Large regional bank Synovus Financial (NYSE:SNV) has released its second-quarter earnings report, a week earlier than previously stated. The report contained much good news for the troubled bank, but the early release was likely timed to coincide with an exciting announcement: The bank also revealed that it has a plan to finally repay its nearly $1 billion portion of Troubled Asset Relief Program funds.

Lagging behind peers
Synovus isn't the only bank that still has TARP money on its books, but it does owe the greatest amount. The financial crisis hit Synovus particularly hard, because it had a greater concentration of problematic commercial loans on its balance sheet than bigger banks.

Megabanks like Bank of America, Citigroup, and Wells Fargo, anxious to escape the additional scrutiny that accompanied bailout funds, received the green light in late 2009 to repay their own TARP debt. Fellow regional BB&T Corp. was able to repay its bailout money earlier that year, probably due to its unusually healthy crisis-era balance sheet.

Repayment plan
Though Synovus did not give a specific date, management had indicated last year that its TARP debt would be repaid in 2013. The bank has been profitable for nearly two years now, and its recent earnings report showed that net income rose to $30.7 million, from $24.8 million in the year-ago quarter. Improving credit quality helped knock down credit costs from $70.3 million one year ago to just $24 million in the most recent quarter.

The repayment plan will entail $680 million of internal funding, as well as a $130-million preferred stock sale, and another $185 million offering of common stock. The debt payment will affect the bank's Tier 1 capital ratio somewhat, reducing it from a robust 14.88, to 10.39.

Though Synovus certainly seems healthy enough to repay these bailout funds, the fact that the Treasury Department plans to raise the dividend rate bank holding companies pay on outstanding TARP balances to 9%, from 5%, later this year could have provided some incentive, as well.

The repayment plan marks a new beginning for Synovus, which has been held back in many ways by its reluctance to pay its TARP debt. Investors greeted the news with glee, sending a stock that has gained more 60% over the past year even higher. Synovus is back, and the next year will almost certainly be one of its best ever.

Fool contributor Amanda Alix has no position in any stocks mentioned. The Motley Fool recommends Bank of America and Wells Fargo. The Motley Fool owns shares of Bank of America, Citigroup Inc , and Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.