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Fair Value Accounting | 9 Months Ended
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Sep. 30, 2022
Fair Value Disclosures [Abstract] |
Fair Value Accounting | Note 6 - Fair Value Accounting See "Part II - Item 8. Financial Statements and Supplementary Data - Note 1 - Summary of Significant Accounting Policies" of Synovus' 2021 Form 10-K for a description of valuation methodologies for assets and liabilities measured at fair value on a recurring and non-recurring basis. The following table presents assets and liabilities measured at estimated fair value on a recurring basis.
| September 30, 2022 |  |  | December 31, 2021
(in thousands) | Level 1 |  | Level 2 |  | Level 3 |  | Total Estimated Fair Value |  |  | Level 1 |  | Level 2 |  | Level 3 |  | Total Estimated Fair Value
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trading securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage-backed securities issued by U.S. Government agencies | $ | — |  |  | $ | 22 |  |  | $ | — |  |  | $ | 22 |  |  |  | $ | — |  |  | $ | 197 |  |  | $ | — |  |  | $ | 197 |
Collateralized mortgage obligations issued by U.S. Government sponsored enterprises | — |  |  | 4,187 |  |  | — |  |  | 4,187 |  |  |  | — |  |  | 671 |  |  | — |  |  | 671 |
U.S. Government agency securities |  |  | 13,712 |  |  | — |  |  | 13,712 |  |  |  | — |  |  | — |  |  | — |  |  | — |
Other mortgage-backed securities | — |  |  | 3,350 |  |  | — |  |  | 3,350 |  |  |  | — |  |  | — |  |  | — |  |  | — |
State and municipal securities | — |  |  | 297 |  |  | — |  |  | 297 |  |  |  | — |  |  | 560 |  |  | — |  |  | 560 |
Asset-backed securities | — |  |  | 3,791 |  |  | — |  |  | 3,791 |  |  |  | — |  |  | 6,963 |  |  | — |  |  | 6,963 |
Other investments | — |  |  | 122 |  |  | — |  |  | 122 |  |  |  | — |  |  | — |  |  | — |  |  | — |
Total trading securities | $ | — |  |  | $ | 25,481 |  |  | $ | — |  |  | $ | 25,481 |  |  |  | $ | — |  |  | $ | 8,391 |  |  | $ | — |  |  | $ | 8,391 |
Investment securities available for sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury securities | $ | 467,756 |  |  | $ | — |  |  | $ | — |  |  | $ | 467,756 |  |  |  | $ | 117,838 |  |  | $ | — |  |  | $ | — |  |  | $ | 117,838 |
U.S. Government agency securities | — |  |  | 48,570 |  |  | — |  |  | 48,570 |  |  |  | — |  |  | 54,201 |  |  | — |  |  | 54,201 |
Mortgage-backed securities issued by U.S. Government agencies | — |  |  | 722,612 |  |  | — |  |  | 722,612 |  |  |  | — |  |  | 779,633 |  |  | — |  |  | 779,633 |
Mortgage-backed securities issued by U.S. Government sponsored enterprises | — |  |  | 6,832,939 |  |  | — |  |  | 6,832,939 |  |  |  | — |  |  | 8,012,301 |  |  | — |  |  | 8,012,301 |
Collateralized mortgage obligations issued by U.S. Government agencies or sponsored enterprises | — |  |  | 684,508 |  |  | — |  |  | 684,508 |  |  |  | — |  |  | 939,623 |  |  | — |  |  | 939,623 |
Commercial mortgage-backed securities issued by U.S. Government agencies or sponsored enterprises | — |  |  | 812,995 |  |  | — |  |  | 812,995 |  |  |  | — |  |  | 481,744 |  |  | — |  |  | 481,744 |
Asset-backed securities | — |  |  | — |  |  | — |  |  | — |  |  |  | — |  |  | 514,188 |  |  | — |  |  | 514,188 |
Corporate debt securities and other debt securities | — |  |  | 18,128 |  |  | — |  |  | 18,128 |  |  |  | — |  |  | 18,801 |  |  | — |  |  | 18,801 |
Total investment securities available for sale | $ | 467,756 |  |  | $ | 9,119,752 |  |  | $ | — |  |  | $ | 9,587,508 |  |  |  | $ | 117,838 |  |  | $ | 10,800,491 |  |  | $ | — |  |  | $ | 10,918,329 |
Mortgage loans held for sale | $ | — |  |  | $ | 56,517 |  |  | $ | — |  |  | $ | 56,517 |  |  |  | $ | — |  |  | $ | 108,198 |  |  | $ | — |  |  | $ | 108,198 |
Other investments | — |  |  | — |  |  | 11,212 |  |  | 11,212 |  |  |  | — |  |  | — |  |  | 12,185 |  |  | 12,185 |
Mutual funds and mutual funds held in rabbi trusts | 40,151 |  |  | — |  |  | — |  |  | 40,151 |  |  |  | 43,657 |  |  | — |  |  | — |  |  | 43,657 |
GGL/SBA loans servicing asset | — |  |  | — |  |  | 2,798 |  |  | 2,798 |  |  |  | — |  |  | — |  |  | 3,233 |  |  | 3,233 |
Derivative assets | — |  |  | 82,087 |  |  | — |  |  | 82,087 |  |  |  | — |  |  | 191,708 |  |  | — |  |  | 191,708 |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trading liability for short positions | $ | 16,236 |  |  | $ | 296 |  |  | $ | — |  |  | $ | 16,532 |  |  |  | $ | — |  |  | $ | 200 |  |  | $ | — |  |  | $ | 200 |
Mutual funds held in rabbi trusts | 25,486 |  |  | — |  |  | — |  |  | 25,486 |  |  |  | 27,205 |  |  | — |  |  | — |  |  | 27,205 |
Derivative liabilities | — |  |  | 338,970 |  |  | 1,184 |  |  | 340,154 |  |  |  | — |  |  | 95,067 |  |  | 3,535 |  |  | 98,602 |
Fair Value Option Synovus has elected the fair value option for mortgage loans held for sale primarily to ease the operational burden required to maintain hedge accounting for these loans. Synovus is still able to achieve effective economic hedges on mortgage loans held for sale without the time and expense needed to manage a hedge accounting program. The following table summarizes the difference between the fair value and the UPB of mortgage loans held for sale and the changes in fair value of these loans. An immaterial portion of these changes in fair value was attributable to changes in instrument-specific credit risk.
Mortgage Loans Held for Sale |
(in thousands) | As of September 30, 2022 |  | As of December 31, 2021
Fair value | $ | 56,517 |  |  | $ | 108,198 |
Unpaid principal balance | 57,038 |  |  | 105,785 |
Fair value less aggregate unpaid principal balance | $ | (521) |  |  | $ | 2,413 |
Changes in Fair Value Included in Net Income | Three Months Ended September 30, |  | Nine Months Ended September 30, |  | Location in Consolidated Statements of Income
(in thousands) | 2022 |  | 2021 |  | 2022 |  | 2021 |
Mortgage loans held for sale | $ | (1,389) |  |  | $ | (1,761) |  |  | $ | (2,934) |  |  | $ | (2,299) |  |  | Mortgage banking income
Activity for Level 3 Assets and Liabilities Se e "Part II - Item 8. Financial Statements and Supplementary Data - Note 12 - Fair Value Accounting" of Synovus' 2021 Form 10-K for a description of the valuation techniques and significant inputs for Level 3 assets and liabilities that are measured at fair value on a recurring and non-recurring basis. During the three and nine months ended September 30, 2022 and 2021, Synovus did not have any transfers in or out of Level 3 in the fair value hierarchy. The following tables provide rollforwards of Level 3 assets and liabilities measured at fair value on a recurring basis.
|  |  |  | Three Months Ended September 30, 2022
(in thousands) |  |  |  | Other Investments |  | GGL / SBA Loans Servicing Asset |  | Visa Derivative
Beginning balance |  |  |  | $ | 11,083 |  |  | $ | 3,155 |  |  | $ | (4,993) |
Total gains (losses) realized/unrealized: |  |  |  |  |  |  |  |
Included in earnings |  |  |  | 129 |  |  | (444) |  |  | — |
Additions |  |  |  | — |  |  | — |  |  | — |
Settlements |  |  |  | — |  |  | 87 |  |  | 3,809 |
Ending balance |  |  |  | $ | 11,212 |  |  | $ | 2,798 |  |  | $ | (1,184) |
Total net gains (losses) for the period included in earnings attributable to the change in unrealized gains/(losses) relating to assets/liabilities still held at September 30, 2022 |  |  |  | $ | 129 |  |  | $ | — |  |  | $ | — |
|  | Three Months Ended September 30, 2021
(in thousands) |  | Other Investments |  | GGL / SBA Loans Servicing Asset |  | Earnout Liability |  | Visa Derivative
Beginning balance |  | $ | 1,026 |  |  | $ | 3,321 |  |  | $ | (6,427) |  |  | $ | (1,473) |
Total gains (losses) realized/unrealized: |  |  |  |  |  |  |  |
Included in earnings |  | (35) |  |  | (467) |  |  | 243 |  |  | — |
Additions |  | 10,000 |  |  | 534 |  |  | — |  |  | — |
Settlements |  | — |  |  | — |  |  | 6,184 |  |  | 302 |
Ending balance |  | $ | 10,991 |  |  | $ | 3,388 |  |  | $ | — |  |  | $ | (1,171) |
Total net gains (losses) for the period included in earnings attributable to the change in unrealized gains/(losses) relating to assets/liabilities still held at September 30, 2021 |  | $ | (35) |  |  | $ | — |  |  | $ | — |  |  | $ | — |
|  |  |  |  | Nine Months Ended September 30, 2022
(in thousands) |  |  |  |  | Other Investments |  | GGL / SBA Loans Servicing Asset |  | Visa Derivative
Beginning balance |  |  |  |  | $ | 12,185 |  |  | $ | 3,233 |  |  | $ | (3,535) |
Total gains (losses) realized/unrealized: |  |  |  |  |  |  |  |  |
Included in earnings |  |  |  |  | (7,000) |  |  | (1,216) |  |  | (3,500) |
Additions |  |  |  |  | 6,027 |  |  | — |  |  | — |
Settlements |  |  |  |  | — |  |  | 781 |  |  | 5,851 |
Ending balance |  |  |  |  | $ | 11,212 |  |  | $ | 2,798 |  |  | $ | (1,184) |
Total net gains (losses) for the period included in earnings attributable to the change in unrealized gains/(losses) relating to assets/liabilities still held at September 30, 2022 |  |  |  |  | $ | (7,000) |  |  | $ | — |  |  | $ | (3,500) |
| Nine Months Ended September 30, 2021
(in thousands) | Investment Securities Available for Sale |  | Other Investments |  | GGL / SBA Loans Servicing Asset |  | Earnout Liability |  | Visa Derivative
Beginning balance | $ | 2,021 |  |  | $ | 1,021 |  |  | $ | 3,258 |  |  | $ | (5,677) |  |  | $ | (2,048) |
Total gains (losses) realized/unrealized: |  |  |  |  |  |  |  |  |
Included in earnings | — |  |  | (30) |  |  | (897) |  |  | (507) |  |  | — |
Sales | (2,021) |  |  | — |  |  | — |  |  | — |  |  | — |
Additions | — |  |  | 10,000 |  |  | 1,027 |  |  | — |  |  | — |
Settlements | — |  |  | — |  |  | — |  |  | 6,184 |  |  | 877 |
Ending balance | $ | — |  |  | $ | 10,991 |  |  | $ | 3,388 |  |  | $ | — |  |  | $ | (1,171) |
Total net gains (losses) for the period included in earnings attributable to the change in unrealized gains/(losses) relating to assets/liabilities still held at September 30, 2021 | $ | — |  |  | $ | (30) |  |  | $ | — |  |  | $ | — |  |  | $ | — |
The following table presents assets measured at fair value on a non-recurring basis, as of the dates indicated, for which there was a fair value adjustment.
| September 30, 2022 |  | Fair Value Adjustments for the |  | Location in Consolidated Statements of Income
(in thousands) | Level 1 |  | Level 2 |  | Level 3 |  |  | Three Months Ended September 30, 2022 |  | Nine Months Ended September 30, 2022 |
Loans(1) | $ | — |  |  | $ | — |  |  | $ | 19,835 |  |  |  | $ | 1,871 |  |  | $ | 6,878 |  |  | Provision for credit losses
Other assets held for sale | — |  |  | — |  |  | 1,736 |  |  |  | 722 |  |  | 722 |  |  | Other operating expense
| September 30, 2021 |  | Fair Value Adjustments for the |  | Location in Consolidated Statements of Income
| Level 1 |  | Level 2 |  | Level 3 |  |  | Three Months Ended September 30, 2021 |  | Nine Months Ended September 30, 2021 |
Loans(1) | $ | — |  |  | $ | — |  |  | $ | 11,123 |  |  |  | $ | 13,933 |  |  | $ | 14,823 |  |  | Provision for credit losses
Other assets held for sale | — |  |  | — |  |  | 806 |  |  |  | 301 |  |  | 301 |  |  | Other operating expense
(1) Collateral-dependent loans that were written down to fair value of collateral. ORE properties are included in other assets on the consolidated balance sheets. The carrying value of ORE at September 30, 2022 and December 31, 2021 was $0 and $11.8 million, respectively. Fair Value of Financial Instruments The following tables present the carrying and estimated fair values of financial instruments at September 30, 2022 and December 31, 2021. The fair values represent management’s best estimates based on a range of methodologies and assumptions. See "Part II - Item 8. Financial Statements and Supplementary Data - Note 1 - Summary of Significant Accounting Policies" to the consolidated financial statements of Synovus' 2021 Form 10-K for a description of how fair value measurements are determined.
| September 30, 2022
(in thousands) | Carrying Value |  | Fair Value |  | Level 1 |  | Level 2 |  | Level 3
Financial assets |  |  |  |  |  |  |  |  |
Total cash, cash equivalents, and restricted cash | $ | 1,867,804 |  |  | $ | 1,867,804 |  |  | $ | 1,867,804 |  |  | $ | — |  |  | $ | — |
Trading securities | 25,481 |  |  | 25,481 |  |  | — |  |  | 25,481 |  |  | — |
Investment securities available for sale | 9,587,508 |  |  | 9,587,508 |  |  | 467,756 |  |  | 9,119,752 |  |  | — |
Loans held for sale | 696,450 |  |  | 693,973 |  |  | — |  |  | 56,517 |  |  | 637,456 |
Other investments | 11,212 |  |  | 11,212 |  |  | — |  |  | — |  |  | 11,212 |
Mutual funds and mutual funds held in rabbi trusts | 40,151 |  |  | 40,151 |  |  | 40,151 |  |  | — |  |  | — |
Loans, net | 42,150,099 |  |  | 40,952,610 |  |  | — |  |  | — |  |  | 40,952,610 |
GGL/SBA loans servicing asset | 2,798 |  |  | 2,798 |  |  | — |  |  | — |  |  | 2,798 |
FRB and FHLB stock | 300,979 |  |  | 300,979 |  |  | — |  |  | 300,979 |  |  |
Derivative assets | 82,087 |  |  | 82,087 |  |  | — |  |  | 82,087 |  |  | — |
Financial liabilities |  |  |  |  |  |  |  |  |
Non-interest-bearing deposits | $ | 16,359,551 |  |  | $ | 16,359,551 |  |  | $ | — |  |  | $ | 16,359,551 |  |  | $ | — |
Non-time interest-bearing deposits | 26,457,928 |  |  | 26,457,928 |  |  | — |  |  | 26,457,928 |  |  | — |
Time deposits | 4,880,085 |  |  | 4,832,971 |  |  | — |  |  | 4,832,971 |  |  | — |
Total deposits | $ | 47,697,564 |  |  | $ | 47,650,450 |  |  | $ | — |  |  | $ | 47,650,450 |  |  | $ | — |
Federal funds purchased and securities sold under repurchase agreements | 240,210 |  |  | 240,210 |  |  | 240,210 |  |  | — |  |  | — |
Trading liability for short positions | 16,532 |  |  | 16,532 |  |  | 16,236 |  |  | 296 |  |  | — |
Short-term FHLB advances | 599,700 |  |  | 599,700 |  |  | — |  |  | 599,700 |  |  | — |
Long-term debt | 4,434,327 |  |  | 4,454,897 |  |  | — |  |  | 4,454,897 |  |  | — |
Mutual funds held in rabbi trusts | 25,486 |  |  | 25,486 |  |  | 25,486 |  |  | — |  |  | — |
Derivative liabilities | 340,154 |  |  | 340,154 |  |  | — |  |  | 338,970 |  |  | 1,184 |
| December 31, 2021
(in thousands) | Carrying Value |  | Fair Value |  | Level 1 |  | Level 2 |  | Level 3
Financial assets |  |  |  |  |  |  |  |  |
Total cash, cash equivalents, and restricted cash | $ | 3,009,853 |  |  | $ | 3,009,853 |  |  | $ | 3,009,853 |  |  | $ | — |  |  | $ | — |
Trading securities | 8,391 |  |  | 8,391 |  |  | — |  |  | 8,391 |  |  | — |
Investment securities available for sale | 10,918,329 |  |  | 10,918,329 |  |  | 117,838 |  |  | 10,800,491 |  |  | — |
Loans held for sale | 750,642 |  |  | 749,980 |  |  | — |  |  | 108,198 |  |  | 641,782 |
Other investments | 12,185 |  |  | 12,185 |  |  | — |  |  | — |  |  | 12,185 |
Mutual funds and mutual funds held in rabbi trusts | 43,657 |  |  | 43,657 |  |  | 43,657 |  |  | — |  |  | — |
Loans, net | 38,884,361 |  |  | 39,118,275 |  |  | — |  |  | — |  |  | 39,118,275 |
GGL/SBA loans servicing asset | 3,233 |  |  | 3,233 |  |  | — |  |  | — |  |  | 3,233 |
FRB and FHLB stock | 159,941 |  |  | 159,941 |  |  | — |  |  | 159,941 |  |  | — |
Derivative assets | 191,708 |  |  | 191,708 |  |  | — |  |  | 191,708 |  |  | — |
Financial liabilities |  |  |  |  |  |  |  |  |
Non-interest-bearing deposits | $ | 16,392,653 |  |  | $ | 16,392,653 |  |  | $ | — |  |  | $ | 16,392,653 |  |  | $ | — |
Non-time interest-bearing deposits | 28,917,148 |  |  | 28,917,148 |  |  | — |  |  | 28,917,148 |  |  | — |
Time deposits | 4,117,475 |  |  | 4,125,673 |  |  | — |  |  | 4,125,673 |  |  | — |
Total deposits | $ | 49,427,276 |  |  | $ | 49,435,474 |  |  | $ | — |  |  | $ | 49,435,474 |  |  | $ | — |
Federal funds purchased and securities sold under repurchase agreements | 264,133 |  |  | 264,133 |  |  | 264,133 |  |  | — |  |  | — |
Trading liability for short positions | 200 |  |  | 200 |  |  | — |  |  | 200 |  |  | — |
Long-term debt | 1,204,229 |  |  | 1,243,147 |  |  | — |  |  | 1,243,147 |  |  | — |
Mutual funds held in rabbi trusts | 27,205 |  |  | 27,205 |  |  | 27,205 |  |  | — |  |  | — |
Derivative liabilities | 98,602 |  |  | 98,602 |  |  | — |  |  | 95,067 |  |  | 3,535 |

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI https://asc.fasb.org/extlink&oid=126976982&loc=d3e19207-110258 + Details
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