Fair Value Accounting (Tables)

6 Months Ended

Jun. 30, 2015

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, 2015 and December 31, 2014, 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. Transfers betweens levels for the period ended June 30, 2015 and December 31, 2014 were inconsequential.



	June 30, 2015
(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	—		1,011	—	1,011
Collateralized mortgage obligations issued by U.S. Government sponsored enterprises	—		7,193	—	7,193
State and municipal securities	—		156	—	156
All other mortgage-backed securities	—		2,416	—	2,416
Other investments	—		1,197	—	1,197
Total trading securities	$	—	11,973	—	11,973
Mortgage loans held for sale	—		98,202	—	98,202
Investment securities available for sale:
U.S. Treasury securities	43,532		—	—	43,532
U.S. Government agency securities	—		25,268	—	25,268
Securities issued by U.S. Government sponsored enterprises	—		127,867	—	127,867
Mortgage-backed securities issued by U.S. Government agencies	—		178,074	—	178,074
Mortgage-backed securities issued by U.S. Government sponsored enterprises	—		2,410,729	—	2,410,729
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises	—		537,268	—	537,268
State and municipal securities	—		4,685	—	4,685
Equity securities	7,603		—	—	7,603
Other investments⁽¹⁾	3,047		14,900	1,700	19,647
Total investment securities available for sale	$	54,182	3,298,791	1,700	3,354,673
Private equity investments	—		1,033	26,959	27,992
Mutual funds held in rabbi trusts	11,218		—	—	11,218
Derivative assets:
Interest rate contracts	—		27,948	—	27,948
Mortgage derivatives⁽²⁾	—		2,691	—	2,691
Total derivative assets	$	—	30,639	—	30,639
Liabilities
Trading account liabilities	—		1,546	—	1,546
Derivative liabilities:
Interest rate contracts	—		28,566	—	28,566
Visa derivative	—		—	1,415	1,415
Total derivative liabilities	$	—	28,566	1,415	29,981



	December 31, 2014
(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	—		145	—	145
Collateralized mortgage obligations issued by U.S. Government sponsored enterprises	—		2,449	—	2,449
State and municipal securities	—		1,976	—	1,976
All other mortgage-backed securities	—		2,483	—	2,483
Other investments	—		6,810	—	6,810
Total trading securities	$	—	13,863	—	13,863
Mortgage loans held for sale	—		63,328	—	63,328
Investment securities available for sale:
U.S. Treasury securities	42,826		—	—	42,826
U.S. Government agency securities	—		27,324	—	27,324
Securities issued by U.S. Government sponsored enterprises	—		82,042	—	82,042
Mortgage-backed securities issued by U.S. Government agencies	—		179,816	—	179,816
Mortgage-backed securities issued by U.S. Government sponsored enterprises	—		2,261,681	—	2,261,681
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises	—		417,076	—	417,076
State and municipal securities	—		5,206	—	5,206
Equity securities	6,748		—	—	6,748
Other investments⁽¹⁾	2,035		15,007	1,645	18,687
Total investment securities available for sale	$	51,609	2,988,152	1,645	3,041,406
Private equity investments	—		995	27,367	28,362
Mutual funds held in rabbi trusts	11,252		—	—	11,252
Derivative assets:
Interest rate contracts	—		30,904	—	30,904
Mortgage derivatives⁽²⁾	—		1,213	—	1,213
Total derivative assets	$	—	32,117	—	32,117
Liabilities
Trading account liabilities	—		2,100	—	2,100
Salary stock units	1,206		—	—	1,206
Derivative liabilities:
Interest rate contracts	—		31,398	—	31,398
Mortgage derivatives⁽²⁾	—		753	—	753
Visa derivative	—		—	1,401	1,401
Total derivative liabilities	$	—	32,151	1,401	33,552

⁽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 of mortgage loans held for sale measured at fair value and the changes in fair value of these loans. Mortgage loans held for sale are initially measured at fair value with subsequent changes in fair value recognized in earnings. Changes in fair value were recorded as a component of mortgage banking income in the consolidated statements of income. An immaterial portion of these changes in fair value was attributable to changes in instrument-specific credit risk.



Changes in Fair Value Included in Net Income
	For the Six Months Ended June 30,			For the Three Months Ended June 30,
(in thousands)	2015		2014	2015		2014
Mortgage loans held for sale	(563	)	1,782	(973	)	1,057



Mortgage Loans Held for Sale
(in thousands)	As of June 30, 2015		As of December 31, 2014
Fair value	$	98,202	63,328
Unpaid principal balance	96,925		61,488
Fair value less aggregate unpaid principal balance	$	1,277	1,840

Changes in Level 3 Fair Value Measurements



	Six Months Ended June 30,
	2015						2014
(in thousands)	Investment Securities Available for Sale		Private Equity Investments		Visa Derivative		Investment Securities Available for Sale		Private Equity Investments		Other Derivative Contracts, Net
Beginning balance, January 1,	1,645		27,367		(1,401	)	2,350		27,745		(2,706	)
Total gains (losses) realized/unrealized:
Included in earnings	—		(408	)	(729	)	(88	)	(369	)	(752	)
Unrealized gains (losses) included in other comprehensive income	55		—		—		144		—		—
Purchases	—		—		—		—		—		—
Sales	—		—		—		—		—		—
Issuances	—		—		—		—		—		—
Settlements	—		—		715		(540	)	—		1,020
Amortization of discount/premium	—		—		—		—		—		—
Transfers in and/or out of Level 3	—		—		—		—		—		—
Ending balance, June 30,	1,700		26,959		(1,415	)	1,866		27,376		(2,438	)
The amount of total net gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets still held at June 30,	—		(408	)	(729	)	(88	)	(369	)	(752	)


	Three Months Ended June 30,
	2015						2014
(in thousands)	Investment Securities Available for Sale		Private Equity Investments		Visa Derivative		Investment Securities Available for Sale		Private Equity Investments		Visa Derivative
Beginning balance, April 1,	$	1,654	27,081		(1,425	)	2,399		27,495		(2,525	)
Total gains (losses) realized/unrealized:
Included in earnings	—		(122	)	(354	)	—		(119	)	(356	)
Unrealized gains (losses) included in other comprehensive income	46		—		—		7		—		—
Purchases	—		—		—		—		—		—
Sales	—		—		—		—		—		—
Issuances	—		—		—		—		—		—
Settlements	—		—		364		(540	)	—		443
Amortization of discount/premium	—		—		—		—		—		—
Transfers in and/or out of Level 3	—		—		—		—		—		—
Ending balance, June 30,	$	1,700	26,959		(1,415	)	1,866		27,376		(2,438	)
The amount of total net gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets still held at June 30,	$	—	(122	)	(354	)	—		(119	)	(356	)

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



	June 30, 2015					December 31, 2014
(in thousands)	Level 1		Level 2	Level 3	Total	Level 1	Level 2	Level 3	Total
Impaired loans^*	$	—	—	6,702	6,702	—	—	28,588	28,588
Other loans held for sale	—		—	—	—	—	—	3,411	3,411
Other real estate	—		—	38,201	38,201	—	—	32,046	32,046
Other assets held for sale	$	—	—	—	—	—	—	3,718	3,718

Assets Measured at Fair Value on a Nonrecurring Basis

The following table presents fair value adjustments recognized in earnings for the six and three months ended June 30, 2015 and 2014 for the assets measured at fair value on a non-recurring basis.



	Six Months Ended June 30,			Three Months Ended June 30,
(in thousands)	2015		2014	2015		2014
Impaired loans^*	$	1,792	8,144	$	1,546	5,542
Other loans held for sale	—		1,631	—		1,631
Other real estate	8,962		3,229	4,714		654
Other assets held for sale	—		7,508	—		7,508

^*Impaired loans that are collateral-dependent.

Fair Value Inputs, Assets, Quantitative Information



June 30, 2015
(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:
Other Investments:

Trust preferred securities	1,700	Discounted cash flow analysis	Credit spread embedded in discount rate	465-565 bps (513 bps)

			Discount for lack of marketability⁽²⁾	0%-10% (0%)

Private equity investments	26,959	Individual analysis of each investee company	Multiple factors, including but not limited to, current operations, financial condition, cash flows, evaluation of business management and financial plans, and recently executed financing transactions related to the investee companies	N/A

Visa derivative liability	1,415	Internal valuation	Estimated future cumulative deposits to the litigation escrow for settlement of the Covered Litigation, and estimated future monthly fees payable to the derivative counterparty	N/A



June 30, 2015
(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	$	6,702	Third-party appraised value of collateral less estimated selling costs	Discount to appraised value ⁽³⁾ Estimated selling costs	0% - 100% (29%) 0% - 10% (7%)

Other real estate	38,201		Third-party appraised value of collateral less estimated selling costs	Discount to appraised value ⁽³⁾ Estimated selling costs	0% - 42% (5%) 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. For assets measured at fair value on a non-recurring basis, the weighted average is the measure of central tendencies; it is not the value that management is using for the asset or liability.

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

⁽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.



December 31, 2014
(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:

Other Investments:

Trust preferred securities	1,645	Discounted cash flow analysis	Credit spread embedded in discount rate	600-675 bps (639 bps)

			Discount for lack of marketability⁽²⁾	0%-10% (0%)

Private equity investments	27,367	Individual analysis of each investee company	Multiple factors, including but not limited to, current operations, financial condition, cash flows, evaluation of business management and financial plans, and recently executed financing transactions related to the investee companies⁽²⁾	N/A

Visa derivative liability	1,401	Internal valuation	Estimated future cumulative deposits to the litigation escrow for settlement of the Covered Litigation, and estimated future monthly fees payable to the derivative counterparty	N/A



December 31, 2014
(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	$	28,588	Third-party appraised value of collateral less estimated selling costs	Discount to appraised value⁽²⁾ Estimated selling costs	0%-100% (46%) 0%-10% (7%)

Other loans held for sale	3,411		Third-party appraised value of collateral less estimated selling costs	Discount to appraised value ⁽²⁾ Estimated selling costs	0%-11% (7%) 0%-10% (7%)

Other real estate	32,046		Third-party appraised value of collateral less estimated selling costs	Discount to appraised value ⁽²⁾ Estimated selling costs	0%-61% (16%) 0%-10% (7%)

Other assets held for sale	3,718		Third-party appraised value of collateral less estimated selling costs or BOV	Discount to appraised value ⁽²⁾ Estimated selling costs	0%-100% (49%) 0%-10% (7%)

⁽¹⁾ The range represents management's best estimate of the high and low end of the value that would be assigned to a particular input. For assets measured at fair value on a non-recurring basis, the weighted average is the measure of central tendencies; it is not the value that management is using for the asset or liability.

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

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, 2015 and December 31, 2014 are as follows:



	June 30, 2015
(in thousands)	Carrying Value		Fair Value	Level 1	Level 2	Level 3
Financial assets
Cash and cash equivalents	$	360,832	360,832	360,832	—	—
Interest bearing funds with Federal Reserve Bank	1,289,205		1,289,205	1,289,205	—	—
Interest earning deposits with banks	18,694		18,694	18,694	—	—
Federal funds sold and securities purchased under resale agreements	72,487		72,487	72,487	—	—
Trading account assets	11,973		11,973	—	11,973	—
Mortgage loans held for sale	98,202		98,202	—	98,202	—
Investment securities available for sale	3,354,673		3,354,673	54,182	3,298,791	1,700
Private equity investments	27,992		27,992	—	1,033	26,959
Mutual funds held in rabbi trusts	11,218		11,218	11,218	—	—
Loans, net of deferred fees and costs	21,494,869		21,310,531	—	—	21,310,531
Derivative assets	30,639		30,639	—	30,639	—
Financial liabilities
Trading account liabilities	1,546		1,546	—	1,546	—
Non-interest bearing deposits	6,421,815		6,421,815	—	6,421,815	—
Interest bearing deposits	16,227,366		16,238,771	—	16,238,771	—
Federal funds purchased and securities sold under repurchase agreements	188,285		188,285	188,285	—	—
Long-term debt	2,139,219		2,200,777	—	2,200,777	—
Derivative liabilities	$	29,981	29,981	—	28,566	1,415



	December 31, 2014
(in thousands)	Carrying Value		Fair Value	Level 1	Level 2	Level 3
Financial assets
Cash and cash equivalents	$	485,489	485,489	485,489	—	—
Interest bearing funds with Federal Reserve Bank	721,362		721,362	721,362	—	—
Interest earning deposits with banks	11,810		11,810	11,810	—	—
Federal funds sold and securities purchased under resale agreements	73,111		73,111	73,111	—	—
Trading account assets	13,863		13,863	—	13,863	—
Mortgage loans held for sale	63,328		63,328	—	63,328	—
Other loans held for sale	3,606		3,606	—	—	3,606
Investment securities available for sale	3,041,406		3,041,406	51,609	2,988,152	1,645
Private equity investments	28,362		28,362	—	995	27,367
Mutual funds held in rabbi trusts	11,252		11,252	11,252	—	—
Loans, net of deferred fees and costs	21,097,699		20,872,939	—	—	20,872,939
Derivative assets	32,117		32,117	—	32,117	—
Financial liabilities
Trading account liabilities	2,100		2,100	—	2,100	—
Non-interest bearing deposits	6,228,472		6,228,472	—	6,228,472	—
Interest bearing deposits	15,303,228		15,299,372	—	15,299,372	—
Federal funds purchased and securities sold under repurchase agreements	126,916		126,916	126,916	—	—
Salary stock units	1,206		1,206	1,206	—	—
Long-term debt	2,140,319		2,191,279	—	2,191,279	—
Derivative liabilities	$	33,553	33,553	—	32,151	1,401