Exhibit 99.3
FORM 11-K
| (Mark One) | ||
| þ | ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended December 31, 2004
OR
| o | TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number 1-10312
SYNOVUS FINANCIAL CORP. DIRECTOR STOCK PURCHASE PLAN
SYNOVUS FINANCIAL CORP.
1111 BAY AVENUE
SUITE 500
COLUMBUS, GEORGIA 31901
(706) 649-5220
SYNOVUS FINANCIAL CORP.
DIRECTOR STOCK PURCHASE PLAN
Financial Statements
December 31, 2004, 2003, and 2002
(With Report of Independent Registered Public Accounting Firm Thereon)
KPMG LLP
Suite 2000
303 Peachtree Street, NE
Atlanta, GA 30308
Report of Independent Registered Public Accounting Firm
The Plan Administrator
Synovus Financial Corp.
Director Stock Purchase Plan:
We have audited the accompanying statements of financial condition of the Synovus Financial Corp. Director Stock Purchase Plan as of December 31, 2004 and 2003, and the related statements of operations and changes in plan equity for each of the years in the three-year period ended December 31, 2004. These financial statements are the responsibility of the Plan’s administrator. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial condition of the Synovus Financial Corp. Director Stock Purchase Plan as of December 31, 2004 and 2003, and the results of its operations and changes in its plan equity for each of the years in the three-year period ended December 31, 2004 in conformity with U.S. generally accepted accounting principles.
Atlanta, Georgia
April 1, 2005
KPMG LLP, a U.S. limited liability partnership, is the U.S.
member firm of KPMG International; a Swiss cooperative.
SYNOVUS FINANCIAL CORP.
DIRECTOR STOCK PURCHASE PLAN
Statements of Financial Condition
December 31, 2004 and 2003
| 2004 | 2003 | |||||||
Assets | ||||||||
| Common stock of Synovus Financial Corp. at market value - 2,002,558 shares (cost $23,126,539) in 2004 and 2,355,286 shares (cost $23,958,032) in 2003 (note 2) | $ | 57,233,118 | 68,114,873 | |||||
| Dividends receivable | 351,880 | 382,930 | ||||||
| $ | 57,584,998 | 68,497,803 | ||||||
Liabilities and Plan Equity | ||||||||
| Plan equity (632 and 605 participants in 2004 and 2003, respectively) | $ | 57,584,998 | 68,497,803 | |||||
See accompanying notes to financial statements.
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SYNOVUS FINANCIAL CORP.
DIRECTOR STOCK PURCHASE PLAN
Statements of Operations and Changes in Plan Equity
Years ended December 31, 2004, 2003, and 2002
| 2004 | 2003 | 2002 | ||||||||||
| Dividend income | $ | 1,427,165 | 1,602,239 | 1,416,585 | ||||||||
| Realized gain on distributions to participants (note 5) | 7,698,828 | 4,951,277 | 2,566,158 | |||||||||
| Unrealized (depreciation) appreciation of common stock of Synovus Financial Corp. (note 4) | (10,050,262 | ) | 18,312,105 | (16,297,840 | ) | |||||||
| Contributions (notes 1 and 3): | ||||||||||||
| Participants | 2,368,339 | 2,191,935 | 2,147,462 | |||||||||
| Synovus Financial Corp. and participating subsidiaries | 1,184,169 | 1,095,967 | 1,073,731 | |||||||||
| 2,628,239 | 28,153,523 | (9,093,904 | ) | |||||||||
| Withdrawals by participants — common stock of Synovus Financial Corp. at market value (545,939 shares in 2004, 381,705 shares in 2003, and 167,638 shares in 2002) — (note 5) | (13,541,044 | ) | (8,639,268 | ) | (4,023,197 | ) | ||||||
| (Decrease) increase in Plan equity for the year | (10,912,805 | ) | 19,514,255 | (13,117,101 | ) | |||||||
| Plan equity at beginning of year | 68,497,803 | 48,983,548 | 62,100,649 | |||||||||
| Plan equity at end of year | $ | 57,584,998 | 68,497,803 | 48,983,548 | ||||||||
See accompanying notes to financial statements.
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SYNOVUS FINANCIAL CORP.
DIRECTOR STOCK PURCHASE PLAN
Notes to Financial Statements
December 31, 2004, 2003, and 2002
| (1) | Description of the Plan | |||
| The Synovus Financial Corp. Director Stock Purchase Plan (the Plan) was implemented as of January 1, 1985. The Plan is designed to enable participating Synovus Financial Corp. (Synovus) and subsidiaries’ directors to purchase shares of Synovus common stock at prevailing market prices from contributions made by them and Synovus and participating subsidiaries (the Participating Companies). | ||||
| Synovus serves as the plan administrator. Prior to August 1, 2002, the Plan agent was State Street Bank and Trust Company. Effective August 1, 2002, the Plan agent is Mellon Investor Services, LLC, hereafter referred to as “Agent.” | ||||
| Any person who currently serves or in the future is elected to serve as a member, advisory member, or emeritus member of the board of directors of any of the Participating Companies is eligible to participate in the Plan. Participants may contribute to the Plan only through automatic transfers of contributions from their designated demand deposit accounts. Participant contributions by directors of subsidiaries may not exceed $1,000 per calendar quarter. Contributions by directors of Synovus may not exceed $5,000 per calendar quarter. Matching contributions to the Plan are to be made by the Participating Companies in an amount equal to one-half of each participant’s contribution. All contributions to the Plan vest immediately. | ||||
| The Plan provides, among other things, that all expenses of administering the Plan shall be paid by Synovus. Brokers’ fees, commissions, postage, and other transaction costs incurred in connection with the purchase in the open market of Synovus common stock under the Plan are included in the cost of such stock to each participant. | ||||
| The Plan provides that each participant may withdraw at any time all or part of the full number of shares in his or her account balance. The participant may elect to receive the proceeds in the form of shares of common stock of Synovus or in a lump-sum cash distribution. | ||||
| The Plan provides that upon termination of participation in the Plan, each former participant will receive, at his discretion, the full number of shares of Synovus common stock held on his behalf by the Agent, together with a check for any fractional share interest, or a lump-sum cash distribution for the proceeds of the sale of all shares held by the Agent on his behalf. A participant who terminates his participation in the Plan may not reenter the Plan until the expiration of a six-month waiting period. | ||||
| Participation in the Plan shall automatically terminate upon termination of a participant’s status as a board of directors member whether by death, retirement, resignation, or otherwise. | ||||
| Synovus expects to maintain the Plan indefinitely, but reserves the right to terminate or amend the Plan at any time, provided, however, that no termination or amendment shall affect or diminish any participant’s right to the benefit of contributions made by him or the Participating Companies prior to the date of such amendment or termination. | ||||
| Synovus reserves the right to suspend Participating Company contributions to the Plan if its board of directors feels that Synovus’ financial condition warrants such action. | ||||
(Continued)
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SYNOVUS FINANCIAL CORP.
DIRECTOR STOCK PURCHASE PLAN
Notes to Financial Statements
December 31, 2004, 2003, and 2002
| (2) | Summary of Accounting Policies | |||
| The investment in Synovus common stock is stated at market value, which is based on the closing price at year-end obtained by using market quotations on the principal public exchange market for which such security is traded. The December 31, 2004 and 2003 market values were $28.58 and $28.92 per share, respectively. | ||||
| The realized gain on distributions to participants is determined by computing the difference between the average cost per share and the market value per share at the date of the distribution to the participants. | ||||
| Dividend income is accrued on the record date. | ||||
| The Plan’s investments include common stock of Synovus which is exposed to market and credit risks. Due to the level of risk associated with investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the Plan’s financial statements. | ||||
| Contributions by participants and Participating Companies, as well as withdrawals, are accounted for on the accrual basis. | ||||
| The Plan is not qualified under Sections 401(a) or 501(a) of the Internal Revenue Code of 1986, as amended. The Plan does not provide for income taxes because any income is taxable to the participants. Participants in the Plan must treat as compensation income their pro rata share of contributions made to the Plan by the participating company. Cash dividends paid on Synovus common stock purchased under the Plan will be taxable to the participants on a pro rata basis for Federal and state income tax purposes during the year any such dividend is received by the participant or the Plan. Upon disposition of the Synovus common stock purchased under the Plan, participants must treat any gain or loss as long-term or short-term capital gain or loss depending upon when such disposition occurs. | ||||
| Management of the Plan believes that the carrying amount of receivables is a reasonable approximation of the fair value due to the short-term nature of these instruments. | ||||
| The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates. | ||||
(Continued)
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SYNOVUS FINANCIAL CORP.
DIRECTOR STOCK PURCHASE PLAN
Notes to Financial Statements
December 31, 2004, 2003, and 2002
| (3) | Contributions Contributions by Participating Companies and by participants are as follows: |
| 2004 | 2003 | 2002 | ||||||||||||||||||||||
| Participating | Participating | Participating | ||||||||||||||||||||||
| Participating Company | Companies | Participants | Companies | Participants | Companies | Participants | ||||||||||||||||||
| Synovus Financial Corp. | $ | 197,676 | 395,342 | 127,500 | 255,000 | 149,667 | 299,334 | |||||||||||||||||
| Columbus Bank and Trust Company | 84,999 | 169,999 | 80,333 | 160,667 | 83,000 | 166,000 | ||||||||||||||||||
| Commercial Bank and Trust Company of Troup County | 26,668 | 53,336 | 30,501 | 61,003 | 28,667 | 57,334 | ||||||||||||||||||
| Commercial Bank of Thomasville | 24,000 | 48,000 | 33,167 | 66,333 | 24,000 | 48,000 | ||||||||||||||||||
| Security Bank and Trust Company of Albany | 53,833 | 107,666 | 50,500 | 101,000 | 36,000 | 72,000 | ||||||||||||||||||
| Sumter Bank and Trust Company | 23,833 | 47,666 | 25,333 | 50,667 | 24,000 | 48,000 | ||||||||||||||||||
| The Coastal Bank of Georgia | 40,333 | 80,666 | 42,500 | 85,000 | 42,000 | 84,000 | ||||||||||||||||||
| First State Bank and Trust Company | 30,666 | 61,333 | 31,000 | 62,000 | 29,000 | 58,000 | ||||||||||||||||||
| Bank of Hazlehurst | — | — | — | — | 15,000 | 30,000 | ||||||||||||||||||
| Cohutta Banking Company | 11,276 | 22,553 | 12,610 | 25,219 | 12,722 | 25,444 | ||||||||||||||||||
| Bank of Coweta | 20,000 | 40,000 | 20,000 | 40,000 | 22,000 | 44,000 | ||||||||||||||||||
| Citizens Bank and Trust of West Georgia | 32,002 | 64,004 | 32,668 | 65,336 | 35,334 | 70,668 | ||||||||||||||||||
| First Community Bank of Tifton | 21,000 | 42,000 | 22,000 | 44,000 | 22,500 | 45,000 | ||||||||||||||||||
| The Quincy State Bank | 6,166 | 12,333 | 22,667 | 45,333 | 24,166 | 48,332 | ||||||||||||||||||
| Community Bank & Trust of Southeast Alabama | 21,833 | 43,666 | 18,334 | 36,667 | 19,500 | 39,000 | ||||||||||||||||||
| CB&T Bank of Middle Georgia | 26,000 | 52,000 | 28,000 | 56,000 | 26,833 | 53,667 | ||||||||||||||||||
| First Coast Community Bank | 18,666 | 37,333 | 18,000 | 36,000 | 16,608 | 33,217 | ||||||||||||||||||
| CB&T Bank of Russell County | 14,443 | 28,887 | 12,833 | 25,666 | 11,833 | 23,667 | ||||||||||||||||||
| Sea Island Bank | 27,000 | 54,000 | 25,334 | 50,667 | 24,167 | 48,333 | ||||||||||||||||||
| Citizens First Bank | 22,166 | 44,333 | 24,000 | 48,000 | 22,000 | 44,000 | ||||||||||||||||||
| Athens First Bank and Trust Co. | 24,450 | 48,900 | 22,000 | 44,000 | 21,500 | 43,000 | ||||||||||||||||||
| Vanguard Bank and Trust | 22,500 | 45,000 | 22,000 | 44,000 | 22,000 | 44,000 | ||||||||||||||||||
| Bank of Pensacola | 39,166 | 78,333 | 40,333 | 80,666 | 40,000 | 80,000 | ||||||||||||||||||
| First Commercial Bank of Birmingham | 24,166 | 48,333 | 36,000 | 72,000 | 27,667 | 55,333 | ||||||||||||||||||
| The Bank of Tuscaloosa | 44,000 | 88,000 | 40,333 | 80,667 | 40,167 | 80,333 | ||||||||||||||||||
| Sterling Bank | 24,000 | 48,000 | 24,000 | 48,000 | 24,667 | 49,333 | ||||||||||||||||||
| First National Bank of Jasper | 22,666 | 45,333 | 22,667 | 45,333 | 22,667 | 45,333 | ||||||||||||||||||
| First Commercial Bank of Huntsville | 24,000 | 48,000 | 24,444 | 48,888 | 27,056 | 54,112 | ||||||||||||||||||
| Tallahassee State Bank | 12,000 | 24,000 | 12,000 | 24,000 | 11,833 | 23,667 | ||||||||||||||||||
| Peachtree National Bank | 26,000 | 52,000 | 26,000 | 52,000 | 27,000 | 54,000 | ||||||||||||||||||
| Citizens Bank of Fort Valley | 10,333 | 20,666 | 7,833 | 15,667 | 12,500 | 25,000 | ||||||||||||||||||
| The Citizens Bank of Cochran | — | — | — | — | 8,167 | 16,333 | ||||||||||||||||||
| Charter Bank and Trust Co. | — | — | 18,333 | 36,667 | 17,000 | 34,000 | ||||||||||||||||||
| Citizens & Merchants State Bank | 19,000 | 38,000 | 14,333 | 28,667 | 16,000 | 32,000 | ||||||||||||||||||
| The National Bank of South Carolina | 36,500 | 73,000 | 39,667 | 79,333 | 36,166 | 72,333 | ||||||||||||||||||
| Bank of North Georgia | 48,961 | 97,922 | 34,744 | 69,489 | 41,844 | 83,689 | ||||||||||||||||||
| Georgia Bank & Trust | 10,500 | 21,000 | 10,500 | 21,000 | 7,000 | 14,000 | ||||||||||||||||||
| Synovus Trust Company | — | — | — | — | 1,500 | 3,000 | ||||||||||||||||||
| The Bank of Nashville | 8,000 | 16,000 | 7,000 | 14,000 | — | — | ||||||||||||||||||
| United Bank of the Gulf Coast | 18,500 | 37,000 | 13,500 | 27,000 | — | — | ||||||||||||||||||
| United Bank and Trust | 20,000 | 40,000 | 16,500 | 33,000 | — | — | ||||||||||||||||||
| First Nation Bank | 22,034 | 44,069 | 6,500 | 13,000 | — | — | ||||||||||||||||||
| Trust One | 3,500 | 7,000 | — | — | — | — | ||||||||||||||||||
| Synovus Bank of Jacksonville | 5,333 | 10,666 | — | — | — | — | ||||||||||||||||||
| Peoples Bank | 16,000 | 32,000 | — | — | — | — | ||||||||||||||||||
| Total contributions | $ | 1,184,169 | 2,368,339 | 1,095,967 | 2,191,935 | 1,073,731 | 2,147,462 | |||||||||||||||||
(Continued)
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SYNOVUS FINANCIAL CORP.
DIRECTOR STOCK PURCHASE PLAN
Notes to Financial Statements
December 31, 2004, 2003, and 2002
| (4) | Unrealized (Depreciation) Appreciation of Synovus Common Stock | |||
| Changes in unrealized (depreciation) appreciation of Synovus common stock are as follows: | ||||
| 2004 | 2003 | 2002 | ||||||||||
| Unrealized appreciation at end of year | $ | 34,106,579 | 44,156,841 | 25,844,736 | ||||||||
| Unrealized appreciation at beginning of year | 44,156,841 | 25,844,736 | 42,142,576 | |||||||||
| Unrealized (depreciation) appreciation for the year | $ | (10,050,262 | ) | 18,312,105 | (16,297,840 | ) | ||||||
| (5) | Realized Gain on Withdrawal/Distributions to Participants | |||
| The realized gain on withdrawal/distributions to participants is summarized as follows: | ||||
| 2004 | 2003 | 2002 | ||||||||||
| Market value at date of distribution or redemption of shares of Synovus common stock | $ | 13,541,044 | 8,639,268 | 4,023,197 | ||||||||
| Less cost (computed on an average cost basis) of shares of Synovus common stock distributed or redeemed | 5,842,216 | 3,687,991 | 1,457,039 | |||||||||
| $ | 7,698,828 | 4,951,277 | 2,566,158 | |||||||||
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