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 March 31, 2010
Commission File Number 1-10312

SYNOVUS FINANCIAL CORP.

(Exact name of registrant as specified in its charter)

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

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

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

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

Yes x           No o

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

Yes o           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 x		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 x

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

Class		April 30, 2010
Common Stock, $1.00 Par Value		489,843,351 shares

SYNOVUS FINANCIAL CORP.

INDEX

Part I.		Financial Information
Item 1.		Unaudited Financial Statements
		Consolidated Balance Sheets as of March 31, 2010 and December 31, 2009			3
		Consolidated Statements of Income for the Three Months Ended March 31, 2010 and 2009			4
		Consolidated Statements of Changes in Equity and Comprehensive Income (Loss) for the Three Months Ended March 31, 2010 and 2009			5
		Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2010 and 2009			6
		Notes to Consolidated Financial Statements			7
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations			33
Item 3.		Quantitative and Qualitative Disclosures About Market Risk			63
Item 4.		Controls and Procedures			64
Part II.		Other Information
Item 1.		Legal Proceedings			65
Item 1A.		Risk Factors			68
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds			69
Item 6.		Exhibits			70
Signatures					72
Index to Exhibits					73
EX-12.1
EX-31.1
EX-31.2
EX-32

PART I. FINANCIAL INFORMATION

SYNOVUS FINANCIAL CORP.

		March 31,				December 31,
(in thousands, except share data)		2010				2009
ASSETS
Cash and due from banks		$	579,620				564,482
Interest bearing funds with Federal Reserve Bank			2,826,702				1,901,847
Interest earning deposits with banks			12,817				12,534
Federal funds sold and securities purchased under resale agreements			166,392				203,959
Trading account assets, at fair value			13,605				14,370
Mortgage loans held for sale, at fair value			112,989				138,056
Other loans held for sale			78,077				36,816
Investment securities available for sale, at fair value			3,237,519				3,188,735
Loans, net of unearned income			24,417,164				25,383,068
Allowance for loan losses			(968,697	)			(943,725	)
Loans, net			23,448,467				24,439,343
Premises and equipment, net			572,815				580,375
Goodwill			24,431				24,431
Other intangible assets, net			15,556				16,649
Other assets			1,350,448				1,709,821
Total assets		$	32,439,438				32,831,418
LIABILITIES AND EQUITY
Liabilities
Deposits:
Non-interest bearing deposits		$	4,352,327				4,172,697
Interest bearing			22,827,721				23,260,836
Total deposits			27,180,048				27,433,533
Federal funds purchased and other short-term borrowings			450,979				475,062
Long-term debt			1,868,343				1,751,592
Other liabilities			301,615				299,730
Total liabilities			29,800,985				29,959,917
Equity
Shareholders’ equity:
Cumulative perpetual preferred stock - no par value. Authorized 100,000,000 shares; 967,870 issued and outstanding at March 31, 2010 and December 31, 2009			930,433				928,207
Common stock - $1.00 par value. Authorized 600,000,000 shares; issued 495,536,131 in 2010 and 495,513,957 in 2009; outstanding 489,843,709 in 2010 and 489,828,319 in 2009			495,536				495,514
Additional paid-in capital			1,607,140				1,605,097
Treasury stock, at cost - 5,692,422 shares in 2010 and 5,685,638 shares in 2009			(114,174	)			(114,155	)
Accumulated other comprehensive income			80,722				84,806
Accumulated deficit			(382,914	)			(148,428	)
Total shareholders’ equity			2,616,743				2,851,041
Non-controlling interest in subsidiaries			21,710				20,460
Total equity			2,638,453				2,871,501
Total liabilities and equity		$	32,439,438				32,831,418
See accompanying notes to consolidated financial statements.

SYNOVUS FINANCIAL CORP.

		Three Months Ended
		March 31,
(in thousands, except per share data)		2010				2009
Interest income:
Loans, including fees		$	304,766				336,228
Investment securities available for sale			35,069				45,512
Trading account assets			194				334
Mortgage loans held for sale			1,325				3,382
Other loans held for sale			15				–
Federal funds sold and securities purchased under resale agreements			41				198
Interest on Federal Reserve Bank balances			1,378				480
Interest earning deposits with banks			7				259
Total interest income			342,795				386,393
Interest expense:
Deposits			83,707				132,294
Federal funds purchased and other short-term borrowings			543				841
Long-term debt			9,678				10,019
Total interest expense			93,928				143,154
Net interest income			248,867				243,239
Provision for losses on loans			340,948				290,437
Net interest expense after provision for losses on loans			(92,081	)			(47,198	)
Non-interest income:
Service charges on deposit accounts			26,280				28,699
Fiduciary and asset management fees			11,338				10,815
Brokerage and investment banking income			5,931				6,871
Mortgage banking income			5,814				9,322
Bankcard fees			9,515				8,361
Investment securities losses, net			(448	)			–
Other fee income			5,530				7,690
Increase in fair value of private equity investments, net			899				–
Other non-interest income			4,839				12,627
Total non-interest income			69,698				84,385
Non-interest expense:
Salaries and other personnel expense			104,022				111,085
Net occupancy and equipment expense			29,978				31,484
FDIC insurance and other regulatory fees			17,646				12,999
Foreclosed real estate expense			45,507				46,330
Losses (gains) on other loans held for sale			61				(65	)
Professional fees			9,380				6,945
Data processing expense			10,683				11,155
Restructuring charges			–				6,358
Other operating expenses			35,520				34,748
Total non-interest expense			252,797				261,039
Loss from continuing operations before income taxes			(275,180	)			(223,852	)
Income tax benefit			(16,337	)			(85,908	)
Loss from continuing operations			(258,843	)			(137,944	)
Income from discontinued operations, net of income taxes and non-controlling interest			43,161				1,215
Net loss			(215,682	)			(136,729	)
Net loss attributable to non-controlling interest			(209	)			(57	)
Net loss attributable to controlling interest			(215,473	)			(136,672	)
Dividends and accretion of discount on preferred stock			14,325				14,192
Net loss available to common shareholders		$	(229,798	)			(150,864	)
Basic loss per common share:
Net loss from continuing operations attributable to common shareholders		$	(0.56	)			(0.46	)
Net loss attributable to common shareholders			(0.47	)			(0.46	)
Diluted loss per common share:
Net loss from continuing operations attributable to common shareholders		$	(0.56	)			(0.46	)
Net loss attributable to common shareholders			(0.47	)			(0.46	)
Weighted average common shares outstanding:
Basic			489,607				329,785
Diluted			489,607				329,785

See accompanying notes to consolidated financial statements.

SYNOVUS FINANCIAL CORP.

Accumulated

Accumulated

Additional

Other

(Deficit)

Non-

Preferred

Common

Paid-In

Treasury

Comprehensive

Retained

Controlling

(in thousands, except per share data)

Stock

Stock

Capital

Stock

Income (Loss)

Earnings

Interest

Total

Balance at December 31, 2008

$

919,635

336,011

1,165,875

(114,117

)

129,253

1,350,501

32,349

3,819,507

Net loss

–

–

–

–

–

(136,672

)

(57

)

(136,729

)

Other comprehensive loss, net of tax:

Net unrealized loss on cash flow hedges

–

–

–

–

(4,030

)

–

–

(4,030

)

Change in unrealized gains/losses on investment securities available for sale, net of reclassification adjustment

–

–

–

–

(256

)

–

–

(256

)

Amortization of postretirement unfunded health benefit

–

–

–

–

46

–

–

46

Other comprehensive loss

–

–

–

–

(4,240

)

–

–

(4,240

)

Comprehensive loss

(140,969

)

Cash dividends declared on common stock – $0.01 per share

–

–

–

–

–

(3,309

)

–

(3,309

)

Cash dividends paid on preferred stock – $7.78 per share

–

–

–

–

–

(7,528

)

–

(7,528

)

Accretion of discount on preferred stock

2,093

–

–

–

–

(2,093

)

–

–

Treasury shares purchased

–

–

–

(22

)

–

–

–

(22

)

Issuance of non-vested stock, net of forfeitures

–

(8

)

8

–

–

–

–

–

Restricted share unit activity

–

29

(29

)

–

–

–

–

–

Share-based compensation expense

–

–

2,769

–

–

–

–

2,769

Stock options exercised

–

37

224

–

–

–

–

261

Share-based compensation tax deficiency

–

–

(638

)

–

–

–

–

(638

)

Change in ownership at majority-owned subsidiary

–

–

200

–

–

–

1,127

1,327

Balance at March 31, 2009

$

921,728

336,069

1,168,409

(114,139

)

125,013

1,200,899

33,419

3,671,398

Balance at December 31, 2009

$

928,207

495,514

1,605,097

(114,155

)

84,806

(148,428

)

20,460

2,871,501

Net loss

–

–

–

–

–

(215,473

)

(209

)

(215,682

)

Other comprehensive loss, net of tax:

Net unrealized loss on cash flow hedges

–

–

–

–

(4,919

)

–

–

(4,919

)

Change in unrealized gains/losses on investment securities available for sale, net of reclassification adjustment

–

–

–

–

789

–

–

789

Amortization of postretirement unfunded health benefit

–

–

–

46

–

46

Other comprehensive loss

–

–

–

–

(4,084

)

–

–

(4,084

)

Comprehensive loss

(219,766

)

Cash dividends declared on common stock – $0.01 per share

–

–

–

–

–

(4,906

)

–

(4,906

)

Cash dividends paid on preferred stock – $12.50 per share

–

–

–

–

–

(12,098

)

–

(12,098

)

Accretion of discount on preferred stock

2,226

–

–

–

–

(2,226

)

–

–

Treasury shares purchased

–

–

–

(19

)

–

–

–

(19

)

Issuance of non-vested stock, net of forfeitures

–

(4

)

4

–

–

–

–

–

Restricted share unit activity

–

25

(25

)

–

–

–

–

–

Share-based compensation expense

–

–

2,335

–

–

–

–

2,335

Stock options exercised

–

1

–

–

–

–

–

1

Share-based compensation tax deficiency

–

–

(271

)

–

–

–

–

(271

)

Change in ownership at majority-owned subsidiary

–

–

–

–

–

217

1,459

1,676

Balance at March 31, 2010

$

930,433

495,536

1,607,140

(114,174

)

80,722

(382,914

)

21,710

2,638,453

See accompanying notes to consolidated financial statements.

SYNOVUS FINANCIAL CORP.

		Three Months Ended
		March 31,
(in thousands)		2010				2009
Operating activities
Net loss		$	(215,682	)			(136,729	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Provision for losses on loans			340,948				290,437
Depreciation, amortization, and accretion, net			11,178				10,639
Deferred income tax (benefit) expense			(8,527	)			587
Decrease in interest receivable			7,527				10,981
(Decrease) increase in interest payable			(4,212	)			10,019
Decrease in trading account assets			765				9,500
Originations of mortgage loans held for sale			(234,425	)			(666,259	)
Proceeds from sales of mortgage loans held for sale			262,283				576,945
Gain on sale of mortgage loans held for sale			(2,824	)			(2,063	)
Decrease (increase) in prepaid and other assets			342,193				(61,121	)
Decrease in accrued salaries and benefits			(451	)			(19,748	)
Increase (decrease) in other liabilities			6,546				(9,493	)
Investment securities losses, net			448				—
Loss (gain) on sale of other loans held for sale			61				(65	)
Loss on other real estate			38,044				41,010
Gain on sale of merchant services business			(69,466	)			—
Share-based compensation			2,335				2,748
Other, net			(545	)			1,398
Net cash provided by operating activities			476,196				58,786
Investing activities
Net increase in interest earning deposits with banks			(283	)			(84,952	)
Net decrease in federal funds sold and securities purchased under resale agreements			37,567				232,648
Proceeds from maturities and principal collections of investment securities available for sale			271,234				190,168
Net (increase) decrease in interest bearing funds with Federal Reserve Bank			(924,855	)			844,130
Proceeds from sales of investment securities available for sale			219				7,947
Purchases of investment securities available for sale			(318,848	)			(83,422	)
Proceeds from sale of other loans held for sale			10,004				—
Proceeds from sale of other real estate			78,641				57,060
Net decrease (increase) in loans			495,633				(218,833	)
Proceeds from sale of merchant services business			69,466				—
Purchases of premises and equipment			(5,093	)			(13,393	)
Proceeds from disposals of premises and equipment			1,310				1,700
Net cash (used in) provided by investing activities			(285,005	)			933,053
Financing activities
Net increase in demand and savings deposits			181,545				702,581
Net decrease in certificates of deposit			(435,030	)			(1,371,774	)
Net decrease in federal funds purchased and other short-term borrowings			(24,083	)			(148,600	)
Principal repayments on long-term debt			(46,487	)			(233,495	)
Proceeds from issuance of long-term debt			165,000				—
Dividends paid to common shareholders			(4,901	)			(19,823	)
Dividends paid to preferred shareholders			(12,098	)			(7,528	)
Proceeds from issuance of common stock			1				261
Net cash used in financing activities			(176,053	)			(1,078,378	)
Increase (decrease) in cash and due from banks			15,138				(86,539	)
Cash and due from banks at beginning of period			564,482				524,327
Cash and due from banks at end of period		$	579,620				437,788
See accompanying notes to consolidated financial statements.

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; therefore, they 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 (GAAP). All adjustments consisting of normally recurring accruals that, in the opinion of management, are necessary for a fair presentation of the financial position and results of operations for the periods covered by this report have been included. The accompanying unaudited consolidated financial statements should be read in conjunction with the Synovus Financial Corp. (Synovus) consolidated financial statements and related notes appearing in Synovus’ annual report on Form 10-K/A for the year ended December 31, 2009 (Synovus’ 2009 10-K) filed with the U.S. Securities and Exchange Commission (SEC).

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

     A substantial portion of Synovus’ loans are secured by real estate in five southeastern states (Georgia, Alabama, Florida, South Carolina, and Tennessee). Accordingly, the ultimate collectability of a substantial portion of Synovus’ loan portfolio is susceptible to changes in market conditions in these areas. Total commercial real estate loans represent 41.7% of the total loan portfolio at March 31, 2010. Due to declines in economic indicators and real estate values, the loans in the commercial real estate portfolio may have a greater risk of non-collection than other loans. Based on available information, management believes that the allowance for loan losses is adequate. While management uses available information to recognize losses on loans, future additions to the allowance may be necessary based on changes in economic conditions and the ability of borrowers to repay their loans. In addition, various regulatory agencies, as an integral part of their examination process, periodically review Synovus’ allowance for loan losses. Such agencies may require Synovus to make changes to the allowance for loan losses based on their judgment about information available to them at the time of their examination.

     Certain prior year amounts have been reclassified to conform to the presentation adopted in 2010.

     Synovus has evaluated all transactions, events, and circumstances subsequent to the balance sheet date for consideration or disclosure and has reflected or disclosed those items within the consolidated financial statements and related footnotes as deemed appropriate.

     During 2009, Synovus committed to a plan to sell its merchant services business. The sale was completed on March 31, 2010. Accordingly, the revenues and expenses of the merchant services business have been reported as discontinued operations for the three months ended March 31, 2010 and 2009. Income from discontinued operations for the three months ended March 31, 2010 includes the gain on sale of this business. There were no significant assets or liabilities associated with the merchant services business.

Notes to Consolidated Financial Statements (Unaudited)

Note 2 - Supplemental Cash Flow Information

     For the three months ended March 31, 2010, Synovus received income tax refunds of approximately $328.4 million (net of taxes paid) and for the three months ended March 31, 2009, Synovus paid income taxes (net of refunds received) of approximately $20 thousand.

     For the three months ended March 31, 2010 and 2009, Synovus paid interest of $87.4 million and $130.9 million, respectively.

     Non-cash investing activities consisted of loans of approximately $100.9 million and $141.9 million, which were foreclosed and transferred to other real estate during the three months ended March 31, 2010 and 2009, respectively; other loans of approximately $53.4 million and $21.3 million, which were transferred to other loans held for sale during the three months ended March 31, 2010 and 2009, respectively; and other loans held for sale of approximately $1.3 million, which were foreclosed and transferred to other real estate during the three months ended March 31, 2009. There were no other loans held for sale that were foreclosed and transferred to other real estate during the three months ended March 31, 2010.

Note 3 - Discontinued Operations

     During 2009, Synovus committed to a plan to sell its merchant services business. The sale was completed on March 31, 2010. Accordingly, the revenues and expenses of the merchant services business have been reported as discontinued operations for the three months ended March 31, 2010 and 2009. Income from discontinued operations for the three months ended March 31, 2010 includes the gain on sale of this business. There were no significant assets or liabilities associated with the merchant services business.

		Three Months Ended March 31,
(in thousands)		2010				2009
Merchant services revenue		$	73,926	(1)			4,363
Merchant services expense			3,285				2,317
Merchant services income before taxes			70,641				2,046
Income tax expense			27,480				831
Income from discontinued operations, net of income taxes(2)		$	43,161				1,215

(1) Includes a pre-tax gain of $69.5 million ($42.4 million net of tax) from the sale of its merchant services business in March 2010.

(2) Cash flows from discontinued operations were limited to revenues and expenses of discontinued operations as components of income from discontinued operations, net of income taxes. The proceeds from sale of the merchant services business are included as a component of net cash used in investing activities and the gain on sale is included as a component of net cash provided by operating activities in the consolidated statement of cash flows for the three months ended March 31, 2010.

Note 4 - Shareholders’ Equity

Preferred Stock and Warrants to Purchase Common Stock

     On December 19, 2008, Synovus issued to the United States Department of the Treasury (Treasury) 967,870 shares of Synovus’ Fixed Rate Cumulative Perpetual Preferred Stock, Series A, without par value (the Series A Preferred Stock), having a liquidation amount per share equal to $1,000, for a total price of $967,870,000. The Series A Preferred Stock pays cumulative dividends at a rate of 5% per year for the first five years and thereafter at a rate of 9% per year. Under provisions of the American Recovery and Reinvestment Act (ARRA), the Series A Preferred Stock may be redeemed at any time with the consent of the Federal Deposit Insurance Corporation (FDIC). The Series A Preferred Stock is generally non-voting. Consequences of the Series A Preferred Stock purchase include certain restrictions on payment of dividends, repurchase or redemption of Synovus’ equity or capital securities, and limits on the tax deductibility of executive compensation.

     As part of its issuance of the Series A Preferred Stock, Synovus issued the Treasury a warrant to purchase up to 15,510,737 shares of Synovus’ common stock (the Warrant) at an initial per share exercise price of $9.36. The Warrant, which expires on December 19, 2018, provides for the adjustment of the exercise price and the number of shares of Synovus’ common stock issuable upon exercise pursuant to customary anti-dilution provisions, such as upon stock splits or distributions of securities or other assets to holders of Synovus’ common stock, and upon certain issuances of Synovus’ common stock at or below a specified price relative to the initial exercise price. Pursuant to the

Notes to Consolidated Financial Statements (Unaudited)

Securities Purchase Agreement, the Treasury has agreed not to exercise voting power with respect to any shares of common stock issued upon exercise of the Warrant.

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

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

Common Stock

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

Exchange of Subordinated Debt for Common Stock

     On November 5, 2009, Synovus completed its previously announced exchange offer (Exchange Offer) of $29,820,000 in aggregate principal amount of its outstanding 4.875% Subordinated Notes Due 2013 (the Notes). The notes exchanged in the Exchange Offer represent 12.6% of the $236,570,000 aggregate principal amount of the Notes outstanding prior to the Exchange Offer. Pursuant to the terms of the Exchange Offer, Synovus issued approximately 9.44 million shares of Synovus’ common stock as consideration for the Notes. The Exchange Offer resulted in a pre-tax gain of approximately $6.1 million which was recorded during the fourth quarter of 2009.

Subsequent Events

     On May 4, 2010, Synovus completed the public offering of 293,250,000 shares of Synovus’ $1.00 par value common stock at $2.75 per share and 13,800,000 tangible equity units (tMEDS) with a stated value of $25.00 (consisting of prepaid common stock purchase contracts to be recorded as equity and junior subordinated amortizing notes to be recorded as debt based on relative fair value) generating net proceeds of approximately $768.9 million and $333.7 million, respectively. The common stock and tMEDS offerings will be recorded during the three months ending June 30, 2010.

Note 5 - Comprehensive Income (Loss)

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

     Comprehensive income (loss) for the three months ended March 31, 2010 and 2009 is presented below.

		Three Months Ended March 31,
(in thousands)		2010				2009
Net loss		$	(215,682	)			(136,729	)
Other comprehensive loss, net of tax:
Change in net unrealized gains/losses on cash flow hedges			(4,919	)			(4,030	)
Change in net unrealized gains/losses on investment securities available for sale, net of reclassification adjustment			789				(256	)
Amortization of postretirement unfunded health benefit			46				46
Other comprehensive loss			(4,084	)			(4,240	)
Comprehensive loss		$	(219,766	)			(140,969	)

Notes to Consolidated Financial Statements (Unaudited)

Note 6 - Investment Securities

     The following table summarizes Synovus’ available for sale investment securities as of March 31, 2010 and December 31, 2009.

		March 31, 2010
						Gross				Gross				Estimated
		Amortized				Unrealized				Unrealized				Fair
(in thousands)		Cost				Gains				Losses				Value
U.S. Treasury securities		$	211,462				368				(279	)			211,551
Other U.S. Government agency securities			931,778				24,357				(223	)			955,912
Government agency issued mortgage-backed securities			1,746,419				82,727				(78	)			1,829,068
Government agency issued collateralized mortgage obligations			73,405				2,485				(202	)			75,688
State and municipal securities			67,698				1,709				(165	)			69,242
Equity securities			9,455				174				—				9,629
Other investments			86,221				450				(242	)			86,429
Total		$	3,126,438				112,270				(1,189	)			3,237,519

		December 31, 2009
						Gross				Gross				Estimated
		Amortized				Unrealized				Unrealized				Fair
(in thousands)		Cost				Gains				Losses				Value
U.S. Treasury securities		$	121,505				167				(83	)			121,589
Other U.S. Government agency securities			900,984				27,174				(532	)			927,626
Government agency issued mortgage-backed securities			1,795,688				78,821				(529	)			1,873,980
Government agency issued collateralized mortgage obligations			83,632				3,271				—				86,903
State and municipal securities			80,931				2,029				(159	)			82,801
Equity securities			9,456				584				(59	)			9,981
Other investments			86,744				—				(889	)			85,855
Total		$	3,078,940				112,046				(2,251	)			3,188,735

     At March 31, 2010 and December 31, 2009, investment securities with a carrying value of $2.4 billion were pledged to secure certain deposits, securities sold under repurchase agreements, and Federal Home Loan Bank (FHLB) advances, as required by law and contractual agreements.

     As of March 31, 2010, Synovus has reviewed investment securities that are in an unrealized loss position in accordance with its accounting policy for other-than-temporary impairment and does not consider them other-than-temporarily impaired. Synovus does not intend to sell its debt securities, and it is more likely than not that Synovus will not be required to sell the securities prior to recovery.

Notes to Consolidated Financial Statements (Unaudited)

     Gross unrealized losses on investment securities and the fair value of the related securities aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at March 31, 2010 and December 31, 2009 were as follows:

		March 31, 2010
		Less than 12 Months								12 Months or Longer								Total Fair Value
		Fair				Unrealized				Fair				Unrealized				Fair				Unrealized
(in thousands)		Value				Losses				Value				Losses				Value				Losses
U.S. Treasury securities		$	109,493				(279	)			—				—				109,493				(279	)
Other U.S. Government agency securities			67,657				(223	)			—				—				67,657				(223	)
Government agency issued mortgage-backed securities			67,596				(280	)			—				—				67,596				(280	)
Government agency issued collateralized mortgage obligations			—				—				—				—				—				—
State and municipal securities			8,688				(165	)			—				—				8,688				(165	)
Equity securities			—				—				—				—				—				—
Other investments			85,848				(242	)			—				—				85,848				(242	)
Total		$	339,282				(1,189	)			—				—				339,282				(1,189	)

		December 31, 2009
		Less than 12 Months								12 Months or Longer								Total Fair Value
		Fair				Unrealized				Fair				Unrealized				Fair				Unrealized
(in thousands)		Value				Losses				Value				Losses				Value				Losses
U.S. Treasury securities		$	19,681				(83	)			—				—				19,681				(83	)
Other U.S. Government agency securities			71,689				(532	)			—				—				71,689				(532	)
Government agency issued mortgage-backed securities		$	145,461				(529	)			—				—				145,461				(529	)
Government agency issued collateralized mortgage obligations			—				—				—				—				—				—
State and municipal securities			5,833				(105	)			1,308				(54	)			7,141				(159	)
Equity securities			2,756				(59	)			—				—				2,756				(59	)
Other investments			79,813				(889	)			—				—				79,813				(889	)
Total		$	325,233				(2,197	)			1,308				(54	)			326,541				(2,251	)

Notes to Consolidated Financial Statements (Unaudited)

     The amortized cost and estimated fair value by contractual maturity of investment securities available for sale at March 31, 2010 are shown below. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

		March 31, 2010
		Amortized				Estimated
(in thousands)		Cost				Fair Value
U.S. Treasury securities:
Within 1 year		$	25,173				25,173
1 to 5 years			186,289				186,378
5 to 10 years			–				–
More than 10 years			–				–
Total U.S. Treasury securities		$	211,462				211,551
U.S. Government agency securities:
Within 1 year		$	217,231				221,407
1 to 5 years			506,540				520,760
5 to 10 years			180,784				185,480
More than 10 years			27,223				28,265
Total U.S. Government agency securities		$	931,778				955,912
State and municipal securities:
Within 1 year		$	7,975				8,050
1 to 5 years			27,886				28,622
5 to 10 years			25,514				26,274
More than 10 years			6,323				6,296
Total state and municipal securities		$	67,698				69,242
Other investments:
Within 1 year		$	–				–
1 to 5 years			81,640				81,398
5 to 10 years			450				900
More than 10 years			4,131				4,131
Total other investments		$	86,221				86,429
Equity securities		$	9,455				9,629
Government agency issued mortgage-backed securities			1,746,419				1,829,068
Government agency issued collateralized mortgage obligations			73,405				75,688
Total investment securities		$	3,126,438				3,237,519
Within 1 year		$	250,379				254,630
1 to 5 years			802,355				817,158
5 to 10 years			206,748				212,654
More than 10 years			37,677				38,692
Equity securities			9,455				9,629
Government agency issued mortgage-backed securities			1,746,419				1,829,068
Government agency issued collateralized mortgage obligations			73,405				75,688
Total		$	3,126,438				3,237,519

Notes to Consolidated Financial Statements (Unaudited)

Note 7 - Other Loans Held for Sale

     Loans or pools of loans are transferred to the other loans held for sale portfolio when the intent to hold the loans has changed due to portfolio management or risk mitigation strategies, there is a plan to sell the loans within a reasonable period of time, and the individual loans are specifically identified. The value of the loans or pools of loans is primarily determined by analyzing the underlying collateral of the loan and the anticipated external market prices of similar assets. At the time of transfer, if the estimated net realizable value is less than the carrying amount, the difference is recorded as a charge-off against the allowance for loan losses. Decreases in estimated net realizable value subsequent to the transfer as well as losses (gains) from sale of these loans are recognized as a component of non-interest expense. During the three months ended March 31, 2010, Synovus transferred loans with a cost basis totaling $100.7 million to the other loans held for sale portfolio. Synovus recognized charge-offs on these loans totaling $47.2 million for the three months ended March 31, 2010. These charge-offs, which resulted in a new cost basis of $53.4 million for the loans transferred during the three months ended March 31, 2010, were based on the estimated sales price of the loans at the time of transfer.

Note 8 - Loans, Net of Unearned Income

     Loans, net of unearned income, at March 31, 2010 and December 31, 2009 are presented below.

		March 31,				December 31,
(in thousands)		2010				2009
Investment properties		$	5,720,251				5,887,432
1-4 family properties			3,064,014				3,330,681
Land acquisition			1,397,870				1,510,981
Total commercial real estate loans			10,182,135				10,729,094
Commercial and industrial loans			10,130,049				10,461,092
Retail loans			4,121,933				4,212,230
Total loans			24,434,117				25,402,416
Unearned income			(16,953	)			(19,348	)
Loans, net of unearned income		$	24,417,164				25,383,068

Note 9 - Allowance for Loan Losses

     Activity in the allowance for loan losses for the three months ended March 31, 2010 and 2009 is presented below.

		Three Months Ended
		March 31,
(in thousands)		2010				2009
Balance, beginning of period		$	943,725				598,301
Provision for losses on loans			340,948				290,437
Loans charged off, net of recoveries			(315,976	)			(246,316	)
Balance, end of period		$	968,697				642,422

Note 10 - Other Real Estate

     Other real estate (ORE) consists of properties obtained through a foreclosure proceeding or through an in-substance foreclosure in satisfaction of loans. In accordance with provisions of ASC 310-10-35 regarding subsequent measurement of loans for impairments and ASC 310-40-15 regarding accounting for troubled debt restructurings by a creditor, a loan is classified as an in-substance foreclosure when Synovus has taken possession of the collateral regardless of whether formal foreclosure proceedings have taken place.

     ORE is reported at the lower of cost or fair value determined on the basis of current appraisals, comparable sales, and other estimates of fair value obtained principally from independent sources, adjusted for estimated selling costs. Management also considers other factors or recent developments

Notes to Consolidated Financial Statements (Unaudited)

such as changes in absorption rates or market conditions from the time of valuation, and anticipated sales values considering management’s plans for disposition, which could result in adjustment to the collateral value estimates indicated in the appraisals. At the time of foreclosure or initial possession of collateral, any excess of the loan balance over the fair value of the real estate held as collateral is recorded as a charge against the allowance for loan losses. Revenue and expenses from ORE operations as well as gains or losses on sales and any subsequent adjustments to the value are recorded as foreclosed real estate expense, a component of non-interest expense.

     The carrying value of ORE was $222.2 million and $238.8 million at March 31, 2010 and December 31, 2009, respectively. During the three months ended March 31, 2010, approximately $100.9 million of loans were foreclosed and transferred to other real estate. During the three months ended March 31, 2010 and 2009, Synovus recognized foreclosed real estate expenses of $45.5 million and $46.3 million, respectively. These costs primarily consist of charges related to declines in fair value or reductions in estimated realizable value subsequent to the date of foreclosure.

Note 11 - Fair Value Accounting

     Synovus carries various assets and liabilities at fair value based on the fair value accounting guidance under ASC 820 and ASC 825. Under ASC 820-10, fair value is defined 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. Synovus determines the fair values of its financial instruments based on the fair value hierarchy established under ASC 820-10, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels of inputs are as follows:

Level 1		Quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities include corporate debt and equity securities as well as certain U.S. Treasury and U.S. Government-sponsored enterprise debt securities that are highly liquid and are actively traded in over-the-counter markets.
Level 2		Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets and liabilities include debt securities with quoted prices that are traded less frequently than exchange-traded instruments and derivative contracts whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. This category generally includes certain U.S. Government-sponsored enterprises and agency mortgage-backed debt securities, obligations of states and municipalities, certain callable brokered certificates of deposit, collateralized mortgage obligations, derivative contracts, and mortgage loans held-for-sale.
Level 3		Unobservable inputs that are supported by little if any market activity for the asset or liability. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. This category primarily includes collateral-dependent impaired loans, other real estate, certain equity investments, and certain private equity investments.

Notes to Consolidated Financial Statements (Unaudited)

Fair Value Option

     Synovus elected the fair value option for mortgage loans held for sale and certain callable brokered certificates of deposits under ASC 825 primarily to ease the operational burdens required to maintain hedge accounting for such instruments under the constructs of ASC 815. For both instruments, Synovus is still able to achieve effective economic hedges without the operational time and expense needed to manage a hedge accounting program.

     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

     The fair values of trading account assets and liabilities and investment securities available-for-sale are primarily based on actively traded markets where prices are based on either quoted market prices or observed transactions. 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. Liquidity is a significant factor in the determination of the fair value of trading account assets and liabilities and available-for-sale securities. The fair value of these instruments also take into account recent market activity as well as other market observable data such as interest rate, spread and prepayment information, volatility, and U.S. Treasury and swap curves. When quoted market prices are not available, which generally occurs due to the lack of liquidity for certain securities, fair values are estimated using bid prices and quoted market prices of pool 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 pricing services to determine whether such valuations are representative of an exit price in Synovus’ principal markets. In certain cases where there is limited activity or less transparency around inputs to valuation, securities are classified as Level 3 within the valuation hierarchy.

Mortgage Loans Held for Sale

     Synovus elected to apply the fair value option for mortgage loans originated with the intent to sell to investors. 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 as a minority interest investor. 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.

Notes to Consolidated Financial Statements (Unaudited)

     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

     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. The majority of derivatives entered into by Synovus are executed over-the-counter and consist of interest rate swaps, floors, caps and collars. The fair values of these derivative instruments are determined based on internally developed models that use readily observable market data, as quoted market prices are not available for these instruments. The valuation model and inputs depend on the type of derivative and the nature of the underlying instrument and include interest rates, prices and indices to generate continuous yield or pricing curves, volatility factors, and customer credit spreads. The principal techniques used to value these instruments are an income approach, discounted cash flows, Black-Scholes or Binomial Pricing model. 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. Interest rate swaps, floors, caps and collars and TBA mortgage-backed securities 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. The fair value of these derivative positions, which are related to mortgage loan commitments, are valued based on a bid pricing convention as mentioned above, except there are fall-out ratios for interest rate lock commitments. The determination of fair value includes assumptions related to the likelihood that a commitment will ultimately result in a closed loan, which is a significant unobservable assumption. Therefore, this type of derivative instrument is classified as Level 3 within the valuation hierarchy. These amounts, however, are insignificant.

     In November 2009, Synovus sold certain Visa Class B shares to another Visa USA member financial institution. The sales price was based on the Visa stock conversion ratio in effect at the time for conversion of Visa Class B shares to Visa Class A unrestricted shares. In conjunction with the sale, Synovus entered into a derivative contract with the purchaser which provides for settlements between the parties based upon a change in the ratio for conversion of Visa Class B shares to Visa Class A shares. The fair value conversion rate derivative is measured using a discounted cash flow methodology for estimated future cash flows determined through use of probability weighting for estimates of Visa’s aggregate exposure to the covered litigation. The conversion rate derivative is classified as Level 3 within the valuation hierarchy as the value is determined using discounted cash flow methodologies and involves unobservable inputs which are not supported by market activity for the liability.

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.

Notes to Consolidated Financial Statements (Unaudited)

     Synovus adopted certain of the new disclosure requirements of Accounting Standards Update (ASU) 2010-06, Improving Disclosures about Fair Value Measurements, effective January 1, 2010. The guidance requires fair value disclosures by class of assets and liabilities rather than by major category. For equity and debt securities, class was determined based on the nature and risks of the investments. 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 March 31, 2010 and December 31, 2009, according to the valuation hierarchy included in ASC 820-10.

		March 31, 2010
														Total
														Assets/Liabilities
(in thousands)		Level 1				Level 2				Level 3				at Fair Value
Assets
Trading securities:
Government agency issued mortgage-backed securities		$	—				2,277				—				2,277
Government agency issued collateralized mortgage obligations			—				1,776				—				1,776
State and municipal securities			—				3,664				—				3,664
Corporate and other debt			—				5,840				—				5,840
Equity, mutual funds, and other			34				14				—				48
Total trading securities			34				13,571				—				13,605
Mortgage loans held for sale			—				112,989				—				112,989
Investment securities available for sale:											—
U.S. Treasury securities			211,551				—				—				211,551
Other U.S. Government agency securities			—				955,912				—				955,912
Government agency issued mortgage-backed securities			—				1,829,068				—				1,829,068
Government agency issued collateralized mortgage obligations			—				75,688				—				75,688
State and municipal securities			—				69,242				—				69,242
Equity securities			2,809				—				6,820				9,629
Other investments(1)			—				80,642				5,787				86,429
Total investment securities available for sale			214,360				3,010,552				12,607				3,237,519
Private equity investments			—				—				52,474				52,474
Derivative assets:
Interest rate contracts			—				106,883				—				106,883
Mortgage derivatives			—				—				1,182				1,182
Total derivative assets		$	—				106,883				1,182				108,065
Liabilities
Trading account liabilities:
U.S. Treasury		$	—				7,241				—				7,241
Government agency issued mortgage-backed securities			—				2,457				—				2,457
Total trading liabilities			—				9,698				—				9,698
Derivative liabilities:
Interest rate contracts			—				91,391				—				91,391
Mortgage derivatives			—				(1,166	)			—				(1,166	)
Other contracts(2)			—				—				12,909				12,909
Total derivative liabilities		$	—				90,225				12,909				103,134