Note 4 - 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, 2017 and 2016 are summarized below.



	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	2,666,818		5,059		(31,354		)	2,640,523
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises	1,135,259		144		(23,404		)	1,111,999
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

	December 31, 2016
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Treasury securities	$	108,221	$	225	$	(644	)	$	107,802
U.S. Government agency securities	12,727		266		—			12,993
Mortgage-backed securities issued by U.S. Government agencies	174,440		1,116		(1,354		)	174,202
Mortgage-backed securities issued by U.S. Government sponsored enterprises	2,543,495		5,416		(42,571		)	2,506,340
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises	905,789		1,214		(16,561		)	890,442
State and municipal securities	2,780		14		—			2,794
Equity securities	919		2,863		—			3,782
Corporate debt and other securities	20,247		—		(407		)	19,840
Total investment securities available for sale	$	3,768,618	$	11,114	$	(61,537	)	$	3,718,195

At December 31, 2017 and 2016, investment securities with a carrying value of $2.00 billion and $2.04 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, 2017 and 2016 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.

Declines in the fair value of available for sale securities below their cost that are deemed to have OTTI are reflected in earnings as realized losses to the extent the impairment is related to credit losses. The amount of the impairment related to other factors is recognized in other comprehensive income. 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, 2017, Synovus had 60 investment securities in a loss position for less than twelve months and 54 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, 2017 and December 31, 2016 are presented below.



	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	1,271,012		10,263		929,223		21,091		2,200,235		31,354
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
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

	December 31, 2016
	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	$	64,023	$	644	$	—	$	—	$	64,023	$	644
Mortgage-backed securities issued by U.S. Government agencies	128,121		1,240		3,626		114		131,747		1,354
Mortgage-backed securities issued by U.S. Government sponsored enterprises	2,123,181		42,571		—		—		2,123,181		42,571
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises	682,492		15,653		24,801		908		707,293		16,561
Corporate debt and other securities	14,952		48		4,888		359		19,840		407
Total	$	3,012,769	$	60,156	$	33,315	$	1,381	$	3,046,084	$	61,537

The amortized cost and fair value by contractual maturity of investment securities available for sale at December 31, 2017 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, 2017
(in thousands)	Within One Year		1 to 5 Years		5 to 10 Years		More Than 10 Years		No Stated Maturity		Total
Amortized Cost
U.S. Treasury securities	$	18,870	$	64,738	$	—	$	—	$	—	$	83,608
U.S. Government agency securities	2,331		6,437		2,003		—		—		10,771
Mortgage-backed securities issued by U.S. Government agencies	—		—		31,259		90,024		—		121,283
Mortgage-backed securities issued by U.S. Government sponsored enterprises	18		1,838		434,603		2,230,359		—		2,666,818
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises	—		—		19,769		1,115,490		—		1,135,259
State and municipal securities	180		—		—		—		—		180
Corporate debt and other securities	—		—		15,000		2,000		3,320		20,320
Total amortized cost	$	21,399	$	73,013	$	502,634	$	3,437,873	$	3,320	$	4,038,239
Fair Value
U.S. Treasury securities	$	18,870	$	63,804	$	—	$	—	$	—	$	82,674
U.S. Government agency securities	2,360		6,459		2,043		—		—		10,862
Mortgage-backed securities issued by U.S. Government agencies	—		—		31,193		89,247		—		120,440
Mortgage-backed securities issued by U.S. Government sponsored enterprises	18		1,928		430,140		2,208,437		—		2,640,523
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises	—		—		19,366		1,092,633		—		1,111,999
State and municipal securities	180		—		—		—		—		180
Corporate debt and other securities	—		—		15,294		1,935		3,162		20,391
Total fair value	$	21,428	$	72,191	$	498,036	$	3,392,252	$	3,162	$	3,987,069

Proceeds from sales, gross gains, and gross losses on sales of securities available for sale for the years ended December 31, 2017, 2016 and 2015 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)	2017			2016			2015
Proceeds from sales of investment securities available for sale	$	812,293		$	968,606		$	347,954
Gross realized gains on sales ⁽¹⁾	$	7,942		$	9,586		$	4,356
Gross realized losses on sales	(8,231		)	(3,575		)	(1,587		)
Investment securities (losses) gains, net	$	(289	)	$	6,011		$	2,769

⁽¹⁾ Includes $1.4 million in gains in 2016 from the transfer of $1.9 million of investment securities available for sale to trading account assets.