XML 27 R11.htm IDEA: XBRL DOCUMENT

Loans and Allowance for Loan Losses

3 Months Ended

Mar. 31, 2021

Loans and Allowance for Loan Losses [Abstract]

Note 3 - Loans and Allowance for Loan Losses

Aging and Non-Accrual Analysis

The following tables provide a summary of current, accruing past due, and non-accrual loans by portfolio class as of March 31, 2021 and December 31, 2020.


	March 31, 2021
(in thousands)	Current		Accruing 30-89 Days Past Due		Accruing 90 Days or Greater Past Due		Total Accruing Past Due		Non-accrual with an ALL		Non-accrual without an ALL		Total
Commercial, financial and agricultural	$	12,573,032	$	12,545	$	292	$	12,837	$	59,145	$	17,315	$	12,662,329
Owner-occupied	7,009,586		4,422		305		4,727		17,192		—		7,031,505
Total commercial and industrial	19,582,618		16,967		597		17,564		76,337		17,315		19,693,834
Investment properties	9,305,441		4,295		400		4,695		16,880		8,709		9,335,725
1-4 family properties	633,971		871		61		932		2,815		1,236		638,954
Land and development	553,698		3,661		89		3,750		1,801		—		559,249
Total commercial real estate	10,493,110		8,827		550		9,377		21,496		9,945		10,533,928
Consumer mortgages	5,283,865		4,109		—		4,109		11,201		—		5,299,175
Home equity lines	1,417,714		2,446		16		2,462		12,191		—		1,432,367
Credit cards	263,660		1,835		1,876		3,711		—		—		267,371
Other consumer loans	1,563,272		7,705		765		8,470		6,684		—		1,578,426
Total consumer	8,528,511		16,095		2,657		18,752		30,076		—		8,577,339
Loans, net of deferred fees and costs	$	38,604,239	$	41,889	$	3,804	$	45,693	$	127,909	$	27,260	$	38,805,101


	December 31, 2020
(in thousands)	Current		Accruing 30-89 Days Past Due		Accruing 90 Days or Greater Past Due		Total Accruing Past Due		Non-accrual with an ALL		Non-accrual without an ALL		Total
Commercial, financial and agricultural	$	12,321,514	$	10,256	$	996	$	11,252	$	55,527	$	21,859	$	12,410,152
Owner-occupied	7,087,992		1,913		92		2,005		20,019		—		7,110,016
Total commercial and industrial	19,409,506		12,169		1,088		13,257		75,546		21,859		19,520,168
Investment properties	9,075,843		2,751		154		2,905		24,631		—		9,103,379
1-4 family properties	621,492		3,548		36		3,584		2,383		1,236		628,695
Land and development	591,048		422		—		422		1,899		264		593,633
Total commercial real estate	10,288,383		6,721		190		6,911		28,913		1,500		10,325,707
Consumer mortgages	5,495,415		8,851		485		9,336		8,740		—		5,513,491
Home equity lines	1,521,575		4,006		—		4,006		12,145		—		1,537,726
Credit cards	276,778		2,363		1,877		4,240		—		—		281,018
Other consumer loans	1,062,899		9,122		477		9,599		2,376		—		1,074,874
Total consumer	8,356,667		24,342		2,839		27,181		23,261		—		8,407,109
Loans, net of deferred fees and costs	$	38,054,556	$	43,232	$	4,117	$	47,349	$	127,720	$	23,359	$	38,252,984

Interest income on non-accrual loans outstanding that would have been recorded if the loans had been current and performing in accordance with their original terms was $3.4 million and $2.1 million for the three months ended March 31, 2021 and 2020, respectively. Of the interest income recognized during the three months ended March 31, 2021 and 2020, cash-basis interest income was $622 thousand and $961 thousand, respectively.

Pledged Loans

Loans with carrying values of $14.27 billion and $15.05 billion, respectively, were pledged as collateral for borrowings and capacity at March 31, 2021 and December 31, 2020, respectively, to the FHLB and Federal Reserve Bank.

Portfolio Segment Risk Factors

The risk characteristics and collateral information of each portfolio segment are as follows:

Commercial and Industrial Loans - The C&I loan portfolio is comprised of general middle market and commercial banking clients across a diverse set of industries. In accordance with Synovus' lending policy, each loan undergoes a detailed underwriting process which incorporates uniform underwriting standards and oversight in proportion to the size and complexity of the lending relationship. These loans are secured by collateral such as business equipment, inventory, and real estate. Whether for real estate or non-real estate purpose, credit decisions on loans in the C&I portfolio are based on cash flow from the operations of the business as the primary source of repayment of the debt, with underlying real estate or other collateral being the secondary source of repayment. PPP loans, which are categorized as C&I loans, were $2.36 billion at March 31, 2021 and are guaranteed by the SBA.

Commercial Real Estate Loans - CRE loans primarily consist of income-producing investment properties loans. Additionally, CRE loans include 1-4 family properties loans as well as land and development loans. Investment properties loans consist of construction and mortgage loans for income-producing properties and are primarily made to finance multi-family properties, hotels, office buildings, shopping centers, warehouses and other commercial development properties. 1-4 family properties loans include construction loans to homebuilders and commercial mortgage loans related to 1-4 family rental properties and are almost always secured by the underlying property being financed by such loans. These properties are primarily located in the markets served by Synovus. Land and development loans include commercial and residential development as well as land acquisition loans and are secured by land held for future development, typically in excess of one year. Properties securing these loans are substantially within markets served by Synovus, and loan terms generally include personal guarantees from the principals. Loans in this portfolio are underwritten based on the LTV of the collateral and the capacity of the guarantor(s).

Consumer Loans - The consumer loan portfolio consists of a wide variety of loan products offered through Synovus' banking network including first and second residential mortgages, HELOCs, and credit card loans, as well as home improvement loans, student, personal, and auto loans from third-party lending. The majority of Synovus' consumer loans are consumer mortgages and HELOCs secured by first and second liens on residential real estate primarily located in the markets served by Synovus. The primary source of repayment for all consumer loans is generally the personal income of the borrower(s).

Credit Quality Indicators

The credit quality of the loan portfolio is reviewed and updated no less frequently than 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 Retail Credit Classification Policy. Additionally, in accordance with Interagency Supervisory Guidance, the risk grade classifications of consumer loans (consumer mortgages and HELOCs) secured by junior liens on 1-4

family residential properties also consider available information on the payment status of any associated senior liens with other financial institutions.

The following tables summarize each loan portfolio class by risk grade and origination year as of March 31, 2021 and December 31, 2020 as required under CECL.


	March 31, 2021
	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans
(in thousands)	2021		2020		2019		2018		2017		Prior		Amortized Cost Basis		Converted to Term Loans		Total
Commercial, financial and agricultural
Pass	$	1,059,766	$	3,169,156	$	1,277,288	$	784,112	$	557,454	$	1,181,305	$	4,072,579	$	45,856	$	12,147,516
Special Mention	807		57,063		38,581		7,942		18,243		3,678		95,135		465		221,914
Substandard(1)	772		64,917		33,901		11,166		23,815		42,824		90,617		114		268,126
Doubtful(2)	—		512		4,055		19,894		—		—		312		—		24,773
Total commercial, financial and agricultural	1,061,345		3,291,648		1,353,825		823,114		599,512		1,227,807		4,258,643		46,435		12,662,329
Owner-occupied
Pass	250,215		1,306,635		1,271,373		1,089,766		880,566		1,640,599		383,907		—		6,823,061
Special Mention	429		5,603		10,306		19,447		10,200		15,568		—		—		61,553
Substandard(1)	92		3,783		26,473		45,438		26,186		35,281		—		—		137,253
Doubtful(2)	—		—		—		9,638		—		—		—		—		9,638
Total owner-occupied	250,736		1,316,021		1,308,152		1,164,289		916,952		1,691,448		383,907		—		7,031,505
Total commercial and industrial	1,312,081		4,607,669		2,661,977		1,987,403		1,516,464		2,919,255		4,642,550		46,435		19,693,834
Investment properties
Pass	266,356		1,189,454		2,196,482		1,879,176		917,367		1,623,228		276,553		—		8,348,616
Special Mention	—		1,321		81,524		229,161		163,844		284,980		56,102		—		816,932
Substandard(1)	1,040		987		8,413		58,991		23,677		76,974		95		—		170,177
Total investment properties	267,396		1,191,762		2,286,419		2,167,328		1,104,888		1,985,182		332,750		—		9,335,725
1-4 family properties
Pass	66,477		179,602		79,636		60,281		78,564		116,823		41,043		—		622,426
Special Mention	271		399		—		366		—		894		—		—		1,930
Substandard(1)	1,812		1,691		439		5,521		1,199		2,596		1,340		—		14,598
Total 1-4 family properties	68,560		181,692		80,075		66,168		79,763		120,313		42,383		—		638,954


	March 31, 2021
	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans
(in thousands)	2021		2020		2019		2018		2017		Prior		Amortized Cost Basis		Converted to Term Loans		Total
Land and development
Pass	23,510		84,651		134,182		81,260		83,035		79,755		59,018		—		545,411
Special Mention	97		849		1,986		1,455		173		383		—		—		4,943
Substandard(1)	22		1,221		50		3,980		893		2,729		—		—		8,895
Total land and development	23,629		86,721		136,218		86,695		84,101		82,867		59,018		—		559,249
Total commercial real estate	359,585		1,460,175		2,502,712		2,320,191		1,268,752		2,188,362		434,151		—		10,533,928
Consumer mortgages
Pass	258,674		1,796,593		797,705		358,353		585,879		1,438,675		1,012		—		5,236,891
Substandard(1)	206		181		2,615		11,939		11,008		36,034		—		—		61,983
Loss(3)	—		—		—		—		—		301		—		—		301
Total consumer mortgages	258,880		1,796,774		800,320		370,292		596,887		1,475,010		1,012		—		5,299,175
Home equity lines
Pass	—		—		—		—		—		—		1,329,980		85,254		1,415,234
Substandard(1)	—		—		—		—		—		—		9,717		6,422		16,139
Doubtful(2)	—		—		—		—		—		—		—		19		19
Loss(3)	—		—		—		—		—		—		832		143		975
Total home equity lines	—		—		—		—		—		—		1,340,529		91,838		1,432,367
Credit cards
Pass	—		—		—		—		—		—		265,496		—		265,496
Substandard(1)	—		—		—		—		—		—		521		—		521
Loss(4)	—		—		—		—		—		—		1,354		—		1,354
Total credit cards	—		—		—		—		—		—		267,371		—		267,371
Other consumer loans
Pass	7,626		797,532		169,798		74,833		88,716		126,009		306,096		—		1,570,610
Substandard(1)	—		15		2,273		1,572		2,967		691		264		—		7,782
Loss(4)	—		—		—		—		—		34		—		—		34
Total other consumer loans	7,626		797,547		172,071		76,405		91,683		126,734		306,360		—		1,578,426
Total consumer	266,506		2,594,321		972,391		446,697		688,570		1,601,744		1,915,272		91,838		8,577,339
Loans, net of deferred fees and costs	$	1,938,172	$	8,662,165	$	6,137,080	$	4,754,291	$	3,473,786	$	6,709,361	$	6,991,973	$	138,273	$	38,805,101

(1) The majority of loans within Substandard risk grade are accruing loans at March 31, 2021.

(2) Loans within Doubtful risk grade are on non-accrual status and generally have an ALL equal to 50% of the loan amount.

(3) Loans within Loss risk grade are on non-accrual status and have an ALL equal to the full loan amount.

(4) Represent amounts that were 120 days past due. These credits are downgraded to the Loss category with an ALL equal to the full loan amount and are generally charged off upon reaching 181 days past due in accordance with the FFIEC Retail Credit Classification Policy.


	December 31, 2020
	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans
(in thousands)	2020		2019		2018		2017		2016		Prior		Amortized Cost Basis		Converted to Term Loans		Total
Commercial, financial and agricultural
Pass	$	3,819,048	$	1,333,460	$	847,283	$	582,612	$	551,413	$	633,871	$	4,102,751	$	49,762	$	11,920,200
Special Mention	63,307		40,618		12,723		22,070		1,665		5,545		60,741		489		207,158
Substandard(1)	28,698		36,618		24,867		36,072		12,808		35,172		84,498		514		259,247
Doubtful(2)	—		3,721		19,778		—		—		—		48		—		23,547
Total commercial, financial and agricultural	3,911,053		1,414,417		904,651		640,754		565,886		674,588		4,248,038		50,765		12,410,152
Owner-occupied
Pass	1,321,680		1,275,435		1,131,183		982,056		555,932		1,297,070		349,566		—		6,912,922
Special Mention	6,170		9,995		10,682		14,138		1,582		13,768		—		—		56,335
Substandard(1)	2,570		22,793		42,615		26,033		7,316		29,794		—		—		131,121
Doubtful(2)	—		—		9,638		—		—		—		—		—		9,638
Total owner-occupied	1,330,420		1,308,223		1,194,118		1,022,227		564,830		1,340,632		349,566		—		7,110,016
Total commercial and industrial	5,241,473		2,722,640		2,098,769		1,662,981		1,130,716		2,015,220		4,597,604		50,765		19,520,168
Investment properties
Pass	1,055,440		2,126,667		1,999,345		1,091,880		483,780		1,301,088		229,044		—		8,287,244
Special Mention	1,482		66,160		176,794		136,004		138,362		129,401		55,440		—		703,643
Substandard(1)	1,007		4,770		24,476		19,820		21,875		40,509		35		—		112,492
Total investment properties	1,057,929		2,197,597		2,200,615		1,247,704		644,017		1,470,998		284,519		—		9,103,379
1-4 family properties
Pass	197,320		95,145		70,267		88,454		38,729		97,374		27,657		—		614,946
Special Mention	402		—		508		109		786		118		—		—		1,923
Substandard(1)	1,527		653		4,312		1,141		554		2,299		1,340		—		11,826
Total 1-4 family properties	199,249		95,798		75,087		89,704		40,069		99,791		28,997		—		628,695
Land and development
Pass	84,985		173,302		83,734		92,911		12,249		76,380		53,250		—		576,811
Special Mention	857		1,995		2,866		282		—		1,332		636		—		7,968
Substandard(1)	1,229		425		4,664		915		136		1,485		—		—		8,854
Total land and development	87,071		175,722		91,264		94,108		12,385		79,197		53,886		—		593,633
Total commercial real estate	1,344,249		2,469,117		2,366,966		1,431,516		696,471		1,649,986		367,402		—		10,325,707


	December 31, 2020
	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans
(in thousands)	2020		2019		2018		2017		2016		Prior		Amortized Cost Basis		Converted to Term Loans		Total
Consumer mortgages
Pass	1,871,512		874,769		425,711		678,255		685,810		965,382		1,040		—		5,502,479
Substandard(1)	33		961		748		889		866		7,224		—		—		10,721
Loss(3)	—		—		—		—		—		291		—		—		291
Total consumer mortgages	1,871,545		875,730		426,459		679,144		686,676		972,897		1,040		—		5,513,491
Home equity lines																	—
Pass	—		—		—		—		—		—		1,429,755		90,832		1,520,587
Substandard(1)	—		—		—		—		—		—		9,698		5,996		15,694
Doubtful(2)	—		—		—		—		—		—		—		19		19
Loss(3)	—		—		—		—		—		—		1,283		143		1,426
Total home equity lines	—		—		—		—		—		—		1,440,736		96,990		1,537,726
Credit cards
Pass	—		—		—		—		—		—		279,142		—		279,142
Substandard(1)	—		—		—		—		—		—		595		—		595
Loss(4)	—		—		—		—		—		—		1,281		—		1,281
Total credit cards	—		—		—		—		—		—		281,018		—		281,018
Other consumer loans																	—
Pass	252,160		190,820		89,187		100,459		80,365		61,040		297,637		—		1,071,668
Substandard(1)	19		762		262		1,195		121		585		227		—		3,171
Loss(4)	—		—		—		—		—		35		—		—		35
Total other consumer loans	252,179		191,582		89,449		101,654		80,486		61,660		297,864		—		1,074,874
Total consumer	2,123,724		1,067,312		515,908		780,798		767,162		1,034,557		2,020,658		96,990		8,407,109
Loans, net of deferred fees and costs	$	8,709,446	$	6,259,069	$	4,981,643	$	3,875,295	$	2,594,349	$	4,699,763	$	6,985,664	$	147,755	$	38,252,984

(1) The majority of loans within Substandard risk grade are accruing loans at December 31, 2020.

(2) Loans within Doubtful risk grade are on non-accrual status and generally have an ALL equal to 50% of the loan amount.

(3) Loans within Loss risk grade are on non-accrual status and have an ALL equal to the full loan amount.

Collateral-Dependent Loans

We classify a loan as collateral-dependent when our borrower is experiencing financial difficulty, and we expect repayment to be provided substantially through the operation or sale of collateral. Our commercial loans have collateral that is comprised of real estate and business assets. Our consumer loans have collateral that is substantially comprised of residential real estate.

There were no significant changes in the extent to which collateral secures our collateral-dependent loans during the three months ended March 31, 2021.

Rollforward of Allowance for Loan Losses

The following tables detail the changes in the ALL by loan segment for the three months ended March 31, 2021 and 2020.


	As Of and For the Three Months Ended March 31, 2021
(in thousands)	Commercial & Industrial		Commercial Real Estate		Consumer		Total
Allowance for loan losses:
Beginning balance	$	229,555	$	130,742	$	245,439	$	605,736
Charge-offs	(9,417)		(10,319)		(5,589)		(25,325)
Recoveries	2,772		1,026		1,323		5,121
Provision for (reversal of) loan losses	31,867		(7,637)		(46,548)		(22,318)
Ending balance	$	254,777	$	113,812	$	194,625	$	563,214

	As Of and For the Three Months Ended March 31, 2020
(in thousands)	Commercial & Industrial		Commercial Real Estate		Consumer		Total
Allowance for loan losses:
Beginning balance, prior to adoption of ASC 326	$	145,782	$	67,430	$	68,190	$	281,402
Impact from adoption of ASC 326	(2,310)		(651)		85,955		82,994
Beginning balance, after adoption of ASC 326	$	143,472	$	66,779	$	154,145	$	364,396
Charge-offs	(14,885)		(1,017)		(7,972)		(23,874)
Recoveries	1,741		399		1,673		3,813
Provision for loan losses	86,622		40,956		21,539		149,117
Ending balance	$	216,950	$	107,117	$	169,385	$	493,452

The ALL of $563.2 million and the reserve for unfunded commitments of $51.5 million, which is recorded in other liabilities, comprise the total ACL of $614.7 million at March 31, 2021, which decreased during the first quarter of 2021 by $38.8 million, resulting in an ACL to loans coverage ratio of 1.58%. The modeling assumptions for the first quarter of 2021 utilized a two-year reasonable and supportable forecast period and comprised a multiple-scenario economic framework. To the extent the lives of the loans in the portfolio extend beyond the period for which a reasonable and supportable forecast can be made, the Company reverts, on a straight-line basis back to the historical rates over a one-year period. The ACL at March 31, 2021 incorporates a baseline outlook with moderate economic expansion and benefits from the estimated impact of government stimulus. Provision for credit losses includes the provisions for loan losses and unfunded commitments. The reversal of provision for credit losses of $18.6 million for the three months ended March 31, 2021 included net charge-offs of $20.2 million and resulted from the improved economic outlook and stable loan portfolio metrics that were partially offset by the increased size of the loan portfolio including $15.2 million in reserves added as result of purchases of $607.0 million of third-party lending loans, including a $476.2 million prime auto purchase.

TDRs

Information about Synovus' TDRs is presented in the following tables. Synovus began entering into loan modifications with borrowers in response to the COVID-19 pandemic, some of which have not been classified as TDRs, and therefore are not included in the discussion below. See "Part II - Item 8. Financial Statements and Supplementary Data - Note 1 - Summary of Significant Accounting Policies" in Synovus' 2020 Form 10-K for information on Synovus' loan modifications due to COVID-19. The following tables represent, by concession type, the post-modification balance for loans modified or renewed during the three months ended March 31, 2021 and 2020 that were reported as accruing or non-accruing TDRs.


TDRs by Concession Type
	Three Months Ended March 31, 2021
(in thousands, except contract data)	Number of Contracts	Below Market Interest Rate		Other Concessions(1)		Total
Commercial, financial and agricultural	40	$	3,233	$	2,563	$	5,796
Owner-occupied	5	1,254		399		1,653
Total commercial and industrial	45	4,487		2,962		7,449
Investment properties	5	1,984		—		1,984
1-4 family properties	5	463		39		502
Land and development	1	—		43		43
Total commercial real estate	11	2,447		82		2,529
Consumer mortgages	—	—		—		—
Home equity lines	13	587		162		749
Other consumer loans	73	129		4,619		4,748
Total consumer	86	716		4,781		5,497
Total TDRs	142	$	7,650	$	7,825	$	15,475	(2)

	Three Months Ended March 31, 2020
(in thousands, except contract data)	Number of Contracts	Below Market Interest Rate		Other Concessions(1)		Total
Commercial, financial and agricultural	36	$	3,724	$	2,011	$	5,735
Owner-occupied	5	1,367		96		1,463
Total commercial and industrial	41	5,091		2,107		7,198
Investment properties	2	23,070		—		23,070
1-4 family properties	6	724		442		1,166
Land and development	1	449		—		449
Total commercial real estate	9	24,243		442		24,685
Consumer mortgages	6	515		1,083		1,598
Home equity lines	19	275		964		1,239
Other consumer loans	29	78		1,897		1,975
Total consumer	54	868		3,944		4,812
Total TDRs	104	$	30,202	$	6,493	$	36,695	(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 the three months ending March 31, 2021 and 2020.

(2) No net charge-offs were recorded during the three months ended March 31, 2021.

(3) No net charge-offs were recorded during the three months ended March 31, 2020.

For the three months ended March 31, 2021 there were no defaults 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 three defaults with a recorded investment of $618 thousand for the three months ended March 31, 2020. As of March 31, 2021 and December 31, 2020, there were no commitments to lend a material amount of additional funds to any customer whose loan was classified as a TDR.