UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)~~
~~OF THE SECURITIES EXCHANGE ACT OF 1934~~


		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June~~September 30, 2009

Commission File Number 1-10312

SYNOVUS FINANCIAL CORP.

(Exact name of registrant as specified in its charter)


GEORGIA		58-1134883
(State or other jurisdiction of		(I.R.S. Employer Identification No.)
incorporation or organization)		~~58-1134883~~ ~~(I.R.S. Employer Identification No.)~~

1111 Bay Avenue, Suite # 500
P.O. Box 120
Columbus, Georgia 31902
(Address of principal executive offices)

(706) 649-2311
(Registrants’ telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yesþ Noo

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every interactive data file required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yeso Noo

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See ~~definition~~the definitions of ~~“accelerated filer, large~~“large accelerated filer,” “accelerated filer” and ~~smaller~~“smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large ~~Accelerated Filer~~ accelerated filerþ	Accelerated ~~Filer~~ filero	~~Non-Accelerated Filer~~	Non-accelerated filero		Smaller reporting companyo
			(Do not check if a smaller reporting company)	~~Smaller Reporting Company~~ o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yeso Noþ

Indicate the number of shares outstanding of each of the issuer’s class of common stock, as of the latest practicable date.


Class		~~July~~October 31, 2009

Common Stock, $1.00 Par Value		~~330,372,763~~480,386,221 shares

PART I. FINANCIAL INFORMATION

ITEM 1 —– FINANCIAL STATEMENTS

SYNOVUS FINANCIAL CORP.

CONSOLIDATED BALANCE SHEETS
(unaudited)


	June 30,			December 31,			September 30,			December 31,
(In thousands, except share data)	2009			2008			2009			2008
ASSETS
Cash and due from banks	$	442,702			524,327		$	401,778			524,327
Interest bearing funds with Federal Reserve Bank		770,220			1,206,168			2,822,577			1,206,168
Interest earning deposits with banks		7,269			10,805			12,771			10,805
Federal funds sold and securities purchased under resale agreements		170,824			388,197			180,194			388,197
Trading account assets		20,687			24,513			13,403			24,513
Mortgage loans held for sale, at fair value		312,620			133,637			112,115			133,637
Other loans held for sale		34,938			3,527			80,945			3,527
Investment securities available for sale, at fair value		3,560,192			3,770,022			3,298,815			3,770,022

Loans, net of unearned income		27,585,741			27,920,177			26,331,739			27,920,177
Allowance for loan losses		(918,723	)		(598,301	)		(918,468	)		(598,301	)

Loans, net		26,667,018			27,321,876			25,413,271			27,321,876


Premises and equipment, net		596,172			605,019			588,179			605,019
Goodwill		39,280			39,521			39,280			39,521
Other intangible assets, net		18,914			21,266			17,775			21,266
Other assets		1,708,834			1,737,391			1,629,377			1,737,391

Total assets	$	34,349,670			35,786,269		$	34,610,480			35,786,269


LIABILITIES AND EQUITY
Liabilities:
Deposits:
Non-interest bearing deposits	$	3,861,782			3,563,619		$	4,018,045			3,563,619
Interest bearing deposits ($— and $75,875 at fair value as of June 30, 2009 and December 31, 2008)		23,562,032			25,053,560
Interest bearing deposits ($— and $75,875 for certain callable brokered certificate of deposits at fair value as of September 30, 2009 and December 31, 2008)								24,036,146			25,053,560

Total deposits		27,423,814			28,617,179			28,054,191			28,617,179
Federal funds purchased and other short-term borrowings		1,580,259			725,869			1,030,520			725,869
Long-term debt		1,865,491			2,107,173			1,963,136			2,107,173
Other liabilities		424,943			516,541			389,034			516,541

Total liabilities		31,294,507			31,966,762			31,436,881			31,966,762

Equity:
Shareholders’ equity:
Cumulative perpetual preferred stock — no par value. Authorized 100,000,000 shares; outstanding 967,870 at June 30, 2009 and December 31, 2008		923,855			919,635
Common stock — $1.00 par value. Authorized 600,000,000 shares; issued 336,059,457 in 2009 and 336,010,941 in 2008; outstanding 330,376,784 in 2009 and 330,334,111 in 2008		336,059			336,011
Cumulative perpetual preferred stock — no par value. Authorized 100,000,000 shares; outstanding 967,870 at September 30, 2009 and December 31, 2008								926,014			919,635
Common stock — $1.00 par value. Authorized 600,000,000 shares; issued 486,073,291 in 2009 and 336,010,941 in 2008; outstanding 480,387,653 in 2009 and 330,334,111 in 2008								486,073			336,011
Additional paid-in capital		1,170,639			1,165,875			1,591,374			1,165,875
Treasury stock, at cost — 5,682,673 shares in 2009 and 5,676,830 shares in 2008		(114,146	)		(114,117	)
Treasury stock, at cost — 5,685,638 shares in 2009 and 5,676,830 shares in 2008								(114,155	)		(114,117	)
Accumulated other comprehensive income		105,520			129,253			108,032			129,253
Retained earnings		596,434			1,350,501			139,322			1,350,501

Total shareholders’ equity		3,018,361			3,787,158			3,136,660			3,787,158
Noncontrolling interest in subsidiaries		36,802			32,349			36,939			32,349

Total equity		3,055,163			3,819,507			3,173,599			3,819,507

Total liabilities and equity	$	34,349,670			35,786,269		$	34,610,480			35,786,269

SYNOVUS FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF INCOME
(unaudited)


	Six Months Ended						Three Months Ended					Nine Months Ended						Three Months Ended
	June 30,						June 30,					September 30,						September 30,
(In thousands, except per share data)	2009			2008			2009			2008		2009			2008			2009			2008

Interest income:
Loans, including fees	$	672,181			863,959			335,952			408,653	$	1,002,846			1,269,010			330,667			405,142
Investment securities available for sale		89,853			91,042			44,341			45,886		131,904			137,724			42,051			46,682
Trading account assets		611			1,022			277			388		889			1,542			278			521
Mortgage loans held for sale		6,704			3,997			3,322			2,301		9,319			5,877			2,615			1,880
Federal funds sold and securities purchased under resale agreements		239			1,875			41			855		305			93			65			—
Interest on Federal Reserve balances		989			—			509			—		1926			2,834			936			960
Interest earning deposits with banks		308			125			49			57		316			163			8			38

Total interest income		770,885			962,020			384,491			458,140		1,147,505			1,417,243			376,620			455,223

Interest expense:
Deposits		249,009			342,726			116,715			155,546		359,577			505,340			110,568			162,613

Federal funds purchased and other short-term borrowings		1,887			29,480			1,046			11,650		3,013			36,602			1,126			7,123
Long-term debt		20,141			37,744			10,122			17,523		30,436			55,433			10,295			17,689

Total interest expense		271,037			409,950			127,883			184,719		393,026			597,375			121,989			187,425

Net interest income		499,848			552,070			256,608			273,421		754,479			819,868			254,631			267,798
Provision for losses on loans		921,963			184,665			631,526			93,616		1,418,485			336,016			496,522			151,351

Net interest income (expense) after provision for losses on loans		(422,115	)		367,405			(374,918	)		179,805		(664,006	)		483,852			(241,891	)		116,447


Non-interest income:
Service charges on deposit accounts		58,401			54,461			29,702			26,070		88,100			82,594			29,699			28,132
Fiduciary and asset management fees		21,471			25,519			10,657			12,898		32,714			37,612			11,244			12,095
Brokerage and investment banking income		14,393			17,693			7,521			9,206		21,440			25,591			7,047			7,898
Mortgage banking income		23,912			13,847			14,590			5,686		30,949			18,323			7,037			4,476
Bankcard fees		26,436			26,417			13,755			14,198		40,098			39,788			13,663			13,371
Net gains on sales of investment securities available for sale													14,730			—			14,730			—
Other fee income		16,412			21,266			8,722			10,081		24,145			30,039			7,733			8,773
Increase in fair value of private equity investments, net		8,090			4,946			8,090			—
Increase (decrease) in fair value of private equity investments, net													1,237			17,673			(6,853	)		12,728
Proceeds from sale of MasterCard shares		8,351			16,186			8,351			16,186		8,351			16,186			—			—
Proceeds from redemption of Visa shares		—			38,542			—			—		—			38,542			—			—
Other non-interest income		19,122			28,798			6,450			13,373		25,620			40,282			6,497			11,482

Total non-interest income		196,588			247,675			107,838			107,698		287,384			346,630			90,797			98,955


Non-interest expense:
Salaries and other personnel expense		221,294			231,806			109,315			109,676		327,119			346,342			105,825			114,535
Net occupancy and equipment expense		62,374			61,337			30,727			31,126		93,910			93,188			31,537			31,852
FDIC insurance and other regulatory fees		43,060			12,250			30,061			6,172		58,401			18,210			15,341			5,960
Foreclosed real estate expense		218,734			21,558			172,404			13,677		320,171			64,764			101,437			43,205
Losses on other loans held for sale		1,095			9,944			1,160			9,944		1,703			9,944			608			—
Goodwill impairment		—			27,000			—			27,000		—			36,887			—			9,887
Professional fees		17,312			13,394			10,355			8,454		28,436			20,311			11,124			6,916
Visa litigation (recovery) expense		—			(17,430	)		—			—		(4,067	)		(11,082	)		(4,067	)		6,347
Restructuring charges		6,755			4,251			397			4,251		6,342			13,299			(413	)		9,048
Other operating expenses		89,050			103,228			41,897			55,664		147,112			150,559			58,061			47,334

Total non-interest expense		659,674			467,338			396,316			265,964		979,127			742,422			319,453			275,084


Income (loss) before income taxes		(885,201	)		147,742			(663,396	)		21,539		(1,355,749	)		88,060			(470,547	)		(59,682	)
Income tax expense (benefit)		(164,220	)		52,952			(79,143	)		9,302		(194,967	)		28,741			(30,745	)		(24,211	)

Net income (loss)		(720,981	)		94,790			(584,253	)		12,237		(1,160,782	)		59,319			(439,802	)		(35,471	)
Net income attributable to non-controlling interest		2,620			1,697			2,677			138
Net income (loss) attributable to non-controlling interest													2,365			6,347			(255	)		4,650

Net income (loss) attributable to controlling interest		(723,601	)		93,093			(586,930	)		12,099		(1,163,147	)		52,972			(439,547	)		(40,121	)

Dividends and accretion of discount on preferred stock		28,417			—			14,225			—		42,675			—			14,258			—

Net income (loss) available to common shareholders	$	(752,018	)		93,093			(601,155	)		12,099	$	(1,205,822	)		52,972			(453,805	)		(40,121	)


Net income (loss) per share available to common shareholders:
Basic	$	(2.28	)		0.28			(1.82	)		0.04	$	(3.60	)		0.16			(1.32	)		(0.12	)

Diluted		(2.28	)		0.28			(1.82	)		0.04		(3.60	)		0.16			(1.32	)		(0.12	)


Weighted average shares outstanding:
Basic		329,818			329,071			329,850			329,173		334,808			329,195			344,626			329,438

Diluted		329,818			331,568			329,850			331,418		334,808			331,317			344,626			329,438


Dividends declared per share	$	0.02			0.34			0.01			0.17	$	0.03			0.40			0.01			0.06

SYNOVUS FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
AND COMPREHENSIVE INCOME (LOSS)
(unaudited)


												Accumulated																						Accumulated
						Additional						Other						Non-										Additional						Other						Non-
	Preferred		Common			Paid-In			Treasury			Comprehensive			Retained			Controlling					Preferred		Common			Paid-In			Treasury			Comprehensive			Retained			Controlling
(in thousands, except per share data)	Stock		Stock			Capital			Stock			Income (Loss)			Earnings			Interest		Total			Stock		Stock			Capital			Stock			Income (Loss)			Earnings			Interest		Total
Balance at December 31, 2007	$	—		335,529			1,101,209			(113,944	)		31,439			2,087,357			—		3,441,590		$	—		335,529			1,101,209			(113,944	)		31,439			2,087,357			—		3,441,590
Cumulative effect of adoption of EITF Issue No. 06-4		—		—			—			—			—			(2,248	)		—		(2,248	)
Cumulative effect of adoption of SFAS No. 159		—		—			—			—			—			58			—		58

Cumulative effect of adoption of ASC 715-60-35-177																								—		—			—			—			—			(2,248	)		—		(2,248	)
Cumulative effect of adoption of ASC 825-10-25																								—		—			—			—			—			58			—		58
Net Income		—		—			—			—			—			93,093			1,697		94,790			—		—			—			—			—			52,972			6,347		59,319
Other comprehensive income (loss), net of tax:
Net unrealized gain on cash flow hedges		—		—			—			—			475			—			—		475			—		—			—			—			4,289			—			—		4,289
Change in unrealized gains/losses on investment securities available for sale, net of reclassification adjustment		—		—			—			—			(1,816	)		—			—		(1,816	)		—		—			—			—			387			—			—		387
Amortization of postretirement unfunded health benefit		—		—			—			—			92			—			—		92			—		—			—			—			138			—			—		138

Other comprehensive income		—		—			—			—			(1,249	)		—			—		(1,249	)		—		—			—			—			4,814			—			—		4,814

Comprehensive income		—		—			—			—			—			—			—		93,541																						64,133

Cash dividends declared — $0.34 per share		—		—			—			—			—			(112,245	)		—		(112,245	)
Cash dividends declared — $0.40 per share																								—		—			—			—			—			(132,100	)		—		(132,100	)
Treasury shares purchased										(131	)										(131	)		—		—			—			(173	)		—			—			—		(173	)
Issuance of non-vested stock, net of forfeitures		—		(10	)		10			—			—			—			—		—			—		(26	)		26			—			—			—			—		—
Share-based compensation expense		—		—			7,675			—			—			—			—		7,675			—		—			10,545			—			—			—			—		10,545
Stock options exercised		—		307			1,342			—			—			—			—		1,649			—		469			2,556			—			—			—			—		3,025
Share-based compensation tax benefit		—		—			399			—			—			—			—		399			—		—			(206	)		—			—			—			—		(206	)
Change in ownership at majority-owned subsidiary		—		—			—			—			—			—			22,395		22,395			—		—			—			—			—			—			24,259		24,259

Balance at June 30, 2008	$	—		335,826			1,110,635			(114,075	)		30,190			2,066,015			24.092		3,452,683
Balance at September 30, 2008																							$	—		335,972			1,114,130			(114,117	)		36,253			2,006,039			30,606		3,408,883


Balance at December 31, 2008	$	919,635		336,011			1,165,875			(114,117	)		129,253			1,350,501			32,349		3,819,507		$	919,635		336,011			1,165,875			(114,117	)		129,253			1,350,501			32,349		3,819,507
Net income (loss)		—		—			—			—			—			(723,601	)		2,620		(720,981	)		—		—			—			—			—			(1,163,147	)		2,365		(1,160,782	)
Other comprehensive income (loss), net of tax:
Net unrealized loss on cash flow hedges		—		—			—			—			(11,689	)		—			—		(11,689	)		—		—			—			—			(14,995	)		—			—		(14,995	)
Change in unrealized gains/losses on investment securities available for sale, net of reclassification adjustment		—		—			—			—			(12,136	)		—			—		(12,136	)		—		—			—			—			(6,364	)		—			—		(6,364	)
Amortization of postretirement unfunded health benefit		—		—			—						92						—		92			—		—			—						138						—		138

Other comprehensive loss		—		—			—			—			(23,733	)		—			—		(23,733	)		—		—			—			—			(21,221	)		—			—		(21,221	)

Comprehensive loss		—		—			—			—			—			—			—		(744,714	)																					(1,182,003	)

Cash dividends declared on common stock — $0.02 per share		—		—			—			—			—			(6,620	)		—		(6,620	)
Cash dividends paid on preferred stock — $20.28 per share		—		—			—			—			—			(19,626	)		—		(19,626	)
Cash dividends declared on common stock — $0.03 per share																								—		—			—			—			—			(9,926	)		—		(9,926	)
Cash dividends paid on preferred stock — $32.77 per share																								—		—			—			—			—			(31,725	)		—		(31,725	)
Accretion of discount on preferred stock		4,220		—			—			—			—			(4,220	)		—		—			6,379		—			—			—			—			(6,379	)		—		—
Issuance of common stock, net of issuance costs																								—		150,000			420,930			—			—			—			—		570,930
Treasury shares purchased		—		—			—			(29	)		—			—			—		(29	)		—		—			—			(38	)		—			—			—		(38	)
Issuance of non-vested stock, net of forfeitures		—		(26	)		26			—			—			—			—		—			—		(31	)		31			—			—			—			—		—
Vesting of restricted share units		—		38			(38	)		—			—			—			—		—
Restricted share unit activity																								—		39			(37	)		—			—			(2	)		—		—
Share-based compensation expense		—		—			5,124			—			—			—			—		5,124			—		—			6,855			—			—			—			—		6,855
Stock options exercised		—		36			217			—			—			—			—		253			—		54			242			—			—			—			—		296
Share-based compensation tax deficiency		—		—			(765	)		—			—			—			—		(765	)		—		—			(2,722	)		—			—			—			—		(2,722	)
Change in ownership at majority-owned subsidiary		—		—			200			—			—			—			1,833		2,033			—		—			200			—			—			—			2,225		2,425

Balance at June 30, 2009	$	923,855		336,059			1,170,639			(114,146	)		105,520			596,434			36,802		3,055,163
Balance at September 30, 2009																							$	926,014		486,073			1,591,374			(114,155	)		108,032			139,322			36,939		3,173,599

SYNOVUS FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)


	Six Months Ended						Nine Months Ended
	June 30,						September 30,
(In thousands)	2009			2008			2009			2008
Operating activities:
Net income (loss)	$	(720,981	)		94,790		$	(1,160,782	)		59,319
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Provision for losses on loans		921,963			184,665			1,418,485			336,016
Depreciation, amortization and accretion, net		30,028			27,715			34,114			42,471
Goodwill impairment		—			27,000			—			36,887
Equity in loss of equity method investments		—			(1,412	)		—			(1,639	)
Deferred tax (benefit) expense		135,039			1,125			155,655			(19,407	)
Decrease in interest receivable		25,972			59,348			38,067			61,684
Decrease in interest payable		(10,965	)		(33,283	)		(34,393	)		(23,423	)
Decrease (increase) in trading account assets		3,826			(2,401	)		11,110			(84,086	)
Originations and purchase of mortgage loans held for sale		(1,276,341	)		(625,996	)		(1,628,466	)		(858,110	)
Proceeds from sales of mortgage loans held for sale		1,101,446			597,445			1,660,744			912,204
Gain on sale of mortgage loans held for sale		(9,934	)		(5,831	)		(12,923	)		(7,128	)
(Increase) Decrease in prepaid and other assets		(159,268	)		12,005
(Decrease) in accrued salaries and benefits		(15,587	)		(20,676	)
Decrease (Increase) in other liabilities		(48,531	)		35,846
(Increase) decrease in prepaid and other assets								(148,865	)		30,995
Decrease in accrued salaries and benefits								(13,013	)		(18,156	)
(Decrease) increase in other liabilities								(59,513	)		5,621
Net gains on sales of investment securities available for sale								(14,730	)		—
Loss on sale of other loans held for sale		1,095			9,944			1,703			9,444
Loss on other real estate		205,469			7,558			298,452			52,475
Increase in fair value of private equity investments, net		(8,090	)		(4,946	)		(1,237	)		(17,673	)
(Gain) loss on sale of MasterCard shares		(8,351	)		(16,186	)
(Gain) loss on redemption of Visa shares		—			(38,542	)
Gain on sale of MasterCard shares								(8,351	)		(16,186	)
Gain on redemption of Visa shares								—			(38,542	)
Decrease in liability for Visa litigation		—			(17,430	)		(4,067	)		(11,082	)
Share-based compensation		5,122			7,732			6,855			10,686
Excess tax benefit from share-based payment arrangements		—			(357	)		—			(756	)
Other, net		(2,240	)		(2,534	)		1,492			9,190

Net cash provided by operating activities		169,672			295,579			540,337			470,804


Investing activities:
Net increase (decrease) in interest earning deposits with banks		3,536			(6,387	)
Net (increase) decrease in interest earning deposits with banks								(1,966	)		8,105
Net decrease (increase) in federal funds sold and securities purchased under resale agreements		217,373			(76,091	)		208,003			(193,514	)
Proceeds from maturities and principal collections of investment securities available for sale		470,295			669,286			780,962			864,999
Net decrease in interest bearing funds with Federal Reserve Bank		435,948			—
Net increase in interest bearing funds with Federal Reserve Bank								(1,616,409	)		—
Proceeds from sales of investment securities available for sale		—			3,309			255,047			5,449
Purchases of investment securities available for sale		(277,042	)		(817,795	)		(555,835	)		(1,022,663	)
Proceeds from sale of loans		120,284			—			232,369			—
Proceeds from sale of other loans held for sale		11,964			10,669			33,393			20,613
Proceeds from sale of other real estate		164,493			62,552			260,332			121,528
Net increase in loans		(773,837	)		(1,290,126	)		(364,609	)		(1,722,490	)
Purchases of premises and equipment		(21,837	)		(63,012	)		(27,026	)		(90,827	)
Proceeds from disposals of premises and equipment		2,671			2,115			2,307			1,998
Proceeds from sale of MasterCard shares		8,351			16,186			8,351			16,186
Proceeds from redemption of Visa shares		—			38,542			—			38,542

Net cash provided (used) by investing activities		362,199			(1,450,752	)
Net cash used by investing activities								(785,081	)		(1,952,074	)


Financing activities:
Net increase in demand and savings deposits		73,536			230,526			182,313			482,836
Net (decrease) increase in certificates of deposit		(1,266,901	)		838,010			(745,301	)		2,406,211
Net increase (decrease) in federal funds purchased and other short-term borrowings		854,390			(31,502	)		304,651			(1,644,911	)
Principal repayments on long-term debt		(756,987	)		(38,041	)		(875,487	)		(196,022	)
Proceeds from issuance of long-term debt		525,000			270,300			743,000			424,300
Treasury shares purchased		(29	)		(131	)		(38	)		(173	)
Excess tax benefit from share-based payment arrangements		—			357			—			756
Dividends paid to common shareholders		(23,132	)		(123,744	)		(26,444	)		(179,916	)
Dividends paid to preferred shareholders		(19,626	)		—			(31,725	)		—
Proceeds from issuance of common stock		253			1,649
Proceeds from issuance of common stock, net of issuance costs								571,226			3,025

Net cash (used) provided by financing activities		(613,496	)		1,147,424
Net cash provided by financing activities								122,195			1,296,106


Decrease in cash and due from banks		(81,625	)		(7,749	)		(122,549	)		(185,164	)
Cash and due from banks at beginning of period		524,327			682,583			524,327			682,583

Cash and due from banks at end of period	$	442,702			674,834		$	401,778			497,419

SYNOVUS FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note 1 — Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and therefore do not include all information and footnotes necessary for a fair presentation of financial position, results of operations, and cash flows in conformity with U.S. generally accepted accounting principles. All adjustments consisting of normally recurring accruals that, in the opinion of management, are necessary for a fair presentation of the financial position and results of operations for the periods covered by this report have been included. The accompanying unaudited consolidated financial statements should be read in conjunction with the Synovus Financial Corp. (Synovus) consolidated financial statements and related notes appearing in Synovus’ ~~2008~~ Annual Report on Form ~~10-K~~10-K/A for the year ended December 31, 2008 previously filed with the U.S. Securities and Exchange Commission (SEC).

In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the respective balance sheets, and the reported amounts of revenues and expenses for the periods presented. Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant change relate to the determination of the fair value of investments; the allowance for loan losses; the valuation of other real estate; the valuation of long-lived assets and other intangible assets; the valuation of deferred tax assets; and the disclosures of contingent assets and liabilities. In connection with the determination of the allowance for loan losses and the valuation of certain impaired loans and other real estate, management obtains independent appraisals for significant properties and for properties collateralizing impaired loans. For valuation of impaired loans and other real estate, management also considers other factors or recent developments such as changes in absorption rates or market conditions at the time of valuation, and anticipated sales values based on management’s plans for disposition.

A substantial portion of Synovus’ loans are secured by real estate in five southeastern states (Georgia, Alabama, Florida, South Carolina, and Tennessee). Accordingly, the ultimate ~~collectibility~~collectability of a substantial portion of Synovus’ loan portfolio is susceptible to changes in market conditions in these areas. ~~Management~~Based on available information, management believes that the allowance for loan losses is adequate. While management uses available information to recognize losses on loans, future additions to the allowance may be necessary based on changes in economic conditions and the ability of borrowers to repay their loans. In addition, various regulatory agencies, as an integral part of their examination process, periodically review Synovus’ allowance for loan losses. Such agencies may require Synovus to make changes to the allowance for loan losses based on their judgment about information available to them at the time of their examination.

Certain prior year amounts have been reclassified to conform to the presentation adopted in 2009. Synovus has evaluated all transactions, events and circumstances for consideration or disclosure through November 9, 2009, the date these financial statements were issued, and has reflected or disclosed those items within the consolidated financial statements and related footnotes as deemed appropriate.

In June 2009, the Financial Accounting Standards Board (FASB) issued SFAS No. 168, “The FASB Accounting Standards CodificationÔ and the Hierarchy of Generally Accepted Accounting Principles, a replacement of FASB Statement No. 162” (ASC 105-10). This statement established the FASB Accounting Standards CodificationÔ (Codification or ASC) as the single source of authoritative U.S. generally accepted accounting principles (GAAP) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. The Codification superseded all pre-existing non-SEC accounting and reporting standards. All non-grandfathered, non-SEC accounting literature not included in the Codification has become non-authoritative.

Following the Codification, the FASB will not issue new standards in the form of statements, FASB Staff Positions or Emerging Industry Task Force Abstracts. Instead, the FASB will issue Accounting Standards Updates (ASU), which will serve to update the Codification, provide background information about the guidance and provide the basis for conclusions on the changes to the Codification.

GAAP was not intended to be changed as a result of the Codification project, but it has changed the way that guidance is organized and presented. As a result, these changes have had significant impact on how companies reference GAAP in their financial statements and in their accounting policies for financial statements issued for interim and annual periods ended after the September 15, 2009 effective date for the Codification. All accounting references have been updated, and therefore, SFAS references have been replaced with ASC references except for SFAS references which have not been integrated into the codification. Adoption of the Codification did not impact Synovus’ financial position, results of operations or cash flows.

Note 2 — Supplemental Cash Flow Information

For the ~~six~~nine months ended ~~June~~September 30, 2009, Synovus received tax refunds of approximately ~~$62.2~~$87.3 million (net of taxes paid) and for the ~~six~~nine months ended ~~June~~September 30, 2008, Synovus paid income taxes (net of refunds received) of approximately ~~$56.4~~$56.9 million. A tax refund of $66.0 million received during the six months ended June 30, 2009 resulted from tax prepayments during the first half of 2008, which were more than offset by the tax benefit from operating losses during the second half of 2008. The tax amount for the six months ended June 30, 2008 was impacted by tax overpayment credits from 2007 that were applied towards the 2008 income tax liability.

For the ~~six~~nine months ended ~~June~~September 30, 2009 and 2008, Synovus paid interest of ~~$256.0~~$352.2 million and ~~$372.9~~$567.8 million, respectively.

Non-cash investing activities consisted of loans of approximately ~~$337.5~~$504.3 million and ~~$171.3~~$286.5 million, which were foreclosed and transferred to other real estate during the ~~six~~nine months ended ~~June~~September 30, 2009 and 2008, respectively, other loans of approximately ~~$47.3~~$118.2 million and ~~$42.3~~$46.8 million, which were transferred to other loans held for sale during the ~~six~~nine months ended ~~June~~September 30, 2009 and 2008, respectively, and other loans held for sale of approximately $1.7 million, which were foreclosed and transferred to other real estate during the ~~six~~nine months ended September 30, 2009.

Note 3 – Shareholders’ Equity

Preferred Stock and Warrants to Purchase Common Stock

On December 19, 2008, Synovus issued to the United States Department of the Treasury (Treasury) 967,870 shares of Synovus’ Fixed Rate Cumulative Perpetual Preferred Stock, Series A, without par value (the Series A Preferred Stock), having a liquidation amount per share equal to $1,000, for a total price of $967,870,000. The Series A Preferred Stock pays cumulative dividends at a rate of 5% per year for the first five years and thereafter at a rate of 9% per year. Synovus may not redeem the Series A Preferred Stock during the first three years except with the proceeds from a qualified equity offering of not less than $241,967,500. After February 15, 2012, Synovus may, with the consent of the Federal Deposit Insurance Corporation, redeem, in whole or in part, the Series A Preferred Stock at the liquidation amount per share plus accrued and unpaid dividends. The Series A Preferred Stock is generally non-voting. Prior to December 19, 2011, unless Synovus has redeemed the Series A Preferred Stock or the Treasury has transferred the Series A Preferred Stock to a third party, the consent of the Treasury will be required for Synovus to (1) declare or pay any dividend or make any distribution on common stock, par value $1.00 per share, other than regular quarterly cash dividends of not more than $0.06 per share, or (2) redeem, repurchase or acquire Synovus common stock or other equity or capital securities, other than in connection with benefit plans consistent with past practice. A consequence of the Series A Preferred Stock purchase includes certain restrictions on executive compensation that could limit the tax deductibility of compensation that Synovus pays to executive management. The recently enacted American Recovery and Reinvestment Act (ARRA) and the Treasury’s February 10, 2009, Financial Stability Plan and regulations issued on June ~~30,~~15, 2009 under these laws may retroactively affect Synovus and modify the terms of the Series A Preferred Stock. In particular, the ARRA provides that the Series A Preferred Stock may now be redeemed at any time with the consent of the Federal Deposit Insurance Corporation.

As part of its issuance of the Series A Preferred Stock, Synovus issued the Treasury a warrant to purchase up to 15,510,737 shares of Synovus common stock (the Warrant) at an initial per share exercise price of $9.36. The Warrant provides for the adjustment of the exercise price and the number of shares of Synovus common stock issuable upon exercise pursuant to customary anti-dilution provisions, such as upon stock splits or distributions of securities or other assets to holders of our common stock, and upon certain issuances of our common stock at or below a specified price relative to the initial exercise price. The Warrant expires on December 19, 2018. If, on or prior to December 31, 2009, Synovus receives aggregate gross cash proceeds of not less than $967,870,000 from “qualified equity offerings” announced after October 13, 2008, the number of shares of common stock issuable pursuant to the Treasury’s exercise of the Warrant will be reduced by one-half of the original number of shares, taking into account all adjustments, underlying the Warrant. Pursuant to the Securities Purchase Agreement, the Treasury has agreed not to exercise voting power with respect to any shares of common stock issued upon exercise of the Warrant.

Synovus allocated the total proceeds received from the Treasury based on the relative fair values of the preferred shares and the Warrants. This allocation resulted in the preferred shares and the Warrants being initially recorded at amounts that are less than their respective fair values at the issuance date.

The $48.5 million discount on the Series A Preferred Stock is being accreted using a constant effective yield over the five-year period preceding the 9% perpetual dividend. Synovus records increases in the carrying amount of the preferred shares resulting from accretion of the discount by charges against retained earnings.

Common Stock

On September 22, 2009, Synovus completed a public offering of 150,000,000 shares of Synovus’ $1.00 par value common stock at a price of $4.00 per share, generating proceeds of $570.9 million, net of issuance costs.

Exchange of Subordinated Debt for Common Stock

On November 5, 2009, Synovus completed its previously announced exchange offer (Exchange Offer) of $29,820,000 in aggregate principal amount of its outstanding 4.875% Subordinated Notes Due 2013 (the “Notes”). The notes exchanged in the Exchange Offer represent 12.6% of the $236,570,000 aggregate principal amount of the Notes outstanding prior to the Exchange Offer. Pursuant to the terms of the Exchange Offer, Synovus has issued approximately 9.44 million shares of the Company’s common stock as consideration for the Notes. The Exchange Offer resulted in a pre-tax gain of approximately $8.0 million which will be recorded during the fourth quarter of 2009.

Note ~~3 —~~4 – Comprehensive Income (Loss)

Other comprehensive income (loss) consists of the change in net unrealized gains (losses) on cash flow hedges, the change in net unrealized gains (losses) on investment securities available for sale, and the amortization of the post-retirement unfunded health benefit. Comprehensive income (loss) consists of net income (loss) plus other comprehensive income (loss).

Comprehensive income (loss) for the ~~six~~nine and three months ended ~~June~~September 30, 2009 and 2008 is presented below:


	Six Months Ended						Three Months Ended						Nine Months Ended					Three Months Ended
	June 30,						June 30,						September 30,					September 30,
(in thousands)	2009			2008			2009			2008			2009			2008		2009			2008
Net income (loss)	$	(720,981	)		94,790			(584,253	)		12,237		$	(1,160,782	)		59,319		(439,802	)		(35,471	)
Other comprehensive income (loss), net of tax:
Change in net unrealized gains (losses) on cash flow hedges		(11,689	)		475			(7,658	)		(11,825	)		(14,995	)		4,289		(3,306	)		3,813
Change in net unrealized losses on investment securities available for sale, net of reclassification adjustment		(12,136	)		(1,816	)		(11,881	)		(50,107	)
Change in net unrealized gains/losses on investment securities available for sale, net of reclassification adjustment														(6,364	)		387		5,772			2,203
Amortization of postretirement unfunded health benefit		92			92			46			46			138			138		46			46

Other comprehensive loss		(23,733	)		(1,249	)		(19,493	)		(61,886	)
Other comprehensive income (loss)														(21,221	)		4,814		2,512			6,062

Comprehensive income (loss)	$	(744,714	)		93,541			(603,746	)		(49,649	)	$	(1,182,003	)		64,133		(437,290	)		(29,409	)

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 ~~June~~September 30, 2009 and December 31, 2008, were as follows:


	June 30, 2009															September 30, 2009
	Less than 12 Months					12 Months or Longer					Total Fair Value					Less than 12 Months					12 Months or Longer					Total Fair Value
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized			Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(in thousands)	Value		Losses			Value		Losses			Value		Losses			Value		Losses			Value		Losses			Value		Losses
U.S. Treasury securities	$	—		—			—		—			—		—		$	19,736		(14	)		¾		¾			19,736		(14	)
Other U.S. Government agency securities		88,145		(1,490	)		—		—			88,145		(1,490	)		35,837		(420	)		¾		¾			35,837		(420	)
Government agency issued mortgage-backed securities		63,271		(259	)		42		—			63,313		(259	)		2,477		(12	)		83		(1	)		2,560		(13	)
Government agency issued collateralized mortgage obligations		—		—			61		—			61		—
State and municipal securities		10,726		(334	)		2,123		(32	)		12,849		(366	)		3,190		(28	)		2,341		(31	)		5,531		(59	)
Equity securities		—		—			—		—			—		—			2,988		(268	)		¾		¾			2,988		(268	)
Other investments		—		—			—		—			—		—

Total	$	162,142		(2,083	)		2,226		(32	)		164,368		(2,115	)	$	64,228		(742	)		2,424		(32	)		66,652		(774	)

The amortized cost and estimated fair value by contractual maturity of investment securities available for sale at ~~June~~September 30, 2009 are shown below. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without a call or prepayment penalties.


	June 30, 2009				September 30, 2009
	Amortized		Estimated		Amortized		Estimated
(in thousands)	Cost		Fair Value		Cost		Fair Value

U.S. Treasury securities:
Within 1 year	$	199		199	$	275		275
1 to 5 years		880		880		20,556		20,542
5 to 10 years		—		—		—		—
More than 10 years		—		—		—		—

Total U.S. Treasury securities	$	1,079		1,079	$	20,831		20,817


U.S. Government agency securities:
Within 1 year	$	285,386		290,964	$	230,942		235,698
1 to 5 years		485,461		505,474		381,446		398,258
5 to 10 years		505,813		523,032		421,615		433,866
More than 10 years		186,731		193,887		27,290		28,748

Total U.S. Government agency securities	$	1,463,391		1,513,357	$	1,061,293		1,096,570


State and municipal securities:
Within 1 year	$	11,817		11,924	$	10,104		10,183
1 to 5 years		46,591		47,747		41,967		43,225
5 to 10 years		35,541		36,298		33,882		35,278
More than 10 years		10,553		10,429		10,424		10,840

Total state and municipal securities	$	104,502		106,398	$	96,377		99,526


Other investments:
Within 1 year	$	—		—	$	—		—
1 to 5 years		997		997		997		997
5 to 10 years		1,800		1,800		1,800		1,800
More than 10 years		5,142		5,296		5,149		5,303

Total other investments	$	7,939		8,093	$	7,946		8,100


Equity securities	$	9,205		11,246	$	9,455		10,644
Government agency issued mortgage-backed securities		1,743,716		1,816,413		1,872,244		1,967,686
Government agency issued collateralized mortgage obligations		100,867		103,606		92,059		95,472

Total investment securities	$	3,430,699		3,560,192	$	3,160,205		3,298,815


Within 1 year	$	297,402		303,087	$	241,321		246,156
1 to 5 years		533,929		555,098		444,966		463,022
5 to 10 years		543,154		561,130		457,297		470,944
More than 10 years		202,426		209,612		42,863		44,891
Equity securities		9,205		11,246		9,455		10,644
Government agency issued mortgage-backed securities		1,743,716		1,816,413		1,872,244		1,967,686
Government agency issued collateralized mortgage obligations		100,867		103,606		92,059		95,472

Total	$	3,430,699		3,560,192	$	3,160,205		3,298,815

Note ~~5 —~~6 – Restructuring Charges

Restructuring charges represent severance and other project related costs incurred in conjunction with the implementation of Project Optimus (an initiative focused on operating efficiency gains and enhanced revenue growth) as well as severance costs associated with additional job function and position eliminations identified during ~~the first quarter of~~ 2009 as part of a continued effort to manage a leaner organization. Synovus expects to incur approximately ~~$25.0~~$23.0 million in restructuring costs related to these efficiency efforts, of which $16.1 million was recorded through December 31, 2008. Synovus recorded ~~$6.8~~$6.3 million and ~~$397~~$(413) thousand in restructuring (severance) charges during the ~~six~~nine and three months ended ~~June~~September 30, 2009. Synovus has recorded cumulative restructuring charges through ~~June~~September 30, 2009 of ~~$22.9~~$22.5 million. At ~~June~~September 30, 2009, Synovus had an accrued liability of ~~$3.5~~$1.3 million related to restructuring charges.

Note ~~6 — Standby Letters of Credit~~

Synovus provides credit enhancements in the form of standby letters of credit to assist certain commercial customers in obtaining long-term funding through taxable and tax-exempt bond issues. Under these agreements and under certain conditions, if the bondholder requires the issuer to repurchase the bonds, Synovus is obligated to provide funding under the letter of credit to the issuer to finance the repurchase of the bonds by the issuer. Bondholders (investors) may require the issuer to repurchase the bonds on a weekly basis for reasons including general liquidity needs of the investors, general industry/market considerations, as well as changes in Synovus’ credit ratings. Synovus’ maximum exposure to credit loss in the event of nonperformance by the counterparty is represented by the contract amount of those instruments. Synovus applies the same credit policies in entering into commitments and conditional obligations as it does for loans. The maturities and yields of the funded letters of credit are comparable to those for new commercial loans. Synovus has issued approximately $1.37 billion in letters of credit related to these bond issuances. At June 30, 2009, substantially all of these standby letters of credit have been funded and are now reported as a component of total loans.

~~Note~~ 7 —– Other Loans Held for Sale

Loans or pools of loans are transferred to the other loans held for sale portfolio when the intent to hold the loans has changed due to portfolio management or risk mitigation strategies, there is a plan to sell the loans within a reasonable period of time, and the individual loans are specifically identified. The value of the loans or pools of loans is primarily determined by analyzing the underlying collateral of the loan and the anticipated external market prices of similar assets. At the time of transfer, if the estimated net realizable value is less than the carrying amount, the difference is recorded as a charge-off against the allowance for loan losses. Decreases in estimated net realizable value subsequent to the transfer as well as losses (gains) from sale of these loans are recognized as a component of non-interest expense. During the ~~six~~nine and three months ended ~~June~~September 30, 2009, Synovus transferred loans with a cost basis totaling ~~$97.5~~$199.0 million and ~~$56.7~~$101.5 million to the other loans held for sale portfolio, respectively. Synovus recognized charge-offs on these loans totaling ~~$50.2~~$80.8 million and ~~$30.7~~$30.6 million for the ~~six~~nine and three months ended ~~June~~September 30, 2009, respectively. These charge-offs, which resulted in a new cost basis of ~~$47.3~~$118.2 million and ~~$26.0~~$70.9 million for the loans transferred during ~~for~~ the ~~six~~nine and ~~nine~~three months ended ~~June~~September 30, 2009, respectively, were based on the estimated sales price of the loans at the time of transfer. Subsequent to their transfer to the other loans held for sale portfolio, Synovus foreclosed on certain other loans held for sale and transferred foreclosed assets of $1.7 million to other real estate during the ~~six~~nine months ended ~~June~~September 30, 2009.

The carrying value of ORE was ~~$211.0~~$187.5 million and $246.1 million at ~~June~~September 30, 2009 and December 31, 2008, respectively. During the ~~six~~nine months ended ~~June~~September 30, 2009, approximately ~~$337.5~~$504.3 million of loans and $1.7 million of other loans held for sale were foreclosed and transferred to other real estate. During the ~~six~~nine months ended ~~June~~September 30, 2009 and 2008, Synovus recognized foreclosed real estate expenses of ~~$218.7~~$320.2 million and ~~$21.6~~$64.8 million, respectively.

~~Foreclosed real estate expenses recognized during the six months ended June 30, 2009 include an $186.4 million charge for the recognition~~ These costs primarily consist of charges related to declines in fair value or reductions in estimated realizable value subsequent to the date of foreclosure, $19.0 million in net losses resulting from sales transactions which have already closed, $9.8 million in carrying costs associated with ORE, and $3.5 million in legal and appraisal fees.

Synovus sold ORE with a carrying value of $243.0 million and $168.7 million during the six and three months ended June 30, 2009, respectively, principally through liquidation sales at prices less than fair value. Synovus received proceeds of approximately $164.4 million and $107.4 million and recognized charges for losses of $78.5 million and $61.3 million for the six and three months ended June 30, 2009, respectively, in connection with these ORE sales. These losses included write-downs to net realizable value which preceded sales transactions, and to a lesser degree, losses on sale for differences between liquidation carrying values and the net proceeds received upon sale.foreclosure.

Note 11 — Fair Value Accounting

Effective January 1, 2008, Synovus adopted ~~Statement~~provisions included in ASC 820-10 regarding fair value measurements and disclosures and provisions of Financial Accounting Standard (SFAS) No. 157, “Fair Value Measurements” (SFAS No. 157) and SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (SFAS No. 159). SFAS No. 157ASC 825-10 regarding the fair value option as described in ASC 825-10-10. ASC 820-10 defines fair value, establishes a framework for measuring fair value under ~~U.S. generally accepted accounting principles (GAAP),~~GAAP, and expands disclosures about fair value measurements. ~~This statement~~The provisions of ASC 820-10 did not introduce any new requirements mandating the use of fair value; rather, it unified the meaning of fair value and added additional fair value disclosures.

~~SFAS No.159 permits~~

ASC 825-10 includes provisions that permit entities to make an irrevocable election, at specified election dates, to measure eligible financial instruments and certain other instruments at fair value. After the initial adoption, the election is made at the acquisition of an eligible financial asset, financial liability, or firm commitment or when certain specified reconsideration events occur. As of January 1, 2008, Synovus elected the fair value option (FVO) for mortgage loans held for sale and certain callable brokered certificates of deposit. Accordingly, a cumulative effect adjustment of $58 thousand ($91 thousand less $33 thousand of income taxes) was recorded as an increase to retained earnings.

In February 2008, the FASB issued FSP No. FAS 157-2, “Effective Date of FASB Statement No. 157,” which delayed the effective date for nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis. As of January 1, 2009, Synovus adopted the provisions of FSP FAS 157-2 for all non-financial assets and non-financial liabilities.

During the three months ended June 30, 2009, Synovus adopted FSP No. FAS 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly.” FSP No. FAS 157-4 is intended to determine the fair value when there is no active market or where the inputs being used represent distressed sales. The impact to Synovus was insignificant.

During the three months ended June 30, 2009, Synovus adopted FSP No. FAS 107-1 and APB 28-1, “Interim Disclosures about Fair Value of Financial Instruments.” FSP No. FAS 107-1 and APB 28-1 expands the fair value disclosures required for all financial instruments that are currently not reflected on the balance sheet at fair value. The disclosure of the fair value of financial instruments not reflected at fair value on the balance sheet is now also required on an interim basis.

The following is a description of the assets and liabilities for which fair value has been elected, including the specific reasons for electing fair value.

Mortgage Loans Held for Sale

Mortgage loans held for sale (MLHFS) have been previously accounted for on a lower of aggregate cost or fair value basis pursuant to ~~SFAS No. 65, “Accounting~~ASC 948-310-35 regarding accounting for ~~Certain Mortgage Banking Activities” (SFAS No. 65).~~certain mortgage banking activities. For certain mortgage loan types, fair value hedge accounting was utilized by Synovus to hedge a given mortgage loan pool, and the underlying mortgage loan balances were adjusted for the change in fair value related to the hedged risk (fluctuation in market interest rates) in accordance with ~~SFAS No. 133, “Accounting~~provisions of ASC 815-20-25 and ASC 815-25-35 regarding accounting for ~~Derivative Instruments and Hedging Activities”,~~fair value hedges as ~~amended and interpreted (SFAS No. 133).~~derivative instruments. For those certain mortgage loan types, Synovus is still able to achieve an effective economic hedge by being able to mark-to-market the underlying mortgage loan balances through the income statement, but has eliminated the operational time and expense needed to manage a hedge accounting program under ~~SFAS No. 133.~~ASC 815-25-35. Previously under ~~SFAS No. 65,~~ASC 948-310-35, Synovus was exposed, from an accounting perspective, only to the downside risk of market volatilities; however by electing FVO, Synovus may now also recognize the associated gains on the mortgage loan portfolio as favorable changes in the market occur.

Certain Callable Brokered Certificates of Deposit

Synovus has elected FVO for certain callable brokered certificates of deposit (CDs) to ease the operational burdens required to maintain hedge accounting for such instruments under the constructs of ~~SFAS No. 133.~~ASC 815. Prior to the adoption ~~of SFAS No. 159,~~the provisions included in ASC 825-10-10, Synovus was highly effective in hedging the risk related to changes in fair value, due to fluctuations in market interest rates, by engaging in various interest rate derivatives. However, ~~SFAS No. 133~~ASC 815 requires an extensive documentation process for each hedging relationship and an extensive process related to assessing the effectiveness and measuring ineffectiveness related to such hedges. By electing FVO on these previously hedged callable brokered CDs, Synovus is still able to achieve an effective economic hedge by being able to mark-to-market the underlying CDs through the income statement, but has eliminated the operational time and expense needed to manage a hedge accounting program under ~~SFAS No. 133.~~ASC 815. As of June 30, 2009, all of these callable brokered certificates of deposit either had been called or had matured. As no such instruments were acquired during the third quarter, the balance for callable brokered certificate of deposits remained at zero as of September 30, 2009.

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The following table summarizes the impact of adopting the fair value option for these financial instruments as of January 1, 2008. Amounts shown represent the carrying value of the affected instruments before and after the changes in accounting resulting from the adoption of ~~SFAS No. 159.~~ASC 825-10-10.


	Ending		Cumulative			Opening
	Balance Sheet		Effect			Balance Sheet
	December 31,		Adjustment			January 1,
(dollars in thousands)	2007		Gain, net			2008
Mortgage loans held for sale	$	153,437	$	91		$	153,528
Certain callable brokered CDs		293,842		—			293,842

Pre-tax cumulative effect of adoption of the fair value option				91
Deferred tax liability				(33	)

Cumulative effect of adoption of the fair value option (increase to retained earnings)			$	58

Determination of Fair Value

~~SFAS No. 157~~ASC 820-10 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ~~SFAS No. 157~~During the three months ended June 30, 2009, Synovus adopted provisions included in ASC 820-10 as described in ASC 820-10-65-4 regarding determination of fair value when the volume and level of activity for the asset or liability have significantly decreased and identifying transactions that are not orderly. These provisions of ASC 820-10 are intended to determine the fair value when there is no active market or where the inputs being used represent distressed sales. The impact to Synovus was insignificant. ASC 820-10 also establishes a fair value hierarchy for disclosure of fair value measurements based on significant inputs used to determine the fair value. The three levels of inputs are as follows:


Level 1		Quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities include corporate debt and equity securities, as well as certain U.S. Treasury and U.S. Government-sponsored enterprise debt securities that are highly liquid and are actively traded in over-the-counter markets.

Level 2		Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets and liabilities include debt securities with quoted prices that are traded less frequently than exchange-traded instruments and derivative contracts whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. This category generally includes certain U.S. Government-sponsored enterprises and agency mortgage-backed debt securities, obligations of states and municipalities, certain callable brokered certificates of deposit, collateralized mortgage obligations, derivative contracts, and mortgage loans held-for-sale.

Level 3		Unobservable inputs that are supported by little if any market activity for the asset or liability. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. This category primarily includes

Following is a description of the valuation methodologies used for the major categories of financial assets and liabilities measured at fair value.

Trading Account Assets/Liabilities and Investment Securities Available for Sale

Where quoted market prices are available in an active market, securities are valued at the last traded price by obtaining feeds from a number of live data sources including active market makers and inter-dealer brokers. These securities are classified as Level 1 within the valuation hierarchy and include U.S. Treasury securities, obligations of U.S. Government-sponsored enterprises, and corporate debt and equity securities. If quoted market prices are not available, fair values are estimated by using bid prices and quoted prices of pools or tranches of securities with similar characteristics. These types of securities are classified as Level 2 within the valuation hierarchy and consist of collateralized mortgage obligations, mortgage-backed debt securities, debt securities of U.S. Government-sponsored enterprises and agencies, and state and municipal bonds. In both cases, Synovus has evaluated the valuation methodologies of its third party valuation providers to determine whether such valuations are representative of an exit price in Synovus’ principal markets. In certain cases where there is limited activity or less transparency around inputs to valuation, securities are classified as Level 3 within the valuation hierarchy.

Mortgage Loans Held for Sale

Since quoted market prices are not available, fair value is derived from a hypothetical-securitization model used to project the “exit price” of the loan in securitization. The bid pricing convention is used for loan pricing for similar assets. The valuation model is based upon forward settlement of a pool of loans of identical coupon, maturity, product, and credit attributes. The inputs to the model are continuously updated with available market and historical data. As the loans are sold in the secondary market and predominantly used as collateral for securitizations, the valuation model represents the highest and best use of the loans in Synovus’ principal market. Mortgage loans held for sale are classified within Level 2 of the valuation hierarchy.

Private Equity Investments

Private equity investments consist primarily of investments in venture capital funds. The valuation of these instruments requires significant management judgment due to the absence of quoted market prices, inherent lack of liquidity, and the long-term nature of such assets. Based on these factors, the ultimate realizable value of private equity investments could differ significantly from the values reflected in the accompanying financial statements. Private equity investments are valued initially based upon transaction price. Thereafter, Synovus uses information provided by the fund managers in the determination of estimated fair value. Valuation factors such as recent or proposed purchase or sale of debt or equity of the issuer, pricing by other dealers in similar securities, size of position held, liquidity of the market and changes in economic conditions affecting the issuer are used in the determination of estimated fair value. These private equity investments are classified as Level 3 within the valuation hierarchy.

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Private equity investments may also include investments in publicly traded equity securities, which have restrictions on their sale, generally obtained through an initial public offering. Investments in the restricted publicly traded equity securities are recorded at fair value based on the quoted market value less adjustments for regulatory or contractual sales restrictions. Discounts for restrictions are determined based upon the length of the restriction period and the volatility of the equity security. Investments in restricted publicly traded equity securities are classified as Level 2 within the valuation hierarchy.

Synovus is considering the sale of all or a portion of its ownership interest in certain private equity investments. In accordance with the provisions of ASC 820-10-30-3, the transaction price would equal the exit price and therefore represent the fair value of the asset. During November 2009, Synovus received information which represents an estimate of the expected transaction price for the sale of these investments. Based on this information, Synovus updated its estimate of fair value for such investments, and recorded an unrealized loss of $6.0 million during the three months ended September 30, 2009.

Derivative Assets and Liabilities

Derivative instruments are valued using internally developed models. These derivatives include interest rate swaps, floors, caps, and collars. The sale of to-be-announced (TBA) mortgage-backed securities for current month delivery or in the future and the purchase of option contracts of similar duration are derivatives utilized by Synovus’ mortgage subsidiary, and are valued by obtaining prices directly from dealers in the form of quotes for identical securities or options using a bid pricing convention with a spread between bid and offer quotations. All of these types of derivatives are classified as Level 2 within the valuation hierarchy. The mortgage subsidiary originates mortgage loans which are classified as derivatives prior to the loan closing when there is a lock commitment outstanding to a borrower to close a loan at a specific interest rate. These derivatives are valued based on the other mortgage derivatives mentioned above except there are fall-out ratios for interest rate lock commitments that have an additional input which is considered Level 3. Therefore, this type of derivative instrument is classified as Level 3 within the valuation hierarchy. These amounts, however, are insignificant.

Certain Callable Brokered Certificates of Deposit

The fair value of certain callable brokered certificates of deposit is derived using several inputs in a valuation model that calculates the discounted cash flows based upon a yield curve. Once the yield curve is constructed, it is applied against the standard certificate of deposit terms that may include the principal balance, payment frequency, term to maturity, and interest accrual to arrive at the discounted cash flow based fair value. When valuing the call option, as applicable, implied volatility is obtained for a similarly dated interest rate swaption, and it is also entered in the model. These types of certificates of deposit are classified as Level 2 within the valuation hierarchy. As of June 30, 2009, all of these callable brokered certificates of deposit either ~~have~~had been called or ~~have~~had matured. As no such instruments were acquired during the third quarter, the balance for callable brokered certificate of deposits remained at zero as of September 30, 2009.

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Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables present all financial instruments measured at fair value on a recurring basis, including financial instruments for which Synovus has elected the fair value option as of ~~June~~September 30, 2009 and December 31, 2008 according to the ~~SFAS No. 157~~ valuation ~~hierarchy:~~hierarchy included in ASC 820-10:


	June 30, 2009									September 30, 2009
								Total									Total
								Assets/Liabilities									Assets/Liabilities
(in thousands)	Level 1		Level 2		Level 3			at Fair Value		Level 1		Level 2		Level 3			at Fair Value

Assets
Trading account assets	$	740		19,947		—			20,687	$	1,152		12,251		—			13,403
Mortgage loans held for sale		—		312,620		—			312,620		—		112,115		—			112,115
Investment securities available for sale:
U.S. Treasury securities		1,079		—		—			1,079		20,817		—		—			20,817
Other U.S. Government agency securities		—		1,513,357		—			1,513,357		—		1,096,570		—			1,096,570
Government agency issued mortgage-backed securities		—		1,816,413		—			1,816,413		—		1,967,686		—			1,967,686
Government agency issued collateralized mortgage obligations		—		103,606		—			103,606		—		95,472		—			95,472
State and municipal securities		—		106,398		—			106,398		—		99,526		—			99,526
Equity securities		2,844		—		8,402			11,246		2,737		—		7,907			10,644
Other investments		—		—		8,093			8,093		—		—		8,100			8,100

Total investment securities available for sale		3,923		3,539,774		16,495			3,560,192		23,554		3,259,254		16,007			3,298,815
Private equity investments		—		—		135,653	⁽¹⁾		135,653		—		—		127,833	⁽¹⁾		127,833
Derivative assets		—		159,179		804			159,983		—		140,543		2,028			142,571

Liabilities
Trading account liabilities	$	—		13,327		—			13,327	$	—		6,880		—			6,880
Derivative liabilities		—		132,398		—			132,398		—		118,291		—			118,291

Changes in Level Three Fair Value Measurements

As noted above, Synovus uses significant unobservable inputs (Level 3) to fair-value certain assets ~~and liabilities~~ as of ~~June~~September 30, 2009 and 2008. The tables below ~~includes~~include a roll forward of the balance sheet amount for the ~~six~~nine and three months ended ~~June~~September 30, 2009 and 2008 (including the change in fair value), for financial instruments of a material nature that are classified by Synovus within Level 3 of the fair value hierarchy and are measured at fair value on a recurring basis.


	Six Months Ended June 30,												Nine Months Ended September 30,
	2009						2008						2009						2008
	Investment						Investment						Investment						Investment
	Securities			Private			Securities			Private			Securities			Private			Securities			Private
	Available			Equity			Available			Equity			Available			Equity			Available			Equity
(in thousands)	for Sale			Investments			for Sale			Investments			for Sale			Investments			for Sale			Investments
Beginning balance, January 1	$	14,358			123,475			14,619			77,417		$	14,358			123,475			14,619			77,417
Total gains or (losses) (realized/unrealized):
Included in earnings		—			8,090	⁽¹⁾		—			4,946	⁽¹⁾		—			1,237	⁽¹⁾		—			17,673	⁽¹⁾
Unrealized gains (losses) included in other comprehensive income		3,240			—			(125	)		—			2,973			—			(24	)		—
Purchases, sales, issuances, and settlements, net		(1,103	)		4,088			(1,830	)		11,214			(1,324	)		3,121			(3,158	)		14,994
Transfers in and/or out of Level 3		—			—			—			—			—			—			—			—

Ending balance, June 30	$	16,495			135,653			12,664			93,577
Ending balance, September 30													$	16,007			127,833			11,437			110,084


The amount of total gains or (losses) for the period included in earnings attributable to the change in unrealized gains or losses relating to assets and liabilities still held at June 30	$	3,240			8,090			—			4,946
The amount of total gains or (losses) for the period included in earnings attributable to the change in unrealized gains or losses relating to assets still held at September 30													$	—			1,237			—			17,673

~~The tables below summarize gains~~Gains and losses ~~due to changes in fair value, including both realized~~(realized and ~~unrealized gains and losses, recorded~~unrealized) included in earnings ~~or changes in net assets for material Level 3 assets and liabilities~~ for the ~~six~~nine and three months ended ~~June~~September 30, 2009 and ~~2008.~~2008 in Miscellaneous Income as follows:

Six Months Ended June 30,
2009 2008
Investment Investment
Securities Private Securities Private
Available Equity Available Equity
(in thousands) for Sale Investments for Sale Investments
Total increase in earnings $ — 8,090 — 4,946
Change in unrealized losses to assets and liabilities still held at June 30, 2009 3,240 — — —

Three Months Ended June 30,
2009 2008
Investment Investment
Securities Private Securities Private
Available Equity Available Equity
(in thousands) for Sale Investments for Sale Investments
Total increase in earnings $ — 8,090 — —
Change in unrealized losses to assets and liabilities still held at June 30, 2008 1,852 — — —


	2009					2008
	Nine Months Ended		Three Months Ended			Nine Months Ended		Three Months Ended
(in thousands)	September 30,		September 30,			September 30,		September 30,
Total gains or (losses) included in earnings for the period	$	1,237		(6,853	)		17,673		12,728

Change in unrealized gains or losses relating to assets still held at September 30,	$	1,237		(6,853	)		17,673		12,728

Assets Measured at Fair Value on a Non-recurring Basis

In February 2008, the FASB issued provisions included in ASC 820-10-15-1A which delayed the effective date for application of the provisions included in ASC 825-10 regarding fair value measurements and disclosures for nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis. As of January 1, 2009, Synovus adopted the provisions of ASC 820-10-15-1A for all non-financial assets and non-financial liabilities.

Certain assets and liabilities are measured at fair value on a non-recurring basis. These assets and liabilities are measured at fair value on a non-recurring basis and are not included in the tables above. These assets and liabilities primarily include impaired loans and other real estate. The amounts below represent only balances measured at fair value during the period and still held as of the reporting date, and losses recognized on those assets for all periods for which an income statement is presented.

Losses
Six Months Three Months
Ended Ended
As of June 30, 2009 June 30, June 30,
(in millions) Level 1 Level 2 Level 3 2009 2009
Impaired loans $ — — 1,008.9 455.9 366.6 ⁽¹⁾
Other real estate — — 211.0 127.0 103.1 ⁽²⁾

Losses
Six Months Three Months
Ended Ended
As of June 30, 2008 June 30, June 30,
(in millions) Level 1 Level 2 Level 3 2008 2008
Impaired loans $ — — 485.7 65.5 40.5 ⁽¹⁾


~~(1)~~	Represents the carrying value of loans for which adjustments are based on the appraised value of the collateral. The excess of carrying value over estimated net realizable value is charged off as a component of provision expense.
	As of September 30, 2009
~~(2)~~(in millions)	Level 1		Level 2		Level 3
Impaired loans	$~~211.0 million is the amount which is included in other assets on the Consolidated Balance Sheet and represents fair value~~	—		—		1,045.8
Other loans held for these assets. $127.0 million and $103.1 million represent losses resulting from valuation adjustments to ORE subsequent to their initial classification as ORE for the six and three months ending June 30, 2009, respectively.sale		—		—		40.0
Other real estate		—		—		187.5

rates, and comparables, adjusted for estimated selling costs. Management also considers other factors or recent developments such as changes in absorption rates or market conditions from the time of valuation, and anticipated sales values considering management plans for disposition, which could result in adjustment to the collateral value estimates indicated in the appraisals. Impaired loans are reviewed and evaluated on at least a quarterly basis for additional impairment and adjusted accordingly, based on the same factors identified above.

The fair value of ORE is determined on the basis of current appraisals, comparable sales, and other estimates of value obtained principally from independent sources, adjusted for estimated selling costs. An asset that is acquired through, or in lieu of, loan foreclosures is valued at the fair value of the asset less the estimated cost to sell. The transfer at fair value results in a new cost basis for the asset. Subsequent to foreclosure, valuations are updated periodically, and assets are marked to current fair value, but not to exceed the new cost basis. Determination of fair value subsequent to foreclosure also considers management’s plans for disposition, including liquidation sales, which could result in adjustment to the collateral value estimates indicated in the appraisals.

Fair Value of Financial Instruments

~~SFAS No. 107, “Disclosures About Fair Value~~During the three months ended June 30, 2009, Synovus adopted provisions included in ASC 825-10-65 regarding interim disclosures about fair value of ~~Financial Instruments” (SFAS 107)~~financial instruments. ASC 825-10-65 expands the fair value disclosures required for all financial instruments that are currently not reflected on the balance sheet at fair value. The disclosure of the fair value of financial instruments not reflected at fair value on the balance sheet is now also required on an interim basis.

ASC 825-10-50 requires the disclosure of the estimated fair value of financial instruments including those financial instruments for which Synovus did not elect the fair value option. The following table presents the carrying and estimated fair values of on-balance sheet financial instruments at ~~June~~September 30, 2009 and December 31, 2008. The fair value represents management’s best estimates based on a range of methodologies and assumptions.

Cash and due from banks, interest bearing funds with the Federal Reserve Bank, interest earning deposits with banks, and federal funds sold and securities purchased under resale agreements are repriced on a short-term basis; as such, the carrying value closely approximates fair value.

The fair value of loans is estimated for portfolios of loans with similar financial characteristics. Loans are segregated by type, such as commercial, mortgage, home equity, credit card, and other consumer loans. Commercial loans are further segmented into certain collateral code groupings. The fair value of the loan portfolio is calculated, in accordance with ~~SFAS 107,~~ASC 825-10-50, by discounting contractual cash flows using estimated market discount rates which reflect the credit and interest rate risk inherent in the loan. This method of estimating fair value does not incorporate the exit-price concept of fair value prescribed by ~~SFAS No. 157.~~ASC 820-10.

2324

The fair value of deposits with no stated maturity, such as non-interest bearing demand accounts, interest bearing demand deposits, money market accounts, and savings accounts, is estimated to be equal to the amount payable on demand as of that respective date. The fair value of time deposits is based on the discounted value of contractual cash flows. The discount rate is estimated using the rates currently offered for deposits of similar remaining maturities. Short-term debt that matures within ten days is assumed to be at fair value. The fair value of other short-term and long-term debt with fixed interest rates is calculated by discounting contractual cash flows using estimated market discount rates.


	June 30, 2009				December 31, 2008				September 30, 2009				December 31, 2008
	Carrying		Estimated		Carrying		Estimated		Carrying		Estimated		Carrying		Estimated
(in thousands)	Value		Fair Value		Value		Fair Value		Value		Fair Value		Value		Fair Value
Financial assets:
Cash and due from banks	$	442,702		442,702		524,327		524,327	$	401,778		401,778		524,327		524,327
Interest bearing funds with Federal Reserve Bank		770,220		770,220		1,206,168		1,206,168		2,822,577		2,822,577		1,206,168		1,206,168
Interest earning deposits with banks		7,269		7,269		10,805		10,805		12,771		12,771		10,805		10,805
Federal funds sold and securities purchased under resale agreements		170,824		170,824		388,197		388,197		180,194		180,194		388,197		388,197
Trading account assets		20,687		20,687		24,513		24,513		13,403		13,403		24,513		24,513
Mortgage loans held for sale		312,620		312,620		133,637		133,637		112,115		112,115		133,637		133,637
Other loans held for sale		34,938		34,938		3,527		3,527		80,945		80,945		3,527		3,527
Investment securities available for sale		3,560,192		3,560,192		3,770,022		3,770,022		3,298,815		3,298,815		3,770,022		3,770,022
Loans, net		26,667,018		26,303,827		27,321,876		27,227,473		25,413,271		25,077,292		27,321,876		27,227,473
Derivative asset positions		159,983		159,983		307,771		307,771		142,571		142,571		307,771		307,771
Financial liabilities:
Non-interest bearing deposits	$	3,861,782		3,861,782		3,563,619		3,563,619	$	4,018,045		4,018,045		3,563,619		3,563,619
Interest bearing deposits		23,562,032		23,677,583		25,053,560		25,209,084		24,036,146		24,108,113		25,053,560		25,209,084
Federal funds purchased and other short-term borrowings		1,580,259		1,580,259		725,869		725,869
Federal funds purchased and other short- term borrowings										1,030,520		1,030,520		725,869		725,869
Trading account liabilities		13,327		13,327		17,287		17,827		6,880		6,880		17,287		17,827
Long-term debt		1,865,491		1,574,033		2,107,173		1,912,679		1,963,136		1,762,704		2,107,173		1,912,679
Derivative liability positions		132,398		132,398		206,340		206,340		118,291		118,291		206,340		206,340

position and the offsetting position, was ~~$3.68~~$2.94 billion, ~~an increase~~a decrease of ~~$27.9~~$765.8 million compared to December 31, 2008.

Mortgage Derivatives

Synovus originates first lien residential mortgage loans for sale into the secondary market and generally does not hold the originated loans for investment purposes. Mortgage loans are sold by Synovus for conversion to securities and the servicing is sold to a third party servicing aggregator, or the mortgage loans are sold as whole loans to investors either individually or in bulk.

At ~~June~~September 30, 2009, Synovus had commitments to fund primarily fixed-rate mortgage loans to customers in the amount of ~~$181.4~~$176.0 million. The fair value of these commitments at ~~June~~September 30, 2009 resulted in an unrealized gain of ~~$804 thousand,~~$2.0 million, which was recorded as a component of mortgage banking income in the consolidated statements of income.

At ~~June~~September 30, 2009, outstanding commitments to sell primarily fixed-rate mortgage loans amounted to approximately ~~$527.5~~$224.7 million. Such commitments are entered into to reduce the exposure to market risk arising from potential changes in interest rates, which could affect the fair value of mortgage loans held for sale and outstanding commitments to originate residential mortgage loans for resale.

The commitments to sell mortgage loans are at fixed prices and are scheduled to settle at specified dates that generally do not exceed 90 days. The fair value of outstanding commitments to sell mortgage loans at ~~June~~September 30, 2009 resulted in an unrealized loss of ~~$4.8~~$1.5 million, which was recorded as a component of mortgage banking income in the consolidated statements of income.

Counterparty Credit Risk and Collateral

Entering into interest rate derivatives potentially exposes Synovus to the risk of counterparties’ failure to fulfill their legal obligations including, but not limited to, potential amounts due or payable under each derivative contract. Notional principal amounts are often used to express the volume of these transactions, but the amounts potentially subject to credit risk are much smaller. Synovus assesses the credit risk of its counterparties regularly, monitoring publicly available credit rating information as well as other market based or, where applicable, customer specific credit metrics. Collateral requirements are determined via policies and procedures and in accordance with existing ~~agreements.~~agreements and reserves for credit losses on swaps are recorded when such losses are probable. Synovus minimizes credit risk by dealing with highly rated counterparties and by obtaining collateral as required by policy.

Collateral Contingencies

Certain of Synovus’ derivative instruments contain provisions that require Synovus to maintain an investment grade credit rating from each of the major credit rating agencies. ~~Should Synovus’ credit rating fall below investment grade,~~A failure to meet these provisions, ~~allow~~as is currently the ~~counterparties of~~case for the ~~derivative instrument~~company, allows certain counterparties to request immediate termination or demand immediate and ongoing full overnight collateralization on derivative instruments in net liability positions. The aggregate fair value of all derivative instruments with credit-risk-related contingent features that are in a liability position on ~~June~~September 30, 2009 is ~~$127.6 million. During~~$116.7 million, for which Synovus had posted collateral value of $128.4 million in the ~~second quarter~~normal course of 2009, Moody’s and Standard and Poor’s downgraded Synovus and its affiliate banks ratings to below investment grade. Due to these downgrades, Synovus was required to post additional collateral against these positions. As of June 30, a total of $122.1 million of collateral has been pledgedbusiness.

2627

against liability derivative positions. Also as a result of these downgrades, Synovus received notification from two counterparties who exercised their provision to terminate their swap positions with Synovus. Synovus received $17.9 million as net settlements during the three months ended June 30, 2009 as a result of these terminations, including terminations of swaps in both asset and liability positions.

The impact of derivatives on the balance sheet at ~~June~~September 30, 2009 and 2008 is presented below:


												Fair Value of Derivative Assets					Fair Value of Derivative Liabilities
	Fair Value of Derivative Assets					Fair Value of Derivative Liabilities							September 30,					September 30,
	Balance Sheet	June 30,				Balance Sheet	June 30,					Balance Sheet					Balance Sheet
(in thousands)	Location	2009		2008		Location	2009		2008			Location	2009		2008		Location	2009		2008
Derivatives Designated as Hedging Instruments:
Interest rate contracts:
Fair value hedges	Other assets	$	1,663		13,277	Other liabilities	$	16		1,414		Other assets	$	1,431		15,531	Other liabilities	$	—		3,060
Cash flow hedges	Other assets		37,057		31,439	Other liabilities		—		1,241		Other assets		33,133		38,214	Other liabilities		—		—

Total derivatives designated as hedging instruments		$	38,720		44,716		$	16		2,655			$	34,564		53,745		$	—		3,060


Derivatives Not Designated as Hedging Instruments:
Interest rate contracts	Other assets	$	120,459		64,437	Other liabilities	$	127,621		65,585		Other assets	$	105,979		69,258	Other liabilities	$	116,748		70,398
Mortgage derivatives	Other assets		804		1,127	Other liabilities		4,761		(877	)	Other assets		2,028		140	Other liabilities		1,543		(214	)

Total derivatives not designated as hedging instruments		$	121,263		65,564		$	132,382		64,708			$	108,007		69,398		$	118,291		70,184


Total derivatives		$	159,983		110,280		$	132,398		67,363			$	142,571		123,143		$	118,291		73,244

The effect of derivatives on the consolidated statements of income for the ~~six~~nine months ended ~~June~~September 30, 2009 and 2008 is presented below:


	Derivative							Hedged Item					Derivative							Hedged Item
		Amount of Gain (Loss)							Amount of Gain (Loss)					Amount of Gain (Loss)							Amount of Gain (Loss)
	Location of	Recognized in Income						Location of	Recognized in Income				Location of	Recognized in Income						Location of	Recognized in Income
	Gain (Loss)	on Derivative						Gain (Loss)	On Hedged Item				Gain (Loss)	on Derivative						Gain (Loss)	On Hedged Item
	Recognized in	Six Months Ended						Recognized in	Six Months Ended				Recognized in	Nine Months Ended						Recognized in	Nine Months Ended
	Income on	June 30,						Income on	June 30,				Income on	September 30,						Income on	September 30,
(in thousands)	Derivative	2009			2008			Hedged Item	2009		2008		Derivative	2009			2008			Hedged Item	2009		2008
Derivatives Designated in Fair Value Hedging Relationships:
Interest rate contracts	Other Non-Interest Income	$	(12,712	)		(6,219	)	Other Non-Interest Income	$	12,066		7,129	Other Non-Interest Income	$	(12,928	)		(5,610	)	Other Non-Interest Income	$	12,023		7,298

Total		$	(12,712	)		(6,219	)		$	12,066		7,129		$	(12,928	)		(5,610	)		$	12,023		7,298


Derivatives Not Designated as Hedging Instruments:
Interest rate contracts	Other Non-Interest Income (Expense)	$	(7,898	)		6,088							Other Non-Interest Income(Expense)	$	(12,986	)		7,158
Mortgage derivatives	Mortgage Revenues		(2,868	)		2,848							Mortgage Revenues		1,572			1,198

Total		$	(10,766	)		8,936								$	(11,414	)		8,356

The effect of derivatives on the consolidated statements of income for the three months ended ~~June~~September 30, 2009 and 2008 is presented below:


	Derivative							Hedged Item					Derivative							Hedged Item
		Amount of Gain (Loss)							Amount of Gain (Loss)					Amount of Gain (Loss)							Amount of Gain (Loss)
	Location of	Recognized in Income						Location of	Recognized in Income				Location of	Recognized in Income						Location of	Recognized in Income
	Gain (Loss)	on Derivative						Gain (Loss)	On Hedged Item				Gain (Loss)	on Derivative						Gain (Loss)	On Hedged Item
	Recognized in	Three Months Ended						Recognized in	Three Months Ended				Recognized in	Three Months Ended						Recognized in	Three Months Ended
	Income on	June 30,						Income on	June 30,				Income on	September 30,						Income on	September 30,
(in thousands)	Derivative	2009			2008			Hedged Item	2009		2008		Derivative	2009			2008			Hedged Item	2009			2008
Derivatives Designated in Fair Value Hedging Relationships:
Interest rate contracts	Other Non-Interest Income	$	(6,831	)		(20,508	)	Other Non-Interest Income	$	5,939		20,029	Other Non-Interest Income	$	(216	)		609		Other Non-Interest Income	$	(43	)		169

Total		$	(6,831	)		(20,508	)		$	5,939		20,029		$	(216	)		609			$	(43	)		169

Derivatives Not Designated as Hedging Instruments:

Derivatives Not Designated as Hedging Instruments:
Interest rate contracts	Other Non-Interest												Other Non-Interest Income (Expense)	$	(5,088	)		1,070
	Income (Expense)	$	(269	)		3,009
Mortgage derivatives	Mortgage Revenues		(3,036	)		1,206							Mortgage Revenues		4,441			(1,651	)

Total		$	(3,305	)		4,215								$	(647	)		(581	)

On December 19, 2008, Synovus issued to the United States Department of the Treasury (Treasury) 967,870 shares of Synovus’ Fixed Rate Cumulative Perpetual Preferred Stock, Series A, without par value (the Series A Preferred Stock), having a liquidation amount per share equal to $1,000, for a total price of $967,870,000. The Series A Preferred Stock pays cumulative dividends at a rate of 5% per year for the first five years and thereafter at a rate of 9% per year. Synovus may not redeem the Series A Preferred Stock during the first three years except with the proceeds from a qualified equity offering of not less than $241,967,500. After February 15, 2012, Synovus may, with the consent of the Federal Deposit Insurance Corporation, redeem, in whole or in part, the Series A Preferred Stock at the liquidation amount per share plus accrued and unpaid dividends. The Series A Preferred Stock is generally non-voting. Prior to December 19, 2011, unless Synovus has redeemed the Series A Preferred Stock or the Treasury has transferred the Series A Preferred Stock to a third party, the consent of the Treasury will be required for Synovus to (1) declare or pay any dividend or make any distribution on common stock, par value $1.00 per share, other than regular quarterly cash dividends of not more than $0.06 per share, or (2) redeem, repurchase or acquire Synovus common stock or other equity or capital securities, other than in connection with benefit plans consistent with past practice. A consequence of the Series A Preferred Stock purchase includes certain restrictions on executive compensation that could limit the tax deductibility of compensation that Synovus pays to executive management. The recently enacted American Recovery and Reinvestment Act (ARRA) and the Treasury’s February 10, 2009, Financial Stability Plan and regulations issued on June 15, 2009 under these laws may retroactively affect Synovus and modify the terms of the Series A Preferred Stock. In particular, the ARRA provides that the Series A Preferred Stock may now be redeemed at any time with the consent of the Federal Deposit Insurance Corporation.

~~Note 14~~ — Income Taxes

Synovus’ income tax returns are subject to review and examination by federal, state and local taxing jurisdictions. Currently, there are no years for which a federal income tax return is under examination by the IRS. However, certain state income tax examinations are currently in progress. Although Synovus is unable to determine the ultimate outcome of these examinations, Synovus believes that current income tax reserves ~~determined in accordance with SFAS Interpretation No. 48, “Accounting for Uncertainty in Income Taxes — an interpretation of SFAS No, 109”, “Accounting for Income Taxes” (SFAS No. 109)~~ are adequate for ~~the~~any uncertain income tax positions relating to these jurisdictions. The tax reserves were determined in accordance with sections 25 and 40 of ASC 740-10 and ASC 835-10-60-14 regarding accounting for uncertainty in income taxes as described in ASC 740-10-05-6. Adjustments to reserves are made when necessary to reflect a change in the probability outcome.

In connection with the spin-off of TSYS on December 31, 2007, Synovus entered into an income tax sharing agreement with TSYS, which requires TSYS to indemnify Synovus from potential income tax liabilities that may arise in future examinations as a result of TSYS’ inclusion in Synovus’ consolidated income tax return filings for calendar years prior to 2008.

This change resulted in an increase toin the deferred tax asset valuation allowance of approximately $173 million during the second quarter of 2009, and an effective tax rate of 18.6% for the first six months of 2009. The 18.6% effective tax rate was representative of the projected annual effective tax rate, which was largely determined based on management’s estimate of the pre-tax loss for the year.

During the three months ended ~~June~~September 30, ~~2009.~~2009, management’s estimate of the anticipated pre-tax loss for the year increased. Based on the revised estimate, the effective tax rate for the year is estimated to be 14.4%. The ~~increase in~~gross deferred tax asset increased approximately $133 million during the quarter, and the related valuation allowance increase for the three months ended September 30, 2009 was ~~recorded through an adjustment to the estimated annual effective tax rate.~~ approximately $155 million.

September 2008, Visa announced the settlement of its Discover litigation for approximately $1.74 billion. Synovus increased its litigation accrual by $6.3 million for its membership proportion of the incremental amount of the final Discover settlement over the previously estimated amount for the Discover settlement. During December 2008, Visa deposited $1.10 billion to the litigation escrow, effectively representing a repurchase of Class AB common stock on an as-converted basis. Synovus reduced its litigation accrual by $6.4 million for its membership proportion of the amount deposited to the litigation escrow. During July 2009, Visa deposited $700 million to the litigation escrow, effectively representing a repurchase of Class B common stock on an as-converted basis. Accordingly, Synovus reduced its litigation accrual by $4.1 million for its membership proportion of the amount deposited to the litigation escrow, during the three months ended September 30, 2009.

~~At June 30,~~On November 6, 2009, ~~Synovus’ accrual~~Synovus completed the sale of its remaining shares of Visa Class B common stock to a qualified Visa member. Synovus expects to recognize a pre-tax gain of $51.9 million on the sale of the Class B shares during the three months ending December 31, 2009. Visa’s Class B shares are subject to restrictions on sale (other than to other qualified Visa members) prior to the latter of March 25, 2011 or Visa’s settlement of all covered litigation. Upon the lifting of restrictions, the Class B shares will convert into Class A shares, which may be sold in the open market, based on a conversion ratio calculated by Visa. The conversion ratio decreases when Visa converts Class B shares for sale as loss shares to fund the ~~aggregate amount of Visa’s~~escrow for covered litigation, ~~was $19.3 million. For~~and may increase if the ~~six months ended June 30, 2008,~~litigation escrow includes excess funds following settlement of all covered litigation. In conjunction with sale of the ~~redemption of~~Class B shares, Synovus has entered into an agreement which provides for payments between the Synovus and the buyer for future changes in the conversion ratio. Synovus is required to post collateral in connection with expected future settlements under the ~~accrued liability for Visa litigation resulted in a gain of $34.1 million, net of tax, or $0.10 per diluted share.~~agreement.

Note 1615 — Recently Adopted Accounting Pronouncements

In December 2007, the FASB issued ~~SFAS No. 141R, “Business Combinations” (SFAS 141R). SFAS 141R clarifies~~revisions to the authoritative guidance for business combinations included in ASC 805 as described in ASC 805-10-65-1. The revisions described by ASC 805-10-65-1 clarify the definitions of both a business combination and a business. All business combinations will be accounted for under the acquisition method (previously referred to as the purchase method). ~~This standard~~ASC 805 now defines the acquisition date as the only relevant date for recognition and measurement of the fair value of consideration paid. ~~SFAS 141R requires~~The new provisions of ASC 805 require the acquirer to expense all acquisition related ~~costs. SFAS 141R will~~costs and also ~~require~~requires acquired loans to be recorded at fair value on the date of acquisition. ~~SFAS 141R~~The revised guidance defines the measurement period as the time after the acquisition date during which the acquirer may make adjustments to the “provisional” amounts recognized at the acquisition date. This period cannot exceed one year, and any subsequent adjustments made to provisional amounts are done retrospectively and restate prior period data. ~~SFAS 141R was~~The provisions of ASC 805 as described in ASC 805-10-65 were adopted by Synovus effective January 1, 2009 and isare applicable to business combinations entered into after December 15, 2008. The estimated impact of adoption will not be determined until Synovus enters into a business combination.

In December 2007, the FASB issued ~~SFAS No. 160, “Non-controlling Interests~~revisions to the authoritative guidance in ~~Consolidated Financial Statements — An Amendment of ARB No. 51” (SFAS 160). SFAS 160 requires~~ASC 810 regarding accounting for non-controlling interests in consolidated financial statements as described in ASC 810-10-65. The revisions to ASC 810 require noncontrolling interests to be treated as a separate component of equity, not as a liability or other item outside of equity. Disclosure requirements include net income and comprehensive income to be displayed for both the controlling and noncontrolling interests and a separate schedule that shows the effects of any transactions with the noncontrolling interests on the equity attributable to the controlling

interests. Synovus adopted ~~SFAS No. 160~~the new provisions of ASC 810 as described in ASC 810-10-65 effective January 1, 2009. The impact of adoption resulted in a change in balance sheet classification and presentation to non-controlling interests which is now reported as a separate component of equity.

In March 2008, the FASB issued ~~SFAS No. 161, “Disclosures~~revisions to ASC 815 regarding disclosures about ~~Derivative Instruments~~derivative instruments and ~~Hedging Activities — An Amendment of FASB Statement No. 133” (SFAS 161). SFAS 161 changes~~hedging activities as described in ASC 815-10-65-1. The revisions to ASC 815 change the disclosure requirements for derivative instruments and hedging activities. Disclosure requirements include qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains/losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. Synovus adopted the new disclosure requirements of ~~SFAS No. 161~~ASC 815 as described in ASC 815-10-65-1 effective January 1, 2009.

In June 2008, the ~~FASB’s Emerging Issues Task Force (EITF) reached a consensus on EITF Issue No. 03-6-1, “Determining Whether Instruments Granted~~FASB issued revisions to ASC 260 regarding the determination of whether instruments granted in ~~Share-Based-Payment Transactions Are Participating Securities” (EITF 03-6-1). EITF 03-6-1 requires~~share-based payment transactions are participating securities as described in ASC 260-10-65-2. The new provisions of ASC 260 require that unvested share-based payment awards that have nonforfeitable rights to dividends or dividend equivalents are participating securities and therefore should be included in computing earnings per share using the two-class method. ~~EITF 03-6-1 was~~The amendments to ASC 260 as described in ASC 260-10-65-2 were adopted by Synovus effective January 1, 2009. The impact of adoption was not material to Synovus’ financial position, results of operations, or cash flows.

In November 2008, the ~~EITF~~FASB’s Emerging Issues Task Force (EITF) reached a consensus on ~~EITF Issue No. 08-6, “Equity Method Investment Accounting Considerations (EITF 08-6). EITF 08-6~~revisions to ASC 323-10 regarding equity method investment accounting considerations to addresses questions about the potential effect of ~~SFAS 141R~~other recently issued changes to ASC 805 and ~~SFAS 160 on equity-method accounting under Accounting Principles Board Opinion 18, “The Equity Method of Accounting for Investments~~ASC 810 as described in ~~Common Stock” (APB 18).~~ASC 805-10-65-1 and ASC 810-10-65-1, respectively. The EITF will continue existing practices under ASC 323-10-35 APB 18 including the use of a cost-accumulation approach to initial measurement of the investment. The EITF will not require the investor to perform a separate impairment test on the underlying assets of an equity method investment, but under APB 18, an overall other-than-temporary impairment test of its investment

is still required. Shares subsequently issued by the equity-method investee that reduce the investor’s ownership percentage should be accounted for as if the investor had sold a proportionate share of its investment, with gains or losses recorded through earnings. EITF 08-6 was adopted by Synovus effective January 1, 2009. There was no impact of adoption to Synovus’ financial position, results of operations, or cash flows.

In April 2009, the FASB issued ~~FSP FAS 115-2 and FAS 124-2, “Recognition and Presentation of Other-Than-Temporary Impairments. FAS 115-2 and 124-2~~revisions to the authoritative guidance included in ASC 320-10 as described in ASC 320-10-65-1, which are intended to bring greater consistency to the timing of impairment recognition and provide greater clarity to investors about the credit and noncredit components of impaired debt securities that are not expected to be sold. ~~FAS 115-2 and 124-2 provide~~The revised guidance provides that if a company does not have the intent to sell a debt security prior to recovery and it is more likely than not that it will not have to sell the security prior to recovery, the security would not be considered other-than-temporarily-impaired unless there is a credit loss. If there is an impairment due to a credit loss, the credit loss component will be recorded in earnings and the remaining portion of the impairment loss would be recognized in other comprehensive income. The credit loss component must be determined based on the company’s best estimate of the decrease in cash flows expected to be collected. The provisions of ~~this statement are~~the revised guidance were effective for interim and annual periods ended after June 15, 2009. Synovus adopted the provisions ~~of FSP FAS 115-2 and FAS 124-2~~described in ASC 320-10-65-1 effective April 1, 2009. The impact of adoption was not material to Synovus’ financial position, results of operations, or cash flows.

In April 2009, the FASB issued ~~FSP FAS 157-4, “Determining Fair Value when~~revisions to the ~~Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That are Not Orderly.” FAS 157-4~~authoritative guidance included in ASC 820 as described in ASC 820-10-65-1, which relates to determining fair values when there is no active market or where the inputs being used represent distressed sales. ~~This statement reaffirms~~These revisions reaffirm the need to use judgment to ascertain if a formerly active market has become inactive and also assists in determining fair values when markets have become inactive. ~~FAS 157-4~~ASC 820, as revised, defines fair value as the price that would be received to sell an asset in an orderly transaction (i.e. not a forced liquidation or distressed sale). Factors must be considered when applying this statement to determine whether there has been a significant decrease in volume and level of activity of the market for the asset. The provisions for this statement are effective for the interim and annual periods ended after June 15, 2009. Synovus adopted the provisions ~~of FSP FAS 157-4~~described in ASC 820-10-65-1 effective April 1, 2009. The impact of adoption was not material to Synovus’ financial position, results of operations, or cash flows.

In April 2009, the FASB issued FSP FAS 107-1 and APB 28-1, “Interim Disclosures about the Fair Value of Financial Instruments.” FAS 107-1 and APB 28-1 provide guidance on fair value disclosures for any financial instruments that are not currently reflected on the balance sheet at fair value. This statement will require public companies to disclose the fair value of financial instruments within the scope of SFAS 107 in interim financial statements (verses disclosing in annual filings only). The provisions for this statement are effective for the interim and annual periods ended after June 15, 2009. Synovus adopted the disclosures requirement of FSP FAS 107-1 and APB 128-1 effective April 1, 2009.

In May 2009, the FASB issued ~~SFAS No. 165, “Subsequent Events” (SFAS 165). SFAS 165 establishes~~revisions to ASC 855-10 which establish general standards of accounting for and disclosure of events that occur after the balance sheet date, but before financial statements are issued or available to be issued. ~~This Statement~~ASC 855-10, as revised, sets forth (1) the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, (2) the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financials, and (3)

ITEM 2 — MANAGEMENT’S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

Forward-Looking Statements

Certain statements made or incorporated by reference in this ~~document~~Report which are not statements of historical fact, including those under “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere in this ~~document,~~report, constitute forward-looking statements within the meaning of, and subject to the protections of, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements include statements with respect to Synovus’ beliefs, plans, objectives, goals, targets, expectations, anticipations, assumptions, estimates, intentions and future performance and involve known and unknown risks, many of which are beyond Synovus’ control and which may cause ~~the~~Synovus’ actual results, performance or achievements ~~of Synovus~~ or the commercial banking industry or economy generally, to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements.

All statements other than statements of historical fact are forward-looking statements. You can identify these forward-looking statements through Synovus’ use of words such as “believes,” “anticipates,” “expects,” “may,” “will,” “assumes,” “should,” “predicts,” “could,” “should,” “would,” “intends,” “targets,” “estimates,” “projects,” “plans,” “potential” and other similar words and expressions of the future or otherwise regarding the outlook for Synovus’ future business and financial performance and/or the performance of the commercial banking industry and economy in general. Forward-looking statements are based on the current beliefs and expectations of Synovus’ management and are subject to significant risks and uncertainties. Actual results may differ materially from those contemplated by such forward-looking statements. A number of factors could cause actual results to differ materially from those contemplated by the forward-looking statements in this document. Many of these factors are beyond Synovus’ ability to control or predict. These factors include, but are not limited to:

	(1)		competitive pressures arising from aggressive competition from other financial service providers;

	(2)		further deteriorations in credit quality, particularly in residential construction and commercial development real estate loans, may continue to result in increased ~~non-performing~~nonperforming assets and credit losses, which will adversely impact our earnings and capital;

	(3)		declining values of residential and commercial real estate may result in further write-downs of assets and realized losses on disposition of ~~non-performing~~nonperforming assets, which may increase our credit losses and negatively affect our financial results;

	(4)		continuing weakness in the residential real estate environment, which may negatively impact our ability to liquidate ~~non-performing~~nonperforming assets;

	(5)		the impact on our borrowing costs, capital cost and our liquidity due to further adverse changes in our credit ratings;

	(6)		~~inadequacy of~~the risk that our allowance for loan losses ~~or the risk that the allowance~~ may prove to be inadequate or may be negatively affected by credit risk exposures;

	(7)		our ability to manage fluctuations in the value of our assets and liabilities to maintain sufficient capital and liquidity to support our operations;

	(8)		the concentration of ~~our~~Synovus’ nonperforming assets by loan type, in certain geographic regions and with affiliated borrowing groups;

	(9)		the risk of additional future losses if the proceeds we receive upon the liquidation of ~~non-performing~~nonperforming assets are less than the fair value of such assets;

	(10)		changes in the interest rate environment which may increase funding costs or reduce earning assets yields, thus reducing margins;

	(11)		restrictions or limitations on access to funds from subsidiaries ~~thereby restricting~~and potential obligations to contribute capital to our subsidiaries, which may restrict Synovus’ ability to make payments on ~~our~~its obligations or dividend payments;

	(12)		the availability and cost of capital and ~~liquidity;~~ liquidity on favorable terms, if at all;

	(13)		changes in accounting standards or applications and determinations made thereunder;

	(14)		slower than anticipated rates of growth in non-interest income and increased non-interest expense;

	(15)		changes in the cost and availability of funding due to changes in the deposit market and credit market, or the way in which Synovus is perceived in such markets, including a further reduction in our debt ratings;

	(16)		the impact of future losses on ~~our~~Synovus’ deferred tax assets and the related impact on ~~our~~Synovus’ financial results of changes in the valuation allowance for ~~our~~its deferred tax assets in future ~~periods;~~periods, as well as the risk that the recoverability of the deferred tax asset balance may extend beyond 2010;

	(17)		the strength of the U.S. economy in general and the strength of the local economies and financial markets in which operations are conducted may be different than expected;

	(18)		the effects of and changes in trade, monetary and fiscal policies, and laws, including interest rate policies of the Federal Reserve Board;

	(19)		inflation, interest rate, market and monetary fluctuations;

	(20)		the impact of the Emergency Economic Stabilization Act of 2008 (EESA), the American Recovery and Reinvestment Act (ARRA), the Financial Stability Plan and other recent and proposed changes in governmental policy, laws and regulations, including proposed and recently enacted changes in the regulation of banks and financial institutions, or the interpretation or application thereof, including restrictions, increased capital requirements, limitations and/or penalties arising from banking, securities and insurance laws, regulations and examinations;

	(21)		the impact on ~~our~~Synovus’ financial results, reputation and business if ~~we are~~Synovus is unable to comply with all applicable federal and state ~~regulations;~~regulations and applicable memoranda of understanding, other supervisory actions and any necessary capital initiatives;

	(22)		the costs and effects of litigation, investigations or similar matters, or adverse facts and developments related thereto, including, without limitation, the pending litigation with CompuCredit Corporation relating to CB&T’s Affinity Agreement with CompuCredit and the pending securities class action and shareholder derivative litigation filed against Synovus;

	(23)		the volatility of our stock price;

	(24)		the actual results achieved by our implementation of Project Optimus, and the risk that we may not achieve the anticipated cost savings and revenue increases from this initiative;

	(25)		the impact on the valuation of our investments due to market volatility or counterparty payment risk;

	(26)		the risks that the assumptions underlying our internal capital analysis are incorrect, and that we will require additional capital to satisfy regulatory capital thresholds in addition to the capital realized through the execution of Synovus’ capital plan announced on September 14, 2009;

	(27)		the risk that, if the assumptions underlying our internal capital analysis are incorrect, we may be required to seek additional liquidity from external sources;

	(28)		the costs of services and products to us by third parties, whether as a result of our financial condition, credit ratings, the way we are perceived by such parties, the economy or otherwise; and

	~~(26)~~(29)		other factors and other information contained in this document and in other reports and filings that Synovus makes with the SEC under the Exchange Act.

For a discussion of these and other risks that may cause actual results to differ from expectations, you should refer to the risk factors in our annual report on Form 10-K/A for the year ended December 31, 2008, this Report and our quarterly reports on form 10-Q for the quarters ended March 31, 2009 and June 30, 2009 and our current report on Form 8-K filed on September 15, 2009 on file with the SEC. All written or oral forward-looking statements that are made by or are attributable to Synovus are expressly qualified by this cautionary notice. You should not place undue reliance on any forward-looking statements, since those statements speak only as of the date on which the statements are made. Synovus undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made to reflect the occurrence of new information or unanticipated events, except as may otherwise be required by law.

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About Synovus

Synovus is a financial services holding company based in Columbus, Georgia, with approximately $35 billion in assets. Synovus provides integrated financial services including banking, financial management, insurance, mortgage, and leasing services through 30 wholly-owned subsidiary banks and other Synovus offices in Georgia, Alabama, South Carolina, Tennessee, and Florida. At September 30, 2009, our banks ranged in size from $241.0 million to $7.70 billion in total assets.

Executive Summary

The following ~~financial review provides a discussion of~~narrative summarizes the significant trends affecting Synovus’ ~~financial condition, changes in financial condition, and~~ results of operations and financial condition for the ~~six~~nine and three months ended ~~June~~September 30, 2009. This overview supplements, and should be read in conjunction with, the condensed consolidated financial statements of Synovus and the notes thereto contained elsewhere in this Report.

Industry Overview

The first ~~six~~nine months of 2009 continue to reflect the adverse impact of severe macro economic conditions which have negatively impacted liquidity, credit quality and ~~credit quality.~~capital. Concerns regarding increased credit losses from the weakening economy have negatively affected capital and earnings of most financial institutions. Financial institutions continue to experience significant declines in the value of collateral for real estate loans and heightened credit losses, which have resulted in record levels of ~~non-performing~~nonperforming assets, charge-offs, foreclosures and ~~foreclosures.~~

losses on disposition of the underlying assets. Liquidity in the debt markets remains low in spite of efforts by the U.S. Department of the Treasury (Treasury) and the Federal Reserve Bank (Federal Reserve) to inject capital into financial institutions. The federal funds rate set by the Federal Reserve has remained at 0.25% since December 2008, following a decline from 4.25% to 0.25% during 2008 through a series of seven rate reductions.

~~Treasury,~~It is uncertain how long the ~~FDIC and other governmental agencies~~recessionary pressures will continue ~~to enact rules and regulations to implement~~before the ~~EESA,~~U.S. economy shows signs of a sustained recovery; however, some leading economic indicators suggest that the Troubled Asset Relief Program (TARP), the Financial Stability Plan, the ARRA and related economic recovery programs, many of which contain limitations on the ability of financial institutions to take certain actions or to engage in certain activities if the financial institution is a participant in the TARP Capital Purchase Program or related programs. Future regulations, or enforcement of the terms of programs already in place,economy may require financial institutions to raise additional capital and result in the conversion of preferred equity issued under TARP or other programs to common equity. There can be no assurance as to the actual impact of the EESA, the FDIC programs or any other governmental program on the financial markets.

~~On May 7, 2009, the Federal Reserve Board announced the results of the Supervisory Capital Assessment Program (“SCAP”), commonly referred to as the “stress test,” of the capital needs~~remain challenging through the end of ~~2010~~this year and into much of the nineteen largest U.S. bank holding companies. As a result of the SCAP, a number of the bank holding companies reviewed as part of the SCAP were required, or voluntarily chose, to raise additional Tier 1 capital, particularly common equity. Following the release of the SCAP results, bank holding companies that were not part of the SCAP, such as Synovus, have faced significant speculation as to the results of the stress tests performed on the largest nineteen2010. Accordingly, financial institutions ~~and the hypothetical results of the stress test methodology if it was applied to other financial institutions, including regional banks smaller in size. See “Capital Resources and Liquidity”.~~

~~The severe economic conditions are expected to continue through 2009 and beyond. Financial institutions~~like ours likely will continue to experience heightened credit losses and higher levels of ~~non-performing~~nonperforming assets, charge-offs and foreclosures. In light of these conditions, financial institutions also face heightened levels of scrutiny and capital and liquidity requirements from federal and state regulators. These factors have negatively influenced, and likely will continue to negatively influence, earning asset yields at a time when the market for deposits is intensely competitive. As a result, financial institutions experienced, and are expected to continue to experience, pressure on credit costs, loan yields, deposit and other borrowing costs, liquidity, and capital.

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Strategic Initiatives

In 2008 and the first three quarters of 2009, Synovus has taken a number of steps to aggressively manage credit and capital and reduce expenses.

	•		Aggressive management of credit issues— Synovus has taken a proactive approach to recognition and disposition of problem assets. During the nine and three month periods ended September 30, 2009, Synovus disposed of $849 million and $339 million, respectively, of nonperforming assets. The allowance and cumulative write-downs on nonperforming assets as a percentage of unpaid principal balance at September 30, 2009 was approximately 46%.

	•		Expense reduction— In addition to managing credit quality, Synovus has reduced overall expenses and fundamental non-interest expenses in each of the last five quarters. Fundamental non-interest expense, which excludes other credit costs, FDIC insurance expense, restructuring charges, changes in the VISA litigation accrual and goodwill impairment expense, was down $33.9 million and $10.2 million, respectively, for the nine and three month periods ended September 30, 2009 as compared to the same periods in the prior year. See “Non-GAAP Financial Measures” in this Report.

	•		Capital Plan— On September 14, 2009, Synovus announced that it would undertake certain initiatives that it expected would increase Synovus’ Tier 1 capital and improve its tangible common equity to tangible assets ratio (the “Capital Plan”). As of November 9, 2009, Synovus has substantially completed the execution of the Capital Plan, as described below:

	o		On September 22, 2009, Synovus completed a public offering of 150,000,000 shares of common stock at a price of $4.00 per share, generating net proceeds of $570.9 million.

	o		On November 4, 2009, Synovus completed the exchange of $29,820,000 in aggregate principal amount of its outstanding 4.875% Subordinated Notes Due 2013 for approximately 9.44 million shares of Synovus common stock.

	o		On November 6, 2009, Synovus completed the sale of its remaining shares of Visa Class B common stock. Synovus expects to recognize a pre-tax gain of $51.9 million on the sale of the Visa Class B common stock during the three months ending December 31, 2009.

Through November 6, 2009, implementation of the Capital Plan has generated an aggregate of approximately $644 million of tangible common equity. Synovus presently expects to continue to work to identify, consider and pursue additional balance sheet optimization initiatives during the fourth quarter of 2009. In addition to these strategies, we may determine to pursue additional strategic initiatives in the future, whether as a result of the continuation or worsening of the current adverse market conditions and our resulting capital position, or as a result of regulatory pressures. See “Capital Resources and Liquidity”.

There can be no assurance that Synovus will realize the anticipated benefits of its strategic initiatives, including the Capital Plan, or that its regulators will be satisfied with such initiatives and plan and will not require Synovus to take further action. See Part II — Item 1A - “Risk Factors.”

~~About Our Business~~Subsequent Events Impacting Results of Operations

On October 22, 2009, Synovus isreported results of operations for the three and nine months ended September 30, 2009. After October 22, 2009, two events occurred which are required under U.S. generally accepted accounting principles (GAAP) to be reflected in Synovus’ results of operations for the nine and three months ended September 30, 2009. The events resulted in a financial services holding company based in Columbus, Georgia, with approximately $34 billion in assets. Synovus provides integrated financial services including banking, financial management, insurance, mortgage,$6.0 million reduction to the carrying value of certain private equity investments and ~~leasing services through 30 wholly-owned subsidiary banks~~the recording of a $10.5 million contingent liability relating to certain pending litigation. The net of tax impact of these two items, net of taxes, totaled $16.1 million. Accordingly, the net loss for the nine and ~~other Synovus offices in Georgia, Alabama, South Carolina, Tennessee, and Florida. At June~~three months ended September 30, 2009 ~~our banks ranged~~increased to $1.16 billion and $439.8 million, respectively, as compared to the results originally reported on October 22, 2009. For further discussion of these items, see “Critical Accounting Policies – Private Equity Investments,” Part II – Item 1 – “Legal Proceedings,” and Note 11 to the unaudited consolidated financial statements in ~~size from $261.1 million to $6.63 billion in total assets.~~this Report.

Our Key Financial Performance Indicators

In terms of how we measure success in our business, the following are our key financial performance indicators:

•		~~Capital Strength~~

	• Capital Strength		~~Liquidity~~• Loan Growth

	• Liquidity		~~Credit Quality~~

•		~~Net Interest Margin~~

•		~~Loan Growth~~

•		Core Deposit Growth

	• Credit Quality		•Fee Income Growth

	• Net Interest Margin		•Expense Management

The net loss for the ~~quarter~~three months ended September 30, 2009 was ~~$586.9~~$439.8 million, or ~~$1.82~~$1.32 per common share. The results for the ~~second~~third quarter were impacted by a non-cash charge of ~~$173.4~~approximately $155 million to record an increase in the valuation allowance for deferred tax assets. Total credit costs (including provision for losses on loans, losses on ORE, reserve for unfunded commitments and charges related to impaired loans held for sale) for the ~~quarter~~three months ended ~~June~~September 30, 2009 were ~~$807.8~~$606.3 million, including provision for losses on loans of ~~$631.5~~$496.5 million and costs related to foreclosed real estate of ~~$172.4~~$101.4 million. The credit costs were largely driven by ~~a significant increase in the allowance for loan losses~~valuation charges on new nonperforming loans and existing nonperforming assets, as well as ~~the impact of~~charges for estimated losses on ~~liquidations of non-performing assets. Non-performing assets decreased $15.0 million from the first quarter of 2009 as~~future asset dispositions. Problem asset dispositions ~~of non-performing assets reached $404~~totaled $339 million in the ~~second~~third quarter.

~~Synovus’ operating results excluding credit costs showed improvement in spite of the challenging economic environment. Synovus’ pre-tax,~~Pre-tax, pre-credit costs income (which excludes provision for losses on loans, other credit costs, and certain other ~~items, as shown in more detail on page 75 of this report)~~items), was ~~$144.8~~$141.7 million, ~~up $15.6~~down $3.1 million ~~over~~from the ~~first~~second quarter of 2009. The net interest margin ~~increased~~decreased one basis point to ~~3.23%, or eighteen basis points,~~3.22% compared to the ~~first~~second quarter of 2009. See “Non-GAAP Financial Measures” on page 83 of this report. The net interest margin in the third quarter was impacted by a net decrease in loans outstanding, an excess liquidity position, and the negative impact of nonperforming assets.

Core deposits continued their positive trend with 3.4% year-over-year growth. See “Non-GAAP Financial Measures” on page 83 of this report. Linked quarter core deposits were relatively flat, however, we successfully improved the mix of deposits by replacing higher priced time deposits with lower cost funding. On a sequential quarter basis, non-interest-bearing deposits grew at an annualized rate of 16.1%.

Fundamental non-interest expense (non-interest expense excluding other credit costs, FDIC insurance expense, restructuring charges, Visa litigation (recovery) expense, and goodwill impairment charges) continued to trend downward, declining $33.9 million, or 5.6%, and $10.2 million, or 5.1%, for the nine and three months ending September 30, 2009 as compared to the

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same periods in the prior year. See “Non-GAAP Financial Measures” on page 83 of this report. Reduced salaries and other personnel expense contributed significantly to the reduced expenses. Total employees (6,376 at September 30, 2009) are down 7.3% from year end 2008, and 13.0% from the peak level of 7,331 in the first quarter of 2008.

A summary of Synovus’ financial performance for the three and ~~six~~nine months ended ~~June~~September 30, 2009 and 2008, is set forth in the table below.

Financial Performance Summary


	Six Months Ended								Three Months Ended									Nine Months Ended								Three Months Ended
	June 30,								June 30,									September 30,								September 30,
(in thousands, except per share data)	2009			2008		Change			2009			2008			Change			2009			2008		Change			2009			2008			Change
Pre-tax, pre-credit costs income⁽¹⁾	$	274,101			346,515		(20.9	%)	$	144,835			176,092			(17.8	%)	$	421,835			508,733		(17.1	%)	$	147,734			162,218			(8.9	%)
Net Income (loss)		(720,981	)		94,790	nm				(584,253	)		12,237		nm
Net income (loss)																			(1,160,782	)		59,319			nm		(439,802	)		(35,471	)			nm
Net income (loss) available to common shareholders		(752,018	)		93,093	nm				(601,155	)		(12,099	)	nm				(1,205,822	)		52,972			nm		(453,805	)		(40,121	)			nm

Diluted earnings (loss) per share (EPS)		(2.28	)		0.28	nm				(1.82	)		0.04		nm				(3.60	)		0.16			nm		(1.32	)		(0.12	)			nm

Provision for losses on loans		921,963			184,665		399.3	%		631,526			93,616		574.6		%		1,418,485			336,016		322.2	%		496,522			151,351			228.1	%

Non-interest income		196,588			247,675		(20.6	%)		107,838			107,698			0.1	%		287,384			346,630		(17.1	%)		90,797			98,955			(8.2	%)

Non-interest expense		659,674			467,338		41.2	%		396,316			265,964			49.0	%		979,127			742,422		31.9	%		319,453			275,084			16.1	%
Fundamental non-interest expense⁽¹⁾⁽²⁾		381,749			405,446		(5.8	%)		190,696			200,284			(4.8	%)		571,251			605,193		(5.6	%)		189,503			199,748			(5.1	%)

Other credit costs⁽³⁾		230,585			38,829	nm				176,308			29,686		nm				340,324			84,094		304.7	%		109,739			45,266			(142.4	%)

Critical Accounting Policies

The accounting and financial reporting policies of Synovus conform to ~~U.S. generally accepted accounting principles (GAAP)~~GAAP and to general practices within the banking and financial services industries. Synovus has identified certain of its accounting policies as “critical accounting policies.” In determining which accounting policies are critical in nature, Synovus has identified the policies that require significant judgment or involve complex estimates. The application of these policies has a significant impact on Synovus’ financial statements. Synovus’ financial results could differ significantly if different judgments or estimates are applied in the application of these policies.

Allowance for Loan Losses

Notes 1 and 8 to Synovus’ consolidated financial statements in Synovus’ ~~2008~~ annual report on Form ~~10-K~~10-K/A for the year ended December 31, 2008 contain a discussion of the allowance for loan losses. The allowance for loan losses at ~~June~~September 30, 2009 was ~~$918.7~~$918.5 million.

The allowance for loan losses is a significant estimate and is regularly evaluated by Synovus for adequacy. The allowance for loan losses is determined based on an analysis which assesses the probable loss within the loan portfolio. The allowance for loan losses consists of two components: the allocated and unallocated allowances. Both components of the allowance are available to cover inherent losses in the portfolio. Significant judgments or estimates made in the determination of the allowance for loan losses consist of the risk ratings for loans in the commercial loan portfolio, the valuation of the collateral for loans that are classified as impaired loans, the qualitative loss factors, and management’s plan for disposition of ~~non-performing~~nonperforming loans. In determining an adequate allowance for loan losses, management makes numerous assumptions, estimates and assessments. The use of different estimates or assumptions could produce different provisions for losses on loans.

As a part of our problem asset disposition strategy, management intends to identify certain non-performing loans for disposition through liquidation or other sales. While all of the non-performing loans have not yet been specifically identified, these types of sales are expected to result in significantly lower proceeds than traditional sales, which could result in additional losses. The excess of carrying value over estimated net proceeds from sale is charged-off against the allowance for loan losses when management has determined the loans or groups of loans for disposition through these liquidation strategies.

Commercial Loans — Risk Ratings and Loss Factors

Commercial loans are assigned a risk rating on a nine point scale. For commercial loans that are not considered impaired, the allocated allowance for loan losses is determined based upon the expected loss percentage factors that correspond to each risk rating.

The risk ratings are based on the borrowers’ credit risk profile, considering factors such as debt service history and capacity, inherent risk in the credit (e.g., based on industry type and source of repayment), and collateral position. Ratings 7 through 9 are modeled after the bank regulatory classifications of substandard, doubtful, and loss. Expected loss percentage factors are based on the probable loss including qualitative factors. The probable loss considers the probability of default, the loss given default, and certain qualitative factors as determined by loan category and risk rating. Through March 31, 2009, the probability of default loss factors were based on industry data. Beginning April 1, 2009, the probability of default loss factors are based on internal default experience because this was the first reporting period when sufficient internal default data became available. This change resulted in a net increase in the allocated allowance for loan losses for the commercial portfolio of approximately $30 million during the three months ended June 30, 2009. The loss given default factors are based on industry data, which will continue to be

expected loss factors. Accordingly, these expected loss factors are reviewed periodically and modified as necessary.

Each loan is assigned a risk rating during the approval process. This process begins with a rating recommendation from the loan officer responsible for originating the loan. The rating recommendation is subject to approvals from other members of management and/or loan committees depending on the size and type of credit. Ratings are re-evaluated on a quarterly basis. Additionally, an independent Parent Company credit review function evaluates each bank’s risk rating process at least every six months.

Impaired Loans

Management considers a loan to be impaired when the ultimate ~~collectibility~~collectability of all amounts due according to the contractual terms of the loan agreement are in doubt. A majority of our impaired loans are collateral-dependent. The net carrying amount of collateral-dependent impaired loans is equal to the lower of the loans’ principal balance or the fair value of the collateral (less estimated costs to sell) not only at the date at which impairment is initially recognized, but also at each subsequent reporting period. Accordingly, our policy requires that we update the fair value of the collateral securing collateral-dependent impaired loans each calendar quarter. Impaired loans, not including impaired loans held for sale, had a ~~net~~ carrying value of ~~$1.23~~$1.29 billion at ~~June~~September 30, 2009. Most of these loans are secured by real estate, with the majority classified as collateral-dependent loans. The fair value of the real estate securing these loans is generally determined based upon appraisals performed by a certified or licensed appraiser. Management also considers other factors or recent developments, such as selling costs and anticipated sales values considering management’s plans for disposition, which could result in adjustments to the collateral value estimates indicated in the appraisals.

Total collateral dependent impaired loans had a carrying value of $1.00 billion at September 30, 2009. Estimated losses on collateral-dependent impaired loans are typically charged-off. At ~~June~~September 30, 2009, ~~$971.9~~$776.6 million ~~or 78.8%,~~ of impaired loans consisted of collateral-dependent impaired loans for which Synovus has recognized charge-offs ~~of approximately $284.0 million.~~and there is therefore no associated reserve. These loans are recorded at the lower of cost or estimated fair value of the underlying collateral net of selling costs. However, if a collateral-dependent loan is placed on impaired status at or near the end of a calendar quarter, management records an allowance for loan losses based on the loan’s risk rating while an updated appraisal is being obtained. The estimated losses on these loans are recorded as a charge-off during the following quarter after the receipt of a current appraisal or fair value estimate based on current market conditions, including absorption rates. Management does not expect a material difference between the current allocated allowance on these loans and the actual charge-off.

~~As part of our problem asset disposition strategy, management intends to identify certain~~ Total impaired loans also include $287.3 million in loans which are not collateral dependent and for ~~liquidation through loan sales in future quarters. While~~which impairment is measured based upon the ~~specific loans have not yet been identified, these liquidations are expected to result in significantly lower proceeds than the fair~~present value of ~~these loans, which is included as a component of our allowance for loan losses.~~discounted cash flows.

During the second quarter of 2009, Synovus was able to significantly accelerate the pace of asset dispositions. This experience provided management a basis to estimate the loan sales (consisting primarily of ~~non-performing~~nonperforming loans) that ~~will~~would be completed over the next two quarters. Based on this, the provision expense for the second quarter of 2009 ~~includes~~included management’s estimate of the losses associated with these asset dispositions that were both probable and could be reasonably estimated as of June 30, 2009.

Problem loan dispositions completed during the three months ended September 30, 2009 totaled $187 million, in line with the previous quarter’s estimate. During the third quarter, management

realizable value is less than the cost, the difference is recorded as a charge-off against the allowance for loan losses.

Retail Loans — Loss Factors

The allocated allowance for loan losses for retail loans is generally determined by segregating the retail loan portfolio into pools of homogeneous loan categories. Expected loss factors applied to these pools are based on the probable loss including qualitative factors. The probable loss considers the probability of default, the loss given default, and certain qualitative factors as determined by loan category and risk rating. The probability of default loss factors are based on internal default experience. The loss given default factors are based on industry data because sufficient internal data is not yet available. The qualitative factors consider credit concentrations, recent levels and trends in delinquencies and nonaccrual loans, and growth in the loan portfolio. The occurrence of certain events could result in changes to the loss factors. Accordingly, these loss factors are reviewed periodically and modified as necessary.

Unallocated Component

The unallocated component of the allowance for loan losses is considered necessary to provide for certain environmental and economic factors that affect the probable loss inherent in the entire loan portfolio. Unallocated loss factors included in the determination of the unallocated allowance are economic factors, changes in the experience, ability, and depth of lending management and staff, and changes in lending policies and procedures, including underwriting standards. Certain macro- economic factors and changes in business conditions and developments could have a material impact on the ~~collectibility~~collectability of the overall portfolio. As an example, a rapidly rising interest rate environment could have a material impact on certain borrowers’ ability to pay. The unallocated component is meant to cover such risks.

Other Real Estate

Other real estate (ORE), consisting of properties obtained through foreclosure or through an in-substance foreclosure in satisfaction of loans, is reported at the lower of cost or fair value, determined on the basis of current appraisals, comparable sales, and other estimates of value obtained principally from independent sources, adjusted for estimated selling costs. Management also considers other factors, or recent developments, such as management’s plans for disposition, which ~~could result~~have resulted in adjustments to the value estimates indicated in ~~the~~certain appraisals. At the time of foreclosure or initial possession of collateral, any excess of the loan balance over the fair value of the real estate held as collateral is treated as a charge against the allowance for loan losses. Gains or losses on sale and any subsequent adjustments to the value are recorded as a

quarters. While all of the properties have not yet been specifically identified, these liquidations are expected to result in significantly lower proceeds than traditional sales, which could result in additional losses. ORE properties are written down to the estimated liquidation value when management has determined the properties or groups of properties for disposition through these liquidation strategies.

Private Equity Investments

Private equity investments are recorded at fair value on the balance sheet with realized and unrealized gains and losses included in non-interest income in the results of operations in accordance with the American Institute of Certified Public Accountants (AICPA) Audit and Accounting Guide for Investment Companies. For private equity investments, Synovus uses information provided by the fund managers in the initial determination of estimated fair value. Valuation factors such as recent or proposed purchase or sale of debt or equity, pricing by other dealers in similar securities, size of position held, liquidity of the market, comparable market multiples, and changes in economic conditions affecting the issuer are used in the final determination of estimated fair value. The valuation of private equity investments requires significant management judgment due to the absence of quoted market prices, inherent lack of liquidity and the long-term nature of such investments. As a result, the net proceeds realized from transactions involving these assets could differ significantly from estimated fair value.

Income Taxes

Synovus’ estimated income tax provision is based on the amount expected to be owed to or refunded from taxing jurisdictions in which it conducts business. Management evaluates the reasonableness of the effective tax rate based on current estimates of the amount and components of income, tax credits and statutory rates for the entire year. This analysis requires that management closely monitor income tax developments on both the state and federal level in order to evaluate the effect they may have on Synovus’ overall tax position.

~~During the three months ended June 30, 2009, Synovus performed its quarterly assessment~~Under provisions of ~~net deferred tax assets. Under SFAS No. 109, “Accounting for Income Taxes” (“SFAS No. 109”),~~ASC 740-30-25, companies are required to assess whether a valuation allowance should be established against their deferred tax assets based on the consideration of all available evidence using a “more likely than not” standard. In making such judgments, significant weight is given to evidence that can be objectively verified. AsPrimarily as a result of ~~the~~ increased credit losses, Synovus ~~is now in~~reached a three-year cumulative pre-tax loss position ~~as of~~during the three months ended June 30, 2009. A cumulative loss position is considered significant negative evidence which is difficult to overcome in assessing the realizability of a deferred tax ~~asset which~~asset. As a result, beginning with the second quarter of 2009, Synovus is ~~difficult to overcome. Synovus did not consider~~no longer considering future taxable income in determining the realizability of its deferred tax assets. Synovus’ estimate of

the realization of its deferred tax assets ~~was~~is solely based on future reversals of existing taxable temporary differences ~~taxable income in prior carry back years,~~ and currently available tax planning strategies.

Based on current projections, Synovus estimates that the effective tax rate for the ~~second half of~~year ending December 31, 2009 will ~~remain at~~be approximately ~~the same level as the actual effective tax rate for the first half of 2009 (18.7%)~~14.4%. While there are many factors that could impact the actual effective tax rate, a significant factor is management’s projection of ~~the~~a pre-tax loss for the year. If the projected pre-tax ~~losses vary~~loss varies significantly from current estimates, the actual effective tax rate could vary significantly. Specifically, if the actual pre-tax loss for the year exceeds the current estimate, the effective tax rate will be lower than 14.4%. Conversely, if the actual pre-tax loss for the year is lower than the current estimate, the effective tax rate will be higher than 14.4%.

See Notes 1 and 22 to Synovus’ consolidated financial statements in Synovus’ ~~2008 annual report~~Annual Report on Form ~~10-K~~10-K/A the year ended December 31, 2008 and Note 1413 of this report for a discussion of income taxes.

Asset Impairment

Long-Lived Assets and Other Intangibles

Synovus reviews long-lived assets, such as property and equipment and other intangibles subject to amortization, including core deposit premiums and customer relationships, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the actual cash flows are not consistent with Synovus’ estimates, an impairment charge may result.

Cumulative Perpetual Preferred Stock

On December 19, 2008, Synovus issued to the Treasury 967,870 shares of Synovus’ Fixed Rate Cumulative Perpetual Preferred Stock, Series A, without par value (the Series A Preferred Stock), having a liquidation amount per share equal to $1,000, for a total price of $967,870,000. The Series A Preferred Stock pays cumulative dividends at a rate of 5% per year for the first five years and thereafter at a rate of 9% per year. Synovus may not redeem the Series A Preferred Stock during the first three years except with the proceeds from a qualified equity offering of not less than $241,967,500. After February 15, 2012, Synovus may, with the consent of the Federal Deposit Insurance Corporation, redeem, in whole or in part, the Series A Preferred Stock at the liquidation amount per share plus accrued and unpaid dividends. The Series A Preferred Stock is

generally non-voting. Prior to December 19, 2011, unless Synovus has redeemed the Series A Preferred Stock or the Treasury has transferred the Series A Preferred Stock to a third party, the consent of the Treasury will be required for Synovus to (1) declare or pay any dividend or make any distribution on common stock, par value $1.00 per share, other than regular quarterly cash dividends of not more than $0.06 per share, or (2) redeem, repurchase or acquire Synovus common stock or other equity or capital securities, other than in connection with benefit plans consistent with past practice. A consequence of the Series A Preferred Stock purchase includes certain restrictions on executive compensation that could limit the tax deductibility of compensation that Synovus pays to executive management.

As part of its purchase of the Series A Preferred Stock, Synovus issued the Treasury a warrant to purchase up to 15,510,737 shares of Synovus common stock (the Warrant) at an initial per share exercise price of $9.36. The Warrant provides for the adjustment of the exercise price and the number of shares of Synovus common stock issuable upon exercise pursuant to customary anti-dilution provisions, such as upon stock splits or distributions of securities or other assets to holders of our common stock, and upon certain issuances of our common stock at or below a specified price relative to the initial exercise price. The Warrant expires on December 19, 2018. If, on or prior to December 31, 2009, Synovus receives aggregate gross cash proceeds of not less than $967,870,000 from “qualified equity offerings” announced after October 13, 2008, the number of shares of common stock issuable pursuant to the Treasury’s exercise of the Warrant will be reduced by one-half of the original number of shares, taking into account all adjustments, underlying the Warrant. Pursuant to the Securities Purchase Agreement, the Treasury has agreed not to exercise voting power with respect to any shares of common stock issued upon exercise of the Warrant.

The offer and sale of the Series A Preferred Stock and the Warrant were effected without registration under the Securities Act in reliance on the exemption from registration under Section 4(2) of the Securities Act. Synovus has allocated the total proceeds received from the United States Department of the Treasury based on the relative fair values of the Series A Preferred Stock and the Warrants. This allocation resulted in the preferred shares and the Warrants being initially recorded at amounts that are less than their respective fair values at the issuance date.

The $48.5 million discount on the Series A Preferred Stock is being accreted using a constant effective yield over the five-year period preceding the ~~9 %~~9% perpetual dividend. Synovus records increases in the carrying amount of the preferred shares resulting from accretion of the discount by charges against retained earnings.

Common Stock

Exchange of Subordinated Debt for Common Stock

Restructuring Charges

Project Optimus, launched in April 2008, is a team member-driven effort to create an enhanced banking experience for our customers and a more efficient organization that delivers greater value for Synovus shareholders. As a result of this process, Synovus announced in the third quarter of 2008 that it expects to achieve $75 million in annual run rate pre-tax earnings benefit by late 2010 through efficiency gains and new revenue growth initiatives. Revenue growth is

expected primarily through new sales initiatives, improved product offerings and improved pricing strategies for consumer and commercial assets and liabilities. Cost savings are expected to be generated primarily through increased process efficiencies and streamlining of support functions. In conjunction with the project as well as the additional position eliminations identified during 2009, Synovus expects to incur restructuring charges of approximately ~~$19.5~~$23 million ~~in conjunction with the project,~~ including approximately ~~$8.4~~$11.8 million in severance charges. ~~In addition, Synovus expects to incur approximately $5.5 million in restructuring charges related to the position eliminations identified during the first quarter of 2009.~~ During the ~~six~~nine and three months ended ~~June~~September 30, 2009, Synovus recognized ~~$6.8~~$6.3 million and ~~$397~~$(413) thousand in total restructuring (severance) charges. To date, ~~$22.9~~$22.5 million in restructuring charges have been recognized related to these efficiency efforts including ~~$11.7~~$11.3 million in severance charges.

Visa Initial Public Offering and Litigation Expense

Visa, Inc. completed an initial public offering (the Visa IPO) in March 2008. Visa used a portion of the proceeds from the Visa IPO to establish a $3.0 billion escrow for settlement of covered litigation and used substantially all of the remaining portion to redeem class B and class C shares held by Visa issuing members. During the three months ended March 31, 2008, Synovus recognized a pre-tax gain of $38.5 million on redemption proceeds received from Visa, Inc. and reduced the $36.8 million litigation accrual recognized in the second half of 2007 by $17.4 million for its membership proportion of the $3.0 billion escrow funded by Visa, Inc. During September 2008, Visa announced the settlement of its Discover litigation for approximately $1.74 billion. Synovus increased its litigation accrual by $6.3 million for its membership proportion of the incremental amount of the final Discover settlement over the previously estimated amount for the Discover settlement. During December 2008, Visa deposited $1.10

billion into the litigation escrow, effectively representing a repurchase of Class AB common stock on an as-converted basis. Synovus reduced its litigation accrual by $6.4 million for its membership proportion of the amount deposited to the litigation escrow. During July 2009, Visa deposited $700 million to the litigation escrow, effectively representing a repurchase of Class B common stock on an as-converted basis. Synovus reduced its litigation accrual by $4.1 million for its membership proportion of the amount deposited to the litigation escrow.

At ~~June~~September 30, 2009, Synovus’ accrual for the aggregate amount of Visa’s covered litigation was ~~$19.3~~$15.2 million. For the ~~six~~nine months ended ~~June~~September 30, 2008, the redemption of shares and changes to the accrued liability for Visa litigation resulted in a gain of ~~$34.1~~$30.2 million, net of tax, or ~~$0.10~~$0.09 per diluted share.

On ~~June 30,~~November 6, 2009, Synovus completed the sale of its remaining shares of Visa ~~announced its plan~~Class B common stock to ~~deposit $700~~a qualified Visa member. Synovus expects to recognize a pre-tax gain of $51.9 million toon the ~~litigation escrow and announced on July 16, 2009 that~~sale of the ~~deposit had been completed. Synovus will assess its indemnification obligations with respect to Visa’s covered litigation~~Class B shares during the three months ~~ended September 30, 2009, giving consideration~~ending December 31, 2009. Visa’s Class B shares are subject to ~~Visa’s deposit~~restrictions on sale (other than to other qualified Visa members) prior to the latter of March 25, 2011 or Visa’s settlement of all covered litigation. Upon the lifting of restrictions, the Class B shares will convert into Class A shares, which may be sold in the open market, based on a conversion ratio calculated by Visa. The conversion ratio decreases when Visa converts Class B shares for sale as loss shares to fund the escrow for covered litigation, ~~escrow.~~and may increase if the litigation escrow includes excess funds following settlement of all covered litigation. In conjunction with sale of the Class B shares, Synovus has entered into an agreement which provides for payments between Synovus and the buyer for future changes in the conversion ratio. Synovus is required to post collateral in connection with expected future settlements under the agreement.

Balance Sheet

During the first ~~six~~nine months of 2009, total assets decreased ~~$1.44~~by $1.17 billion. ~~$435.9 million~~The principal components of ~~the~~this decrease ~~is due to~~were a ~~decline~~$1.91 billion decrease in the balance of funds due from the Federal Reserve Bank. In addition, investment securities available for sale decreased by $209.8 million, federal funds sold and securities purchased under resale agreements decreased $217.4 million, and loans, net of unearned income and allowance for loan losses, ~~decreased $654.8 million.~~a $471.2 million decrease in investment securities available for sale, and a $208.0 million decrease in federal funds sold and securities purchased under resale agreements, which were offset in part by a $1.62 billion increase in interest bearing funds with the Federal Reserve Bank. The decrease in net loans reflects a slower demand for loans in the current economic downturn as well as an increase of $320.2 million in the allowance for loan losses and approximately $504.3 million of loans that were foreclosed and transferred to other real estate. The decline in investment securities available for sale includes maturities and mortgage backed security payoffs which were not reinvested. The increase in funds with the Federal Reserve Bank is the result of liquidity generated by declines in loan and investment security balances, and also includes $570.9 million of net proceeds from common stock issued in September of 2009.

Fair Value Accounting

~~SFAS No. 157~~ASC 820-10 establishes a framework for measuring fair value in accordance with U.S. GAAP, clarifies the definition of fair value within that framework, and expands disclosures about the use of fair value measurements. ~~SFAS No. 159~~ASC 825-10-15 permits entities to make an irrevocable election, at specified election dates, to measure eligible financial instruments and certain other items at fair value. Fair value is used on a recurring basis for certain assets and liabilities in which fair value is the primary basis of accounting. Fair value is used on a non-recurring basis for collateral-dependent impaired loans and other real estate. Examples of recurring use of fair value include trading account assets, mortgage loans held for sale, investment securities available for sale, private equity investments, derivative instruments, and trading account liabilities. The extent to which fair value is used on a recurring basis was expanded upon the adoption of ~~SFAS No. 159,~~the provisions of ASC 825-10, effective on January 1, 2008. At ~~June~~September 30, 2009, approximately ~~$5.41~~$4.97 billion, or ~~15.8%,~~14.4% compared to ~~$5.21~~$5.09 billion, or ~~14.6%~~14.2% at December 31, 2008, of total assets were recorded at fair value, which includes items measured on a recurring and non-recurring basis.

Fair value is the price that could be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Fair value determination in accordance with ~~SFAS No. 157~~ASC 820-10 requires that a number of significant judgments be made. The standard also establishes a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Synovus has an established and well-documented process for determining fair values and fair value hierarchy classifications. Fair value is based upon quoted market prices, where available (Level 1). Where prices for identical assets and liabilities are not available, ~~SFAS No. 157~~ASC 820-10 requires that similar assets and liabilities are identified (Level 2). If observable market prices are unavailable or impracticable to obtain, or similar assets cannot be identified, then fair value is estimated using internally-developed valuation modeling techniques such as discounted cash flow analyses that primarily use as inputs market-based or independently sourced market parameters (Level 3). These modeling techniques incorporate assessments regarding assumptions that market

The following tables summarize the assets accounted for at fair value on a recurring basis by level within the valuation hierarchy at ~~June~~September 30, 2009 and December 31, 2008.


	June 30, 2009
										Total										Total
										Assets										Assets
										Held at										Held at
										Fair Value										Fair Value
										On the										On the
										Balance										Balance
(dollars in millions)	Level 1			Level 2		Level 3		Total		Sheet			Level 1			Level 2		Level 3		Sheet
Trading account assets		4	%		96		—		100	$	20.7			9	%		91		—	$	13.4
Mortgage loans held for sale					100		—		100		312.6						100		—		112.1
Investment securities available for sale:
U.S. Treasury securities		100			—		—		100		1.1			100			—		—		20.8
Other U.S. Government agency securities		—			100		—		100		1,513.4			—			100		—		1,096.6
Government agency issued mortgage-backed securities		—			100		—		100		1,816.4			—			100		—		1,967.7
Government agency issued collateralized mortgage obligations		—			100		—		100		103.6			—			100		—		95.5
State and municipal securities		—			100		—		100		106.4			—			100		—		99.3
Equity securities		25			—		75		100		11.2			26			—		74		10.6
Other investments		—			—		100		100		8.1			—			—		100		8.1

Total investment securities available for sale		—			99		1		100		3,560.2			1			99		—		3,298.8
Private equity investments		—			—		100		100		135.7			—			—		100		127.8
Derivative assets		—			99		1		100		159.9			—			99		1		142.6

Total		100			100		100		100	$	4,189.1									$	3,694.7


Level 3 assets as a percentage of total assets measured at fair value											3.65	%									3.95	%

of the market and changes in economic conditions affecting the issuer are used in the final determination of estimated fair value.

Valuation methodologies are reviewed each quarter to ensure that fair value estimates are appropriate. Any changes to the valuation methodologies are reviewed by management to confirm the changes are justified. As markets and products develop and the pricing for certain products becomes more or less transparent, Synovus continues to refine its valuation methodologies. For a detailed discussion of valuation methodologies, refer to Note 11 to the consolidated financial statements (unaudited) as of and for the nine and three months ended ~~June~~September 30, 2009.

Trading Account Assets

The trading account assets portfolio is substantially comprised of mortgage-backed securities which are bought and held principally for sale and delivery to correspondent and retail customers of Synovus. Trading account assets are reported on the consolidated balance sheets at fair value, with unrealized gains and losses included in other non-interest income on the consolidated statements of income. Synovus recognized a net gain on trading account assets of ~~$2.6~~$4.7 million and ~~$1.9~~$2.2 million for the ~~six~~nine and three months ended ~~June~~September 30, 2009, respectively, compared to a net ~~loss~~gain of ~~$239 thousand~~$1.2 million and a net gain of ~~$519~~$667 thousand for the same periods in the prior year.

Other Loans Held for Sale

Loans or pools of loans are transferred to the other loans held for sale portfolio when the intent to hold the loans has changed due to portfolio management or risk mitigation strategies and when there is a plan to sell the loans within a reasonable period of time. The value of the loans or pools of loans is primarily determined by analyzing the underlying collateral of the loan and the external market prices of similar assets. At the time of transfer, if the estimated net realizable value is less than the carrying amount, the difference is recorded as a charge-off against the allowance for loan losses. Decreases in estimated net realizable value subsequent to the transfer as well as losses (gains) from sale of these loans are recognized as a component of non-interest expense.

During the ~~six~~nine and three months ended ~~June~~September 30, 2009, Synovus transferred loans with a cost basis totaling ~~$97.5~~$199.0 million and ~~$56.7~~$101.5 million to the other loans held for sale portfolio, respectively. Synovus recognized charge-offs on these loans totaling ~~$50.2~~$80.8 million and ~~$30.7~~$30.6 million for the ~~six~~nine and three months ended ~~June~~September 30, 2009, respectively. These charge-offs, which resulted in a new cost basis of ~~$47.3~~$118.2 million and ~~$26.0~~$70.9 million for the loans transferred during the ~~six~~nine and three months ended ~~June~~September 30, 2009, respectively, were based on the estimated sales price of the loans at the time of transfer. Subsequent to their transfer to the other loans held for sale portfolio, Synovus foreclosed on certain other loans held for sale and transferred foreclosed assets of $1.7 million ~~and $423 thousand~~ to other real estate during the ~~six and three~~nine months ended ~~June~~September 30, 2009.

5053

Other Real Estate

ORE, consisting of properties obtained through foreclosure or in satisfaction of loans, is reported at the lower of cost or fair value, determined on the basis of current appraisals, comparable sales, and other estimates of value obtained principally from independent sources and recent sales history, adjusted for estimated selling costs. Management also considers other factors or recent developments such as changes in absorption rates or market conditions from the time of valuation, and anticipated sales values considering management plans for disposition, which ~~could result~~have resulted in adjustment to the collateral value estimates indicated in ~~the~~certain appraisals. At the time of foreclosure, any excess of the loan balance over the fair value of the real estate held as collateral is recorded as a charge against the allowance for loan losses. Gains or losses on sale and any subsequent adjustments to the value are recorded as a component of non-interest expense.

5154

Loans

The following table compares the composition of the loan portfolio at ~~June~~September 30, 2009, December 31, 2008, and ~~June~~September 30, 2008.


(dollars in thousands)																Total Loans									Total Loans
																						September 30,						September 30,
																						2009 vs.						2009 vs.
							June 30,						June 30,									Dec. 31,						September 30,
							2009 vs.						2009 vs.			September 30,			Dec. 31,			2008			September 30,			2008
	Total Loans						Dec. 31,			Total Loans			March 31,
(dollars in thousands)	June 30,			Dec. 31,			2008			June 30,			2008
Loan Type	2009			2008			% Change⁽¹⁾			2008			% Change			2009			2008			% Change⁽¹⁾			2008			% Change
Multi-family	$	838,795			589,708			85.2	%	$	532,345			57.6	%	$	864,849			589,708			62.4	%	$	565,937			52.8	%
Hotels		1,026,163			965,886			12.6			755,125			35.9			1,023,492			965,886			8.0			818,328			25.1
Office building		1,110,896			1,036,837			14.4			1,003,278			10.7			1,075,011			1,036,837			4.9			1,000,245			7.5
Shopping centers		1,084,080			1,090,807			(1.2	)		980,545			10.6			1,078,436			1,090,807			(1.5	)		1,024,988			5.2
Commercial development		735,834			763,962			(7.4	)		816,482			(9.9	)		699,532			763,962			(11.3	)		811,172			(13.8	)
Warehouses		491,944			461,402			13.3			423,465			16.2			497,062			461,402			10.3			453,672			9.6
Other investment property		609,313			614,149			(1.6	)		564,549			7.9			580,696			614,149			(7.3	)		613,333			(5.3	)

Total Investment Properties		5,897,025			5,522,751			13.7			5,075,789			16.2			5,819,078			5,522,751			7.2			5,287,675			10.0


1-4 family construction		1,224,446			1,611,779			(48.5	)		1,943,120			(37.0	)		991,368			1,611,779			(51.5	)		1,750,756			(43.4	)
1-4 family perm/mini-perm		1,429,916			1,441,798			(1.7	)		1,387,711			3.0
1-4 family perm/ mini-perm																	1,355,111			1,441,798			(8.0	)		1,411,783			(4.0	)
Residential development		1,739,246			2,123,669			(36.5	)		2,241,985			(22.4	)		1,521,939			2,123,669			(37.9	)		2,231,299			(31.8	)

Total 1-4 Family Properties		4,393,608			5,177,246			(30.5	)		5,572,816			(21.2	)		3,868,418			5,177,246			(33.8	)		5,393,838			(28.3	)


Land Acquisition		1,619,395			1,620,370			(0.1	)		1,650,334			(1.9	)		1,485,568			1,620,370			(11.1	)		1,636,548			(9.2	)

Total Commercial Real Estate		11,910,028			12,320,367			(6.7	)		12,298,939			(3.2	)		11,173,064			12,320,367			(12.5	)		12,318,061			(9.3	)


Commercial, financial, and agricultural		6,545,088			6,747,928			(6.1	)		6,689,206			(2.2	)		6,328,176			6,747,928			(8.3	)		6,728,621			(6.0	)
Owner-occupied		4,829,805			4,499,339			14.8			4,281,469			12.8			4,587,747			4,499,339			2.6			4,313,167			6.4

Total Commercial and Industrial		11,374,893			11,247,267			2.3			10,970,675			3.7			10,915,923			11,247,267			(3.9	)		11,041,788			(1.1	)


Home equity		1,729,528			1,725,075			0.5			1,633,604			5.9			1,729,458			1,725,075			0.3			1,682,598			2.8
Consumer mortgages		1,725,223			1,763,449			(4.4	)		1,725,064		nm				1,667,593			1,763,449			(7.3	)		1,761,057			(5.3	)
Credit card		288,349			295,055			(4.6	)		299,850			(3.8	)		288,147			295,055			(3.1	)		291,162			(1.0	)
Other retail loans		586,029			606,347			(6.8	)		558,633			4.9			579,797			606,347			(5.9	)		595,220			(2.6	)

Total Retail		4,329,129			4,389,926			(2.8	)		4,217,151			2.7			4,264,995			4,389,926			(3.8	)		4,330,037			(1.5	)


Unearned Income		(28,309	)		(37,383	)		(48.9	)		(40,874	)		(30.7	)		(22,243	)		(37,383	)		(54.1	)		(41,903	)		(46.9	)

Total	$	27,585,741			27,920,177			(2.4	)%	$	27,445,891			0.5	%	$	26,331,739			27,920,177			(7.6	)%	$	27,647,983			(4.8	)%

Loans by Type

Loans for investment property ~~grew~~increased by ~~$374.3~~$296.3 million, or ~~13.7%~~7.2% annualized, from December 31, 2008, and increased ~~$821.2~~$531.4 million, or ~~16.2%~~10.0%, compared to ~~June~~September 30, 2008. The primary loan categories contributing to the growth within the investment property portfolio ~~compared to December 31, 2008~~ were within the multi-family ~~hotel~~ and ~~office building~~hotel categories. The growth in the investment property portfolio during the first ~~six~~nine months of 2009 is primarily due to the funding of credit enhancement letters of credit of $221.5 million as well as advances on existing commitments. In addition, the continued impact of a lack of exit capabilities in the market place with commercial mortgage-backed securities (CMBS), where borrowers have historically secured permanent financing, has increased the duration of the investment property portfolio. The unfunded commitments for investment property loans decreased from approximately $680 million at December 31, 2008 to approximately ~~$364~~$260 million at ~~June~~September 30, 2009.

Residential construction and development loans at ~~June~~September 30, 2009 were ~~$2.96~~$2.51 billion, down ~~41.7%~~43.7% annualized from December 31, 2008, and accounted for ~~10.7%~~9.5% of total loans outstanding as of ~~June~~September 30, 2009. The following table shows the composition of the residential construction and development portfolio as of ~~June~~September 30, 2009:


	June 30, 2009										September 30, 2009
			% of Total					% of Total					% of Total
	Residential		Residential			Residential		Residential			Residential		Residential
	Construction		Construction			Construction		Construction			Construction		Construction
	and		and			and		and			and		and
	Development		Development			Development		Development			Development		Development
(dollars in thousands)	Total Loans		Portfolio			NPL		NPL			Total Loans		Portfolio
Georgia	$	1,506,337		50.9	%	$	386,595		68.0	%	$	1,239,197		49.3	%
Atlanta		698,088		23.6			233,099		41.0			535,941		21.3
Florida		355,870		12.0			65,096		11.5			284,376		11.3
West Coast of Florida		261,208		8.8			53,991		9.5			207,073		8.2
South Carolina		708,849		23.9			85,470		15.0			636,446		25.3
Tennessee		92,719		3.1			16,725		2.9			76,606		3.0
Alabama		299,917		10.1			14,433		2.6			276,682		11.1

Total	$	2,963,692		100.0	%	$	568,319		100.0	%	$	2,513,307		100.0	%

Retail loans at ~~June~~September 30, 2009 totaled ~~$4.33~~$4.26 billion, representing ~~15.7%~~16.2% of the total loan portfolio. Total retail loans ~~increased~~decreased by ~~2.7%~~1.5% compared to ~~June~~September 30, 2008 and declined at an annualized rate of ~~2.8%~~3.8% since December 31, 2008, led principally by a decline in consumer mortgage ~~credit card~~ and other consumer loans, and was partially offset by an increase in small business loans, which are a component of other retail loans. The retail loan portfolio credit ~~scores.~~scores were updated as of June 30, 2009. There was no material migration within the retail loan portfolio. These loans are primarily extended to customers who have an existing banking relationship with Synovus. The home equity loan portfolio consists primarily of loans with strong credit scores ~~(Average Beacon Score~~(average beacon score of ~~743~~745 at ~~June~~September 30, 2009), conservative debt-to-income ratios ~~(Average Debt~~(average debt to ~~Income Ratio~~income of ~~28.0%~~28.7% at ~~June~~September 30, 2009), and appropriate loan-to-value ratios ~~(Maximum~~(maximum of 89.9%). The utilization rate (total amount outstanding as a percentage of total available lines) of this portfolio was approximately ~~61%~~62% at ~~June~~September 30, 2009, compared to ~~59%~~60% a year ago. ~~The retail loan portfolio credit scores.~~

require the issuer to repurchase the bonds on a weekly basis for reasons including general liquidity needs of the investors, general industry/market considerations, as well as changes in Synovus’ credit ratings. Synovus’ maximum exposure to credit loss in the event of nonperformance by the counterparty is represented by the contract amount of those instruments. Synovus applies the same credit policies in entering into commitments and conditional obligations as it does for loans. The maturities and yields of the funded letters of credit are comparable to those for new commercial loans. Synovus has issued approximately $1.37 billion in letters of credit related to these bond issuances. At June 30, 2009, substantially all of these standby letters of credit have been funded and are now reported as a component of total loans. The funding of letters of credit does not impact regulatory capital measures such as the risk-based capital ratio since letters of credit are already included in risk-weighted assets at the same risk-weighting as the funded loans. Synovus anticipates its continuing exposure to credit enhancements to remain at lower levels until such time that market conditions, investor liquidity, and Synovus’ credit ratings improve.

Credit Quality

~~Synovus increased its~~The allowance for loan losses ~~by $276.3~~at September 30, 2009 was $918.5 million, or 3.49% of total loans, compared to $918.7 million, or 3.33% of total loans, in the prior quarter. The allowance for loan losses at September 30, 2009 includes estimated losses on problem loans which are planned for disposition during the ~~three months ended June 30,~~fourth quarter of 2009 ~~primarily to provide for probable losses on planned dispositions~~and first quarter of ~~non-performing loans throughout the remainder of 2009. Non-performing~~2010. Nonperforming assets ~~decreased~~increased by ~~$15.0~~$29.3 million and total past due loans still accruing interest as a percentage of outstanding loans ~~decreased~~increased from ~~2.12%~~1.20% to ~~1.20%~~1.35%, or ~~$255.3~~$24.7 million, as compared to ~~March 31,~~June 30, 2009.

During the ~~second~~third quarter of 2009, Synovus completed sales of ~~non-performing~~problem assets ~~with carrying values of~~totaling approximately ~~$404~~$339 million as compared to sales of ~~$106~~$404 million in the ~~first~~second quarter of 2009. Asset sales for the ~~second~~third quarter were comprised of approximately ~~$300~~$226 million of residential real estate loans and ~~approximately $100~~ORE properties, $46 million of investment real estate ~~plus some~~loans and ORE properties, and $67 million of loans and ORE properties which are primarily comprised of owner occupied commercial and industrial loans and land acquisition loans. Approximately ~~half~~40% of these asset sales were from the Atlanta market. While it is very difficult to predict the volume or speed of the migration of performing loans to problem assets, and while market conditions, regulatory directives and a number of other factors may ultimately effect that migration and the attractiveness of selling problem assets, we presently believe that we are on track with our plan to sell a total of $600 million in problem assets during the third and fourth quarters of 2009.

Total credit costs for the quarter ended ~~June~~September 30, 2009 were ~~$807.8~~$606.3 million, including provision for losses on loans of ~~$631.5~~$496.5 million and ~~costs~~expenses related to ~~disposition~~foreclosed real estate of ~~ORE of $172.4~~$101.4 million. The credit costs were largely driven by valuation charges on new nonperforming loans and existing nonperforming assets, as well as charges for estimated losses on future asset dispositions. For a further discussion of the ~~significant increase~~potential impact of additional credit losses on our results of operations and capital, see “Capital Resources and Liquidity” and the risk factors in Part II — Item 1A — “Risk Factors” elsewhere in this Report.

Nonperforming Assets

Total nonperforming assets were $1.75 billion at September 30, 2009 compared to $1.72 billion at June 30, 2009. Additions to nonperforming loans during the third quarter were $756.4 million, down slightly from second quarter additions of $764.8 million and significantly down from first quarter additions of $938.6 million. Based upon current projections, management presently expects that the level of gross additions to nonperforming loans will remain elevated in the fourth quarter, but may be somewhat lower than third quarter levels. Total allowance and cumulative write-downs on nonperforming assets as a percentage of unpaid principal balance at September 30, 2009 were approximately 46%. At September 30, 2009, approximately 58.6% of total nonperforming assets are in the Atlanta, South Carolina and West Florida markets (31.1%, 14.5%, and 13.0%, respectively).

During the third quarter of 2009, Synovus revised its definition of nonperforming loans to exclude accruing restructured loans. Such loans are not considered to be nonperforming because they are performing in accordance with the restructured terms. Management believes that this change better aligns our definition of nonperforming loans and nonperforming assets with the definition used by our peers and therefore improves the comparability of this measure across the industry. All prior periods presented have been reclassified to conform to the new presentation. See footnote (5) under the credit quality metrics table on page 60 for further details. Accruing restructured loans were approximately $193 million at September 30, 2009, compared to $18 million at June 30, 2009. At September 30, 2009, the allowance for loan losses ~~as well as~~allocated to these accruing restructured loans was approximately $29.7 million. The increase in accruing restructured loans since the ~~impact of losses on liquidations of non-performing assets.~~

~~The non-performing assets ratio (NPA ratio — non-performing loans plus other loans held for sale~~prior quarter is directly related to the challenges our commercial customers continue to face in the current economic environment and ~~other real estate divided by total loans, other loans held for sale, and other real estate) at June 30, 2009 was 6.24% compared~~Synovus’ efforts to ~~6.25% at March 31, 2009, 4.16% at December 31, 2008, and 3.00% at June 30, 2008. At June 30, 2009, approximately 44.3% of total non-performing assets~~work with creditworthy customers to find solutions that are in the ~~Atlanta~~best interest of both the customer and ~~West Florida markets.~~ Synovus.

~~The following table shows the NPA ratio by state as of June 30, 2009, December 31, 2008, and June 30, 2008.~~


	September 30, 2009
			% of Total
	Residential		Residential
	Construction		Construction
	and		and
	Development		Development
(dollars in thousands)	NPL		NPL
Georgia	$	412,121		69.0	%
Atlanta		210,640		35.3
Florida		53,901		9.0
West Florida		42,214		7.1
South Carolina		90,821		15.2
Tennessee		19,129		3.2
Alabama		21,496		3.6

Consolidated	$	597,468		100.0	%

June 30, December 31, June 30,
2009 2008 2008
Georgia
7.74 % 5.28 3.76
Atlanta 11.93 8.61 7.24
Florida
7.54 5.52 4.36
West Florida 8.68 6.65 5.24
South Carolina
6.39 1.68 1.35
Tennessee
4.09 2.62 2.64
Alabama
2.30 1.86 0.77

Consolidated
6.24 % 4.16 3.00

~~The following table shows total past due loans (and still accruing interest) at June 30, 2009, March 31, 2009, December 31, 2008 and March 31, 2008:~~

June 30, March 31, December 31, June 30,
(dollars in thousands) 2009 2009 2008 2008
Total past due loans (and still accruing interest) $ 331,731 587,014 362,538 365,046
As a percentage of loans outstanding 1.20 % 2.12 1.30 1.33

Total past due loans (and still accruing interest) declined $255.3 million from March 31, 2009, and declined $33.3 million from June 30, 2008. The sequential quarter decrease included $198.1 million in loans that migrated to non-performing loans during the quarter, and a reduction in the remaining past due loans (and still accruing interest) of $57.1 million.Charge-Offs

Net charge-offs for the three months ended ~~June~~September 30, 2009 were ~~$355.2~~$496.8 million, an increase of ~~$284.6~~$391.4 million compared to the same period a year ago and an increase of $141.6 million compared to the second quarter of 2009. The third quarter charge-offs included ~~$141.5~~approximately $135 million related to fair value write-downs on existing nonperforming loans, $119 million related to impairment on new loans and $76 million related to charge-offs on loan dispositions. Given the elevated level of charge-offs ~~within~~recorded during the ~~Atlanta portfolio~~third quarter as well as the fact that, as of September 30, 2009, the allowance and ~~$90.8~~cumulative write-downs on nonperforming assets as a percentage of unpaid principal balance was approximately 46%, management presently anticipates that the level of net charge-offs should decline in future periods.

Net charge-offs for the nine months ended September 30, 2009 were $1.10 billion, an increase of $858.5 million ofcompared to the same period in the prior year. The annualized net charge-off ratio for the nine months ended September 30, 2009 was 5.30% compared to 1.18% for the same period in 2008 and 1.71% for the year ended December 31, 2008.

The following tables show net charge-offs ~~from~~by geography and type for the ~~South Carolina portfolio.~~three and nine months ended September 30, 2009. Residential construction and development loans continue to be the largest component of credit losses with Atlanta losses leading that ~~category.~~ category with $61 million in current period charge-offs:

Net charge-offs for the six months ended June 30, 2009 were $601.5 million, an increase of $467.1 million compared to the same period in the prior year, and included $241.1 million, or 40 basis points, of charge-offs within the Atlanta portfolio, and $72.8 million, or 12 basis points, in charge-offs from the West Coast of Florida portfolio. The net charge-off ratio for the six months ended June 30, 2009 was 4.31% compared to 0.99% for the same period in 2008 and 1.71% for the year ended December 31, 2008.by geography

~~The following table shows net charge-offs by loan type for the three months ended June 30 and March 31, 2009:~~

Three Months Ended
June 30, 2009 March 31, 2009
(dollars in thousands) Net % of Average Loans Net % of Average Loans
Loan Type Charge-Offs for the Quarter Charge-Offs for the Quarter
Investment properties $ 47,658 3.2 % $ 16,087 1.1 %
1 — 4 Family properties 184,986 16.9 113,427 9.5
Land for future development 36,123 9.0 46,504 11.4

Total commercial real estate
268,767 9.1 176,018 5.8
Commercial and industrial 61,619 2.2 53,239 1.9
Retail 24,838 2.3 17,057 1.6

Total⁽¹⁾
$ 355,224 5.1 % $ 246,314 3.5 %


~~(1)~~		~~Excluding charge-offs associated with the sale of non-performing loans, net charge offs for the three months ended June 30, 2009 were $252 million, or 3.7% of loans~~


	September 30, 2009
	Three Months		Nine Months
(in thousands)	Ended		Ended
Atlanta	$	109,770		350,837
West Florida		103,504		176,323
South Carolina		115,761		242,243
Other		167,742		328,912

Consolidated	$	496,777		1,098,315

5658

Net charge-offs by type


(dollars in thousands)	September 30, 2009
	Three Months Ended					Nine Months Ended
			% of Average					% of Average
	Net		Loans for the			Net		Loans for the
Loan Type	Charge-Offs		Quarter			Charge-Offs		Quarter
Investment properties	$	57,364		3.9	%	$	121,110		2.8	%
1 — 4 Family properties		237,360		24.3			535,773		18.5
Land for future development		72,749		19.4			155,376		14.0

Total commercial real estate		367,473		13.1			812,259		9.7
Commercial and industrial		94,905		3.5			209,763		2.6
Retail		34,399		3.2			76,293		2.4

Total	$	496,777		7.3	%	$	1,098,315		5.3	%

Provision Expense and Allowance for Loan Losses

Provision expense for the ~~six~~nine months ended ~~June~~September 30, 2009 was ~~$922.0 million,~~$1.42 billion, an increase of ~~$737.3 million~~$1.08 billion compared to the same period in the prior year. Total provision expense for the three months ended ~~June~~September 30, 2009 was ~~$631.5~~$496.5 million, an increase of ~~$537.9~~$345.2 million compared to the same period in the prior year. The increase in both periods was primarily driven by increases in nonperforming loans and charges associated with declines in the fair value of existing impaired loans, which consider estimated losses from ~~non-performing~~ note sales. Another significant component of the year to date increase was losses from note sales completed during the second quarter of 2009.

The allowance for loan losses was $918.5 million, or 3.49% of net loans, at September 30, 2009 compared to $918.7 million, or 3.33% of net loans at June 30, 2009, ~~compared to $642.4 million, or 2.32% of net loans at March 31, 2009,~~and $598.3 million, or 2.14% of net loans, at December 31, ~~2008, and $417.8 million, or 1.52% of net loans, at June 30,~~ 2008. The $277 million increase in the allowance for loan losses during the three months ended June 30, 2009 was primarily driven by an increase in the loss factors associated with management’s problem asset disposition strategy.

The allowance for loan losses to ~~non-performing~~nonperforming loans coverage was ~~61.65%~~60.46% at ~~June~~September 30, 2009, compared to ~~64.91%~~65.00% at December 31, ~~2008, and 66.68% at June 30,~~ 2008. The decline in coverage ratio is impacted by the increase in non-performing loans, the increase in collateral-dependent impaired loans, and the ratio of collateral-dependent impaired loans to non-performing loans. At June 30, 2009, $971.9 million, or 78.8%, of impaired loans consisted of collateral-dependent impaired loans for which Synovus has recognized charge-offs of approximately $284.0 million. Synovus evaluates loans for impairment when the ultimate ~~collectibility~~collectability of all amounts due, according to contractual terms of the loan agreement, is in doubt. Upon the determination of impairment for a collateral-dependent loan, the amount of impairment (the excess of carrying value of the loan above estimated fair value of the collateral less estimated selling costs) is charged off. As a result, the ~~decline in~~ coverage ratio is impacted by the ~~increase in non-performing~~level of nonperforming loans as well as the ~~increase in~~level of collateral-dependent impaired loans for which charge-offs have been recorded and ~~the ratio of collateral dependent impaired loans to non-performing loans (which was 65.2% at June 30, 2009, 77.9% at December 31, 2008, and 76.5% at June 30, 2008).~~there is therefore no associated reserve. During times when ~~non-performing~~nonperforming loans are not significant, this coverage ratio — which measures the allowance for loan losses ~~(which is there for~~(for the entire loan portfolio) against a small ~~non-performing~~nonperforming loans total — appears very large. As ~~non-performing~~nonperforming loans increase, this ratio will decline even with significant incremental additions to the allowance.

A substantial part of Synovus’ loans are secured by real estate in five southeastern states (Georgia, Alabama, Florida, South Carolina, and Tennessee). Accordingly, the ultimate ~~collectibility~~collectability of a substantial part of Synovus’ loan portfolio is susceptible to changes in market conditions in these areas. Based on current information and market conditions, management believes that the allowance for loan losses is adequate.

5759

The table below includes selected credit quality metrics.


	June 30,			March 31,			December 31,			September 30,			June 30,
(dollars in thousands)	2009			2009			2008			2008			2008			September 30,			June 30,		March 31,		December 31,		September 30,
Non-performing loans⁽¹⁾	$	1,490,267			1,441,188			921,708			769,950			626,571
Other loans held for sale⁽²⁾		34,938			22,751			3,527			13,554			6,365
																2009			2009		2009		2008		2008
Nonperforming loans^{(1) (4)}																$	1,519,049			1,472,242		1,415,269		920,506		768,050
Impaired loans held for sale⁽²⁾																	40,932			34,938		22,750		3,527		13,554
Other real estate		210,968			287,246			246,121			215,082			197,328			187,494			210,968		287,246		246,121		215,082

Non-performing assets	$	1,736,173			1,751,185			1,171,356			998,586			830,264
Nonperforming assets^{(3) (4)}																$	1,747,475			1,718,148		1,725,265		1,170,154		996,686


Net charge-offs — quarter	$	355,224			246,317			229,402			105,328			70,651		$	496,777			355,224		246,314		229,402		105,328
Net charge-offs/Avg. loans — quarter⁽³⁾⁽⁵⁾		5.09	%		3.53	%		3.25	%		1.53	%		1.04	%		7.33	%		5.09		3.53		3.25		1.53

Net charge-offs — YTD	$	601,541			246,317			469,195			239,793			134,465		$	1,098,315			601,541		246,314		469,195		239,793
Net charge-offs/Avg. loans — YTD⁽³⁾⁽⁵⁾		4.31	%		3.53	%		1.71	%		1.18	%		0.99	%		5.30	%		4.31		3.53		1.71		1.18

Loans over 90 days past due and still accruing	$	31,018			31,316			38,794			49,868			39,614		$	43,816			31,018		31,316		38,794		49,868
As a % of loans		0.11	%		0.11	%		0.14	%		0.18	%		0.14	%		0.17	%		0.11		0.11		0.14		0.18

Total past due loans and still accruing	$	331,731			587,014			362,538			403,180			365,046		$	356,456			331,731		587,014		362,538		403,180
As a % of loans		1.20	%		2.12	%		1.30	%		1.46	%		1.33	%		1.35	%		1.20		2.12		1.30		1.46

Restructured loans (accruing)																$	192,559			18,025		25,919		1,202		1,900

Allowance for loan losses	$	918,723		$	642,422			598,301			463,836			417,813		$	918,468			918,723		642,422		598,301		463,836
Allowance for loan losses as a % of loans		3.33	%		2.32	%		2.14	%		1.68	%		1.52	%		3.49	%		3.33		2.32		2.14		1.68
Non-performing loans as a % of total loans		5.40	%		5.20	%		3.30	%		2.78	%		2.28	%
Non-performing assets as a % of total loans, other loans held for sale, and ORE		6.24	%		6.25	%		4.16	%		3.58	%		3.00	%
Nonperforming loans as a % of total loans																	5.77	%		5.34		5.10		3.30		2.78
Nonperforming assets as a % of total loans, other loans held for sale, and ORE																	6.58	%		6.17		6.15		4.15		3.58

Allowance to non-performing loans		61.65	%		44.58	%		64.91	%		60.24	%		66.68	%
Allowance to nonperforming loans																	60.46	%		62.40		45.39		65.00		60.39

Collateral-dependent impaired loans⁽⁴⁾	$	971,909		$	953,126			718,068			609,181			479,322
Collateral-dependent impaired loans⁽⁶⁾																$	1,004,828			971,909		953,126		718,068		609,181

Management continuously monitors ~~non-performing~~nonperforming and past due loans in an effort to mitigate further deterioration regarding the condition of these loans. Potential problem loans are defined ~~by management~~ as certain ~~performing~~ loans ~~with a well defined weakness and~~ where there is information about possible credit problems of borrowers which causes management to have doubts as to the ability of such borrowers to comply with the present loan repayment terms. ~~Management’s decision~~The definition is believed to ~~include performing loans in~~be substantially consistent with the ~~category~~bank regulatory classification of ~~potential problem loans means that management has recognized a higher degree of risk associated with these loans.~~substandard. In addition to accruing loans 90 days past due, Synovus had approximately ~~$730 million~~$1.25 billion of potential problem commercial and commercial real estate loans at ~~June~~September 30, 2009 as compared to approximately ~~$710~~$730 million at ~~March 31,~~June 30, 2009. The current expectation of losses from potential problem loans has been included in management’s analysis for assessing the adequacy of the allowance for loan losses. At September 30, 2009, the allowance for loan losses allocated to these potential problem loans was approximately $179 million. The increase in potential problem loans is primarily related to credits within the residential and commercial development categories. We cannot predict at this time whether these potential problem loans ultimately will become problem loans or result in losses to us.

5861

The table below includes selected credit quality metrics for the commercial real estate portfolio. The data by geographic location is primarily based on regulatory reporting.



(dollars in thousands)		As of											West		South
																						As of											West		South
CRE Loan Type		Date		Total			Georgia		Atlanta		Florida		Florida		Carolina		Tennessee		Alabama			Date		Total			Georgia		Atlanta		Florida		Florida		Carolina		Tennessee		Alabama
Total investment properties	Total investment properties																				Total investment properties
Balance outstanding			06/30/09	$	5,897,025			3,446,750		979,788		851,477		686,609		694,785		299,360		674,653			09/30/09	$	5,819,078			3,429,368		955,328		830,302		661,366		671,994		227,907		659,507
% of total CRE					49.5	%		50.9		42.9		52.1		52.9		38.7		60.6		50.7					52.1	%		53.9		47.0		55.6		55.9		40.0		63.7		51.4
% of loan type					100.0			58.4		16.6		14.4		11.6		11.8		3.9		11.4					100.0	%		58.9		16.4		14.3		11.4		11.6		3.9		11.3
Delinquency rates(1):
Delinquency rates⁽¹⁾ :
30-89 days			06/30/09		0.8	%		0.7		1.8		0.9		1.0		1.6		0.9		0.3			09/30/09		0.8	%		0.9		2.1		1.3		1.6		0.8		0.3		0.2
			12/31/08		0.5			0.6		0.7		0.8		1.0		0.3		0.4		0.2			12/31/08		0.5			0.6		0.7		0.9		1.0		0.3		0.5		0.2
³ 90 days			06/30/09		0.04			—		—		0.2		0.3		—		—		—			09/30/09		0.1			0.2		0.7		¾		¾		¾		¾		¾
			12/31/08		0.1			0.2		0.4		—		—		0.1		—		—			12/31/08		0.1			0.2		0.4		¾		¾		0.1		¾		¾
Accruing past due over 90 days			06/30/09	$	2,153			163		—		1,797		1,797		193		—		—
Accruing past due 90 days																							09/30/09	$	8,347			8,347		6,369		¾		¾		¾		¾		¾
			12/31/08		6,918			6,298		4,808		—		—		620		—		—			12/31/08		6,918			6,298		4,808		¾		¾		620		¾		¾
Nonperforming loans			06/30/09		351,397			260,062		34,334		39,294		35,204		26,618		6,678		16,745
NonAccrual loans																							09/30/09		354,395			279,733		40,115		36,873		31,661		17,509		3,746		16,533
			12/31/08		60,530			13,746		12,297		27,372		27,372		15,832		110		3,469			12/31/08		60,529			13,746		12,297		27,372		27,372		15,832		110		3,469

Total 1-4 family properties	Total 1-4 family properties																				Total 1-4 family properties
Balance outstanding			06/30/09	$	4,393,608			2,316,042		877,241		520,723		385,224		892,330		125,481		539,032			09/30/09	$	3,868,418			2,011,638		706,811		435,038		323,925		803,177		107,156		511,409
% of total CRE					36.9	%		34.7		37.9		31.4		29.2		49.1		31.9		39.2					34.6	%		31.7		34.7		29.1		27.4		47.8		30.0		39.9
% of loan type					100.0			52.6		20.0		11.9		8.8		20.3		2.9		12.3					100.0	%		52.0		18.3		11.2		8.4		20.8		2.8		13.2
Delinquency rates(1):
Delinquency rates⁽¹⁾ :
30-89 days			06/30/09		1.9	%		2.5		4.1		1.6		0.6		1.2		0.4		0.9			09/30/09		2.4	%		3.3		7.0		2.3		1.7		0.9		0.7		1.8
			12/31/08		2.4			3.0		4.7		4.2		3.6		0.9		0.4		0.5			12/31/08		2.4			3.0		4.7		4.2		3.6		0.9		0.4		0.5
³ 90 days			06/30/09		0.2			0.1		0.2		0.1		0.1		0.5		—		0.1			09/30/09		0.1			0.1		0.2		0.2		0.3		0.1		¾		¾
			12/31/08		0.2			0.3		0.4		—		—		—		—		—			12/31/08		0.2			0.3		0.4		¾		¾		¾		¾		¾
Accruing past due over 90 days			06/30/09	$	8,160			2,861		2,085		432		274		4,302		—		565
Accruing past due 90 days																							09/30/09	$	3,762			2,203		1,245		840		840		698		¾		21
			12/31/08		9,780			9,039		5,520		183		47		460		58		40			12/31/08		9,780			9,039		5,520		183		47		460		58		40
Nonperforming loans			06/30/09		651,982			437,093		251,070		79,259		65,479		100,345		18,033		17,252
NonAccrual loans																							09/30/09		666,800			453,969		228,897		60,286		48,229		107,470		19,111		25,964
			12/31/08		539,782			420,203		240,600		55,928		51,444		20,410		11,576		31,665			12/31/08		539,782			420,203		240,600		55,928		51,444		20,410		11,576		31,665

Land acquisition	Land acquisition																				Land acquisition
Balance outstanding			06/30/09	$	1,619,395			1,005,881		426,121		262,698		225,930		209,646		23,939		117,231			09/30/09	$	1,485,568			916,565		372,491		229,262		196,810		205,958		22,517		111,266
% of total CRE					13.6	%		15.1		18.4		15.8		17.2		11.5		6.1		8.5					13.3	%		14.4		18.3		15.3		16.7		12.2		6.3		8.7
% of loan type					100.0			62.1		26.3		16.2		14.0		13.0		1.5		7.2					100.0	%		61.7		25.1		15.4		13.2		13.9		1.5		7.5
Delinquency rates(1):
Delinquency rates⁽¹⁾ :
30-89 days			06/30/09		1.6	%		1.9		2.3		1.2		0.9		1.4		1.0		0.4			09/30/09		1.9	%		1.8		2.7		0.1		0.2		3.3		3.9		3.6
			12/31/08		2.0			2.7		3.0		1.5		1.6		0.3		—		0.5			12/31/08		2.0			2.7		3.0		1.5		1.6		0.3		¾		0.5
³ 90 days			06/30/09		0.1			0.1		0.1		0.1		0.1		—		—		—			09/30/09		0.5			0.7		0.1		0.1		0.1		0.4		¾		¾
			12/31/08		—			—		—		—		—		—		—		—			12/31/08		¾			¾		¾		¾		¾		¾		¾		¾
Accruing past due over 90 days			06/30/09	$	810			574		255		236		236		—		—		—
Accruing past due 90 days																							09/30/09	$	7,294			6,270		242		168		168		856		¾		¾
			12/31/08		299			281		157		—		—		18		—		—			12/31/08		300			282		157		¾		¾		18		¾		¾
Nonperforming loans			06/30/09		188,919			126,423		83,703		28,042		28,042		27,910		3,979		2,565
NonAccrual loans																							09/30/09		201,769			130,776		85,058		42,437		41,767		17,850		2,619		8,087
			12/31/08		106,865			75,014		57,708		23,876		23,078		1,726		2,425		3,824			12/31/08		106,865			75,014		57,708		23,876		23,078		1,726		2,425		3,824

Total commercial real estate	Total commercial real estate																				Total commercial real estate
Balance outstanding			6/30/09	$	11,910,028			6,768,673		2,283,510		1,634,898		1,297,763		1,796,761		378,781		1,330,916			09/30/09	$	11,173,064			6,357,571		2,034,631		1,494,602		1,182,101		1,681,129		357,580		1,282,182
% of total CRE					100.0	%																			100.0	%
% of loan type					100.0			56.8		19.2		13.7		10.9		15.1		3.2		11.2					100.0	%		56.9		18.2		13.4		10.6		15.0		3.2		11.5
Delinquency rates(1):
Delinquency rates⁽¹⁾ :
30-89 days			06/30/09		1.3	%		1.5		2.8		1.1		0.9		1.4		0.7		0.5			09/30/09		1.5	%		1.8		4.0		1.4		1.4		1.2		0.6		1.1
			12/31/08		1.5			1.9		2.9		2.1		2.0		0.6		0.4		0.3			12/31/08		1.5			1.9		2.9		2.1		2.0		0.6		0.4		0.3
³ 90 days			06/30/09		0.1			0.1		0.1		0.1		0.2		0.2		—		—			09/30/09		0.2			0.3		0.4		0.1		0.1		0.1		¾		¾
			12/31/08		0.1			0.2		0.4		—		—		0.1		—		—			12/31/08		0.1			0.2		0.4		¾		¾		0.1		¾		¾
Accruing past due over 90 days			06/30/09	$	11,123			3,598		2,340		2,465		2,307		4,495		—		565
Accruing past due 90 days																							09/30/09	$	19,403			16,820		7,856		1,008		1,008		1,554		¾		21
			12/31/08		16,997			15,618		10,485		183		47		1,098		58		40			12/31/08		16,998			15,619		10,485		183		47		1,098		58		40
Nonperforming loans			06/30/09		1,192,298			823,578		369,107		146,595		128,725		156,873		28,691		36,562
NonAccrual loans																							09/30/09		1,222,964			864,478		354,071		139,597		121,657		142,829		25,476		50,585
			12/31/08		707,176			508,963		310,605		107,176		101,894		37,968		14,111		38,958			12/31/08		707,176			508,963		310,605		107,176		101,894		37,968		14,112		38,958

The following table shows the composition of the loan portfolio and ~~non-performing~~nonperforming loans (classified by loan type) as of ~~June~~September 30, 2009:


(dollars in thousands)																				% of
																		Total		Total
									% of						% of			Non-		Non-
							Total		Total						Total Loans			Performing		Performing
				% of			Non-		Non-
(dollars in thousands)				Total Loans			Performing		Performing
Loan Type	Total Loans			Outstanding			Loans		Loans			Total Loans			Outstanding			Loans		Loans
Multi-family	$	838,795			3.0	%	$	23,050		1.5	%	$	864,849			3.3	%	$	9,074		0.6	%
Hotels		1,026,163			3.7			236,087		15.8			1,023,492			3.9			230,307		15.2
Office buildings		1,110,896			4.0			19,691		1.3			1,075,011			4.1			13,059		0.9
Shopping centers		1,084,080			3.9			5,820		0.4			1,078,436			4.1			21,546		1.4
Commercial development		735,834			2.7			44,373		3.0			699,532			2.6			59,168		3.9
Warehouses		491,944			1.8			5,729		0.4			497,062			1.9			9,081		0.6
Other investment property		609,313			2.2			16,647		1.1			580,696			2.2			12,160		0.8

Total Investment Properties		5,897,025			21.3			351,397		23.5			5,819,078			22.1			354,395		23.4


1-4 family construction		1,224,446			4.4			237,244		15.9			991,368			3.8			226,653		14.9
1-4 family perm/mini-perm		1,429,916			5.2			83,663		5.6			1,355,111			5.1			69,332		4.6
Residential development		1,739,246			6.3			331,075		22.2			1,521,939			5.8			370,815		24.4

Total 1-4 Family Properties		4,393,608			15.9			651,982		43.7			3,868,418			14.7			666,800		43.9


Land Acquisition		1,619,395			5.9			188,919		12.7			1,485,568			5.6			201,769		13.2

Total Commercial Real Estate		11,910,028			43.1			1,192,298		79.9			11,173,064			42.4			1,222,964		80.5


Commercial, financial, and agricultural		6,545,088			23.7			158,720		10.7			6,328,176			24.0			165,846		10.9
Owner-occupied		4,829,805			17.5			68,913		4.6			4,587,747			17.5			66,449		4.4

Total Commercial and Industrial Loans		11,374,893			41.2			227,633		15.3			10,915,923			41.5			232,295		15.3


Home equity		1,729,528			6.3			16,121		1.1			1,729,458			6.6			15,119		1.0
Consumer mortgages		1,725,223			6.3			47,365		3.2			1,667,593			6.3			41,493		2.7
Credit card		288,349			1.0			—		—			288,147			1.1			¾		¾
Other retail loans		586,029			2.2			6,850		0.5			579,797			2.2			7,178		0.5

Total Retail		4,329,129			15.8			70,336		4.8			4,264,995			16.2			63,790		4.2


Unearned Income		(28,309	)		(0.1	)		—		—			(22,243	)		(0.1	)		¾		¾

Total	$	27,585,741			100.0	%	$	1,490,267		100.0	%	$	26,331,739			100.0	%	$	1,519,049		100.0	%

Total deposits at ~~June~~September 30, 2009 were ~~$27.4~~$28.1 billion, a decrease of ~~$1.19 billion,~~$563.0 million, or ~~8.4%~~2.6% annualized, compared to December 31, 2008, and an increase of ~~$1.40 billion,~~$205.3 million, or ~~5.4%~~0.7%, compared to ~~June~~September 30, 2008. Core deposits (total deposits excluding national market brokered deposits) increased ~~$150.1~~$135.8 million, or ~~1.4%~~0.8% annualized, compared to December 31, 2008, and increased ~~$988.1~~$740.6 million, or ~~4.6%~~3.4%, compared to ~~June~~September 30, 2008. The year over year increase was ~~primarily related to~~driven by growth within ~~total core time deposits, which increased $0.9 billion, or 8.5%, and~~ demand deposit accounts, which increased ~~$308.4~~$538.7 million, or ~~8.7%~~15.5%, and NOW accounts, which increased $312.1 million, or 10.1%. During 2009, Synovus has successfully improved the mix of deposits by replacing higher priced time deposits with lower cost funding.

Because of its multiple charter structure, Synovus has the unique ability to offer certain shared deposit products (Synovus^® Shared Deposit). Synovus’ Shared CD and Money Market accounts provide customers up to $7.5 million in FDIC insurance per individual account by spreading deposits across its 30 separately-chartered banks. Shared deposit products totaled ~~$1.92~~$1.98 billion at ~~June~~September 30, 2009 as compared to $1.74 billion at December 31, 2008 and ~~$303.4~~$887.6 million at ~~June~~September 30, 2008. ~~These products were the primary driver of the year over year time deposit growth.~~

During the first quarter of 2009, Synovus received notification from the FDIC that deposits obtained through Synovus^® Shared Deposit products should be listed as brokered deposits in bank subsidiary Call Reports. Therefore, Synovus’ March 31, 2009 bank subsidiary Call Reports reflect customer deposits held in Synovus^® Shared Deposit products as brokered deposits as requested by the FDIC. The FDIC defines brokered deposits as “funds which the reporting bank obtains, directly or indirectly, by or through any deposit broker for deposit into one or more deposit accounts.” The FDIC further defines the term deposit broker to include: “(1) any person engaged in the business of placing deposits, or facilitating the placement of deposits, of third parties with insured depository institutions or the business of placing deposits with insured depository institutions for the purpose of selling interests in those deposits to third parties, and (2) an agent or trustee who establishes a deposit account to facilitate a business arrangement with an insured depository institution to use the proceeds of the account to fund a prearranged loan.” The FDIC also provides the following 9 exclusions for what the term deposit broker does not include: “(1) an insured depository institution, with respect to funds placed with that depository institution; (2) an employee of an insured depository institution, with respect to funds placed with the employing depository institution; (3) a trust department of an insured depository institution, if the trust in question has not been established for the primary purpose of placing funds with insured depository institutions; (4) the trustee of a pension or other employee benefit plan, with respect to funds of the plan; (5) a person acting as a plan administrator or an investment adviser in connection with a pension plan or other employee benefit plan provided that that person is performing managerial functions with respect to the plan; (6) the trustee of a testamentary account; (7) the trustee of an irrevocable trust (other than a trustee who establishes a deposit account to facilitate a business arrangement with an insured depository institution to use the proceeds of the account to fund a prearranged loan), as long as the trust in question has not been established for the primary purpose of placing funds with insured depository institutions; (8) a trustee or custodian of a pension or profit-sharing plan qualified under Section 401(d) or 430(a) of the Internal Revenue Code of 1986; or (9) an agent or nominee whose primary purpose is not the placement of funds with depository institutions. (For purposes of applying this ninth exclusion from the definition of deposit broker, “primary purpose” does not mean “primary activity,” but should be construed as “primary intent.”)” The FDIC requested this

Due to the significant turmoil in financial markets during the second half of 2008, national market brokered deposits became more attractive to financial market participants and investors as an FDIC insured alternative to money market and other investment accounts. Synovus grew this funding source as demand for these products increased during the second half of 2008, but has reduced its dependence on funding from these products through normal run off during the ~~six~~nine months ended ~~June~~September 30, 2009. National market brokered deposits were ~~$4.99~~$5.64 billion at ~~June~~September 30, 2009 as compared to $6.34 billion at December 31, 2008 and ~~$4.59~~$6.17 billion at ~~June~~September 30, 2008.

Capital Resources and Liquidity

Capital

Synovus has always placed great emphasis on maintaining a solid capital base and continues to ~~exceed~~satisfy applicable regulatory capital ~~requirements for well capitalized financial institutions.~~requirements. Management is committed to maintaining a capital level sufficient to assure shareholders, customers, and regulators that Synovus is financially sound, and to enable Synovus to provide a desirable level of long-term profitability. ~~Based on internal calculations and previous regulatory exams, each of Synovus’ subsidiary banks is currently in compliance with regulatory capital guidelines and is considered well capitalized.~~

The following table presents certain ratios used to measure Synovus’ capitalization:


	June 30,			March 31,		December 31,		September 30,			June 30,		December 31,
(in thousands)	2009			2009		2008		2009			2009		2008
Tier 1 capital	$	2,862,225			3,454,987		3,602,848	$	2,974,066			2,862,225		3,602,848
Tier 1 common equity		1,928,370			2,523,119		2,673,055		2,037,951			1,928,370		2,673,055
Total risk-based capital		3,836,405			4,440,573		4,674,476		3,927,752			3,836,405		4,674,476
Tier 1 capital ratio		9.53	%		11.06		11.22		10.48	%		9.53		11.22
Tier 1 common equity ratio		6.42			8.08		8.33		7.18			6.42		8.33
Total risk-based capital to risk-weighted assets ratio		12.77			14.22		14.56		13.84			12.77		14.56
Leverage ratio		8.25			9.88		10.28		8.76			8.25		10.28
Equity to assets ratio		8.89			10.63		10.67
Common equity to assets ratio									6.39			6.10		8.01
Tangible common equity to tangible assets ratio⁽¹⁾		6.05			7.80		7.95		6.23			5.94		7.86
Tangible common equity to risk-weighted assets⁽¹⁾		6.90			8.61		8.84		7.59			6.78		8.74

~~voluntarily chose, to raise additional~~more optimistic than the assumptions used by the nineteen largest banks under the SCAP methodology. Although Synovus’ regulators have expressed concern that its 2010 stress test assumptions are notably more optimistic than those used for 2009 despite the current difficult economic environment, based upon Synovus’ internal analysis, management believes that, through internally generated sources of capital only, as of June 30, 2009, Synovus complied with the Tier 1 capital ~~particularly common equity. Following the release~~threshold of the SCAP results, bank holding companies that were not part of the SCAP, such as Synovus, have faced significant speculation as to the results of the stress tests performed on the largest 19 financial institutions and the hypothetical results if the stress test methodology if it was applied to other financial institutions, including regional banks smaller in size. Under the SCAP methodology, financial institutions were required to maintain Tier 1 common equity at or above 4% of risk weighted assets. ~~This additional~~As of June 30, 2009, utilizing the SCAP-defined methodology and assumptions, Synovus would have been unable to demonstrate that it would meet the Tier 1 capital threshold of common equity ~~is intended~~at or above 4% of risk weighted assets under the “More Adverse” scenario of SCAP. See Part II — Item 1A — Risk Factors—“We presently are subject to, ~~serve~~and in the future may become subject to, additional supervisory actions and/or enhanced regulation that could have a material negative effect on our business, operating flexibility, financial condition and the value of our common stock”.

In light of these factors, on September 14, 2009, Synovus announced its Capital Plan, pursuant to which Synovus implemented certain initiatives that it expected would increase Synovus’ Tier 1 capital and improve its tangible common equity to tangible assets ratio. Synovus has substantially completed the execution of the Capital Plan, as described below:

	•		On September 22, 2009, Synovus completed a public offering of 150,000,000 shares of common stock at a price of $4.00 per share, generating net proceeds of $570.9 million.

	•		On November 5, 2009, Synovus completed the previously announced exchange offer (Exchange Offer) of $29,820,000 in aggregate principal amount of its outstanding 4.875% Subordinated Notes Due 2013 (Notes) for approximately 9.44 million shares of Synovus common stock. The Notes exchanged in the Exchange Offer represent 12.6% of the $236,570,000 aggregate principal amount of Notes outstanding prior to the Exchange Offer. The Exchange Offer resulted in an increase to tangible common equity of approximately $28 million.

	•		On November 6, 2009, Synovus completed the sale of its remaining shares of Visa Class B common stock. Synovus expects to recognize a pre-tax gain of $51.9 million on the sale of the Visa Class B common stock during the three months ending December 31, 2009.

Through November 9, 2009, implementation of the Capital Plan has generated an aggregate of approximately $644 million of tangible common equity. Synovus presently expects to continue to work to identify, consider and pursue additional balance sheet optimization initiatives during the fourth quarter of 2009. In addition to these strategies, we may determine to pursue additional strategic initiatives in the future, whether as a ~~buffer against higher losses than generally expected,~~result of the continuation or worsening of the current adverse market conditions and ~~allow such bank holding companies to remain well capitalized and able to lend to creditworthy borrowers should such losses materialize. Synovus’ management conducted an analysis of Synovus’~~our resulting capital position, ~~using certain aspects~~or as a result of regulatory pressures.

We will continue to execute the ~~SCAP methodology but applying Synovus’ own assumptions relating~~remainder of our strategic initiatives and Capital Plan during the course of fiscal 2009. We cannot assure that we will realize the anticipated benefits of our strategic initiatives, or that our bank regulators will be satisfied with the outcomes of such initiatives and plan and will not require us to ~~certain economic factors and credit conditions. Based on this analysis, management presently believes that Synovus would~~take further action. See Part II — Item 1A —Risk Factors — “We may be ~~able~~required to raise additional Tier 1 capital to comply with ~~this 4%~~new regulatory standards adopted following the release of the results of the Supervisory Capital Assessment Program.”

Synovus will continue to monitor its capital ~~threshold using internally generated sources~~position, particularly as capital is impacted by current credit conditions, economic conditions and regulatory requirements. For the first nine months of ~~capital.~~ 2009, we have experienced significant declines in the value of collateral for real estate loans and heightened credit losses, which has resulted in record levels of non-performing assets, charge-offs, foreclosures and losses on disposition of the underlying assets. Although we presently expect that certain of these levels will begin to flatten out over the near term, it is difficult to predict the effects of further negative developments in the credit, economic and regulatory environments, which could cause these levels to worsen.

Our internal stress test is based upon a consolidated review of the performance of our assets, and our resulting capital position, over an extended period ending December 31, 2010. Because of our aggressive approach to identifying and recognizing losses on problem assets, there have been certain components (including, for example, the timing of losses realized in connection with dispositions) of our internal stress test that have performed and may continue to perform at velocities that are different than initially anticipated. We believe that the majority of the credit losses incurred during the third quarter of 2009 were included in our internal stress test as of June 30, 2009. While actual results inherently differ from any forecast, as of September 30, 2009, Synovus’ longer-term view of capital adequacy generally is consistent with the conclusion reached in our internal stress test as of June 30, 2009.

However, if economic conditions or other factors worsen to a greater degree than the assumptions underlying Synovus’ internal assessment of its capital position, if minimum regulatory capital requirements for Synovus or its subsidiary banks increase as the result of regulatory directives or otherwise, or if ~~there are opportunities~~Synovus’ stress test for ~~Synovus~~any reason fails to ~~undertake one or~~adequately address some of the more ~~transactions that potentially would be accretive to Synovus’ capital and/or liquidity position,~~complex aspects of our 30 bank charter structure, then Synovus may be required to seek additional capital from external ~~sources, or enter into such other transactions.~~sources. Given the weakened economy, current market conditions and Synovus’ recent financial performance and related credit ratings, there can be no assurance that additional capital will be available on favorable terms, if at all.

Synovus’ management, operating under liquidity and funding policies approved by the Board of Directors, actively analyzes and manages the liquidity position in coordination with the subsidiary banks. Liquidity

Synovus generates liquidity through maturities and repayments of loans by customers, deposit growth and access to sources of funds other than deposits. Management must ensure that adequate liquidity, at a reasonable cost, is available to meet the cash flow needs of depositors,

borrowers, and creditors. Management constantly monitors and maintains appropriate levels of liquidity so as to provide adequate funding sources to meet estimated customer deposit withdrawals and future loan requests. Liquidity is also enhanced by the acquisition of new deposits. ~~The~~Each of the 30 subsidiary banks ~~monitor~~monitors deposit flows and ~~evaluate~~evaluates alternate pricing structures in an effort to retain and grow deposits. In the current market environment, customer confidence is a critical element in growing and retaining deposits. In this regard, Synovus subsidiary banks’ asset quality could play a larger role in the stability of our deposit base. In the event asset quality ~~declined~~declines significantly from its current level, the subsidiary banks’ ability to grow and retain deposits could be diminished, which in turn could reduce deposits as a liquidity source.

Synovus subsidiary banks also generate liquidity through the national deposit markets. These subsidiary banks issue longer-term certificates of deposit across a broad geographic base to increase their liquidity and funding positions. For individual Synovus banks, access to these deposits could become more limited if their asset quality and financial performance were to significantly deteriorate. Selected Synovus subsidiary banks have the capacity to access funding through their membership in the Federal Home Loan Bank System. At ~~June~~September 30, 2009, most Synovus subsidiary banks had access to incremental funding, subject to available collateral and Federal Home Loan Bank credit policies, through utilization of Federal Home Loan Bank advances.

Synovus Financial Corp., as the holding company (Parent Company), requires cash for various operating needs, including payment of dividends to shareholders, capital infusions into subsidiaries, the servicing of debt, and the payment of general corporate expenses. The primary source of liquidity for the Parent Company isconsists of dividends from the subsidiary banks, which are governed by certain rules and regulations of various state and federal banking regulatory agencies. Dividends from subsidiaries in 2009 ~~will be~~have been significantly lower than those received in previous years. Should Synovus’ subsidiaries require additional capital resources, either due to asset growth or realized losses, the Parent Company may be required to provide capital infusions

to these subsidiaries. During 2009, Synovus has been required to provide capital to certain ~~subsidiaries~~subsidiary banks and expects to continue to do so inover the ~~second half~~remainder of 2009. There is an increasing possibility that additional Synovus subsidiary banks may be directed by their regulators to increase their capital levels as a result of weakened financial conditions, which may require that Synovus contribute additional capital to these banks at a time when Synovus is not receiving a meaningful amount of dividend payments from its other banks to offset those capital infusions. In addition, current ~~market~~ conditions ~~and dividends~~in the public markets for bank holding companies, together with the dividend payments on ~~the~~our Series A Preferred Stock and other obligations and expenses of our holding company, will likely continue to put ~~additional~~further pressure on our liquidity.

The Parent Company has historically enjoyed a solid reputation and credit standing in the capital markets and historically has been able to raise funds in the form of either short or long-term borrowings or equity ~~issuances. Given~~issuances, including the public offering executed in September 2009 as part of the Capital Plan. However, given the weakened economy, current market conditions and ~~our~~Synovus’ recent financial performance and related credit ratings, ~~downgrades,~~ there iscan be no assurance that the Parent Company ~~will, if it chooses to do so,~~would be able to obtain new borrowings or issue additional equity on favorable terms, ~~that are satisfactory.~~if at all. See Part II — Item 1A — Risk Factors — “We may be unable to receive dividends from our subsidiary banks, and we may be required to contribute capital to those banks, which could adversely affect our liquidity and cause us to raise capital on terms that are unfavorable to us.” Due to these factors, Synovus is currently maintaining a cash position in excess of normal levels. Synovus is also evaluating additional capital and cash management strategies including the potential sale of selected assets.

While liquidity is an ongoing challenge for all financial institutions, Synovus presently believes that the sources of liquidity discussed above, including existing liquid funds on hand, are sufficient to meet its anticipated funding ~~needs.~~

~~The consolidated statements~~needs through the near future. However, if economic conditions or other factors worsen to a greater degree than the assumptions underlying Synovus’ internal assessment of ~~cash flows detail cash flows~~its capital position, if minimum regulatory capital requirements for Synovus or its subsidiary banks increase as the result of regulatory directives or otherwise, or if Synovus’ stress test for any reason fails to adequately address some of the more complex and unpredictable dynamics of our operating structure, then Synovus may be required to seek additional liquidity from ~~operating, investing,~~external sources. Given the weakened economy, current market conditions and ~~financing activities. For~~Synovus’ recent financial performance and related credit ratings, there can be no assurance that the ~~six months ended June 30, 2009, operating activities provided net cash~~additional liquidity will be available on favorable terms, if at all. See Part II — Item 1A — Risk Factors — “Our allowance for loan losses may not be adequate to cover actual losses, and we may be required to materially increase our allowance, which may adversely affect our capital, financial condition and results of ~~$169.7 million, investing activities provided $362.2 million, and financing activities used $613.5 million, resulting in a decrease in cash and due from banks of $81.6 million.~~operations.”

Earning Assets, Sources of Funds, and Net Interest Income

Average total assets for the first ~~six~~nine months of 2009 ~~were $35.01~~increased $1.10 billion to $34.76 billion, an increase of ~~4.7%~~3.3% compared to the first ~~six~~nine months of 2008. Average earning assets increased ~~5.3%~~$1.16 billion, or 3.8%, in the first ~~six~~nine months of 2009 compared to the same period in 2008, and represented ~~91.8%~~92.2% of average total assets. ~~Average~~Funding sources supporting this growth in average total assets and average earning assets include a $2.15 billion increase in average deposits ~~increased $2.74 billion,~~(including core deposit growth of $1.42 billion), and a $922.6 million increase in preferred stock (issued in December 2008). A portion of the funding described above was used to reduce average short-term borrowings and long-term debt ~~increased $38.4~~by $1.022 billion and $46.1 million, and average shareholders’ equity increased $148.1 million for the six months ended June 30, 2009 as compared to the same period last year. Average investment securities (available for sale and trading securities) decreased $44.8 million for the first six months of 2009 as compared to the same period in 2008.respectively. The primary components of the $1.16 billion earning asset growth were a ~~$868.2 million~~$1.02 billion increase in ~~federal funds sold,~~ balances held with the Federal Reserve ~~and securities purchased under resale agreements, $600.3 million growth in average net loans, and~~Bank, a ~~$119.1~~$107.6 million increase in average mortgage loans held for ~~sale. Additionally, the growth in funding sources discussed above permitted a $1.32 billion reduction~~sale, and an $86.5 million increase in average ~~federal funds purchased.~~net loans.

Net interest income for the ~~six~~nine months ended ~~June~~September 30, 2009 was ~~$499.8~~$754.5 million, a decrease of ~~$52.2~~$65.4 million, or ~~9.5%~~8.0%, compared to ~~$552.1~~$819.9 million for the ~~six~~nine months ended ~~June~~September 30, 2008. Net interest income for the three months ended ~~June~~September 30, 2009 was ~~$256.6~~$254.6 million, a decrease of ~~$16.8~~$13.2 million, or ~~6.1%~~4.9%, compared to ~~$273.4~~$267.8 million for the three months ended ~~June~~September 30, 2008.

The net interest margin for the ~~six~~nine months ended ~~June~~September 30, 2009 was ~~3.15%~~3.16%, down 4941 basis points from ~~3.64%~~3.57% for the ~~six~~nine months ended ~~June~~September 30, 2008. Compared to the ~~six~~nine months ended ~~June~~September 30, 2008, earning asset yields decreased by ~~148~~135 basis points. Loan yields declined by ~~155~~134 basis points, primarily due to a ~~240~~218 basis point decline in the average prime rate and higher levels of nonperforming loans and interest charge-offs. The decline in earning asset yields was partially offset by a 9994 basis point decline in the effective cost of funds. The most significant decrease in funding costs was federal funds purchased and other short term liabilities, which declined by ~~213~~200 basis points, ~~and~~ national market money market accounts, which declined by ~~218~~191 basis points, long term debt, which declined by 156 basis points, and core money market accounts, which declined by 119 basis points.

On a sequential quarter basis, net interest income ~~increased~~decreased by ~~$13.4~~$2.0 million, while the net interest margin ~~increased 18~~decreased 1 basis ~~points~~point to ~~3.23%~~3.22%. ~~The increase was primarily due to a continued focus on improving loan pricing and the downward repricing of maturing certificates of deposit.~~ Yields on earning assets decreased by 17 basis ~~point as loan yields decreased by 5 basis points. This decrease was due to a higher level of non-performing loans and interest charge-offs, and paydowns on higher yielding fixed rate loans. The~~points, while the effective cost of funds decreased by 196 basis points. Effective cost of funds was positively impacted by the downward repricing of maturing certificates of ~~deposit~~deposit. The third quarter margin was impacted by the net decrease in loans outstanding, an excess liquidity position, and ~~continued declines in money market yields.~~the negative impact of nonperforming assets. Excluding the impact of nonperforming assets, the third quarter margin was 3.64%, up 2 basis points, from the second quarter of 2009.

The ~~direction of~~factors negatively impacting the third quarter margin are expected to continue to pressure the margin ~~during~~in the ~~remainder of 2009 could be significantly influenced~~fourth quarter. The excess liquidity position, partially driven by loan ~~pricing trends, deposit pricing competition and trends in credit costs. Current expectations are for further margin improvement~~balance declines, peaked later in the ~~second half~~third quarter and is expected to moderate over a period of ~~2009. The primary factors~~time. Synovus currently expects this to result in ~~this improvement should be additional downward repricing~~higher average balances of ~~maturing certificates of deposit and~~lower yielding assets for the fourth quarter which will have a ~~continued emphasis in improving loan pricing performance.~~negative impact on the margin.

6571

Quarterly yields earned on average interest-earning assets and rates paid on average interest-bearing liabilities for the five most recent quarters are presented below:


	2009						2008									2009									2008
	Second			First			Fourth			Third			Second			Third			Second			First			Fourth			Third
(dollars in thousands)	Quarter			Quarter			Quarter			Quarter			Quarter			Quarter			Quarter			Quarter			Quarter			Quarter
Interest Earning Assets:
Taxable investment securities	$	3,353,382			3,455,091			3,549,643			3,548,227			3,437,320		$	3,209,718			3,353,382			3,455,091			3,549,643			3,548,227
Yield		5.16	%		5.22			4.94			5.06			5.16			5.06	%		5.16			5.22			4.94			5.06
Tax-exempt investment securities	$	107,626			116,163			122,332			128,241			137,606		$	98,435			107,626			116,163			122,332			128,241
Yield		7.08	%		6.91			6.79			6.74			7.34			7.06	%		7.08			6.91			6.79			6.74
Trading account assets	$	19,984			22,580			29,727			30,584			26,531		$	13,439			19,984			22,580			29,727			30,584
Yield		5.57	%		6.02			5.10			6.77			5.88			8.22	%		5.57			6.02			5.10			6.77
Commercial loans	$	23,572,578			23,525,450			23,870,384			23,302,028			23,183,128		$	22,850,126			23,572,578			23,525,450			23,870,384			23,302,028
Yield		4.72	%		4.77			5.46			5.78			5.96			4.73	%		4.72			4.77			5.46			5.78
Consumer loans	$	4,335,897			4,353,580			4,347,332			4,267,477			4,115,130		$	4,303,592			4,335,897			4,353,580			4,347,332			4,267,477
Yield		5.38	%		5.50			5.88			6.19			6.29			5.37	%		5.38			5.50			5.88			6.19
Allowance for loan losses	$	(663,355	)		(627,110	)		(473,875	)		(422,331	)		(397,392	)	$	(905,700	)		(663,355	)		(627,110	)		(473,875	)		(422,331	)

Loans, net	$	27,245,120			27,251,920			27,743,841			27,147,174			26,900,866		$	26,248,018			27,245,120			27,251,920			27,743,841			27,147,174
Yield		4.96	%		5.01			5.63			5.95			6.12			5.01	%		4.96			5.01			5.63			5.95
Mortgage loans held for sale	$	268,933			247,937			98,362			108,873			157,049		$	194,158			268,933			247,937			98,362			108,873
Yield		4.94	%		5.46			5.96			6.91			5.86			5.39	%		4.94			5.46			5.96			6.91
Federal funds sold, due from Federal Reserve Bank and other short-term investments	$	996,754			1,214,897			642,396			211,323			201,081		$	1,653,546			996,754			1,214,897			642,396			211,323
Yield		0.24	%		0.31			0.60			1.88			1.83			0.24	%		0.24			0.31			0.60			1.88
Federal Home Loan Bank and Federal Reserve Bank Stock⁽¹⁾	$	132,346			117,205			121,994			122,088			119,061		$	139,230			132,346			117,205			121,994			122,088
Yield		0.54	%		0.66			0.20			3.61			5.71			1.38	%		0.54			0.66			0.20			3.61

Total interest earning assets	$	32,124,145			32,425,793			32,308,295			31,296,510			30,979,514		$	31,556,544			32,124,145			32,425,793			32,308,295			31,296,510
Yield		4.83	%		4.84			5.44			5.81			5.96			4.76	%		4.83			4.84			5.44			5.81


Interest Bearing Liabilities:
Interest bearing demand deposits	$	3,582,954			3,602,371			3,201,355			3,076,447			3,154,884		$	3,310,924			3,582,954			3,602,371			3,201,355			3,076,447
Rate		0.45	%		0.49			0.80			1.07			1.10			0.42	%		0.45			0.49			0.80			1.07
Money market accounts	$	6,241,764			6,272,015			6,129,751			6,771,080			6,826,724		$	6,309,578			6,241,764			6,272,015			6,129,751			6,771,080
Rate		1.24	%		1.30			1.80			2.19			2.15			1.23	%		1.24			1.30			1.80			2.19
Savings deposits	$	477,752			452,206			442,623			457,526			461,970		$	477,909			477,752			452,206			442,623			457,526
Rate		0.15	%		0.16			0.22			0.25			0.25			0.15	%		0.15			0.16			0.22			0.25
Time deposits under $100,000	$	3,126,984			3,222,601			3,264,401			3,055,465			2,814,714		$	3,030,346			3,126,984			3,222,601			3,264,401			3,055,465
Rate		3.13	%		3.41			3.64			3.69			3.97			2.86	%		3.13			3.41			3.64			3.69
Time deposits over $100,000	$	5,355,736			5,555,084			5,386,772			4,731,468			4,316,454		$	5,281,529			5,355,736			5,555,084			5,386,772			4,731,468
Rate		3.04	%		3.31			3.63			3.79			4.09			2.73	%		3.04			3.31			3.63			3.79
National market brokered money market accounts	$	1,885,214			2,073,734			1,982,179			1,271,113			1,082,008		$	1,365,477			1,885,214			2,073,734			1,982,179			1,271,113
Rate		0.75	%		0.82			1.27			2.27			2.54			0.77	%		0.75			0.82			1.27			2.27
National market brokered time deposits	$	3,203,546			3,718,570			4,549,172			3,968,783			3,495,947		$	3,941,977			3,203,546			3,718,570			4,549,172			3,968,783
Rate		3.09	%		3.38			3.70			3.61			3.64			2.66	%		3.09			3.38			3.70			3.61

Total interest bearing deposits	$	23,873,950			24,896,581			24,956,253			23,331,882			22,152,701		$	23,717,740			23,873,950			24,896,581			24,956,253			23,331,882
Rate		1.96	%		2.16			2.58			2.77			2.82			1.85	%		1.96			2.16			2.58			2.77
Federal funds purchased and other short-term liabilities	$	1,166,785			578,717			876,330			1,459,097			2,302,986		$	1,194,759			1,166,785			578,717			876,330			1,459,097
Rate		0.36	%		0.59			0.90			1.94			2.03			0.37	%		0.36			0.59			0.90			1.94
Long-term debt	$	2,090,710			1,964,064			2,106,785			2,119,321			2,048,213		$	1,906,320			2,090,710			1,964,064			2,106,785			2,119,321
Rate		1.94	%		2.07			3.44			3.32			3.44			2.14	%		1.94			2.07			3.44			3.32

Total interest bearing liabilities	$	27,131,445			27,439,362			27,939,368			26,910,300			26,503,900		$	26,818,819			27,131,445			27,439,362			27,939,368			26,910,300
Rate		1.89	%		2.11			2.59			2.77			2.80			1.80	%		1.89			2.11			2.59			2.77


Non-interest bearing demand deposits	$	3,812,876			3,611,958			3,508,753			3,463,563			3,448,794		$	4,069,108			3,812,876			3,611,958			3,508,753			3,463,563


Net interest margin		3.23	%		3.05			3.20			3.42			3.57			3.22	%		3.23			3.05			3.20			3.42

Yields earned on average interest-earning assets and rates paid on average interest-bearing liabilities for the ~~six~~nine months ended ~~June~~September 30, 2009 and 2008 are presented below:


	Six Months Ended June 30,						Nine Months Ended September 30,
(dollars in thousands)	2009			2008			2009			2008
Interest Earning Assets:
Taxable investment securities	$	3,403,956			3,404,324		$	3,338,498			3,452,642
Yield		5.19	%		5.19			5.14	%		5.15
Tax-exempt investment securities	$	111,871			146,007		$	107,343			140,042
Yield		6.99	%		7.16			7.02	%		7.03
Trading account assets	$	21,275			31,592		$	18,634			31,254
Yield		5.71	%		6.40			6.29	%		6.48
Commercial loans	$	23,549,144			22,973,543		$	23,313,577			23,082,533
Yield		4.74	%		6.37			4.74	%		6.17
Consumer loans	$	4,344,690			4,071,035		$	4,330,840			4,136,993
Yield		5.44	%		6.70			5.42	%		6.52
Allowance for loan losses	$	(645,333	)		(389,544	)	$	(733,808	)		(400,553	)

Loans, net	$	27,248,501			26,655,034		$	26,910,609			26,818,973
Yield		4.98	%		6.53			4.99	%		6.33
Mortgage loans held for sale	$	258,493			139,427		$	236,813			129,168
Yield		5.19	%		5.75			5.25	%		6.08
Federal funds sold, due from Federal Reserve Bank and other short-term investments	$	1,105,223			164,731		$	1,290,006			180,375
Yield		0.28	%		2.40			0.26	%		2.18
Federal Home Loan Bank and Federal Reserve Bank stock⁽¹⁾	$	124,817			116,551		$	129,674			118,411
Yield		0.59	%		5.76			0.87	%		5.06

Total interest earning assets	$	32,274,136			30,657,666		$	32,031,577			30,870,865
Yield		4.84	%		6.32			4.80	%		6.15


Interest Bearing Liabilities:
Interest bearing demand deposits	$	3,592,609			3,177,767		$	3,497,682			3,143,747
Rate		0.47	%		1.33			0.46	%		1.25
Money market accounts	$	6,256,806			6,922,184		$	6,274,590			6,871,184
Rate		1.27	%		2.57			1.26	%		2.45
Savings deposits	$	465,050			455,276		$	469,383			456,031
Rate		0.15	%		0.27			0.15	%		0.26
Time deposits under $100,000	$	3,174,528			2,796,239		$	3,125,939			2,883,278
Rate		3.27	%		4.20			3.14	%		4.02
Time deposits over $100,000	$	5,454,859			4,244,085		$	5,396,448			4,407,732
Rate		3.18	%		4.38			3.03	%		4.17
National market brokered money market accounts	$	1,978,953			968,595		$	1,772,214			1,070,170
Rate		0.79	%		2.97			0.78	%		2.69
National market brokered time deposits	$	3,459,636			3,398,312		$	3,622,183			3,589,857
Rate		3.25	%		3.98			3.03	%		3.84

Total interest bearing deposits	$	24,382,441			21,962,458		$	24,158,439			22,421,999
Rate		2.00	%		3.01			1.99	%		2.88
Federal funds purchased and other short-term liabilities	$	874,376			2,278,313		$	982,344			2,003,248
Rate		0.43	%		2.56			0.40	%		2.40
Long-term debt	$	2,027,737			1,989,312		$	1,986,820			2,032,965
Rate		1.98	%		3.75			2.02	%		3.58

Total interest bearing liabilities	$	27,284,554			26,230,083		$	27,127,602			26,458,212
Rate		2.00	%		3.14			1.94	%		3.01


Non-interest bearing demand deposits	$	3,712,972			3,393,450		$	3,832,989			3,416,978


Net interest margin		3.15	%		3.64			3.16	%		3.57

year. The increase in account analysis fees was primarily due to lower earnings credits on commercial demand deposit accounts. All other service charges on deposit accounts, which consist primarily of monthly fees on retail demand deposit and saving accounts, were ~~$8.9~~$13.2 million and ~~$4.9~~$4.4 million for the ~~six~~nine and three months ended ~~June~~September 30, 2009, representing an increase of ~~$404~~$553 thousand, or ~~4.8%~~4.4%, and ~~$639~~$149 thousand, or ~~15.1%~~3.5%, respectively, compared to the same periods in 2008.

Financial management services revenues (which primarily consist of fiduciary and asset management fees, brokerage and investment banking revenue, and customer interest rate swap revenue which is included in other fee income) decreased ~~21.3%~~18.1% to ~~$40.8~~$61.0 million for the ~~six~~nine months ended ~~June~~September 30, 2009, and decreased ~~18.2%~~10.7% to ~~$21.3~~$20.2 million for the three months ended ~~June~~September 30, 2009, as compared to the same periods in 2008. The decline in financial management services revenue for the ~~six~~nine and three months ended ~~June~~September 30, 2009 was impacted by market factors, including weakness in the economy as well as the lower market value of assets under management.

Mortgage banking income increased ~~$10.1~~$12.6 million, or ~~72.7%~~68.9%, for the ~~six~~nine months ended ~~June~~September 30, 2009, and increased ~~$8.9~~$2.6 million, or ~~156.6%~~57.2%, for the three months ended ~~June~~September 30, 2009 as compared to the same periods in 2008. The increase primarily results from mortgage production, which increased ~~$646.2~~$750.8 million, or ~~95.0%~~79.4%, and ~~$298.0~~$104.6 million, or ~~87.3%~~39.5% for the ~~six~~nine and three months ended ~~June~~September 30, 2009 compared to the same periods in the prior year. The increased mortgage production is principally related to a high volume of refinance business. The 2008 results for the three months ended March 31, 2008, include a $1.2 million increase in mortgage revenues due to the adoption of the Securities and Exchange Commission (SEC) Staff Accounting Bulletin (SAB) No. 109, “Written Loan Commitments Recorded at Fair Value through Earnings.”

Synovus recognized $14.7 million in securities gains during the three months ended September 30, 2009, in association with a targeted reallocation of certain securities within the Available-for-Sale portfolio.

Other fee income decreased ~~$4.9~~$5.9 million and ~~$1.4~~$1.0 million, or ~~22.8%~~19.6% and ~~13.5%~~11.9%, respectively, for the ~~six~~nine and three months ended ~~June~~September 30, 2009 as compared to the same periods in 2008. The decreases for the ~~six~~nine and three month periods are principally due to a decline in fees associated with customer interest rate swap transactions and letters of credit.

Other non-interest income decreased ~~$9.7~~$14.7 million, or ~~33.6%~~36.4%, for the ~~six~~nine months ended ~~June~~September 30, 2009 and decreased ~~$6.9~~$5.0 million, or ~~51.8%~~43.4%, for the three months ended ~~June~~September 30, 2009 compared to the same periods in 2008. The ~~decline~~largest component of the change in other non-interest income for the ~~six~~nine and three months ended ~~June~~September 30, 2009 was ~~primarily due to a~~the decline in life insurance cash surrender value appreciation income.

During the three months ended June 30, 2009, Synovus sold the remainder of its MasterCard shares and recognized a pre-tax gain of $8.4 million as compared to a $16.2 million gain from the sale of MasterCard shares for the three months ended June 30, 2008. During the three months ended March 31, 2008, Synovus recognized a pre-tax gain of $38.5 million on

voluntary participation in the FDIC Temporary Liquidity Guarantee Program. This FDIC program allows Synovus to offer 100% deposit protection for non-interest bearing deposit transaction accounts regardless of dollar amount at FDIC-insured institutions.

~~Restructuring (severance) charges of $6.8~~Professional fees were $28.4 million and ~~$400 thousand were recognized~~$11.1 million for the ~~six~~nine and three months ended ~~June~~September 30, ~~2009.~~2009, respectively. This represents an increase of $8.1 million and $4.2 million for those time periods, respectively. The increase in professional fees is driven by legal fees associated with specific litigation as well as legal and other professional fees associated with problem asset dispositions.

Synovus recorded a litigation accrual in 2007 associated with indemnification obligations under Visa’s Retrospective Responsibility Plan. During the three months ended March 31, 2008, Synovus reversed $17.4 million of its litigation accrual for its membership proportion of the amount which Visa funded to an escrow established to pay judgments or settlements of Visa’s covered litigation. During the three months ended September 30, 2008, Synovus increased its litigation accrual by $6.4 million following Visa’s announcement of the settlement of its litigation with Discover. During the three months ended September 30, 2009, Synovus reduced its litigation accrual by $4.1 million for its membership proportion of the amount which Visa deposited to the litigation escrow during the quarter. For further discussion of the Visa litigation expense, see the section titled “Visa Initial Public Offering and Litigation Expense.”

Income Tax Expense

~~The effective tax rate for the second quarter 2009 was principally impacted by the recognition~~Under provisions of a significant increase in the deferred tax assets valuation allowance. Other contributing factors were the level of exempt income earned relative to the overall level of pre-tax loss, restrictions imposed by state laws which prohibit net operating loss deductions from being applied in either past or future periods, the recognition of a valuation allowance for certain state deferred tax assets and changes in the level of income in various jurisdictions where Synovus operates, due to the income tax rates differing among such jurisdictions.

Six Months Ended Three Months Ended
June 30, June 30,
(in thousands) 2009 2008 2009 2008
Income (loss) before income taxes $ (885,201 ) 147,742 (663,396 ) 21,539
Income tax (benefit) expense (164,220 ) 52,952 (79,143 ) 9,302
Effective tax rate (18.6 %) 35.8 % (11.9 %) 43.2 %

~~During the three months ended June 30, 2009, Synovus performed its quarterly assessment of net deferred tax assets. Under SFAS No. 109, “Accounting for Income Taxes” (“SFAS No. 109”),~~ASC 740-30-25, companies are required to assess whether a valuation allowance should be established against their deferred tax assets based on the consideration of all available evidence using a “more likely than not” standard. In making such judgments, significant weight is given to evidence that can be objectively verified. AsPrimarily as a result of ~~the~~ increased credit losses, Synovus ~~is now in~~reached a three-year cumulative pre-tax loss position ~~as of~~during the three months ended June 30, 2009. A cumulative loss position is considered significant negative evidence which is difficult to overcome in assessing the realizability of a deferred tax ~~asset which~~asset. As a result, beginning with the second quarter of 2009, Synovus is ~~difficult to overcome. Synovus did not consider~~no longer considering future taxable income in determining the realizability of its deferred tax assets. Synovus’ estimate of the realization of its deferred tax assets ~~was~~is solely based on future reversals of existing taxable temporary differences ~~taxable income in prior carry back years,~~ and currently available tax planning strategies.

This change resulted in an increase toin the deferred tax asset valuation allowance of approximately $173 million during the second quarter of 2009, and an effective tax rate of 18.6% for the first six moths of 2009. The 18.6% effective tax rate was representative of the projected annual effective tax rate, which was largely determined based on management’s estimate of the pre-tax loss for the year.

During the three months ended ~~June~~September 30, ~~2009. The increase in~~2009, management’s revised estimate of the ~~valuation allowance was recorded through an adjustment to~~pre- tax loss anticipated for the ~~estimated annual effective tax rate.~~year increased. Based on ~~current projections, Synovus estimates that~~the revised estimate, the effective tax rate for the ~~second half of 2009 will remain at approximately the same level as the actual effective tax rate for the first half of 2009 (18.7%)~~fourth quarter and year is estimated to be 14.4%. While there are many factors that could impact the actual effective tax rate, a significant factor is management’s projection of ~~the~~ pre-tax

projected pre-tax losses vary significantly from current estimates, the actual effective tax rate could vary significantly. Specifically, if the actual pre-tax loss for the year exceeds the current estimate, the effective tax rate will be lower than 14.4%. Conversely, if the actual pre-tax loss for the year is lower than the current estimate, the effective tax rate will be higher than 14.4%.

The gross deferred tax asset increased approximately $133 million during the quarter, and the related valuation allowance increase for the three months ended September 30, 2009 was approximately $155 million. The table below shows the effective tax rate for the nine and three months ended September 30, 2009 and 2008.


	Nine Months Ended						Three Months Ended
	September 30,						September 30,
(dollars in thousands)	2009			2008			2009			2008
Income (loss) before income taxes	$	(1,355,749	)		88,060			(470,547	)		(59,682	)
Income tax (benefit) expense, gross		(526,699	)		25,964			(185,726	)		(25,000	)
Increase in valuation allowance for deferred tax assets		331,732			2,777			154,981			789

Net income (loss)	$	(1,160,782	)		59,319			(439,802	)		(35,471	)

Effective tax rate before valuation allowance		38.9	%		29.5	%		39.5	%		41.9	%
Effective tax rate after valuation allowance		14.4	%		32.6	%		6.5	%		40.6	%

A reconciliation of the beginning and ending amount of valuation allowance recorded against deferred tax assets is as follows:


(in thousands)	2009		2008		2009		2008
Balance at January 1	$	5,068		—	$	5,068		¾
Increase for three months ended March 31		3,327		1,221		3,327		1,221
Increase for the three months ended June 30		173,424		767		173,424		767
Increase for the three months ended September 30						154,981		789

Balance at June 30	$	181,819		1,988
Balance at September 30					$	336,800		2,777

Recently Issued Accounting Standards

In June 2009, the FASB issued SFAS No. 166, “Accounting for Transfers of Financial Assets — an amendment of FASB Statement No. 140” (SFAS 166). SFAS 166 removes the concept of a qualifying special-purpose entity from SFAS No. 140, “Accounting for Transfers of Financial Assets” (SFAS 140), and removes the exception from applying FASB Interpretation No. 46 (revised December 2003), “Consolidation of Variable Interest Entities,” to qualifying special-purpose entities. SFAS 166 clarifies that the objective of paragraph 9 of SFAS 140 is to determine whether a transferor and all of the entities included in the transferor’s financial statements being presented have surrendered control over transferred financial assets. This determination must consider the transferor’s continuing involvement in the transferred financial asset, including all arrangements or agreements made contemporaneously with, or in contemplation of, the transfer, even if they were not entered into at the time of the transfer. SFAS 166 modifies the financial-components approach used in SFAS 140 and limits the circumstances in which a financial asset, or portion of a financial asset, should be derecognized when the transferor has not transferred the entire financial asset to an entity that is not consolidated with the transferor in the financial statements being presented and/or when the transferor has continuing involvement. The special provisions of SFAS 140 and SFAS No. 65, “Accounting for Certain Mortgage Banking Activities” (SFAS 65), for guaranteed mortgage securitizations are removed to require those securitizations to be treated the same as any other transfer of financial assets within the scope of SFAS 140, as amended by this SFAS 166. If the transfer does not meet the requirements for sale accounting, the securitized mortgage loans should continue to be classified as loans in the transferor’s statement of financial position. SFAS 166 requires that a transferor recognize and initially measure at fair value all assets obtained (including a transferor’s beneficial interest) and liabilities incurred as a result of a transfer of financial assets accounted for as a sale. Enhanced disclosures are required to provide financial statement users with greater transparency about transfers of financial assets and a transferor’s continuing involvement with transferred financial assets. The provisions of this statement are effective as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period, and for interim and annual reporting periods thereafter. Early application is prohibited. Synovus is currently evaluating the impact of SFAS 166, but does not presently expect that the provisions of SFAS 166 will have a material impact on its financial position, results of operations and cash flows.

In June 2009, the FASB issued SFAS No. 167, “Amendments to FASB Interpretation No. 46(R)” (SFAS 167). The FASB expects SFAS 167 to improve financial reporting by enterprises involved with variable interest entities. The FASB undertook this project to address (1) the effects on certain provisions of FASB Interpretation No. 46 (revised December 2003), “Consolidation of Variable Interest Entities” (FIN 46), as a result of the elimination of the qualifying special-purpose entity concept in FASB 166, and (2) constituent concerns about the application of certain key provisions of Interpretation 46(R), including those in which the accounting and disclosures under FIN 46 do not always provide timely and useful information about an enterprise’s involvement in a variable interest entity. SFAS 167 is effective as of the beginning of each reporting entity’s first annual reporting period that begins after November 15,

In June 2009, the FASB issued ~~SFAS~~Accounting Standards Update (ASU) No. 2009-01, “Topic 105- Generally Accepted Accounting Principles — amendments based on Statement of Financial Accounting Standards No. 168 ~~“The~~— The FASB Accounting Standards CodificationÔ and the Hierarchy of Generally Accepted Accounting Principles, a replacement of FASB Statement No. 162” ~~(SFAS 168)~~(ASU 2009-01). The FASB Accounting Standards CodificationÔ (Codification) will become the source of authoritative U.S. generally accepted accounting principles (GAAP) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. On the effective date of this Statement, the Codification will supersede all then-existing non-SEC accounting and reporting standards. All other ~~nongrandfathered~~non-grandfathered non-SEC accounting literature not included in the Codification will become ~~nonauthoritative. SFAS 168~~non-authoritative. ASU 2009-01 is effective for financial statements issued for interim and annual periods ending after September 15, 2009. The provisions of ASU 2009-01 did not have an impact on Synovus’ financial position, results of operations or cash flows.

In June 2009, the FASB issued ASU No. 2009-02, “Omnibus Update — Amendments to Various Topics for Technical Corrections” (ASU 2009-02). The FASB issued ASU 2009-02 in order to make technical corrections to the Codification. ASU 2009-02 includes technical corrections are effective for the first reporting period (including interim periods) beginning after issuance. The provisions of ASU 2009-02 did not have an impact on Synovus’ financial position, results of operations or cash flows.

In August 2009, the FASB issued ASU No. 2009-03, “SEC Update — Amendments to Various Topics Containing SEC Staff Accounting Bulletins” (ASU 2009-03). The Codification includes certain SEC and SEC staff guidance in order to increase usefulness of the Codification for public companies. The SEC guidance is presented in separate sections and is limited to material on the basic financial statements. ASU 2009-03 includes technical corrections to various topics containing SEC Staff Accounting Bulletins to update cross-references to Codification text. The amendments included in ASU 2009 are effective for the first reporting period (including interim periods) beginning after issuance. The provisions of ASU 2009-03 did not have an impact on Synovus’ financial position, results of operations or cash flows.

In August 2009, the FASB issued ASU No. 2009-05, “Fair Value Measurements and Disclosures (Topic 820) — Measuring Liabilities at Fair Value” (ASU 2009-05). This ASU amends Subtopic 820-10, Fair Value Measurements and Disclosures-Overall, for the fair value measurement of liabilities, and provides clarification regarding required valuations techniques for circumstances in which a quoted price in an active market for the identical liability is not available. The provisions of ASU 2009-05, which are effective for the first reporting period (including interim periods) beginning after issuance, did not have a material impact on Synovus’ financial position, results of operations or cash flows.

In September 2009, the FASB issued ASU No. 2009-07, “Accounting for Various Topics — Technical Corrections to SEC Paragraphs” (ASU 2009-07). This ASU represents technical corrections to various topics containing SEC guidance based on external comments received. Synovus does not expect that the provisions of ~~SFAS 168~~ASU 2009-07, which are effective for the first reporting period (including interim periods) beginning after issuance, will have an impact on Synovus’ financial position, results of operations or cash flows.

In September 2009, the FASB issued ASU No. 2009-08, “Earnings per Share — Amendments to Section 260-10-S99” (ASU 2009-08). This ASU represents technical corrections to Topic 260-10-S99, Earnings per Share, based on EITF Topic D-53,Computation of Earnings per Share for a ~~material~~Period that Includes a Redemption or an Induced Conversion of a Portion of a Class of Preferred Stockand EITF topic D-42,The Effect of the Calculation of Earnings per Share for the Redemption or Induced Conversion of Preferred Stock. Synovus does not expect that the provisions of ASU 2009-08, which are effective for the first reporting period (including interim periods) beginning after issuance, will have an impact on Synovus’ financial position, results of operations or cash flows.

In September 2009, the FASB issued ASU No. 2009-09, “Accounting for Investments — Equity Method and Joint Ventures and Accounting for Equity-Based Payments to Non-Employees — Amendments to Sections 323-10-S99 and 505-50-S99” (ASU 2009-09). This ASU represents a correction of Section 323-10-S99-4, Accounting by an Investor for Stock-Based Compensation Granted to Employees of an Equity Method Investee. Section 313-10-99-4 was originally entered into the Codification incorrectly. This ASU also adds an SEC observer commentAccounting Recognition for Certain Transactions Involving Equity Instruments Granted to Other Than Employeesto the Codification. Synovus does not expect that the provisions of ASU 2009-09, which are effective for the first reporting period (including interim periods) beginning after issuance, will have an impact on Synovus’ financial position, results of operations or cash flows. In September 2009, the FASB issued ASU No. 2009-12, “Fair Value Measurements and Disclosures (Topic 820) — Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent)” (ASU 2009-12). This ASU provides amendments to Subtopic 820-10, Fair Value Measurements and Disclosures-Overall, for the fair value measurement of investments in certain entities that calculate net asset value per share (or its equivalent). The amendments in this ASU permit, as a practical expedient, a reporting entity to measure the fair value of an investment that is within the scope of the amendments in this ASU on the basis of the net asset value per share of the investment (or its equivalent) if the net asset value of the investment (or its equivalent) is calculated in a manner consistent with the measurement principles of Topic 946 as of the reporting entity’s measurement date, including measurement of all or substantially all of the underlying investments of the investee in accordance with Topic 820. The amendments in this ASU also require disclosures by major category of investment about the attributes of investments within the scope of amendments in this ASU. The provisions of ASU 2009-12 are effective for interim and annual periods ending after December 15, 2009. Early adoption is permitted in financial statements for earlier interim and annual periods that have not been issued. Synovus does not expect that the impact of ASU 2009-12 on its financial position, results of operations ~~and~~or cash ~~flows.~~flows to be material.

7482

Non-GAAP Financial Measures

~~Presentation~~The measures entitled pre-tax, pre-credit costs income; fundamental non-interest expense; net interest margin excluding the negative impact of nonperforming assets; core deposits; the tangible common equity to tangible assets ~~ratio~~ratio; and the tangible common equity to risk-weighted assets ~~ratio, core deposits, pre-tax pre-credit costs income,~~are not measures recognized under U.S. generally accepted accounting principals (GAAP), and ~~fundamental non-interest expense~~therefore are ~~non-Generally Accepted Accounting Principles (non-GAAP)~~considered non-GAAP financial measures. The most comparable GAAP measures are income (loss) before income taxes, total non-interest expense, net interest margin, total deposits, and the ratio of total common shareholders’ equity to total assets, ~~ratio, total deposits, pre-tax income (loss), and total non-interest expense. The following table illustrates the method of calculating these non-GAAP financial measures:~~respectively.

~~Reconciliation of Non-GAAP Financial Measures~~

June 30, December 31, June 30,
(dollars in thousands) 2009 2008 2008

Total risk-weighted assets $ 30,037,167 32,106,501 32,455,002

Total assets $ 34,349,670 35,786,270 34,227,301
Goodwill (39,280 ) (39,521 ) (492,138 )
Other intangible assets, net (18,914 ) (21,266 ) (24,860 )

Tangible assets $ 34,291,476 35,725,483 33,710,303

Total equity $ 3,055,163 3,819,507 3,452,683
Goodwill (39,280 ) (39,521 ) (492,138 )
Other intangible assets, net (18,914 ) (21,266 ) (24,860 )
Cumulative perpetual preferred stock (923,855 ) (919,635 ) —

Tangible common equity $ 2,073,114 2,839,085 2,935,685

Tangible common equity to tangible assets 6.05 % 7.95 8.71
Tangible common equity to risk-weighted assets 6.90 % 8.84 9.05

Total deposits $ 27,423,814 28,617,179 26,028,352
National market brokered deposits (4,994,641 ) (6,338,079 ) (4,587,302 )

Core deposits $ 22,429,173 22,279,100 21,441,050

Six Months Ended Three Months Ended
June 30, June 30,
June 30, June 30, June 30, June 30,
2009 2008 2009 2008
Income (loss) before income taxes $ (885,201 ) 147,742 (663,396 ) 21,539
Add: Provision for losses on loans 921,963 184,665 631,526 93,616
Add: Other credit costs⁽¹⁾
230,585 38,828 176,308 29,686
Add: Goodwill impairment — 27,000 — 27,000
Add: Restructuring costs 6,755 4,251 397 4,251
Add (Subtract) Visa litigation settlement expense (recovery) — (17,430 ) — —

Pre-tax pre-credit costs income $ 274,102 385,056 144,835 176,092

Total non-interest expense $ 659,674 467,338 396,316 265,964
Other credit costs (230,585 ) (38,829 ) (176,308 ) (29,686 )
FDIC insurance expense (40,585 ) (9,242 ) (28,915 ) (4,743 )
Restructuring charges (6,755 ) (4,251 ) (397 ) (4,251 )
Visa litigation recovery — 17,430 — —
Goodwill impairment expense — (27,000 ) — (27,000 )

Fundamental non-interest expense $ 381,749 405,446 190,696 200,284

~~Reconciliation of Non-GAAP Financial Measures~~

Six Months Ended Three Months Ended
June 30, June 30,
June 30, June 30, June 30, June 30,
(dollars in thousands) 2009 2008 2009 2008

Other credit costs:
Foreclosed real estate expenses $ 218,734 21,558 172,404 13,677
Loss on sale of impaired loans 1,095 9,944 1,160 9,944
Reserve for unfunded commitments⁽¹⁾
(3,423 ) 4,067 (622 ) 4,067
Reserve for customer interest rate swap agreements⁽¹⁾
8,755 — 833 —
Loan collection expenses⁽¹⁾
4,309 2,832 2,159 1,648
Appraisal and recording expenses⁽¹⁾
1,115 428 374 350

Total other credit costs $ 230,585 38,829 176,308 29,686


~~(1)~~		~~Components of other operating expenses on the consolidated statements of income.~~

Management uses these non-GAAP financial measures to assess the performance of Synovus’ core business and the strength of its capital position. Synovus believes that ~~the above~~these non-GAAP financial measures provide meaningful additional information about Synovus to assist investors in evaluating Synovus’ operating results, financial strength and capitalization. ~~The~~These non-GAAP financial measures should not be considered as ~~(a) additional views of the way Synovus’ financial~~a substitute for operating results determined in accordance with GAAP and may not be comparable to other similarly titled measures are affected by significant charges for credit costs and goodwill impairment, and (b) additional views of the strength of Synovus’ tangible capitalization using the non-GAAP financial ratios, tangible common equity to tangible assets and tangible common equity to risk-weighted assets. Total risk-weighted assets is a required measure used by banks and financial institutions in reporting regulatory capital and regulatory capital ratios to Federal and state regulatory agencies. Tangible common equity to tangible assets and tangible common equity to risk-weighted assets are non-GAAP financial measures utilized by many investors and investment analysts to evaluate the financial strength and capitalization of banks and financial institutions. Core deposits is a measure used by management and investment analysts to evaluate organic growth of deposits and the quality of deposits as a funding source.at other companies. Pre-tax, pre-credit costs income is a measure used by management to evaluate core operating results exclusive of credit costs as well as certain non-core expenses such as goodwill impairment charges, restructuring charges, and Visa litigation expense ~~(benefit)~~(recovery). Fundamental non-interest expense is a measure ~~utilized~~used by management to evaluate core non-interest expense exclusive of other credit costs, FDIC insurance expense, restructuring charges, Visa litigation expense (recovery), and goodwill impairment charges. Net interest margin excluding the impact of nonperforming assets is a measure used by management to measure the ~~success~~net interest margin exclusive of the impact of nonperforming assets and associated net interest charge-offs on the net interest margin. Core deposits is a measure used by management to evaluate organic growth of deposits and the quality of deposits as a funding source. Total risk-weighted assets is a required measure used by banks and financial institutions in reporting regulatory capital and regulatory capital ratios to Federal and state regulatory agencies. The tangible common equity to tangible assets ratio and the tangible common equity to risk-weighted assets ratio are used by management and investment analysts to assess the strength of Synovus’ capital position.

The computations of pre-tax, pre-credit costs income; fundamental non-interest expense; net interest margin excluding the impact of nonperforming assets; core deposits; the tangible common equity to tangible assets ratio; and the tangible common equity to risk-weighted assets, and the reconciliation of these measures to income (loss) before income taxes, total non-interest expense, ~~management initiatives focused on reducing recurring controllable operating costs.~~net interest margin, total deposits, and the ratio of total common shareholders’ equity to total assets are set forth in the tables below:

Reconciliation of Non-GAAP Financial Measures


	September 30,			June 30,			March 31,			December 31,			September 30,
(dollars in thousands)	2009			2009			2009			2008			2008
Tangible Common Equity Ratios:
Total risk-weighted assets	$	28,377,624			30,037,167			31,236,550			32,106,501			32,262,347

Total assets	$	34,610,480			34,349,670			34,547,432			35,786,269			34,339,141
Goodwill		(39,280	)		(39,280	)		(39,521	)		(39,521	)		(482,251	)
Other intangible assets, net		(17,775	)		(18,914	)		(20,064	)		(21,266	)		(23,579	)

Tangible assets	$	34,553,425			34,291,476			34,487,847			35,725,482			33,833,311


Total shareholders’ equity	$	3,136,660			3,018,361			3,637,979			3,787,158			3,378,277
Goodwill		(39,280	)		(39,280	)		(39,521	)		(39,521	)		(482,251	)
Other intangible assets, net		(17,775	)		(18,914	)		(20,064	)		(21,266	)		(23,579	)
Cumulative perpetual preferred stock		(926,014	)		(923,855	)		(921,728	)		(919,635	)		—

Tangible common equity	$	2,153,591			2,036,312			2,656,666			2,806,736			2,872,447


Total common shareholders’ equity to total assets⁽¹⁾		6.39	%		6.10			7.86			8.01			9.81
Tangible common equity to tangible assets		6.23	%		5.94			7.70			7.86			8.49
Tangible common equity to risk-weighted assets		7.59	%		6.78			8.50			8.74			8.90

Core Deposits:
Total deposits	$	28,054,191			27,423,814			27,947,986			28,617,179			27,848,863
National market brokered deposits		(5,639,336	)		(4,994,641	)		(5,258,841	)		(6,338,078	)		(6,174,573	)

Core deposits	$	22,414,855			22,429,173			22,689,145			22,279,101			21,674,290


Net Interest Margin Excluding the Negative Impact of Nonperforming Assets:
Average earning assets⁽²⁾		31,556,544			32,124,145			32,425,793			32,308,295			31,296,510

Net interest income (taxable equivalent)	$	255,850			257,827			244,420			259,437			268,975
Add: Negative impact of nonperforming assets on net interest income⁽³⁾		32,951			31,911			26,429			22,745			18,716

Net interest income excluding the negative impact of nonperforming assets	$	288,801			289,738			270,849			282,182			287,691


Net interest margin		3.22	%		3.23			3.05			3.20			3.42
Add: Negative impact of nonperforming assets on net interest margin		0.42			0.39			0.33			0.27			0.24

Net interest margin excluding the negative impact of nonperforming assets		3.64	%		3.62			3.38			3.47			3.66


⁽¹⁾		Total shareholders’ equity less preferred stock divided by total assets.

⁽²⁾		Quarterly average balance.

⁽³⁾		Represents pro forma interest income on nonperforming loans at current commercial loan portfolio yield, carrying cost of ORE, and net interest charge-offs on loans recognized during the quarter.

7684

Reconciliation of Non-GAAP Financial Measures


	Nine Months Ended						Three Months Ended
	September 30,			September 30,			September 30,			June 30,			September 30,
(dollars in thousands)	2009			2008			2009			2009			2008
Pre-Tax Pre-Credit Costs Income:
Income (loss) before income taxes	$	(1,355,749	)		88,060			(470,547	)		(663,396	)		(59,682	)
Add: Provision for losses on loans		1,418,485			336,016			496,522			631,526			151,351
Add: Other credit costs⁽⁴⁾		340,324			84,095			109,739			176,308			45,267
Add: Goodwill impairment		—			36,887			—			—			9,887
Add: Restructuring costs		6,342			13,299			(413	)		397			9,048
Add: (Subtract) Net litigation contingency expense (recovery)		6,433			(11,082	)		6,433			—			6,347
Less: Gain on redemption of Visa shares		—			(38,542	)		—			—			—

Pre-tax pre-credit costs income	$	415,835			508,733			141,734			144,835			162,218


Fundamental Non-Interest Expense:
Total non-interest expense	$	979,127			742,422			319,453			396,316			275,084
Less: Other credit costs⁽⁴⁾		(340,324	)		(84,095	)		(109,739	)		(176,308	)		(45,267	)
Less: FDIC insurance expense		(54,777	)		(14,030	)		(14,191	)		(28,915	)		(4,787	)
Less: Restructuring charges		(6,342	)		(13,299	)		413			(397	)		(9,048	)
Less: Net litigation contingency (expense) recovery		(6,433	)		11,082			(6,433	)		—			(6,347	)
Less: Goodwill impairment expense		—			(36,887	)		—			—			(9,887	)

Fundamental non-interest expense	$	571,251			605,193			189,503			190,696			199,748


⁽⁴⁾		Other credit costs consist primarily of losses on ORE, reserve for unfunded commitments, and charges related to impaired loans held for sale.

ITEM 3 — QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT
MARKET RISK

Interest rate risk is the primary market risk to which Synovus is potentially exposed. Synovus measures its sensitivity to changes in market interest rates through the use of a simulation model. Synovus uses this simulation model to determine a baseline net interest income forecast and the sensitivity of this forecast to changes in interest rates. These simulations include all of Synovus’ earning assets, liabilities, and derivative instruments. Forecasted balance sheet changes, primarily reflecting loan and deposit growth forecasts, are included in the periods modeled. Anticipated deposit mix changes in each interest rate scenario are also included in the periods modeled.

Synovus has modeled its baseline net interest income forecast assuming a flat interest rate environment with the federal funds rate at the Federal Reserve’s current targeted range of 0% to ~~.25%~~0.25%. Due to short-term interest rates being at or near 0% at this time, only rising rate scenarios have been modeled. Synovus has modeled the impact of a gradual increase in short-term rates of 100 and 200 basis points to determine the sensitivity of net interest income for the next twelve months. As of the end of the ~~second~~third quarter, the interest rate sensitivity of Synovus has not significantly changed as compared to December 31, 2008. Synovus continues to maintain a moderately asset sensitive position which would be expected to benefit net interest income in a rising interest rate environment. Several factors could serve to diminish this asset sensitivity, the primary of which would be an increase in the level of deposit pricing competition. The following table represents the estimated sensitivity of net interest income to these changes in short term interest rates at ~~June~~September 30, 2009, with comparable information for December 31, 2008.


			Estimated % Change in Net Interest Income
			as Compared to Unchanged Rates
	Estimated % Change in Net Interest Income		(for the next twelve months)
Change in Short-Term	as Compared to Unchanged Rates
Interest Rates	(for the next twelve months)
(in basis points)	June 30, 2009	December 31, 2008	September 30, 2009	December 31, 2008
+ 200	1.7%	3.9%	2.0%	3.9%
+ 100	0.8%	0.9%	1.2%	0.9%

PART II — OTHER INFORMATION

ITEM 1 — LEGAL PROCEEDINGS

Synovus and its subsidiaries are subject to various legal proceedings and claims that arise in the ordinary course of its business. In the ordinary course of business, Synovus and its subsidiaries are also subject to regulatory examinations, information gathering requests, inquiries and investigations. Synovus establishes accruals for litigation and regulatory matters when those matters present loss contingencies that Synovus determines to be both probable and reasonably estimable. In the pending regulatory matter described below, loss contingencies are not reasonably estimable in the view of management, and, accordingly, a reserve has not been established for this matter. Based on current knowledge, advice of counsel and available insurance coverage, management does not believe that the eventual outcome of pending litigation and/or regulatory matters, including the pending regulatory matters described below, will have a material adverse effect on Synovus’ consolidated financial condition, results of operations or cash flows. However, in the event of unexpected future developments, it is possible that the ultimate resolution of these matters, if unfavorable, may be material to Synovus’ results of operations for any particular period.

CompuCredit Litigation

As previously disclosed, the FDIC conducted an investigation of the policies, practices and procedures used by Columbus Bank and Trust Company (CB&T), a wholly owned banking subsidiary of Synovus Financial Corp. (Synovus), in connection with the credit card programs offered pursuant to its Affinity Agreement with CompuCredit Corporation (CompuCredit). CB&T issues credit cards that are marketed and serviced by CompuCredit pursuant to the Affinity Agreement. A provision of the Affinity Agreement generally requires CompuCredit to indemnify CB&T for losses incurred as a result of the failure of credit card programs offered pursuant to the Affinity Agreement to comply with applicable law. Synovus is subject to a per event 10% share of any such loss, but Synovus’ 10% payment obligation is limited to a cumulative total of $2 million for all losses incurred.

On June 9, 2008, the FDIC and CB&T entered into a settlement related to this investigation. CB&T did not admit or deny any alleged violations of law or regulations or any unsafe and unsound banking practices in connection with the settlement. As a part of the settlement, CB&T and the FDIC entered into a Cease and Desist Order and Order to Pay whereby CB&T agreed to: (1) pay a civil money penalty in the amount of $2.4 million; (2) institute certain changes to CB&T’s policies, practices and procedures in connection with credit card programs; (3) continue to implement its compliance plan to maintain a sound risk-based compliance management system and to modify them, if necessary, to comply with the Order; and (4) maintain its previously established Director Compliance Committee to oversee compliance with the Order. CB&T has paid the civil money penalty, and that payment is not subject to the indemnification provisions of the Affinity Agreement described above.

CB&T and the FDIC also entered into an Order for Restitution pursuant to which CB&T agreed to establish and maintain an account in the amount of $7.5 million to ensure the availability of restitution with respect to categories of consumers, specified by the FDIC, who activated Aspire credit card accounts issued pursuant to the Affinity Agreement on or before May 31, 2005. The FDIC may require the account to be applied if, and to the extent that, CompuCredit defaults, in whole or in part, on its obligation to pay restitution to any consumers required under the settlement agreements CompuCredit entered into with the FDIC and the Federal Trade

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Commission (FTC) on December 19, 2008. Those settlement agreements require CompuCredit to credit approximately $114 million to certain customer accounts that were opened between 2001 and 2005 and subsequently charged off or were closed with no purchase activity. CompuCredit has stated that this restitution involves mostly non-cash credits — in effect, reversals of amounts for which payments were never received. In addition, CompuCredit has stated that cash refunds to consumers are estimated to be approximately $3.7 million. This $7.5 million account represents a contingent liability of CB&T. At ~~June~~September 30, 2009, CB&T has not recorded a liability for this contingency.

Any amounts paid from the restitution account are expected to be subject to the indemnification provisions of the Affinity Agreement described above. Synovus does not currently expect that the settlement will have a material adverse effect on its consolidated financial condition, results of operations or cash flows.

On May 23, 2008, CompuCredit and its wholly owned subsidiary, CompuCredit Acquisition Corporation, sued CB&T and Synovus in the State Court of Fulton County, Georgia, alleging breach of contract with respect to the Affinity Agreement. This case has subsequently been transferred to Georgia Superior Court, CompuCredit Corp,. v. Columbus Bank and Trust Co. , Case No. 08-CV-157010 (Ga. Super Ct.) (the “Superior Court Litigation”). CompuCredit seeks compensatory and general damages in an unspecified amount, a full accounting of the shares received by CB&T and Synovus in connection with the MasterCard and Visa initial public offerings and remittance of certain of those shares to CompuCredit, and the transfer of accounts under the Affinity Agreement to a third-party. The parties are actively engaged in settlement discussions to resolve the Superior Court Litigation. Although no assurances can be given as to whether the litigation will settle, Synovus has recorded a contingent liability in the amount of $10.5 million in the third quarter of 2009 relating to this potential settlement. CB&T and Synovus intend to continue to vigorously defend themselves against these allegations. Based on current knowledge and advice of counsel, management does not believe that the eventual outcome of this case will have a material adverse effect on Synovus’ consolidated financial condition, results of operations or cash flows. It is possible, however, that in the event of unexpected future developments the ultimate resolution of this matter, if unfavorable, may be material to Synovus’ results of operations for any particular period.

On October 24, 2008, a putative class action lawsuit was filed against CompuCredit and CB&T in the United States District Court for the Northern District of California, Greenwood v. CompuCredit, et. al., Case No. 4:08-cv-04878 (CW) (“Greenwood”), alleging that the solicitations used in connection with the credit card programs offered pursuant to the Affinity Agreement violated the Credit Repair Organization Act, 15 U.S.C. § 1679 (“CROA”), and the California Unfair Competition Law, Cal. Bus. & Prof. Code § 17200. CB&T intends to vigorously defend itself against these allegations. On January 22, 2009, the court in the Superior Court Litigation ruled that CompuCredit must pay the reasonable attorneys’ fees incurred by CB&T in connection with the Greenwood case pursuant to the indemnification provision of the Affinity Agreement described above. Any losses that CB&T incurs in connection with Greenwood are also expected to be subject to the indemnification provisions of the Affinity Agreement described above. Based on current knowledge and advice of counsel, management does not believe that the eventual outcome of this case will have a material adverse effect on Synovus’ consolidated financial condition, results of operations or cash flows.

defendants misrepresented or failed to disclose material facts that artificially inflated Synovus’ stock price in violation of the federal securities laws. The plaintiffs in the Securities Class Action seek damages in an unspecified amount.

On November 4, 2009, a shareholder filed a putative derivative action purportedly on behalf of Synovus in the United States District Court, Northern District of Georgia (Civil Action File No. 1 09-CV-3069) (the “Shareholder Derivative Lawsuit”), against certain current and/or former directors and executive officers of the Company. The Shareholder Derivative Lawsuit asserts that the individual defendants violated their fiduciary duties based upon substantially the same facts as alleged in the Securities Class Action described above. The plaintiff is seeking to recover damages in an unspecified amount and equitable and/or injunctive relief.

Synovus and the individual named defendants collectively intend to vigorously defend themselves against ~~these allegations. Because~~ the Securities Class Action ~~was recently filed~~ and ~~there~~Shareholder Derivative Lawsuit allegations. There are significant uncertainties involved in any potential class action ~~litigation, based~~and derivative litigation. Based upon information that presently is available to it, Synovus’ management team is unable to predict the outcome of the purported Securities Class Action and Shareholder Derivative Lawsuit and cannot currently reasonably determine the probability of a material adverse result or reasonably estimate a range of potential exposure, if any. Although the ultimate outcome of ~~this lawsuit~~these lawsuits cannot be ascertained at this time, based upon information that presently is available to it, Synovus’ management team presently does not believe that the Securities Class Action or the Shareholder Derivative Lawsuit, when resolved, will have a material adverse effect on Synovus’ consolidated financial condition, results of operations or cash flows.

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ITEM 1A — RISK FACTORS

In addition to the other information set forth in this Report, you should carefully consider the factors discussed in Part I under the caption “Item 1A. Risk Factors” in our Annual Report on Form ~~10-K~~10-K/A for the year ended December 31, 2008 and in Part II under the caption “Item 1A. Risk Factors” in our Quarterly ~~Report~~Reports on Form 10-Q for the ~~period~~periods ended March 31, 2009 and June 30, 2009, and our current report on Form 8-K filed on September 15, 2009 (the September 15 8-K) which could materially affect our business, financial position, results of operations or cash flows or future results. The risks described in our Annual Report on Form ~~10-K and~~10-K/A, our Quarterly Reports on Form 10-Q and the September 15 8-K are not the only risks facing Synovus. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial position, results of operations or cash flows or future results.

Other than the risk factors set forth below, there were no material changes during the period covered by this Report to the risk factors previously disclosed in the Synovus’ Annual Report on Form ~~10-K~~10-K/A for the year ended December 31, 2008, ~~and~~ Synovus’ Quarterly ~~Report~~Reports on Form 10-Q for the ~~period~~periods ended March 31, ~~2009.~~

~~Further adverse changes in our credit rating could increase the cost of our funding from the capital markets~~.

~~During the second quarter of~~ 2009, ~~Moody’s Investors Service, Standard~~ and Poor’s Ratings Services and Fitch Ratings downgraded Synovus’ long term debt to below investment grade. The ratings agencies regularly evaluate Synovus and certain of its subsidiary banks, and their ratings of long-term debt are based on a number of factors, including our financial strength as well as factors not entirely within our control, including conditions affecting the financial services industry generally. In light of the continuing difficulties in the financial services industryJune 30, 2009, and the housing and financial markets, there can be no assurance that Synovus will not receive additional adverse changes in its ratings, which could adversely affect the cost and other terms upon which Synovus is able to obtain funding.September 15 8-K.

Future losses ~~may~~will result in an additional valuation allowance to our deferred tax ~~assets.~~assets and impair our ability to recover our deferred tax asset during 2010.

During the quarter ended June 30, 2009, Synovus reached a cumulative three-year pre-tax loss position. Under GAAP, a cumulative loss position is considered significant negative evidence in assessing the realizability of a deferred tax asset. Synovus incurred ~~a charge of~~additional pre-tax losses in the quarter ended September 30, 2009. Accordingly, Synovus was required to increase the valuation allowance against its deferred tax assets by approximately $173 million ~~to record an increase in its valuation allowance~~and $155 million, respectively, during the quarters ended June 30, 2009 and September 30, 2009, which adversely impacted Synovus’ results of operations for ~~deferred tax assets.~~these periods. See Note 1413 — Income Taxes to the Unaudited Financial Statements in Part 1 of this report. ~~Additional future losses will require Synovus to recognize an additional~~Under GAAP, once a company that has recorded valuation allowance against a deferred tax asset returns to profitability, it is possible to reverse the valuation allowance and recapture the deferred tax asset. However, recapture of the deferred tax assets balance is subject to considerable judgment and uncertainty. Synovus expects to recover the balance of its deferred tax assets once it has demonstrated a consistent return to profitability, and the internal stress test methodology used by Synovus management assumes that Synovus will be able to recover all of the recorded valuation allowance in 2010. There can be no assurance that Synovus will be able to fully reverse the valuation allowance against its deferred tax assets during 2010, which ~~will adversely~~may negatively impact ~~its results of operations.~~Synovus’ capital ratios.

We are heavily regulated by federal and state agencies; changes in laws and regulations or failures to comply with such laws and regulations may adversely affect our operations and our financial results.

Synovus and our subsidiary banks, and many of our nonbank subsidiaries, are heavily regulated at the federal and state levels. This regulation is designed primarily to protect depositors, federal deposit insurance funds and the banking system as a whole, not shareholders. Congress and state legislatures and federal and state regulatory agencies continually review banking laws, regulations and policies for possible changes. Changes to statutes, regulations or regulatory policies, including interpretation and implementation of statutes, regulations or policies, including EESA, TARP, the Financial Stability Plan, and the ARRA could affect us in

services and products. While we cannot predict the regulatory changes that may be borne out of the current economic crisis, and we cannot predict whether we will become subject to increased regulatory scrutiny by any of these regulatory agencies, any regulatory changes or scrutiny could be expensive for us to address and/or could result in our changing the way that we do business.
Furthermore, various federal and state bodies regulate and supervise our nonbank subsidiaries, including our brokerage, investment advisory, insurance agency and processing operations. These include, but are not limited to, the SEC, FINRA, federal and state banking regulators and various state regulators of insurance and brokerage activities. Federal and state regulators have the ability to impose substantial sanctions, restrictions and requirements on our banking and nonbanking subsidiaries if they determine, upon examination or otherwise, violations of laws with which the Synovus or its subsidiaries must comply, or weaknesses or failures with respect to general standards of safety and soundness. Such enforcement may be formal or informal and can include directors’ resolutions, memoranda of understanding, cease and desist orders, civil money penalties and termination of deposit insurance and bank closures. Enforcement actions may be taken regardless of the capital level of the institution. In particular, institutions that are not sufficiently capitalized in accordance with regulatory standards may also face capital directives or prompt corrective action. Enforcement actions may require certain corrective steps (including staff additions or changes), impose limits on activities (such as lending, deposit taking, acquisitions or branching), prescribe lending parameters (such as loan types, volumes and terms) and require additional capital to be raised, any of which could adversely affect our financial condition and results of operations. The imposition of regulatory sanctions, including monetary penalties, may have a material impact on our financial condition and results of operations, and damage to our reputation, and loss of our financial services holding company status. In addition, compliance with any such action could distract management’s attention from our operations, cause us to incur significant expenses, restrict us from engaging in potentially profitable activities, and limit our ability to raise capital.

We presently are subject to, and in the future may become subject to, additional supervisory actions and/or enhanced regulation that could have a material negative effect on our business, operating flexibility, financial condition and the value of our common stock.

Under federal and state laws and regulations pertaining to the safety and soundness of insured depository institutions, various state regulators (for state chartered banks), the Federal Reserve (for bank holding companies), the Office of the Comptroller of the Currency (for national banks) and separately the FDIC as the insurer of bank deposits, have the authority to compel or restrict certain actions on our part if they determine that we have insufficient capital or are otherwise operating in a manner that may be deemed to be inconsistent with safe and sound banking practices. Under this authority, our bank regulators can require us to enter into informal or formal enforcement orders, including board resolutions, memoranda of understanding, written agreements and consent or cease and desist orders, pursuant to which we would be required to take identified corrective actions to address cited concerns and to refrain from taking certain actions.

As a result of losses that we have incurred to date and our high level of classified assets, we entered into a memorandum of understanding with the Federal Reserve Bank of Atlanta and the Banking Commissioner of the State of Georgia, or the “Georgia Commissioner,” pursuant to which we agreed to implement plans that are intended to, among other things, minimize credit losses and reduce the amount of our nonperforming loans, limit and manage our concentrations in commercial loans, improve our credit risk management and related policies and procedures,

address liquidity management and current and future capital requirements, strengthen enterprise risk management practices, and provide for succession planning for key corporate and regional management positions. The memorandum of understanding also requires that we obtain the prior approval of the Federal Reserve Bank of Atlanta and the Georgia Commissioner prior to increasing the cash dividend on our common stock above the current level of $0.01 per share.

In addition, several of our subsidiary banks presently are subject to memoranda of understanding with the FDIC and their applicable state bank regulatory authorities and/or resolutions adopted by those banks’ boards of directors at the direction of their appropriate bank regulatory authorities. These supervisory actions are similar in substance and scope to the memorandum of understanding described above. In the future, our other subsidiary banks may become subject to similar and/or heightened supervisory actions and enhanced regulation.

If we are unable to comply with the terms of our current regulatory orders, or if we are unable to comply with the terms of any future regulatory orders to which we may become subject, then we could become subject to additional, heightened supervisory actions and orders, possibly including cease and desist orders, prompt corrective actions and/or other regulatory enforcement actions. If our regulators were to take such additional supervisory actions, then we could, among other things, become subject to significant restrictions on our ability to develop any new business, as well as restrictions on our existing business, and we could be required to raise additional capital, dispose of certain assets and liabilities within a prescribed period of time, or both. The terms of any such supervisory action could have a material negative effect on our business, operating flexibility, financial condition and the value of our common stock.

See the “Business-Supervision, Regulation and Other Factors” section of our Annual Report on Form 10-K/A for the year ended December 31, 2008 and the September 15 8-K, which are incorporated by reference in this quarterly report on Form 10-Q.

We may be required to raise additional Tier 1 capital to comply with new regulatory standards adopted following the release of the results of the Supervisory Capital Assessment Program.

On May 7, 2009, the Federal Reserve Board announced the results of the ~~Supervisory Capital Assessment Program (“SCAP”),~~SCAP, commonly referred to as the “stress test,” of the capital needs through the end of 2010 of the nineteen largest U.S. bank holding companies. As a result of the SCAP, a number of the bank holding companies reviewed as part of the SCAP were required, or voluntarily chose, to raise additional Tier 1 capital, particularly common equity. Following the release of the SCAP results, bank holding companies that were not part of the SCAP, such as Synovus, have faced significant speculation as to the results of the stress tests performed on the largest 19 financial institutions and the hypothetical results if the stress test methodology if it was applied to other financial institutions, including regional banks smaller in size. Under the SCAP methodology, financial institutions were required to maintain Tier 1 common equity at or above 4% of risk weighted assets. This additional common equity is intended to serve as a buffer against higher losses than generally expected, and allow such bank holding companies to remain well capitalized and able to lend to creditworthy borrowers should such losses materialize. ~~Synovus’ management~~Although Synovus was not among the bank holding companies that the Federal Reserve reviewed under the SCAP, Synovus conducted an internal analysis of ~~Synovus’~~its capital position as of June 30, 2009, using ~~certain aspects~~many of the same methodologies of the SCAP, ~~methodology~~ but applying ~~Synovus’ own~~underlying assumptions relating to ~~certain~~potential losses that Synovus believed to be more appropriately tailored to reflect the composition and attributes of its loan portfolio. Certain of those assumptions were more optimistic than the assumptions used by the nineteen largest banks under the SCAP methodology. Although Synovus’ regulators have expressed concern that its 2010 stress test assumptions are notably more optimistic than those used for 2009 despite the current difficult economic ~~factors and credit conditions. Based on this~~environment, based upon Synovus’ internal analysis, management ~~presently~~ believes that, ~~Synovus would be able to comply with this 4% regulatory capital threshold using~~through internally generated sources of ~~capital. However, if~~capital only, as of June 30, 2009, Synovus complied with the Tier 1 capital threshold of common equity at or above 4% of risk weighted assets. As of June 30, 2009, utilizing the SCAP-defined methodology and assumptions, Synovus would have been unable to demonstrate that it would meet the Tier 1 capital threshold of common equity at or above 4% of risk weighted assets under the “More Adverse” scenario of SCAP. If economic conditions or other factors worsen to a

greater degree than the assumptions underlying our own internal assessment of our capital position, then we may need to seek additional Tier 1 capital from external sources in addition to our recently completed public offering and the Exchange Offer.

As Synovus has continued to carefully monitor the dramatically evolving financial services landscape in general, and its position in that landscape compared to its peers in particular, Synovus considered a number of factors, including, but not limited to: the regulators’ urging for Synovus to bolster its capital position promptly; strategies pursued by Synovus’ peers to improve their capital position and the window of opportunity to raise available capital; and available strategic opportunities resulting from the distressed banking environment. In light of these factors, on September 14, 2009, Synovus announced a Capital Plan. Through November 9, 2009, implementation of the Capital Plan has generated an aggregate of approximately $644 million of tangible common equity. Synovus presently expects to continue to work to identify, consider and pursue additional balance sheet optimization initiatives during the fourth quarter of 2009. If economic conditions or other factors worsen to a greater degree than the assumptions underlying Synovus’ internal assessment of its capital position, if minimum regulatory capital requirements for Synovus or its subsidiary banks increase as the result of regulatory directives or otherwise, or if Synovus’ stress test for any reason fails to adequately address some of the more complex aspects of our 30 bank charter structure, then Synovus may be required to seek additional capital from external sources. Given the weakened economy, current market conditions and Synovus’ recent financial performance and related credit ratings, there can be no assurance that additional capital will be available on favorable terms, if at all.

Our allowance for loan losses may not be adequate to cover actual losses, and we may be required to materially increase our allowance, which may adversely affect our capital, financial condition and results of operations.

We maintain an allowance for loan losses, which is a reserve established through a provision for loan losses charged to expenses, which represents management’s best estimate of probable credit losses that have been incurred within the existing portfolio of loans, all as described under Note 8 of Notes to Consolidated Financial Statements on pages F-19 and F-20 of the Financial Appendix and under “Critical Accounting Policies Allowance for Loan Losses” in the “Management’s Discussion and Analysis” Section on pages F-59 through F-61 of the Financial Appendix, which is attached as Exhibit 99.1 to our Annual Report on Form 10-K/A for the year ended December 31, 2008. The allowance, in the judgment of management, is established to reserve for estimated loan losses and risks inherent in the loan portfolio. The determination of the appropriate level of the allowance for loan losses inherently involves a high degree of subjectivity and requires us to make significant estimates of current credit risks using existing qualitative and quantitative information, all of which may undergo material changes. Changes in economic conditions affecting borrowers, new information regarding existing loans, identification of additional problem loans, and other factors, both within and outside of our control, may require an increase in the allowance for loan losses.

We also apply a comprehensive loan classification methodology across each of our 30 bank subsidiaries. Using this methodology, each of our subsidiary banks makes objective and subjective determinations in concluding what they believe to be the appropriate classification of each of their outstanding loans. We carefully monitor, on a bank-by-bank basis, the volume of loans that migrate through each of the various levels of classification. During each quarter, we review a pool of what we believe to be representative sample loans from each of our subsidiary banks in an effort to monitor the level of reserves that are ~~opportunities for Synovus~~maintained in respect of those loans, and to ~~undertake one or more transactions~~work towards a uniform application of allowance principles across our enterprise.

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Because the initial classification of the loans is inherently subjective and subject to evolving local market conditions and other changing factors, it can be difficult for us to predict the effects that ~~potentially would~~those factors will have on the classifications assigned to the loan portfolio of any of our banks, and thus difficult to anticipate the velocity or volume of the migration of loans through the classification process and affect on the level of the allowance for loan losses. Accordingly, we monitor our credit quality and our reserves on a consolidated basis, and use that as a basis for capital planning and other purposes. See Part I — Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations — “Capital Resources and Liquidity”.

In addition, bank regulatory agencies periodically review our allowance for loan losses and may require an increase in the provision for loan losses or the recognition of additional loan charge offs, based on judgments different than those of management. An increase in the allowance for loan losses results in a decrease in net income, and possibly risk-based capital, and may have a material adverse effect on our capital, financial condition and results of operations.

In light of current market conditions, we regularly reassess the creditworthiness of our borrowers and the sufficiency of our allowance for loan losses. Our allowance for loan losses increased from 2.14% of total loans at December 31, 2008 to 3.49% at September 30, 2009. We made a provision for loan losses during the nine months ended September 30, 2009 of approximately $1.42 billion, which was significantly higher than in previous periods. We also charged-off approximately $1.10 billion in loans, net of recoveries, during the nine months ended September 30, 2009, which was significantly higher than in previous periods. We will likely experience additional classified loans and non-performing assets in the foreseeable future as the deterioration in the credit and real estate markets causes borrowers to default. Further, the value of the collateral underlying a given loan, and the realizable value of such collateral in a foreclosure sale, likely will be ~~accretive~~negatively affected by the recent downturn in the real estate market, and therefore may result in an inability to ~~Synovus’ capital and/~~realize a full recovery in the event that a borrower defaults on a loan. Any additional non-performing assets, loan charge-offs, increases in the provision for loan losses or ~~liquidity position, then Synovus may seek additional capital from external sources,~~the continuation of aggressive charge-off policies or ~~enter into such other transactions.~~any inability by us to realize the full value of underlying collateral in the event of a loan default, will negatively affect our business, financial condition, and results of operations and the price of our securities.

We may be unable to receive dividends from our subsidiary banks, and we may be required to contribute capital to those banks, which could adversely affect our liquidity and cause us to raise capital on terms that are unfavorable to us.

~~The~~Our primary source of liquidity ~~for Synovus Financial Corp., as the holding company,~~ is dividends from our subsidiary banks, which are governed by certain rules and regulations of various state and federal banking regulatory agencies. Dividends from our subsidiaries in 2009 have been and will continue to be significantly lower than those received in previous years. ~~In addition, should Synovus’ subsidiaries require additional capital, either due to asset growth or realized losses, Synovus~~This may be ~~required to provide capital infusions to these subsidiaries.~~the result of those banks’ financial condition and/or regulatory limitations they may face. During 2009, ~~Synovus has~~we have been required to provide capital to certain subsidiaries and ~~expects~~expect to continue to do so over the remainder of 2009. There is an increasing possibility that additional Synovus subsidiary banks may be directed by their regulators to increase their capital levels as a result of weakened financial condition, which may require that we contribute additional capital to these banks at a time when Synovus is not receiving a meaningful amount of dividend payments from its banks to offset those capital infusions. This could require that Synovus maintain a consolidated capital position that is beyond what we presently anticipate and in excess of the levels of capital used in the ~~second half~~assumptions underlying our internal capital analysis. Further, as a holding company

with obligations (such as TARP and trust preferred repayments) and expenses (such as salaries) separate from our bank subsidiaries, and because many of ~~2009.~~ our banks will be unable to make dividend payments to us, we must maintain a level of liquidity at our holding company that is sufficient to address those obligations and expenses. The maintenance of adequate liquidity at our holding company could limit our ability to make further capital investments in our bank subsidiaries, and which could adversly impact us.

In addition, current market conditions and required dividend payments on the Series A Preferred Stock likely will ~~likely~~ continue to put additional pressure on ~~Synovus’~~our liquidity position. If these trends continue, ~~Synovus~~we may be forced to raise additional ~~capital.~~capital including beyond the amounts raised through our recently announced Capital Plan. Given the weakened economy, current market conditions and ~~Synovus’~~our recent financial performance and related credit rating downgrades, ~~Synovus~~we may be unable to ~~raise~~ obtain new borrowings or issue equity on favorable terms, if at all. In addition, the terms of a potential equity offering would result in dilution to our existing shareholders. Also, ~~Synovus~~we may be unable to raise the amount of capital that ~~it desires~~we desire due to the limited number of shares of ~~its~~our common stock that currently remain authorized and available for issuances under ~~its~~our organizational documents.

WeFailure to successfully implement or realize the anticipated benefits of our strategic initiatives could adversely impact us.

There can be no assurance that we will be able to successfully implement or realize the anticipated benefits of our strategic initiatives, including our aggressive plans to dispose of nonperforming assets. If we are not successful in implementing or realizing the anticipated benefits, we could be adversely impacted by negative perceptions regarding our ability to withstand a ~~defendant in a purported federal securities class~~“more adverse” economic scenario by investors, our regulators and the rating agencies. In addition, we may become subject to further supervisory action ~~lawsuit,~~ and even if we ~~are~~succeed in our strategic initiatives, we may be unable to ~~prevail~~realize the anticipated benefits of our initiatives.

Also, while we consider our capital position on a consolidated basis, the regulators of each of our individual banks may require that those individual banks require a higher level of capital than we may anticipate, which would require that we maintain a consolidated capital position that is well beyond what we presently anticipate and in ~~this matter, then our business, operating results and financial condition would suffer.~~

~~On July 7, 2009,~~excess of the ~~City~~levels of ~~Pompano Beach General Employees’ Retirement System filed suit against us~~capital used in the ~~United States District Court, Northern District~~assumptions underlying our internal capital analysis. Further, as a holding company with obligations (such as TARP and trust preferred repayments) and expenses (such as salaries) separate from our bank subsidiaries, and because many of ~~Georgia against Synovus~~our banks will be unable to make dividend payments to us, we must maintain a level of liquidity at our holding company that is sufficient to address those obligations and ~~certain current and former executive officers alleging, among other things, that Synovus and the named defendants misrepresented or failed~~expenses. The maintenance of adequate liquidity at our holding company will limit our ability to ~~disclose material facts that artificially inflated~~make further capital investments in our stock price in violation of the federal securities laws. The plaintiffs in the suit seek damages in an unspecified amount. Synovus cannot at this time predict the outcome of this litigation or reasonably determine the probability of a material adverse result or reasonably estimate range of potential exposure, if any, that this litigation might have on us, our business, our financial condition or our results of operations, although such effectsbank subsidiaries, which could be materially adverse. In addition, in the future, Synovus may need to record litigation reserves in respect of this litigation. Further, regardless of how this litigation proceeds, it could divert Synovus’ management’s attention and other resources away from operations and other affairs.adversly inpact us.

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ITEM ~~4 — SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS~~

The annual shareholders’ meeting was held on April 23, 2009. Following is a summary of the proposals that were submitted to the shareholders for approval and a tabulation of the votes with respect to each proposal.

~~Proposal I~~

~~The proposal was to elect as directors the eighteen nominees named in the proxy statement for Synovus’ 2009 Annual Meeting of Shareholders.~~

Nominee Votes For Votes Against Abstentions
Daniel P. Amos 1,814,157,560 854,431,424 41,425,754
Richard E. Anthony 2,599,422,333 98,814,098 11,778,307
James H. Blanchard 2,621,889,813 80,627,779 7,497,136
Richard Y. Bradley 2,468,010,074 228,977,851 13,026,804
Frank W. Brumley 2,040,216,382 656,617,107 13,181,239
Elizabeth W. Camp 2,624,873,573 72,718,095 12,423,071
Gardiner W. Garrard, Jr. 2,580,815,532 116,019,913 13,179,294
T. Michael Goodrich 2,619,161,696 78,055,258 12,797,775
Frederick L. Green, III 2,616,021,975 80,503,762 13,489,001
V. Nathaniel Hansford 2,611,900,881 85,100,502 13,013,245
Mason H. Lampton 2,615,251,533 82,343,542 12,419,654
Elizabeth C. Ogie 2,623,781,881 74,175,320 12,057,527
H. Lynn Page 2,627,784,443 75,967,359 6,262,937
J. Neal Purcell 2,626,574,325 70,213,179 13,227,234
Melvin T. Stith 2,622,542,555 74,269,480 13,202,694
Philip W. Tomlinson 2,581,699,251 115,684,839 12,630,628
William B. Turner, Jr. 2,588,197,799 110,275,320 11,541,610
James D. Yancey 2,624,892,749 73,882,270 11,239,710

~~Proposal II~~

~~The proposal was to ratify the appointment of KPMG LLP as Synovus’ independent auditor for the fiscal year ended December 31, 2009.~~

Votes For Votes Against Abstentions
Votes 2,644,624,251 50,337,861 15,052,637

~~Proposal III~~

~~The proposal was to approve the compensation of Synovus’ named executive officers as determined by the Compensation Committee.~~

Votes For Votes Against Abstentions
Votes 2,518,781,279 171,536,831 19,696,629

~~ITEM 6~~3 — EXHIBITS


(a) Exhibits		Description

3.1		Articles of Incorporation of Synovus, as amended, incorporated by reference to Exhibit 3.1 of Synovus’ Quarterly Report on Form 10- Q for the quarter ended March 31, 2006, as filed with the SEC on May 10, 2006

3.2		Articles of Amendment to Articles of Incorporation of Synovus incorporated by reference to Exhibit 3.1 of Synovus’ Current Report on Form 8-K dated December 17, 2008, as filed with the SEC on December 17, 2008

3.3		Articles of Amendment to Articles of Incorporation of Synovus establishing the terms of the Fixed Rate Cumulative Perpetual Preferred Stock, Series A, incorporated by reference to Exhibit 3.1 of Synovus’ Current Report on Form 8-K dated December 17, 2008, as filed with the SEC on December 22, 2008

3.4		Articles of Amendment to Articles of Incorporation of Synovus establishing the terms of the Fixed Rate Cumulative Perpetual Preferred Stock, Series A, incorporated by reference to Exhibit 3.2 of Synovus’ Current Report on Form 8-K dated December 17, 2008, as filed with the SEC on December 22, 2008

3.5		Bylaws, as amended, of Synovus, incorporated by reference to Exhibit 3.2 of Synovus’ Current Report on Form 8-K date December 17, 2008, as filed with the SEC on December 17, 2008

~~10.1~~		~~Synovus Financial Corp. Executive Salary Continuation Death Benefit Plan dated August 1, 2009~~

~~10.2~~		~~Summary of Board of Directors Compensation, as amended~~

12.1		Ratio of Earnings to Fixed Charges

31.1		Certification of Chief Executive Officer

31.2		Certification of Chief Financial Officer

32		Certification of Periodic Report

8798

INDEX TO EXHIBITS


Exhibit Number		Description

3.1		Articles of Incorporation of Synovus, as amended, incorporated by reference to Exhibit 3.1 of Synovus’ Quarterly Report on Form 10-Q for the quarter ended March 31, 2006, as filed with the SEC on May 10, 2006

3.2		Articles of Amendment to Articles of Incorporation of Synovus incorporated by reference to Exhibit 3.1 of Synovus’ Current Report on Form 8-K dated December 17, 2008, as filed with the SEC on December 17, 2008

3.3		Articles of Amendment to Articles of Incorporation of Synovus establishing the terms of the Fixed Rate Cumulative Perpetual Preferred Stock, Series A, incorporated by reference to Exhibit 3.1 of Synovus’ Current Report on Form 8-K dated December 17, 2008, as filed with the SEC on December 22, 2008

3.4		Articles of Amendment to Articles of Incorporation of Synovus establishing the terms of the Fixed Rate Cumulative Perpetual Preferred Stock, Series A, incorporated by reference to Exhibit 3.2 of Synovus’ Current Report on Form 8-K dated December 17, 2008, as filed with the SEC on December 22, 2008

3.5		Bylaws, as amended, of Synovus, incorporated by reference to Exhibit 3.2 of Synovus’ Current Report on Form 8-K date December 17, 2008, as filed with the SEC on December 17, 2008

~~10.1~~		~~Synovus Financial Corp. Executive Salary Continuation Death Benefit Plan dated August 5, 2009~~

~~10.2~~		~~Summary of Board of Directors Compensation, as amended~~

12.1		Ratio of Earnings to Fixed Charges

31.1		Certification of Chief Executive Officer

31.2		Certification of Chief Financial Officer

32		Certification of Periodic Report

89100



Part I.	Financial Information:

~~Item 1.~~	~~Unaudited Financial Statements~~

	~~Consolidated Balance Sheets as of June 30, 2009 and December 31, 2008~~		3

Item 1.Unaudited Financial Statements		3

Consolidated Balance Sheets as of September 30, 2009 and December 31, 2008		3

Consolidated Statements of Income for the ~~Six~~Nine and Three Months Ended ~~June~~September 30, 2009 and 2008		4

	Consolidated Statements of Changes in Equity and Comprehensive Income (Loss) for the ~~Six~~Nine Months Ended ~~June~~September 30, 2009 and 2008		5

	Consolidated Statements of Cash Flows for the ~~Six~~Nine Months Ended ~~June~~September 30, 2009 and 2008		6

	Notes to Consolidated Financial Statements		7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		36

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		77

~~Item 4.~~	~~Controls and Procedures~~		78

~~Part II.~~	~~Other Information:~~

~~Item 1.~~	~~Legal Proceedings~~		79

~~Item 1A.~~	~~Risk Factors~~		82

~~Item 2.~~	~~Unregistered Sales of Equity Securities and Use of Proceeds~~		85

~~Item 4.~~	~~Submission Of Matters To A Vote Of Security Holders~~		86

Item 6.4.Controls and Procedures	~~Exhibits~~		87

Part II. Other Information:		88

Item 1.Legal Proceedings		88

Item 1A.Risk Factors		91

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds		97

Item 3.Exhibits		98

Signatures			8899

Index to Exhibits		89100
~~EX-10.1~~
~~EX-10.2~~
EX-12.1
EX-31.1
EX-31.2
EX-32


	December 31, 2008									December 31, 2008
			Gross		Gross							Gross		Gross
	Amortized		Unrealized		Unrealized			Fair		Amortized		Unrealized		Unrealized			Fair
(in thousands)	Cost		Gains		Losses			Value		Cost		Gains		Losses			Value
U.S. Treasury securities	$	4,576		2		—			4,578	$	4,576		2		¾			4,578
Other U.S. Government agency securities		1,474,409		78,227		—			1,552,636		1,474,409		78,227		¾			1,552,636
Government agency issued mortgage-backed securities		1,888,128		68,411		(568	)		1,955,971
Government agency issued mortgage- backed securities											1,888,128		68,411		(568	)		1,955,971
Government agency issued collateralized mortgage obligations		114,727		1,877		(162	)		116,442		114,727		1,877		(162	)		116,442
State and municipal securities		120,552		3,046		(317	)		123,281		120,552		3,046		(317	)		123,281
Equity securities		9,455		—		(1,288	)		8,167		9,455		¾		(1,288	)		8,167
Other investments		9,021		—		(74	)		8,947		9,021		¾		(74	)		8,947

Total	$	3,620,868		151,563		(2,409	)		3,770,022	$	3,620,868		151,563		(2,409	)		3,770,022


(1)		See reconciliation of non-GAAP Financial Measures on page ~~75.~~83.

(2)		Fundamental non-interest expense is comprised of total non-interest expense less other credit costs, FDIC insurance expense, restructuring charges, Visa litigation recovery, and goodwill impairment expense.

(3)		Other credit costs are comprised primarily of foreclosed real estate costs which also include the reserve for unfunded commitments, and charges related to other loans held for sale.

(4)		~~Ratios~~Percentages are annualized

nm = non meaningful


		collateral-dependent impaired loans, other real estate, certain equity investments, and certain private equity investments.


(1)		Amount represents the recorded value of private equity investments ~~before~~including non-controlling interest. The value ~~net of~~excluding non-controlling interest was ~~$95.7~~$90.3 million and $85.7 million at ~~June~~September 30, 2009 and December 31, 2008, respectively.

(2)		Amounts represent the value of certain callable brokered certificates of deposit for which Synovus has elected the fair value option under ~~SFAS No. 159.~~ASC 825-10-10.


				Changes in Fair Value Gains (Losses)												Changes in Fair Value Gains (Losses)
				Six Months Ended					Three Months Ended							Nine Months Ended					Three Months Ended
				June 30, 2009					June 30, 2009							September 30, 2009					September 30, 2009
	As of			Mortgage			Other		Mortgage			Other		As of		Mortgage			Other		Mortgage		Other
	June 30,			Banking			Operating		Banking			Operating		September 30,		Banking			Operating		Banking		Operating
(in thousands)	2009			Income			Income		Income			Income		2009		Income			Income		Income		Income

Mortgage loans held for sale	$	(512	)	$	(5,455	)		—		(3,779	)		—	$	2,847	$	(2,096	)		—		3,359		—
Certain callable brokered certificates of deposit		—			—			520		—			18		—		—			520		—		—


	Three Months Ended June 30,											Three Months Ended September 30,
	2009						2008					2009						2008
	Investment						Investment					Investment						Investment
	Securities			Private			Securities			Private		Securities			Private			Securities			Private
	Available			Equity			Available			Equity		Available			Equity			Available			Equity
(in thousands)	for Sale			Investments			for Sale			Investments		for Sale			Investments			for Sale			Investments
Beginning balance, April 1	$	15,529			124,166			13,610			86,905
Beginning balance, July 1												$	16,495			135,653			12,664			93,577
Total gains or (losses) (realized/unrealized):
Included in earnings		—			8,090	⁽¹⁾		—			—		—			(6,853)	⁽¹⁾		—			12,728	⁽¹⁾
Unrealized gains (losses) included in other comprehensive income		1,852			—			(53	)		—		(495	)		—			102			—
Purchases, sales, issuances, and settlements, net		(886	)		3,397			(893	)		6,672		7			(967	)		(1,329	)		3,779
Transfers in and/or out of Level 3		—			—			—			—		—			—			—			—

Ending balance, June 30	$	16,495			135,653			12,664			93,577
Ending balance, September 30,												$	16,007			127,833			11,437			110,084


The amount of total gains or (losses) for the period included in earnings attributable to the change in unrealized gains or losses relating to assets and liabilities still held at June 30,	$	1,852			8,090			—			—
The amount of total gains or (losses) for the period included in earnings attributable to the change in unrealized gains or losses relating to assets still held at September 30,												$	—			(6,853	)		—			12,728


(1)		Amount represents net gains or (losses) from private equity investments ~~before~~including non-controlling interest. The net loss excluding the non-controlling interest was $1.3 million and $6.6 million for the nine months and three months ended September 30, 2009, respectively. The net gain after non-controlling interest was ~~$5.3~~$11.4 million and $8.0 million for the ~~six~~nine and three months ended ~~June~~September 30, ~~2009and $3.4 million for the six months ended June 30, 2008.~~2008, respectively.


							Losses
							Six Months		Three Months
							Ended		Ended
	As of June 30, 2009						June 30,		June 30,
(in millions)	Level 1		Level 2		Level 3		2009		2009
Impaired loans	$	—		—		1,008.9		455.9		366.6	⁽¹⁾
Other real estate		—		—		211.0		127.0		103.1	⁽²⁾


	As of December 31, 2008
(in millions)	Level 1		Level 2		Level 3
Impaired loans	$	—		—		729.6


			Weighted-Average															Weighted-Average
									Maturity															Maturity
	Notional		Receive			Pay			In		Fair Value					Notional		Receive			Pay			In		Fair Value
(dollars in thousands)	Amount		Rate			Rate^(*)			Months		Assets		Liabilities			Amount		Rate			Rate^(*)			Months		Assets		Liabilities
Receive fixed interest rate swaps:
Fair value hedges	$	348,936		2.35	%		0.67	%		7	$	1,663		(16	)	$	240,000		1.40	%		0.42	%		8	$	1,431		—
Cash flow hedges		650,000		7.93	%		3.25	%		19		37,057		—			600,000		7.95	%		3.25	%		17		33,133		—

Total	$	998,936		5.98	%		2.35	%		15	$	38,720		(16	)	$	840,000		6.08	%		2.44	%		15	$	34,564		—


(*)		Variable pay rate based upon contract rates in effect at ~~June~~September 30, 2009.


	Amount of Gain (Loss)					��	Location of	Amount of Gain (Loss)										Amount of Gain (Loss)				Location of	Amount of Gain (Loss)
	Recognized in OCI on						Gain (Loss)	Reclassified from OCI				Location of	Amount of Gain (Loss)					Recognized in OCI on				Gain (Loss)	Reclassified from OCI				Location of	Amount of Gain (Loss)
	Derivative						Reclassified	into Income				Gain (Loss)	Recognized in Income					Derivative				Reclassified	into Income				Gain (Loss)	Recognized in Income
	Effective Portion						from OCI	Effective Portion				Recognized	Ineffective Portion					Effective Portion				from OCI	Effective Portion				Recognized	Ineffective Portion
	Three Months Ended						into Income	Three Months Ended				in Income	Three Months Ended					Three Months Ended				into Income	Three Months Ended				in Income	Three Months Ended
	June 30,						Effective	June 30,				Ineffective	June 30,					September 30,				Effective	September 30,				Ineffective	September 30,
(in thousands)	2009			2008			Portion	2009		2008		Portion	2009		2008			2009		2008		Portion	2009		2008		Portion	2009		2008
							Interest Income					Other Non-Interest
Interest rate contracts	$	(1,981	)		(8,283	)	(Expense)	$	5,677		3,542	Income	$	6		(1,343	)	$	2,077		7,655	Interest Income(Expense)	$	5,383		3,841	Other Non-Interest Income	$	—		1,822

Total	$	(1,981	)		(8,283	)		$	5,677		3,542		$	6		(1,343	)	$	2,077		7,655		$	5,383		3,841		$	—		1,822


(1)		Unrecognized state income tax benefits are not adjusted for the ~~Federal~~federal income tax impact.


							Sequential															Sequential
	June 30,			March 31,			Quarter			June 30,			Year Over Year			September 30,			June 30,			Quarter			September 30,			Year Over Year
	2009			2009			Change (4)			2008			Change			2009			2009			Change (4)			2008			Change
Loans, net of unearned income	$	27,585,741			27,730,272			(2.1	%)	$	27,445,891			0.5	%	$	26,331,739			27,585,741			(18.0	%)	$	27,647,983			(4.8	%)
Non-performing assets		1,736,173			1,751,185			(3.4	%)		830,264			109.1	%
Nonperforming assets																	1,747,475			1,718,148			6.8	%		996,686			75.3	%
Core deposits⁽¹⁾		22,429,172			22,689,145			(4.6	%)		21,441,050			4.6	%		22,414,855			22,429,173			(0.1	%)		21,674,290			3.4	%

Net interest margin		3.23	%		3.05	%	18 bp				3.57	%	(34) bp				3.22	%		3.23	%		(1	)bp		3.42	%		(20	)bp
Nonperforming assets ratio		6.24			6.25		(1) bp				3.00		324 bp				6.58			6.17			41	bp		3.58			300	bp
Loans past due over 90 days and still accruing interest		0.11			0.11		0 bp				0.14		(3) bp				0.17			0.11			6	bp		0.18			(1	)bp
Total past due loans and still accruing interest		1.20			2.12		(92) bp				1.33		(13) bp				1.35			1.20			15	bp		1.46			(11	)bp
Net charge-off ratio (quarter)		5.09			3.53		156 bp				1.04		405 bp				7.33			5.09			224	bp		1.53			580	bp
Net charge-off ratio (ytd)		4.31			3.53		78 bp				1.18		313 bp				5.30			4.31			99	bp		1.18			412	bp

Tier 1 capital	$	2,862,225			3,454,987			(68.8	%)	$	2,891,831			(1.0	%)	$	2,974,066			2,862,225			15.5	%	$	2,842,587			4.6	%
Tier 1 common equity		1,928,370			2,523,119			(95.0	%)		2,881,634			(33.2	%)		2,037,951			1,928,370			22.5	%		2,881,634			(29.3	%)
Total risk-based capital		3,836,405			4,440,573			(54.5	%)		3,987,595			(3.8	%)		3,927,752			3,836,405			9.5	%		3,936,665			(0.2	%)
Tier 1 capital ratio		9.53	%		11.06	%	(153) bp				8.91	%	62 bp				10.48	%		9.53	%		95	bp		8.81	%		167	bp
Tier 1 common equity ratio		6.42			8.08		(166) bp				8.88		(246) bp				7.18			6.42			76	bp		8.78			(160	)bp
Total risk-based capital ratio		12.77			14.22		(145) bp				12.29		48 bp				13.84			12.77			107	bp		12.20			164	bp
Tangible common equity to tangible assets⁽¹⁾		6.05			7.80		(175) bp				8.71		(266) bp				6.23			5.94			29	bp		8.49			(226	)bp
Tangible common equity to risk-weighted assets⁽¹⁾		6.90			8.61		(171) bp				9.05		(215) bp				7.59			6.78			81	bp		8.90			(131	)bp


	Three Months Ended
	June 30, 2009					March 31, 2009
(dollars in thousands)	Net		% of Average Loans			Net		% of Average Loans
Loan Type	Charge-Offs		for the Quarter			Charge-Offs		for the Quarter
Investment properties	$	47,658		3.2	%	$	16,087		1.1	%
1 — 4 Family properties		184,986		16.9			113,427		9.5
Land for future development		36,123		9.0			46,504		11.4

Total commercial real estate		268,767		9.1			176,018		5.8
Commercial and industrial		61,619		2.2			53,239		1.9
Retail		24,838		2.3			17,057		1.6

Total⁽¹⁾	$	355,224		5.1	%	$	246,314		3.5	%


(1)		~~At June~~Allowance and cumulative write-downs on nonperforming loans as a percentage of unpaid principal balance at September 30, 2009 ~~Synovus had $347 million in loans under the terms of troubled debt restructurings. These loans continue~~was approximately 42% compared to ~~accrue interest as long as the borrower complies with the revised terms and conditions and has demonstrated repayment performance. Approximately $18 million of such loans were accruing interest as of~~36% at June 30, 2009.

(2)		Represent only the impaired loans that are intended to be sold. ~~Other~~Impaired loans held for sale are carried at the lower of cost or fair value.

(3)		~~Ratio is annualized.~~Allowance and cumulative write-downs on nonperforming assets as a percentage of unpaid principal balance at September 30, 2009 was approximately 46%.

(4)		~~Life-to-date net charge-offs recognized as a percentage~~During the third quarter of 2009, Synovus revised its definition of nonperforming assets to exclude loans that have been restructured and remain on accruing status. These loans are not considered to be nonperforming because they are performing in accordance with the ~~unpaid principal balance~~restructured terms. Management believes that this change better aligns our definition of ~~collateral-dependent~~nonperforming loans and nonperforming assets with the definition used by our peers and therefore improves the comparability of this measure across the industry. All prior periods presented have been reclassified to conform to the new presentation.

(5)		Ratio is annualized.

(6)		Collateral-dependent impaired loans ~~were approximately 23%~~for which there was no associated reserve were: $776.6 million at September 30, 2009; $674.6 million at June 30, ~~2009.~~2009; $785.0 million at of March 31, 2009; $618.2 million at of December 31, 2008; and $540.7 million at September 30, 2008.



	Outstanding					30+ Past Due
(dollars in thousands)	Balance		NPL Ratio			Ratio
Multi-family	$	864,849		1.1	%		1.2
Hotels		1,023,492		22.5			0.1
Office buildings		1,075,011		1.2			0.9
Shopping centers		1,078,436		2.0			1.4
Commercial development		699,532		8.5			2.4
Warehouses		497,062		1.8			0.0
Other investment property		580,696		2.1			0.8

Total investment property loans	$	5,819,078		6.1	%		1.0


(1)		Core deposits include total deposits less national market brokered deposits. See reconciliation of non-GAAP financial measures on page ~~75.~~83.


*		Yields and rates are annualized.

(1)		Included as a component of other assets on the accompanying balance sheet.


Nominee	Votes For		Votes Against		Abstentions
Daniel P. Amos		1,814,157,560		854,431,424		41,425,754
Richard E. Anthony		2,599,422,333		98,814,098		11,778,307
James H. Blanchard		2,621,889,813		80,627,779		7,497,136
Richard Y. Bradley		2,468,010,074		228,977,851		13,026,804
Frank W. Brumley		2,040,216,382		656,617,107		13,181,239
Elizabeth W. Camp		2,624,873,573		72,718,095		12,423,071
Gardiner W. Garrard, Jr.		2,580,815,532		116,019,913		13,179,294
T. Michael Goodrich		2,619,161,696		78,055,258		12,797,775
Frederick L. Green, III		2,616,021,975		80,503,762		13,489,001
V. Nathaniel Hansford		2,611,900,881		85,100,502		13,013,245
Mason H. Lampton		2,615,251,533		82,343,542		12,419,654
Elizabeth C. Ogie		2,623,781,881		74,175,320		12,057,527
H. Lynn Page		2,627,784,443		75,967,359		6,262,937
J. Neal Purcell		2,626,574,325		70,213,179		13,227,234
Melvin T. Stith		2,622,542,555		74,269,480		13,202,694
Philip W. Tomlinson		2,581,699,251		115,684,839		12,630,628
William B. Turner, Jr.		2,588,197,799		110,275,320		11,541,610
James D. Yancey		2,624,892,749		73,882,270		11,239,710


	SYNOVUS FINANCIAL CORP.
Date: ~~August 10,~~November 9, 2009	BY:	/s/ Thomas J. Prescott
		Thomas J. Prescott
		Executive Vice President and Chief Financial Officer