Synovus Financial (SNV) 8-K Synovus Reports Results for Third Quarter of 2010

Exhibit 99.3

Explanation of Non-GAAP Financial Measures

The measures entitled tangible common equity to tangible assets ratio, tangible common equity to risk-weighted assets ratio, core deposits, core deposits excluding time deposits, net interest margin excluding the negative impact of non-performing assets, pre-tax, pre-credit costs income, non-interest expense excluding credit costs and other non-recurring items, and fundamental non-interest expense are not measures recognized under U.S. generally accepted accounting principles (GAAP), and therefore are considered non-GAAP financial measures. The most comparable GAAP measures are the ratio of total shareholders’ equity to total assets, total deposits, net interest margin, loss before income taxes, and total non-interest expense, respectively.

Management uses these non-GAAP measures to assess the performance of Synovus’ core business and its capital position. Synovus believes that these non-GAAP financial measures provide meaningful additional information about Synovus to assist investors in evaluating Synovus’ capital strength and the performance of its core business. These non-GAAP financial measures should not be considered as substitutes for the ratio of total shareholders’ equity to total assets, total deposits, net interest margin, loss before income taxes, or total non-interest expense determined in accordance with GAAP and may not be comparable to other similarly titled measures at other companies. Total risk-weighted assets is a required measure used by banks and financial institutions in reporting regulatory capital and regulatory capital ratios to Federal and state regulatory agencies. The tangible common equity to tangible assets ratio and the tangible common equity to risk-weighted assets ratio are used by management and investment analysts to assess the strength of Synovus’ capital position. Core deposits and core deposits excluding time deposits are measures used by management to evaluate organic growth of deposits and the quality of deposits as a funding source. Net interest margin excluding the negative impact of non-performing assets is a measure used by management to measure net interest margin exclusive of the impact of non-performing assets and associated net interest charge-offs. Pre-tax, pre-credit costs income is a measure used by management to evaluate core operating results exclusive of credit costs as well as certain non-core expenses such as goodwill impairment charges, severance charges, net litigation contingency expense (recovery), and the gain on sale of Visa shares. Non-interest expense excluding credit costs and other non-recurring items is a measure used by management to evaluate core non-interest expense exclusive of other credit costs, severance charges, net litigation (expense) recovery, and goodwill impairment charges (i.e., excluding components of non-interest expense which are also excluded in the computation of pre-tax, pre-credit costs income). Fundamental non-interest expense is a measure used by management to evaluate core non-interest expense exclusive of other credit costs, severance charges, net litigation (expense) recovery, goodwill impairment charges, and FDIC insurance expense.

The computations of the tangible common equity to tangible assets ratio, the tangible common equity to risk-weighted assets ratio, core deposits, core deposits excluding time deposits, net interest margin excluding the negative impact of non-performing assets, pre-tax, pre-credit costs income, non-interest expense excluding credit costs and other non-recurring items, and fundamental non-interest expense, and the reconciliation of these measures to the ratio of total shareholders’ equity to total assets, total deposits, net interest margin, loss before income taxes, and total non-interest expense are set forth in the tables below:

Reconciliation of Non-GAAP Financial Measures

(dollars in thousands)

	3Q10			2Q10			1Q10			4Q09			3Q09
Tangible Common Equity to Tangible Assets Ratio
Total risk-weighted assets	$	23,676,957			24,603,856			25,767,271			26,781,973			28,377,624
Total assets	$	30,954,761			32,382,340			32,439,438			32,831,418			34,610,480
Less: Goodwill		(24,431	)		(24,431	)		(24,431	)		(24,431	)		(39,280	)
Less: Other intangible assets, net		(13,463	)		(14,505	)		(15,556	)		(16,649	)		(17,775	)
Tangible assets	$	30,916,867			32,343,404			32,399,451			32,790,338			34,553,425
Total shareholders’ equity	$	3,216,066			3,423,932			2,616,743			2,851,041			3,136,660
Less: Goodwill		(24,431	)		(24,431	)		(24,431	)		(24,431	)		(39,280	)
Less: Other intangible assets, net		(13,463	)		(14,505	)		(15,556	)		(16,649	)		(17,775	)
Less: Cumulative perpetual preferred stock		(934,991	)		(932,695	)		(930,433	)		(928,207	)		(926,014	)
Tangible common equity	$	2,243,181			2,452,301			1,646,323			1,881,754			2,153,591
Total shareholders’ equity to total assets ratio (1)		10.39	%		10.57			8.07			8.68			9.06
Tangible common equity to tangible assets ratio		7.26			7.58			5.08			5.74			6.23
Tangible common equity to risk-weighted assets ratio		9.47			9.97			6.39			7.03			7.58
Core Deposits and Core Deposits Excluding Time Deposits
Total deposits	$	25,236,225			26,257,563			27,180,048			27,433,533			28,054,191
Less: National market brokered deposits		(3,549,175	)		(4,175,762	)		(4,642,345	)		(5,039,328	)		(5,639,336	)
Core deposits		21,687,050			22,081,801			22,537,703			22,394,205			22,414,855
Less: Time deposits		(6,482,521	)		(6,971,056	)		(7,384,005	)		(7,597,738	)		(8,091,021	)
Core deposits excluding time deposits	$	15,204,529			15,110,745			15,153,698			14,796,467			14,323,834

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

Reconciliation of Non-GAAP Financial Measures

(dollars in thousands)

	3Q10			2Q10			1Q10			4Q09			3Q09
Net Interest Margin Excluding the Negative Impact of Non-performing Assets
Average earning assets (2)	$	29,397,980			30,133,553			29,816,791			31,402,913			31,556,544
Net interest income (taxable equivalent)	$	246,547			251,095			249,978			257,058			255,850
Add: Negative impact of non-performing assets on net interest income (3)		22,336			24,383			27,863			30,102			32,951
Net interest income excluding the negative impact of non-performing assets	$	268,883			275,478			277,841			287,160			288,801
Net interest margin		3.33	%		3.34			3.39			3.25			3.22
Add: Negative impact of non-performing assets on net interest margin		0.30			0.33			0.38			0.38			0.42
Net interest margin excluding the negative impact of non-performing assets		3.63	%		3.67			3.77			3.63			3.64
Pre-tax, Pre-credit Costs Income
Loss before income taxes	$	(180,807	)		(233,632	)		(275,180	)		(243,929	)		(472,476	)
Add: Provision for losses on loans		239,020			298,904			340,948			387,114			496,522
Add: Other credit costs		61,870			53,689			53,562			40,659			109,739
Add: Goodwill impairment		—			—			—			14,849			—
Add (subtract): Severance charges		2,520			—			—			(347	)		(413	)
(Subtract) add: Net litigation contingency expense (recovery)		—			—			—			(2,374	)		6,433
Less: Gain on sale of Visa shares		—			—			—			(51,900	)		—
Pre-tax, pre-credit costs income	$	122,603			118,961			119,330			144,072			139,805
Non-interest Expense Excluding Credit Costs and Other Non-recurring Items, and Fundamental Non-interest Expense
Total non-interest expense	$	269,011			258,762			252,797			249,493			316,820
Less: Other credit costs		(61,870	)		(53,389	)		(53,562	)		(40,659	)		(109,739	)
(Subtract) add: Severance charges		(2,520	)		—			—			347			413
Add (subtract): Net litigation contingency (expense) recovery		—			—			—			2,374			(6,433	)
Less: Goodwill impairment		—			—			—			(14,849	)		—
Non-interest expense excluding credit costs and other non-recurring items		204,621			205,073			199,235			196,706			201,061
Less: FDIC insurance expense		(15,492	)		(18,064	)		(16,555	)		(16,675	)		(14,191	)
Fundamental non-interest expense	$	189,129			187,009			182,680			180,031			186,870

⁽²⁾ Quarterly average balance

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

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