SYNOVUS FINANCIAL CORP. In this Report, the words "Synovus," "the Company," "we," "us," and "our" refer
to
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 financial
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 risks and uncertainties related to the impact of the COVID-19 pandemic on our
assets, business, capital and liquidity, financial condition, prospects and results
of operations;
(2) the risk that the current and any further economic downturn and contraction could
have a material adverse effect on our capital, liquidity, financial condition,
credit quality, results of operations and future growth, including the risk that
the current economic contraction could last much longer and be much more severe
if efforts to contain the pandemic are unsuccessful and restrictions on movement
last longer than currently anticipated;
(3) the risk that our asset quality may deteriorate, our allowance for credit 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 loan or other receivables;
(4) changes in the cost and availability of funding due to changes in the deposit
market and credit market;
(5) the risks that if economic conditions worsen further or regulatory capital rules
are modified, we may be required to undertake initiatives to improve our capital
position;
(6) 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;
(7) 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 ;
(8) changes in the interest rate environment, including changes to the federal funds
rate to include a possible negative interest rate environment, and competition in
our primary market area may result in increased funding costs or reduced earning
assets yields, thus further reducing margins and net interest income;
(9) the risk that competition in the financial services industry may adversely affect
our future earnings and growth;
(10) the risk that we may not realize the expected benefits from our efficiency and
growth initiatives or that we may not be able to realize those cost savings or
revenue initiatives in the time period expected, which could negatively impact our
future profitability;
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(11) our ability to identify and address cyber-security risks such as data security
breaches, malware, "denial of service" attacks, "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;
(12) 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;
(13) our ability to attract and retain employees that are key to our strategic and
growth initiatives;
(14) the risk related to our implementation of new lines of business, new products and
services or new technologies;
(15) the impact of recent and proposed changes in governmental policy, laws and
regulations, including recently enacted laws, regulations and guidance related to
government stimulus programs related to the COVID-19 pandemic, 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;
(16) our ability to receive dividends from our subsidiaries could affect our
liquidity, including our ability to pay dividends or take other capital actions;
(17) 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;
(18) risks related to our business relationships with, and reliance upon, third parties
that 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 with a third-party vendor or business relationship;
(19) 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 business partners,
as well as our relationship with third-party vendors and other service providers;
(20) 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 business partner
fails to pay amounts due to us under that relationship or under any arrangement
that we enter into with them;
(21) 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;
(22) risks related to the fluctuation in our stock price and general volatility in the
stock market;
(23) 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;
(24) risks related to regulatory approval to take certain actions, including any
dividends on our common stock or preferred stock, any repurchases of common stock
or any issuance or redemption of any other regulatory capital instruments;
(25) risks related to the continued use, availability and reliability of LIBOR and
other "benchmark" rates;
(26) the costs and effects of litigation, investigations, inquiries or similar matters,
or adverse facts and developments related thereto, including the costs and effects
of litigation related to our participation in government stimulus programs
associated with the COVID-19 pandemic;
(27) the effects of any damages to our reputation resulting from developments related
to any of the items identified above; and
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(28) 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 II - 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' 2019 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 oral or 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 Company provides commercial and retail banking in
addition to a full suite of specialized products and services including private
banking, treasury management, wealth management, mortgage services, premium
finance and international banking. Synovus also provides financial planning, and
investment advisory services through its wholly-owned subsidiaries, 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 293 branches in Alabama , Florida , Georgia , South Carolina , 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 six months ended June 30, 2020 and financial
condition as of June 30, 2020 and December 31, 2019 . 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' 2019 Form 10-K.
Management's Discussion and Analysis of Financial Condition and Results of
Operations consists of:
•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.
•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.
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