Exhibit 99.1
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, 2002
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
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Commission file number 1-10312
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SYNOVUS FINANCIAL CORP. EMPLOYEE STOCK PURCHASE PLAN
SYNOVUS FINANCIAL CORP.
901 FRONT AVENUE
SUITE 301
COLUMBUS, GEORGIA 31901
(706) 649-5220
SYNOVUS FINANCIAL CORP.
EMPLOYEE STOCK PURCHASE PLAN
Financial Statements
December 31, 2002, 2001, and 2000
(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, 2002 and
2001, and the related statements of operations and changes in plan equity for
each of the years in the three-year period ended December 31, 2002. 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, 2002 and 2001, 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, 2002 in conformity with accounting
principles generally accepted in the United States of America.
April 11, 2003
/s/KPMG LLP
SYNOVUS FINANCIAL CORP.
EMPLOYEE STOCK PURCHASE PLAN
Statements of Financial Condition
December 31, 2002 and 2001
2002 2001
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ASSETS
Common stock of Synovus Financial Corp. at market value -
2,507,469 shares (cost $41,725,679) in 2002 and
2,490,767 shares (cost $36,757,923) in 2001 (note 2) $ 48,644,895 62,368,026
Dividends receivable 370,175 317,735
Cash 502,514 482,005
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$ 49,517,584 63,167,766
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LIABILITIES AND PLAN EQUITY
Plan equity (4,577 and 5,426 participants in 2002 and 2001,
respectively) $ 49,517,584 63,167,766
============ ============
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, 2002, 2001, and 2000
2002 2001 2000
------------- ------------ ------------
Dividend income $ 1,452,578 1,279,615 1,186,878
Realized gain on distributions to
participants (note 5) 5,036,924 9,056,709 5,171,516
Unrealized (depreciation) appreciation of common
stock of Synovus Financial Corp. (note 4) (18,690,887) (13,549,202) 14,166,917
Contributions (notes 1 and 3):
Participants 7,991,626 7,392,598 6,620,926
Participating employers 3,995,292 3,697,695 3,307,572
------------- ------------ ------------
(214,467) 7,877,415 30,453,809
Withdrawals by participants - common stock of
Synovus Financial Corp. at market value
(531,105 shares in 2002, 627,031 shares in 2001,
and 655,064 shares in 2000) - (note 5) (13,435,715) (17,437,311) (12,738,838)
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(Decrease) increase in Plan equity
for the year (13,650,182) (9,559,896) 17,714,971
Plan equity at beginning of year 63,167,766 72,727,662 55,012,691
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Plan equity at end of year $ 49,517,584 63,167,766 72,727,662
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See accompanying notes to financial statements.
3
SYNOVUS FINANCIAL CORP.
EMPLOYEE STOCK PURCHASE PLAN
Notes to Financial Statements
December 31, 2002, 2001, and 2000
(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. 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."
Through June 30, 2002, all employees who worked twenty hours per week or
more were eligible to participate in the Plan after completing three
months of continuous employment prior to the beginning of a calendar
quarter. Effective July 1, 2002, the Plan was amended to allow employees
who work twenty hours per week or more to become eligible to participate
in the plan on the first payroll date after completing three months of
continuous employment.
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.
Participants contribute to the Plan through payroll deductions as a
percentage of compensation. The maximum contribution ranges from 3% to 7%
of compensation, based on years of service. Through June 30, 2002, the
minimum contribution percentage was 0.5% of compensation. Effective July
1, 2002, the minimum allowable contribution is 1% of compensation.
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 each participant may withdraw at any time all or
some of his 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. Prior to January 23, 2002, participants who
had previously withdrawn shares from their Plan account remained eligible
to participate, but with certain exceptions were 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
(Continued)
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SYNOVUS FINANCIAL CORP.
EMPLOYEE STOCK PURCHASE PLAN
Notes to Financial Statements
December 31, 2002, 2001, and 2000
right to the benefit of contributions made by him or his employer prior
to the date of such amendment or termination.
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, 2002 and 2001 market values were
$19.40 and $25.05 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.
(Continued)
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SYNOVUS FINANCIAL CORP.
EMPLOYEE STOCK PURCHASE PLAN
Notes to Financial Statements
December 31, 2002, 2001, and 2000
(3) CONTRIBUTION
Contributions by Participating Employers and by participants are as
follows:
2002 2001 2000
---------------------------- ---------------------------- -----------------------------
PARTICIPATING PARTICIPATING PARTICIPATING
PARTICIPATING EMPLOYERS EMPLOYERS PARTICIPANTS EMPLOYERS PARTICIPANTS EMPLOYERS PARTICIPANTS
- --------------------------------------- ------------- ------------ ------------- ------------ ------------- ------------
Synovus Financial Corp. $ 754,288 1,510,390 659,656 1,321,014 238,201 476,402
Columbus Bank and Trust Company 333,828 667,614 320,172 640,925 371,061 743,835
Commercial Bank and Trust Company
of Troup County 34,908 69,809 32,457 65,011 32,623 65,559
Commercial Bank of Thomasville 52,010 104,012 49,355 98,706 48,416 96,828
Security Bank and Trust Company
of Albany 48,014 95,965 55,350 110,693 53,011 106,014
Sumter Bank and Trust Company 40,832 81,660 36,629 73,269 34,401 68,844
The Coastal Bank of Georgia 47,833 95,661 47,173 94,787 47,588 95,620
First State Bank and Trust Company 39,685 79,362 39,028 78,397 41,102 82,591
Bank of Hazlehurst 15,477 30,952 16,168 32,421 15,717 31,431
Cohutta Banking Company 40,439 80,872 35,579 71,204 33,176 66,346
Bank of Coweta 55,863 111,718 54,907 109,805 59,053 118,363
Citizens Bank & Trust of West Georgia 86,381 172,749 83,006 165,999 77,841 155,672
Synovus Securities, Inc. 187,350 374,689 164,216 329,372 131,227 262,198
The Quincy State Bank 30,276 60,548 29,761 59,516 29,993 59,980
Community Bank and Trust of
Southeast Alabama 24,485 48,966 24,296 48,588 26,697 53,504
Tallahassee State Bank 21,436 42,869 21,330 42,655 18,463 36,924
CB&T Bank of Middle Georgia 41,018 82,031 36,272 72,968 40,387 80,767
First Community Bank of Tifton 40,694 81,382 38,078 76,782 38,497 77,252
Synovus Technologies, Inc. -- -- -- -- 189,541 379,644
CB&T Bank of Russell County 34,326 68,647 35,272 70,540 34,066 68,127
Sea Island Bank 35,718 71,429 42,077 77,746 37,820 75,636
Citizens First Bank 41,777 83,547 39,006 78,109 36,365 72,724
First Coast Community Bank 24,932 49,861 20,358 41,329 19,329 38,655
Bank of Pensacola 76,836 153,334 38,046 76,086 34,604 69,203
Vanguard Bank and Trust 65,984 131,956 63,060 127,072 53,102 106,896
The National Bank of Walton County 37,535 75,064 36,448 72,890 37,635 75,266
Athens First Bank & Trust Co. 139,416 278,815 131,285 262,557 124,251 248,493
The Citizens Bank of Fort Valley 18,380 36,757 15,623 31,244 14,337 28,714
The Citizens Bank of Cochran 10,158 20,314 10,789 21,578 10,306 20,610
First Commercial Bank of Birmingham 124,945 249,877 109,881 219,761 101,537 203,061
First National Bank of Jasper 84,556 169,098 83,830 167,647 81,383 162,411
Sterling Bank 34,570 69,135 32,077 64,149 32,318 64,632
The Bank of Tuscaloosa 43,352 86,697 44,183 88,359 43,140 86,273
First Commercial Bank of Huntsville 43,909 87,812 39,329 78,652 34,762 69,520
Peachtree National Bank 48,987 97,967 48,824 97,642 45,444 91,014
Synovus Mortgage Corp. 217,767 435,517 198,435 392,059 106,690 212,478
Citizens & Merchants State Bank 25,424 50,845 27,189 54,374 31,469 62,933
Synovus Trust Company 161,567 323,119 138,387 277,526 131,951 264,359
Synovus Service Corp. -- -- -- -- 195,237 392,609
The National Bank of South Carolina 253,789 507,539 247,187 494,371 231,542 462,991
Bank of North Georgia 248,713 497,407 205,409 410,911 131,570 263,127
Georgia Bank & Trust 34,056 68,107 28,504 57,002 26,223 52,440
Synovus Trust Company of Florida 12,456 24,911 9,755 19,509 7,633 15,266
Synovus Trust Company of Alabama 27,780 55,557 27,914 55,827 15,384 30,768
Charter Bank and Trust Co. 40,056 80,106 42,226 84,446 42,034 84,064
Merit Leasing Corp. 2,855 5,710 3,046 6,091 1,491 2,982
Mountain National Bank 38,291 76,577 36,096 72,187 33,733 67,462
Total Technology Ventures 3,029 6,057 3,006 6,012 2,562 5,125
ProCard 85,369 170,731 90,082 180,078 42,947 85,893
Synovus Insurance of Georgia 10,461 20,921 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 44,812 89,621 16,237 32,472 -- --
GLOBALT, Inc. 18,284 36,567 -- -- -- --
Machinery Leasing Co., Inc. 654 1,314 -- -- -- --
The Bank of Nashville 9,731 19,461 -- -- -- --
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Total contributions $ 3,995,292 7,991,626 3,697,695 7,392,598 3,307,572 6,620,926
============= ========== ========= ========= ========= =========
(Continued)
6
SYNOVUS FINANCIAL CORP.
EMPLOYEE STOCK PURCHASE PLAN
Notes to Financial Statements
December 31, 2002, 2001, and 2000
(4) UNREALIZED (DEPRECIATION) APPRECIATION OF SYNOVUS COMMON STOCK
Changes in unrealized (depreciation) appreciation of Synovus common stock
are as follows:
2002 2001 2000
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Unrealized appreciation at end of year $ 6,919,216 25,610,103 39,159,305
Unrealized appreciation at beginning
of year 25,610,103 39,159,305 24,992,388
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Unrealized appreciation (depreciation)
for the year $ (18,690,887) (13,549,202) 14,166,917
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(5) REALIZED GAIN ON WITHDRAWAL DISTRIBUTIONS TO PARTICIPANTS
The gain realized on withdrawal distributions to participants is
summarized as follows:
2002 2001 2000
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Market value at dates of distribution or
redemption of shares of Synovus
common stock $ 13,435,715 17,437,311 12,738,838
Less cost (computed on an average cost
basis) of shares of Synovus common
stock distributed or redeemed 8,398,791 8,380,602 7,567,322
------------- ----------- ----------
Total realized gain $ 5,036,924 9,056,709 5,171,516
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