Fair Value Accounting (Tables)

6 Months Ended

Jun. 30, 2013

Financial Instruments Measured at Fair Value on Recurring Basis

The following table presents all financial instruments measured at fair value on a recurring basis as of June 30, 2013 and December 31, 2012, according to the valuation hierarchy included in ASC 820-10. For equity and debt securities, class was determined based on the nature and risks of the investments.



	June 30, 2013
(in thousands)	Level 1		Level 2	Level 3	Total Assets and Liabilities at Fair Value
Assets
Trading securities:
Mortgage-backed securities issued by U.S. Government agencies	$	—	15,454	—	15,454
Collateralized mortgage obligations issued by U.S. Government sponsored enterprises	—		3,072	—	3,072
State and municipal securities	—		75	—	75
All other residential mortgage-backed securities	—		825	—	825
Other investments	—		3,643	—	3,643
Total trading securities	$	—	23,069	—	23,069
Mortgage loans held for sale	—		112,761	—	112,761
Investment securities available for sale:
U.S. Treasury securities	357		—	—	357
U.S. Government agency securities	—		36,296	—	36,296
Securities issued by U.S. Government sponsored enterprises	—		188,087	—	188,087
Mortgage-backed securities issued by U.S. Government agencies	—		209,561	—	209,561
Mortgage-backed securities issued by U.S. Government sponsored enterprises	—		2,305,351	—	2,305,351
Collateralized mortgage obligations issued by U.S. Government sponsored enterprises	—		319,515	—	319,515
State and municipal securities	—		11,024	—	11,024
Equity securities	4,061		—	892	4,953
Other investments⁽¹⁾	—		—	2,562	2,562
Total investment securities available for sale	$	4,418	3,069,834	3,454	3,077,706
Private equity investments	—		1,345	29,568	30,913
Mutual funds held in Rabbi Trusts	10,460		—	—	10,460
Derivative assets:
Interest rate contracts	—		44,790	—	44,790
Mortgage derivatives⁽²⁾	—		7,210	—	7,210
Total derivative assets	$	—	52,000	—	52,000
Liabilities
Trading account liabilities	—		15,847	—	15,847
Salary stock units	793		—	—	793
Derivative liabilities:
Interest rate contracts	—		45,991	—	45,991
Mortgage derivatives⁽²⁾	—		—	—	—
Visa derivative	—		—	2,977	2,977
Total derivative liabilities	$	—	45,991	2,977	48,968



	December 31, 2012
(in thousands)	Level 1		Level 2	Level 3	Total Assets and Liabilities at Fair Value
Assets
Trading securities:
Mortgage-backed securities issued by U.S. Government agencies	$	—	2,171	—	2,171
Collateralized mortgage obligations issued by U.S. Government sponsored enterprises	—		4,875	—	4,875
State and municipal securities	—		451	—	451
All other residential mortgage-backed securities	—		1,159	—	1,159
Other investments	—		2,446	—	2,446
Total trading securities	$	—	11,102	—	11,102
Mortgage loans held for sale	—		212,663	—	212,663
Investment securities available for sale:
U.S. Treasury securities	356		—	—	356
U.S. Government agency securities	—		38,046	—	38,046
Securities issued by U.S. Government sponsored enterprises	—		293,310	—	293,310
Mortgage-backed securities issued by U.S. Government agencies	—		245,593	—	245,593
Mortgage-backed securities issued by U.S. Government sponsored enterprises	—		1,867,493	—	1,867,493
Collateralized mortgage obligations issued by U.S. Government sponsored enterprises	—		514,489	—	514,489
State and municipal securities	—		15,798	—	15,798
Equity securities	2,849		—	891	3,740
Other investments⁽¹⁾	—		—	2,287	2,287
Total investment securities available for sale	$	3,205	2,974,729	3,178	2,981,112
Private equity investments	—		1,168	30,708	31,876
Mutual funds held in Rabbi Trusts	10,001		—	—	10,001
Derivative assets:
Interest rate contracts	—		61,869	—	61,869
Mortgage derivatives⁽²⁾	—		2,793	—	2,793
Total derivative assets	$	—	64,662	—	64,662
Liabilities
Trading account liabilities	—		91	—	91
Salary stock units	1,888		—	—	1,888
Derivative liabilities:
Interest rate contracts	—		62,912	—	62,912
Mortgage derivatives⁽²⁾	—		525	—	525
Visa derivative	—		—	2,956	2,956
Total derivative liabilities	$	—	63,437	2,956	66,393

⁽¹⁾ Based on an analysis of the nature and risks of these investments, Synovus has determined that presenting these investments as a single asset class is appropriate.

⁽²⁾Mortgage derivatives consist of customer interest rate lock commitments that relate to the potential origination of mortgage loans, which would be classified as held for sale and forward loan sales commitments with third party investors.

Changes in Fair Value Included in Consolidated Statements of Income

The following table summarizes the difference between the fair value and the unpaid principal balance for mortgage loans held for sale measured at fair value and the changes in fair value of these loans. The table does not reflect the change in fair value attributable to the related economic hedge Synovus uses to mitigate interest rate risk associated with the financial instruments. Changes in fair value were recorded as a component of mortgage banking income and other non-interest income in the consolidated statements of income, as appropriate. An immaterial portion of these amounts was attributable to changes in instrument-specific credit risk.



Net Gains (Losses) from Fair Value Changes
	For the Six Months Ended June 30,					For the Three Months Ended June 30,
(in thousands)	2013			2012		2013		2012
Mortgage loans held for sale	$	(7,930	)	(192	)	(5,171	)	2,516



Mortgage Loans Held for Sale
(in thousands)	As of June 30, 2013			As of December 31, 2012
Fair value	$	112,761		212,663
Unpaid principal balance	114,685			206,657
Fair value less aggregate unpaid principal balance	$	(1,924	)	6,006

Changes in Level 3 Fair Value Measurements



	Six Months Ended June 30,
	2013						2012
(in thousands)	Investment Securities Available for Sale		Private Equity Investments		Other Derivative Contracts, Net		Investment Securities Available for Sale		Private Equity Investments		Other Derivative Contracts, Net
Beginning balance, January 1,	$	3,178	30,708		(2,956	)	6,842		21,418		(7,242	)
Total gains (losses) realized/unrealized:
Included in earnings⁽¹⁾	—		(1,140	)	(801	)	(450	)	7,372		(4,713	)
Unrealized gains (losses) included in other comprehensive income	276		—		—		(788	)	—		—
Purchases	—		—		—		—		1,057	⁽²⁾	—
Sales	—		—		—		—		—		—
Issuances	—		—		—		—		—		—
Settlements	—		—		780		—		—		10,756
Amortization of discount/premium	—		—		—		—		—		—
Transfers in and/or out of Level 3	—		—		—		(501	)	—		(1,851	)
Ending balance, June 30,	$	3,454	29,568		(2,977	)	5,103		29,847		(3,050	)
The amount of total net gains (losses) for the six months included in earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities still held at June 30,	$	—	(1,140	)	(801	)	(450	)	7,372		(4,713	)

	Three Months Ended June 30,
	2013						2012
(in thousands)	Investment Securities Available for Sale		Private Equity Investments		Other Derivative Contracts, Net		Investment Securities Available for Sale		Private Equity Investments		Other Derivative Contracts, Net
Beginning balance, April 1,	$	3,312	30,451		(2,610	)	5,085		22,568		(1,719	)
Total gains (losses) realized/unrealized:
Included in earnings⁽¹⁾	—		(883	)	(764	)	—		7,279		(1,734	)
Unrealized gains (losses) included in other comprehensive income	142		—		—		18		—		—
Purchases	—		—		—		—		—		—
Sales	—		—		—		—		—		—
Issuances	—		—		—		—		—		—
Settlements	—		—		397		—		—		403
Amortization of discount/premium	—		—		—		—		—		—
Transfers in and/or out of Level 3	—		—		—		—		—		—
Ending balance, June 30,	$	3,454	29,568		(2,977	)	5,103		29,847		(3,050	)
The amount of total net gains (losses) for the three months included in earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities still held at June 30,	$	—	(883	)	(764	)	—		7,279		(1,734	)

⁽¹⁾ Included in earnings as a component of other non-interest income (expense).

⁽²⁾ Represents additional capital contributed to a private equity investment fund for capital calls. There are no such calls outstanding as of June 30, 2013.

Assets and Liabilities Measured at Fair Value on Non-Recurring Basis



	June 30, 2013					December 31, 2012
(in thousands)	Level 1		Level 2	Level 3	Total	Level 1	Level 2	Level 3	Total
Impaired loans⁽¹⁾	$	—	—	233,530	233,530	—	—	80,299	80,299
Other loans held for sale	—		—	7,594	7,594	—	—	7,420	7,420
Other real estate	—		—	20,583	20,583	—	—	79,293	79,293
Other assets held for sale	$	—	—	409	409	—	—	5,804	5,804

⁽¹⁾Represents impaired loans that are collateral-dependent.

Assets Measured at Fair Value on a Nonrecurring Basis

The following table presents fair value adjustments recognized for the six and three months ended June 30, 2013 and 2012 for the assets measured at fair value on a non-recurring basis.



	Six Months Ended June 30,			Three Months Ended June 30,
(in thousands)	2013		2012	2013	2012
Impaired loans⁽¹⁾	$	30,152	62,506	10,184	29,699
Other loans held for sale	3,546		1,288	3,315	1,183
Other real estate	4,513		19,925	363	7,580
Other assets held for sale	$	170	1,345	—	431

⁽¹⁾Represents impaired loans that are collateral-dependent.

Fair Value Inputs, Assets, Quantitative Information



June 30, 2013
(dollars in thousands)	Level 3 Fair Value		Valuation Technique	Significant Unobservable Input	Range (Weighted Average)⁽¹⁾
Assets measured at fair value on a recurring basis

Investment Securities Available for Sale
Equity securities	$	892	Individual analysis of each investment	Multiple data points, including, but not limited to evaluation of past and projected business performance⁽²⁾	N/A⁽⁴⁾

Other investments:

Trust preferred securities	2,562		Discounted cash flow	Credit spread embedded in discount rate	425-525 bps (463 bps)
				Discount for lack of marketability⁽²⁾	0%-10% (0%)

Private equity investments	29,568		Individual analysis of each investee company	Multiple factors, including but not limited to, current operations, financial conditions, cash flows, evaluation of business management and financial plans, and recently executed financing transactions related to the investee companies ⁽²⁾	N/A⁽⁴⁾

Visa derivative liability	$	2,977	Probability model	Probability-weighted potential outcomes of the Covered Litigation, and fees payable to the counterparty, through the estimated term of the contract	$400 thousand to $3.0 million ($3.0 million)



June 30, 2013
(dollars in thousands)	Level 3 Fair Value		Valuation Technique	Significant Unobservable Input	Range (Weighted Average)⁽¹⁾
Assets measured at fair value on a non-recurring basis
Collateral dependent impaired loans	$	233,530	Third party appraised value of collateral less estimated selling costs	Discount to appraised value ⁽³⁾ Estimated selling costs	0% - 53% (22%) 0% - 10% (7%)

Other loans held for sale	7,594		Third party appraised value of collateral less estimated selling costs	Discount to appraised value ⁽³⁾ Estimated selling costs	0% - 1% (1%) 0% - 10% (7%)

Other real estate	20,583		Third party appraised value of collateral less estimated selling costs	Discount to appraised value ⁽³⁾ Estimated selling costs	0% - 8% (8%) 0% - 10% (7%)

Other assets held for sale	$	409	Third party appraised value of collateral less estimated selling costs or BOV	Discount to appraised value ⁽³⁾ Estimated selling costs	0% - 29% (3%) 0% - 10% (7%)

⁽¹⁾ The range represents management's best estimate of the high and low of the value that would be assigned to a particular input. The weighted average is the measure of central tendencies; it is the value that management is using or most likely to use for the asset or liability.

⁽²⁾ Represents management's estimate of discount that market participants would require based on the instrument's lack of marketability.

⁽³⁾ Synovus also makes adjustments to the values of the assets listed above for various reasons, including age of the appraisal, information known by management about the property, such as occupancy rates, changes to the physical conditions of the property, and other factors.

⁽⁴⁾ The range has not been disclosed due to the wide range of possible values given the methodology used.



December 31, 2012
(dollars in thousands)	Level 3 Fair Value		Valuation Technique	Significant Unobservable Input	Range (Weighted Average)⁽¹⁾
Assets measured at fair value on a recurring basis

Investment Securities Available for Sale:
Equity securities	$	891	Individual analysis of each investment	Multiple data points, including, but not limited to evaluation of past and projected business performance⁽²⁾	N/A⁽⁴⁾

Other investments:

Trust preferred securities	2,287		Discounted cash flow analysis	Credit spread embedded in discount rate	425-650 bps (571 bps)
				Discount for lack of marketability⁽²⁾	0%-10% (0%)

Private equity investments	30,708		Individual analysis of each investee company	Multiple factors, including but not limited to, current operations, financial conditions, cash flows, evaluation of business management and financial plans, and recently executed company transactions related to the investee companies ⁽²⁾	N/A⁽⁴⁾

Visa derivative liability	$	2,956	Probability model	Probability-weighted potential outcomes of the Covered Litigation and fees payable to the counterparty through the estimated term of the contract	$400 thousand to $3.0 million ($3.0 million)



December 31, 2012
(dollars in thousands)	Level 3 Fair Value		Valuation Technique	Significant Unobservable Input	Range (Weighted Average)⁽¹⁾
Assets measured at fair value on a non-recurring basis
Collateral dependent impaired loans	$	80,299	Third party appraised value of collateral less estimated selling costs	Discount to appraised value⁽³⁾ Estimated selling costs	0%-12% (4%) 0%-10% (7%)

Other loans held for sale	7,420		Third party appraised value of collateral less estimated selling costs	Discount to appraised value ⁽³⁾ Estimated selling costs	0%-12% (4%) 0%-10% (7%)

Other real estate	79,293		Third party appraised value of collateral less estimated selling costs	Discount to appraised value ⁽³⁾ Estimated selling costs	0%-7% (2%) 0%-10% (7%)

Other assets held for sale	$	5,804	Third party appraised value of collateral less estimated selling costs or BOV	Discount to appraised value ⁽³⁾ Estimated selling costs	13%-51% (29%) 0%-10% (7%)

⁽²⁾ Represents management's estimate of discount that market participants would require based on the instrument's lack of marketability.

Carrying and Estimated Fair Values of Financial Instruments Carried on Balance Sheet

The carrying and estimated fair values of financial instruments, as well as the level within the fair value hierarchy, as of June 30, 2013 and December 31, 2012 are as follows:



	June 30, 2013
(in thousands)	Carrying Value		Estimated Fair Value	Level 1	Level 2	Level 3
Financial assets
Cash and cash equivalents	$	428,487	428,487	428,487	—	—
Interest bearing funds with Federal Reserve Bank	1,459,251		1,459,251	1,459,251	—	—
Interest earning deposits with banks	22,065		22,065	22,065	—	—
Federal funds sold and securities purchased under resale agreements	88,636		88,636	88,636	—	—
Trading account assets	23,069		23,069	—	23,069	—
Mortgage loans held for sale	112,761		112,761	—	112,761	—
Other loans held for sale	12,083		12,083	—	—	12,083
Investment securities available for sale	3,077,706		3,077,706	4,418	3,069,834	3,454
Private equity investments	30,913		30,913	—	1,345	29,568
Mutual funds held in Rabbi Trusts	10,460		10,460	10,460	—	—
Loans, net of deferred fees and costs	19,608,283		19,312,409	—	—	19,312,409
Derivative assets	52,000		52,000	—	52,000	—
Financial liabilities
Trading account liabilities	15,847		15,847	—	15,847	—
Non-interest bearing deposits	5,203,437		5,203,437	—	5,203,437	—
Interest bearing deposits	15,507,266		15,517,284	—	15,517,284	—
Federal funds purchased, other short-term borrowings and other short-term liabilities	222,933		222,933	222,933	—	—
Salary stock units	793		793	793	—	—
Long-term debt	1,885,689		1,937,232	—	1,937,232	—
Derivative liabilities	$	48,968	48,968	—	45,991	2,977



	December 31, 2012
(in thousands)	Carrying Value		Estimated Fair Value	Level 1	Level 2	Level 3
Financial assets
Cash and cash equivalents	$	614,630	614,630	614,630	—	—
Interest bearing funds with Federal Reserve Bank	1,498,390		1,498,390	1,498,390	—	—
Interest earning deposits with banks	23,442		23,442	23,442	—	—
Federal funds sold and securities purchased under resale agreements	113,517		113,517	113,517	—	—
Trading account assets	11,102		11,102	—	11,102	—
Mortgage loans held for sale	212,663		212,663	—	212,663	—
Other loans held for sale	10,690		10,690	—	—	10,690
Investment securities available for sale	2,981,112		2,981,112	3,205	2,974,729	3,178
Private equity investments	31,876		31,876	—	1,168	30,708
Mutual funds held in Rabbi Trusts	10,001		10,001	10,001	—	—
Loans, net	19,541,690		19,254,199	—	—	19,254,199
Derivative assets	64,662		64,662	—	64,662	—
Financial liabilities
Trading account liabilities	91		91	—	91	—
Non-interest bearing deposits	5,665,527		5,665,527	—	5,665,527	—
Interest bearing deposits	15,391,517		15,415,160	—	15,415,160	—
Federal funds purchased other short-term borrowings, and other short-term liabilities	201,243		201,243	201,243	—	—
Salary stock units	1,888		1,888	1,888	—	—
Long-term debt	1,726,455		1,784,223	—	1,784,223	—
Derivative liabilities	$	66,393	66,393	—	63,437	2,956

- Definition

Tabular disclosure of assets and liabilities by class, including financial instruments measured at fair value that are classified in shareholders' equity, if any, that are measured at fair value on a nonrecurring basis in periods after initial recognition (for example, impaired assets). Disclosures may include, but are not limited to: (a) the fair value measurements recorded and the reasons for the measurements and (b) the level within the fair value hierarchy in which the fair value measurements are categorized in their entirety (levels 1, 2, 3).

+ References+ Details

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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- Definition

Tabular disclosure of the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such certain disclosures about the financial instruments, assets, and liabilities include: (1) the fair value of the required items together with their carrying amounts (as appropriate) and (2) the methodology and assumptions used in developing such estimates of fair value.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

-Paragraph 15

-Subparagraph b-d

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 159

-Paragraph 18

-Subparagraph c(2), d, e, f

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 157

-Paragraph 32

-Subparagraph a, c(1), c(2), c(3), d

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 820

-SubTopic 10

-Section 50

-Paragraph 2

-Subparagraph (a)

-URI http://asc.fasb.org/extlink&oid=7578670&loc=d3e19207-110258

Reference 5: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

-Section 50

-Paragraph 10

-Subparagraph (a)

-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13433-108611

Reference 6: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

-Section 50

-Paragraph 11

-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13467-108611

Reference 7: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

-Section 50

-Paragraph 12

-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13476-108611

Reference 8: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

-Paragraph 10

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 9: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

-Section 50

-Paragraph 30

-Subparagraph (a)

-URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612

Reference 10: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

-Paragraph 14

-Subparagraph a

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 11: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

-Section 45

-Paragraph 2

-URI http://asc.fasb.org/extlink&oid=6447952&loc=d3e13220-108610

Reference 12: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 159

-Paragraph 19

-Subparagraph a, b, c(1), d(1)

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details