Note 20 - Commitments and Contingencies

In the normal course of business, Synovus enters into commitments to extend credit such as loan commitments and letters of credit to meet the financing needs of its customers. Synovus uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee.

The contractual amount of these financial instruments represents Synovus' maximum credit risk should the counterparty draw upon the commitment, and should the counterparty subsequently fail to perform according to the terms of the contract. Since many of the commitments are expected to expire without being drawn upon, total commitment amounts do not necessarily represent future cash requirements.

The carrying amount of loan commitments and letters of credit closely approximates the fair value of such financial instruments. Carrying amounts include unamortized fee income and, in some instances, allowances for any estimated credit losses from these financial instruments. These amounts are not material to Synovus' consolidated balance sheets.

Unfunded lending commitments and letters of credit at December 31, 2013 are presented below.



(in thousands)
Letters of credit*	$	155,494
Commitments to fund commercial real estate, construction, and land development loans	1,341,994
Unused credit card lines	922,358
Commitments under home equity lines of credit	896,817
Commitments to fund commercial and industrial loans	3,290,598
Other loan commitments	140,128
Total unfunded lending commitments and letters of credit	$	6,747,389

*Represents the contractual amount net of risk participations of $116 million.

Lease Commitments

Synovus and its subsidiaries have entered into long-term operating leases for various facilities and equipment. Management expects that as these leases expire they will be renewed or replaced by similar leases based on need.

At December 31, 2013, minimum rental commitments under all such non-cancelable leases for the next five years and thereafter are presented below.



(in thousands)
2014	$	23,776
2015	22,581
2016	21,626
2017	20,147
2018	18,476
Thereafter	191,657
Total	$	298,263

Rental expense on facilities was $31.5 million, $32.1 million, and $31.6 million for the years ended December 31, 2013, 2012, and 2011, respectively.

Repurchase Obligations for Mortgage Loans Originated for Sale

The majority of mortgage loans originated by Synovus are sold to third-party purchasers on a servicing released basis, without recourse, or continuing involvement (Synovus does not retain the servicing rights). These loans are originated and underwritten internally by Synovus personnel and are primarily to borrowers in Synovus’ geographic market footprint. These sales are typically effected as non-recourse loan sales to GSEs and non-GSE purchasers.

Each GSE and non-GSE purchaser has specific guidelines and criteria for sellers of loans, and the risk of credit loss with regard to the principal amount of the loans sold is generally transferred to the purchasers upon sale. The purchase agreements require Synovus to make certain representations and warranties regarding the existence and sufficiency of file documentation and the absence of fraud by borrowers or other third parties such as appraisers in connection with obtaining the loan. If it is determined that loans sold were in breach of these representations or warranties, Synovus has obligations to either repurchase the loan at the unpaid principal balance and related investor fees or make the purchaser whole for the economic benefits of the loan.

To date, repurchase activity pursuant to the terms of these representations and warranties has been minimal and has primarily been associated with loans originated from 2005 through 2008. From January 1, 2005 through December 31, 2013, Synovus Mortgage originated and sold approximately $7.9 billion of first lien GSE eligible mortgage loans and approximately $3.4 billion of first and second lien non-GSE eligible mortgage loans. The total expense pertaining to losses from repurchases of mortgage loans previously sold, including amounts accrued in accordance with ASC 450, was $1.7 million, $6.7 million, and $4.1 million for the years ended December 31, 2013, 2012, and 2011, respectively. The total accrued liability related to mortgage repurchase claims was $4.1 million and $5.2 million, at December 31, 2013 and 2012, respectively.

Mortgage Loan Foreclosure Practices

At December 31, 2013 and December 31, 2012, Synovus had $3.11 billion and $2.95 billion, respectively of home equity and consumer mortgage loans which are secured by first and second liens on residential properties. Of this amount, approximately $992 million and $922 million, respectively, consists of mortgages relating to properties in Florida and South Carolina which are states in which foreclosures proceed through the courts. To date, foreclosure activity in the home equity and consumer mortgage loan portfolio has been low. Any foreclosures on these loans are handled by designated Synovus personnel and external legal counsel, as appropriate, following established policies regarding legal and regulatory requirements. Based on information currently available, management believes that it does not have significant exposure to faulty foreclosure practices.