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Income Taxes
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Income Taxes
Note 16 - Income Taxes
The components of income tax expense (benefit) included on the consolidated statements of income for the years ended December 31, 2022, 2021, and 2020 are presented below:
(in thousands)202220212020
Current
Federal$167,255 $153,911 $187,741 
State28,152 29,982 9,421 
Total current income tax expense195,407 183,893 197,162 
Deferred
Federal11,570 28,873 (90,777)
State(702)16,127 4,585 
Total deferred income tax expense (benefit) 10,868 45,000 (86,192)
Total income tax expense$206,275 $228,893 $110,970 
Income tax expense as shown on the consolidated statements of income differed from the federal statutory rate for the years ended December 31, 2022, 2021, and 2020. A reconciliation of the differences is presented below:
Years Ended December 31,
(dollars in thousands)202220212020
Income tax expense at statutory federal income tax rate$202,477 $207,765 $101,779 
Increase (decrease) resulting from:
State income tax expense, net of federal income tax benefit21,981 38,452 11,168 
Income not subject to tax(9,346)(10,455)(9,207)
Low income housing tax credits and other tax benefits, net of amortization(6,336)(4,858)(2,611)
FDIC premiums
5,517 4,111 4,744 
General business tax credits
(3,293)(3,727)(657)
Excess tax benefit from share-based compensation(3,153)(3,084)311 
    Executive compensation2,152 1,096 1,501 
    Goodwill impairment— — 9,424 
Other, net(3,724)(407)(5,482)
Total income tax expense$206,275 $228,893 $110,970 
Effective tax rate21.4 %23.1 %22.9 %
The components of the Company's deferred tax assets and liabilities at December 31, 2022 and 2021 are presented below:
(in thousands)20222021
Deferred tax assets
Net unrealized losses on investment securities available for sale and cash flow hedges$455,744 $19,261 
Allowance for credit losses121,941 112,180 
Lease liability107,818 102,412 
Employee benefits and deferred compensation42,746 36,701 
Net operating loss carryforwards23,590 23,897 
Tax credit carryforwards14,553 15,870 
Unrealized losses on fair value hedges11,101 — 
Miscellaneous accrued expenses5,125 3,870 
Fair value of investment securities and loans2,019 6,439 
Non-performing loan interest2,695 2,621 
Deferred revenue— 14,616 
Other6,585 6,182 
Total gross deferred tax assets793,917 344,049 
Less valuation allowance(19,114)(19,003)
Total deferred tax assets774,803 325,046 
Deferred tax liabilities
Right-of-use asset(102,945)(98,773)
Excess tax over financial statement depreciation(23,762)(27,355)
Purchase accounting intangibles(15,224)(14,820)
Deferred loan fees(15,901)— 
Unrealized gain on hedged liabilities(11,101)— 
Prepaid expense(4,947)(4,631)
Other properties held for sale(2,828)(5,345)
Other(2,778)(5,071)
Total gross deferred tax liabilities(179,486)(155,995)
Net deferred tax assets$595,317 $169,051 
Synovus believes the realization of net deferred tax assets (after valuation allowance) at December 31, 2022 is more likely than not based on its history of cumulative profitability as well as expectations of future taxable income, including reversals of taxable temporary differences, in the jurisdictions in which it operates.
Synovus expects that a portion of its $23.6 million of federal and state NOLs, which have carryforward periods ending in tax years 2027 through 2042, will not be realized before their carryforward period lapses and the Company has accordingly established a valuation allowance in the amount of $19.1 million at December 31, 2022. State tax credit deferred tax assets at December 31, 2022 total $14.6 million and have expiration dates through the tax year 2032.
Federal and state NOLs and tax credit carryforwards as of December 31, 2022 are summarized in the following table on a tax effected basis.
Tax CarryforwardsAs of December 31, 2022
(in thousands)Expiration DatesDeferred
Tax Asset, Before Valuation Allowance		Valuation AllowanceNet Deferred Tax Asset Balance
Net operating losses - federal2027-2033$18,969 $(15,544)$3,425 
Net operating losses - states(1)
2027-20424,621 (3,570)1,051 
Other credits - states2023-203214,553 — 14,553 
(1) Included in this balance are state NOLs that can be carried forward indefinitely and have no expiration date.
Synovus is subject to income taxation in the United States and various state and local taxing jurisdictions. Generally, Synovus is no longer subject to income tax examinations by the IRS for years before 2019 and by state and local income tax authorities for years before 2015. Although Synovus is unable to determine the ultimate outcome of current and future examinations, Synovus believes that the resolution of these examinations will not have a material effect on the consolidated financial statements.
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)202220212020
Balance at January 1,
$25,104 $20,250 $20,994 
Additions based on income tax positions related to current year
649 3,754 461 
Additions for income tax positions of prior years(1)
247 1,379 147 
Reductions for income tax positions of prior years
(1,215)(200)(327)
Statute of limitation expirations
(2,002)(79)(820)
Settlements
(383)— (205)
Balance at December 31,
$22,400 $25,104 $20,250 
(1)    Includes deferred tax benefits that could reduce future tax liabilities.
Accrued interest and penalties related to unrecognized income tax benefits are recognized as a component of income tax expense, and totaled $3.2 million, $3.3 million, and $2.7 million as of December 31, 2022, 2021 and 2020, respectively. Unrecognized income tax benefits as of December 31, 2022, 2021 and 2020 that, if recognized, would affect the effective income tax rate totaled $20.9 million, $23.5 million and $19.1 million (net of the federal benefit on state income tax issues), respectively. It is reasonably possible that significant changes in the balance of unrecognized tax benefits may occur within the next 12 months. At this time, Synovus expects that $1.4 million of uncertain income tax positions will be either settled or resolved during the next twelve months.