FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 2001
------------------------------------------------------
OR
[ ] 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. EMPLOYEE STOCK PURCHASE PLAN
SYNOVUS FINANCIAL CORP.
901 FRONT AVENUE
SUITE 301
COLUMBUS, GEORGIA 31901
(706) 649-5220
Exhibit 99.1
SYNOVUS FINANCIAL CORP.
EMPLOYEE STOCK PURCHASE PLAN
Financial Statements
December 31, 2001, 2000, and 1999
(With Independent Auditors' Report Thereon)
Independent Auditors' Report
The Plan Administrator
Synovus Financial Corp. Employee
Stock Purchase Plan:
We have audited the accompanying statements of financial condition of the
Synovus Financial Corp. Employee Stock Purchase Plan as of December 31, 2001 and
2000 and the related statements of operations and changes in plan equity for
each of the years in the three-year period ended December 31, 2001. 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 auditing standards generally accepted
in the United States of America. 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.
Employee Stock Purchase Plan as of December 31, 2001 and 2000 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, 2001 in conformity with accounting
principles generally accepted in the United States of America.
/s/KPMG LLP
March 1, 2002
SYNOVUS FINANCIAL CORP.
EMPLOYEE STOCK PURCHASE PLAN
Statements of Financial Condition
December 31, 2001 and 2000
Assets 2001 2000
----------- ----------
Common stock of Synovus Financial Corp. at market value-
2,490,767 shares (cost $36,757,923) in 2001 and
2,673,504 shares (cost $32,859,546) in 2000 (note 2) $62,368,026 72,018,851
Dividends receivable 317,735 295,121
Cash 482,005 413,690
----------- ----------
$63,167,766 72,727,662
=========== ==========
Liabilities and Plan Equity
Plan equity (5,426 and 5,284 participants in 2001 and 2000,
respectively) $63,167,766 72,727,662
=========== ==========
See accompanying notes to financial statements.
2
SYNOVUS FINANCIAL CORP.
EMPLOYEE STOCK PURCHASE PLAN
Statements of Operations and Changes in Plan Equity
Years ended December 31, 2001, 2000, and 1999
2001 2000 1999
----------- ---------- ------------
Dividend income $ 1,279,615 1,186,878 1,016,261
Realized gain on distributions to
participants (note 5) 9,056,709 5,171,516 7,738,894
Unrealized appreciation (depreciation) of common
stock of Synovus Financial Corp. (note 4) (13,549,202) 14,166,917 (19,748,317)
Contributions (notes 1 and 3):
Participants 7,392,598 6,620,926 5,958,921
Participating employers 3,697,695 3,307,572 2,968,499
----------- ---------- ------------
7,877,415 30,453,809 (2,065,742)
Withdrawals by participants - common stock of
Synovus Financial Corp. at market value
(627,031 shares in 2001, 655,064 shares in
2000, and 711,079 shares in 1999)-
(note 5) (17,437,311) (12,738,838) (14,788,895)
----------- ---------- ------------
Increase (decrease) in Plan equity
for the year (9,559,896) 17,714,971 (16,854,637)
Plan equity at beginning of year 72,727,662 55,012,691 71,867,328
----------- ---------- ------------
Plan equity at end of year $63,167,766 72,727,662 55,012,691
=========== ========== ============
See accompanying notes to financial statements.
3
SYNOVUS FINANCIAL CORP.
EMPLOYEE STOCK PURCHASE PLAN
Notes to Financial Statements
December 31, 2001, 2000, and 1999
(1) Description of the Plan
The Synovus Financial Corp. Employee Stock Purchase Plan (the Plan) was
implemented as of January 15, 1979. The Plan is designed to enable
participating Synovus Financial Corp. (Synovus) and subsidiaries'
employees to purchase shares of Synovus common stock at prevailing market
prices from contributions made by them and Synovus and subsidiaries (the
Participating Employers).
Synovus serves as the Plan administrator. State Street Bank and Trust
Company serves as the Plan agent, hereafter referred to as "Agent."
All employees who work twenty hours per week or more are eligible to
participate in the Plan after completing three months of continuous
employment prior to the beginning of a calendar quarter.
The Plan also permits a participant who has successfully completed the
State of Georgia's Intellectual Capital Partnership Program (ICAPP) to
begin participation in the Plan immediately upon the participant's
commencement of employment with a Participating Employer. Such
participant's period of employment for purposes of determining the
maximum compensation participant payroll deduction under the Plan will be
measured beginning on the date of such participant's commencement of
participation in such program.
A participant may contribute to the Plan based on a formula through
payroll deductions in multiples of $1, with a minimum deduction of $10
per month and a maximum deduction not to exceed a specified percentage of
compensation (from 3% to 7%). Effective January 1, 1999, participants
initially joining the Plan, requesting reinstatement in the Plan, or
making a change under the Plan must select their payroll deduction amount
as a percentage of compensation, with a minimum contribution level of
0.5%. Participants in the Plan prior to January 1, 1999 may continue
contributing to the Plan through payroll deductions in whole dollar
amounts. Matching contributions to the Plan are to be made by the
Participating Employers 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 upon withdrawal from the Plan, each participant
has the option to receive the proceeds from his account balance in the
form of shares of Synovus common stock and a check for any fractional
shares and cash held, a lump-sum cash distribution, or a combination of
both. With certain exceptions, employees who have previously withdrawn
shares from their Plan account are precluded from receiving matching
contributions from the participating employers for a specified period of
time. Effective January 23, 2002, the Plan was amended to remove the
above mentioned restriction on receiving matching contributions upon a
withdrawal of shares from the Plan.
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 his employer prior to the
date of such amendment or termination.
4 (Continued)
SYNOVUS FINANCIAL CORP.
EMPLOYEE STOCK PURCHASE PLAN
Notes to Financial Statements
December 31, 2001, 2000, and 1999
Synovus reserves the right to suspend participating employer
contributions to the Plan if its board of directors feels that Synovus'
financial condition warrants such action.
(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, 2001 and 2000 market values were
$25.05 and $26.938 per share, respectively.
The realized gain on distributions to participants is determined by
computing the difference between the average cost per common stock share
and the market value per share at the date of the distribution to the
participants.
Dividend income is accrued on the record date.
Contributions by participants and Participating Employers, 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 their employer. 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.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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.
5 (Continued)
SYNOVUS FINANCIAL CORP.
EMPLOYEE STOCK PURCHASE PLAN
Notes to Financial Statements
December 31, 2001, 2000, and 1999
(3) Contributions
Contributions by Participating Employers and by participants are as follows:
2001 2000 1999
--------------------------- ------------------------- ---------------------
Participating Participating Participating
Participating employers employers Participants employers Participants employers Participants
- ------------------------------------------------- ------------- -------------- ------------- ----------- ---------- -----------
Synovus Financial Corp. $ 659,656 1,321,014 238,201 476,402 214,785 430,345
Columbus Bank and Trust Company 320,172 640,925 371,061 743,835 405,594 815,476
Commercial Bank and Trust Company of Troup County 32,457 65,011 32,623 65,559 27,442 55,825
Commercial Bank of Thomasville 49,355 98,706 48,416 96,828 45,790 92,223
Security Bank and Trust Company of Albama 55,350 110,693 53,011 106,014 51,045 102,150
Sumter Bank and Trust Company 36,629 73,269 34,401 68,844 32,793 66,899
The Coastal Bank of Georgia 47,173 94,787 47,588 95,620 50,936 102,879
First State Bank and Trust Company 39,028 78,397 41,102 82,591 38,861 78,740
Bank of Hazlehurst 16,168 32,421 15,717 31,431 17,325 35,296
Cohutta Banking Company 35,579 71,204 33,176 66,346 37,499 75,175
Bank of Coweta 54,907 109,805 59,053 118,363 55,483 111,311
Citizens Bank & Trust of West Georgia 83,006 165,999 77,841 155,672 73,046 146,927
Synovus Securities, Inc. 164,216 329,372 131,227 262,198 85,699 172,330
The Quincy State Bank 29,761 59,516 29,993 59,980 31,033 62,186
Community Bank and Trust of Southeast Alabana 24,296 48,588 26,697 53,504 32,646 65,320
Tallahassee State Bank 21,330 42,655 18,463 36,924 15,371 30,863
CB&T Bank of Middle Georgia 36,272 72,968 40,387 80,767 37,125 74,369
First Community Bank of Tifton 38,078 76,782 38,497 77,252 35,938 71,974
Synovus Technologies, Inc. -- -- 189,541 379,644 177,094 357,463
CB&T Bank of Russell County 35,272 70,540 34,066 68,127 35,687 71,495
Sea Island Bank 42,077 77,746 37,820 75,636 35,172 71,294
Citizens First Bank 39,006 78,109 36,365 72,724 38,553 78,399
First Coast Community Bank 20,358 41,329 19,329 38,655 18,388 37,313
Bank of Pensacola 38,046 76,086 34,604 69,203 28,157 57,108
Vanguard Bank and Trust 63,060 127,072 53,102 106,896 49,556 99,744
The National Bank of Walton County 36,448 72,890 37,635 75,266 32,300 65,508
Athens First Bank & Trust Co. 131,285 262,557 124,251 248,493 121,133 242,503
The Citizens Bank of Fort Valley 15,623 31,244 14,337 28,714 16,653 33,308
The Citizens Bank of Cochran 10,789 21,578 10,306 20,610 10,315 20,631
First Commercial Bank of Birmingham 109,881 219,761 101,537 203,061 99,586 196,945
First National Bank of Jasper 83,830 167,647 81,383 162,411 77,634 155,383
Sterling Bank 32,077 64,149 32,318 64,632 30,369 60,759
The Bank of Tuscaloosa 44,183 88,359 43,140 86,273 43,479 86,952
First Commercial Bank of Huntsville 39,329 78,652 34,762 69,520 32,767 65,531
Peachtree National Bank 48,824 97,642 45,444 91,014 44,062 88,710
Synovus Mortgage Corp. 198,435 392,059 106,690 212,478 38,688 77,592
Citizens & Merchants State Bank 27,189 54,374 31,469 62,933 28,828 57,656
Synovus Trust Company 138,387 277,526 131,951 264,359 134,887 270,964
Synovus Service Corp. -- -- 195,237 392,609 207,938 417,575
The National Bank of South Carolina 247,187 494,371 231,542 462,991 231,348 463,006
Bank of North Georgia 205,409 410,911 131,570 263,127 119,714 239,457
Georgia Bank & Trust 28,504 57,002 26,223 52,440 27,780 53,337
Synovus Trust Company of Florida 9,755 19,509 7,633 15,266 -- --
Synovus Trust Company of Alabama 27,914 55,827 15,384 30,768 -- --
Charter Bank and Trust Co. 42,226 84,446 42,034 84,064 -- --
Merit Leasing Corp. 3,046 6,091 1,491 2,982 -- --
Mountain National Bank 36,096 72,187 33,733 67,462 -- --
Total Technology Ventures 3,006 6,012 2,562 5,125 -- --
ProCard 90,082 180,078 42,947 85,893 -- --
Synovus Insurance of Georgia 9,832 19,663 8,505 17,010 -- --
Pointpathbank 30,603 61,274 10,718 21,434 -- --
TSYS Total Debt Management, Inc. 50,266 101,323 20,489 40,976 -- --
Creative Financial Group 16,237 32,472 -- -- -- --
------------- ------------ ------------ ----------- ---------- -----------
Total contributions $3,697,695 7,392,598 3,307,572 6,620,926 2,968,499 5,958,921
============ ============ ============ =========== ========== ===========
6
SYNOVUS FINANCIAL CORP.
EMPLOYEE STOCK PURCHASE PLAN
Notes to Financial Statements
December 31, 2001, 2000, and 1999
(4) Unrealized Appreciation (Depreciation) of Synovus Common Stock
Changes in unrealized appreciation (depreciation) on Synovus common stock
are as follows:
2001 2000 1999
------------------- -------------------- --------------------
Unrealized appreciation at end of year $ 25,610,103 39,159,305 24,992,388
Unrealized appreciation at beginning of year 39,159,305 24,992,388 44,740,705
------------------- -------------------- --------------------
Unrealized appreciation (depreciation) for the
year $ (13,549,202) 14,166,917 (19,748,317)
=================== ==================== ====================
(5) Realized Gain on Withdrawal Distributions to Participants
The gain realized on withdrawal distributions to participants is
summarized as follows:
2001 2000 1999
-------------------- -------------------- -------------------
Market value at dates of distribution or
redemption of shares of Synovus common stock $ 17,437,311 12,738,838 14,788,895
Less cost (computed on an average cost basis)
of shares of Synovus common stock
distributed or redeemed 8,380,602 7,567,322 7,050,001
-------------------- -------------------- -------------------
Total realized gain $ 9,056,709 5,171,516 7,738,894
==================== ==================== ===================
7