(2) further deteriorations in credit quality, particularly in residential construction and commercial development real estate loans, may continue to result in increased 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 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 nonperforming assets;

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

(6) the risk that our allowance for loan losses 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 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 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 and potential obligations to contribute capital to our subsidiaries, which may restrict Synovus' ability to make payments on its obligations or dividend payments;

(12) the availability and cost of capital and 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 Synovus' deferred tax assets and the related impact on Synovus' financial results of changes in the valuation allowance for its deferred tax assets in future 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 Synovus' financial results, reputation and business if Synovus is unable to comply with all applicable federal and state 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

(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.

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 narrative summarizes the significant trends affecting Synovus' results of operations and financial condition for the nine and three months ended 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 nine months of 2009 continue to reflect the adverse impact of severe macro economic conditions which have negatively impacted liquidity, credit quality and 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 nonperforming assets, charge-offs, foreclosures and 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.
It is uncertain how long the recessionary pressures will continue before the U.S. economy shows signs of a sustained recovery; however, some leading economic indicators suggest that the economy may remain challenging through the end of this year and into much of 2010. Accordingly, financial institutions like ours likely will continue to experience heightened credit losses and higher levels of 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.

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."

Subsequent Events Impacting Results of Operations On October 22, 2009, Synovus reported 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 $6.0 million reduction to the carrying value of certain private equity investments and 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 three months ended September 30, 2009 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 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      •   Loan Growth

                   •   Liquidity             •   Core Deposit Growth

                   •   Credit Quality        •   Fee Income Growth

                   •   Net Interest Margin   •   Expense Management

The net loss for the three months ended September 30, 2009 was $439.8 million, or $1.32 per common share. The results for the third quarter were impacted by a non-cash charge of 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 three months ended September 30, 2009 were $606.3 million, including provision for losses on loans of $496.5 million and costs related to foreclosed real estate of $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. Problem asset dispositions totaled $339 million in the third quarter.
Pre-tax, pre-credit costs income (which excludes provision for losses on loans, other credit costs, and certain other items), was $141.7 million, down $3.1 million from the second quarter of 2009. The net interest margin decreased one basis point to 3.22% compared to the 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

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 nine months ended September 30, 2009 and 2008, is set forth in the table below.

Financial Performance Summary

                                                        Nine Months Ended                                                 Three Months Ended
                                                          September 30,                                                     September 30,
(in thousands, except per share data)               2009                   2008                Change                 2009                  2008                 Change
Pre-tax, pre-credit costs income(1)            $    421,835               508,733               (17.1 %)          $  147,734               162,218                 (8.9 %)
Net income (loss)                                (1,160,782 )              59,319                     nm            (439,802 )             (35,471 )                    nm
Net income (loss) available to common
shareholders                                     (1,205,822 )              52,972                     nm            (453,805 )             (40,121 )                    nm

Diluted earnings (loss) per share
(EPS)                                                 (3.60 )                0.16                     nm               (1.32 )               (0.12 )                    nm

Provision for losses on loans                     1,418,485               336,016               322.2 %              496,522               151,351                228.1 %

Non-interest income                                 287,384               346,630               (17.1 %)              90,797                98,955                 (8.2 %)

Non-interest expense                                979,127               742,422                31.9 %              319,453               275,084                 16.1 %
Fundamental non-interest expense(1)(2)              571,251               605,193                (5.6 %)             189,503               199,748                 (5.1 %)

Other credit costs (3)                              340,324                84,094               304.7 %              109,739                45,266               (142.4 %)



                                                                                   Sequential
                                       September 30,            June 30,            Quarter          September 30,         Year Over Year
                                            2009                  2009             Change (4)             2008                 Change
Loans, net of unearned income          $ 26,331,739            27,585,741            (18.0 %)        $ 27,647,983                (4.8 %)
Nonperforming assets                      1,747,475             1,718,148              6.8 %              996,686                75.3 %
Core deposits (1)                        22,414,855            22,429,173             (0.1 %)          21,674,290                 3.4 %

Net interest margin                            3.22 %                3.23 %             (1 )bp               3.42 %               (20 )bp
Nonperforming assets ratio                     6.58                  6.17               41 bp                3.58                 300 bp
Loans past due over 90 days and
still accruing interest                        0.17                  0.11                6 bp                0.18                  (1 )bp
Total past due loans and still
accruing interest                              1.35                  1.20               15 bp                1.46                 (11 )bp
Net charge-off ratio (quarter)                 7.33                  5.09              224 bp                1.53                 580 bp
Net charge-off ratio (ytd)                     5.30                  4.31               99 bp                1.18                 412 bp

Tier 1 capital                         $  2,974,066             2,862,225             15.5 %         $  2,842,587                 4.6 %
Tier 1 common equity                      2,037,951             1,928,370             22.5 %            2,881,634               (29.3 %)
Total risk-based capital                  3,927,752             3,836,405              9.5 %            3,936,665                (0.2 %)
Tier 1 capital ratio                          10.48 %                9.53 %             95 bp                8.81 %               167 bp
Tier 1 common equity ratio                     7.18                  6.42               76 bp                8.78                (160 )bp
Total risk-based capital ratio                13.84                 12.77              107 bp               12.20                 164 bp
Tangible common equity to
tangible assets (1)                            6.23                  5.94               29 bp                8.49                (226 )bp
Tangible common equity to
risk-weighted assets (1)                       7.59                  6.78               81 bp                8.90                (131 )bp

(1) See reconciliation of non-GAAP Financial Measures on page 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) Percentages are annualized

nm = non meaningful

Critical Accounting Policies
The accounting and financial reporting policies of Synovus conform to 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' annual report on Form 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 September 30, 2009 was $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 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. 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 . . .