Goodwill And Other Intangible Assets

12 Months Ended

Dec. 31, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Note 8 - Goodwill and Other Intangible Assets

Synovus assesses goodwill for impairment at the reporting unit level on an annual basis and between annual assessments if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Synovus performs its annual goodwill impairment testing as of June 30^th of each year. At June 30, 2013, Synovus completed its annual goodwill impairment evaluation, and as a result of this evaluation, concluded that goodwill was not impaired. At June 30, 2013, the carrying value of goodwill was $24.4 million, consisting of goodwill associated with two financial management services reporting units; $19.9 million of the goodwill was attributable to the investment advisory services reporting unit. The remaining goodwill of $4.5 million was attributable to the trust services reporting unit.

For the annual goodwill impairment test, a third- party valuation was obtained on the investment advisory services reporting unit, which accounts for approximately 82% of the recorded goodwill. The fair value of this reporting unit was determined by equally weighting the income approach (50%) and market approach (50%), plus a tax amortization benefit component, to assess goodwill for potential impairment at June 30, 2013. The income approach utilized a discounted cash flow method, which is based on the expected future cash flows of the reporting unit. The market approach measures values based on what other market participants have paid for assets that can be considered reasonably similar to those being valued. The first step (Step 1) of impairment testing requires a comparison of each reporting unit's fair value to the carrying amount to identify potential impairment. The result of the Step 1 process indicated that goodwill at the investment advisory services reporting unit was not impaired, as the fair value of the reporting unit exceeded the respective estimated carrying value; therefore, no further testing was required. The estimated fair value of this reporting unit using a weighted approach (income and market approach evenly weighted), plus a tax amortization component, was $28.7 million, which exceeded the carrying value of $22.9 million by $5.8 million, or 25%. The key assumptions that drove the fair value of this reporting unit under the income approach included projected revenue growth, projected EBITDA margin, projected growth in assets under management and assets under supervision, and the discount rate. The market approach determined the fair value of this reporting unit using comparisons of the reporting unit to publicly-traded companies with similar operations. Under this method, valuation multiples were: (1) derived from operating data of the selected guideline companies; (2) evaluated and adjusted based on the strengths and weaknesses of the reporting unit relative to the selected guideline companies; and (3) applied to the operating data of the reporting unit to arrive at an indication of value.

Effective July 10, 2013, the investment advisory services reporting unit was consolidated into the trust services reporting unit as part of Synovus’ efforts to continue to improve operating efficiency. The consolidation was based on results from a comprehensive business review, which identified significant benefits from consolidating the two reporting units. This review identified opportunities to maximize revenue growth and earnings potential, reduce expenses, and create operational synergies between the two business units. As a result of this consolidation, goodwill of $19.9 million was transferred from the investment advisory services reporting unit to the trust services reporting unit. The consolidation was not considered a triggering event as defined by ASC 350; therefore, management was not required to complete an interim goodwill impairment test at the new consolidated reporting unit level.

The following table shows the changes in the carrying amount of goodwill for the years ended December 31, 2013 and 2012:



(in thousands)
Balance as of January 1, 2012
Goodwill	$	519,138
Accumulated impairment losses	494,707
Additional impairment losses during the year	—
Ending Balance December 31, 2012	24,431

Balance as of January 1, 2013
Goodwill	519,138
Accumulated impairment losses	494,707
Additional impairment losses during the year	—
Ending Balance December 31, 2013	$	24,431

Other intangible assets as of December 31, 2013 and 2012 are presented in the following table:



	2013
(in thousands)	Gross Carrying Amount		Accumulated Amortization		Impairment	Net
Other intangible assets:
Purchased trust revenues	$	4,210	(3,532)		—	678
Acquired customer contracts	5,270		(5,267	)	—	3
Core deposit premiums	46,331		(43,856	)	—	2,475
Other	640		(381	)	—	259
Total carrying value	$	56,451	(53,036)		—	3,415

	2012
(in thousands)	Gross Carrying Amount		Accumulated Amortization		Impairment	Net
Other intangible assets:
Purchased trust revenues	$	4,210	(3,251)		—	959
Acquired customer contracts	5,270		(5,262	)	—	8
Core deposit premiums	46,331		(42,457	)	—	3,874
Other	640		(332	)	—	308
Total carrying value	$	56,451	(51,302)		—	5,149

Aggregate other intangible assets amortization expense for the years ended December 31, 2013, 2012, and 2011 was $1.7 million, $3.4 million, and $3.9 million, respectively. Aggregate estimated amortization expense over the next five years is: $1.2 million in 2014, $1.0 million in 2015, $466 thousand in 2016, $212 thousand in 2017, and $186 thousand in 2018.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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