Positive Credit Trends Continue

Synovus Financial Corp. (NYSE: SNV) today reported a net loss for the third quarter of $195.8 million, a 19 percent improvement from the net loss of $243 million for the second quarter of 2010, and a 57 percent improvement from the net loss of $454 million for the third quarter of 2009. The net loss per common share for the third quarter was $0.25. During the quarter, Synovus’ credit trends continued to improve, its capital position remained strong, and its core performance remained stable.

Third Quarter Business Results:

Continued Positive Credit Trends

Provision expense decreased $60 million from the second quarter to $239 million in the third quarter, the lowest provision expense since the third quarter of 2008.

Total credit costs declined 15 percent during the third quarter to $301 million, from $353 million in the second quarter of 2010, for the fifth consecutive quarterly decline in total credit costs.

Net charge-offs decreased $196 million from the second quarter to $237 million, the lowest level since the fourth quarter of 2008.

Total non-performing assets declined for the second consecutive quarter.

Total loans past due and still accruing were 1.12 percent of total loans, continuing the relatively low level of past dues.

Strong Capital Position

As of September 30, 2010, capital ratios were as follows:

Tier 1 Capital Ratio – 13.06%

Tier 1 Common Equity Ratio – 9.07%

Tangible Common Equity to Tangible Assets Ratio – 7.26%

Total Risk-based Capital Ratio – 16.70%

Stable Core Performance

Pre-tax, pre-credit costs income was $123 million for the third quarter of 2010, up from $119 million for the second quarter of 2010.

Non-interest income increased by $7.8 million, offsetting a $4.6 million decline in net interest income in the quarter, with mortgage revenue and bankcard fees providing $3.8 million and $0.9 million, respectively, of the increase.

The net interest margin remained stable at 3.33% in the third quarter of 2010, compared to 3.34% in the second quarter of 2010.

Non-interest expense (excluding credit costs and other non-recurring items) remained flat compared to the prior quarter at $205 million.

Balance Sheet Fundamentals

Net loans of $22.6 billion at September 30, 2010 decreased $762 million or 3.3% from June 30, 2010, compared to a 4.4% sequential quarter decrease in the previous quarter.

Total core deposits, excluding time deposits, grew 2.5% (annualized) in the third quarter over the second quarter of 2010, and 6.1% over the third quarter of 2009.

Total deposits declined $1.0 billion from the prior quarter to $25.2 billion. $627 million of the decline was in brokered money market and brokered time deposit accounts. Total core deposits declined $395 million linked quarter to $21.7 billion, driven by a $489 million decline in higher priced time deposits.

“Although credit trends continued to improve in the quarter, we know there is much work to be done as we continue to drive Synovus back to profitability,” said Kessel D. Stelling, President and CEO of Synovus. “The lowest provision expense since the third quarter of 2008, the lowest net charge-offs since the fourth quarter of 2008, stable past-due levels, and declining overall credit costs are all indicators that our credit trends are moving in the right direction. Improvement in credit is the single most important factor in our return to profitability, and our team continues to work aggressively to resolve these issues. We are also focused on re-establishing a growth engine for Synovus’ long-term success that is driven by accelerating top line revenue growth through targeting specific customer segments, hiring additional top producer talent in high-growth markets, and developing an enhanced product suite specifically for commercial customers,” continued Stelling.

“Additionally, our team is actively working on a number of strategies to create a more efficient organization and eliminate excess capacity. The fundamental objective is a much more streamlined organization that delivers the optimal customer experience. We are confident that our relationship-centered model, with local branding and local decision-making, positions us well to accomplish these objectives,” added Stelling.

Synovus will host an earnings highlights conference call at 4:30 p.m. EDT on October 25, 2010.  The earnings call will be accompanied by a slide presentation.  Shareholders and other interested parties can access the slide presentation and listen to the conference call via simultaneous Internet broadcast at www.synovus.com by clicking on the “Live Webcast” icon.  RealPlayer or Windows Media Player can be downloaded prior to accessing the actual call or the replay.  The replay will be archived for 12 months and will be available 30-45 minutes after the call.