SYNOVUS FINANCIAL CORP (Form: 10-Q, Received: 08/08/2008 15:47:47)

• Loan Growth

• Credit Quality

• Capital Strength

• Core Deposit Growth

• Fee Income Growth

• Net Interest Margin

• Expense Management

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

For the quarterly period ended June 30, 2008

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)

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.

Yes þ No o

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 the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer þ	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o
		(Do not check if a smaller reporting company)

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

Yes o No þ

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


Class		July 31, 2008

Common Stock, $1.00 Par Value		330,148,536 shares

SYNOVUS FINANCIAL CORP.

INDEX


Part I. Financial Information:

Item 1. Unaudited Financial Statements

Consolidated Balance Sheets as of June 30, 2008 and December 31, 2007			3

Consolidated Statements of Income for the Six and Three Months Ended June 30, 2008 and 2007			4

Consolidated Statements of Changes in Shareholders’ Equity and Comprehensive Income for the Six Months Ended June 30, 2008 and 2007			5

Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2008 and 2007			6

Notes to Consolidated Financial Statements			7

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			24

Item 3. Quantitative and Qualitative Disclosures About Market Risk			52

Item 4. Controls and Procedures			53

Part II. Other Information:

Item 1. Legal Proceedings			54

Item 1A. Risk Factors			56

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			58

Item 4. Submission of Matters to a Vote of Security Holders			59

Item 6. Exhibits			60

Signatures			61

Index to Exhibits			62

EX-10.1 FORM OF CHANGE OF CONTROL AGREEMENT
EX-10.2 AMENDED AND RESTATED SYNOVUS FINANCIAL DIRECTOR DEFERRED COMPENSATION PLAN
EX-10.3 SECOND AMENDED AND RESTATED DEFERRED COMPENSATION PLAN
EX-31.1 SECTION 302 CERTIFICATION OF CEO
EX-31.2 SECTION 302 CERTIFICATION OF CFO
EX-32 SECTION 906 CERTIFICATION OF CEO AND CFO

PART I. FINANCIAL INFORMATION

ITEM 1 — FINANCIAL STATEMENTS

SYNOVUS FINANCIAL CORP.

CONSOLIDATED BALANCE SHEETS

(unaudited)


	June 30,			December 31,
(In thousands, except share data)	2008			2007
ASSETS
Cash and due from banks	$	674,834			682,583
Interest earning deposits with banks		17,337			10,950
Federal funds sold and securities purchased under resale agreements		152,177			76,086
Trading account assets		20,204			17,803
Mortgage loans held for sale, at fair value		185,245			153,437
Impaired loans held for sale		6,365			—
Investment securities available for sale		3,814,384			3,666,974

Loans, net of unearned income		27,445,891			26,498,585
Allowance for loan losses		(417,813	)		(367,613	)

Loans, net		27,028,078			26,130,972


Premises and equipment, net		581,352			547,437
Goodwill		492,138			519,138
Other intangible assets, net		24,860			28,007
Other assets		1,230,327			1,185,065

Total assets	$	34,227,301			33,018,452


LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Deposits:
Non-interest bearing retail and commercial deposits	$	3,553,342			3,472,423
Interest bearing retail and commercial deposits		17,887,708			17,734,851

Total retail and commercial deposits		21,441,050			21,207,274
Brokered deposits ($90,722 and $293,842 at fair value as of June 30, 2008 and December 31, 2007)		4,587,302			3,752,542

Total deposits		26,028,352			24,959,816
Federal funds purchased and securities sold under repurchase agreements		2,287,910			2,319,412
Long-term debt		2,121,625			1,890,235
Other liabilities		336,731			407,399

Total liabilities		30,774,618			29,576,862

Minority interest in consolidated subsidiaries		24,092			—
Shareholders’ equity:
Common stock — $1.00 par value. Authorized 600,000,000 shares; issued 335,825,867 in 2008 and 335,529,482 in 2007; outstanding 330,153,646 in 2008 and 329,867,944 in 2007		335,826			335,529
Additional paid-in capital		1,110,635			1,101,209
Treasury stock, at cost - 5,672,221 shares in 2008 and 5,661,538 shares in 2007		(114,075	)		(113,944	)
Accumulated other comprehensive income		30,190			31,439
Retained earnings		2,066,015			2,087,357

Total shareholders’ equity		3,428,591			3,441,590

Total liabilities and shareholders’ equity	$	34,227,301			33,018,452

See accompanying notes to consolidated financial statements.

SYNOVUS FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF INCOME

(unaudited)


	Six Months Ended					Three Months Ended
	June 30,					June 30,
(In thousands, except per share data)	2008			2007		2008		2007
Interest income:
Loans, including fees	$	863,959			1,018,364		408,653		516,307
Investment securities available for sale		91,042			83,373		45,886		42,920
Trading account assets		1,022			1,877		388		970
Mortgage loans held for sale		3,997			4,959		2,301		2,522
Federal funds sold and securities purchased under resale agreements		1,875			2,850		855		1,372
Interest earning deposits with banks		125			968		57		401

Total interest income		962,020			1,112,391		458,140		564,492

Interest expense:
Deposits		342,726			460,334		155,546		234,268
Federal funds purchased and securities sold under repurchase agreements		29,480			42,198		11,650		21,619
Long-term debt		37,744			38,435		17,523		20,130

Total interest expense		409,950			540,967		184,719		276,017

Net interest income		552,070			571,424		273,421		288,475
Provision for losses on loans		184,665			40,797		93,616		20,281

Net interest income after provision for losses on loans		367,405			530,627		179,805		268,194

Non-interest income:
Service charges on deposit accounts		54,461			54,420		26,070		28,050
Fiduciary and asset management fees		25,519			25,129		12,898		12,657
Brokerage and investment banking income		17,693			15,259		9,206		7,809
Mortgage banking income		13,847			14,920		5,686		7,695
Bankcard fees		26,417			23,447		14,198		11,567
Net gains on sales of available for sale investment securities		—			705		—		258
Other fee income		21,266			19,838		10,081		10,411
Proceeds from sale of MasterCard shares		16,186			—		16,186		—
Proceeds from redemption of Visa shares		38,542			—		—		—
Other operating income		33,744			30,116		13,373		17,883

Total non-interest income		247,675			183,834		107,698		96,330

Non-interest expense:
Salaries and other personnel expense		232,614			229,749		110,483		115,822
Net occupancy and equipment expense		61,340			54,860		31,130		27,572
FDIC insurance and other regulatory fees		12,250			4,698		6,172		2,315
Impaired loans held for sale and other real estate		31,502			1,150		23,621		577
Goodwill impairment		27,000			—		27,000		—
Professional fees		16,697			10,245		11,756		4,743
Visa litigation expense		(17,430	)		—		—		—
Other operating expenses		103,365			91,755		55,802		46,631

Total non-interest expense		467,338			392,457		265,964		197,660


Minority interest in consolidated subsidiaries		1,697			—		138		—

Income from continuing operations before income taxes		146,045			322,004		21,401		166,864
Income tax expense		52,952			115,789		9,302		61,055

Income from continuing operations		93,093			206,215		12,099		105,809
Income from discontinued operations, net of income taxes and minority interest		—			103,287		—		56,941

Net income	$	93,093			309,502		12,099		162,750


Net income per share:
Basic
Income from continuing operations	$	0.28			0.63		0.04		0.32

Net income		0.28			0.95		0.04		0.50


Diluted
Income from continuing operations	$	0.28			0.63		0.04		0.32

Net income		0.28			0.94		0.04		0.49


Weighted average shares outstanding:
Basic		329,071			326,051		329,173		326,410

Diluted		331,568			329,920		331,418		330,263

See accompanying notes to consolidated financial statements.

SYNOVUS FINANCIAL CORP.

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


													Accum
													ulated
													Other
													Compre-
							Additional						hensive
	Shares			Common			Paid-In			Treasury			Income			Retained
(In thousands, except per share data)	Issued			Stock			Capital			Stock			(Loss)			Earnings			Total
Balance at December 31, 2006		331,214		$	331,214			1,033,055			(113,944	)		(2,129	)		2,460,454			3,708,650
Cumulative effect of adoption of FIN No. 48																	(230	)		(230	)
Net Income																	309,502			309,502
Other comprehensive income (loss), net of tax:
Net unrealized gain on cash flow hedges														(2,917	)					(2,917	)
Change in unrealized gains (losses) on investment securities available for sale, net of reclassification adjustment														(18,047	)					(18,047	)
Gain on foreign currency translation														2,164						2,164

Other comprehensive loss														(18,800	)					(18,800	)

Comprehensive income																				290,702

Cash dividends declared — $0.41 per share																	(134,124	)		(134,124	)
Issuance of non-vested stock		52			52			(52	)											—
Share-based compensation expense								11,126												11,126
Stock options exercised		1,750			1,750			31,800												33,550
Share-based tax benefit								7,741												7,741
Ownership change at majority-owned subsidiary								5,793												5,793
Issuance of common stock for acquisition		62			62			2,054												2,116

Balance at June 30, 2007		333,078		$	333,078			1,091,517			(113,944	)		(20,929	)		2,635,602			3,925,324


Balance at December 31, 2007		335,529		$	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
Net Income																	93,093			93,093
Other comprehensive income (loss), net of tax:
Net unrealized gain on cash flow hedges														475						475
Change in unrealized losses on investment securities available for sale, net of reclassification adjustment														(1,816	)					(1,816	)
Amortization of post-retirement unfunded health benefit, net of tax														92						92

Other comprehensive loss														(1,249	)					(1,249	)

Comprehensive income																				91,844

Cash dividends declared — $0.34 per share																	(112,245	)		(112,245	)
Treasury shares purchased											(131	)								(131	)
Issuance of non-vested stock, net		(10	)		(10	)		10												—
Share-based compensation expense								7,675												7,675
Stock options exercised		307			307			1,342												1,649
Share-based tax benefit								399												399

Balance at June 30, 2008		335,826		$	335,826			1,110,635			(114,075	)		30,190			2,066,015			3,428,591

See accompanying notes to consolidated financial statements

SYNOVUS FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)


	Six Months Ended
	June 30,
(In thousands)	2008			2007
Operating activities:
Net income	$	93,093			309,502
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for losses on loans		184,665			40,797
Depreciation, amortization and accretion, net		27,715			89,405
Goodwill impairment		27,000			—
Equity in income of equity method investments		(1,412	)		(3,237	)
Deferred tax expense		1,125			(15,343	)
Decrease (increase) in interest receivable		59,348			(9,479	)
Decrease in interest payable		(33,283	)		(1,278	)
Minority interest in subsidiaries’ net income		1,697			24,465
Increase in trading account assets		(2,401	)		(55,360	)
Originations of mortgage loans held for sale		(625,996	)		(808,759	)
Proceeds from sales of mortgage loans held for sale		597,445			798,826
Gain on sale of mortgage loans held for sale		(5,831	)		(6,243	)
Loss on sale of impaired loans held for sale		10,126			—
Decrease (increase) in prepaid and other assets		71,989			(45,109	)
Decrease in accrued salaries and benefits		(20,676	)		(77,628	)
Increase (decrease) in other liabilities		35,846			(20,980	)
Net gains on sales of available for sale investment securities		—			(705	)
Increase in fair value of private equity investments		(4,946	)		(4,245	)
Gain from transfer of mutual funds		—			(6,885	)
Gain on sale of MasterCard shares		(16,186	)		—
Proceeds from redemption of Visa shares		(38,542	)		—
Decrease in liability for Visa litigation		(17,430	)		—
Share-based compensation		7,732			15,143
Excess tax benefit from share-based payment arrangements		(357	)		(7,398	)
Impairment of developed software		—			620
Other, net		(2,534	)		17,929

Net cash provided by operating activities		348,187			234,038


Investing activities:
Net (increase) decrease in interest earning deposits with banks		(6,387	)		14,232
Net increase in federal funds sold and securities purchased under resale agreements		(76,091	)		(140,594	)
Proceeds from maturities and principal collections of investment securities available for sale		669,286			376,654
Proceeds from sales of investment securities available for sale		3,309			21,501
Purchases of investment securities available for sale		(817,795	)		(642,529	)
Proceeds from sale of impaired loans held for sale		20,613			—
Net increase in loans		(1,290,126	)		(934,359	)
Purchases of premises and equipment		(63,012	)		(76,095	)
Proceeds from disposals of premises and equipment		2,115			1,914
Net proceeds from transfer of mutual funds		—			7,958
Proceeds from sale of MasterCard shares		16,186			—
Proceeds from redemption of Visa shares		38,542			—
Additions to other intangible assets		—			(77	)
Contract acquisition costs		—			(9,542	)
Additions to licensed computer software from vendors		—			(8,866	)
Additions to internally developed computer software		—			(7,458	)

Net cash used by investing activities		(1,503,360	)		(1,397,261	)


Financing activities:
Net increase in demand and savings deposits		230,526			549,601
Net increase in certificates of deposit		838,010			153,838
Net (decrease) increase in federal funds purchased and other securities sold under repurchase agreements		(31,502	)		213,378
Principal repayments on long-term debt		(38,041	)		(201,845	)
Proceeds from issuance of long-term debt		270,300			529,313
Treasury shares purchased		(131	)		—
Excess tax benefit from share-based payment arrangements		357			7,398
Dividends paid to shareholders		(123,744	)		(130,482	)
Proceeds from issuance of common stock		1,649			33,550

Net cash provided by financing activities		1,147,424			1,154,751


Effect of exchange rate changes on cash and cash equivalent balances held in foreign currencies		—			841


Decrease in cash and due from banks		(7,749	)		(7,631	)
Cash and due from banks at beginning of period		682,583			889,975

Cash and due from banks at end of period	$	674,834			882,344

See accompanying notes to consolidated financial statements.

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 the 2007 Annual Report previously filed on Form 10-K.

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 in the near-term relate to the determination of the allowance for loan losses, the valuation of impaired loans held for sale, the valuation of real estate acquired in connection with foreclosures or in satisfaction of loans and the fair value of intangible assets, including goodwill.

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 of a substantial portion of Synovus’ loan portfolio is susceptible to changes in market conditions in these areas. 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. 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.

Synovus conducted its annual assessment of goodwill for impairment during the three months ended June 30, 2008. Determining the fair value of Synovus’ reporting units requires management to make certain judgments and assumptions related to various items, including discount rates, future estimates of operating results, etc. Management believes that the estimates and assumptions used in the goodwill impairment analysis for its business units are reasonable; however, if actual results and market conditions differ from the assumptions or estimates used, the fair value of each reporting unit could be different in the future.

Certain prior year amounts have been reclassified to conform to the presentation adopted in 2008.

Note 2 — Supplemental Cash Flow Information

For the six months ended June 30, 2008 and 2007, Synovus paid income taxes (net of refunds received) of $56.4 million and $191.0 million, respectively. The amount for the six months ended June 30, 2008 is impacted by tax overpayment credits from 2007 that were applied towards the 2008 income tax liability. For the six months ended June 30, 2008 and 2007, Synovus paid interest of $372.9 million and $530.3 million, respectively.

Non-cash investing activities consisted of loans of approximately $171.3 million and $23.0 million, which were foreclosed and transferred to other real estate during the six months ended June 30, 2008 and 2007, respectively, and impaired loans of approximately $42.3 million which were transferred to impaired loans held for sale during the six months ended June 30, 2008.

Note 3 — Comprehensive Income

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, gains (losses) on foreign currency translation, and the amortization of the post-retirement unfunded health benefit. Comprehensive income consists of net income plus other comprehensive income (loss).

Comprehensive income (loss) for the six and three months ended June 30, 2008 and 2007 is presented below:


	Six Months Ended						Three Months Ended
	June 30,						June 30,
(in thousands)	2008			2007			2008			2007
Net income	$	93,093			309,502			12,099			162,750
Other comprehensive income (loss), net of tax:
Change in net unrealized gains (losses) on cash flow hedges		475			(2,917	)		(11,825	)		(4,428	)
Change in net unrealized gains (losses) on investment securities available for sale, net of reclassification adjustment		(1,816	)		(18,047	)		(50,107	)		(25,741	)
Gains on foreign currency translation		—			2,164			—			2,251
Amortization of postretirement unfunded health benefit, net of tax		92			—			46			—

Other comprehensive loss		(1,249	)		(18,800	)		(61,886	)		(27,918	)

Comprehensive income (loss)	$	91,844			290,702			(49,787	)		134,832

Note 4 — Impaired Loans Held for Sale

$63.3 million to the impaired loans held for sale portfolio. At the time of the transfer, Synovus recognized a $21.0 million charge-off on these loans, which resulted in a new cost basis of $42.3 million at March 31, 2008. The $21.0 million charge-off was estimated based on the estimated sales price of the portfolio through bulk sales. During the three months ended June 30, 2008, Synovus recognized a loss of $4.7 million from the sale of impaired loans held for sale and recognized additional write-downs of $5.4 million on the loans remaining in the portfolio. The $5.4 million write-down was based upon the estimated sales proceeds from a pending liquidation sale.

Note 5 — Other Real Estate

Other real estate, 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, adjusted for estimated selling costs. At the time of foreclosure, 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 component of non-interest expense.

The carrying value of other real estate was $197.3 million and $101.5 million at June 30, 2008 and December 31, 2007, respectively. During the six and three months ended June 30, 2008, approximately $169.8 million of loans and $1.5 million of impaired loans held for sale were foreclosed and transferred to other real estate. The increased in other real estate is the result of negative migration in credit quality, the declining value of real estate in certain parts of Florida and the excess supply of residential real estate in the Atlanta area. During the six and three months ended June 30, 2008, Synovus recognized other real estate costs of $21.4 million and $13.5 million, respectively. These costs primarily relate to losses from the liquidation of other real estate through bulk sales and auctions as well as further write-downs due to declines in fair value subsequent to the date of foreclosure and, to a lesser degree, carrying costs associated with other real estate.

Note 6 — Fair Value Accounting — Adoption of SFAS Nos. 157 and 159

In September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standard No. 157, “Fair Value Measurements” (SFAS No. 157). SFAS No. 157 defines fair value, establishes a framework for measuring fair value under U.S. Generally Accepted Accounting Principles (GAAP), and expands disclosures about fair value measurements. This statement does not introduce any new requirements mandating the use of fair value; rather, it unifies the meaning of fair value and adds additional fair value disclosures. The provisions of this statement are effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. Effective January 1, 2008, Synovus adopted SFAS No. 157 for financial assets and liabilities. As permitted under FASB Staff Position No. FAS 157-2, Synovus has elected to defer the application of SFAS No. 157 to non-financial assets and liabilities until January 1, 2009.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (SFAS No. 159). SFAS No.159 permits entities to make an irrevocable election, at specified election dates, to measure eligible financial instruments and certain other instruments at fair value. As of January 1, 2008, Synovus has elected the fair value option (FVO) for mortgage loans held for sale and certain callable brokered certificates of deposit. Accordingly, a cumulative adjustment of $58 thousand ($91 thousand less $33 thousand of income taxes) was recorded as an increase to retained earnings.

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 for Certain Mortgage Banking Activities” (SFAS No. 65). 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 for Derivative Instruments and Hedging Activities”, as amended and interpreted (SFAS No. 133). 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. Previously under SFAS No. 65, 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. Prior to the adoption of SFAS No. 159, 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 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.

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.


	Ending					Opening
	Balance		Cumulative			Balance
	Sheet		Effect			Sheet
	December		Adjustment			January 1,
(Dollars in thousands)	31, 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 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 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, certain derivative contracts, 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 Federal Home Loan Bank and Federal Reserve Bank stock, collateral-dependent impaired loans, and certain private equity investments.

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. These Level 3 items are primarily Federal Home Loan Bank (FHLB) and Federal Reserve Bank (FRB) stock.

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.

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.

Derivative Assets and Liabilities

Equity derivatives are valued using quoted market prices and are classified as Level 1 within the valuation hierarchy. All other derivatives 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 is 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.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents 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 30, 2008 according to the SFAS No. 157 valuation hierarchy:


								Total
								Assets/Liabilities at
(in thousands)	Level 1		Level 2		Level 3			Fair Value
Assets

Trading account assets	$	780		19,424		—		$	20,204
Mortgage loans held for sale		—		185,245		—			185,245

Investment securities available for sale		5,730		3,673,742		134,912	⁽²⁾		3,814,384
Private equity investments		—		—		65,049			65,049
Derivative assets		6,914		102,261		—			109,175

Liabilities

Brokered certificates of deposit (1)	$	—		90,722		—		$	90,722
Trading account liabilities		—		10,611		—			10,611
Derivative liabilities		6,914		59,208		—			66,122


(1)		Amounts represent the value of the certain callable brokered certificates of deposit for which Synovus has elected the fair value option under SFAS No. 159.

(2)		This amount primarily consists of Federal Home Loan Bank stock and Federal Reserve Bank stock of approximately $117.9 million and $4.4 million, respectively.

Changes in Fair Value — FVO Items

The following table presents the changes in fair value included in the consolidated statement of income for items which the fair value election was made. The table does not reflect the change in fair value attributable to the related economic hedges Synovus used to mitigate interest rate risk associated with the financial instruments. These changes in fair value were recorded as a component of mortgage banking income and other operating income, as appropriate, and substantially offset the change in fair value of the financial instruments referenced below.


	Three Months Ended June 30, 2008								Six Months Ended June 30, 2008
						Total									Total
	Mortgage			Other		Changes in			Mortgage			Other			Changes in
	Banking			Operating		Fair Value			Banking			Operating			Fair Value
(in thousands)	Income			Income		Recorded			Income			Income			Recorded
Mortgage loans held for sale	$	(2,370	)		—	$	(2,370	)	$	(2,320	)		—		$	(2,320	)
Certain callable brokered CDs	$	—			988	$	(988	)	$	—			(1,262	)	$	1,262

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 30, 2008. The table below includes a roll forward of the balance sheet amount for the six months ended June 30, 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.


	Investment
	Securities
	Available			Private Equity
(in thousands)	for Sale			Investments
Beginning balance January 1, 2008	$	126,715			55,581
Total gains or (losses) (realized/unrealized), net of minority interest:
Included in earnings		—			3,577
Included in other comprehensive income		(126	)		—
Purchases, sales, issuances, and settlements, net		8,323			5,891
Transfers in and/or out of Level 3		—			—

Ending balance June 30, 2008	$	134,912			65,049

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, 2008	$	(126	)		3,577

The table below summarizes gains and losses due to changes in fair value, including both realized and unrealized gains and losses, recorded in earnings or changes in net assets for material Level 3 assets and liabilities for the three months ended June 30, 2008.


	Three Months Ended June 30,						Six Months Ended June 30,
	2008						2008
	Investment						Investment
	Securities						Securities
	Available for			Private Equity			Available for			Private Equity
(in thousands)	Sale			Investments			Sale			Investments
Total change in earnings, net of minority interest	$	—			(234	)	$	—			3,577

Change in unrealized losses to assets and liabilities still held at June 30, 2008	$	(53	)		—		$	(126	)		—

Assets Measured at Fair Value on a Non-recurring Basis

Loans under the scope of SFAS No. 114, “Accounting by Creditors for Impairment of a Loan” (SFAS No. 114), are evaluated for impairment using the present value of the expected future cash flows discounted at the loan’s effective interest rate, or as a practical expedient, a loan’s observable market price, or the fair value of the collateral if the loan is collateral dependent. The measurement of impaired loans using future cash flows discounted at the loan’s effective interest rate rather than the market rate of interest is not a fair value measurement and is therefore excluded from the requirements of SFAS No. 157. Impaired loans measured by applying the practical expedient in SFAS No. 114 are included in the requirements of SFAS No. 157.

Under the practical expedient, Synovus measures the fair value of collateral-dependent impaired loans based on the fair value of the collateral securing these loans. These measurements are classified as Level 3 within the valuation hierarchy. All impaired loans are secured by real estate. The fair value of this real estate is generally determined based upon appraisals performed by a certified or licensed appraiser using inputs such as absorption rates, capitalization rates, and comparables. Management also considers other factors or recent developments which could result in adjustments to the collateral value estimates indicated in the appraisals such as changes in absorption rates or market conditions from the time of valuation. 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 collateral-dependent impaired loans (including impaired loans held for sale) totaled $485.7 million at June 30, 2008, compared to $433.6 million at March 31, 2008, and $264.9 million at December 31, 2007.

Note 7 — Derivative Instruments

Synovus accounts for its derivative financial instruments as either assets or liabilities on the balance sheet at fair value through adjustments to either the hedged items, accumulated other comprehensive income (loss), or current earnings, as appropriate. As part of its overall interest rate risk management activities, Synovus utilizes derivative instruments to manage its exposure to various types of interest rate risk. These derivative instruments consist of interest rate swaps, commitments to sell fixed-rate mortgage loans, and interest rate lock commitments made to prospective mortgage loan customers. Interest rate lock commitments represent derivative instruments since it is intended that such loans will be sold.

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 a whole loan to an investor either individually or in bulk.

At June 30, 2008, Synovus had commitments to fund primarily fixed-rate mortgage loans to customers in the amount of $72.0 million. The fair value of these commitments at June 30, 2008 resulted in an unrealized gain of $1.1 million, which was recorded as a component of mortgage banking income in the consolidated statements of income.

At June 30, 2008, outstanding commitments to sell primarily fixed-rate mortgage loans amounted to approximately $231.0 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 30, 2008 resulted in an unrealized gain of $877 thousand, which was recorded as a component of mortgage banking income in the consolidated statements of income.

Synovus utilizes interest rate swaps to manage interest rate risks, primarily arising from its core banking activities. These interest rate swap transactions generally involve the exchange of fixed and floating rate interest rate payment obligations without the exchange of underlying principal amounts. 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.

The receive fixed interest rate swap contracts at June 30, 2008 are being utilized to hedge $850 million in floating rate loans and $1.38 billion in fixed-rate liabilities. A summary of interest rate swap contracts and their terms at June 30, 2008 is shown below. In accordance with the provisions of SFAS No. 133, the fair value (net unrealized gains and losses) of these contracts has been recorded on the consolidated balance sheets.


			Weighted-Average													Net
									Maturity							Unrealized
	Notional		Receive			Pay			In		Unrealized					Gains
(Dollars in thousands)	Amount		Rate			Rate ^(*)			Months		Gains		Losses			(Losses)
Receive fixed interest swaps:
Fair value hedges	$	1,377,500		4.08	%		2.64	%		29	$	13,276		(1,414	)		11,862
Cash flow hedges		850,000		7.86	%		5.00	%		30		31,440		(1,242	)		30,198

Total	$	2,227,500		5.52	%		3.54	%		30	$	44,716		(2,656	)		42,060


(*)		Variable pay rate based upon contract rates in effect at June 30, 2008.

Synovus designates hedges of floating rate loans as cash flow hedges. These swaps hedge against the variability of cash flows from specified pools of floating rate prime based loans. Synovus calculates effectiveness of the hedging relationship quarterly using regression analysis for all cash flow hedges entered into after March 31, 2007. The cumulative dollar offset method is used for all hedges entered into prior to that date. As of June 30, 2008, cumulative ineffectiveness for Synovus’ portfolio of cash flow hedges represented a gain of approximately $20 thousand. Ineffectiveness from cash flow hedges is recognized in the consolidated statements of income as a component of other operating income.

Synovus expects to reclassify from accumulated other comprehensive income (loss) approximately $11.7 million as net-of-tax income during the next twelve months, as the related payments for interest rate swaps and amortization of deferred gains (losses) are recorded.

Synovus designates hedges of fixed rate liabilities as fair value hedges. These swaps hedge against the change in fair market value of various fixed rate liabilities due to changes in the benchmark interest rate LIBOR. Synovus calculates effectiveness of the hedging relationships

quarterly using regression analysis for all fair value hedges entered into after March 31, 2007. As of June 30, 2008, cumulative ineffectiveness for Synovus’ portfolio of fair value hedges represented a gain of approximately $1.3 million. Ineffectiveness from fair value hedges is recognized in the consolidated statements of income as other operating income.

Synovus also enters into derivative financial instruments to meet the financing and interest rate risk management needs of its customers. Upon entering into these instruments to meet customer needs, Synovus enters into offsetting positions in order to minimize the risk to Synovus. These derivative financial instruments are recorded at fair value with any resulting gain or loss recorded in current period earnings. As of June 30, 2008, the notional amount of customer related interest rate derivative financial instruments, including both the customer position and the offsetting position, was $3.76 billion, an increase of $799.3 million compared to December 31, 2007.

Synovus also enters into derivative financial instruments to meet the equity risk management needs of its customers. Upon entering into these instruments to meet customer needs, Synovus enters into offsetting positions in order to minimize the risk to Synovus. These derivative financial instruments are recorded at fair value with any resulting gain or loss recorded in current period earnings. As of June 30, 2008, the notional amount of customer related equity derivative financial instruments, including both the customer position and the offsetting position, was $10.7 million, unchanged from December 31, 2007.

Note 8 — Share-Based Compensation

General Description of Share-Based Compensation Plans

Synovus has various long-term incentive plans under which the Compensation Committee of the Board of Directors has the authority to grant share-based compensation to Synovus employees. At June 30, 2008, Synovus had a total of 19,872,818 shares of its authorized but unissued common stock reserved for future grants under the 2007 Omnibus Plan. The general terms of each of these plans are substantially the same, permitting the grant of share-based compensation including stock options, non-vested shares, restricted share units, and stock appreciation rights. These plans generally include vesting periods ranging from three to five years and contractual terms ranging from five to ten years. Stock options are granted at exercise prices which equal the fair market value of a share of common stock on the grant date. Synovus historically issues new shares to satisfy share option exercises.

Share-Based Compensation Expense

Synovus’ share-based compensation costs are recorded as a component of salaries and other personnel expense in the consolidated statements of income. Share-based compensation expense is recognized for plan participants on a straight-line basis over the shorter of the vesting period or the period until reaching retirement eligibility. Share-based compensation expense from continuing operations recognized in income is presented below:


	Six Months Ended				Three Months Ended
	June 30,				June 30,
(In thousands)	2008		2007		2008		2007
Share-based compensation expense:
Stock options	$	2,360		5,084		1,223		2,559
Non-vested shares		5,399		3,463		2,883		1,697

Total share-based compensation expense	$	7,759		8,547		4,106		4,256

Stock Option Awards

Synovus granted 3,090,911 and 48,000 options to purchase shares of Synovus common stock to certain key Synovus employees during the six and three months ended June 30, 2008, at a weighted-average exercise price of $13.17 and $12.50, respectively. At June 30, 2008, there were 31,601,244 options to purchase shares of Synovus common stock outstanding with a weighted-average exercise price of $10.87.

Non-Vested Shares and Restricted Share Units

During the six and three months ended June 30, 2008, Synovus awarded 122,309 and 27,600, respectively, restricted share units and 24,391 and 6,134, respectively, non-vested shares of non-transferable Synovus common stock to certain key employees and non-employee directors of Synovus. The weighted-average grant date fair value of both the awarded stock and the stock units for the six months ended June 30, 2008 was $12.93.

All holders of non-vested shares of Synovus common stock on December 31, 2007 received Total System Services, Inc. (TSYS) non-vested shares based on the distribution ratio applicable to all Synovus shares in connection with the spin-off of TSYS. At June 30, 2008, there were 1,028,223 non-vested Synovus shares and restricted share units outstanding and 426,087 non-vested shares of TSYS stock outstanding with a combined weighted-average grant date fair value of $25.67.

In addition, 12,677 non-transferable non-vested shares of Synovus common stock and 6,135 non-vested shares of TSYS common stock were awarded to a key Synovus executive from a 2005 authorized grant of 63,386 shares under a performance vesting schedule during the six-month period ended June 30, 2008, with a grant date fair value of $23.42.

Note 9 — Discontinued Operations

TSYS Spin-off

On December 31, 2007, Synovus completed the tax-free spin-off of its shares of TSYS common stock to Synovus shareholders. The distribution of approximately 80.6% of TSYS’ outstanding shares owned by Synovus was made to shareholders of record on December 18, 2007 (the “record date”). Each Synovus shareholder received 0.483921 of a share of TSYS common stock for each share of Synovus common stock held as of the record date. Synovus shareholders received cash in lieu of fractional shares for amounts of less than one share of TSYS common stock. Pursuant to the agreement and plan of distribution, TSYS paid on a pro rata basis to its shareholders, including Synovus, a one-time cash dividend of $600 million or $3.0309 per TSYS share based on the number of TSYS shares outstanding as of the record date. Based on the number of TSYS shares owned by Synovus as of the record date, Synovus received $483.8 million in proceeds from this one-time cash dividend. The dividend was paid on December 31, 2007.

In accordance with the provisions of SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” and SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities,” the historical consolidated results of operations of TSYS, as well as all costs associated with the spin-off of TSYS are now presented as a component of income from discontinued operations. The balance sheet for the periods ended June 30, 2008 and December 31, 2007 does not include assets and liabilities of TSYS.

Transfer of Mutual Funds

During the three months ended June 30, 2007, Synovus transferred its proprietary mutual funds (Synovus Funds) to a non-affiliated third party. As a result of the transfer, Synovus received gross proceeds of $7.96 million and incurred transaction related costs of $1.07 million, resulting in a pre-tax gain of $6.89 million or $4.20 million, after-tax. The net gain has been reported as discontinued operations on the accompanying consolidated statements of income. Financial results of the business associated with the Synovus Funds for 2007 have not been presented as discontinued operations as such amounts are inconsequential. This business did not have significant assets, liabilities, revenues, or expenses associated with it.

The following amounts have been segregated from continuing operations and included in income from discontinued operations, net of income taxes and minority interest, in the consolidated statements of income:


	Six Months			Three Months
	Ended			Ended
(In thousands)	June 30, 2007			June 30, 2007
TSYS
TSYS revenues	$	903,155		$	466,546

TSYS income, net of minority interest and before taxes		169,946			88,707
Income tax expense		(70,496	)		(35,603	)

Income from discontinued operations related to TSYS, net of income taxes		99,450			53,104
Spin-off related expenses incurred by Synovus, net of income tax benefit		(363	)		(363	)
Gain on sale of mutual funds, net of income taxes		4,200			4,200

Income from discontinued operations, net of income taxes and minority interest	$	103,287		$	56,941

Cash flows of discontinued operations for the six months ended June 30, 2007 are presented below.


	Six Months
	Ended
(In thousands)	June 30, 2007
Cash provided by operating activities	$	119,506
Cash used in investing activities		(43,720	)
Cash used in financing activities		(13,556	)
Effect of exchange rates on cash and cash equivalents		841

Cash provided by discontinued operations	$	63,071

Note 10 — Goodwill and Other Intangible Assets

Under SFAS No. 142 (SFAS No. 142), “Goodwill and Other Intangible Assets,” goodwill is required to be tested for impairment annually, or more frequently if events or circumstances indicate that there may be impairment. The combination of the income approach utilizing the

discounted cash flow (DCF) method, the public company comparables approach, utilizing multiples of tangible book value, and the transaction approach, utilizing readily available market valuation multiples for closed transactions, is used to estimate the fair value of the reporting unit.

Impairment is tested at the reporting unit (sub-segment) level involving two steps. Step 1 compares the fair value of the reporting unit to its carrying value. If the fair value is greater than carrying value, there is no indication of impairment. Step 2 is performed when the fair value determined in Step 1 is less than the carrying value. Step 2 involves a process similar to business combination accounting where fair values are assigned to all assets, liabilities, and intangibles. The result of Step 2 is the implied fair value of goodwill. If the Step 2 implied value of goodwill is less than the recorded goodwill, an impairment charge is recorded for the difference. The total of all reporting unit fair values is compared for reasonableness to Synovus’ market capitalization plus a control premium.

Goodwill at June 30, 2008 and December 31, 2007 was $492.1 million and $519.1 million, respectively. During the three months ended June 30, 2008, Synovus conducted its annual goodwill impairment evaluation. As a result of this evaluation, Synovus recognized a goodwill impairment charge of $27.0 million (pre-tax and after-tax) on one of its reporting units. The charge has been recorded as a component of non-interest expense. The goodwill impairment charge was primarily related to a decrease in valuation based on market trading and transaction multiples.

The goodwill impairment charge is preliminary and is subject to the finalization of the Step 2 calculation; however, based on preliminary Step 2 results, Synovus does not expect a significant change in the impairment charge.

Intangible assets (excluding goodwill) net of accumulated amortization as of June 30, 2008 and December 31, 2007, respectively, are presented in the table below.


	June 30,		December 31,
(In thousands)	2008		2007
Other intangible assets:
Purchased trust revenues	$	2,222		2,362
Acquired customer contracts		2,098		2,407
Core deposit premiums		19,998		22,668
Other		542		570

Total carrying value	$	24,860		28,007

Note 11 — Income Taxes

Synovus files income tax returns in the U.S. Federal jurisdiction and various state jurisdictions, and is subject to examinations by these taxing authorities unless statutory examination periods lapse. Synovus’ U.S. Federal income tax return is filed on a consolidated basis. Most state income tax returns are filed on a separate entity basis. Synovus is no longer subject to U.S. Federal income tax examinations for years before 2004 and Synovus is no longer subject to income tax examinations from state and local tax authorities for years before 2001. There is currently no Federal tax examination in progress. However, certain state tax examinations are in progress by the relevant state tax authorities. Although Synovus is unable to determine the ultimate outcome of these examinations, Synovus believes that its liability for uncertain tax positions relating to these jurisdictions for such years is adequate.

In connection with the spin-off of TSYS, Synovus entered into a 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 tax return filings for calendar years prior to 2008.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows ⁽¹⁾ :


	Six Months			Three Months
	Ended			Ended
(in thousands)	June 30, 2008			June 30, 2008
Beginning balance	$	7,074		$	8,207
Current activity:
Additions based on tax positions related to current year		493			322
Additions for tax positions of prior years		1,299			—
Reductions for tax positions of prior years		(337	)		—
Settlements		—			—

Net, current activity		1,455			322

Ending balance	$	8,529		$	8,529


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

Synovus recognizes accrued interest and penalties related to unrecognized income tax benefits as a component of income tax expense. Accrued interest and penalties on unrecognized tax benefits totaled $1.1 million and $1.2 million as of December 31, 2007 and June 30, 2008, respectively. The total amount of unrecognized income tax benefits as of December 31, 2007 and June 30, 2008 that, if recognized, would affect the effective tax rate is $5.4 million and $6.4 million (net of the Federal benefit on state tax issues), respectively, which includes interest and penalties of $745 thousand and $780 thousand.

Synovus is not able to reasonably estimate the amount by which the liability will increase or decrease over time; however, at this time, Synovus does not expect a significant payment related to these obligations within the next year. Synovus expects that approximately $450 thousand of uncertain tax positions will be either settled or resolved during the next twelve months.

Note 12 — Visa Initial Public Offering and Litigation Expense

Synovus is a member of the Visa USA network. Under Visa USA bylaws, Visa members are obligated to indemnify Visa USA and/or its parent company, Visa, Inc., for potential future settlement of, or judgments resulting from, certain litigation, which Visa refers to as the “covered litigation.” Synovus’ indemnification obligation is limited to its membership proportion of Visa USA. On November 7, 2007, Visa announced the settlement of its American Express litigation, and disclosed in its annual report to the U.S. Securities and Exchange Commission (SEC) on Form 10-K for the year ended September 30, 2007 that Visa had accrued a contingent liability for the estimated settlement of its Discover litigation. During the second half of 2007, Synovus recognized a contingent liability in the amount of $36.8 million as an estimate for its membership proportion of the American Express settlement and the potential Discover settlement, as well as its membership proportion of the amount that Synovus estimates will be required for Visa to settle the remaining covered litigation.

Visa, Inc. completed an initial public offering (the Visa IPO) in March 2008. Visa used a portion of the proceeds from the 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 pro-rata share of the $3.0 billion escrow funded by Visa, Inc. The redemption of shares and reduction of the accrued liability following the Visa IPO resulted in a gain of $34.1 million, net of tax, or $0.10 per diluted share, for the six months ended June 30, 2008.

Note 13 — Recently Adopted Accounting Pronouncements

In September 2006, the FASB’s Emerging Issues Task Force (EITF) reached a consensus on EITF Issue No. 06-4, “Accounting for Deferred Compensation and Postretirement Benefit Aspects of Endorsement Split-Dollar Life Insurance Arrangements” (EITF 06-4). EITF 06-4 requires an employer to recognize a liability for future benefits based on the substantive agreement with the employee. EITF 06-4 requires a company to use the guidance prescribed in SFAS No. 106, “Employers’ Accounting for Postretirement Benefits Other Than Pensions” and Accounting Principles Board Opinion No. 12, “Omnibus Opinion,” when entering into an endorsement split-dollar life insurance agreement and recognizing the liability. EITF 06-4 was effective for fiscal periods beginning after December 15, 2007. Synovus adopted the provisions of EITF 06-4 effective January 1, 2008 and recognized approximately $2.4 million as a cumulative effect adjustment to retained earnings.

In November 2006, the EITF reached a consensus on EITF Issue No. 06-10, “Accounting for Deferred Compensation and Postretirement Benefit Aspects of Collateral Assignment Split-Dollar Life Insurance Arrangements” (EITF 06-10). Under EITF 06-10, an employer should recognize a liability for the postretirement benefit related to a collateral assignment split-dollar life insurance arrangement. The recognition of an asset should be based on the nature and substance of the collateral, as well as the terms of the arrangement such as (1) future cash flows to which the employer is entitled and (2) employee’s obligation (and ability) to repay the employer. EITF 06-10 was effective for fiscal periods beginning after December 15, 2007. Synovus adopted the provisions of EITF 06-10 effective January 1, 2008. There was no impact to Synovus upon adoption of EITF 06-10.

In November 2006, the EITF reached a consensus on EITF Issue No. 06-11, “Accounting for Income Tax Benefits of Dividends on Share-Based Payment Awards” (EITF 06-11). Employees may receive dividend payments (or the equivalent of) on vested and non-vested share-based payment awards. Under EITF 06-11, the Task Force concluded that a realized income tax benefit from dividends (or dividend equivalents) that are charged to retained earnings and are paid to employees for equity classified nonvested equity shares, nonvested equity share units, and outstanding equity share options should be recognized as an increase in additional paid-in capital. Once the award is settled, the Company should determine whether the cumulative tax deduction exceeded the cumulative compensation cost recognized on the income statement. If the total tax benefit exceeds the tax effect of the cumulative compensation cost, the excess would be an increase to additional paid-in capital. EITF 06-11 was effective for fiscal periods beginning after September 15, 2007. The impact of adoption of EITF 06-11 was not material to Synovus’ financial position, results of operations or cash flows.

In November 2007, the SEC issued Staff Accounting Bulletin (SAB) No. 109, “Written Loan Commitments Recorded at Fair Value Through Earnings,” (SAB 109). SAB 109 supercedes SAB 105, “Application of Accounting Principles to Loan Commitments.” SAB 109, consistent with SFAS No. 156, “Accounting for Servicing of Financial Assets,” and SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities,” requires that the expected net

future cash flows related to the associated servicing of the loan should be included in the measurement of all written loan commitments that are accounted for at fair value through earnings. A separate and distinct servicing asset or liability is not recognized for accounting purposes until the servicing rights have been contractually separated from the underlying loan by sale or securitization of the loan with servicing retained. The provisions of this bulletin were effective for derivative loan commitments issued or modified in fiscal quarters beginning after December 15, 2007. The impact of adoption of SAB 109 was an increase in mortgage revenues of approximately $1.2 million for the three months ended March 31, 2008.

In December 2007, the SEC issued SAB No. 110, “Share-Based Payment,” (SAB 110) SAB 110 allows eligible public companies to continue to use a simplified method for estimating the expected term of stock options if their own historical exercise data no longer provides a reasonable basis. Under SAB No. 107, “Share-Based Payment,” the simplified method was scheduled to expire for all grants made after December 31, 2007. The provisions of this bulletin were effective on January 1, 2008. Due to the spin-off of TSYS on December 31, 2007 and recent changes to the terms of stock option agreements, Synovus elected to continue using the simplified method for determining the expected term component for all share options granted during 2008.

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 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, constitute forward-looking statements within the meaning of, and subject to the protections of, Section 27A of the Securities Act of 1933, as amended (Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (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 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 generally. 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) deteriorating credit quality, particularly in residential construction and development loans, may result in increased delinquencies and credit losses, which will adversely impact us; (3) declining values of residential and commercial real estate may increase our credit losses and negatively affect our financial results; (4) the concentration of our nonperforming assets in certain geographic regions and with affiliated borrower groups; (5) inadequacy of our allowance for loan loss reserve, or the risk that the allowance may prove to be inadequate or may be negatively affected by credit risk exposures; (6) changes in the interest rate environment which expand or reduce interest margins, impact funding sources or adversely affect critical estimates, as applied, and fair value of assets; (7) slower than anticipated rates of growth in non-interest income; (8) 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 reduction in our debt ratings; (9) inability to access the capital markets on terms that are satisfactory; (10) the strength of the U.S. economy in general and the strength of the local economies in which operations are conducted may be different than expected; (11) the effects of and changes in trade, monetary and fiscal policies, and laws, including interest rate policies of the Federal Reserve Board; (12) inflation, interest rate, market and monetary fluctuations; (13) restrictions or limitations on access to funds from subsidiaries, thereby restricting our ability to make payments on our obligations or dividend payments; (14) the effect of 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, limitations and/or penalties arising from banking, securities and insurance laws, regulations and examinations; (15) 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; (16) Synovus’ indemnification obligation in connection with the Visa covered litigation may be greater than expected; (17) the volatility of our stock price; and (18) other factors and other information contained in this document and in other reports and filings that Synovus makes with the Securities and Exchange Commission under the Exchange Act.

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.

Executive Summary

The following financial review provides a discussion of Synovus’ financial condition, changes in financial condition, and results of operations.

Industry Overview

The first half of 2008 has been marked by challenging financial and credit markets, building on issues that began in the sub-prime mortgage market in the second half of 2007 and which led to declines in real estate and home values. Consumer confidence declined as rising costs fueled by unprecedented prices for crude oil have paralleled the downturns in housing and mortgage related financial services. The supply of housing has surged as new and existing home sales declined sharply and foreclosures reached record levels.

The Federal Reserve Bank (Federal Reserve) responded, lowering the federal funds rate by 200 basis points in the first quarter and another 25 basis points in the second quarter. Despite these rate cuts and other measures taken by the Federal Reserve to provide additional liquidity in financial markets, consumer confidence has remained weak.

The economic environment for the financial services industry as a whole has been affected in a variety of ways, as evidenced by heightened levels of credit losses, declining value of real property as collateral for loans, record levels of non-performing assets, charge-offs and foreclosures. While these factors have negatively influenced earning asset yields, the average cost of funds has risen in an intensely competitive market for deposits. As a result, financial institutions have experienced pressure on credit costs, loan yields, deposit and other borrowing costs, and capital.

About Our Business

Synovus is 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, and leasing services through 35 wholly-owned subsidiary banks and other Synovus offices in Georgia, Alabama, South Carolina, Tennessee, and Florida. At June 30, 2008, our banks ranged in size from $113.1 million to $5.76 billion in total assets.

Our Key Financial Performance Indicators

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

Financial Performance Summary

•

Net income: $12.1 million, down 88.6%, and $93.1 million, down 54.9%, for the three and six months ended June 30, 2008, respectively, as compared to income from continuing operations for the prior year periods.

	•		Goodwill impairment: $27.0 million, or $0.08 per diluted share, for the six and three months ended June 30, 2008. Goodwill impairment is a non-cash charge and has no impact on Synovus’ tangible capital levels, regulatory capital ratios or on liquidity since goodwill is already excluded from these measures.

	•		Diluted earnings per share (EPS): $0.04 for the three months ended June 30, 2008 and $0.28 for the six months ended June 30, 2008, down 88.6% and 55.1%, respectively, from EPS from continuing operations for the same periods a year ago (EPS of $0.12 for the three months ended June 30, 2008, excluding the goodwill impairment charge of $27.0 million).

	•		Net interest margin: 3.57% and 3.64% for the three and six months ended June 30, 2008, respectively, as compared to 4.00% and 4.03%, respectively, for the same periods in 2007 (on a sequential quarter basis, 3 basis points of the 14 basis point decrease in the margin are related to increased credit costs).

	•		Loan growth: 7.5% increase from June 30, 2007, 7.2% annualized increase from December 31, 2007, and 4.9% annualized sequential quarter growth.

	•		Credit quality:

	•		Non-performing assets ratio of 3.00%, compared to 2.49% at March 31, 2008 and 1.67% at December 31, 2007 (29 basis points of the sequential quarter increase was from the Atlanta market).

	•		Provision expense of $93.6 million and $184.7 million for the three and six months ended June 30, 2008, respectively, as compared to $20.3 million and $40.8 million for the same periods in 2007.

	•		Past dues over 90 days and still accruing interest as a percentage of total loans of 0.14%, compared to 0.16% at March 31, 2008 and 0.13% at December 31, 2007.

	•		Total past dues over 30 days and still accruing interest as a percentage of total loans of 1.33% compared to 1.39% at March 31, 2008 and 1.02% at December 31, 2007.

	•		Net charge-off ratio of 1.04% and 0.99% for the three and six months ended June 30, 2008, respectively, compared to 0.25% and 0.19% for the same periods in the prior year.

	•		Core deposits (total deposits less brokered deposits): 0.7% decline compared to June 30, 2007, and 4.1% annualized sequential quarter growth.

	•		Non-interest income: up 11.8% for the three months ended June 30, 2008 and 34.7% for the six months ended June 30, 2008 compared to the corresponding periods in the prior year (up 13.8% for the six months ended June 30, 2008 excluding the gain from redemption of Visa shares).

	•		Non-interest expense: up 34.6% for the three months ended June 30, 2008 and 19.1% for the six months ended June 30, 2008 compared to the corresponding periods in the prior year (up 20.9% and 16.6% for the three and six months ended June 30, 2008, respectively, excluding the reduction in the Visa litigation accrual and goodwill impairment charge).

	•		Shareholder’s equity: $3.43 billion at June 30, 2008, or 10.02% of assets. The Tier I Capital Ratio was 8.91%, the Total Risk-Based Capital Ratio was 12.28%, and the Tangible Common Equity to Tangible Assets Ratio was 8.64%.

	•		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 pro-rata share of the $3.0 billion escrow funded by Visa. Inc. The redemption proceeds and reduction of the Visa litigation accrual resulted in a gain of $34.1 million, net of tax, or $0.10 per diluted share. Synovus currently holds 1.4 million Visa class B shares which are subject to certain restrictions on sale and have a carrying value of zero.

Critical Accounting Policies

The accounting and financial reporting policies of Synovus conform to U.S. generally accepted accounting principles and to general practices within the banking industry. 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 6 to the consolidated financial statements in Synovus’ 2007 annual report contain a discussion of the allowance for loan losses. The allowance for loan losses at June 30, 2008 was $417.8 million.

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 collateral-dependent impaired loans, and the loss factors.

Commercial Loans — Risk Ratings and Expected 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 6 through 9 are modeled after the bank regulatory classifications of special mention, 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. The probability of default and loss given default are based on industry data. Industry data will continue to be used until sufficient internal data becomes 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 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 holding company credit review function evaluates each bank’s risk rating process at least every twelve to eighteen months.

Impaired Loans

Management considers a loan to be impaired when the ultimate collectibility 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 $479.3 million at June 30, 2008. 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 which could result in adjustments to the collateral value estimates indicated in the appraisals.

Estimated losses on collateral-dependent impaired loans are typically charged-off. At June 30, 2008, $424.5 million, or 67.8%, of non-performing loans consisted of collateral-dependent impaired loans for which there is no allowance for loan losses as the estimated losses have been charged-off. These loans are recorded at the 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 appraisal is being obtained. At June 30, 2008, Synovus had $54.8 million in collateral-dependent impaired loans with a recorded allocated allowance for loan losses of $10.4 million, or 19.0% of the principal balance. The estimated losses on these loans will be recorded as a charge-off during the third quarter of 2008 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.

Retail Loans — Expected 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. Through December 31, 2007, the probability of default loss factors were based on industry data. Beginning January 1, 2008, 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. Synovus believes that this data provides a more accurate estimate of probability of default considering the lower inherent risk of the retail portfolio and lower than expected charge-offs. This change resulted in a reduction in the allocated allowance for loan losses for the retail portfolio of approximately $19 million during the three months ended March 31, 2008. The loss given default factors continue to be 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 effect 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 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.

Income Taxes

Note 17 to the consolidated financial statements in Synovus’ 2007 Annual Report contains a discussion of income taxes. The calculation of Synovus’ income tax provision is complex and requires the use of estimates and judgments in its determination. As part of Synovus’ overall business strategy, management must consider tax laws and regulations that apply to the specific facts and circumstances under consideration. This analysis includes the amount and timing of the realization of income tax liabilities or benefits. Management closely monitors tax developments on both the state and federal level in order to evaluate the effect they may have on Synovus’ overall tax position. At June 30, 2008, Synovus concluded that it did not need a valuation allowance for its deferred income tax assets and had a net accrual of $6.4 million for unrecognized tax benefits.

Asset Impairment

Goodwill

Under SFAS No. 142, “Goodwill and Other Intangible Assets,” (SFAS No. 142) goodwill is required to be tested for impairment annually, or more frequently if events or circumstances indicate that there may be impairment. The combination of the income approach utilizing the

Goodwill at June 30, 2008 and December 31, 2007 was $492.1 million and $519.1 million, respectively. During the three months ended June 30, 2008, Synovus conducted its annual goodwill impairment evaluation. As a result of this evaluation, Synovus recognized a non-cash charge for impairment of goodwill of $27.0 million (pre-tax and after-tax) on one of its reporting units. The change has been recorded as a component of non-interest expense. The goodwill impairment charge was primarily related to a decrease in valuation based on market trading and transaction multiples.

An extended period of future significant deterioration in credit and financial markets could result in additional impairment of Synovus’ goodwill.

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.

Discontinued Operations

Refer to Note 9 to the consolidated financial statements (unaudited) as of and for the three and six months ended June 30, 2008 for a discussion of discontinued operations.

Balance Sheet

During the first six months of 2008, total assets increased $1.21 billion. The more significant increases consisted of loans, net of unearned income, up $947.3 million and investment securities available for sale up $147.4 million.

The balance sheet growth during the first six months of 2008 was funded through an increase in brokered deposits of $834.8 million, core deposits of $233.8 million, and Federal Home Loan Bank advances (a component of long-term debt) of $232.3 million.

Adoption of SFAS Nos. 157 and 159

SFAS No. 157 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 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. 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 during the first quarter, effective on January 1, 2008. At June 30, 2008, approximately $4.67 billion, or 13.7%, 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 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 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 participants would use in pricing the asset or the liability. The assessments with respect to assumptions that market participants would make are inherently difficult to determine and use of different assumptions could result in material changes to these fair value measurements.

The following table summarizes the assets accounted for at fair value on a recurring basis by level within the valuation hierarchy at June 30, 2008.


	June 30, 2008
							Investment
	Trading			Mortgage			securities
	account			loans held			available for			Private equity
(dollars in millions)	assets			for sale			sale			investments			Derivative assets			Total
Level 1		4	%		—			—			—			6			—	%
Level 2		96			100			96			—			94			95
Level 3		—			—			4			100			—			5

Total		100	%		100	%		100	%		100	%		100	%		100	%

Total assets held at fair value on the balance sheet	$	20.2		$	185.2		$	3,814.4		$	65.0		$	109.2		$	4,194.1

Level 3 assets as a percentage of total assets measured at fair value																	4.77	%

The following table summarizes the liabilities accounted for at fair value on a recurring basis by level within the valuation hierarchy at June 30, 2008.


	June 30, 2008
	Brokered
	certificates of			Trading account			Derivative
(dollars in millions)	deposit			liabilities			liabilities			Total
Level 1		—	%		—			10			4	%
Level 2		100			100			90			96
Level 3		—			—			—			—

Total		100	%		100	%		100	%		100	%

Total liabilities held at fair value on the balance sheet	$	90.7		$	10.6		$	66.1		$	167.4

Level 3 liabilities as a percentage of total liabilities measured at fair value											—	%

In estimating the fair values for investment securities and most derivative financial instruments, independent, third-party market prices are the best evidence of exit price and, where available, Synovus bases estimates on such prices. If such third-party market prices are not available on the exact securities that Synovus owns, fair values are based on the market prices of similar instruments, third-party broker quotes, or are estimated using industry-standard or proprietary models whose inputs may be unobservable. When market observable data is not available, the valuation of financial instruments becomes more subjective and involves substantial judgment. The need to use unobservable inputs generally results from the lack of market liquidity for certain types of loans and securities, which results in diminished observability of both actual trades and assumptions that would otherwise be available to value these instruments. When fair values are estimated based on internal models, relevant market indices that correlate to the underlying collateral are considered, along with assumptions such as interest rates, prepayment speeds, default rates, and discount rates.

The valuation for mortgage loans held for sale (MLHFS) is based upon forward settlement of a pool of loans of identical coupon, maturity, product, and credit attributes. The model is continuously updated with available market and historical data. The valuation methodology of nonpublic 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 assets. Private equity investments are valued initially based upon transaction price. Thereafter, 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 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 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 6 to the consolidated financial statements (unaudited) as of and for the three and six months ended June 30, 2008.

Trading Account Assets

The trading account assets portfolio, which had a balance of $20.2 million at June 30, 2008, 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 operating income on the consolidated statements of income. Synovus recognized a net loss on trading account assets of $239 thousand for the three months ended June 30, 2008 and a net gain of $519 thousand for the six months ended June 30, 2008, as compared to a net gain of $563 thousand and $801 thousand, respectively, for the same periods in the prior year.

Impaired Loans Held for Sale

Loans or pools of loans are transferred to the impaired 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 fair value is less than the cost, the difference attributable to declines in credit quality is recorded as a charge-off against the allowance for loan losses. Decreases in fair value subsequent to the transfer as well as losses from sale of these loans are recognized as a component of non-interest expense. During the three months ended March 31, 2008, Synovus transferred loans totaling $63.3 million to the impaired loans held for sale portfolio. At the time of the transfer, Synovus recognized a $21.0 million charge-off on these loans, which resulted in a new cost basis of $42.3 million at March 31, 2008. During the three months ended June 30, 2008, Synovus recognized a loss of $4.7 million from the sale of impaired loans held for sale and recognized additional write-downs of $5.4 million on the loans remaining in the portfolio. The $5.4 million write-down was based upon the estimated sales proceeds from a pending liquidation sale.

Other Real Estate

Loans

The following table compares the composition of the loan portfolio at June 30, 2008, December 31, 2007, and June 30, 2007.


	Total Loans						Total Loans
							June 30,						June 30,
							2008 vs.						2008 vs.
							Dec. 31,						June 30,
(Dollars in thousands)	June 30,			Dec. 31,			2007			June 30,			2007
Loan Type	2008			2007			% change ⁽¹⁾			2007			% change
Multi-family	$	527,881		$	452,163			33.7	%	$	489,453			7.9	%
Hotels		756,492			614,979			46.3			581,376			30.1
Office buildings		966,171			953,093			2.8			856,999			12.7
Shopping centers		965,130			834,025			31.6			712,210			35.5
Commercial development		909,965			961,271			(10.7	)		919,965			(1.1	)
Other investment property		873,902			714,296			44.9			687,683			27.1

Total Investment Properties		4,999,541			4,529,827			20.9			4,247,686			17.7


1-4 family construction		1,971,819			2,238,925			(24.0	)		2,382,147			(17.2	)
1-4 family perm /mini-perm		1,350,463			1,273,843			12.1			1,167,658			15.7
Residential development		2,227,709			2,311,459			(7.3	)		2,297,807			(3.1	)

Total 1-4 Family Properties		5,549,991			5,824,227			(9.5	)		5,847,612			(5.1	)


Land Acquisition		1,569,618			1,545,933			3.1			1,430,431			9.7


Total Commercial Real Estate ⁽²⁾		12,119,150			11,899,987			3.7			11,525,729			5.1


Commercial, financial, and agricultural		6,788,276			6,420,689			11.5			6,240,987			8.8
Owner-occupied		4,367,743			4,226,707			6.7			4,095,800			6.6

Total Commercial and Industrial		11,156,019			10,647,396			9.6			10,336,787			7.9

Home equity		1,632,551			1,543,701			11.6			1,417,681			15.2
Consumer mortgages		1,723,689			1,667,924			6.7			1,544,932			11.6
Credit card		299,850			291,149			6.0			280,805			6.8
Other retail loans		555,507			494,591			24.8			483,820			14.8

Total Retail		4,211,597			3,997,365			10.8			3,727,238			13.0

Unearned Income		(40,875	)		(46,163	)		(23.0	)		(48,012	)		(14.9	)


Total	$	27,445,891		$	26,498,585			7.2	%	$	25,541,742			7.5	%


(1)		Percentage changes are annualized.

(2)		Commercial real estate represents 44.2%, 44.9% and 45.1% of total loans at June 30, 2008, December 31, 2007 and June 30, 2007, respectively.

At June 30, 2008, loans outstanding were $27.45 billion, an increase of $1.90 billion, or 7.5%, compared to June 30, 2007. On a sequential quarter basis, total loans outstanding grew by $328.4 million or 4.9% annualized.

At June 30, 2008, Synovus had 48 loan relationships with total commitments of $50 million or more (including amounts funded). The average funded balance of these relationships at June 30, 2008 was approximately $53 million.

Total loans as of June 30, 2008 for the five southeastern state areas in which Synovus’ banks are located are summarized in the following table:

Dec. 31,

June 30,

June 30, 2008

2007

As a % of

Total Loan

(Dollars in thousands)

Total Loans

Portfolio

Georgia ⁽¹⁾

14,543,534

53.0

52.5

52.6

Atlanta

5,427,321

19.8

19.9

19.6

Florida ⁽¹⁾

3,593,893

13.1

13.6

14.0

West Coast of Florida

2,847,694

10.4

10.8

11.2

South Carolina

4,123,435

15.0

14.9

Tennessee

1,287,412

4.7

4.8

4.5

Alabama

3,897,617

14.2

14.1

14.0

Total

27,445,891

100.0


(1)		Loans in Georgia and Florida collectively represent 66.1% of our loan portfolio as of June 30, 2008.

At June 30, 2008, total loans in the Atlanta market were $5.43 billion, or 19.8% of the total loan portfolio, and increased $425.9 million, or 8.5%, compared to the same period in the prior year. The Atlanta market includes commercial real estate (CRE) loans of $3.10 billion (which includes $1.55 billion in 1-4 family properties) and commercial and industrial (C&I) loans of $1.91 billion at June 30, 2008. Compared to June 30, 2007, CRE loans and C&I loans in the Atlanta market increased by $122.8 million, or 4.1%, and $266.0 million, or 16.1%, respectively. On a sequential quarter basis, Atlanta market loans grew at an annualized rate of 1.8%, CRE loan growth declined at an annualized rate of 4.2%, and C&I loans grew at an annualized rate of 8.2%.

Total loans in the West Coast of Florida market were $2.85 billion, or 10.4% of the total loan portfolio at June 30, 2008, and decreased $1.8 million, or 0.06% compared to the same period in the prior year. The West Coast of Florida market includes CRE loans of $1.35 billion (which includes $496.1 million in 1-4 family properties) and C&I loans of $1.16 billion at June 30, 2008. Compared to June 30, 2007, CRE loans in the West Coast of Florida market decreased by $136.8 million, or 9.2%, and C&I loans increased by $101.3 million, or 9.6%. On a sequential quarter basis, loans within the West Coast of Florida market remained relatively flat, declining at an annualized rate of 0.5%, CRE loans declined at an annualized rate of 3.7%, and C&I loans grew at an annualized rate of 0.6%.

Loans for investment property grew by $469.7 million, or 20.9% annualized, from December 31, 2007, and increased $751.9 million, or 17.7%, compared to June 30, 2007. The primary loan types which contributed to the growth within the investment property portfolio compared to December 31, 2007 were the hotels, office buildings, and other investment property (primarily leased warehouses) categories. The growth in the investment property portfolio during the first six months of 2008 is primarily due to 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) has increased the duration of the investment property portfolio.

Commercial loans for 1-4 family properties at June 30, 2008 were $5.55 billion, down 9.5% annualized from December 31, 2007 and accounted for 20.2% of total loans outstanding as of June 30, 2008. The following table shows the composition of the 1-4 family portfolio as of June 30, 2008:

June 30, 2008

% of Total

1-4 Family

(Dollars in thousands)

Portfolio

NPL

Georgia

3,222,457

58.0

290,791

71.2

Atlanta

1,553,137

28.0

233,929

57.4

Florida

648,510

11.7

70,319

17.3

West Coast of Florida

496,121

8.9

66,629

16.3

South Carolina

920,627

16.6

20,998

5.2

Tennessee

178,285

3.2

20,259

5.0

Alabama

580,112

10.5

5,264

1.3

Total

5,549,991

100.0

407,631

100.0

Retail loans at June 30, 2008 totaled $4.21 billion, representing 15.3% of the total loan portfolio. Total retail loans grew by 13.0% compared to June 30, 2007 and grew at an annualized rate of 16.2% on a sequential basis, led principally by growth in home equity and consumer mortgage loans. The home equity loan portfolio consists primarily of loans with strong credit scores, conservative debt-to-income ratios, and appropriate loan-to-value ratios. The utilization rate (total amount outstanding as a percentage of total available lines) of this portfolio was approximately 59% at June 30, 2008, compared to 57% a year ago. These loans are primarily extended to customers who have an existing banking relationship with Synovus.

Credit Quality

Non-performing assets were $830.3 million at June 30, 2008, an increase of $150.9 million compared to March 31, 2008, which included increases of $111.3 million in non-performing loans, $75.6 million in other real estate (ORE), and was partially off-set by a decrease of $35.9 million in impaired loans held for sale. The increase in non-performing assets was significantly impacted by the Atlanta market, where non-performing assets increased by $81.4 million. The Atlanta market accounted for 45.9%, or $51.0 million, of the $111.3 million increase in non-performing loans during the three months ended June 30, 2008. Total loans within the Atlanta portfolio accounted for 145 basis points of the non-performing assets ratio at June 30, 2008, and 29 basis points of the sequential quarter increase.

The non-performing assets ratio (NPA ratio — non-performing loans plus impaired loans held

for sale and other real estate divided by total loans, impaired loans held for sale, and other real estate) at June 30, 2008 was 3.00% compared to 1.67% at December 31, 2007 and 0.87% at June 30, 2007. The net charge-off ratio for the three months ended June 30, 2008 was 1.04% compared to 0.25% for the same period in the prior year and 0.46% for the year ended December 31, 2007. The net charge-off ratio for the six months ended June 30, 2008 was 0.99% compared to 0.19% during the same period in the prior year.

The following table shows the NPA ratio by state as of June 30, 2008, December 31, 2007, and June 30, 2007.


	June 30,			December 31,			June 30,
	2008			2007			2007
Georgia		3.76	%		1.70	%		0.88	%
Atlanta		7.24			3.06			1.39
Florida		4.36			4.12			1.65
West Florida		5.24			5.11			2.01
South Carolina		1.35			0.55			0.33
Tennessee		2.64			0.63			0.83
Alabama		0.77			0.71			0.61

Consolidated		3.00	%		1.67	%		0.87	%

Net charge-offs for the three months ended June 30, 2008 were $70.7 million, an increase of $54.7 million compared to the same period a year ago. Net charge-offs for the three months ended June 30, 2008 included $22.9 million, or 33 basis points, of charge-offs from the Atlanta portfolio, and $12.0 million, or 17 basis points, of charge-offs from the West Coast of Florida portfolio. Net charge-offs for the six months ended June 30, 2008 were $134.5 million, an increase of $110.3 million compared to the same period in the prior year, and included $41.4 million, or 31 basis points, of charge-offs within the Atlanta portfolio, and $40.2 million, or 30 basis points, in charge-offs from the West Coast of Florida portfolio. The net charge-off ratio for the six months ended June 30, 2008 was 0.99% compared to 0.19% for the same period in 2007 and 0.46% for the year ended December 31, 2007.

Provision expense for the six months ended June 30, 2008 was $184.7 million, an increase of $143.9 million compared to the same period in the prior year. The Atlanta market accounted for $36.7 million of the total provision expense, while the West Coast of Florida market accounted for $46.2 million of the total provision expense for the six months ended June 30, 2008.

Total past due loans (and still accruing interest) were 1.33% of total loans at June 30, 2008 compared to 1.02% at December 31, 2007, and 0.64% at June 30, 2007. The year over year increase was primarily due to increases in the one to four family residential portfolios in the Atlanta and West Coast of Florida markets. Loans over 90 days past due and still accruing interest at June 30, 2008 were $39.6 million, or 0.14% of total loans, compared to 0.13% at December 31, 2007, and 0.09% at June 30, 2007.

The allowance for loan losses was $417.8 million, or 1.52% of net loans, at June 30, 2008 compared to $367.6 million, or 1.39% of net loans, at December 31, 2007, and $331.1 million, or 1.30% of net loans, at June 30, 2007. The allowance for loan losses to non-performing loans coverage was 66.68% at June 30, 2008, compared to 107.46% at December 31, 2007, and

183.17% at June 30, 2007. The decline in the coverage ratio is impacted by the increase in collateral-dependent impaired loans, which have no allowance for loan losses as the estimated losses on these credits have been charged-off. Therefore, a more meaningful allowance for loan losses coverage ratio is the allowance to non-performing loans (excluding collateral-dependent impaired loans for which there is no related allowance for loan losses), which was 206.82% at June 30, 2008, compared to 337.49% at December 31, 2007 and 417.79% at June 30, 2007.

During times when non-performing loans are not significant, this coverage ratio – which measures the allowance for loan losses (which is there for the entire loan portfolio) against a small non-performing loans total – appears very large. As non-performing loans increase, this ratio will decline even with significant incremental additions to the allowance.

The allowance for loan losses allocated to non-performing loans (exclusive of collateral-dependent impaired loans which have no allowance, as the estimated losses on these loans have already been recognized) is as follows:


				December 31,
(Dollars in millions)	June 30, 2008			2007			June 30, 2007
Non-performing loans, excluding collateral dependent impaired loans which have no allowance	$	202.0		$	108.9		$	79.3

Total allocated allowance for loan losses on above loans	$	41.2		$	20.5		$	22.9

Allocated allowance as a % of loans		20.4	%		18.8	%		28.9	%

Collateral-dependent impaired loans which have no allowance at June 30, 2008 (because they are carried at fair value net of selling costs) totaled $424.5 million, or 67.8% of non-performing loans. Net charge-offs recognized on collateral dependent impaired loans during the three months ended June 30, 2008 were $26.5 million.

As of June 30, 2008, the carrying value of impaired loans was $479.3 million. This balance reflects approximately $63.7 million in partial charge-offs (approximately 12.0% of the original unpaid principal balance) which we have recognized on these loans since they were placed on impaired status.

The table below includes selected credit quality metrics.


( Dollars in thousands )	June 30, 2008			December 31, 2007
Non-performing loans (1)	$	626,571			342,082
Impaired loans held for sale (2)		6,365			—
Other real estate		197,328			101,487

Non-performing assets	$	830,264			443,569


Net charge-offs – quarter	$	70,652			59,916

Net charge-offs/Avg. loans – quarter (3)		1.04	%		0.91	%


Net charge-offs — YTD	$	134,465			117,055
Net charge-offs/Avg. loans — YTD		0.99	%		0.46	%

Loans over 90 days past due and still accruing	$	39,614			33,663

As a % of loans		0.14	%		0.13	%


Total past due loans and still accruing	$	365,046			270,496

As a % of loans		1.33	%		1.02	%


Allowance for loan losses	$	417,813			367,613

Allowance for loan losses as a % of loans		1.52	%		1.39	%

Non-performing loans as a % of total loans		2.29	%		1.29	%

Non-performing assets as a % of total loans, impaired loans held for sale, and ORE		3.00	%		1.67	%


Allowance to non-performing loans		66.68	%		107.46	%

Allowance to non-performing loans, excluding impaired loans for which there is no related allowance for loan losses (4)		206.82	%		337.49	%


(1)		Includes $424.5 million and $233.2 million at June 30, 2008 and December 31, 2007, respectively, of loans considered to be impaired (consisting of collateral-dependent loans) for which there is no related allowance for loan losses determined in accordance with SFAS No. 114, “Accounting by Creditors for Impairment of a Loan.” The allowance on these loans is zero because the estimated losses on collateral-dependent impaired loans have been charged-off, at the time these loans were considered to be impaired.

(2)		Represent impaired loans that are intended to be sold. Held for sale loans are carried at lower of cost or fair value.

(3)		Ratio is annualized.

(4)		Impaired loans for which there is no related allowance for loan losses as described in note (1).

Management continuously monitors non-performing and past due loans, to mitigate further deterioration regarding the condition of these loans. Management believes non-performing loans and loans past due over 90 days and still accruing include all material loans where known information about possible credit problems of borrowers causes management to have serious

doubts as to the collectibility of amounts due according to the contractual terms of the loan agreement.

The following table shows the composition of the loan portfolio and non-performing loans (classified by loan type) as of June 30, 2008:


									% of
							Total		Total
				% of			Non-		Non-
(Dollars in thousands)				Total Loans			performing		performing
Loan Type	Total Loans			Outstanding			Loans		Loans
Multi-family	$	527,881			1.9	%	$	1,552		0.2	%
Hotels		756,492			2.8			766		0.1
Office buildings		966,171			3.5			3,119		0.5
Shopping centers		965,130			3.6			1,031		0.2
Commercial development		909,965			3.3			12,573		2.0
Other investment property		873,902			3.2			—		—

Total Investment Properties		4,999,541			18.3			19,041		3.0


1-4 family construction		1,971,819			7.2			220,194		35.1
1-4 family perm /mini-perm		1,350,463			4.9			32,661		5.2
Residential development		2,227,709			8.1			154,776		24.7

Total 1-4 Family Properties		5,549,991			20.2			407,631		65.0


Land Acquisition		1,569,618			5.7			75,623		12.1


Total Commercial Real Estate		12,119,150			44.2			502,295		80.1


Commercial, financial, and agricultural		6,788,276			24.7			70,608		11.3
Owner-occupied		4,367,743			15.9			32,345		5.2

Total Commercial and Industrial Loans		11,156,019			40.6			102,953		16.5

Home equity		1,632,551			5.9			6,771		1.1
Consumer mortgages		1,723,689			6.3			12,486		2.0
Credit card		299,850			1.1			—		—
Other retail loans		555,507			2.0			2,066		0.3

Total Retail		4,211,597			15.3			21,323		3.4
Unearned Income		(40,875	)		(0.1	)		—		—


Total	$	27,445,891			100.0	%	$	626,571		100.0	%

Deposits

The following table presents the composition of deposits:


			December 31,
(in thousands)	June 30, 2008		2007		June 30, 2007
Demand deposits	$	3,553,342		3,472,423		3,638,434
Money market		6,784,667		7,091,885		7,264,790
NOW		3,247,978		3,362,572		3,195,501
Savings		459,888		442,824		489,467
Time deposits		7,395,175		6,837,570		6,999,593

Total core deposits	$	21,441,050		21,207,274		21,587,785
Brokered money market		1,019,501		465,146		437,988
Brokered time deposits		3,567,801		3,287,396		3,275,948

Total deposits	$	26,028,352		24,959,816		25,301,721

Total deposits at June 30, 2008 were $26.03 billion, an increase of $1.07 billion, or 8.6% annualized, compared to December 31, 2007, and an increase of $726.6 million, or 2.9%, compared to June 30, 2007. Total deposits excluding brokered deposits (core deposits) increased $233.8 million, or 2.2% annualized, compared to December 31, 2007, and decreased $146.7 million, or 0.7%, compared to June 30, 2007. On a year over year basis, the decline was primarily related to a decline in money market accounts, which decreased $480.1 million, or 6.6%, compared to the same period in 2007. Actions currently being taken by Synovus to address deposit growth include modifications to the incentive compensation programs to include a significant component of actual incentives paid to be based on core deposit growth. On a sequential quarter basis, core deposits increased $218.9 million, or 4.1% annualized. The majority of the growth was within time deposit and non-interest bearing demand deposit accounts. On April 1, 2008, Synovus implemented a new company-wide sales campaign, which focused on growing non-interest bearing deposit accounts in both the commercial and retail customer bases. Synovus has also developed new money market and NOW account products that were offered to commercial and retail customers during the three months ended June 30, 3008.

Capital Resources and Liquidity

Synovus has always placed great emphasis on maintaining a strong capital base and continues to exceed regulatory capital 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 sustain an appropriate degree of leverage to provide a desirable level of profitability. Based on internal calculations and previous regulatory exams, each of the 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:


(in thousands)	June 30, 2008			December 31, 2007
Total risk-based capital	$	3,987,595		$	3,988,171
Total risk-based capital to risk-weighted assets ratio		12.29	%		12.66	%
Tier 1 capital ratio		8.91	%		9.11	%
Leverage ratio		8.70	%		8.65	%
Equity to assets ratio		10.02	%		10.42	%
Tangible equity to tangible assets ratio (1)		8.64	%		8.91	%


(1)		Excludes the carrying value of goodwill and other intangible assets from shareholders’ equity and total assets.

Continued credit deterioration and the resulting increases in non-performing assets and the allowance for loan losses and a corresponding decrease in Synovus’ net interest margin may adversely impact our liquidity position and capital ratios.

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. 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 assets and liabilities so as to provide adequate funding sources to meet estimated customer deposit withdrawals and future loan requests. Subsidiary banks have access to overnight federal funds lines with various financial institutions, which can be drawn upon for short-term liquidity needs. Subsidiary banks’ utilization of this funding source increased modestly during the second quarter.

The Parent Company requires cash for various operating needs including payment of dividends to shareholders, acquisitions, capital infusions into subsidiaries, the servicing of debt, and the payment of general corporate expenses. The primary source of liquidity for the Parent Company is dividends from the subsidiary banks, which are governed by certain rules and regulations of various state and federal banking regulatory agencies. See the discussion of “Dividends Per Share” below in this report. As a short-term liquidity source, the Parent Company has access to a $25 million line of credit with an unaffiliated banking organization. There were no borrowings outstanding on this line of credit at June 30, 2008. The Parent Company has historically enjoyed a solid reputation and credit standing in the capital markets and has the ability to raise funds in the form of either short or long-term borrowings or equity issuances. Maintaining adequate credit ratings is essential to Synovus’ continued cost-effective access to these capital market funding sources. Given the weakened economy and current market conditions, there is no assurance that the Parent Company will, if it chooses to do so, be able to obtain new borrowings or issue additional equity on terms that are satisfactory. Synovus believes that the sources of liquidity discussed above are sufficient to meet its anticipated funding needs.

The consolidated statements of cash flows detail cash flows from operating, investing, and financing activities. For the six months ended June 30, 2008, operating activities provided net cash of $348.2 million, investing activities used $1.50 billion, and financing activities provided $1.15 billion, resulting in a decrease in cash and due from banks of $7.7 million.

Earning Assets, Sources of Funds, and Net Interest Income

Average total assets of continuing operations for the first six months of 2008 were $33.4 billion, an increase of 7.8% compared to the first six months of 2007. Average earning assets increased 6.6% in the first six months of 2008 compared to the same period in 2007, and represented 91.7% of average total assets. Average deposits increased $589.4 million, average federal funds purchased and other short-term liabilities increased $567.8 million, average long-term debt increased $492.2 million, and average shareholders’ equity increased $668.9 million for the six months ended June 30, 2008 as compared to the same period last year. This growth provided the funding for $1.80 billion growth in average net loans and $93.8 million growth in average investment securities (available for sale and trading securities).

Net interest income for the six months ended June 30, 2008 was $552.1 million, a decrease of $19.4 million, or 3.4%, compared to $571.4 million for the six months ended June 30, 2007. Net interest income for the three months ended June 30, 2008 was $273.4 million, a decrease of $15.1 million, or 5.2%, from $288.5 million for the three months ended June 30, 2007.

The net interest margin for the six months ended June 30, 2008 was 3.64%, down 39 basis points from 4.03% for the six months ended June 30, 2007. Compared to the six months ended June 30, 2007, earning asset yields decreased by 149 basis points. Loan yields declined by 174 basis points, primarily due to a 260 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 110 basis point decline in the effective cost of funds. The most significant decreases in funding costs were realized in core money markets, which declined by 189 basis points, and fed funds purchased and other short term liabilities, which declined by 232 basis points.

On a sequential quarter basis, net interest income decreased by $5.2 million, while the net interest margin decreased 14 basis points to 3.57%. The net interest margin decline included a 3 basis point decrease related to increased credit costs, which results from loans placed on non-accrual and the reversal of accrued interest on those loans at the time of their change to non-accrual status. The remainder of the decline was primarily due to lower average short-term rates and the continued very competitive deposit markets. Yields on earning assets declined by 73 basis points as loan yields decreased by 82 basis points. This decrease was driven by a 113 basis point decrease in the average prime rate and a higher level of non-performing loans and interest charge-offs. The effective cost of funds decreased by 59 basis points. This decrease was driven by a 83 basis point decrease in core money market yields and a 115 basis point decrease in the cost of federal funds purchased and other short-term liabilities.

The direction of the margin during the remainder of 2008 will be significantly influenced by deposit pricing competition, trends in credit costs, and any additional Federal Reserve Bank rate actions. Competitive deposit market conditions are not expected to moderate in the near term and could negatively impact the margin in the second half of this year.

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:


	2008						2007
	Second			First			Fourth			Third			Second
(dollars in thousands)	Quarter			Quarter			Quarter			Quarter			Quarter

Interest Earning Assets
Taxable investment securities	$	3,556,381			3,485,370			3,496,843			3,495,017			3,420,831
Yield		5.00	%		5.01			4.90			4.82			4.83
Tax-exempt investment securities	$	137,606			154,408			164,587			170,211			178,183
Yield		7.34	%		7.00			6.82			6.72			6.75
Trading account assets	$	26,531			36,652			29,698			56,217			59,311
Yield		5.88	%		6.96			7.05			7.15			6.47
Commercial loans (1)	$	23,183,128			22,763,954			22,157,460			21,820,687			21,739,107
Yield		5.96	%		6.79			7.69			8.13			8.20
Consumer loans	$	966,111			931,644			928,942			915,847			896,267
Yield		7.53	%		7.86			8.05			8.17			8.14
Mortgage loans	$	1,252,275			1,241,018			1,237,962			1,152,621			1,110,754
Yield		6.54	%		6.84			7.04			7.10			7.03
Credit card loans	$	291,143			296,428			285,410			277,445			275,105
Yield		8.60	%		9.65			10.26			10.96			10.64
Home equity loans	$	1,605,601			1,557,852			1,517,510			1,444,411			1,407,005
Yield		5.31	%		6.48			7.34			7.80			7.82
Allowance for loan losses	$	(397,392	)		(381,695	)		(357,283	)		(335,406	)		(329,028	)

Loans, net	$	26,900,866			26,409,201			25,770,001			25,275,605			25,099,210
Yield		6.12	%		6.94			7.79			8.21			8.26
Mortgage loans held for sale	$	157,049			121,806			108,044			176,448			163,364
Yield		5.86	%		5.57			6.12			6.91			6.18
Federal funds sold and other short-term investments	$	201,081			128,381			110,745			85,094			131,029
Yield		1.83	%		3.41			4.63			5.76			5.37

Total Interest Earning Assets	$	30,979,514			30,335,818			29,679,918			29,258,592			29,051,928
Yield		5.96	%		6.69			7.42			7.78			7.81


Interest Bearing Liabilities
Interest bearing demand deposits	$	3,154,884			3,200,650			3,200,408			3,047,279			3,141,899
Rate		1.10	%		1.56			1.99			2.24			2.28
Money market accounts	$	6,826,724			7,017,644			7,502,063			7,421,900			7,217,265
Rate		2.15	%		2.98			3.92			4.40			4.46
Savings deposits	$	461,970			448,581			454,204			479,479			497,422
Rate		0.25	%		0.28			0.35			0.48			0.57
Time deposits under $100,000	$	2,814,714			2,777,764			2,790,869			2,917,089			3,020,881
Rate		3.97	%		4.44			4.69			4.81			4.85
Time deposits over $100,000 (less brokered time deposits)	$	4,316,454			4,171,716			4,006,350			4,029,091			4,118,221
Rate		4.09	%		4.69			4.98			5.12			5.19

Total interest bearing core deposits	$	17,574,746			17,616,355			17,953,894			17,894,838			17,995,688
Rate		2.68	%		3.29			3.84			4.16			4.20
Brokered money market accounts	$	1,082,805			854,385			467,346			476,377			426,988
Rate		2.54	%		3.50			4.89			5.34			5.45
Brokered time deposits	$	3,495,947			3,300,677			2,941,592			3,188,310			3,175,161
Rate		3.64	%		4.35			4.98			5.19			5.05

Total interest bearing deposits	$	22,153,498			21,771,417			21,362,832			21,559,525			21,597,837
Rate		2.82	%		3.46			4.02			4.33			4.35
Federal funds purchased and other short-term liabilities	$	2,302,986			2,253,640			2,472,339			1,930,598			1,720,535
Rate		2.03	%		3.18			4.37			4.84			4.96
Long-term debt	$	2,048,213			1,930,412			1,819,198			1,660,788			1,552,310
Rate		3.44	%		4.21			5.08			5.32			5.18

Total Interest Bearing Liabilities	$	26,504,697			25,955,469			25,654,369			25,150,911			24,870,682
Rate		2.80	%		3.48			4.12			4.43			4.44


Non-interest bearing demand deposits	$	3,448,794			3,338,106			3,422,684			3,405,622			3,428,246


Net Interest Margin		3.57	%		3.71			3.86			3.97			4.00


(1)		Impaired loans held for sale are included in commercial loans.

Yields earned on average interest-earning assets and rates paid on average interest-bearing liabilities for the six months ended June 30, 2008 and 2007 are presented below:


	Six Months Ended June 30,
(dollars in thousands)	2008			2007

Interest Earning Assets
Taxable Investment Securities	$	3,520,875			3,361,314
Yield		4.99	%		4.78
Tax-Exempt Investment Securities	$	146,007			181,579
Yield		7.16	%		6.78
Trading Account Assets	$	31,592			61,744
Yield		6.40	%		6.01
Commercial Loans	$	22,973,543			21,492,384
Yield		6.37	%		8.22
Consumer Loans	$	948,878			912,173
Yield		7.69	%		8.07
Mortgage Loans	$	1,246,646			1,096,337
Yield		6.69	%		7.01
Credit Card Loans	$	293,785			272,787
Yield		9.14	%		10.90
Home Equity Loans	$	1,581,726			1,396,069
Yield		5.89	%		7.76
Allowance for Loan Losses	$	(389,544	)		(323,533	)

Loans, Net	$	26,655,034			24,846,217
Yield		6.53	%		8.27
Mortgage Loans Held for Sale	$	139,427			161,931
Yield		5.75	%		6.13
Federal funds Sold and Other Short-Term Investments	$	164,731			139,397
Yield		2.40	%		5.42

Total Interest Earning Assets	$	30,657,666			28,752,182
Yield		6.32	%		7.81


Interest Bearing Liabilities
Interest Bearing Demand Deposits	$	3,177,767			3,127,793
Rate		1.33	%		2.29
Money Market Accounts	$	6,922,184			7,098,269
Rate		2.57	%		4.46
Savings Deposits	$	455,276			500,170
Rate		0.27	%		0.62
Time Deposits under $100,000	$	2,796,239			3,029,301
Rate		4.20	%		4.82
Time Deposits over $100,000 (less brokered time deposits)	$	4,244,085			4,109,892
Rate		4.38	%		5.17

Total Interest Bearing Core Deposits	$	17,595,551			17,865,425
Rate		2.98	%		4.20
Brokered Money Market Accounts	$	968,595			392,970
Rate		2.97	%		5.46
Brokered Time Deposits	$	3,398,312			3,103,376
Rate		3.98	%		5.06

Total Interest Bearing Deposits	$	21,962,458			21,361,771
Rate		3.01	%		4.25
Federal funds Purchased and Other Short-Term Liabilities	$	2,278,313			1,710,475
Rate		2.56	%		4.88
Long-Term Debt	$	1,989,312			1,497,083
Rate		3.75	%		5.08

Total Interest Bearing Liabilities	$	26,230,083			24,569,329
Rate		3.14	%		4.43


Non-Interest Bearing Demand Deposits	$	3,393,450			3,404,781


Net Interest Margin		3.64	%		4.03

The following table summarizes the components of net interest income for the six and three months ended June 30, 2008 and 2007, including the tax-equivalent adjustment that is required in making yields on tax-exempt loans and investment securities comparable to taxable loans and investment securities. The taxable-equivalent adjustment is based on a 35% Federal income tax rate.

Six Months Ended

Three Months Ended

June 30,

(In thousands)

2008

2007

2008

2007

Interest income

962,020

1,112,391

458,140

564,492

Taxable-equivalent adjustment

2,311

2,629

1,134

1,285

Interest income,

Taxable-equivalent

964,331

1,115,020

459,274

565,777

Interest expense

409,950

540,967

184,719

276,017

Net interest income,

Taxable-equivalent

554,381

574,053

274,555

289,760

Non-Interest Income

The following table summarizes non-interest income for the six and three months ended June 30, 2008 and 2007.


	Six months ended				Three months ended
	June 30,				June 30,
( In thousands )	2008		2007		2008		2007
Service charges on deposit accounts	$	54,461		54,420		26,070		28,050
Fiduciary and asset management fees		25,519		25,129		12,898		12,657
Brokerage and investment banking revenue		17,693		15,259		9,206		7,809
Mortgage banking income		13,847		14,920		5,686		7,695
Bankcard fees		26,417		23,447		14,198		11,567
Net gains on sales of available for sale investment securities		—		705		—		258
Other fee income		21,266		19,838		10,081		10,411
Other operating income		33,744		30,116		13,373		17,883
Proceeds from sale of MasterCard shares		16,186		—		16,186		—
Proceeds from redemption of Visa shares		38,542		—		—		—

Total non-interest income	$	247,675		183,834		107,698		96,330

Total non-interest income for the six months ended June 30, 2008 was $247.7 million, up 34.7%, from the same period in 2007. Excluding the $38.5 million gain on redemption of Visa shares, total non-interest income increased $25.3 million, or 13.8%, compared to same period a year ago. Total non-interest income for the three months ended June 30, 2008 was $107.7 million, up 11.8% compared to the same period in 2007.

Service charges on deposit accounts, the single largest component of fee income, were $54.5 million and $26.1 million, respectively, for the six and three months ended June 30, 2008, up 0.1% and down 7.1% from the same periods in 2007, respectively. Service charges on deposit

accounts consist of non-sufficient funds (NSF) fees (which represent 63.4% and 60.2% of the total for the six and three months ended June 30, 2008), account analysis fees, and all other service charges.

NSF fees for the six and three months ended June 30, 2008 were $34.5 million and $15.7 million, down $3.1 million, or 8.4%, and $3.8 million, or 19.7% compared to the same periods in 2007. Account analysis fees were $11.5 million and $6.1 million for the six and three months ended June 30, 2008, respectively, and increased by $4.3 million, or 59.1%, and $2.4 million, or 66.5%, compared to the same periods in the prior 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 $8.5 million and $4.2 million for the six and three months ended June 30, 2008, respectively, down $1.1 million, or 11.4%, and $579 thousand, or 12.0%, compared to the same periods in 2007. The decline in all other service charges for the six and three months ended June 30, 2008 was largely due to a continued market emphasis of checking accounts with no monthly service charge and a decline on fees for check orders.

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) increased 13.1% to $51.9 million for the six months ended June 30, 2008, and increased 8.8% to $26.1 million for the three months ended June 30, 2008, as compared to the same periods in 2007. The financial management services revenue growth was led by increases in fees from customer interest rate swaps and brokerage and investment banking revenues.

Mortgage banking income decreased $1.1 million, or 7.2%, for the six months ended June 30, 2008, and decreased $2.0 million, or 26.1%, for the three months ended June 30, 2008 as compared to the same periods in 2007. The decline was primarily related to the decline in mortgage production, which declined $107.9 million, or 13.7% and $61.3 million, or 15.2%, for the six and three months ended June 30, 2008 compared to the same periods in the prior year. The results for the six months ended June 30, 2008 also included a $1.2 million increase in revenues due to the adoption of the SEC’s Staff Accounting Bulletin (SAB) No. 109, “Written Loan Commitments Recorded at Fair Value Through Earnings.”

Other operating income increased $3.6 million, or 12.0%, and decreased $4.5 million, or 25.2%, for the six and three months ended June 30, 2008, as compared to the same periods in 2007, respectively. This increase included a $4.9 million gain in 2008 on increase in the fair value of private equity investments.

During the three months ended June 30, 2008, MasterCard conducted a conversion and sale program permitting the sale of a limited number of Class B shares, which are otherwise subject to restrictions on sale until 2010. Synovus recognized a gain of $16.2 million on the sale of a portion of its shares under the conversion and sale program.

Synovus recognized a pre-tax gain of $38.5 million on redemption of a portion of its membership interest in Visa, Inc. as a result of Visa’s initial public offering (the Visa IPO). The gain from the proceeds of the Visa IPO is reflected as a component of non-interest income for the six months ended June 30, 2008. For further discussion of Visa, see section titled “Non-Interest Expense” below.

Non-Interest Expense

The following table summarizes non-interest expense for the six and three months ended June 30, 2008 and 2007.


	Six months ended					Three months ended
	June 30,					June 30,
( In thousands )	2008			2007		2008		2007
Salaries and other personnel expense	$	232,614			229,749		110,483		115,822
Net occupancy and equipment expense		61,340			54,860		31,130		27,572
FDIC insurance and other regulatory fees		12,250			4,698		6,172		2,315
Impaired loans held for sale and other real estate costs		31,502			1,150		23,621		577
Goodwill impairment		27,000			—		27,000		—
Professional fees		16,697			10,245		11,756		4,743
Other operating expenses		103,365			91,755		55,802		46,631
Visa litigation expense		(17,430	)		—		—		—

Total non-interest expense	$	467,338			392,457		265,964		197,660

Non-interest expense increased by 19.1% and 34.6% for the six and three months ended June 30, 2008, compared to the same periods in the prior year. Excluding the reduction in the Visa litigation accrual and the charge for impairment of goodwill, non-interest expense increased by 16.6% and 20.9% for the six and three months ended June 30, 2008, respectively.

For the six and three months ended June 30, 2008, salaries and other personnel expenses increased by $2.9 million, or 1.2%, and decreased $5.3 million, or 4.6%, compared to the same periods in the prior year. The 2008 amounts reflect a reduction in accruals for performance-based pay. Total employees at June 30, 2008 were 7,275, down 56 compared to March 31, 2008, and down 26 compared to the prior year.

Net occupancy and equipment expense increased $6.5 million, or 11.8%, and $3.6 million, or 12.9%, for the six and three months ended June 30, 2008 compared to the same periods in the prior year. The increase in occupancy and equipment expenses for the six months ended June 30, 2008 include approximately $2.0 million in costs associated with the addition of new branch locations.

During 2007, the FDIC reinstituted the FDIC insurance assessment. In conjunction with the reinstituted assessment, the FDIC granted credits, which were fully utilized by early 2008. The increase in FDIC insurance and regulatory fees is substantially the result of expense recognized in 2008, following full recognition of credits, associated with the FDIC insurance assessment.

The increase in professional fees for both the six and three months ended June 30, 2008 include legal fees paid in connection with the FDIC investigation, which is discussed in Part II – Item 1: Legal Proceedings, and professional fees associated with Project Optimus, Synovus’ initiative to identify opportunities to increase revenues and reduce costs.

The increase in other operating expenses for the six and three months ended June 30, 2008 reflects the $2.4 million civil money penalty, discussed in Part II – Item 1: Legal Proceedings, and a $4.1 million provision for unfunded commitments. Synovus has historically assessed the

loss exposure associated with unfunded loan commitments and letters of credit at each financial statement date. Previous assessments have resulted in inconsequential estimated loss exposure amounts. The negative credit migration that occurred during the second quarter of 2008 in certain credits resulted in an estimated loss exposure of $4.1 million.

During the second half of 2007, Synovus recognized litigation expenses of $36.8 million associated with indemnification obligations arising from Synovus’ ownership interest in Visa. During the six months ended June 30, 2008, Synovus reversed $17.4 million of the accrued litigation expense it recognized in the second half of 2007 as its proportionate share of the $3.0 billion escrow fund established by Visa to settle covered litigation out of the Visa IPO proceeds. For further discussion of Visa, see section titled “Non-Interest Income” above.

Income Tax Expense

Income tax expense was $53.0 million and $9.3 million based on income from continuing operations of $146.0 million and $21.4 million for the six and three months ended June 30, 2008. The effective income tax rate, which was impacted by non-deductible impairment of goodwill, was 36.3% for the six months ended June 30, 2008.

In the normal course of business, Synovus is subject to examinations from various tax authorities. These examinations may alter the timing or amount of taxable income or deductions or the allocation of income among tax jurisdictions. The total liability for uncertain tax positions under FIN 48, “Accounting for Uncertainty in Income Taxes – an Interpretation of FASB Statement No. 109” is $6.4 million and $6.9 million at June 30, 2008 and 2007, respectively. Synovus is not able to reasonably estimate the amount by which the liability will increase or decrease over time; however, at this time, Synovus does not expect a significant payment related to these obligations within the next year.

Synovus continually monitors and evaluates the potential impact of current events and circumstances on the estimates and assumptions used in the analysis of its income tax positions, and, accordingly, Synovus’ effective tax rate may fluctuate in the future.

Dividends per Share

As a result of the TSYS spin-off, Synovus adjusted its cash dividend so that Synovus shareholders who retained their TSYS shares would initially receive, in the aggregate, the same cash dividends per share that were paid before the spin-off. As a result, Synovus adjusted its cash dividend per share for the six and three months ended June 30, 2008 to $0.3400 and $0.1700, respectively. Prior to the TSYS spin-off, Synovus paid a cash dividend for the six and three months ended June 30, 2007 of $0.4100 and $0.2050, respectively. The dividend payout ratio for the six months ended June 30, 2008 was 121.1%, as compared to 43.7% for the same period in 2007.

Management closely monitors trends and developments in credit quality, liquidity, financial markets and other economic trends, as well as regulatory requirements, all of which impact Synovus’ capital position, and will periodically review the dividend payout ratio to determine whether the payout ratio is appropriate in light of these factors.

Recently Issued Accounting Standards

In December 31, 2007, the FASB issued SFAS No. 141R, “Business Combinations.” SFAS No. 141R clarifies 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 defines the acquisition date as the only relevant date for recognition and measurement of the fair value of consideration paid. SFAS No. 141R requires the acquirer to expense all acquisition related costs. SFAS No. 141R will also require acquired loans to be recorded net of the allowance for loan losses on the date of acquisition. SFAS No. 141R 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. The provisions of this statement are effective for business combinations during fiscal years beginning after December 15, 2008. Synovus is currently evaluating the impact that SFAS No. 141R will have on its financial position and results of operations and believes that such determination will not be meaningful until Synovus enters into a business combination.

In December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in Consolidated Financial Statements – An Amendment of ARB No. 51.” SFAS No. 160 requires non-controlling 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. The provisions for this statement are effective for fiscal years beginning after December 31, 2008. This statement should be applied prospectively except for the presentation and disclosure requirements which shall be applied retrospectively for all periods presented. Synovus does not expect the impact of SFAS No. 160 on its financial position, results of operations or cash flows to be material.

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities – An Amendment of FASB Statement No. 133.” SFAS No. 161 changes 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. The provisions for this statement are effective for fiscal years beginning after December 31, 2009. The impact to Synovus will be additional disclosure in SEC filings.

ITEM 3 — QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT
MARKET RISK

Interest rate risk is the primary market risk to which Synovus is potentially exposed. As of the end of the second quarter, the interest rate risk position of Synovus has changed modestly as compared to December 31, 2007. A further decline in short-term interest rates would be expected to have a modest negative impact on net interest income as implied rate floors are reached on lower cost core deposits. An expected increase in fixed rate asset prepayments would also negatively impact net interest income. This impact has been moderated somewhat by a significant amount of variable rate loans reaching a floor rate and effectively becoming fixed rate loans in a declining rate environment. A rising rate environment would be expected to have a moderately positive impact on net interest income. A rising rate environment would positively impact overall loan yields, as loan growth has been more concentrated in variable rate loans this year. Deposit rate repricing would be expected to lag somewhat in a rising rate environment and have a favorable impact on net interest income.

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 models its baseline net interest income forecast assuming an unchanged or flat interest rate environment. Synovus has modeled the impact of a gradual increase and decrease in short-term rates of 100 basis points to determine the sensitivity of net interest income for the next twelve months. The following table represents the estimated sensitivity of net interest income to these gradual changes in short term interest rates at June 30, 2008, with comparable information for December 31, 2007.


	Estimated % Change in Net Interest Income
Change in Short-Term	as Compared to Unchanged Rates
Interest Rates	(for the next twelve months)
(in basis points)	June 30, 2008			December 31, 2007
+ 100		1.2	%		(0.1	)%
- 100		(2.2	)%		(1.5	)%

While these estimates are reflective of the general interest rate sensitivity of Synovus, local market conditions and their impact on loan and deposit pricing would be expected to have a significant impact on the realized level of net interest income. Actual realized balance sheet growth and mix would also impact the realized level of net interest income. Synovus also considers the interest rate sensitivity of non-interest income, primarily deposit account analysis fees, mortgage banking income, and financial management services income, in determining the appropriate net interest income sensitivity positioning.

ITEM 4 – CONTROLS AND PROCEDURES

We have evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this quarterly report as required by Rule 13a-15 of the Securities Exchange Act of 1934, as amended. This evaluation was carried out under the supervision and with the participation of our management, including our chief executive officer and chief financial officer. Based on this evaluation, these officers have concluded that our disclosure controls and procedures are effective in timely alerting them to material information relating to Synovus (including its consolidated subsidiaries) required to be included in our periodic SEC filings. No change in Synovus’ internal control over financial reporting occurred during the period covered by this report that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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. 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 regulatory matter 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.

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 under the following circumstances: (1) if CompuCredit is required by an order or other agreement with the FDIC or the Federal Trade Commission (FTC), including an order or agreement issued or made pursuant to a settlement arrangement, to pay restitution to any consumers who activated their Aspire credit cards before May 31, 2005, and CompuCredit defaults, in whole or in part, on its obligation to make the required restitution, the FDIC may require the account to be applied to the extent of such default; or (2) if the FDIC and the FTC are unable to obtain an order or agreement requiring

CompuCredit to pay restitution to any consumers who activated their Aspire credit cards before May 31, 2005, because of a reason other than the merits of their claims and despite making reasonable efforts to do so, the FDIC may require the account to be applied in full. This $7.5 million account represents a contingent liability of CB&T. At June 30, 2008, 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. 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. CB&T and Synovus intend 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.

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 for the year ended December 31, 2007, 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 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 for the year ended December 31, 2007.

The current and further deterioration in the residential construction and commercial development real estate markets may lead to increased non-performing assets in our loan portfolio and increased provision expense for losses on loans, which could have a material adverse effect on our capital, financial condition and results of operations.

Since the third quarter of 2007, the residential construction and commercial development real estate markets have experienced a variety of difficulties and changed economic conditions. In particular, market conditions in the Atlanta and the West Coast of Florida markets, which combined represent 66% of non-performing assets at June 30, 2008, have experienced continued declines in credit quality since the end of 2007. Synovus’ non-performing assets were $830.3 million at June 30, 2008, compared to $443.6 million at December 31, 2007. Non-performing assets in the Atlanta area and West Coast of Florida markets represented 48% and 18%, respectively, of Synovus’ total non-performing assets at June 30, 2008. If market conditions continue to deteriorate, they may lead to additional valuation adjustments on our loan portfolios and real estate owned as we continue to reassess the market value of our loan portfolio, the loss severities of loans in default, and the net realizable value of real estate owned. Poor economic conditions could result in decreased demand for residential housing, which, in turn, could adversely affect the development and construction efforts of residential real estate developers. Consequently, such economic downturns could adversely affect the ability of such residential real estate developer borrowers to repay these loans and the value of property used as collateral for such loans. While Synovus believes that the severity of market conditions in the Atlanta and West Coast of Florida markets are related to factors which are specific to those individual markets, management continually monitors market conditions and economic factors throughout Synovus’ footprint for indications of change in other markets. Any further increase in our non-performing assets and related increases in our provision expense for losses on loans could negatively affect our business and could have a material adverse effect on our capital, financial condition and results of operations.

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 expense, which represents management’s best estimate of probable credit losses that have been incurred within the existing portfolio of loans, all as described under “Item

2. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies – Allowance for Loan Losses.” The allowance, in the judgment of management, is necessary 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. 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.

Synovus’ net interest income could be negatively affected by the lower level of short-term interest rates, recent developments in the credit and real estate markets and competition in our primary market area.

Net interest income, which is the difference between the interest income that we earn on interest-earning assets and the interest expense that we pay on interest-bearing liabilities, is a major component of our income. Our income is in turn our primary source of funding for our operations, including extending credit and reserving for loan losses. The Federal Reserve reduced interest rates on three occasions in 2007 by a total of 100 basis points, to 4.25%, and by another 225 basis points, to 2.00%, during the first four months of 2008. A significant portion of our loans, including residential construction and development loans and other commercial loans, bear interest at variable rates. The interest rates on these loans decrease when the Federal Reserve reduces interest rates, which may reduce our net interest income. In addition, in order to compete for deposits in our primary market areas, we may offer more attractive interest rates to depositors, and we may increasingly rely on out-of-market or brokered deposits as a source of liquidity.

Increased credit costs and the decrease in interest rates reduced our net interest income during the first six months of 2008 and could cause additional pressure on net interest income in future periods. This reduction in net interest income may also be exacerbated by the high level of competition that we face in our primary market area. Any significant reduction in our net interest income could negatively affect our business and could have a material adverse impact on our capital, financial condition and results of operations.

ITEM 2 – UNREGISTERED SALES OF EQUITY
SECURITIES AND USE OF PROCEEDS

In prior periods, Synovus received previously owned shares of its common stock in payment of the exercise price of stock options and shares withheld to cover taxes on vesting for non-vested shares granted. No shares of Synovus common stock were delivered during the three months ended June 30, 2008.

ITEM 4 – SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The annual shareholders’ meeting was held on April 24, 2008. 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 nineteen directors of Synovus to serve until the 2009 Annual Meeting of Shareholders.


Nominee	Votes For		Withheld Authority to Vote

Daniel P. Amos		2,715,097,418		31,136,914
Richard E. Anthony		2,712,382,683		33,851,649
James H. Blanchard		2,708,055,173		38,179,159
Richard Y. Bradley		2,615,162,411		131,071,921
Frank W. Brumley		2,714,679,132		31,555,200
Elizabeth W. Camp		2,718,859,561		27,374,771
Gardiner W. Garrard, Jr.		2,677,916,304		68,318,028
T. Michael Goodrich		2,717,176,836		29,057,496
Frederick L. Green, III		2,712,878,843		33,355,489
V. Nathaniel Hansford		2,712,601,676		33,632,656
Alfred W. Jones, III ⁽¹⁾		2,708,212,796		38,021,536
Mason H. Lampton		2,714,456,076		31,778,256
Elizabeth C. Ogie		2,711,057,152		35,177,180
H. Lynn Page		2,713,665,168		32,569,164
J. Neal Purcell		2,718,125,486		28,108,846
Melvin T. Stith		2,718,531,260		27,703,072
Philip W. Tomlinson		2,708,529,248		37,705,084
William B. Turner, Jr.		2,687,859,679		58,374,653
James D. Yancey		2,708,817,099		37,417,233


(1)		Alfred W. Jones, III resigned from Synovus’ board of directors effective July 7, 2008.

Proposal II

The proposal was to ratify the appointment of KPMG LLP as the independent auditor to audit the consolidated financial statements of Synovus and its subsidiaries for the fiscal year ended December 31, 2008.


	For		Against		Abstain

Votes		2,717,676,955		23,926,119		4,631,257

ITEM 6 — 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		Bylaws, as amended, of Synovus, incorporated by reference to Exhibit 3.1 of Synovus’ Current Report on Form 8-K dated July 24, 2008, filed with the SEC on July 28, 2008

10.1		Form of Change of Control Agreements for executive officers

10.2		Amended and Restated Synovus Financial Corp. Directors’ Deferred Compensation Plan

10.3		Second Amended and Restated Synovus Financial Corp. Deferred Compensation Plan

31.1		Certification of Chief Executive Officer

31.2		Certification of Chief Financial Officer

32		Certification of Periodic Report

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	SYNOVUS FINANCIAL CORP.
Date: August 08, 2008	BY:	/s/ Thomas J. Prescott
		Thomas J. Prescott
		Executive Vice President and Chief Financial Officer

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		Bylaws, as amended, of Synovus, incorporated by reference to Exhibit 3.1 of Synovus’ Current Report on Form 8-K dated July 24, 2008, filed with the SEC on July 28, 2008

10.1		Form of Change of Control Agreements for executive officers

10.2		Amended and Restated Synovus Financial Corp. Directors’ Deferred Compensation Plan

10.3		Second Amended and Restated Synovus Financial Corp. Deferred Compensation Plan

31.1		Certification of Chief Executive Officer

31.2		Certification of Chief Financial Officer

32		Certification of Periodic Report

Exhibit 10.1

CHANGE OF CONTROL AGREEMENT

THIS AGREEMENT (“Agreement”), by and between SYNOVUS FINANCIAL CORP. , a Georgia corporation (the “Company”) and (the “Employee”) is entered into as of the day of , (the “Effective Date”);

WHEREAS, the Board of Directors of the Company (the “Board”), has determined that it is in the best interests of the Company and its shareholders to assure that the Company will have the continued dedication of the Employee, notwithstanding the possibility, threat or occurrence of a Change of Control (as defined below) of the Company;

WHEREAS, the Board believes it is imperative to diminish the inevitable distraction of the Employee by virtue of the personal uncertainties and risks created by a pending or threatened Change of Control and to encourage the Employee’s full attention and dedication to the Company currently and in the event of any threatened or pending Change of Control, and to provide the Employee with appropriate compensation and benefits arrangements upon a Change of Control which are competitive with those of other corporations; and

WHEREAS, in order to accomplish these objectives, the Board has caused the Company to enter into this Agreement.

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

1. Certain Definitions . (a) The “Change of Control Date” shall mean the first date during the Change of Control Period (as defined in Section 1(b)) on which a Change of Control (as defined in Section 2) occurs. Anything in this Agreement to the contrary notwithstanding, if a Change of Control occurs and if the Employee’s employment with the Company is terminated prior to the date on which the Change of Control occurs, and if it is reasonably demonstrated by Employee that such termination of employment (i) was at the request of a third party who has taken steps reasonably calculated to effect a Change of Control or (ii) otherwise arose in connection with or in anticipation of a Change of Control, then for all purposes of this Agreement the “Change of Control Date” shall mean the date immediately prior to the date of such termination of employment.

(b) The “Change of Control Period” shall mean the period commencing on the Effective Date and ending on the day after the date of Employee’s termination of employment from the Company or, if earlier, the date which is two years after the Change of Control Date.

(1) the willful and continued failure of the Employee to perform substantially the Employee’s duties with the Company or one of its affiliates after a written demand for substantial performance is delivered to the Employee by the Executive Committee of the Board

or the Chief Executive Officer of the Company which specifically identifies the manner in which the Executive Committee of the Board or Chief Executive Officer believes that the Employee has not substantially performed the Employee’s duties, after which Employee shall have a reasonable amount of time to remedy such failure to substantially perform his or her duties; or

(2) the willful engaging by the Employee in illegal conduct or gross misconduct which is materially and demonstrably injurious to the Company.

For purposes of this provision, no act, or failure to act, on the part of the Employee shall be considered “willful” unless it is done, or omitted to be done, by the Employee in bad faith or without reasonable belief that the Employee’s action or omission was in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board, or the Executive Committee of the Board, or upon the instructions of the Chief Executive Officer, or an Executive Vice President (or higher ranking officer), of the Company, or based upon the advice of counsel for the Company, shall be conclusively presumed to be done, or omitted to be done, by the Employee in good faith and in the best interests of the Company. The cessation of employment of the Employee shall not be deemed to be for Cause unless and until there shall have been delivered to the Employee a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters (3/4) of the entire membership of the Executive Committee of the Board at a meeting of the Executive Committee of the Board called and held for such purpose (after reasonable notice is provided to the Employee and the Employee is given an opportunity, together with counsel, to be heard before the Executive Committee of the Board), finding that, in the good faith opinion of the Executive Committee of the Board, the Employee is guilty of the conduct described in subparagraph (1) or (2) above, and specifying the particulars thereof in detail.

(d) “Good Reason” shall mean:

(1) a material adverse reduction in the Employee’s position duties or responsibilities excluding for this purpose: (i) a change in the position or level of officer to whom the Employee reports, (ii) a change that is part of a policy, program or arrangement applicable to peer executives (including peer executives of any successor to the Company), or (iii) an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Employee;

(2) the Company’s requiring the Employee to be based at any office or location more than 35 miles from the location where Employee was employed on the Change of Control Date or the date which is 120 days prior to the Change of Control Date (if such earlier date is selected by Employee);

(3) a material reduction in Employee’s annual base salary, target annual bonus opportunity (including, without limitation, the use of bonus goals that are not reasonable and consistent with the bonus goals established for the preceding year), or participation in employee benefit plans, as such salary, bonus and plans were in effect on either the Change of Control Date or the date which is 120 days prior to the Change of Control Date (if such earlier date is selected by Employee) unless such reduction is part of a policy, program or arrangement applicable to peer executives (including peer executives to any successor to Company) ; or

(4) any failure by the Company to comply with and satisfy Section 8(c) of this Agreement.

For purposes of this Section 1(d), any good faith determination of “Good Reason” made by the Employee shall be conclusive.

(e) “Disability” shall be defined the same as such term is defined in either, at the selection of the Employee, (a) the group long-term disability insurance plan sponsored or maintained by Company on the Change of Control Date in which Employee participates or (b) any individual long-term disability insurance arrangement in effect on the Change of Control Date, the premiums of which are paid by Company for the benefit of Employee.

2. Change of Control . For the purposes of this Agreement, a “Change of Control” shall mean:

(a) the acquisition by any “person” (“Person”), as such term is used in Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (other than the Company or a subsidiary or any Company employee benefit plan (including its trustee), of “beneficial ownership” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 20% or more of the total number of shares of the Company’s then outstanding securities;

(b) individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least two-thirds (2/3) of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least two-thirds (2/3) of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

(c) consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets or stock of the Company (a “Business Combination”), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the total number of shares of the Company’s outstanding securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than sixty percent (60%) of, respectively, the total number of shares of the then outstanding securities of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the total number of shares of the Company’s outstanding securities, (ii) no Person (excluding any corporation resulting from such Business Combination, or any employee benefit plan (including its trustee) of the Company or such corporation resulting from such Business

Combination, or an “Exempt Person” as defined below) beneficially owns, directly or indirectly, 20% or more of, respectively, the total number of shares of the then outstanding securities of the corporation resulting from such Business Combination except to the extent that such ownership existed prior to the Business Combination and (iii) at least two-thirds (2/3) of the members of the board of directors of the Corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination.

For purposes of this Section 2, a “Change of Control” shall not result from any transaction precipitated by the Company’s insolvency, appointment of a conservator, or determination by a regulatory agency that the Company is insolvent, nor from any transaction initiated by the Company in regard to converting from a publicly traded company to a privately held company.

3. Obligations of Company Upon Termination . In the event Employee’s employment by Company is terminated before the two-year anniversary date of the Change of Control Date either (i) by the Company for any reason other than Cause or Employee’s death or Disability, or (ii) by Employee for Good Reason, then

(a) The Company shall pay to Employee in a lump sum in cash on the date which is six months and one day after the date Employee has a separation from service (within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”)) the aggregate of the following amounts:

(1) three times the sum of: (a) Employee’s annual base salary as in effect immediately prior to Employee’s termination; plus (b) the product of (i) Employee’s annual base salary as in effect immediately prior to Employee’s termination of employment multiplied by (ii) a percentage equal to the average percentage of Employee’s annual bonus earned with respect to the three calendar years ended prior to Employee’s termination, measured as a percentage of Employee’s annual base salary for the year the bonus was earned; and

(2) the product of (a) a fraction, the numerator of which is the greater of (i) six, or (ii) number of full months Employee worked in the calendar year of Employee’s termination ( e.g. , an October 1 termination date results in a numerator of 9) and the denominator of which is 12; multiplied by (b) the target annual bonus for which Employee was eligible immediately prior to Employee’s termination.

For purposes of this Agreement, “annual base salary” means Employee’s annual rate of pay excluding all other elements of compensation such as, without limitation, bonuses, perquisites, restricted stock awards, stock options, and retirement and welfare benefits.

(b) For three years after Employee’s termination of employment, Employee shall continue to be eligible to receive medical and welfare benefits (including, without limitation, medical, prescription, dental, disability (both individual and group arrangements), life (both individual and group arrangements), and accidental death and dismemberment plans and programs) for Employee and Employee’s dependents at the level of coverage elected by Employee during the open enrollment period immediately preceding Employee’s termination of employment date under

benefit plans that are generally equivalent to those provided generally at any time after the Effective Date to other peer employees of the Company and its affiliated companies (excluding individual disability and individual life insurance arrangements, which must continue to be provided regardless of whether provided to peer employees) and the Company shall reimburse Employee for Employee’s costs or expenses for such benefits; provided, however, that if Employee becomes reemployed with another employer (specifically excluding self-employment) and is eligible to receive medical or other welfare benefits under another employer provided plan, Company shall terminate all medical and other welfare benefits being provided hereunder; and provided further, however, that, if Employee is not eligible to participate under the terms of such medical and welfare benefit plans (including COBRA continuation coverage for which Executive is eligible), Company shall pay Employee in cash on the date which is six months and one day after the date Employee has a separation from service (within the meaning of Section 409A of the Code) a lump sum amount equal to the lesser of (1) two times the average monthly cost per employee to the Company to provide the benefits described in this Section 3(b) to its employees or (2) 25% of the lump sum amount payable to Employee pursuant to Section 3(a) of this Agreement.

(c) The Company shall not be obligated under this Agreement to provide outplacement assistance or any other benefits and perquisites not covered above, such as a Company-provided automobile, country club and dining club dues, health club dues, retirement benefits, etc.

4. Non-exclusivity of Rights . Nothing in this Agreement shall prevent or limit the Employee’s continuing or future participation in any plan, program, policy or practice provided by the Company or any of its affiliated companies and for which the Employee may qualify, nor, subject to Section 9(f), shall anything herein limit or otherwise affect such rights as the Employee may have under any contract or agreement with the Company or any of its affiliated companies. Amounts which are vested benefits or which the Employee is otherwise entitled to receive under any plan, policy, practice or program of or any contract or agreement with the Company or any of its affiliated companies at or subsequent to the date of termination shall be payable in accordance with such plan, policy, practice or program or contract or agreement except as explicitly modified by this Agreement.

5. Full Settlement . The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against the Employee or others. In no event shall the Employee be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Employee under any of the provisions of this Agreement and, except as otherwise provided in this Agreement, such amounts shall not be reduced whether or not the Employee obtains other employment. The Company agrees to pay as incurred, to the full extent permitted by law, all legal fees and expenses which the Employee may reasonably incur as a result of any contest (regardless of the outcome thereof) by the Company, the Employee or others of the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by the Employee about the amount of any payment pursuant to this Agreement), plus in each case interest on any delayed payment at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the Code.

6. Certain Additional Payments by the Company . (a) Anything in this Agreement to the contrary notwithstanding and except as set forth below, in the event it shall be determined that any payment or distribution by the Company to or for the benefit of the Employee (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section (6) (a “Payment”)) would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by the Employee with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), then the Employee shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by the Employee of all taxes on the Gross-Up Payment including, without limitation, any income taxes, employment taxes, excise taxes, and interest and penalties imposed upon the Gross-Up Payment, the Employee retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. Notwithstanding the foregoing provisions of this Section 6, if it shall be determined that the Employee is entitled to a Gross-Up Payment, but that the Payments do not exceed 110% of the greatest amount (the “Reduced Amount”) that could be paid to the Employee such that the receipt of Payments would not give rise to any Excise Tax, then no Gross-Up Payment shall be made to the Employee and the remaining provisions of this Section 6 shall not apply.

(b) Subject to the provisions of Section 6(c), all determinations required to be made under this Section 6, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by KPMG Peat Marwick or such other nationally recognized certified public accounting firm as may be designated by the Company (the “Accounting Firm”) which shall provide detailed supporting calculations both to the Company and the Employee within 15 business days of the receipt of notice from the Employee that there has been a Payment, or such earlier time as is requested by the Company. All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 6, shall be paid by the Company to the Employee within five days of the receipt of the Accounting Firm’s determination. Any determination by the Accounting Firm shall be binding upon the Company and the Employee. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made (“Underpayment”), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 6(c) and the Employee thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Employee.

(c) The Employee shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable but no later than 10 business days after the Employee is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. The Employee shall not pay such claim prior to the expiration of the 30-day period following the date on which it gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies the Employee in writing prior to the expiration of such period that it desires to contest such claim, the Employee shall:

(1) give the Company any information reasonably requested by the Company relating to such claim,

(2) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company,

(3) cooperate with the Company in good faith in order effectively to contest such claim, and

(4) permit the Company to participate in any proceedings relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Employee harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 6(c), the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct the Employee to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Employee agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that if the Company directs the Employee to pay such claim and sue for a refund, the Company shall advance the amount of such payment to the Employee, on an interest-free basis and shall indemnify and hold the Employee harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Employee with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Employee shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

(d) If, after the receipt by the Employee of an amount advanced by the Company pursuant to Section 6(c), the Employee becomes entitled to receive any refund with respect to such claim, the Employee shall (subject to the Company’s complying with the requirements of Section 6(c)) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the Employee of an amount advanced by the Company pursuant to Section 6(c), a determination is made that the Employee shall not be entitled to any refund with respect to such claim and the Company does not notify the

Employee in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.

7. Confidential Information . The Employee shall hold in a fiduciary capacity for the benefit of the Company all secret or confidential information, knowledge or data relating to the Company or any of its affiliated companies, and their respective businesses, which shall have been obtained by the Employee during the Employee’s employment by the Company or any of its affiliated companies and which shall not be or become public knowledge (other than by acts by the Employee or representatives of the Employee in violation of this Agreement). After termination of the Employee’s employment with the Company, the Employee shall not, without the prior written consent of the Company or as may otherwise be required by law or legal process, communicate or divulge any such information, knowledge or data to anyone other than the Company and those designated by it.

8. Successors . (a) This Agreement is personal to the Employee and without the prior written consent of the Company shall not be assignable by the Employee otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Employee’s legal representatives.

(b) This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.

(c) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.

9. Miscellaneous . (a) This Agreement shall be governed by and construed in accordance with the laws of the State of Georgia, without reference to principles of conflict of laws. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives; provided, however, that the Company may amend, modify or terminate this Agreement without Employee’s consent by providing Employee with 12 months prior written notice of such amendment, modification, or termination.

(b) All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid


		If to the Employee : To the Employee’s most recent home address as filed with the Company


		If to the Company : Synovus Financial Corp. P. O. Box 120 Columbus, GA 31902 Attention: General Counsel

or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.

(c) The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.

(d) The Company may withhold from any amounts payable under this Agreement such Federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation.

(e) The Employee’s or the Company’s failure to insist upon strict compliance with any provision of this Agreement or the failure to assert any right the Employee or the Company may have hereunder, including, without limitation, the right of the Employee to terminate employment for Good Reason pursuant to Section 3 of this Agreement, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement.

(f) The Employee and the Company acknowledge that, except as may otherwise be provided under any other written agreement between the Employee and the Company, the employment of the Employee by the Company is “at will” and, subject to Section 1(a) hereof, prior to the Change of Control Date, the Employee’s employment may be terminated by either the Employee or the Company at any time prior to the Change of Control Date, in which case the Employee and Company shall have no further rights under this Agreement. In addition, in the event Employee’s employment is terminated as a result of Employee’s death or Disability, Employee shall have no further rights under this Agreement. From and after the Effective Date this Agreement shall supersede any other agreement between the parties with respect to the subject matter hereof.

(g) This Agreement cancels and supercedes any and all previous change of control agreements between Employee and Company (including without limitation all Company affiliates and subsidiaries).

(h) This Agreement is executed in two counterparts, each of which shall be deemed an original and together shall constitute one and the same agreement, with one counterpart being delivered to each party hereto.

(i) To the extent this Agreement is subject to Section 409A of the code, Employee and the Company intend for all payments under this Agreement to comply with such section, and this Agreement shall, to the extent practical, be operated and administered to effect such intent. To the extent necessary to avoid adverse tax consequences under Section 409A of the code, the timing of any payment under this Agreement shall be delayed six months and one day in a manner consistent with Section 409A(a)(2)(8)(i) of the Code.

IN WITNESS WHEREOF, the Employee has hereunto set the Employee’s hand and, pursuant to the authorization from its Board of Directors, the Company has caused these presents to be executed in its name on its behalf, all being done in duplicate originals, with one original being delivered to each party hereto, all as of the day and year first above written.




	[Employee]


	SYNOVUS FINANCIAL CORP.
	By:

	Title:

Exhibit 10.2

AMENDED AND RESTATED SYNOVUS FINANCIAL CORP.
DIRECTORS’ DEFERRED COMPENSATION PLAN

Effective as of the 1 ^st day of January, 2009, Synovus Financial Corp. (the “Company”) hereby approves and adopts the Amended and Restated Synovus Financial Corp. Directors’ Deferred Compensation Plan (the “Plan”).

BACKGROUND AND PURPOSE

A. Goal . The Company desires to provide members of its Board of Directors with an opportunity (i) to defer the receipt and income taxation of a portion of such directors’ retainers, fees, and other compensation as described in the Plan; and (ii) to receive an investment return on those deferred amounts.

B. Purpose . The purpose of the Plan is to set forth the terms and conditions pursuant to which these deferrals may be made and deemed invested and to describe the nature and extent of the Directors’ rights to their deferred amounts.

C. Type of Plan . The Plan constitutes an unfunded, nonqualified deferred

compensation plan and is intended to meet the requirements of Code Section 409A.

ARTICLE I
DEFINITIONS

For purposes of the Plan, each of the following terms, when used with an initial capital letter, shall have the meaning set forth below unless a different meaning plainly is required by the context.

1.1 “Account” shall mean, with respect to a Participant or Beneficiary, the total notional dollar amount or value evidenced by the last balance posted in accordance with the terms of the Plan to the record established for such Participant or Beneficiary with respect to the Deferral Contributions of such Participant for any Plan Year.

1.2 “Beneficiary” shall mean, with respect to a Participant, the person(s) determined in accordance with Section 5.5 to receive any death benefits that may be payable under the Plan upon the death of the Participant.

1.3 “Board” shall mean the Board of Directors of Synovus Financial Corp.

1.4 “Business Day” shall mean each day on which the New York Stock Exchange operates and is open to the public for trading.

1.5 “Code” shall mean the Internal Revenue Code of 1986, as amended.

1.6 “Company” or “Synovus” shall mean Synovus Financial Corp., a Georgia corporation.

1.7 “Compensation” shall mean the total of the directors’ fees and retainers which actually would be payable to a Director in cash during a Plan Year absent a Deferral Election under this Plan.

1.8 “Deferral Contributions” shall mean, for each Plan Year, that portion of a Participant’s Compensation deferred under the Plan pursuant to Section 3.2.

1.9 “Deferral Election” shall mean a written election form provided by the Plan Administrator on which a Participant may elect to defer under the Plan all or a portion of such individual’s Compensation for a Plan Year.

1.10 “Director” shall mean a member of the Board.

1.11 “Effective Date” shall mean January 1, 2009. The original effective date of the Plan was January 1, 2002.

1.12 “Election Deadline” shall mean, with respect to a Plan Year:

(a) For a Director who is then a member of the Board, the December 20 (or if December 20 is not a Business Day, the last Business Day immediately preceding December 20) immediately preceding the first day of such Plan Year.

(b) For a Director who is first elected by shareholders to be a member of the Board after (or within thirty (30) days before) the Election Deadline described in Section 1.12(a) above with respect to a Plan Year, the date which is thirty (30) days after the date the Director first becomes eligible to participate in the Plan.

1.13 “Investment Election” shall mean a written election form provided by the Plan Administrator on which a Participant may elect to have such individual’s Deferral Contributions for a Plan Year (and all investment earnings attributable thereto) invested to the extent permitted under the terms of the Plan.

1.14 “Investment Options” shall mean (a) any designated open-end registered investment company for which Fidelity Investments or one of its subsidiaries or affiliates (collectively “Fidelity”) serves as investment advisor or for which Fidelity is the principal underwriter,, and (b) any other investment option selected by the Plan Administrator.

1.15 “Participant” shall mean any person participating in the Plan pursuant to the provisions of Article II.

1.16 “Plan” shall mean the Synovus Financial Corp. Directors’ Deferred Compensation Plan, as contained herein and all amendments hereto.

1.17 “Plan Administrator” shall mean the Company’s Compensation Committee and any individual or committee the Board designates to act on the Compensation Committee’s behalf with respect to any or all of the Compensation Committee’s responsibilities hereunder.

1.18 “Plan Year” shall mean each calendar year period beginning on January 1 on ending on December 31 of the succeeding calendar year.

1.19 “Specified Employee” shall mean specified employee within the meaning of Section 409A.

1.20 “Valuation Date” shall mean each business day in the Plan Year and such other date(s) as designated by the Plan Administrator.

ARTICLE II
ELIGIBILITY AND PARTICIPATION

2.1 Annual Participation . Each individual who is a Director as of the first day of a Plan Year and is a member of the Board before the beginning of such Plan Year shall be eligible to defer all or a portion of such individual’s Compensation and thereby to actively participate in the Plan for such Plan Year. Such individual’s participation shall become effective as of the first day of such Plan Year, assuming such individual properly and timely completes the election procedures described below.

2.2 Interim Plan Year Participation . Each individual who becomes a Director during a Plan Year shall be immediately eligible to make a Deferral Election and thereby to participate actively in the Plan for the remainder of such Plan Year.

2.3 Election Procedures . Each Director shall elect to defer all or a portion of such individual’s Compensation and thereby become an active Participant for a Plan Year by delivering a completed Deferral Election and an Investment Election by the Election Deadline. The Plan Administrator also may require the Director to complete other forms and provide other data, as a condition of participation in the Plan.

2.4 Cessation of Eligibility . A Director’s active participation in the Plan shall terminate, and such individual shall not be eligible to make any additional Deferral Contributions for any portion of a Plan Year following the date such individual’s service as a Director with Synovus Financial Corp. ceases. In addition, an individual who actively participated in the Plan during prior Plan Years but who is not a Director or does not complete the election procedures, for a subsequent Plan Year, shall cease active participation in the Plan for such subsequent Plan Year. Even if an individual’s active participation in the Plan ends, such individual shall remain an inactive Participant in the Plan until the earlier of (i) the date the full amount of such individual’s Accounts is

distributed from the Plan, or (ii) the date such individual again becomes a Director and recommences active participation in the Plan. During the period of time that an individual is an inactive Participant in the Plan, such individual’s Accounts shall continue to be credited with earnings as provided in the Plan.

ARTICLE III
PARTICIPANTS’ ACCOUNTS; DEFERRAL CONTRIBUTIONS

3.1 Participants’ Accounts .

(a) Establishment of Accounts . The Plan Administrator shall establish and maintain an Account on behalf of each Participant for each Plan Year for which the Participant makes Deferral Contributions. The Plan Administrator shall credit each Participant’s Account with the Participant’s Deferral Contributions for such Plan Year and earnings attributable thereto, and shall maintain such Account until the value thereof has been distributed to or on behalf of the Participant or the Participant’s Beneficiary.

3.2 Deferral Contributions .

(a) Each Director may irrevocably elect to have Deferral Contributions made for a Plan Year by completing in a timely manner a Deferral Election and an Investment Election and following other election procedures as provided in Section 2.3. Subject to any modifications, additions or exceptions that the Plan Administrator, in its sole discretion, deems necessary, appropriate or helpful, the following terms shall apply to such Deferral Elections:

(b) Effective Date . A Participant’s Deferral Election for all or a portion of a Plan Year shall be effective beginning with the first Compensation (i) in such Plan Year with respect to a Participant participating for the entire Plan Year, and (ii) with respect to a Participant participating for a portion of a Plan Year, in the calendar month following the calendar month in which the Participant makes a Deferral Election. To be effective, a Participant’s Deferral Election must be made by the Election Deadline. Any Participant who fails to deliver a Deferral Election, or to complete any of the other requisite election procedures, in a timely manner, shall be deemed to have elected not to participate in the Plan for that Plan Year.

(c) Term . Each Participant’s Deferral Election regarding Compensation for a Plan Year shall remain in effect with respect to a portion of all Compensation paid or payable during such Plan Year, but shall not apply to any subsequent Plan Year.

(d) Deferral Amount . To defer Compensation, a Participant’s Deferral Election shall specify the percentage of Compensation for a Plan Year to be deferred. A Director may defer for any Plan Year zero percent (0%) or one hundred percent (100%) of the Participant’s Compensation for such Plan Year.

The percentage so elected shall be withheld from each payment of Compensation otherwise payable to such Participant during the Plan Year. Notwithstanding any provision of this Plan or a Deferral Election to the contrary, however, the amount withheld from any payment of Compensation shall be reduced automatically, if necessary, so that it does not exceed the amount of such payment net of all withholding, allotments and deductions, other than any reduction pursuant to such Deferral Election. No amounts shall be withheld during any period an individual ceases to receive Compensation as a Director for any reason during the Plan Year.

(e) Revocation . Once made for a Plan Year, a Participant may not revoke a Deferral Election for such Plan Year.

(f) Crediting of Deferral Contributions . The Plan Administrator shall credit to each Participant’s Account for a Plan Year the amount of Compensation reflected on the Participant’s Deferral Election as of the date(s) on which such Compensation would have been paid if not subject to the Participant’s Deferral Election.

3.3 Vesting . A Participant shall at all times be fully vested in such Participant’s Deferral Contributions and all deemed investment earnings attributable thereto.

ARTICLE IV
DETERMINATION AND CREDITING OF INVESTMENT RETURN

4.1 General Investment Parameters . The rate of return credited to each Participant’s Accounts shall be determined on the basis of the Investment Option(s) applicable to the Participant’s Accounts.

4.2 Investment of Existing Account Balances . A Participant may change the percentage of an existing Account balance that will be invested in Investment Options in accordance with procedures established by the Plan Administrator.

4.3 Investment Subaccounts . For the sole purpose of tracking a Participant’s investment elections and calculating investment earnings attributable to a Participant’s Account for a Plan Year pursuant to the terms of this Article IV, the Plan Administrator may establish and maintain for such Participant for such Plan Year separate subaccounts, as necessary, the total of which shall equal such Participant’s Account for such Plan Year.

ARTICLE V
PAYMENT OF ACCOUNT BALANCES

5.1 Benefit Amounts .

(a) Benefit Entitlement . As the benefit under the Plan, each Participant (or Beneficiary) shall be entitled to receive the total amount of the Participant’s

(or Beneficiary’s) Accounts, determined as of the most recent Valuation Date, and payable at such times and in such forms as described in this Article V.

(b) Valuation of Benefit . For purposes hereof, each Account of a Participant as of any Valuation Date shall be equal to (i) the total amount of all of such Participant’s Deferral Contributions credited thereto; plus or minus (as applicable) (ii) all investment earnings or losses attributable thereto; minus (iii) the total amount of all benefit payments previously made therefrom.

5.2 Elections of Timing and Form . In conjunction with, and at the time of, completing a Deferral Election for each Plan Year, a Participant shall select the timing and form of the distribution that will apply to the Account of such Participant for Deferral Contributions (and investment earnings attributable thereto) for such Plan Year. The terms applicable to this selection process are as follows:

(a) Timing . For a Participant’s Account for each Plan Year, the Participant may elect that distribution will be made or commence as of: (1) any January 1 following a special date, (2) the January 1 immediately following the date a Participant attains a specified age, or (3) the January 1 immediately following the Participant’s cessation of service as a Director of the Company. The special date or age selected above must be at least two years after the Plan Year for which the Deferral Contributions are made.

(b) Form of Distribution . For a Participant’s Account for each Plan Year, the Participant may elect that the distribution will be paid in one of the following forms:

(i) a single lump-sum cash payment; or

(ii) substantially equal annual installments (adjusted for investment earnings or losses between payments in the manner described in Article IV) over a period of five (5) to ten (10) years.

(c) Multiple Selections . A Participant may select a different benefit payment or commencement date and/or a different form of distribution with respect to such Participant’s Account for each Plan Year. For ease of administration, the Plan Administrator may combine Accounts and subaccounts of a Participant to which the same benefit payment/commencement date and the same form of distribution apply.

5.3 Benefit Payments to a Participant .

(a) Timing . A Participant shall receive or begin receiving a distribution of each of such Participant’s Accounts as of the January 1 selected by such Participant with respect to each such Account pursuant to the terms of Section 5.2(a). An amount payable “as of” any January 1 shall be made as soon as

practicable after such January 1 and, unless extenuating circumstances arise, no later than January 31, provided that under no circumstances, such payment will be made more than 90 days after January 1.

(b) Form of Distribution . A Participant shall receive or begin receiving a distribution of each of such Participant’s Accounts in cash in the form selected by such Participant with respect to such Account pursuant to the terms of Section 5.2(b).

(c) Valuation of Single Lump-Sum Payments . The amount of a Participant’s single lump-sum distribution of any of such Participant’s Accounts as of any applicable January 1 shall be equal to the value of such Account as of the Valuation Date immediately preceding the date on which such distribution is paid.

(d) Valuation of Installment Payments . For purposes of determining the amount of any installment payment to be paid as of a January 1 from an Account, the Account balance shall be divided by the number of remaining installments to be paid from such Account (including the current installment).

(e) Mandatory 6 Month Delay . Notwithstanding anything in this Section 5.3 to the contrary, in the case where a Participant is a Specified Employee, any payment made under this Plan on account of such Participant’s cessation of service as a Director of the Company shall commence no earlier than the first day of the seventh month following the Participant’s termination of employment from the Company. In the case of installment payments under Section 5.2(b) that would have otherwise been paid during the first six months following the Participant’s termination of employment from the Company, the first payment will include a lump sum payment equal to any annual installment that would have been made during such 6 month delay.

5.4 Death Benefits.

(a) General . If a Participant dies before receiving the entire amount of the benefit under the Plan, such Participant’s Beneficiary shall receive distribution of amounts remaining in the Participant’s Accounts in the form, as elected by the Participant on a Beneficiary designation form described in Section 5.5, of either:

(i) a single lump-sum cash payment of the entire balance in the Participant’s Accounts as of the January 1 immediately following the date of the Participant’s death; or

(ii) (A) for Accounts with respect to which distribution has not commenced under Section 5.2 at the time of the Participant’s death, substantially equal annual installments (adjusted for investment earnings between payments in the manner described in Article IV) over a period of

five (5) to ten (10) years, commencing as of the January 1 immediately following the Participant’s death; and (B) for Accounts with respect to which distribution has commenced in the form of installments described in Section 5.2(b)(ii) at the time of the Participant’s death, continuation of such installment payment schedule.

An amount payable “as of” any January 1 shall be made as soon as practicable after such January 1 and, unless extenuating circumstances arise, no later than January 31, provided that under no circumstances, such payment will be made more than 90 days after January 1.

(b) Valuation . The valuation rules described in subsections 5.3(c) and 5.3(d) shall apply to payments described in this Section 5.4.

5.5 Beneficiary Designation .

(a) General . A Participant shall designate a Beneficiary or Beneficiaries for all of such Participant’s Accounts by completing the form prescribed for this purpose for the Plan by the Plan Administrator and submitting such form as instructed by the Plan Administrator. Once a Beneficiary designation is made, it shall continue to apply until and unless such Participant makes and submits a new Beneficiary designation form for this Plan.

(b) No Designation or Designee Dead or Missing . In the event that:

(i) a Participant dies without designating a Beneficiary;

(ii) the Beneficiary designated by a Participant is not surviving or in existence when payments are to be made or commence to such designee under the Plan, and no contingent Beneficiary, surviving or in existence, has been designated; or

(iii) the Beneficiary designated by a Participant cannot be located by the Plan Administrator within 1 year from the date benefit payments are to be made or commence to such designee;

then, in any of such events, the Beneficiary of such Participant shall be the Participant’s surviving spouse, if any, who can then be located, and if not, the estate of the Participant. The entire balance in the Participant’s Accounts shall be paid to such Beneficiary in the form of a single lump-sum cash payment described in Section 5.4(a)(i).

(c) Death of Beneficiary . If a Beneficiary who survives the Participant, and to whom payment of Plan benefits commences, dies before complete distribution of the Participant’s Accounts, the entire balance in such Accounts shall be paid to the estate of such Beneficiary in the form of a single lump-sum

cash payment as of the January 1 immediately following such Beneficiary’s death. An amount payable “as of” any January 1 shall be made as soon as practicable after such January 1 and, unless extenuating circumstances arise, no later than January 31, provided that under no circumstances, such payment will be made more than 90 days after January 1 The valuation rules described in subsection 5.3(c) shall apply to any payments described in this subsection 5.5(c).

5.6 Unforeseeable Financial Emergency . A Participant who believes he or she is suffering an “Unforeseeable Financial Emergency” may apply to the Plan Administrator for a distribution under the Plan in order to alleviate such emergency. An “Unforeseeable Financial Emergency” shall mean a severe financial hardship resulting from an illness or accident of the Participant or a dependent (as defined in Section 152 of the Code without regard to Section 152(b)(1), (b)(2), and (d)(1)(B)), loss of the Participant’s property due to casualty (including the need to rebuild a home not otherwise covered by insurance), or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. Except as otherwise provided herein, the purchase of a home and the payment of college tuition are not unforeseeable emergencies. Whether a Participant or dependent is faced with an unforeseeable emergency is to be determined by the Plan Administrator based on the relevant facts and circumstances of each case, but, in any case, a distribution on account of an unforeseeable emergency may not be made to the extent that such emergency is or may be relieved through reimbursement or compensation from insurance or otherwise, by liquidation of the Participant’s assets, to the extent the liquidation of such assets would not cause severe financial hardship, or by cessation of deferrals under the arrangement. If the Plan Administrator determines, in its sole discretion, that a Participant qualified for a distribution due to an Unforeseeable Financial Emergency, the Participant will receive a distribution in an amount which it determines is necessary or appropriate, not to exceed the Participant’s Account balance, and the Plan Administrator shall pay such amount to the Participant in a single lump sum cash payment.

5.7 Taxes . If the whole or any part of any Participant’s or Beneficiary’s benefit hereunder shall become subject to any estate, inheritance, income, employment or other tax which a Company shall be required to pay or withhold, the Company shall have the full power and authority to withhold and pay such tax out of any monies or other property in its hand for the account of the Participant or Beneficiary whose interests hereunder are so affected. Prior to making any payment, the Company may require such releases or other documents from any lawful taxing authority as it shall deem necessary.

ARTICLE VI
CLAIMS

6.1 Initial Claim . Claims for benefits under the Plan may be filed with the Plan Administrator on forms or in such other written documents, as the Plan Administrator may prescribe. The Plan Administrator shall furnish to the claimant written notice of the

disposition of a claim within 90 days after the application therefor is filed. In the event the claim is denied, the notice of the disposition of the claim shall provide the specific reasons for the denial, citations of the pertinent provisions of the Plan, and, where appropriate, an explanation as to how the claimant can perfect the claim and/or submit the claim for review.

6.2 Appeal . Any Participant or Beneficiary who has been denied a benefit shall be entitled, upon request to the Plan Administrator, to appeal the denial of the claim. The claimant (or a duly authorized representative) may review pertinent documents related to the Plan and in the Plan Administrator’s possession in order to prepare the appeal. The request for review, together with written statement of the claimant’s position, must be filed with the Plan Administrator no later than 60 days after receipt of the written notification of denial of a claim provided for in Section 6.1. The Plan Administrator’s decision shall be made within 60 days following the filing of the request for review. If unfavorable, the notice of the decision shall explain the reasons for denial and indicate the provisions of the Plan or other documents used to arrive at the decision.

6.3 Satisfaction of Claims . The payment of the benefits due under the Plan to a Participant or Beneficiary shall discharge the Company’s obligations under the Plan, and neither the Participant nor the Beneficiary shall have any further rights under the Plan upon receipt by the appropriate person of all benefits. In addition, (i) if any payment is made to a Participant or Beneficiary with respect to benefits described in the Plan from any source arranged by the Company including, without limitation, any fund, trust, insurance arrangement, bond, security device, or any similar arrangement, such payment shall be deemed to be in full and complete satisfaction of the obligation of the Company under the Plan to the extent of such payment as if such payment had been made directly by such Company.

ARTICLE VII
PLAN ADMINISTRATION

7.1 Rights and Duties of the Plan Administrator . The Plan Administrator shall administer the Plan and shall have all powers necessary to accomplish that purpose, including (but not limited to) the following:

(a) to construe, interpret and administer the Plan;

(b) to make determinations required by the Plan, and to maintain records regarding Participants’ and Beneficiaries’ benefits hereunder;

(c) to compute and certify to Company the amount and kinds of benefits payable to Participants and Beneficiaries, and to determine the time and manner in which such benefits are to be paid;

(d) to authorize all disbursements by Company pursuant to the Plan;

(e) to maintain all the necessary records of the administration of the Plan;

(f) to make and publish such rules and procedures for the regulation of the Plan as are not inconsistent with the terms hereof;

(g) to delegate to other individuals or entities from time to time the performance of any of its duties or responsibilities hereunder; and

(h) to hire agents, accountants, actuaries, consultants and legal counsel to assist in operating and administering the Plan.

The Plan Administrator shall have the exclusive right to construe and interpret the Plan, to decide all questions of eligibility for benefits and to determine the amount of such benefits, and its decisions on such matters shall be final and conclusive on all parties.

7.2 Bond; Compensation . The Plan Administrator and (if applicable) its members shall serve as such without bond and without compensation for services hereunder. All expenses of the Plan Administrator shall be paid by the Company.

ARTICLE VIII
AMENDMENT AND TERMINATION

8.1 Amendments . Subject to Section 8.3, the Board shall have the right, in its sole discretion, to amend the Plan in whole or in part at any time and from time to time. In addition, the Plan Administrator shall have the right, in its sole discretion, to amend the Plan at any time and from time to time so long as such amendment will not result in a material increase in liabilities associated with the Plan.

8.2 Termination of Plan . Subject to Section 8.3, the Company reserves the right to discontinue and terminate the Plan at any time, for any reason. Any action to terminate the Plan shall be taken by the Board and such termination shall be binding on the Company, Participants and Beneficiaries; provided, however, the Plan may not be terminated before the date on which all amounts credited to all Participant accounts have been distributed in accordance with Article 5, except as permitted under Code Section 409A and Treas. Reg. Section 1.409A-3(j)(ix).

8.3 Limitation on Authority . Except as otherwise provided in this Section 8.3, no contractual right created by and under any Deferral Election made prior to the effective date of any amendment or termination shall be abrogated by any amendment or termination of the Plan, absent the express, written consent of the Participant who made the Deferral Election.

(a) Plan Amendments . The limitation on authority described in this Section 8.3 shall not apply to any amendment of the Plan which is reasonably necessary, in the opinion of counsel, (i) to preserve the intended income tax consequences of the Plan described in Section 9.1, or (ii) to guard against other material adverse impacts on Participants and Beneficiaries, and which, in the opinion of counsel, is drafted primarily to preserve such intended consequences, or status, or to guard against such adverse impacts.

(b) Plan Termination . The limitation on authority described in this Section 8.3 shall not apply to any termination of the Plan as the result of a determination that, in the opinion of counsel, Participants and Beneficiaries generally are subject to federal income taxation on Deferral Contributions or other amounts in Participant Accounts prior to the time of distribution of amounts under the Plan but only if such termination is reasonably necessary, in the opinion of counsel, to guard against material adverse impacts on Participants and Beneficiaries, or the Company; provided, however, the Plan may not be terminated before the date on which all amounts credited to all Participant accounts have been distributed in accordance with Article 5, except as permitted under Code Section 409A and Treas. Reg. Section 1.409A-3(j)(ix).

(c) Opinions of Counsel . In each case in which an opinion of counsel is contemplated in this Section 8.3, such opinion shall be in writing and delivered to the Board, rendered by a nationally recognized law firm selected or approved by the Board.

ARTICLE IX
MISCELLANEOUS

9.1 Taxation . It is the intention of the Company that the benefits payable hereunder shall not be deductible by the Company nor taxable for federal income tax purposes to Participants or Beneficiaries until such benefits are paid by the Participating Company to such Participants or Beneficiaries. When such benefits are so paid, it is the intention of the Company that they shall be deductible by the Company under Code Section 162.

9.2 Withholding . All payments made to a Participant or Beneficiary hereunder shall be reduced by any applicable federal, state or local withholding or other taxes or charges as may be required under applicable law.

9.3 No Continued Directorship . Nothing herein contained is intended to be nor shall be construed as constituting a contract or other arrangement between the Company and any Participant to the effect that the Participant will be employed by the Company or continue to be a Director for any specific period of time.

9.4 Headings . The headings of the various articles and sections in the Plan are solely for convenience and shall not be relied upon in construing any provisions hereof. Any reference to a section shall refer to a section of the Plan unless specified otherwise.

9.5 Gender and Number . Use of any gender in the Plan will be deemed to include all genders when appropriate, and use of the singular number will be deemed to include the plural when appropriate, and vice versa in each instance.

9.6 Assignment of Benefits . The right of a Participant or Beneficiary to receive payments under the Plan may not be anticipated, alienated, sold, assigned, transferred, pledged, encumbered, attached or garnished by creditors of such Participant or Beneficiary, except by will or by the laws of descent and distribution and then only to the extent permitted under the terms of the Plan.

9.7 Legally Incompetent . The Plan Administrator, in its sole discretion, may direct that payment be made to an incompetent or disabled person, for whatever reason, to the guardian of such person or to the person having custody of such person, without further liability on the part of the Company for the amount of such payment to the person on whose account such payment is made.

9.8 Entire Document . This Plan document sets forth the entire Plan and all rights and limits. Except for a formal amendment hereto, no document shall modify the Plan or create any additional rights or benefits.

9.9 Governing Law . The Plan shall be construed, administered and governed in all respects in accordance with applicable federal law and, to the extent not preempted by federal law, in accordance with the laws of the State of Georgia. If any provisions of this instrument shall be held by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions hereof shall continue to be fully effective.

9.10 No Funding . The Plan constitutes a mere promise by the Company to make benefit payments to such Participants and Beneficiaries in the future and Participants and Beneficiaries shall have the status of general unsecured creditors of the Company. Any Accounts established pursuant to the Plan shall remain the property of the Company until distributed, and nothing in the Plan will otherwise be construed to create a trust or to obligate the Company or any other person to segregate a fund, purchase an insurance contract, or in any other way currently to fund the future payment of any benefits hereunder, nor will anything herein be construed to give any employee or any other person rights to any specific assets of the Company or of any other person. The Company may, in its sole discretion, create a grantor trust to pay its obligations hereunder, but shall have no obligation to do so. In all events, it is the intent of the Company that the Plan be treated as unfunded for tax purposes. This Plan is not subject to the provisions of the Employee Retirement Income Security Act of 1974.

Exhibit 10.3

SECOND AMENDED AND RESTATED
SYNOVUS FINANCIAL CORP.
DEFERRED COMPENSATION PLAN

EFFECTIVE JANUARY 1, 2009

PLAN DOCUMENT

INTRODUCTION

	A.		Purpose of Plan . The Employer has adopted the Plan set forth herein to provide benefits in excess of those that may be accrued under the Employer’s qualified retirement plans as a result of the limitations of Code Section 401(a)(17) and 415 as a means by which certain designated employees may elect to defer designated portions of their Compensation, or in the discretion of the Employer, receive additional amounts of deferred compensation in the form of Discretionary Credits.

	B.		Status of Plan . To the extent the Plan provides benefits in excess of the limitations of Code Section 415, the Plan is intended to be an “excess benefit plan” within the meaning of Sections 3(36) and 4(6) of ERISA, and to the extent the Plan provides other benefits, the Plan is intended to be “a plan which is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees” within the meaning of Sections 201(2), 301(a)(3), 401(a)(1), and 4021(b)(6) of ERISA, and shall be interpreted and administered to the extent possible in a manner consistent with that intent. This Plan is intended to constitute a nonqualified deferred compensation plan and to meet the requirements of Code Section 409A.

II.		DEFINITIONS

		Wherever used herein, the following terms have the meanings set forth below, unless a different meaning is clearly required by the context:

	A.		“Account” means, for each Participant, the bookkeeping account established for his or her benefit under the Plan.

	B.		“Code” means the Internal Revenue Code of 1986, as amended from time to time. Reference to any section or subsection of the Code includes reference to any comparable or succeeding provisions of any legislation that amends, supplements or replaces such section or subsection.

	C.		“Compensation” means, with respect to a Participant, his or her base salary, including any bonuses, overtime, commissions and incentives. Compensation shall not include any amounts previously deferred under this Plan or any other nonqualified deferred compensation plan.

	D.		“Discretionary Credit” means an amount credited to a Participant’s Account by the Employer in accordance with Section IV.B.

	E.		“Effective Date” means January 1, 2002.

	F.		“Elective Deferral” means the portion of Compensation which is deferred by a Participant under Section IV.A.

	G.		“Eligible Employee” means each individual selected by the Plan Administrator for eligibility from among the group of highly compensated or managerial employees of the Employer.

	H.		“Employer” means Synovus Financial Corp. and any of its affiliates.

	I.		“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time. Reference to any section or subsection of ERISA includes reference to any comparable or succeeding provisions of any legislation that amends, supplements or replaces such section or subsection.

	J.		“Participant” means any individual who participates in the Plan in accordance with Article III.

	K.		“Plan” means the Second Amended and Restated Synovus Financial Corp. Deferred Compensation Plan and as set forth herein and all subsequent amendments hereto.

	L.		“Plan Administrator” means the Employer, or the person, persons or entity otherwise designated by the Employer to administer the Plan.

	M.		“Plan Year” means the calendar year, except that the initial plan year may be a period of less than 12 months’ duration beginning on the Effective Date.

	N.		“Valuation Date” means each business day in the Plan year and any such other date designated by the Plan Administrator.

	O.		“Vested” means the nonforfeitable right to a portion of the Participant’s Account attributable to Discretionary Credits, if any, determined in accordance with the vesting schedule set forth in Section V.D.

III.

PARTICIPATION

	A.		Commencement of Participation . Any individual who is an Eligible Employee on or after the Effective Date and who has elected to defer part of his or her Compensation in accordance with Section IV.A or who has been selected to receive Discretionary Credits under Section IV.B shall become a Participant on the date such Elective Deferral election or Discretionary Credit is made, as the case may be.

	B.		Continued Participation . Subject to Section III.C, an individual who has become a Participant in the Plan shall continue to be a Participant so long as any amount remains credited to his or her Account.

	C.		Termination of Participation . The Plan Administrator may terminate an employee’s participation in the Plan prospectively for any reason, effective as of

the first day of the Plan Year following such termination of participation, including but not limited to the Plan Administrator’s determination that such termination is necessary in order to maintain the Plan as a “plan which is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees” within the meaning of Sections 201(2), 301(a)(3), 401(a)(1), and 4021(b)(6) of ERISA. Amounts credited to a Participant’s Account (regardless of the extent otherwise Vested) shall be paid out to such Participant in accordance with the Participant’s election under Article VI.

IV.

DEFERRALS AND CREDITS

Elective Deferrals .

	1.		In general. An individual who is an Eligible Employee may elect to defer a designated portion of Compensation to be earned during a Plan Year, by filing an irrevocable written election with the Plan Administrator prior to the first day of the Plan Year in which such Compensation is to be earned. An individual who first becomes an Eligible Employee on or after the first day of any Plan Year may elect to defer a designated portion of his or her Compensation by filing an irrevocable written election with the Plan Administrator on or before the date that is 30 days after the date on which the employee first becomes an Eligible Employee. The deferral election shall apply only to Compensation earned after the date on which the Eligible Employee files his or her deferral election form.

	2.		Nature of Election. Each election under this Section IV for a Plan Year (or the balance of a Plan Year) shall be made on a form approved or prescribed by the Plan Administrator and shall apply only to Compensation earned for the calendar year after the date the election form is completed and filed with the Plan Administrator. The election form shall apply to bonuses and shall specify the whole percentage or flat dollar amount that is to be deferred. A Participant may revoke his or her deferral election as of the first day of any Plan Year which follows such revocation by giving written notice to the Plan Administrator before that day (or any such earlier date as the Plan Administrator may prescribe). Any deferral election made under this Section IV.A shall continue to be effective until revoked or changed pursuant to this paragraph.

Excess Benefit Credits . The Employer shall credit the Account of each Participant with the excess of any employer contributions that would have been allocated to the Participant’s account under the Synovus Money Purchase Pension Plan (the “Money Purchase Plan”), the Synovus Profit Sharing Plan (the “Profit Sharing Plan”) or the Synovus 401(k) Savings Plan (the “401(k) Plan”) but for the limitation of Code Sections 401(a)(17) and 415 over the amount actually credited to such account; such credits to be made as of the date or dates that the amounts would have been allocated to the Participant’s account under the Money Purchase Plan, the Profit Sharing Plan or the 401(k) Plan.

ACCOUNTS

	A.		Accounts . The Plan Administrator shall establish an Account for each Participant reflecting Elective Deferrals or Discretionary Credits made for the Participant’s benefit together with any adjustments hereunder. Subject to Sections V.E and IX.A, the Employer shall deposit the amount of deferrals and credits for a period as soon as practicable after the date as of which such amounts are credited to the Accounts. As of each Valuation Date, the Plan Administrator shall provide the Participant with a statement of his or her Account reflecting the income, gains and losses (realized and unrealized), amounts of deferrals and credits, and distributions of such Account since the prior Valuation Date.

	B.		Investments . Each Participant’s Account shall be deemed invested in shares of any open-end registered investment company for which Fidelity Investments or one of its subsidiaries or affiliates (collectively “Fidelity”) serves as investment advisor or for which Fidelity is the principal underwriter, or any other investment option selected by the Plan Administrator. If any Participant or beneficiary makes an investment selection, the Employer (or in the event of the establishment of a trust hereunder, the trustee of such trust as directed by the Employer) may follow such investment selection but shall not be legally bound to do so.

	C.		Payments . Each Participant’s Account shall be reduced by the amount of any payment made to or on behalf of the Participant under Article VI as of the date such payment is made.

	D.		Vesting . A Participant will at all times be 100% Vested in the portion of his or her Account attributable to Elective Deferrals. A Participant will be vested in the portion of his or her Account attributable to Excess Benefit Credits from the Profit Sharing Plan or the Money Purchase Pension Plan according to the following schedule, based on his or her years of service with the Employer. A Participant’s years of service for this purpose will be determined by the Administrator pursuant to uniform rules based on the time elapsed since the Participant’s commencement of employment with the Employer or its affiliates.


Years of Service		% Vested
less than 1		0
2		25
3		50
4		75
5 or more		100

Forfeiture of non-Vested Amounts . To the extent that any amounts credited to a Participant’s Account are not Vested at the time the Account becomes distributable under the Plan, such non-Vested amounts shall be forfeited and may be used by the Employer as future Discretionary Credits for other Participants.

Plan Mergers . From time to time, other non-qualified deferred compensation plans may be merged into the Plan. All Accounts resulting from such merged plans will be 100% vested as of the date of merger. A list of merged plans, together with any special terms and conditions adopted in connection with the merger, is attached to the Plan as Exhibit “A.”

VI.

PAYMENTS

	A.		Unforeseeable Financial Emergency . A Participant who believes he or she is suffering an “Unforeseeable Financial Emergency” may apply to the Plan Administrator for a distribution under the Plan in order to alleviate such emergency. An “Unforeseeable Financial Emergency” shall mean a severe financial hardship resulting from an illness or accident of the Participant or a dependent (as defined in Section 152 of the Code without regard to Section 152(b)(1), (b)(2), and (d)(1)(B)), loss of the Participant’s property due to casualty (including the need to rebuild a home not otherwise covered by insurance), or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. Except as otherwise provided herein, the purchase of a home and the payment of college tuition are not unforeseeable emergencies. Whether a Participant or dependent is faced with an unforeseeable emergency is to be determined by the Plan Administrator based on the relevant facts and circumstances of each case, but, in any case, a distribution on account of unforeseeable emergency may not be made to the extent that such emergency is or may be relieved through reimbursement or compensation from insurance or otherwise, by liquidation of the Participant’s assets, to the extent the liquidation of such assets would not cause severe financial hardship, or by cessation of deferrals under the arrangement. If the Plan Administrator determines, in its sole discretion, that a Participant qualified for a distribution due to an Unforeseeable Financial Emergency, the Employer shall be directed to pay to the Participant an amount which it determines is necessary or appropriate, not to exceed the Vested portion of the Participant’s Account balance, and the Employer shall pay such amount to the Participant in a single lump sum cash payment..

	B.		Timing of Distribution . Each Participant shall specify as part of his or her deferral election under Section IV.A, the date on which the Elective Deferrals and/or Discretionary Credits made on his or her behalf, if any, shall be distributed. The Participant may elect the timing of the payment of all vested amounts credited to his or her Account from one of the following options:

the January 1 following a specified date, which must be at least two years after the Plan Year for which the Elective Deferrals or Discretionary Credits are made, or

subject to Section VI.C below, within 90 days following termination of employment for any reason including retirement or death.

			The foregoing election shall be made on a form approved or prescribed by the Plan Administrator. A Participant may irrevocably elect to subsequently postpone such distribution provided that: (i) the subsequent election shall not take effect for at least 12 months after the date on which it is made; (ii) the subsequent election must be made at least 12 months prior to the original payment date; and (iii) the subsequent election shall result in a new payment date that is delayed by at least five (5) years, as measured from the original payment date. Any subsequent election must be in writing, filed in a manner acceptable to the Plan Administrator and comply with such other restrictions, consistent with Section 409A, that are imposed generally by the Plan Administrator on such postponements.

			If no election is in effect with respect to a portion of a Participant’s Account, subject to Section VI.C below, payment will be made within 90 days following termination of employment for any reason including retirement or death.

	C.		Mandatory 6 Month Delay . Notwithstanding anything in this Article VI to the contrary, any payment made under this Plan on account of the Participant’s termination of employment for any reason, except on account of death, shall commence no earlier than the first day of the seventh month following the Participant’s termination of employment from the Employer. In the case of installment payments under Section VI.E that would have otherwise been paid during the first six months following the Participant’s termination of employment, the first payment will include a lump sum payment equal to any annual installment that would have been made during such 6 month delay.

	D.		Beneficiary Designation . A Participant shall designate a beneficiary who shall be entitled to receive any Vested amounts remaining in the Participant’s Account after his or death. Such designation shall be made in writing on a form approved or prescribed by the Plan Administrator, and may be changed by the Participant at any time. If there is no such designation or no designated beneficiary survives the Participant, payment shall be made to the Participant’s estate.

	E.		Form of Payment .

Each Participant shall specify as part of his or her deferral election under Section IV.A a form of payment of the Elective Deferrals and/or Discretionary Credits, made on his or her behalf, if any. The Participant may elect the form of payment of all Vested amounts credited to his or her Account from one of the following options:

a single lump sum payment; or

annual installments over a period elected by the Participant up to 10 years, the amount of each installment to equal the balance of his or her Account immediately prior to the installment divided by the number of installments remaining to be paid.

			The foregoing election shall be made on a form approved or prescribed by the Plan Administrator. A Participant may irrevocably elect to subsequently change such form of payment provided that: (i) the subsequent election shall not take effect for at least 12 months after the date on which it is made; (ii) the subsequent election must be made at least 12 months prior to the original payment date; and (iii) the subsequent election shall result in a new payment date that is delayed by at least five (5) years, as measured from the original payment date. Any subsequent election must be in writing, filed in a manner acceptable to the Plan Administrator and comply with such other restrictions, consistent with Section 409A, that are imposed generally by the Plan Administrator on such postponements.

			If no election is in effect with respect to a portion of a Participant’s Account, payment will be made in the form of annual installments for a period of 10 years.

			Payments under this Section shall be made in cash. Any such election shall be made in such form and with such prior notice as the Administrator may require. Regardless of the Participant’s election, if the Participant’s vested Account balance is less than or equal to $10,000 the distribution will be made in a single lump sum payment.

VII.

ADMINISTRATION

Plan Administrator; Interpretation. The Plan Administrator shall oversee the administration of the Plan. The Plan Administrator shall have complete discretionary control and authority to administer all aspects of the Plan, including without limitation the power to appoint agents and counsel, and to determine the rights and benefits and all claims, demands and actions arising out of the provisions of the Plan of any Participant, beneficiary, deceased Participant, or other person having or claiming to have any interest under the Plan, in a manner consistent with Section VII.B. The Plan Administrator shall have the exclusive discretionary power to interpret the Plan and to decide all matters under the Plan. Such interpretation and decision shall be final, conclusive and binding on all Participants and any person claiming under or through any Participant, in the absence of clear and convincing evidence that the Plan Administrator acted arbitrarily and capriciously. Any individual serving as Plan Administrator, or on a committee acting as Plan Administrator, who is a Participant will not vote or act on any matter relating solely to himself or herself. When making a determination or calculation, the Plan Administrator shall be entitled to rely on information furnished by a Participant, a beneficiary, or any other person or entity. The Plan Administrator shall be deemed to be the plan administrator with responsibility for complying with any reporting and disclosure requirements of ERISA.

Claims Procedure .

	1.		In General. If any person believes he or she is being denied any rights or benefits under the Plan, such person may file a claim in writing with the Plan Administrator. If any such claim is wholly or partially denied, the Plan Administrator will notify such person of its decision in writing. Such notification will contain (i) specific reasons for the denial, (ii) specific reference to pertinent plan provisions, (iii) a description of any additional material or information necessary for such person to perfect such claim and an explanation of why such material or information is necessary and (iv) information as to the steps to be taken if the person wishes to submit a request for review. Such notification will be given within 90 days after the claim is received by the Plan Administrator (or within 180 days, if special circumstances require an extension of time for processing the claim, and if written notice of such extension and circumstances is given to such person within the initial 90 day period).

	2.		Appeals. Within 60 days after the date on which a person receives a written notice of a denied claim (or, if applicable, within 60 days after the date on which such denial is considered to have occurred) such person (or his or her duly authorized representative) may (i) file a written request with the Plan Administrator for a review of his or her denied claim and of pertinent documents and (ii) submit written issues and comments to the Plan Administrator. The Plan Administrator will notify such person of its decision in writing. Such notification will be written in a manner calculated to be understood by such person and will contain specific reasons for the decision as well as specific references to pertinent plan provisions. The decision on review will be made within 60 days after the request for review is received by the Plan Administrator (or within 120 days, if special circumstances require an extension of time for processing the request, such as an election by the Plan Administrator to hold a hearing, and if written notice of such extension and circumstances is given to such person within the initial 60 day period). .

Indemnification of Plan Administrator . The Employer agrees to indemnify and to defend to the fullest extent permitted by law any director, officer or employee of the Employer or any affiliated company who serves as the Plan Administrator or as a member of a committee appointed to serve as Plan Administrator, or who assists the Plan Administrator in carrying out its duties as part of his or her employment (including any such individual who formerly served in any such capacity) against all liabilities, damages, costs and expenses (including attorneys’ fees and amounts paid in settlement of any claims approved by the Employer) occasioned by any act or omission to act in connection with the Plan, if such act or omission is in good faith.

VIII.

AMENDMENT AND TERMINATION

	A.		Amendments . The Employer shall have the right to amend the Plan from time to time, subject to Section VIII.C, by an instrument in writing which has been executed on the Employer’s behalf by an officer thereof or by vote of its Board of Directors.

	B.		Termination of Plan . This Plan is strictly a voluntary undertaking on the part of the Employer and shall not be deemed to constitute a contract between the Employer and any Eligible Employee (or any other employee) or a consideration for, or an inducement or condition of employment for, the performance of the services by any Eligible Employee (or other employee). The Employer reserves the right to terminate the Plan at any time, subject to Section VIII.C, by an instrument in writing which has been executed on said Employer’s behalf by an officer thereof or by vote of its Board of Directors; provided, the Plan may not be terminated before the date on which all amounts credited to all Participant Accounts have been distributed in accordance with Article VI, except as permitted under Code Section 409A and Treas. Reg. Section 1.409A-3(j)(ix).

	C.		Existing Rights . No amendment or termination of the Plan shall adversely affect the rights of any Participant with respect to amounts credited to his or her Account that are attributable to Elective Deferrals or Discretionary Credits credited prior to the date of such amendment or termination. Any termination of the Plan will cause each Participant to be 100% Vested in his or her Account, notwithstanding Section V.D. The limitations described in this Section VIII.C shall not apply to any amendment of the Plan which is reasonably necessary, in the opinion of counsel, (i) to preserve the intended income tax consequences of the Plan or (ii) to guard against other material adverse impacts on Participants and beneficiaries, and which, in the opinion of counsel, is drafted primarily to preserve such intended consequences, or status, or to guard against such adverse impacts.

	D.		Assignment . The rights and obligations of the Employer shall enure to the benefit of and shall be binding upon its successors and assigns.

IX.

MISCELLANEOUS

No Funding . The Plan constitutes a mere promise by the Employer to make benefit payments to such Participants and beneficiaries in the future and Participants and beneficiaries shall have the status of general unsecured creditors of the Employer. Any Accounts established pursuant to the Plan shall remain the property of the Employer until distributed, and nothing in the Plan will otherwise be construed to create a trust or to obligate the Employer or any other person to segregate a fund, purchase an insurance contract, or in any other way currently to fund the future payment of any benefits hereunder, nor will anything herein be construed to give any employee or any other person rights to any specific assets of the Employer or of any other person. The Employer may, in its sole discretion, create a grantor trust to pay its obligations hereunder, but shall have no obligation to do so. In all events, it is the intent of the Employer that the Plan be treated as unfunded for tax purposes and for purposes of Title I of ERISA.

	B.		Nonassignability . None of the benefits, payments, proceeds or claims of any Participant or beneficiary shall be subject to any claim of any creditor of any Participant or beneficiary and, in particular, the same shall not be subject to attachment or garnishment or other legal process by any creditor of such Participant or beneficiary, nor shall any Participant or beneficiary have any right to alienate, anticipate, commute, pledge, encumber, sell, transfer or assign any of the benefits or payments or proceeds which he may expect to receive, contingently or otherwise, under the Plan.

	C.		Limitation of Participants’ Rights . Participation in the Plan shall not give any Eligible Employee the right to be retained in the employ of the Employer or any right or interest in the Plan other than as herein provided. The Employer reserves the right to dismiss any Eligible Employee without any liability for any claim against the Employer, except to the extent provided herein.

	D.		Government Regulations . It is intended that this Plan will comply with all applicable laws and government regulations, and the Employer shall not be obligated to perform an obligation hereunder in any case where, in the opinion of the Employer’s counsel, such performance would result in the violation of any law or regulation.

	E.		Governing Law . The Plan shall be construed, administered, and governed in all respects under and by the laws of the State of Georgia. If any provision shall be held by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions hereof shall continue to be fully effective.

	F.		Headings and Subheadings . Headings and subheadings in this Plan are inserted for convenience only and are not to be considered in the construction of the provisions hereof.

Exhibit “A”

Merged Plans

Exhibit “B”

Spinoff of Total System Services, Inc.

1. Spinoff to TSYS Deferred Compensation Plan . In connection with the spinoff of Total System Services, Inc. from the Synovus Financial Corp., the assets and liabilities with respect to participants and beneficiaries of Total System Services, Inc. and its subsidiaries and affiliates shall be transferred in a tax-free spinoff from this Plan to the TSYS Deferred Compensation Plan (“TSYS Plan”) effective December 31, 2007. The assets and liabilities with respect to such participants and beneficiaries shall be transferred as soon as administratively practicable following the date of the spinoff. In addition, TSYS and its subsidiaries and affiliates shall cease to sponsor this Plan as of December 31, 2007.

2. Transferees . Any Employee who transfers from Total System Services, Inc. or any subsidiary or affiliate of Total System Services, Inc. (“TSYS”) to the Employer or any subsidiary or affiliate of the Employer from January 1, 2008 to December 31, 2008 (a “Synovus Transferee”) shall receive credit for service under this Plan to the same extent such service was recognized under the provisions of the TSYS Plan. This Plan shall recognize all elections (including deferral, investment and distribution elections) and beneficiary designations with respect to Synovus Transferees under the TSYS Plan. In addition, a Participant who transfers from the Employer or any subsidiary or affiliate of the Employer to TSYS or any subsidiary or affiliate of TSYS from January 1, 2008 to December 31, 2008 (a “TSYS Transferee”) shall be treated as a transfer instead of a separation of employment under this Plan, and account balances for TSYS Transferees shall be transferred to the TSYS Plan as soon as administratively practicable following their date of transfer.

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Richard E. Anthony, certify that:

1.		I have reviewed this quarterly report on Form 10-Q of Synovus Financial Corp.;

2.		Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.		Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.		The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	(a)		Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	(b)		Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	(c)		Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

	(a)		All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	(b)		Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Date: August 08, 2008	BY:	/s/ Richard E. Anthony
		Richard E. Anthony
		Chief Executive Officer

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Thomas J. Prescott, certify that:

1.		I have reviewed this quarterly report on Form 10-Q of Synovus Financial Corp.;

2.		Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.		Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.		The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	(a)		Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	(b)		Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	(c)		Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

	(a)		All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	(b)		Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Date: August 08, 2008	BY:	/s/ Thomas J. Prescott
		Thomas J. Prescott
		Chief Financial Officer

EXHIBIT 32

CERTIFICATION OF PERIODIC REPORT

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, Richard E. Anthony, the Chief Executive Officer of Synovus Financial Corp. (the “Company”), and Thomas J. Prescott, the Chief Financial Officer of the Company, hereby certify that, to the best of their knowledge:

(1) The Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2008 (the “Report”) fully complies with the requirements of section 13(a) or section 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



Dated: August 08, 2008	BY:	/s/ Richard E. Anthony
		Richard E. Anthony
		Chief Executive Officer


Dated: August 08, 2008	BY:	/s/ Thomas J. Prescott
		Thomas J. Prescott
		Chief Financial Officer

This certification “accompanies” the Form 10-Q to which it relates, is not deemed filed with the SEC and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-Q, irrespective of any general incorporation contained in such filing.)