With the last vestiges of the financial crisis behind it, Synovus Financial (NYSE:SNV) reported third quarter earnings that reflect a strong balance sheet and an optimistic view of the future.

A true Cinderella story
After suffering mightily during the financial crisis, Synovus has made an amazing recovery. Though it was one of the last of the large banks to exit the Troubled Asset Relief Program, the bank announced at the beginning of last quarter that it was ready to do so. In July, Synovus repaid its TARP warrants, and now looks forward to celebrating 125 years in the banking business.

Though the bank's earnings report did not hold any big surprises, it showed that the long journey back to health resulted in a solid foundation upon which Synovus continues to build. Like the megabanks, Synovus took a hit from the mortgage banking slowdown, noting a $2 million decline from the linked quarter. Overall, however, total loan growth was strong, with commercial and industrial loans clocking a 0.7% annualized increase, and retail loans up 9.5% on an annualized basis.

Credit quality improved again, with total credit costs down to $22.4 million compared to last quarter's $24 million and a hefty $85.6 million in the year ago quarter. Net charge-offs were brilliant, at a mere $23 million versus $30 million in the linked quarter -- and a huge improvement from last year's $96.5 million.

The future, post-TARP
Exiting TARP has lifted a great weight from Synovus, and management's relief is palpable. In an interview earlier this month, CEO Kessel Stelling Jr. spoke of all the hard work put in by the bank's team to get to the point of repaying its loans, and noted "the extra spring in the steps of our employees". Similarly, Stelling mentioned on the earnings call that putting the debt in the past has "put the offensive spring in the step of our bankers." Stelling notes that he sees the redemption of the warrants as a positive signal to customers and the greater business community, too -- and highlights the fact that the bank's Tier 1 Common Equity ratio is nearly 10%, compared with 8.97% at the end of June.

A big birthday bash, to boot
With past damage repaired and the future looking bright, Synovus is in an especially festive frame of mind. The company is planning a series of events to celebrate its 125th birthday, which falls on Halloween. In honor of this occasion, Stelling will ring the closing bell at the New York Stock Exchange on November 13. Even as Synovus pays homage to its past, however, Stelling notes that management's sights are trained unwaveringly on the future.

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