XML 75 R21.htm IDEA: XBRL DOCUMENT v2.4.0.8
Income Taxes
3 Months Ended
Mar. 31, 2014
Income Tax Disclosure [Abstract]  
Income Taxes
Note 13 - Income Taxes
The valuation allowance for deferred tax assets was $14.8 million and $14.6 million at March 31, 2014 and December 31, 2013, respectively.  The $200 thousand increase in the valuation allowance from December 31, 2013 to March 31, 2014 is related to certain state income tax credits earned that are available to reduce future tax liability through the tax year 2019 and are expected to expire before they can be utilized.  Management assesses the need for a valuation allowance for deferred tax assets at each reporting period. The determination of whether a valuation allowance for deferred tax assets is appropriate is subject to considerable judgment and requires an evaluation of all the positive and negative evidence.  Based on the assessment of all of the positive and negative evidence at March 31 2014, management has concluded that it is more likely than not that $712.1 million of the net deferred tax asset will be realized based upon future taxable income.
Synovus expects to realize substantially all of the $712.1 million in net deferred tax assets well in advance of the statutory carryforward period. At March 31, 2014, $194.5 million of existing deferred tax assets are not related to net operating losses or credits and therefore, have no expiration dates. Approximately $422.7 million of the remaining deferred tax assets relate to federal net operating losses which expire in years beginning in 2028 through 2032. Additionally, $62.1 million of the deferred tax assets relate to state NOLs which will expire in installments annually through the tax year 2034. Tax credit carryforwards at March 31, 2014 include federal alternative minimum tax credits totaling $22.9 million, which have an unlimited carryforward period. Other federal and state tax credits at March 31, 2014 total $24.7 million and have expiration dates through the tax year 2034.
The valuation allowance could fluctuate in future periods based on management's assessment of the positive and negative evidence. Management's conclusion at March 31, 2014 that it is more likely than not that the net deferred tax assets of $712.1 million will be realized is based upon management's estimate of future taxable income. Management's estimate of future taxable income is based on internal projections which consider historical performance, various internal estimates and assumptions, as well as certain external data, all of which management believes to be reasonable although inherently subject to significant judgment. If actual results differ significantly from the current estimates of future taxable income, the valuation allowance may need to be increased. Such an increase to the deferred tax asset valuation allowance could have a material adverse effect on Synovus' financial condition or results of operations.
Synovus is subject to income taxation in the United States and various state jurisdictions.  Synovus' federal income tax return is filed on a consolidated basis, while state income tax returns are filed on both a consolidated and separate entity basis. Currently, no years for which Synovus filed a Federal income tax return are under examination by the IRS. A state tax examination by the Tennessee Department of Revenue is currently in progress. Synovus is no longer subject to income tax examinations by the IRS for years before 2009, and excluding certain limited exceptions, Synovus is no longer subject to income tax examinations by state and local income tax authorities for years before 2008. Although Synovus is unable to determine the ultimate outcome of current and future examinations, Synovus believes that the liability recorded for uncertain tax positions is adequate.