Exhibit 99.2
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
------------------------------------------------------
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. DIRECTOR STOCK PURCHASE PLAN
SYNOVUS FINANCIAL CORP.
901 FRONT AVENUE
SUITE 301
COLUMBUS, GEORGIA 31901
(706) 649-5220
SYNOVUS FINANCIAL CORP.
DIRECTOR 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. 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, 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.
Director 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.
DIRECTOR STOCK PURCHASE PLAN
Statements of Financial Condition
December 31, 2002 and 2001
2002 2001
------------ ------------
ASSETS
Common stock of Synovus Financial Corp. at market value -
2,506,568 shares (cost $22,782,686) in 2002 and
2,466,983 shares (cost $19,655,351) in 2001 (note 2) $ 48,627,422 61,797,927
Dividends receivable 356,126 302,722
------------ ------------
$ 48,983,548 62,100,649
============ ============
LIABILITIES AND PLAN EQUITY
Plan equity (567 and 539 participants in 2002 and 2001,
respectively) $ 48,983,548 62,100,649
============ ============
See accompanying notes to financial statements.
2
SYNOVUS FINANCIAL CORP.
DIRECTOR STOCK PURCHASE PLAN
Statements of Operations and Changes in Plan Equity
Years ended December 31, 2002, 2001, and 2000
2002 2001 2000
------------- ------------ ------------
Dividend income $ 1,416,585 1,260,072 1,223,597
Realized gain on distributions to participants
(note 5) 2,566,158 7,142,245 11,976,879
Unrealized (depreciation) appreciation of common
stock of Synovus Financial Corp. (note 4) (16,297,840) (11,790,479) 5,593,136
Contributions (notes 1 and 3):
Participants 2,147,462 2,154,189 1,894,675
Synovus Financial Corp. and participating
subsidiaries 1,073,731 1,077,111 946,468
------------- ------------ ------------
(9,093,904) (156,862) 21,634,755
Withdrawals by participants - common stock
of Synovus Financial Corp. at market value
(167,638 shares in 2002, 356,420 shares
in 2001, and 977,291 shares in 2000) (note 5) (4,023,197) (9,715,476) (17,933,043)
------------- ------------ ------------
(Decrease) increase in Plan equity
for the year (13,117,101) (9,872,338) 3,701,712
Plan equity at beginning of year 62,100,649 71,972,987 68,271,275
------------- ------------ ------------
Plan equity at end of year $ 48,983,548 62,100,649 71,972,987
============= ============ ============
See accompanying notes to financial statements.
3
SYNOVUS FINANCIAL CORP.
DIRECTOR STOCK PURCHASE PLAN
Notes to Financial Statements
December 31, 2002, 2001, and 2000
(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 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)
4
SYNOVUS FINANCIAL CORP.
DIRECTOR STOCK PURCHASE PLAN
Notes to Financial Statements
December 31, 2002, 2001, and 2000
(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 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 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.
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)
5
SYNOVUS FINANCIAL CORP.
DIRECTOR STOCK PURCHASE PLAN
Notes to Financial Statements
December 31, 2002, 2001, and 2000
(3) CONTRIBUTIONS
Contributions by Participating Companies and by participants are as
follows:
2002 2001 2000
---------------------------- ---------------------------- -----------------------------
PARTICIPATING PARTICIPATING PARTICIPATING
PARTICIPATING COMPANY COMPANIES PARTICIPANTS COMPANIES PARTICIPANTS COMPANIES PARTICIPANTS
- --------------------------------------- ------------- ------------ ------------- ------------ ------------- ------------
Synovus Financial Corp. $ 149,667 299,334 168,334 336,667 69,000 138,000
Columbus Bank and Trust Company 83,000 166,000 88,668 77,332 90,668 181,499
Commercial Bank and Trust
Company of Troup County 28,667 57,334 28,667 57,333 28,667 57,333
Commercial Bank of Thomasville 24,000 48,000 24,000 48,000 23,000 46,000
Security Bank and Trust Company of
Albany 36,000 72,000 39,000 78,000 38,667 77,333
Sumter Bank and Trust Company 24,000 48,000 21,000 42,000 22,667 45,333
The Coastal Bank of Georgia 42,000 84,000 37,834 75,666 37,334 74,666
First State Bank and Trust Company 29,000 58,000 26,000 52,000 23,000 46,000
Bank of Hazlehurst 15,000 30,000 16,000 32,000 13,833 27,667
Cohutta Banking Company 12,722 25,444 13,334 26,666 13,333 26,667
Bank of Coweta 22,000 44,000 25,500 51,000 25,000 50,000
Citizens Bank and Trust of West Georgia 35,334 70,668 38,556 77,111 39,334 78,666
First Community Bank of Tifton 22,500 45,000 21,000 41,999 24,000 48,000
The Quincy State Bank 24,166 48,332 27,334 54,666 22,834 45,666
Community Bank & Trust of Southeast
Alabama 19,500 39,000 16,500 33,000 14,500 29,000
CB&T Bank of Middle Georgia 26,833 53,667 25,667 51,333 24,778 49,555
First Coast Community Bank 16,608 33,217 17,834 35,666 17,334 34,666
CB&T Bank of Russell County 11,833 23,667 12,112 24,222 12,890 25,778
Sea Island Bank 24,167 48,333 24,667 49,333 24,945 49,889
Citizens First Bank 22,000 44,000 22,834 45,666 23,000 46,000
Athens First Bank and Trust Co. 21,500 43,000 24,000 48,000 22,500 45,000
Vanguard Bank and Trust 22,000 44,000 18,500 37,000 20,000 40,000
Bank of Pensacola 40,000 80,000 22,556 45,111 19,833 39,667
First Commercial Bank of Birmingham 27,667 55,333 24,667 49,333 24,000 48,000
The Bank of Tuscaloosa 40,167 80,333 39,000 78,000 36,001 72,000
Sterling Bank 24,667 49,333 24,000 47,999 22,500 45,000
First National Bank of Jasper 22,667 45,333 22,667 45,333 22,278 44,555
First Commercial Bank of Huntsville 27,056 54,112 25,334 50,666 24,834 49,666
Tallahassee State Bank 11,833 23,667 10,000 20,000 10,667 21,333
Peachtree National Bank 27,000 54,000 25,000 50,000 26,000 52,000
Citizens Bank of Fort Valley 12,500 25,000 10,667 21,333 10,667 21,333
The Citizens Bank of Cochran 8,167 16,333 8,278 16,555 4,055 8,111
Charter Bank and Trust Co. 17,000 34,000 15,667 31,333 12,000 24,000
Citizens & Merchants State Bank 16,000 32,000 24,500 49,000 23,667 47,333
The National Bank of South Carolina 36,166 72,333 37,667 75,333 37,000 74,000
Bank of North Georgia 41,844 83,689 41,100 82,200 34,167 68,333
Georgia Bank & Trust 7,000 14,000 6,667 13,333 5,515 12,626
Synovus Trust Company 1,500 3,000 2,000 4,000 2,000 4,000
------------- --------- --------- --------- ------- ---------
Total contributions $ 1,073,731 2,147,462 1,077,111 2,154,189 946,468 1,894,675
============= ========= ========= ========= ======= =========
(Continued)
6
SYNOVUS FINANCIAL CORP.
DIRECTOR 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
------------- ----------- ----------
Unrealized appreciation at end of year $ 25,844,736 42,142,576 53,933,055
Unrealized appreciation at beginning
of year 42,142,576 53,933,055 48,339,919
------------- ----------- ----------
Unrealized appreciation (depreciation)
for the year $ (16,297,840) (11,790,479) 5,593,136
============= =========== ==========
(5) Realized Gain on Withdrawal Distrubutions to Participants
The realized gain on withdrawal distributions to participants is
summarized as follows:
2002 2001 2000
------------- ----------- ----------
Market value at dates of distribution or
redemption of shares of Synovus
common stock $ 4,023,197 9,715,476 17,933,043
Less cost (computed on an average cost
basis) of shares of Synovus common
stock distributed or redeemed 1,457,039 2,573,231 5,956,164
------------- ----------- ----------
Total realized gain $ 2,566,158 7,142,245 11,976,879
============= =========== ==========
7