Note 10 - Shareholders' Equity and Other Comprehensive Income

The following table shows the changes in shares of preferred and common stock issued and common stock held as treasury shares for the three years ended December 31, 2018.



(shares in thousands)	Series C Preferred Stock Issued (Redeemed)		Series D Preferred Stock Issued	Common Stock Issued	Treasury Stock Held	Common Stock Outstanding
Balance at December 31, 2015	5,200		—	140,592	11,045	129,547
Issuance of common stock for acquisition	—		—	821	—	821
Restricted share unit activity	—		—	316	—	316
Stock options exercised	—		—	297	—	297
Repurchase of common stock	—		—	—	8,715	(8,715	)
Balance at December 31, 2016	5,200		—	142,026	19,760	122,266
Issuance of common stock for earnout payment	—		—	118	—	118
Restricted share unit activity	—		—	336	—	336
Stock options exercised	—		—	198	—	198
Repurchase of common stock	—		—	—	4,021	(4,021	)
Balance at December 31, 2017	5,200		—	142,678	23,781	118,897
Issuance of preferred stock	—		8,000	—	—	—
Redemption of preferred stock	(5,200	)	—	—	—	—
Issuance of common stock for earnout payment	—		—	199	—	199
Restricted share unit activity	—		—	297	—	297
Stock options exercised	—		—	126	—	126
Repurchase of common stock	—		—	—	3,653	(3,653	)
Balance at December 31, 2018	—		8,000	143,300	27,434	115,866

Issuance of Series D Preferred Stock

On June 21, 2018, Synovus completed a $200 million public offering of Series D Preferred Stock, $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 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

During 2018, Synovus repurchased $175.0 million, or 3.7 million shares, of common stock through open market transactions under the $150 million and $25 million share repurchase programs authorized during the fourth quarter of 2017 and fourth quarter of 2018, respectively, for execution during 2018.

During 2017, Synovus repurchased $175.0 million, or 4.0 million shares, of common stock through open market transactions under the $200 million share repurchase program authorized during the fourth quarter of 2016 for execution during 2017.

During 2016, Synovus completed its $300 million share repurchase program with repurchases of $262.9 million, or 8.7 million shares, of common stock. This program was authorized during the third quarter of 2015 and was executed over a 15 month period through a combination of open market transactions and an ASR. Share repurchases of common stock during 2016 executed through open market transactions totaled $212.9 million, or 7.3 million shares, and $50.0 million, or 1.4 million shares, were executed through an ASR.

Warrant

At December 31, 2017 and 2016, Synovus had warrants outstanding issued to Treasury to purchase up to 2.2 million shares of Synovus common stock at a per share exercise price of $65.52. These warrants expired unexercised on December 19, 2018 and therefore were not outstanding as of December 31, 2018. The warrants were issued by Synovus to Treasury in 2008 in connection with the Capital Purchase Program, promulgated under the Emergency Economic Stabilization Act of 2008.

Accumulated Other Comprehensive Income (Loss)

The following table illustrates activity within the balances in accumulated other comprehensive income (loss) by component, and is shown for the years ended December 31, 2018, 2017, and 2016.



Changes in Accumulated Other Comprehensive Income (Loss) by Component (Net of Income Taxes)
(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, 2015	$	(12,504	)	$	(18,222	)	$	907		$	(29,819	)
Other comprehensive loss before reclassifications	—			(22,405		)	63			(22,342		)
Amounts reclassified from accumulated other comprehensive income (loss)	287			(3,697		)	(88		)	(3,498		)
Net current period other comprehensive income (loss)	287			(26,102		)	(25		)	(25,840		)
Balance at December 31, 2016	$	(12,217	)	$	(44,324	)	$	882		$	(55,659	)
Other comprehensive income before reclassifications	—			676			38			714
Amounts reclassified from accumulated other comprehensive income (loss)	80			178			(67		)	191
Net current period other comprehensive income (loss)	80			854			(29		)	905
Balance at December 31, 2017	$	(12,137	)	$	(43,470	)	$	853		$	(54,754	)
Other comprehensive loss before reclassifications	—			(33,023		)	(34		)	(33,057		)
Amounts reclassified from accumulated other comprehensive income (loss)	—			960			(98		)	862
Net current period other comprehensive loss	—			(32,063		)	(132		)	(32,195		)
Reclassification from adoption of ASU 2018-02	—			(7,763		)	175			(7,588		)
Cumulative-effect adjustment from adoption of ASU 2016-01	—			117			—			117
Balance at December 31, 2018	$	(12,137	)	$	(83,179	)	$	896		$	(94,420	)

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 December 31, 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.