Note 3 - Investment Securities Available for Sale

The amortized cost, gross unrealized gains and losses, and estimated fair values of investment securities available for sale at December 31, 2018 and 2017 are summarized below.



	December 31, 2018
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Treasury securities	$	123,436	$	—	$	(1,359	)	$	122,077
U.S. Government agency securities	38,021		361		—			38,382
Mortgage-backed securities issued by U.S. Government agencies	100,060		172		(3,027		)	97,205
Mortgage-backed securities issued by U.S. Government sponsored enterprises	2,460,498		1,981		(63,829		)	2,398,650
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises	1,215,406		2,997		(29,885		)	1,188,518
Commercial mortgage-backed securities issued by U.S. Government sponsored enterprises	131,492		613		(2,240		)	129,865
Corporate debt and other debt securities	17,000		150		(215		)	16,935
Total investment securities available for sale	$	4,085,913	$	6,274	$	(100,555	)	$	3,991,632

	December 31, 2017
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Treasury securities	$	83,608	$	—	$	(934	)	$	82,674
U.S. Government agency securities	10,771		91		—			10,862
Mortgage-backed securities issued by U.S. Government agencies	121,283		519		(1,362		)	120,440
Mortgage-backed securities issued by U.S. Government sponsored enterprises	2,621,694		5,037		(31,105		)	2,595,626
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises	1,135,259		144		(23,404		)	1,111,999
Commercial mortgage-backed securities issued by U.S. Government sponsored enterprises	45,124		22		(249		)	44,897
State and municipal securities	180		—		—			180
Corporate debt and other securities	20,320		294		(223		)	20,391
Total investment securities available for sale	$	4,038,239	$	6,107	$	(57,277	)	$	3,987,069

At December 31, 2018 and 2017, investment securities with a carrying value of $1.56 billion and $2.00 billion, respectively, were pledged to secure certain deposits and securities sold under repurchase agreements as required by law and contractual agreements.

Synovus has reviewed investment securities that are in an unrealized loss position as of December 31, 2018 and 2017 for OTTI and does not consider any securities in an unrealized loss position to be other-than-temporarily impaired. If Synovus intended to sell a security in an unrealized loss position, the entire unrealized loss would be reflected in earnings. Synovus does not intend to sell investment securities in an unrealized loss position prior to the recovery of the unrealized loss, which may not be until maturity, and has the ability and intent to hold those securities for that period of time. Additionally, Synovus is not currently aware of any circumstances which will require it to sell any of the securities that are in an unrealized loss position prior to the respective securities' recovery of all such unrealized losses.

For investment securities that Synovus does not expect to sell, or it is not more likely than not it will be required to sell prior to recovery of its amortized cost basis, the credit component of an OTTI would be recognized in earnings and the non-credit component would be recognized in OCI. Currently, unrealized losses on debt securities are attributable to increases in interest rates on comparable securities from the date of purchase. Synovus regularly evaluates its investment securities portfolio to ensure that there are no conditions that would indicate that unrealized losses represent OTTI. These factors include the length of time the security has been in a loss position, the extent that the fair value is below amortized cost, and the credit standing of the issuer. As of December 31, 2018, Synovus had 9 investment securities in a loss position for less than twelve months and 123 investment securities in a loss position for twelve months or longer.

Gross unrealized losses on investment securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at December 31, 2018 and December 31, 2017 are presented below.



	December 31, 2018
	Less than 12 Months					12 Months or Longer					Total
(in thousands)	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
U.S. Treasury securities	$	39,031	$	(118	)	$	63,570	$	(1,241	)	$	102,601	$	(1,359	)
Mortgage-backed securities issued by U.S. Government agencies	2,059		(2		)	79,736		(3,025		)	81,795		(3,027		)
Mortgage-backed securities issued by U.S. Government sponsored enterprises	130,432		(700		)	2,105,358		(63,129		)	2,235,790		(63,829		)
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises	—		—			964,732		(29,885		)	964,732		(29,885		)
Commercial mortgage-backed securities issued by U.S. Government sponsored enterprises	58,998		(1,298		)	44,220		(942		)	103,218		(2,240		)
Corporate debt and other debt securities	—		—			1,785		(215		)	1,785		(215		)
Total	$	230,520	$	(2,118	)	$	3,259,401	$	(98,437	)	$	3,489,921	$	(100,555	)

	December 31, 2017
	Less than 12 Months					12 Months or Longer					Total
(in thousands)	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
U.S Treasury securities	$	34,243	$	(443	)	$	29,562	$	(491	)	$	63,805	$	(934	)
Mortgage-backed securities issued by U.S. Government agencies	36,810		(357		)	55,740		(1,005		)	92,550		(1,362		)
Mortgage-backed securities issued by U.S. Government sponsored enterprises	1,238,464		(10,014		)	929,223		(21,091		)	2,167,687		(31,105		)
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises	653,781		(9,497		)	426,237		(13,907		)	1,080,018		(23,404		)
Commercial mortgage-backed securities issued by U.S. Government sponsored enterprises	32,548		(249		)	—		—			32,548		(249		)
Corporate debt and other securities	—		—			5,097		(223		)	5,097		(223		)
Total	$	1,995,846	$	(20,560	)	$	1,445,859	$	(36,717	)	$	3,441,705	$	(57,277	)

The amortized cost and fair value by contractual maturity of investment securities available for sale at December 31, 2018 are shown below. The expected life of mortgage-backed securities or CMOs may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. For purposes of the maturity table, mortgage-backed securities and CMOs, which are not due at a single maturity date, have been classified based on the final contractual maturity date.



	Distribution of Maturities at December 31, 2018
(in thousands)	Within One Year		1 to 5 Years		5 to 10 Years		More Than 10 Years		Total
Amortized Cost
U.S. Treasury securities	$	19,476	$	103,960	$	—	$	—	$	123,436
U.S. Government agency securities	1,917		6,118		29,986		—		38,021
Mortgage-backed securities issued by U.S. Government agencies	—		—		24,076		75,984		100,060
Mortgage-backed securities issued by U.S. Government sponsored enterprises	—		52,656		414,265		1,993,577		2,460,498
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises	—		—		26,950		1,188,456		1,215,406
Commercial mortgage-backed securities issued by U.S. Government sponsored enterprises	—		—		131,492		—		131,492
Corporate debt and other debt securities	—		—		15,000		2,000		17,000
Total amortized cost	$	21,393	$	162,734	$	641,769	$	3,260,017	$	4,085,913

Fair Value
U.S. Treasury securities	$	19,476	$	102,601	$	—	$	—	$	122,077
U.S. Government agency securities	1,922		6,161		30,299		—		38,382
Mortgage-backed securities issued by U.S. Government agencies	—		—		23,698		73,507		97,205
Mortgage-backed securities issued by U.S. Government sponsored enterprises	—		52,316		404,554		1,941,780		2,398,650
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises	—		—		26,291		1,162,227		1,188,518
Commercial mortgage-backed securities issued by U.S. Government sponsored enterprises	—		—		129,865		—		129,865
Corporate debt and other securities	—		—		15,150		1,785		16,935
Total fair value	$	21,398	$	161,078	$	629,857	$	3,179,299	$	3,991,632

Proceeds from sales, gross gains, and gross losses on sales of securities available for sale for the years ended December 31, 2018, 2017, and 2016 are presented below. The specific identification method is used to reclassify gains and losses out of other comprehensive income at the time of sale.



(in thousands)	2018			2017			2016
Proceeds from sales of investment securities available for sale	$	35,066		$	812,293		$	968,606
Gross realized gains on sales	$	—		$	7,942		$	9,586
Gross realized losses on sales	(1,296		)	(8,231		)	(3,575		)
Investment securities (losses) gains, net	$	(1,296	)	$	(289	)	$	6,011