Note 2 - Acquisition

On October 1, 2016, Synovus completed its acquisition of all of the outstanding stock of Global One. Global One is an Atlanta-based private specialty financial services company that lends primarily to commercial entities, with all loans fully collateralized by cash value life insurance policies and/or annuities issued by investment grade life insurance companies. Under the terms of the merger agreement, Synovus acquired Global One for an up-front payment of $30 million, consisting of the issuance of 821 thousand shares of Synovus common stock valued at $26.6 million and $3.4 million in cash, with additional payments to Global One's shareholders over the next three to five years based on earnings from the Global One business as further discussed below.

The acquisition of Global One constituted a business combination. Accordingly, the assets acquired and liabilities assumed were recorded at their estimated fair values as shown in the table below. The determination of fair value required management to make estimates about discount rates, future expected earnings and cash flows, market conditions, future loan growth, and other future events that are highly subjective in nature and subject to change. These fair value estimates have been determined only provisionally, and are based on preliminary fair value estimates.



Global One	October 1, 2016
(in thousands)	Preliminary Fair Value
Assets acquired:
Cash and due from banks	$	9,554
Commercial and industrial loans⁽¹⁾	356,665
Goodwill⁽²⁾	35,247
Other intangible assets	13,400
Other assets	2,742
Total assets acquired	$	417,608
Liabilities assumed:
Notes payable⁽³⁾	$	358,560
Contingent consideration	14,000
Deferred tax liability, net	3,145
Other liabilities	11,903
Total liabilities assumed	$	387,608
Consideration paid	$	30,000

Cash paid	$	3,408
Fair value of common stock issued	26,592

⁽¹⁾The unpaid principal balance of the loans was $356.7 million.

⁽²⁾The goodwill is not expected to be deductible for tax purposes.

⁽³⁾ The unpaid principal balance of the notes payable was $357.0 million.

Under the terms of the merger agreement, the purchase price includes additional annual payments ("Earnout Payments") to Global One's former shareholders over the next three to five years, with amounts based on a percentage of net income attributable to "Global One Earnings," as defined in the merger agreement. The Earnout Payments will consist of shares of common stock as well as a smaller cash consideration component. The December 31, 2016 balance sheet reflects a provisional earnout liability of $14.0 million which represents management's preliminary estimate of the fair value of the Earnout Payments.

Other intangible assets consist of existing borrower relationships, trade name, and distribution network. Refer to Note 9 - "Goodwill and Other Intangible Assets" of this Report for more information.

Synovus' consolidated statement of income for the year ended December 31, 2016 includes the operating results produced by the acquired assets and assumed liabilities for the period of October 1, 2016 through December 31, 2016. The income statement impact was not significant. Additionally, Global One's historical results are not material to Synovus' results; accordingly, pro forma disclosures are not presented.