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Executives

Richard Anthony - Chairman and CEO

Tommy Prescott - CFO

Fred Green - President and COO

Mark Holladay - EVP and CCO

Analysts

Nancy Bush

Tony Davis

James Raymond

Kevin St. Pierre

Rob Patton

Steven Alexopoulos

Christopher Marinac

Ken Houston

Rob Rutschow

Adam Barkstrom

Synovus Financial Corp. (SNV) Q4 2007 Earnings Call January 24, 2008 4:30 PM ET

Operator

Good afternoon ladies and gentlemen, and welcome to the Synovus-sponsored fourth quarter earnings 2007 conference call. (Operator Instructions).

It is now my pleasure to turn the floor over to your host, Chairman and CEO, Richard Anthony. Sir, the floor is yours.

Richard Anthony

Thank you very much, and welcome to each participant to our fourth quarter conference call. We appreciate your joining us earlier today. We distributed our press release which apparently is the last set of numbers that you'll receive in the marketplace that has TSYS as a part of Synovus, as everyone knows. The spin was completed at the end of the year.

I feel extremely good about the impact of that spin on both companies. We certainly have a lot of focus in each line of business. We have the strategic flexibility that was really the targeted outcome of this transaction. And on the banking side, we are in good shape with quite a bit of excess capital as cushion in these challenging times.

I wish I could find words to describe the environment, that have not been used before, but all the bankers are talking about this difficult credit environment and the challenges that we face as an industry. I certainly have been paying attention to our peer reports, and we are trying to organize our call this afternoon in a manner that will help you understand our current situation and prospects for the future as well as possible.

We had a lengthy Board meeting today. I came away from that as did our Board feeling that the management team has its arms around all the issues that we need to be contending with. You will hear more about that during the call.

The way we've organized the presentation is to start with Tommy Prescott, our CFO who will work through the financial results, then we'll turn to Fred Green, our President and Chief Operating Officer and Mark Holladay, who will talk about credit-related issues.

Without a doubt, credit is the [prominent thing] so we will try to spend time helping you understand the picture there.

At this time I would like to turn to Tommy Prescott and ask him to cover the financials.

Tommy Prescott

Thank you, Richard, and good afternoon to all. I will remind you that we'll be making forward-looking statements today that are subject to risks and uncertainties. Factors that could cause our results to differ materially from these forward-looking statements are set forth in our public reports as filed with SEC.

Our fourth quarter earnings were $81.9 million compared to $175.5 million in the fourth quarter of '06. On per share basis, this represents a reported $0.25 per share in the fourth quarter compared to $0.54 in the fourth quarter of 2006.

Please keep in mind that the 2007 fourth quarter numbers include spin-off related costs and Visa litigation charges - both of which combined reduced EPS $12.2 - and also remember that the fourth quarter of 2006 included a one-time early termination fee of TSYS related to the Bank of America deconversion. Excluding these items, earnings per share was $37 for the fourth quarter, down 14.6% from the same period a year ago.

For the year we reported earnings of $526 million, down 14.7% from '06, with earnings per share of a $1.60 compared to a $1.90 in '06. Excluding the annual impact to the Visa litigation, the spin-off costs, and the Bank of America deconversion fee last year. Earnings per share for '07 was a $1.76, down 2.4% a year ago.

Credit costs remained the key driver for the fourth quarter, with a loan loss provision of $71 million pressure in our fourth quarter performance. The provision was fueled by higher charge-offs and reserves due to the negative migration of credits within the risk grades.

The net charge-off ratio for the quarter was [0.46%] for all of 2007. The increase in credit costs is primarily related to residential construction and development loans in our West Florida and Atlanta area markets.

The non-performing asset ratio grew to 1.67% during the fourth quarter with one-to-four family, construction and development loans representing most of the growth in non-performing assets. Our net interest income for the fourth quarter was $286.7 million and that was $4.2 million below the third quarter net interest income and $2.2 million below the fourth quarter of 2006.

The margin for the fourth quarter was $386 million, down 11 basis points from the third quarter, primarily due to higher level of carry-on non-performing loans and interest charge-offs. Actually, the 11 basis points decline out of that 7 basis point, sort of was related to credit.

Net interest income for the year was $1.1 million, 2.1% over 2006. The margin for all of 2007 was 3.97% compared to an annual margin in '06 of 4.27% million.

Keep in mind that the margin for all periods has been changed to conform with the presentation required by the completion of the spin-off of TSYS. The previous reported net interest margin included the benefit of TSYS deposits with Synovus banking affiliates, since the interest paid to TSYS was eliminated in consolidation.

Additionally, net interest income as previously reported, included income earned by TSYS-owned deposits and investments with third-parties. This change in presentation has reduced the reported net interest margin for 2007 by 5 basis points, and it's about 5 basis points in all the periods that are presented.

The $484 million special dividend that Synovus received in connection with the spin-off will have a favorable impact to the Synovus margin prospectively, in a way, as the dividend will result in a corresponding decrease in interest bearing liabilities.

Loans end of the year at $26.5 billion, up 7.5% over last year. Late quarter growth was $724 million representing [11.1%] annualized growth rate. The year-over-year total loan growth of $1.8 million was diverged with commercial real estate reflecting growth rate of 6.9%. Commercial and industrial loans are up 7.4% and retail 9.3%

Core deposits end of year at $21.7 billion, up a $154 million or 0.7% over 2006. Core deposit growth for the year was primarily and now in money market accounts, compared to the third quarter core deposits are down $91 million. Both comparisons are impacted by the run off of the higher priced CDs, as well as the decline in TSYS deposits. TSYS deposits declined by $107 million and $184 million for the year and quarter respectively, and this decline was primary due to the payment of the special dividends, so some amount of those deposits have been reclassed in our capital, and basically reduced our overnight funding.

Non-interest income was $99 million for the quarter, up 1.4% over the fourth quarter of 2006, and down 7.2% from the third quarter of 2007 primarily due to private equity investment gains recognized in the third quarter.

The year-to-date non-interest income was $389, up $29.6 million or 8.2% over 2006. Service charges remained flat year-over-year, while financial planning, investment banking and brokerage revenue provided solid growth here in '07. Private equity investment gains and gains on the sale of MasterCard stock [holding] also provided a boost during 2007. The expenses - excluding Visa litigation charges - have grown modestly over the last year.

Core deposit expenses are up 3.5% over last year, for the quarter, and up 5% for the full year. Included in '07 were the costs related to 19 new branches that we put online which have added expenses, however we largely offset these costs by managing headcount otherwise, and by lower performance-based pay. There was a smallest spike you might have seen in the fourth quarter G&A expense and that was primarily ORE related.

You'll see TSYS that's presented in discontinued operations line, and we will certainly discontinue talking about TSYS going forward. But just one more time, I’ve got to say that our great subsidiary that's now been spun has left us in great order and had a great year in 2007 and a great finish to that.

I'm going to stop here and turn it over to Fred Green.

Fred Green

Thank you, Tommy, and good afternoon, everyone. Credit issues continue to dominate the headlines lately. So I'll just jump right in on ours. I suspect that most of you on the call are very familiar with our company, so this might be a little redundant to begin with. But as we said last quarter, we do not have any subprime exposure. We do not have any SIVs and we do not have any CDOs.

Recently there has been some concern about consumer debt and some of our peers have reported deterioration there. So, again it's important for you to know, we do not have any indirect automobile loans. We do have a credit card portfolio but it's relatively small at $290 million or 1% of our portfolio. It's very mature portfolio. It's grown at modest levels through cross selling efforts to existing customers, and incidentally our losses there are about one-half of industry averages.

Our HELOC portfolio is around $1.5 billion, or 5.8% of our portfolio. It's a proud portfolio, was underwritten with high credit scores, conservative debt-to-income ratios and proper loan-to-values. Again like the credit cards, they are sold to existing customers in the market to round out our relationships and they are not bought through brokers.

Our consumer mortgage portfolio is around $1.7 billion, or 6.3% of our total portfolio, and is primarily made up of short-term loans to our very best private banking customers. So on the consumer side, we are very comfortable with where our portfolio is now and heading into the rest of the year.

Let me shift now to what we do have, what's created our credit issues and what we are doing to work our way through them. 75% of our non-performing assets are housing related, broken out at 65% in residential construction and development loans and 10% in land loans. These NPAs are concentrated in West Florida and Atlanta, with 70% of our NPAs in these markets. There is close to a 50-50 split between the two markets, and incidentally these markets comprise 31% of our total loan portfolio for Synovus.

Credit losses for 2007 are very similar, 40% of our total losses were in West Florida and 20% in Atlanta. And then the residential construction in development category, 88% of the losses in that segment came again from these two markets.

In 2008 we expect to continue to have some pressure in this sector and in these markets. We've been aggressive in our approach of recognizing problems and reserving appropriately. This past quarter we've reviewed our entire portfolio with the a-tooth comb. The purpose was to recognize all of our problems as quickly as possible and to make sure that we are not inadvertently dragging current problems into future periods.

So at this point our credit issues have been contained, both geographically and by product type. We will begin a continuous review process throughout the year, looking for signs of creepage, but at this point we don't see any signs, if that exist today.

On the problems that we do have, we beefed up our special assets resources so that we can work away through our non-performing loans and other real estate quicker and at a better resolution. There is still a price discovery process taking place in Florida, and although we have not build this into the plan, we do hope that the recent Fed rate cut and any future fiscal or monetary stimulus will help establish values in those markets quicker.

Also, I want to point out a little bit about how aggressively - I guess I should say conservatively - we're looking at loans and reserving appropriately, and we've never shared this with you. But our methodology for these types of loans that I just discussed we would allocate 22.7% reserves on all loans that migrate to substandard but are still accruing.

There is a point at which we are concerned about their ability to continue to pay us, but they haven't hit that point. They are still accruing because we reserved 22.7% of the value of that loan. If these loans continue to deteriorate, and we recognize that they can no longer perform, we'll run an impairment test that calls for us to get a current fair value appraisal, discounted about 10% for selling costs.

We can work through the math. But generally a $4 million loan that might have had an original appraisal of [5 at 80%] after we reserve, again still accruing that loan is around 60% of the original amount. If we look at the loans that this quarter have moved into our NPA category, compare the charge-offs that were reserved of us going through this impairment task that I just mentioned.

The charge offs have actually been less in the aggregate than the 22.7% reserve we previously established, and continue to establish, as these type loans migrate towards that substandard category.

So again, we are attacking the problem as quickly as possible. We are aggressively working through it, and our desire as this credit cycle turns is to be one of the first to come out of it.

With that Richard, let me turn it back over to you.

Richard Anthony

Fred, thank you. And thank you, Tommy, for those reports. I'm going to repeat just quickly two or three things that Fred had mentioned because I think it is important for everybody to understand this about our approach to credit in the company.

As he said in our portfolio, the credit weakness is largely contained within and confined to the Atlanta and West Florida markets. These weaknesses are still concentrated heavily in construction and development. You call tell by Fred's description that we as a company are proactive and aggressive in managing these problems, and we are very sensitive to any potential weakness in other products and in other markets. So we will watch that carefully, but at this point we have not seen any further deterioration.

As we look to the future, these credit challenges will continue to evolve. There is obviously, in our industry, and in our economy, a high level of uncertainty about the depth of this cycle. But I will give you now just a few thoughts concerning some of the drivers that will affect our financial results in 2008.

We believe that our charge-off ratio this year will be somewhat higher than the 2007 annual charge-off ratio of 46 basis points. We believe that our NPAs or non-performing assets could increase during the first half of this year and we think there is a good possibility that some improvement will be seen in the second half. We believe that additional margin pressure will be felt in our results due to these recent rate cuts and extremely competitive marketplace for deposits.

So what we're doing in communicating about the future is giving our directional thoughts. We will continue to update the investment community when appropriate and we will add facts and color when those thoughts are more clearly developed as we experience results moving through the first half of 2008.

And let me conclude, before we get to the Q&A session, by talking about more focused company, our new Synovus if that is a term that you like. The key strategy - and this goes back three years - is our emphasis on the middle market, our commercial strategy, our aspiration and belief that we can become the premier commercial bank in the southeast. This will help us be a more diversified company and it will help us, we think, be more balanced in our risk management of the loan portfolio.

We believe that strength in our company continues to be the markets that we have placed ourselves in the major southeastern markets, so we have made a number of strategic moves over the last five or six years that should serve us well over the next ten years. Our capital position as I mentioned earlier is strong, stronger than most. We have a Tier 1 capital ratio between 9.3% and 9.4%. Our equity and assets ratio is 10.4%. These are the measures at the end of the year.

We believe that it is essential that we take a more intense approach than ever in managing our infrastructure, our expense base, down to the optimal level. We will be looking at processes throughout the company. We will have an internal focus, and if needed, we will use external resources as we determine the right size of our cost structure in Synovus.

Our risk management is stronger than it’s ever been. It's been changed somewhat with the recent innovation of our credit function. We believe that the team now available to Mark Holladay, our Chief Credit Officer and working with the Chief Credit Officers of each regional CEOs management team, gives us a good combination and blend of line support and staff support and management of the credit function.

We will continue as we have for years to lead with people that will be our differentiator, our model. We'll continue to be an attraction, we think, for a talent. Our decentralized approach will be balanced with a proper level of consistent processes and we have moved toward this more efficient approach very strongly in recent years that will continue throughout 2008.

So we are excited about the prospects. We're excited to show what we can do in this difficult period. We look forward to reporting these activities and results to you regularly.

And at this time I want to pause and open up the floor for questions that we will be happy to answer.

Question-and-Answer Session

Operator

Thank you very much, ladies and gentlemen. The floor is now open for questions. (Operator Instructions) We will take the first question from Nancy Bush. Ma'am your line is live.

Nancy Bush

Good afternoon, guys.

Richard Anthony

Hello Nancy.

Nancy Bush

I guess my major question would be the increase in NPAs sequentially from third quarter to fourth quarter were something on the order of 50% which was little bit more than I had expected. Is there some acceleration here? Was there a review during the quarter, perhaps that resulted in this large increase in NPAs, if you could just put some color around that increase, I would very much appreciate it?

Richard Anthony

Okay. We will do that and we will start with Mark and others will pitch in as necessary.

Mark Holladay

The answer to your first question about the review, yes there has been an ongoing review Nancy that, I guess, if I were to describe it in terms of the dollar increase, we had a group of larger loans this quarter than what we would typically look at in terms of average size. We really had three credits on the West Coast of Florida. One in Tampa, that was about $17 million. Two in Valparaiso, one for $14 million and one for about $12 million.

And that along with a few others in the $8 million or $9 million range that drove the percentage increase. Typically what we've seen in prior quarters, our loans in the $2 million, $3 million, $5 million range. So it wasn't so much a function of just a math of amount of loans that were coming in, but there were some. I mean that also created the magnitude of the loss for us. The West Coast loans, our charge-offs there were pretty high for the quarter. The biggest three loans that we had, we charge-off a $1.750 million and $6.5 million on those three loans. So that had also created the dollar sign.

Nancy Bush

Mark are these continuing to come from the bank that was acquired in West Florida or are they still because my impression had been in the third quarter that you kind of got your hands around that portfolio?

Mark Holladay

No, we haven't had a lot coming out of the Naples. In fact, I am feeling, I hate to say but I am feeling a little better about the West Coast of Florida because we've tackled it and we tackled all the coastal banks. We've been very aggressive if you just look at the past years in that sector, West Florida is 10.8% of our total portfolio. Our past dues now are less than that the size of the portfolio they are running. I think they're 9.9% of our past dues and 10.8% of our portfolio.

And the severity of loss that we've had this year if you really look at loss severity, it's been in Florida. And I'm beginning to feel a little better, some of the things we're seeing or some of the wealthy clients that we have are going in and buying high-end condos. There are some prices being set there. I think our CEOs who are on top of their credit, and I'm feeling a little better.

And really if you look at what happened to us in this year, Florida, the charge-off ratio of Florida is very high and Georgia was I think 67 basis points in the fourth quarter. Hang on, I'll get that. Nancy, I would say on Naples, the only meaningful charge we had there during the quarter was a subcontract. We had a low seven figure charge-off there. But the real estate portfolio and the Naples bank was not a drain on the company during that period.

Fred Green

And let me just add for numbers. At the end of the year, we had $34 million in the spread over 240 loans in this construction portfolio we talked about last quarter.

Nancy Bush

Okay. And if I could just ask Tommy: are you guys still asset sensitive? And going into a 75 basis point cut this week and, maybe, a 75 basis point next week or whenever the next meeting is, I mean: is the damage to the margin going to be sort of proportional to that? Or: how do you stand in sort of asset liability management position right now?

Tommy Prescott

Nancy, we are asset sensitive and as Richard mentioned, we do expect some pressure on the margin next year and it will come from a couple of areas. We have the continuation of credit cost built into the margin. We are and I superheated competitive deposit marketplace, one like I think most of us have never seen and seems like the liquidity in banking systems bled into national markets and now local markets and certainly the brokered CDs and that will pressure us.

In addition to that we are asset sensitive. In 2007 you will see that when you isolate the credit cost and you look at our margins since the first quarter of 2007, we really went down only 7 basis points that wasn't credit related. So we did and we were certainly in a period there where you did have some cuts and one of them was 50 basis points [within them]. It gets tougher as you get further down the rate cycle to move deposit rates. I know the industry overall is facing that and quite frankly, dealing with smaller bites out of the rate cuts is better than the big bites. But we'll weather through the 75 basis points and honestly would expect some more on top of that between now and midyear.

Nancy Bush

So I should expect sort of the bulk of the margin damage both from Fed cuts and deposit pricing and credits in the first half of the year?

Tommy Prescott

Yeah, if you are working off the fourth quarter margin, most of the credit impact is in there. If you are just focusing on the 75 basis points cut, you can model out 6 to 7 basis points a little bit more in the real short-term, but settling out in the mid-term '06 and then that settling out and hopefully recovered some of that later in the year. But that’s about as specific as I can be on margin.

Nancy Bush

Thanks very much.

Richard Anthony

Thank you.

Operator

Thank you. The next question is coming from Tony Davis. Your line is live.

Tony Davis

Good afternoon Richard.

Richard Anthony

Hi Tony.

Tony Davis

Good morning, Fred. Tampa Bay seems like a new name here. I mean on my safe standpoint and I guess what I would like to get you do if you would, would just be to specify the dollar amount of construction development exposures you've gotten the big three today Mark. Tampa, the Panhandle, and Atlanta, and also the amount of loans that are either non-accrual or REO: can you do that?

Mark Holladay

I think I can do that. Let me start with Atlanta. Atlanta, one to four construction in residential development, it makes up -- I am sorry, I'm lost.

Tony Davis

(inaudible).

Mark Holladay

Yeah, give me a minute to find that section.

Tony Davis

Okay. You've got this third-party relationship that you've set up here I guess to in terms of workouts. I wonder: if you could give us any color on that as looking only at Atlanta, or is this system-wide effort? And I also want to follow up on your comment about buyers' interest in distressed properties, just kind of: what you're seeing there in the last several weeks? But first thing: is the third-party help out?

Mark Holladay

Yeah. The third-party assistance is devoted to Atlanta and not to the West Coast of Florida. They've gone through pretty much every property that Atlanta has got, is giving a land advice on the strategies of exiting those properties. And it's really being looked at by county, in each one of the counties based on absorption rates. They are giving them advice of whether they should go through realtors, through options or through other parties for the sale.

We've not seen that final report. That is a February initiative for us to get that done. We've also added some additional special assets capabilities there as well. In Florida, we've hired really two very strong high-end talent special assets folks to help us with that strategy and again that is a February initiative as well. So, hopefully at our next report, we will give some good information on that.

Richard Anthony

Tony, I would say it's been hard to move property in Atlanta. We conducted a -- it was not an absolute option, but it was the wrong time of the year and it might have been the wrong type of option, but we had very, very limited interest in a number of lots and a couple of houses at that time.

Tony Davis

That was last quarter?

Richard Anthony

That was in December. We tested the water and I think we will learn from that, but it didn't turn out in a very robust fashion to say the least.

Tony Davis

Mark, I will circle back to you on those other question about the distribution of those loans, those loans by market.

Mark Holladay

Okay.

Operator

Thank you. We ill take the next question from [James Raymond]. Your line is live.

James Raymond

Yes, thank you. It seems that when we take a look at the provision expense that was taken for the fourth quarter, it seemed to be higher than what would have been expected from the release you put out in mid-December. Could you comment on: if anything changed? And: to what extent was the final provision expense you took for the quarter? Or: attempt to try and get ahead of problems, and be even more conservative, to the extent that you might be able to see the provision expense come down at some point in the first half of 2008? Thank you.

Richard Anthony

I am going to say a couple of things and then ask Tommy to fill in. But I think there was a modest increase over the level of guidance that we gave in our pre-announcement back in, I guess, that was in December. Let's say I've forgotten the other part of your question. I have one more.

Tommy Prescott

I will be glad to.

Richard Anthony

Go ahead Tommy.

Tommy Prescott

To offer my view on the guidance that we put in mid December, we basically realized that we knew something that we needed to share with the market and that was that our low loss provision in the fourth quarter would not subside back to a normal level and that it would be higher than normal times. We looked for some sort of guiding tone without being too precise because we still had a couple of weeks to go and a lot of scrubs to got and so we chose to say that the portfolio provision would approximate the level of the third quarter.

The third quarter was $60 million in the final stages of closing out '07 and being as aggressive as we can in looking, we found other issues that added that $10 million to it but felt internally like we're still in the spirit of this closure of mid-December. The thought that escaped me has to do with the notion of getting out ahead and being a little more conservative and really we have a very clear defined methodology that has to do with loan grades and reserves, a lot of which Fred was talking about through his example.

So there is limited ability in the accounting world today to go out and take charges that are deemed to be abnormally conservative. We certainly are realistic and conservative in the way that we grade our loans but all of our provisioning is tide to either actual charge-offs, or are losses or migration into loan grades either positive or negative.

James Raymond

I am sorry, good. Could you quickly comment on whether or not you've seen weakness in any other market, in a significant manner, beside Atlanta and the West Coast of Florida?

Richard Anthony

No

Tommy Prescott

No, we have not, any metrics on that. I think we’ve given them already.

James Raymond

So: what was it specifically about those two markets, which are very different markets from each other, which led to a significant weakening that you’ve not seen elsewhere in contiguous geographies?

Richard Anthony

Here’s my take on that, and I think, we all share this, in Florida, the problem is that there were certain markets in the West Coast in the Panhandle are those where in recent years, you had rapid increases in housing and condominium prices. So, there has been, just like in Nevada and California, and some other markets around the country, a severe correction as the bubble has burst in those markets.

The situation in Atlanta is not that, in Atlanta, you have not seen the rapid increase in housing prices, but there is a tendency in Atlanta for developers and builders to get out ahead of the growth, since there is steady population and job growth. So, in Atlanta, we are dealing more with excess inventory levels that were exacerbated in the Southern Crescent by the subprime fall, because that market in South Atlanta is more dependent upon first time homebuyers. And since financing programs were limited as the subprime crisis unfolded, those inventory levels built up and we had some problems with developers in that regard.

James Raymond

Very good, last quick question would be, the comments you just made on Florida, would you believe that, that pertains to most of Florida or just to Tampa and North-West up to the Panhandle.

Richard Anthony

Well, we don't compete all over Florida, but certainly as you go south and in parts of the east coast we don’t banks there, there are even greater problems in severity. as you move up the east coast where we do have banks over in our case Jacksonville and in front of Dena beach, there is a lot more stability and not nearly the problems that the west coast and further south have experienced. As you get into the interior, we have limited exposure in Orlando, but I think Orlando has had some weakness and we are just not directly involved there.

James Raymond

Very good. Thank you so much for the time.

Richard Anthony

Thank you.

Operator

Thank you very much. We will take the next question from Kevin St. Pierre. Your line is live.

Kevin St. Pierre

Good afternoon gentlemen. Just two quick questions on capital and charge-offs. I will touch charge-offs first. Richard, you mentioned that in '08 you expect charge-offs could be somewhat higher than the 46 basis points. Assuming that a doubling wouldn't be considered somewhat, that would imply that, that sequentially charge-offs should be down from the 91 basis points in the fourth quarter. I was wondering if you could either you or Mark could give us some insight as to: what gives you confidence that the charge-off ratio will come down sequentially?

Richard Anthony

Well, first of all I like the way you said it and I accept your interpretation of what I said and Mark Holladay and his team go at this from several different angles on a regular basis. But the level of confidence that we have in a quantitative analysis and projection is not great enough for us to start putting specific numbers out there, but based upon the fact that our credit issues, as we've said earlier, are contained in the manner that we have described. We feel confident and this somewhat higher level description of projected charge-offs compared to the 46 basis points for the last year. And as I said earlier, we will continue to have a firmer grip on this as we gain some experience in the first half of the year and we do have these different approaches that are quantitative in nature but the level of confidence is not that great in anyone of them.

Kevin St. Pierre

Okay and then on capital, as you mentioned you're dealing from one of the strongest capital positions among your peer group, I was wondering: if you could just review for us what the prioritization of capital deployment will be? We hear a lot of other banks saying that share repurchase is on hold for the first half of the year until capital ratio is build, I was wondering: if you could give us what your plans for capital are?

Richard Anthony

We're in that category, if you have would asked me this question back in November, I would have said that in fact this Friday we're working on a share repurchase program that perhaps might be implemented in the first quarter. But as the industry events unfolded, as capital has become king in our industry. We felt like having this capital on the balance sheet, at this time it was a great source of strength that we felt good about. And we wanted to use it to our advantage. It gives us flexibility in the long-term to do more then just have it there as a source of strength. And certainly our dividend payment is a consideration and that we are right now, given the level of earnings reported for the full year '07 have a higher then desired payout ratio. Of course we certainly expect for our earnings to get back soon in to more normal levels. But for now this excess capital helps us protect the dividend.

Kevin St. Pierre

Thank you very much.

Operator

Thank you. We'll take the next question from Rob Patton. Your line is live.

Rob Patton

Good morning guys or good afternoon.

Richard Anthony

How you doing?

Rob Patton

Just want to talk on the income statement, a couple of run rates for expenses. The personnel expense number for the bank only look like a drop down, I was just wondering: if there's anything in there? Any deferred cost to the 115 to 109. And also I believe, in the other non-interest: we should be pulling out like about $13 million or $14 million of the bank only spin cost?

Tommy Prescott

Yeah, Bob. On the personnel expense line and I guess you're looking at the fourth quarter back to the third quarter.

Rob Patton

Yeah, page 6 of 10.

Tommy Prescott

Yeah. Okay. You're really looking at a $6.5 million reduction in incentive payment and also performance based retirement benefits being lower, in line with the finish of the year and the performance, that’s the primary item in the personnel line.

Rob Patton

Are you saying: there is no catch up on that later on?

Tommy Prescott

That was a '07 adjustment and trued it up to -- based on our performance on what our formulas demanded.

Rob Patton

Okay.

Tommy Prescott

And you asked also about the spin cost.

Rob Patton

Yeah, the other non interest expense, that looks a little elevated. So, I think we’re going to pullout probably $14 million of the pre-tax, bank only portion of the cost to get to a run rate on other…

Tommy Prescott

The other non-interest expense is primarily repo and recovery expense, ORE related cost. The spin costs are shown in discontinued operations; only discontinued operations.

Rob Patton

Okay. Down below, alright. So, then: what is the normalized run rate for that $70.9 million? How much was the ORE?

Tommy Prescott

There is about a $11 million increase.

Rob Patton

Okay.

Tommy Prescott

Of over the normal rate.

Rob Patton

Okay. And I guess, if I could ask Mark, Mark just for color, if you lose those temp on those doubt (inaudible), the three loans, the 17, 14, the 12.

Mark Holladay

Yes.

Rob Patton

And you gave us the charge-off amounts. Can you just tell us: what the loan originally was? What is was secured by? What it was charged down to? Just to get an idea: what the collateral values that you have in the NPA portfolio are?

Mark Holladay

Yes, we can do that. The first one, the largest one, $16.8 million was originally the purchase of land to build to nine building for condominium units, on really a golf course community located in Pinellas county. The origination, I believe within now 2004. We basically went in to the properties that are 50% pre-sold, at the time we did have a $12 million revolver for the [buildings] one and two. And then we had built out three, four and five and they were at present $11.4 million, there is 39 of those 90 units sold, 51 are unsold.

Also have loans for other pads, that are built on and they represent $3 million of debt. And the land loan project has about I believe $4.1 million. So, the three (inaudible) after that $18.5 million, we wrote down $1.7 million against that loan based on the most up-to-date current valuation of the property. Wrote our loan down to $16.8 million. And some condos we have at a price of about $240,000 a unit. We believe we can move these, so we have contracts on properties on that and those condos now that are in excess of that amount. So, we feel pretty good about it.

I guess the other, the other large one, is a development in a residential substantially-division, a case (inaudible) of something that we did around three years ago. This is a customer who at that time had a lot of liquidity, he certainly has placed has reserves, and has the possibility of coming up some more cash. There is other company outside of real estate, (inaudible) down there we have 59 lots, 8 have been sold and again, the customer is out of money and in addition, we have 15 acres in Atlanta, the value of the commercial profit -- with a current of $2 million.

The two combined appraisals are $12.83 million. We charged-off [$2 million], let me make sure I got that number right, $4 million on that credit. I think these are depressed pricings right now, we do believe that we’ve written amount what we get back out of and we do believe the prices will come back but at this point in time, if we chose to sell this property -- that's what we think -- we got in it.

The last one, is I guess, the last big one was, a property at Seagrove, this one is $8.93 million. Originally, this was a property on the beach, purchased for $21 million, we had a $6 million cash injection from the customer. We made a $15.7 million loan at the time with these customers, who were well known to us, they had very strong liquidity in the $10 million to $12 million range. This property was intended to build a club house for a adjacent sub division as well as build 22 units, pretty upscale condo units. Obviously the condo market has receded and the actual sub division that was being developed, which we didn’t do had public company taking out (inaudible), they worked from there. They got substituted for another property, but we believe at today's value, we value that property at $10 million roughly and we wrote down $6.5 million. Again we had guarantors that were good. But at this point in time, that's kind of what we got.

Rob Patton

Well, thank you very much, I appreciate the color.

Tommy Prescott

Thank you.

Mark Holladay

Also, Tommy I believe it was you who had asked me the question about the concentrations in Tampa, Atlanta and Panhandle for residential A&D. Okay. did what I have to then, Atlanta 32% of our one-to-four construction and residential development is in Atlanta Tampa Bay makes up 2.5% of the one-to-four on the residential development and the Panhandle is about 5.5% of that.

Rob Patton

Thank you Mark

Operator

Thank you very much. We'll take the next question from Steven Alexopoulos. Your line is live.

Steven Alexopoulos

Hi, everyone

Richard Anthony

Hi Steve

Steven Alexopoulos

I just wanted to first follow-up on Tommy's margin comments. Tom, if you're saying the net interest margin could compress 6 or 7 basis points from the 75 basis points cut, that would imply that you have considerable room in the deposit pricing to reduce rates. I am curious: where is the flexibility coming from, though, given the environment for deposits today?

Tommy Prescott

Steven, you are absolutely right. We've got a portion of our loans that are swapped, and those get taken care. We've got an amount of variable rate funding that will help cover the gap. And then there is some serious heavy lifting on the pricing side out in our local markets to push deposit prices down. We've got a track record of being able to do that.

And in addition to that, we've got the Federal home loan bank advances that are at variable rates, and of course, Fed funds accounts that re-price overnight. But the biggest opportunity for quick re-price is in the money market accounts. But it's a tough environment. You got to push hard to do it.

Steven Alexopoulos

But you're confident there's enough room in the pricing where you ended the quarter to pull that off?

Tommy Prescott

Yeah, that's our belief. There's also, as Fred mentioned earlier, some good things that will come from this re-price that aren't totally built into our credit model. And one of those things one mentioned was the benefits that will come in our corporate analysis charges. That's one of the hedges that does not show off in the margin, but it's certainly a positive that we've seen a curve through previous cycles.

Steven Alexopoulos

Just one other question: Did you guys sell any non-performing loans during the quarter? Or: is the plan just to hold on to what you have and work the credits?

Richard Anthony

We didn't sell anything, although that is always on the list of possibility. And Mark and his team, and really these banks that represent the concentration of these credit weaknesses are looking at that as a possibility. We're usually pretty guarded on that though because there's a profit margin that hires certainly under demand.

Steven Alexopoulos

Okay. Thanks, guys.

Tommy Prescott

Thank you.

Operator

Thank you. The next question is coming from Christopher Marinac. Your line is live.

Christopher Marinac

Thanks. I want to ask a little bit about interest reserves as well as Atlanta, and just get a sense of some of the changes this quarter on the charge-offs related to getting rid of loans and head interest reserves. And also just want some more color on Atlanta in terms of: where you see that evolving in the next three to six months?

Fred Green

Atlanta is, and what we've seen there or the dynamics of the market are good. The population, the income levels of Atlanta, and just the characteristics of the market, I also would say that the valuations in houses there are not overpriced. So, that's one dynamic that really makes us feel good that we're not going to have severity losses, like we have in Florida, which the dynamics there tell you just the opposite.

The issues in Atlanta are lot inventory turnover because of sales. Sales are down. Lot inventory continues climb. The absorption period there is over 50 months now for lots. The housing absorption is running 10 or 11 months in Atlanta. And until we see a rebound in sales, that dynamic is going to remain the same.

So, your default rates are going to be higher there than they would be anywhere else in the other surrounding areas of the other states. And that's just a fact of life. We do think that we've got our hands on who that is and who they are and what the risks are. We are migrating the loans that need to be migrated from a risk rate standpoint, and again looking at the proper execution on the turnover of assets.

Christopher Marinac

And then, Mark, on the interest reserve part: is that a driver of some of the charge-offs this quarter?

Mark Holladay

I don't really think it's the interest reserves. I think those reserves probably have been, at least, for portfolio probably have been depleted for sometime because we're not bringing on a lot of new loans online in terms of the development of properties there, our construction loans, the age of those has, based on the absorption, has depleted reserves.

And I don't really that's it. I think it's more of a function of the borrowers' liquidity. One of the tests we put on those borrowers up there was the ability to carry property for normally would be an 18 month period, and they are struggling with liquidity. And where we can support those customers we will, where we feel like we cannot, we won't.

Christopher Marinac

Okay. The last question has to do with new loan demand in your pipelines. Outside of construction: where would the pockets of your strength for the new loan pipeline that you see across the footprint?

Mark Holladay

Yeah. We feel like we will get some growth in the income properties, if you look at multi-family, office, hotel, and some retail in the portfolio, really a function of the change in the spreads in the CNBS market. Number one, the duration of our portfolio is going to increase some, and then, opportunities for acquisition and things like that, which we used to do more of, went directly to the CNBS market.

The spreads have gone up to 250 to 350 over the comparable treasuries. The underwriting has tightened, the interest-only loans are gone, and the cash flows are appropriate. And we think we will have opportunities there, and that's showing up in our portfolio right now.

Also, in this C&I sector, in the segments that are healthy, we put a lot of focus on that. We spend all year along, making sure we have the right talent embedded in the banks. We've given our bankers the tools that they told us they needed to be able to succeed in that area. And we feel pretty good that we can do well there as well. And then, from a consumer standpoint, we need to focus on our private banking customers where appropriate, the other areas of retail.

Christopher Marinac

Great, Mark. Thank you for all the color. I appreciate it.

Mark Holladay

Thanks, Chris.

Operator

Thank you. We will take the next question from [Ken Houston]. Your line is live.

Ken Houston

Thanks a lot. Just two quick follow-ups on some prior questions: Just taking your points about expecting higher charge-offs, but then looking at the fact that you really only built the reserve by about $11 million, you're expecting higher NPAs and decent loan growth, but your coverage of NTLs is only about one times. Should we also expect that you'll have to continue to over provide by a decent amount too for the course of '08?

Richard Anthony

Let me answer that. If you look at the fourth quarter, if you make up provision expenses of $70 million, $49 million of that was charge-offs, $6 million was growth, another $9 million was the migration of risks in the portfolio, which we embedded into the portfolio, and then the impairments on loans was about $6 million. That made up the $70 million.

You are seeing with Synovus, I think because we've put in heavy allocations for concentrations and for credit trends in this residential sector. Really, what you're seeing is our losses flow through the P&L rather than beefing up the provision. And I think that's what you'll continue to see.

Unless we have some massive migration in the portfolio, I would not expect those provision expenses to be as heavy as if charge-offs come down, say, in Florida where we're seeing some changes in the portfolio, past dues, things like that.

Fred Green

Okay. And this is Fred Green, I'll add a little color to that. I mentioned in my remarks earlier how we reserved 22.7% of the base amount of the loan once it becomes substandard even still accruing. A review of all of our impaired loans, we had reserved on all of our impaired loans $58.5 million. And after we had impairment testing with current appraisals discounted to include selling cost, the charge-offs related to those were only $38 million.

So I think that the issue is less reserves tied to NPAs, more reserve tied to migration. And once that migration stops going down or deteriorating is when we will obviously have improvement in the amount of reserves we're taking.

Richard Anthony

One more issue is we impair every non-accrual over $1 million and that covers roughly 78% of our non-performing assets. Our practice has been the loan goes on a non-accrual, we immediately impair it, we immediately update appraisals, and we take the charge-offs in that quarter. So our coverage ratio I feel very good about in terms of the coverage, the NPAs, because 70% of those NPAs have already been addressed.

Ken Houston

Great! That's great color. My second question relates to, you talked about how this quarter, on an operating basis, you backed out the Visa charge. You kind of covered the dividend around $0.21. And you mentioned that overtime you'd expect to pay out to kind of normalize. And given that this is again "new Synovus", I'm wondering: if you could just give us a color on where you expect the payout ratio to normalize overtime? What do you expect to be paying out?

Tommy Prescott

Ken, this is Tommy. I'll take a shot at that. Obviously, based on the '07 results and the stated run rate of a dividend, we got a fairly high dividend payout ratio. We've got to work through the credit cycle. That's taken a very big bit out of earnings. And when you normalize things for that, it rationalizes the payout ratio. And it's our intention to watch this cycle through, to see it through, get to some equilibrium there, and then to plot our course from there.

Ken Houston

Okay. So you don't intend to be like within peers? Or, I mean: no kind on commentary on generally expected range of payout that you expect overtime?

Mark Holladay

Over a longer period of time, we certainly have to be like our peers. But we have the capital and stay in power to see our way through that. And obviously, the depth and the duration of the credit cycle will determine the final answer there.

Richard Anthony

I'd say it is pulling out into the future with our excess capital we could live with a 50% or even higher payout ratio for some period of time. But overtime, it's going to get back in the 45% range.

Mark Holladay

Mid 40.

Richard Anthony

Mid 40s.

Mark Holladay

Yeah. Reasonable target overtime.

Ken Houston

Over time, right? Not necessarily say in '08, but you're saying: “over time”.

Richard Anthony

That's correct: over time.

Mark Holladay

There was a plan to get there on the earnings side of moving?

Ken Houston

Right.

Richard Anthony

That's right.

Ken Houston

Right. I understand it to mean: that we shouldn't necessarily imply dividend growth, but more so as the earnings power growing into it over some or whatever time out there in the future.

Richard Anthony

That's correct.

Ken Houston

Okay. Thanks a lot.

Richard Anthony

Thank you.

Operator

Thank you. We'll take the next question from Rob Rutschow. Your line is live.

Rob Rutschow

Hi. Good evening.

Richard Anthony

Hello, Rob.

Rob Rutschow

If I can revisit Atlanta, I guess, for one more time. You gave the metric last quarter about months of inventory, I think, 10 months of housing and 44 months of developed lot. Is that still pretty close to those numbers?

Richard Anthony

Rob, it's changed a little bit. I just recently got in the data, and I'll look it up for you real quick. In rough numbers, the North Atlanta market has 11.3% months of supply on houses, and that increased from 9.3 months of supply in the fourth quarter of '06. And then the portion of total inventory that is finished vacant increased to 6.7 months of supply over the fourth quarter '07, and that dropped from 4.4 months of supply at this time last year. So, we have continued to see some increase in supply, and the vacant [developed] lot inventory for North Atlanta is running 50.2 months, I don’t remember third quarter, but it was not that high.

And again South Atlanta, single-family inventories at 9.7 months of supply, that includes inner-state [Connecticut] construction, and that’s up from 9.1 month of supply in the fourth quarter of last year. And then the vacant [developed] lot inventory is at 66.2 months. Job growth is really the key factor towards the recovery. Job growth in Atlanta is still good, it's increased at a solid rate during the fourth quarter of '07. The labor figures show that Atlanta through December of '07, the rate of job growth was 52,600. The economic forecasting center at Georgia state is still projecting that Atlanta will add 59,100 jobs in our way in another 62,500 in '09. So, we will get there with Atlanta, but we're going to have to work through some of that inventory that’s out there before all that happens.

Rob Rutschow

Is the issue, new builder's putting up houses or are u getting an influx of foreclosures as well.

Richard Anthony

Atlanta is a two-fold issue there. There has been development still coming on line in Atlanta, obviously with book store, absorption that’s pushed up a lot. I do think if you look at future lot inventories, and I have those statistics for third quarter, I don’t have them in for fourth quarter, but future lot inventories is projecting to move down. So we can help you with that data as well once we get an [end], which will be in hopefully next week, but we are expecting inventories forward to come down, that’s a function of new development coming on line and the other is just starts, and starts are down because sales is down.

Rob Rutschow

Okay, that’s helpful. If I can switch gears a little bit. Can you give us any sort of guidance for the efficiency ration going forward? And: how that might be impacted by a lower margin? And then also: what your expectations for tax rate for 2008?

Richard Anthony

I am going to let Tommy tackle that. I would say just in looking at the efficiency ration, it's starting to bounce around given the numerator size, the revenue. I guess that would be the denominator side. And so it's gone up and we therefore, my point is, we are targeting year-over-year expense growth more right now than efficiency rates because of the volatility of that measure. But, I am going to let Tommy add to that.

Yeah I will be glad to do that. First of all the tax rate question, just assuming, for 2008 just slightly over 35% combined tax rate and that should get you there. As far as efficiency ratio, it has slipped some due to the deterioration primarily on the revenue side, and we'd still like to target being back in the 50 range and even getting it below that. But obviously you have to press on both sides of the equation, get revenue back to a normalized level and then work as hard as you can and use every tool you can on the expense side and that's our intention.

Rob Rutschow

Can you share with us the target for expense growth?

Tommy Prescott

They are still under construction, but it will be very low. I can go ahead and share that with you.

Rob Rutschow

Okay. I think that's all my questions for now. Thanks a lot.

Richard Anthony

Thank you.

Operator

Thank you very much. The next question is coming from Adam Barkstrom. Your line is live.

Adam Barkstrom

Hey good afternoon.

Richard Anthony

Hi, Adam.

Adam Barkstrom

Hey, Mark, to make sure I understand it: Did you say a lot inventory in South Atlanta was 66.2 months?

Mark Holladay

Yes, I believe I did.

Adam Barkstrom

Okay, alright. And then -- so I was thinking the overall Atlanta number was somewhere around 53-54 months, something like that. Does it sound right on a blended basis?

Mark Holladay

We're going to you take another look, I am pretty sure.

Adam Barkstrom

And then maybe while you are looking at that, you also have mentioned that there were some data that you are looking at. Does that indicate to you that you anticipated future lot inventories to start coming down? I was just curious: if you could may be give us, as the first I have heard of that at least in the near term, kind of: what you are looking at to make that conclusion?

Mark Holladay

It's actually a function of starts, sales and residential developments coming on line. Just to give you some of these areas to back them. You know at [Carroll County] has a very high level of lot supply with a (inaudible) 85.3 months, the future projected lot inventory based on that [bank] is 48.7 months. And I can't remember if it's 24 months out or 36 months out, but there is a time projection based on what's going on in the market, developments coming online, those kind of things. So I think overall for Atlanta, I think that if they can develop, lot inventory for the fourth quarter is 55.3 months. North Atlanta is 50 months and South Atlanta is 66 months.

Adam Barkstrom

Okay, great. And if I could circle back kind of in the middle of the Q&: Mark you were talking about three credits, specifically Florida credits; one 16.8, one 14, and one 12. And I think later you said the charge-offs associated with that credit you wanted some detail with the 16.8 one, said you charge-off $1.7 million. But I though I heard you charged-off $6 million each on the other two. And obviously the magnitude of the charge-off on those two versus the first is significantly different. First I want to know if I heard the right number? And then, if I did: could you sort of reconcile that a little bit for us?

Mark Holladay

Yeah, I think I can. I've got Kevin Howard in here my Chief Underwriter. He is also familiar with these properties. The one moment you talked about that was if we're going to find the (inaudible) detection line data. It’s really a function of the appraised value at the time the property was made and the appraised value today on the property. The one land we talked about I think at Seagrove I believe there was a $6 million capital infusion in that property, the original cost of that loan was roughly $21 million.

Adam Barkstrom

Was that the $16 million credit you are talking about?

Mark Holladay

The [balance] on that credit right now is $8.9 million, and that’s the one we took where we had really a $15 million roughly I think balance and charged it down to $9 million. And that’s based on a darn hard, down and dirty look at the property today less selling cost?

Fred Green

Adam this is Fred Green again. The other difference between the one that had less charge-off versus the two that had more was a property type. The two that had a greater charge-offs were land for future development, and obviously, at this point there's less demand for that, less demand for development, and therefore a greater charge-off. The one that had a lower charge-off level was the -- it was associated with projects where there were actually units already completed. So again, all three of them were apprised at current market values less selling cost and that's just the difference between them.

Adam Barkstrom

Okay. And then just curious: if you could quantify this for me? In your residential construction portfolio: how prevalent would you say personal guarantees are used? How quickly and when are they enforced?

Mark Holladay

Practically all, unless it's a ongoing revenue stream, an income property, would have some kind of limited guarantee. But our practice is not - and has been as long as I'm the Chief Credit Officer it will continue to be, as long as it will be guaranteed by the [Florida]. One other issues for Atlanta and we talked about this in this [full ways].

It's more of a speculated market than some of our other markets and we've been in there. There are more builders that have done stack that typically run 60% stack, 40% contract. And you look at other markets, it's kind of reverse. And then they have gone out leveraged with some other banks and created some liquidity issues for themselves.

Fred Green

And Adam, let me add to that. We will very aggressively pursue a recovery opportunities through the guarantors that we do have on those loans that were now seeing charge-offs.

Adam Barkstrom

Tony, just not to beat a dead horse, but [fresh issue] out of me, I mean: do you guys go to the level of…… You've got a developer, he is got a personal guarantee and: you are going to foreclose on his personal relevance?

Fred Green

Yes, it will work your way through the core system, ultimately you work through judgment and sometimes through judgment there is forced assets sales. But: yes, we will actively and aggressively pursue collection of charge-offs in our credit area.

Adam Barkstrom

Got you. Last question, I want to make sure, I clarify one more thing with you guys. I thought earlier on the call, someone asked about reserve levels, provision levels, charge-off levels etcetera. And it sounded like here going forward that, your current reserve levels, given you don’t see another huge migration to NPAs, that you feel relatively comfortable where there reserve level is here. Did I hear that correctly?

Fred Green

You did.

Adam Barkstrom

Got you. All right, thank you, guys.

Richard Anthony

Thank you.

Fred Green

Thank you.

Operator

Thank you, ladies and gentlemen. We have one final question, a follow-up coming Rob Patton, your line is live.

Rob Patton

Guys, just a theoretical question: In the last cycle there was a gradual reserve plead over several years from the banks. Obviously the FCC has taken a much different approach this time around. If we come out of this cycle in sort of as you are viewing a second half sort of recovery or start to get better, we can account or we'll have a better improving economic cycle, so we won't be able to account for that in the reserve anymore, we're going to have improving loan. Are we going to have to let the reserve out on over a much quicker maybe a couple of quarters versus over several quarters?

Fred Green

Yes Rob, this is Fred Green. We adopted a formulaic reserve methodology that I mentioned and gave several examples about the high level we are reserving as loans deteriorate. If that seven loan that I mentioned that substandard loans improves, right now we've got 22.7%. That dropped down to six with just one notch. And so if we see the overall portfolio improving, there will be very rapid reductions in reserves. As the formulaic approach we can't use judgment, we do have a 10% unallocated associated with it, but you are right, there will be much more rapid reductions upon improvement of the portfolio and the economy in general.

Rob Patton

Okay, and just one other dumb question: How are the banks marketing these properties? I've talked to a number of banks and do you think you just want to put a tab on your website and start listing these properties up, because you got a lot of them. But: how are you getting, how are you marketing them this time around?

Fred Green

Well, just first off because of our system. We've got 37 separate charters, different communities and those folks who run the bank know those markets, and so they have a better feel for what's selling in those communities and how to sell and list them with. We coordinate all of those activities with Mark and his staff to make sure that we are aggressively trying to liquidate those at current market values, not co-trying to recover everything we may have lost. We've got the beefed up group working on the charged off loans for recoveries, the OREO and all other NPAs. So it’s a pretty program to work through and liquidate them, at their current value, not to just [disparage] our sale, get through them, and then take huge losses associated. But at the current values, we think that we’re seeing the math.

Rob Patton

Okay, thanks.

Operator

Thank you Ladies and gentlemen, there appear to be no further question. Do you have any closing comments you’d like to finish with?

Richard Anthony

I just want to thank everybody for your questions and for participating in the call. Predictably, the questions were primarily about credit, but I believe firmly that our team has a approach that will enable us to manage through this part of the cycle extremely well. It's also important for those of us in leadership not let this credit weakness that we’re working through become a distraction for our banks in their growth in business development efforts. We’re seeing today through the way we organize responsibilities that that distraction does not occur.

We look forward to continuing to update the investment community and thank you for joining us today.

Operator

Thank you very much ladies and gentlemen. This does conclude today's conference. You may disconnect your line and have a wonderful day.

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Source: Synovus Financial Q4 2007 Earnings Call Transcript
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