890
              2,256
 372
          
Net interest income, actual    $850,480
 $753,597
              $1,196,535
 $850,480
          
                                  
(1) Average loans are shown net of unearned income. Non-performing loansNPLs are included. Interest income includes fees as follows: 2019 - $26.4 million, 2018 - $23.5 million, 2017 - $23.4 million.
(2)
Reflects taxable-equivalent adjustments, using the statutory federal income tax rate of 21%, in adjusting interest on tax-exempt loans to a taxable-equivalent basis.
(3)
Includes interest-bearing funds with Federal Reserve Bank, interest earning deposits with banks, and federal funds sold and securities purchased under resale agreements.
(4)
Includes average net unrealized gains (losses) on investment securities available for sale of $14.7 million and $(123.8) million for the nine months ended September 30, 2019 and 2018, respectively.
(5)
The net interest margin is calculated by dividing annualized net interest income - FTE by average total interest earnings assets.
(2) Reflects taxable-equivalent adjustments, using the statutory federal income tax rate (21% in 2018 and 35% in 2017, in adjusting interest on tax-exempt loans and investment securities to a taxable-equivalent basis.
(3) Includes interest-bearing funds with Federal Reserve Bank, interest earning deposits with banks, and federal funds sold and securities purchased under resale agreements.
(4) Includes average net unrealized gains (losses) on investment securities available for sale of $(123.8) million and $(34.7) million for the nine months ended September 30, 2018 and 2017, respectively.
(5) The net interest margin is calculated by dividing annualized net interest income - FTE by average total interest earnings assets.


Market Risk Analysis
Interest rate risk is the primary market risk to which Synovus is potentially exposed. Synovus measures its sensitivity to changes in market interest rates through the use of a simulation model. Synovus uses this simulation model to determine a baseline net interest income forecast and the sensitivity of this forecast to changes in interest rates. These simulations include all of Synovus’ earning assets and liabilities. Forecasted balance sheet changes, primarily reflecting loan and deposit growth forecasts, are included in the periods modeled. Anticipated deposit mix changes in each interest rate scenario are also included in the periods modeled. Assumptions utilized in the model are updated on an ongoing basis and are reviewed and approved by ALCO and the Risk Committee of the Board of Directors.
Synovus has modeled its baseline net interest income forecast assuming a flat interest rate environment with the federal funds rate at the Federal Reserve’s current targeted range of 2.00%1.75% to 2.25%2.00% and the current prime rate of 5.25%5.00%. Synovus has modeled the impact of a gradual increase in short-term ratesthe targeted federal funds range and the prime rate of 100 and 200 basis points and a gradual decline of 100 and 200 basis points to determine the sensitivity of net interest income for the next twelve months. For the 200 basis point decline scenario, Synovus continues to maintain aassumes the targeted federal funds rate is 0% and the prime rate is 3.00%. Synovus' current rate risk position is considered modestly asset-sensitive position whichand would be expected to benefit net interest income in a rising interest rate environment and reduce net interest income in a declining interest rate environment. The following table represents the estimated sensitivity of net interest income to these changes in short-term interest rates at September 30, 2018,2019, with comparable information for December 31, 2017.2018.
 
Table 12 - Twelve Month Net Interest Income Sensitivity(1)
   Estimated % Change in Net Interest Income as Compared to Unchanged Rates (for the next twelve months)
 
 Change in Short-term Interest Rates (in basis points) September 30, 2019 December 31, 2018
 +200 4.2% 3.4%
 +100 2.8% 2.0%
 Flat —% —%
 -100 (2.7)% (2.0)%
 -200 (5.4)% N/A
      
   Estimated % Change in Net Interest Income as Compared to Unchanged Rates (for the next twelve months)
 
 Change in Short-term Interest Rates (in basis points) September 30, 2018 December 31, 2017
 +200 3.5% 3.6%
 +100 1.9% 1.9%
 Flat —% —%
 -100 (2.2)% (4.7)%
      
Several factors could serve to diminish or eliminate this asset sensitivity in a rising rate environment. These factors(1) December 31, 2018 does not include a higher than projected levelassets and liabilities of deposit customer migration to higher cost deposits, such as certificates of deposit,FCB which would increase total interest expense and serve to reduce the realized level of asset sensitivity. Another factor which could impact the realized interest rate sensitivity is the repricing behavior of interest-bearing non-maturity deposits. Assumptions for repricing are expressed as a beta relative to the change in the prime rate. For instance, a 50% beta would correspond to a deposit rate that would increase 0.5% for every 1% increase in the prime rate. Projected betas for interest-bearing non-maturity deposit repricing are a key component of determining the Company's interest rate risk positioning. Projected betas are basedwere acquired on historical analysis, current product features, and deposit mix. These projected betas reflect an assumption that realized betas will increase as short-term rates increase. Should realized betas be higher than projections, the expected benefit from higher interest rates would be diminished. The following table presents an example of the potential impact of an increase in repricing betas on Synovus' realized interest rate sensitivity position.
  As of September 30, 2018
Change in Short-term Interest Rates (in basis points) Base Scenario 15% Increase in Average Repricing Beta
+200 3.5% 1.9%
+100 1.9% 1.1%
     
January 1, 2019.
The net interest income simulation model is the primary tool utilized to evaluate potential interest rate risks over a shorter termshorter-term time horizon. Synovus also evaluates potential longer termlonger-term interest rate risk through modeling and evaluation of EVE. Simulation modeling is utilized to measure the economic value of equityEVE and its sensitivity to immediate changes in interest rates. This EVE modeling allows Synovus to capture longer-term repricing risk and options risk embedded in the balance sheet. These simulations value only the current balance sheet and do not incorporate growth assumptions used in the net interest income simulation. The economic value of equityEVE is the net fair value of assets, liabilities, and off-balance sheet financial instruments derived from the present value of future cash flows discounted at current market interest rates. From this baseline valuation, Synovus evaluates changes in the value of each of these items in various interest rate scenarios to determine the net impact on the economic value of equity.EVE. Key assumptions utilized in the model, namely loan prepayments, investment security prepayments, deposit repricing betas, and non-maturity deposit duration have a significant impact on the results of the EVE simulations. As illustrated in the table below, the EVE model indicates that, compared with a valuation assuming stable rates, EVE is projected to increase by 1.4%2.6% and decrease by 1.0%, assuming an immediate and sustained increase in interest rates of 100 and 200 basis points, respectively. Assuming an immediate 100 basis point and 200 basis point decline in rates, EVE is projected to decrease by 13.3%. These metrics reflect a relatively stable long term interest rate risk position as compared to December 31, 2017.

9.3% and 20.0%, respectively.
Table 13 - Economic Value of Sensitivity(1)
 
 Estimated Change in EVE Estimated Change in EVE
Immediate Change in Interest Rates (in basis points) September 30, 2018 December 31, 2017 September 30, 2019 December 31, 2018
+200 1.0% (0.2)% (1.0)% 0.7%
+100 1.4% 1.6% 2.6% 1.3%
-100 (13.3)% (16.9)% (9.3)% (13.9)%
-200 (20.0)% N/A
  
(1) December 31, 2018 does not include assets and liabilities of FCB which were acquired on January 1, 2019.





LIBOR
In July 2017, the Financial Conduct Authority, which regulates LIBOR, announced that it intends to stop persuading or compelling banks to submit rates for the calculation of LIBOR after 2021, confirming the continuation of LIBOR will not be guaranteed beyond that date.  The ARRC has proposed the SOFR as its preferred rate as an alternative to LIBOR and has proposed a paced market transition plan to SOFR from LIBOR.  Organizations are currently working on industry-wide and company-specific transition plans as it relates to derivatives and cash markets exposed to LIBOR.  As noted within our 10-K Risk Factors, Synovus holds instruments that may be impacted by the discontinuance of LIBOR including floating rate obligations, loans, deposits, derivatives and hedges, and other financial instruments but is not able to currently predict the associated financial impacts of the transition to an alternative reference rate.  Synovus has established a cross-functional LIBOR transition working group that is in the process of i) assessing the Company's current exposure to LIBOR indexed instruments and the data, systems and processes that may also be impacted; ii) establishing an implementation plan; and iii) developing a formal governance structure for the transition. 
Critical Accounting Policies
The accounting and financial reporting policies of Synovus are in accordance with GAAP and conform to the accounting and reporting guidelines prescribed by bank regulatory authorities. Synovus has identified certain of its accounting policies as “critical accounting policies,” consisting of those related to the allowance for loan losses, and determination of the fair value of financial instruments.measurements and income taxes. In determining which accounting policies are critical in nature, Synovus has identified the policies that require significant judgment or involve complex estimates. It is management's practice to discuss critical accounting policies with the Board of Directors' Audit Committee, including the development, selection, implementation and disclosure of the critical accounting policies. The application of these policies has a significant impact on Synovus’ unaudited interim consolidated financial statements. Synovus’ financial results could differ significantly if different judgments or estimates are used in the application of these policies. All accounting policies described in "Part II - Item 8. Financial Statements and Supplementary Data - Note 1 - Summary of Significant Accounting Policies" in Synovus' 20172018 Form 10-K should be reviewed for a greater understanding of how we record and report our financial performance. In connection with the adoption of ASU 2016-18, Statement of Cash Flows-Restricted Cash, Synovus changed its presentation of cash and cash equivalents, effective January 1, 2018, to include cash and due from banks as well as interest-bearing funds with the Federal Reserve Bank, interest earning deposits with banks, and federal funds sold and securities purchased under resale agreements, which are inclusive of any restricted cash and restricted cash equivalents. Prior to 2018, cash and cash equivalents only included cash and due from banks. Prior periods have been revised to maintain comparability. Excluding the aforementioned presentation change and the recently adopted accounting standards and purchased loans accounting policy disclosed in ""Part I - Item 1. Financial Statements and Supplementary Data - Note 1 - Basis of Presentation"Presentation" in this Report, there have been no significant changes to the accounting policies, estimates and assumptions, or the judgments affecting the application of these estimates and assumptions from those disclosed in Synovus' 20172018 Form 10-K.














Non-GAAP Financial Measures
The measures entitled adjusted non-interest income; adjusted non-interest expense; adjusted total revenues; adjusted tangible efficiency ratio; adjusted net income per common share, diluted; adjusted return on average assets; adjusted return on average common equity; adjusted return on average tangible common equity; average core deposits; core transaction deposits; tangible common equity ratio; and common equity Tier 1 (CET1)CET1 ratio (fully phased-in) 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 income; total non-interest expense; total revenues; efficiency ratio;ratio-FTE; net income per common share, diluted; return on average assets; return on average common equity; total average deposits; the ratio of total shareholders' equity to total assets; and the CET1 ratio, 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 income are measures used by management to evaluate non-interest income exclusive of net investment securities losses and gains (losses),on sale and changes in fair value of private equity investments, net, and the Cabela's Transaction Fee.net. Adjusted non-interest expense and the adjusted tangible efficiency ratio are measures utilized by management to measure the success of expense management initiatives focused on reducing recurring controllable operating costs. Adjusted net income per common share, diluted, adjusted return on average assets, and adjusted return on average common equity are measurements used by management to evaluate operating results exclusive of items that management believes are not indicative of ongoing operations and impact period-to-period comparisons. The adjustedAdjusted return on average tangible common equity is a measure used by management to compare Synovus' performance with other financial institutions because it calculates the return available to common shareholders without the impact of intangible assets and their related amortization, thereby allowing management to evaluate the performance of the business consistently. AverageCore deposits and core transaction deposits is a measureare measures used by management to evaluate organic growth of deposits and the quality of deposits as a funding source. The tangible common equity ratio and common equity Tier 1 (CET1)CET1 ratio (fully phased-in) are used by management and bank regulators 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
Three Months Ended Nine Months Ended
(in thousands, except per share data)September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017
Table 14 - Reconciliation of Non-GAAP Financial MeasuresTable 14 - Reconciliation of Non-GAAP Financial Measures      
Three Months Ended Nine Months Ended
(in thousands)September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018
Adjusted non-interest income              
Total non-interest income$71,668
 $135,435
 $212,101
 $275,974
$88,760
 $71,668
 $257,945
 $212,101
Subtract: Cabela's Transaction Fee—
 (75,000) —
 (75,000)
Add: Investment securities losses, net—
 7,956
 1,296
 289
3,731
 —
 5,502
 1,296
Subtract/add: (Increase) decrease in fair value of private equity investments, net(434) 27
 2,659
 3,193
Subtract/add: Gain on sale and (increase) decrease in fair value of private equity investments, net(1,194) (434) (3,507) 2,659
Adjusted non-interest income$71,234
 $68,418
 $216,056
 $204,456
$91,297
 $71,234
 $259,940
 $216,056
              
Adjusted non-interest expense              
Total non-interest expense$220,297
 $205,646
 $619,531
 $594,780
$276,310
 $220,297
 $832,847
 $619,531
Subtract: Discounts to fair value for ORE accelerated dispositions—
 (7,082) —
 (7,082)
Subtract: Asset impairment charges related to accelerated disposition of corporate real estate and other properties—
 (1,168) —
 (1,168)
Subtract: Earnout liability adjustments(11,652) (2,059) (11,652) (2,059)(10,457) (11,652) (10,457) (11,652)
Subtract: Merger-related expense(6,684) (23) (6,684) (110)(353) (6,684) (57,493) (6,684)
Subtract/add: Litigation settlement/contingency expense—
 (401) 4,026
 (401)
Subtract/add: Restructuring charges, net(21) (519) 191
 (7,043)
Subtract: Amortization of intangibles(292) (292) (875) (767)
Add: Litigation settlement/contingency expense—
 —
 —
 4,026
Add/subtract: Restructuring charges, net66
 (21) 29
 191
Subtract: Valuation adjustment to Visa derivative—
 —
 (2,328) —
(2,500) —
 (2,500) (2,328)
Subtract: Loss on early extinguishment of debt, net(4,592) —
 (4,592) —
Adjusted non-interest expense$201,648
 $194,102
 $602,209
 $576,150
$258,474
 $201,940
 $757,834
 $603,084
              

Reconciliation of Non-GAAP Financial Measures, continued
Three Months Ended Nine Months Ended
Table 14 - Reconciliation of Non-GAAP Financial Measures, continuedTable 14 - Reconciliation of Non-GAAP Financial Measures, continued    

Three Months Ended Nine Months Ended
(in thousands, except per share data)September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018
Adjusted total revenues and adjusted efficiency ratio       
Adjusted total revenues and adjusted tangible efficiency ratio       
Adjusted non-interest expense$201,648
 $194,102
 $602,209
 $576,150
$258,474
 $201,940
 $757,834
 $603,084
Subtract: Amortization of intangibles(2,901) (292) (8,702) (875)
Adjusted tangible non-interest expense$255,573
 $201,648
 $749,132
 $602,209
              
Net interest income291,619
 262,572
 850,480
 753,597
$402,097
 $291,619
 $1,196,535
 $850,480
Add: Tax equivalent adjustment136
 283
 372
 890
819
 136
 2,256
 372
Add: Total non-interest income71,668
 135,435
 212,101
 275,974
88,760
 71,668
 257,945
 212,101
Total FTE revenues$491,676
 $363,423
 $1,456,736
 $1,062,953
Add: Investment securities losses, net—
 7,956
 1,296
 289
3,731
 —
 5,502
 1,296
Total FTE revenues$363,423
 $406,246
 $1,064,249
 $1,030,750
Subtract: Cabela's Transaction Fee—
 (75,000) —
 (75,000)
Subtract/add: (Increase) decrease in fair value of private equity investments, net(434) 27
 2,659
 3,193
Subtract/add: Gain on sale and (increase) decrease in fair value of private equity investments, net(1,194) (434) (3,507) 2,659
Adjusted total revenues$362,989
 $331,273
 $1,066,908
 $958,943
$494,213
 $362,989
 $1,458,731
 $1,066,908
Efficiency ratio60.62% 50.62% 58.21% 57.70%
Adjusted efficiency ratio55.55
 58.59
 56.44
 60.08
Efficiency ratio-FTE56.20% 60.62% 57.17% 58.28%
Adjusted tangible efficiency ratio51.71
 55.55
 51.36
 56.44
              
Adjusted net income per common share, diluted              
Net income available to common shareholders$99,330
 $95,448
 $308,559
 $238,190
$127,435
 $99,330
 $397,505
 $308,559
Subtract: Cabela's Transaction Fee—
 (75,000) —
 (75,000)
Add: Provision expense on loans transferred to held-for-sale—
 27,710
 —
 27,710
Add: Discounts to fair value for ORE accelerated dispositions—
 7,082
 —
 7,082
Add: Asset impairment charges related to accelerated disposition of corporate real estate and other properties—
 1,168
 —
 1,168
Subtract: Income tax benefit, net related to SAB 118, State Tax Reform, and adjusted portion of other discrete items(9,865) —
 (9,148) —
Add/subtract: Income tax expense (benefit), net related to State Tax Reform, SAB 118, and adjusted portion of other discrete items4,402
 (9,865) 4,402
 (9,148)
Add: Earnout liability adjustments10,457
 11,652
 10,457
 11,652
Add: Preferred stock redemption charge4,020
 —
 4,020
 —
—
 4,020
 —
 4,020
Add: Earnout liability adjustments11,652
 2,059
 11,652
 2,059
Add: Merger-related expense6,684
 23
 6,684
 110
353
 6,684
 57,493
 6,684
Add/subtract: Litigation settlement/contingency expense—
 401
 (4,026) 401
Add/subtract: Restructuring charges, net21
 519
 (191) 7,043
Add: Amortization of intangibles292
 292
 875
 767
Subtract: Litigation settlement/contingency expense—
 —
 —
 (4,026)
Subtract/add: Restructuring charges, net(66) 21
 (29) (191)
Add: Valuation adjustment to Visa derivative—
 —
 2,328
 —
2,500
 —
 2,500
 2,328
Add: Loss on early extinguishment of debt, net4,592
 —
 4,592
 —
Add: Investment securities losses, net—
 7,956
 1,296
 289
3,731
 —
 5,502
 1,296
Subtract/add: (Increase) decrease in fair value of private equity investments, net(434) 27
 2,659
 3,193
Add/subtract: Tax effect of adjustments27
 11,034
 (691) 10,078
Subtract/add: Gain on sale and (increase) decrease in fair value of private equity investments, net(1,194) (434) (3,507) 2,659
Subtract/add: Tax effect of adjustments(2,478) 96
 (10,137) (486)
Adjusted net income available to common shareholders$111,727
 $78,719
 $324,017
 $223,090
$149,732
 $111,504
 $468,778
 $323,347
Weighted average common shares outstanding, diluted118,095
 121,814
 118,847
 122,628
154,043
 118,095
 158,595
 118,847
Adjusted net income per common share, diluted$0.95
 $0.65
 $2.73
 $1.82
$0.97
 $0.94
 $2.96
 $2.72
              





Reconciliation of Non-GAAP Financial Measures, continued
 Three Months Ended Nine Months Ended
(in thousands, except per share data)September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017
Adjusted return on average assets (annualized)       
Net income$109,059
 $98,007
 $323,407
 $245,868
Subtract: Cabela's Transaction Fee—
 (75,000) —
 (75,000)
Add: Provision expense on loans transferred to held-for-sale—
 27,710
 —
 27,710
Add: Discounts to fair value for ORE accelerated dispositions—
 7,082
 —
 7,082
Add: Asset impairment charges related to accelerated disposition of corporate real estate and other properties—
 1,168
 —
 1,168
Subtract: Income tax benefit, net related to SAB 118, State Tax Reform, and adjusted portion of other discrete items(9,865) —
 (9,148) —
Add: Earnout liability adjustments11,652
 2,059
 11,652
 2,059
Add: Merger-related expense6,684
 23
 6,684
 110
Add/subtract: Litigation settlement/contingency expense—
 401
 (4,026) 401
Add/subtract: Restructuring charges, net21
 519
 (191) 7,043
Add: Amortization of intangibles292
 292
 875
 767
Add: Valuation adjustment to Visa derivative—
 —
 2,328
 —
Add: Investment securities losses, net—
 7,956
 1,296
 289
Subtract/add: (Increase) decrease in fair value of private equity investments, net(434) 27
 2,659
 3,193
Add/subtract: Tax effect of adjustments27
 11,034
 (691) 10,078
Adjusted net income$117,436
 $81,278
 $334,845
 $230,768
Net income annualized$432,680
 $388,832
 $432,394
 $328,725
Adjusted net income annualized$465,915
 $322,462
 $447,687
 $308,536
Total average assets$31,725,604
 $30,678,388
 $31,493,115
 $30,584,607
Return on average assets1.36% 1.27% 1.37% 1.07%
Adjusted return on average assets (annualized)1.47
 1.05
 1.42
 1.01
        
Table 14 - Reconciliation of Non-GAAP Financial Measures, continued    
 Three Months Ended Nine Months Ended
(dollars in thousands)September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018
Adjusted return on average assets (annualized)       
Net income$135,726
 $109,059
 $412,096
 $323,407
Add/subtract: Income tax expense (benefit), net related to State Tax Reform, SAB 118, and adjusted portion of other discrete items4,402
 (9,865) 4,402
 (9,148)
Add: Earnout liability adjustments10,457
 11,652
 10,457
 11,652
Add: Merger-related expense353
 6,684
 57,493
 6,684
Subtract: Litigation settlement/contingency expense—
 —
 —
 (4,026)
Subtract/add: Restructuring charges, net(66) 21
 (29) (191)
Add: Valuation adjustment to Visa derivative2,500
 —
 2,500
 2,328
Add: Loss on early extinguishment of debt, net4,592
 —
 4,592
 —
Add: Investment securities losses, net3,731
 —
 5,502
 1,296
Subtract/add: Gain on sale and (increase) decrease in fair value of private equity investments, net(1,194) (434) (3,507) 2,659
Subtract/add: Tax effect of adjustments(2,478) 96
 (10,137) (486)
Adjusted net income$158,023
 $117,213
 $483,369
 $334,175
Net income annualized538,478
 432,680
 550,971
 432,394
Adjusted net income annualized626,939
 465,030
 646,263
 446,791
Total average assets47,211,026
 31,725,604
 46,566,994
 31,493,115
Return on average assets (annualized)1.14% 1.36% 1.18% 1.37%
Adjusted return on average assets (annualized)1.33
 1.47
 1.39
 1.42
        



Reconciliation of Non-GAAP Financial Measures, continuedThree Months Ended
Table 14 - Reconciliation of Non-GAAP Financial Measures, continued     
Three Months Ended
(dollars in thousands)September 30, 2018 June 30, 2018 September 30, 2017September 30, 2019 June 30, 2019 September 30, 2018
Average return on average common equity and adjusted return on average tangible common equity (annualized)     
Adjusted return on average common equity and adjusted return on average tangible common equity (annualized)     
Net income available to common shareholders$99,330
 $108,622
 $95,448
$127,435
 $153,034
 $99,330
Subtract: Cabela's Transaction Fee—
 —
 (75,000)
Add: Provision expense on loans transferred to held-for-sale—
 —
 27,710
Add: Discounts to fair value for ORE accelerated dispositions—
 —
 7,082
Add: Asset impairment charges related to accelerated disposition of corporate real estate and other properties—
 —
 1,168
Subtract: Income tax benefit, net related to SAB 118, State Tax Reform, and adjusted portion of other discrete items(9,865) (608) —
Add/subtract: Income tax expense (benefit), net related to State Tax Reform, SAB 118, and adjusted portion of other discrete items4,402
 —
 (9,865)
Add: Earnout liability adjustments10,457
 —
 11,652
Add: Preferred stock redemption charge4,020
 —
 —
—
 —
 4,020
Add: Earnout liability adjustments11,652
 —
 2,059
Add: Merger-related expense6,684
 —
 23
353
 7,401
 6,684
Add/subtract: Litigation settlement/contingency expense—
 (1,400) 401
Add/subtract: Restructuring charges, net21
 103
 519
Subtract/add: Restructuring charges, net(66) 18
 21
Add: Valuation adjustment to Visa derivative2,500
 —
 —
Add: Loss on early extinguishment of debt, net4,592
 —
 —
Add: Investment securities losses, net3,731
 1,845
 —
Subtract: Gain on sale and increase in fair value of private equity investments(1,194) (1,455) (434)
Subtract/add: Tax effect of adjustments(2,478) (1,951) 96
Net income available to common shareholders$149,732
 $158,892
 $111,504
     
Adjusted net income available to common shareholders' annualized$594,045
 $637,314
 $442,379
Add: Amortization of intangibles292
 292
 292
8,632
 7,250
 886
Add: Valuation adjustment to Visa derivative—
 2,328
 —
Add: Investment securities losses, net—
 1,296
 7,956
Subtract/add: (Increase) decrease in fair value of private equity investments, net(434) 37
 27
Add/subtract: Tax effect of adjustments27
 (624) 11,034
Adjusted net income available to common shareholders$111,727
 $110,046
 $78,719
Net income annualized$443,265
 $441,393
 $312,309
Adjusted net income available to common shareholders excluding amortization of intangibles annualized$602,677

$644,564

$443,265
     
Net income available to common shareholders annualized$505,585
 $613,818
 $394,081
Add: Amortization of intangibles$8,632
 $7,250
 $886
Net income available to common shareholders excluding amortization of intangibles$514,217
 $621,068
 $394,967
          
Total average shareholders' equity less preferred stock$2,824,707
 $2,831,368
 $2,859,491
$4,450,301
 $4,416,705
 $2,824,707
Subtract: Goodwill(57,315) (57,315) (57,167)(492,320) (487,601) (57,315)
Subtract: Other intangible assets, net(10,265) (10,555) (11,648)(60,278) (69,853) (10,265)
Total average tangible shareholders' equity less preferred stock$2,757,127
 $2,763,498
 $2,790,676
$3,897,703
 $3,859,251
 $2,757,127
Return on average common equity (annualized)13.95% 15.39% 13.24%11.36% 13.90% 13.95%
Adjusted return on average common equity (annualized)15.69
 15.59
 10.92
13.35
 14.43
 15.66
Return on average tangible common equity (annualized)13.19
 16.09
 14.33
Adjusted return on average tangible common equity (annualized)16.08
 15.97
 11.19
15.46
 16.70
 16.08
          


Table 14 - Reconciliation of Non-GAAP Financial Measures, continued
(in thousands)September 30, 2019 June 30, 2019 December 31, 2018 September 30, 2018
Period-end core deposits and core transaction deposits       
Total deposits$37,433,070
 $37,966,722
 $26,720,322
 $26,433,658
Subtract: Brokered deposits(3,195,495) (3,003,544) (1,548,030) (1,683,772)
Core deposits34,237,575
 34,963,178
 25,172,292
 24,749,886
Subtract: Time deposits, excluding brokered and public funds(6,647,788) (7,342,951) (3,685,867) (3,492,504)
Subtract: Public funds(3,795,320) (4,351,304) (2,374,892) (2,024,697)
Core transaction deposits$23,794,467
 $23,268,923
 $19,111,533
 $19,232,685
        


Reconciliation of Non-GAAP Financial Measures, continued

Table 14 - Reconciliation of Non-GAAP Financial Measures, continuedTable 14 - Reconciliation of Non-GAAP Financial Measures, continued
(dollars in thousands)September 30, 2018 June 30, 2018 December 31, 2017 September 30, 2017September 30, 2019
June 30,
2019
 December 31, 2018
September 30, 2018
Average core deposits       
Average total deposits$26,387,312
 $26,268,074
 $26,286,009
 $25,286,919
Subtract: Average brokered deposits(1,772,977) (1,922,917) (2,198,333) (1,530,889)
Average core deposits$24,614,335
 $24,345,157
 $24,087,676
 $23,756,030
       
Tangible common equity ratio              
Total assets$32,075,120
 $31,740,305
 $31,221,837
 $31,642,123
$47,661,182
 $47,318,203
 $32,669,192
 $32,075,120
Subtract: Goodwill(57,315) (57,315) (57,315) (57,315)(487,865) (492,390) (57,315) (57,315)
Subtract: Other intangible assets, net(10,166) (10,458) (11,254) (11,548)(58,572) (61,473) (9,875) (10,166)
Tangible assets$32,007,639
 $31,672,532
 $31,153,268
 $31,573,260
$47,114,745
 $46,764,340
 $32,602,002
 $32,007,639
Total shareholders' equity$3,040,073
 $3,167,694
 $2,961,566
 $2,997,078
$4,868,838
 $4,753,816
 $3,133,602
 $3,040,073
Subtract: Goodwill(57,315) (57,315) (57,315) (57,315)(487,865) (492,390) (57,315) (57,315)
Subtract: Other intangible assets, net(10,166) (10,458) (11,254) (11,548)(58,572) (61,473) (9,875) (10,166)
Subtract: Preferred Stock, no par value(195,138) (321,118) (125,980) (125,980)(536,550) (195,140) (195,140) (195,138)
Tangible common equity$2,777,454
 $2,778,803
 $2,767,017
 $2,802,235
$3,785,851
 $4,004,813
 $2,871,272
 $2,777,454
Total shareholders' equity to total assets ratio9.48% 9.98% 9.49% 9.47%10.22% 10.05% 9.59% 9.48%
Tangible common equity ratio8.68
 8.77
 8.88
 8.88
8.04
 8.56
 8.81
 8.68
              
Common equity Tier 1 (CET1) ratio (fully phased-in)       
Common equity Tier 1 (CET1)$2,846,416
      
Subtract: Adjustment related to capital components(2,784)      
CET1 (fully phased-in)$2,843,632
     

CET1 ratio (fully phased-in)       
CET1$3,660,078
      
Total risk-weighted assets$28,738,381
      40,856,279
      
Total risk-weighted assets (fully phased-in)$28,844,942
      40,924,685
      
Common equity Tier 1 (CET1) ratio9.90%     

Common equity Tier 1 (CET1) ratio (fully phased-in)9.86
     

CET1 ratio8.96%     

CET1 ratio (fully phased-in)8.94
     

              


 Current expectation - increase (decrease) vs. 2017
(dollars in thousands)2017 $ %
2018 Expectation for adjusted non-interest income growth     
Total non-interest income, as reported$345,327
 $285 million-$290 million (16%)-(18%)
Subtract: Cabela's Transaction Fee(75,000)    
Add: Investment securities losses, net289
    
Add: Decrease in fair value of private equity investments, net3,093
    
Adjusted non-interest income$273,709
 $285 million-$290 million 4%-6%
      


ITEM 3. – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information presented in the Market Risk Analysis section of the Management's Discussion and Analysis of Financial Condition and Results of Operations is incorporated herein by reference.
ITEM 4. – CONTROLS AND PROCEDURES
In connection with the preparation of this Quarterly Report on Form 10-Q, an evaluation was carried out by Synovus' management, with the participation of Synovus' Chief Executive Officer and Chief Financial Officer, of the effectiveness of Synovus' disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures. Based on that evaluation, Synovus' Chief Executive Officer and Chief Financial Officer have concluded that, as of September 30, 2018,2019, Synovus' disclosure controls and procedures were effective.     
There have been no material changes in Synovus' internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the quarter ended September 30, 20182019 that have materially affected, or are reasonably likely to materially affect, Synovus' internal control over financial reporting.




PART II. – OTHER INFORMATION
ITEM 1. – LEGAL PROCEEDINGS
Synovus and its subsidiaries are subject to various legal proceedings, claims and disputes that arise in the ordinary course of its business. Additionally, in the ordinary course of its business, Synovus and its subsidiaries are subject to regulatory examinations, information gathering requests, inquiries and investigations. Synovus, like many other financial institutions, has been the target of legal actions and other proceedings asserting claims for damages and related relief for losses. These actions include mortgage loan and other loan put-back claims, claims and counterclaims asserted by individual borrowers related to their loans and allegations of violations of state and federal laws and regulations relating to banking practices, including putative class action matters. In addition to actual damages, if Synovus does not prevail in such asserted legal actions, credit-related litigation could result in additional write-downs or charge-offs of assets, which could adversely affect Synovus' results of operations during the period in which the write-down or charge-off were to occur.
Based on Synovus' current knowledge and advice of counsel, management presently does not believe that the liabilities arising from these legal matters will have a material adverse effect onof Synovus' consolidated financial condition, results of operations or cash flows. However, it is possible that the ultimate resolution of these legal matters could have a material adverse effect on Synovus' results of operations and financial condition for any particular period. For additional information, see ""Part I - Item 1. Financial Statements and Supplementary Data - Note 1312 - Commitments and Contingencies"Contingencies" of this Report, which Note is incorporated herein by this reference.
ITEM 1A. – RISK FACTORS
In addition to the other information set forth in this Report, you should carefully consider the factors discussed in "Part I - Item IA - Risk Factors” of Synovus' 20172018 Form 10-K which could materially affect its business, financial position, results of operations, cash flows, or future results. Please be aware that these risks may change over time and other risks may prove to be important in the future. New risks may emerge at any time, and we cannot predict such risks or estimate the extent to which they may affect our business, financial condition or results of operations, or the trading price of our securities.
As a result of Synovus entering intoThere are no material changes during the Merger Agreement with FCB, certainperiod covered by this Report to the risk factors aspreviously disclosed in "Part II - Item 1A - Risk Factors" of Synovus' Form 10-Q for the quarterly period ended June 30, 2018 have been identified in addition to those previously reported in Synovus' 2017 Form 10-K. These risks and the other risks associated with the proposed Merger are more fully discussed in the joint proxy statement/prospectus included in the registration statement on Form S-4 that Synovus filed with the SEC in connection with the Merger. We urge you to read the registration statement on Form S-4 as it contains important information about the Merger, including relevant risk factors.

ITEM 2. – UNREGISTERED SALES OF SECURITIES AND USE OF PROCEEDS
(a) None.
(b) None.
(c) Issuer Purchases of Equity Securities:
Synovus'On June 17, 2019, the Company announced that the Board of Directors authorized a $150increased its prior $400 million share repurchase program that will expire atauthorization to $725 million for the end of 2018. This program was announced on January 23, 2018. The table below sets forth information regarding repurchases of our common stock during the third quarter of 2018.year 2019.
Share Repurchases
(in thousands, except per share data) Total Number of Shares Repurchased 
Average Price Paid per Share(1)
 
Total Number
of Shares Repurchased as
Part of
Publicly Announced
Plans or Programs
 
Maximum Approximate
Dollar Value
of Shares
that May Yet Be
Purchased Under the
Plans or Programs
 Total Number of Shares Repurchased 
Average Price Paid per Share(1)
 
Total Number
of Shares Repurchased as
Part of
Publicly Announced
Plans or Programs
 
Maximum Approximate
Dollar Value
of Shares
that May Yet Be
Purchased Under the
Plans or Programs
July 2018 450
 $52.88
 450
 $49,405
August 2018 372
 50.13
 372
 30,743
September 2018 320
 48.48
 320
 15,248
July 2019 2,616
 $35.64
 2,616
 $286,755
August 2019 4,315
 35.43
 4,315
 133,869
September 2019 2,690
 36.20
 2,690
 36,517
Total 1,142
 $50.75
 1,142
 
 9,621
 $35.70
 9,621
 
                
(1) The average price paid per share is calculated on a trade date basis for all open market transactions and excludes commissions and other transaction expenses.


The foregoing repurchases during the third quarter of 20182019 were purchased through open market transactions, including under plans complying with Rule 10b5-1 under the Exchange Act.

ITEM 3. – DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. – MINE SAFETY DISCLOSURES
None.
ITEM 5. – OTHER INFORMATION
None.


ITEM 6. – EXHIBITS
   
Exhibit
Number
 Description
  
2.13.1

 
Agreement and Plan of Merger by and among Synovus Financial Corp., FCB Financial Holdings, Inc. and Azalea Merger Sub Corp., dated as of July 23, 2018, incorporated by reference to Exhibit 2.1 to Synovus' Current Report on Form 8-K dated July 23, 2018, as filed with the SEC on July 25, 2018.
3.1
Amended and Restated Articles of Incorporation of Synovus, as amended, incorporated by reference to Exhibit 3.1 of Synovus’ Quarterly Report on Form 10-Q for the quarter ended June 30, 2010, as filed with the SEC on August 9, 2010.
   
3.2

 
Articles of Amendment to the Amended and Restated Articles of Incorporation of Synovus, with respect to the Series C Preferred Stock, incorporated by reference to Exhibit 3.1 to Synovus' Current Report on Form 8-K dated July 25, 2013, as filed with the SEC on July 25, 2013.
   
3.3

 
Articles of Amendment to the Amended and Restated Articles of Incorporation of Synovus, incorporated by reference to Exhibit 3.1 to Synovus' Current Report on Form 8-K dated April 29, 2014, as filed with the SEC on April 29, 2014.
   
3.4

 
Articles of Amendment to the Amended and Restated Articles of Incorporation of Synovus, incorporated by reference to Exhibit 3.1 to Synovus' Current Report on Form 8-K dated May 19, 2014, as filed with the SEC on May 19, 2014.
   
3.5

 
Articles of Amendment to the Amended and Restated Articles of Incorporation of Synovus, incorporated by reference to Exhibit 3.1 of Synovus' Current Report on Form 8-K dated June 20, 2018, as filed with the SEC on June 21, 2018.
   
3.6

 
Articles of Amendment to the Amended and Restated Articles of Incorporation of Synovus, incorporated by reference to Exhibit 3.1 of Synovus' Current Report on Form 8-K dated July 1, 2019, as filed with the SEC on July 1, 2019.
3.7
Bylaws, as amended, of Synovus, incorporated by reference to Exhibit 3.1 of Synovus' Current Report on Form 8-K dated November 8, 2010, as filed with the SEC on November 9, 2010.
  
12.131.1

 
Ratio of Earnings to Fixed Charges
31.1
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 20022002..
   
31.2

 
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
   
32

 
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
   
101

 Interactive Data File
   
104
Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101).


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


 
 SYNOVUS FINANCIAL CORP.
   
November 6, 20185, 2019By: /s/ Kevin S. BlairAndrew J. Gregory, Jr.
Date  Kevin S. BlairAndrew J. Gregory, Jr.
   Executive Vice President and Chief Financial Officer
   (Duly Authorized Officer and Principal Financial Officer)




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