Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense (Benefit)

The components of income tax expense (benefit) included in the consolidated statements of income for the years ended December 31, 2017, 2016, and 2015 are presented below:

(in thousands)	2017			2016		2015
Current
Federal	$	(32,341	)	$	7,329	$	6,163
State	5,949			5,501		4,424
Total current income tax expense (benefit)	(26,392		)	12,830		10,587
Deferred
Federal	229,917			117,463		108,877
State	1,139			11,374		13,027
Total deferred income tax expense	231,056			128,837		121,904
Total income tax expense	$	204,664		$	141,667	$	132,491

Note: The table above does not reflect a net charge of $790 thousand and a credit of $1.7 million for the years ended December 31, 2016 and 2015, respectively, relating to share-based compensation transactions that were charged or credited directly to shareholders' equity.

Schedule of Effective Income Tax Rate Reconciliation

A reconciliation of the differences for the years ended December 31, 2017, 2016 and 2015 is presented below:

	Years Ended December 31,
(dollars in thousands)	2017			2016			2015
Income tax expense at statutory federal income tax rate	$	168,048		$	135,957		$	125,501
Increase (decrease) resulting from:
State income tax expense, net of federal income tax benefit	11,961			13,256			12,870
Provisional tax adjustment related to reduction in U.S. federal statutory income tax rate (1)(2)	46,573			—			—
LIHTC amortization, net of tax benefits	268			—			—
Tax-exempt income	(719		)	(825		)	(835		)
Tax benefit from share-based compensation	(4,318		)	—			—
Bank-owned life insurance	(4,702		)	(3,402		)	(2,885		)
Change in valuation allowance (3)	(6,227		)	(2,055		)	(589		)
General business tax credits(4)	(6,546		)	(1,213		)	(1,173		)
Other, net	326			(51		)	(398		)
Total income tax expense	$	204,664		$	141,667		$	132,491
Effective tax rate	42.6		%	36.5		%	36.9		%

⁽¹⁾ Does not include a provisional tax expense adjustment of $608 thousand which is included as a component of the change in the valuation allowance. The income tax effect of the provisional federal income tax expense of $47.2 million relating to Federal Tax Reform represents 9.8% of income before taxes.

⁽²⁾ Includes $7.8 million expense from remeasurement of deferred tax assets relating to unrealized losses on available for sale securities which were initially recorded through accumulated other comprehensive income (AOCI).   As further described in Note 1, ASU 2018-02, issued in February 2018, provides for the reclassification of the tax effects stranded in AOCI resulting from Federal Tax Reform to retained earnings.   As a result, Synovus will elect to apply the ASU 2018-02 guidance during the reporting period ending on March 31, 2018 and reclassify $7.8 million from AOCI to retained earnings.

⁽³⁾Includes a provisional federal income tax expense of $608 thousand related to Federal Tax Reform.

⁽⁴⁾ 2017 includes research and development tax credits for the tax years 2013-2017 totaling $4.6 million.

Schedule of Deferred Tax Assets and Liabilities

Significant portions of the deferred tax assets and liabilities at December 31, 2017 and 2016 are presented below:

(in thousands)	2017			2016
Deferred tax assets
Allowance for loan losses	$	66,034		$	100,419
Net operating loss carryforwards	41,059			167,072
Tax credit carryforwards	19,175			67,031
Employee benefits and deferred compensation	18,333			26,183
Net unrealized losses on investment securities available for sale	13,253			19,413
Deferred revenue	12,311			18,639
Non-performing loan interest	10,388			19,137
Other	8,892			14,600
Total gross deferred tax assets	189,445			432,494
Less valuation allowance	(3,431		)	(9,658		)
Total deferred tax assets	186,014			422,836
Deferred tax liabilities
Other properties held for sale	(5,447		)	(8,179		)
Excess tax over financial statement depreciation	(6,628		)	(5,343		)
Other	(8,151		)	(13,958		)
Total gross deferred tax liabilities	(20,226		)	(27,480		)
Net deferred tax asset	$	165,788		$	395,356

Schedule of Net Operating Loss and Tax Credit Carryforward

State NOL and tax credit carryforwards as of December 31, 2017 are summarized in the following table.

Tax Carryforwards	As of December 31, 2017
(in thousands)	Expiration Dates	Deferred Tax Asset Balance (2)		Valuation Allowance			Net Deferred Tax Asset Balance		Pre-Tax Earnings Necessary to Realize(1)
Net operating losses - states	2023-2027	$	1,688	$	—		$	1,688	$	1,018,310
Net operating losses - states	2028-2032	48,430		—			48,430		1,093,946
Net operating losses - states	2033-2035	360		—			360		7,584
Other credits - states	2018-2022	18,381		(3,431		)	14,950		N/A
Other credits - states	2023-2027	207		—			207		N/A
Other credits - states	None	587		—			587		N/A

⁽¹⁾ N/A indicates credits are not measured on a pre-tax earnings basis.

⁽²⁾ Effective December 31, 2017, alternative minimum tax credits of $42.1 million were reclassified from deferred tax assets to current taxes receivable reflecting their refundability pursuant to Federal Tax Reform.

Reconciliation of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized income tax benefits is as follows (unrecognized state income tax benefits are not adjusted for the federal income tax impact).

	Years Ended December 31,
(in thousands)	2017			2016			2015
Balance at January 1,	$	14,745		$	12,745		$	13,023
Additions based on income tax positions related to current year	152			—			—
Additions for income tax positions of prior years *	934			1,811			8
Additions from acquisition	—			608			—
Reductions for income tax positions of prior years	(706		)	—			—
Statute of limitation expirations	(8		)	(419		)	(286		)
Settlements	—			—			—
Balance at December 31,	$	15,117		$	14,745		$	12,745

*Includes deferred tax benefits that could reduce future tax liabilities.