Fair Value Accounting (Tables)

6 Months Ended

Jun. 30, 2012

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, 2012 and December 31, 2011, 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 between Levels 1 and 2 for the six months ended June 30, 2012 and the year ended December 31, 2011 were inconsequential.



	June 30, 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	$	—	786	—	786
Collateralized mortgage obligations issued by U.S. Government sponsored enterprises	—		3,613	—	3,613
State and municipal securities	—		461	—	461
All other residential mortgage-backed securities	—		7,346	—	7,346
Other investments	—		125	—	125
Total trading securities	—		12,331	—	12,331
Mortgage loans held for sale	—		120,007	—	120,007
Investment securities available for sale:
U.S. Treasury securities	307		—	—	307
U.S. Government agency securities	—		39,680	—	39,680
Securities issued by U.S. Government sponsored enterprises	—		564,526	—	564,526
Mortgage-backed securities issued by U.S. Government agencies	—		280,045	—	280,045
Mortgage-backed securities issued by U.S. Government sponsored enterprises	—		2,056,627	—	2,056,627
Collateralized mortgage obligations issued by U.S. Government sponsored enterprises	—		600,166	—	600,166
State and municipal securities	—		21,097	—	21,097
Equity securities	2,795		—	891	3,686
Other investments⁽¹⁾	—		—	4,212	4,212
Total investment securities available for sale	3,102		3,562,141	5,103	3,570,346
Private equity investments	—		861	29,847	30,708
Mutual funds held in Rabbi Trusts	10,114		—	—	10,114
Derivative assets:
Interest rate contracts	—		74,471	—	74,471
Mortgage derivatives	—		3,887	—	3,887
Total derivative assets	—		78,358	—	78,358
Liabilities
Trading securities:
Mortgage-backed securities issued by U.S. Government agencies	—		766	—	766
Total trading securities	—		766	—	766
Derivative liabilities:
Interest rate contracts	—		75,761	—	75,761
Mortgage derivatives	—		2,095	—	2,095
Visa derivative	—		—	3,050	3,050
Total derivative liabilities	$	—	77,856	3,050	80,906



	December 31, 2011
(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	$	—	33	—	33
Collateralized mortgage obligations issued by U.S. Government sponsored enterprises	—		4,040	—	4,040
State and municipal securities	—		10	—	10
All other residential mortgage-backed securities	—		11,748	—	11,748
Other investments	—		1,035	—	1,035
Total trading securities	—		16,866	—	16,866
Mortgage loans held for sale	—		161,509	—	161,509
Investment securities available for sale:
U.S. Treasury securities	426		—	—	426
U.S. Government agency securities	—		40,493	—	40,493
Securities issued by U.S. Government sponsored enterprises	—		675,421	—	675,421
Mortgage-backed securities issued by U.S. Government agencies	—		285,753	—	285,753
Mortgage-backed securities issued by U.S. Government sponsored enterprises	—		2,002,006	—	2,002,006
Collateralized mortgage obligations issued by U.S. Government sponsored enterprises	—		651,500	—	651,500
State and municipal securities	—		25,318	—	25,318
Equity securities	2,366		—	1,393	3,759
Other investments⁽¹⁾	—		—	5,449	5,449
Total investment securities available for sale	2,792		3,680,491	6,842	3,690,125
Private equity investments	—		597	21,418	22,015
Mutual funds held in Rabbi Trusts	10,353		—	—	10,353
Derivative assets:
Interest rate contracts	—		83,072	—	83,072
Mortgage derivatives	—		—	1,851	1,851
Total derivative assets	—		83,072	1,851	84,923
Liabilities
Derivative liabilities:
Interest rate contracts	—		85,534	—	85,534
Mortgage derivatives	—		1,947	—	1,947
Visa derivative	—		—	9,093	9,093
Total derivative liabilities	$	—	87,481	9,093	96,574

⁽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.

Schedule of Net Gains (Losses) from Fair Value Changes [Table Text Block]



Net gains (losses) from fair value changes
(in thousands)	Six Months Ended June 30,				Three Months Ended June 30,
	2012			2011	2012	2011
Mortgage loans held for sale	$	(192	)	2,883	2,516	(221	)

Changes in Fair Value Included in Consolidated Statements of Income



Mortgage Loans Held for Sale
(in thousands)	June 30, 2012		December 31, 2011
Aggregate fair value	$	120,007	161,509
Unpaid principal balance	116,006		157,316
Aggregate fair value less aggregate unpaid principal balance	$	4,001	4,193

Changes in Level 3 Fair Value Measurements

The table below includes a roll-forward of the amounts on the consolidated balance sheet for the six months ended June 30, 2012 and 2011 (including the change in fair value), for financial instruments of a material nature that are classified by Synovus within Level 3 of the fair value hierarchy and are measured at fair value on a recurring basis. Transfers between fair value levels are recognized at the end of the reporting period in which the associated change in inputs occur. During the first quarter of 2012, Synovus transferred the mortgage derivative asset, which consists of interest rate lock commitments totaling $1.9 million, from Level 3 to Level 2 within the fair value hierarchy, reflecting increased transparency of the inputs used to value these financial instruments, which are based on the mortgage banking subsidiary's historical experience, conversion ratios for similar loan commitments, and market conditions instead of previously used external industry data. Additionally, during the first quarter of 2012, Synovus transferred assets totaling $501 thousand that were classified as a Level 3 equity security to other assets to more accurately reflect the financial characteristics of the financial instruments.



	Six Months Ended June 30,
	2012						2011
(in thousands)	Investment Securities Available for Sale			Private Equity Investments	Other Derivative Contracts, Net⁽⁴⁾		Investment Securities Available for Sale	Private Equity Investments			Other Derivative Contracts, Net⁽⁴⁾
Beginning balance, January 1,	$	6,842		21,418	(7,242	)	10,622	47,357			5,470
Total gains (losses) realized/unrealized:
Included in earnings⁽¹⁾	(450		)	7,372	(4,713	)	1,000	(169	)		(2,319	)
Unrealized gains (losses) included in other comprehensive income	(788		)	—	—		1,776	—			—
Changes from consolidated to equity method investment	—			—	—		—	(27,291	)		—
Purchases	—			1,057	—		—	376		⁽²⁾	—
Settlements	—			—	10,756		—	—			—
Transfers in or (out of) Level 3	(501		)	—	(1,851	)	—	—			—
Ending balance, June 30,	$	5,103		29,847	(3,050	)	13,398	20,273			3,151
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 remaining at June 30,	$	(450	)	7,372	(4,713	)	1,000	(169	)		(2,319	)

	Three Months Ended June 30,
	2012						2011
(in thousands)	Investment Securities Available for Sale			Private Equity Investments	Other Derivative Liability Contracts⁽³⁾		Investment Securities Available for Sale	Private Equity Investments			Other Derivative Contracts, Net⁽⁴⁾
Beginning balance, April 1,	$	5,085		22,568	(1,719	)	11,546	20,198			5,475
Total gains (losses) realized/unrealized:
Included in earnings⁽¹⁾	—			7,279	(1,734	)	—	(301	)		(2,324	)
Unrealized gains (losses) included in other comprehensive income	18			—	—		1,852	—			—
Changes from consolidated to equity method investment	—			—	—		—	—			—
Purchases	—			—	—		—	376		⁽²⁾	—
Settlements	—			—	403		—	—			—
Transfers in or (out of) Level 3	—			—	—		—	—			—
Ending balance, June 30,	$	5,103		29,847	(3,050	)	13,398	20,273			3,151
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 still held at June 30,	$	—		7,279	(1,734	)	—	(301	)		(2,324	)

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

⁽²⁾ Represents additional capital contributed to a private equity investment fund for capital calls. Note that there are no such calls outstanding as of June 30, 2012.

⁽³⁾ Other derivative contracts represent the Visa Derivative.

⁽⁴⁾ Other derivative contracts include the Visa Derivative and the mortgage derivatives.

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

The following table presents these assets measured at fair value on a non-recurring basis as of the dates indicated, according to the valuation hierarchy included in ASC 820-10.



	June 30, 2012					December 31, 2011
(in thousands)	Level 1		Level 2	Level 3	Total	Level 1	Level 2	Level 3	Total
Collateral dependent impaired loans	$	—	—	516,038	516,038	—	—	523,288	523,288
Other loans held for sale	—		—	4,074	4,074	—	—	2,841	2,841
Other real estate	—		—	154,475	154,475	—	—	112,164	112,164
Other assets held for sale	$	—	—	3,199	3,199	—	—	16,254	16,254

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, 2012 and 2011 for the following assets measured at fair value on a non-recurring basis.



	Fair Value Adjustments for the Six Months Ended June 30,			Fair Value Adjustments for the Three Months Ended June 30,
(in thousands)	2012		2011	2012	2011
Collateral dependent impaired loans	$	62,506	91,828	29,699	42,728
Other loans held for sale	1,288		4,244	1,183	4,029
Other real estate	19,925		34,288	7,580	21,464
Other assets held for sale	$	1,345	6,531	431	6,531

Fair Value Inputs, Assets, Quantitative Information

The tables below provide an overview of the valuation techniques and significant unobservable inputs used in those techniques to measure financial instruments that are classified within Level 3 of the valuation hierarchy. The range of sensitivities that management utilized in its fair value calculations is deemed acceptable in the industry with respect to the identified financial instruments.



	June 30, 2012
(dollars in thousands)	Level 3 Fair Value		Valuation Technique	Significant Unobservable Input	Range (Weighted Average)
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	N/A

Other investments:

Corporate bonds	1,002		Discounted cash flow	Credit spread embedded in discount rate	500-700 b.p.s (598 b.p.s)
				Discount for lack of marketability^(a)	0%-10% (0%)

Trust preferred securities	3,210		Discounted cash flow	Credit spread embedded in discount rate	250-750 b.p.s (568 b.p.s)
				Discount for lack of marketability^(a)	0%-10% (0%)

Private equity investments	29,847		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	N/A

Visa derivative liability	3,050		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 $3.1 million ($3.1 million)



	June 30, 2012
(dollars in thousands)	Level 3 Fair Value		Valuation Technique	Significant Unobservable Input	Range (Weighted Average)
Assets measured at fair value on a non-recurring basis
Collateral dependent impaired loans	$	516,038	Third party appraised value of collateral less estimated selling costs	Appraised value (b)	0%-75% (20%)
				Estimated selling costs	0%-10% (7%)

Other loans held for sale	4,074		Third party appraised value of collateral less estimated selling costs	Appraised value (b)	0%-75% (20%)
				Estimated selling costs	0%-10% (7%)

Other real estate	154,475		Third party appraised value of collateral less estimated selling costs	Appraised value (b)	0%-50% (22%)
				Estimated selling costs	0%-10% (7%)

Other assets held for sale	3,199		Third party appraised value of collateral less estimated selling costs or BOV	Appraised value (b)	0% - 45% (21%)
				Estimated selling costs	0%-10% (7%)

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

^(b) 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.

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, 2012 and December 31, 2011 are as follows:



	June 30, 2012
(in thousands)	Carrying Value		Estimated Fair Value	Level 1	Level 2	Level 3
Financial assets
Cash and cash equivalents	$	523,302	523,302	523,302	—	—
Interest bearing funds with Federal Reserve Bank	1,301,244		1,301,244	1,301,244	—	—
Interest earning deposits with banks	16,003		16,003	16,003	—	—
Federal funds sold and securities purchased under resale agreements	118,098		118,098	118,098	—	—
Trading account assets	12,331		12,331	—	12,331	—
Mortgage loans held for sale	120,007		120,007	—	120,007	—
Other loans held for sale	32,601		32,601	—	—	32,601
Investment securities available for sale	3,570,346		3,570,346	3,102	3,562,141	5,103
Private equity investments	30,708		30,708	—	861	29,847
Loans, net	19,226,802		19,291,650	—	—	19,291,650
Derivative asset positions	78,358		78,358	—	78,358	—
Financial liabilities
Trading account liabilities	766		766	—	766	—
Non-interest bearing deposits	5,607,680		5,607,680	—	5,607,680	—
Interest bearing deposits	15,957,385		15,991,415	—	15,991,415	—
Federal funds purchased and other short-term borrowings	351,173		351,173	351,173	—	—
Long-term debt	1,301,616		1,308,580	—	1,308,580	—
Derivative liability positions	$	80,906	80,906	—	77,856	3,050



	December 31, 2011
(in thousands)	Carrying Value		Estimated Fair Value
Financial assets
Cash and cash equivalents	$	510,423	510,423
Interest bearing funds with Federal Reserve Bank	1,567,006		1,567,006
Interest earning deposits with banks	13,590		13,590
Federal funds sold and securities purchased under resale agreements	158,916		158,916
Trading account assets	16,866		16,866
Mortgage loans held for sale	161,509		161,509
Other loans held for sale	30,156		30,156
Investment securities available for sale	3,690,125		3,690,125
Private equity investments	22,015		22,015
Loans, net	19,543,319		19,621,279
Derivative asset positions	84,923		84,923
Financial liabilities
Non-interest bearing deposits	5,366,868		5,366,868
Interest bearing deposits	17,044,884		17,092,784
Federal funds purchased and other short-term borrowings	313,757		313,757
Long-term debt	1,364,727		1,302,560
Derivative liability positions	$	96,574	96,574

- Definition

Tabular disclosure of assets and liabilities by class, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, that are measured at fair value on a nonrecurring basis in periods after initial recognition (for example, impaired assets). The disclosures that may be required or desired include: (a) the fair value measurements recorded during the period and the reasons for the measurements and (b) the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets or liabilities (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3). Where the quoted price in an active market for the identical liability is not available, the Level 1 input is the quoted price of an identical liability when traded as an asset.

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- 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, 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, issuances, 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.

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