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, 2003
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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, 2003, 2002, and 2001
(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, 2003 and
2002, and the related statements of operations and changes in plan equity for
each of the years in the three-year period ended December 31, 2003. 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, 2003 and 2002, 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, 2003 in conformity with accounting
principles generally accepted in the United States of America.
/s/KPMG LLP
March 12, 2004
SYNOVUS FINANCIAL CORP.
EMPLOYEE STOCK PURCHASE PLAN
Statements of Financial Condition
December 31, 2003 and 2002
Assets 2003 2002
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Common stock of Synovus Financial Corp. at market value -
2,596,928 shares (cost $46,630,651) in 2003 and
2,507,469 shares (cost $41,725,679) in 2002 (note 2) $ 75,103,163 48,644,895
Dividends receivable 417,922 370,175
Contributions receivable 525,750 502,514
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$ 76,046,835 49,517,584
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Liabilities and Plan Equity
Plan equity (4,621 and 4,577 participants in 2003 and 2002,
respectively) $ 76,046,835 49,517,584
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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, 2003, 2002, and 2001
2003 2002 2001
------------------ ------------------ ------------------
Dividend income $ 1,610,272 1,452,578 1,279,615
Realized gain on distributions to
participants (note 5) 3,021,846 5,036,924 9,056,709
Unrealized appreciation (depreciation) of common
stock of Synovus Financial Corp. (note 4) 21,553,296 (18,690,887) (13,549,202)
Contributions (notes 1 and 3):
Participants 8,514,987 7,991,626 7,392,598
Participating employers 4,257,622 3,995,292 3,697,695
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38,958,023 (214,467) 7,877,415
Withdrawals by participants - common stock of
Synovus Financial Corp. at market value
(597,829 shares in 2003, 531,105 shares in 2002,
and 627,031 shares in 2001) - (note 5) (12,428,772) (13,435,715) (17,437,311)
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Increase (decrease) in Plan equity
for the year 26,529,251 (13,650,182) (9,559,896)
Plan equity at beginning of year 49,517,584 63,167,766 72,727,662
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Plan equity at end of year $ 76,046,835 49,517,584 63,167,766
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See accompanying notes to financial statements.
3
SYNOVUS FINANCIAL CORP.
EMPLOYEE STOCK PURCHASE PLAN
Notes to Financial Statements
December 31, 2003, 2002, and 2001
(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.
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 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. 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
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, 2003, 2002, and 2001
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, 2003 and 2002 market values were
$28.92 and $19.40 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.
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 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.
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 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, 2003, 2002, and 2001
(3) Contributions
Contributions by Participating Employers and by participants are as
follows:
2003 2002 2001
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Participating Participating Participating
Participating employers Employers Participants Employers Participants Employers Participants
- ----------------------------------------- ------------ ------------ ------------ ----------- ------------ ------------
Synovus Financial Corp. $ 785,144 1,570,571 754,288 1,510,390 659,656 1,321,014
Columbus Bank and Trust Company 340,621 681,202 333,828 667,614 320,172 640,925
Commercial Bank and Trust Company
of Troup County 36,536 73,066 34,908 69,809 32,457 65,011
Commercial Bank of Thomasville 51,824 103,643 52,010 104,012 49,355 98,706
Security Bank and Trust Company of Albany45,742 91,478 48,014 95,965 55,350 110,693
Sumter Bank and Trust Company 40,935 81,867 40,832 81,660 36,629 73,269
The Coastal Bank of Georgia 47,700 95,394 47,833 95,661 47,173 94,787
First State Bank and Trust Company 40,427 80,848 39,685 79,362 39,028 78,397
Bank of Hazlehurst -- -- 15,477 30,952 16,168 32,421
Cohutta Banking Company 50,916 101,825 40,439 80,872 35,579 71,204
Bank of Coweta 57,431 114,854 55,863 111,718 54,907 109,805
Citizens Bank & Trust of West Georgia 92,057 184,098 86,381 172,749 83,006 165,999
Synovus Securities, Inc. 238,439 476,868 187,350 374,689 164,216 329,372
The Quincy State Bank 27,999 55,996 30,276 60,548 29,761 59,516
Community Bank and Trust of
Southeast Alabama 26,424 52,844 24,485 48,966 24,296 48,588
Tallahassee State Bank 23,306 46,610 21,436 42,869 21,330 42,655
CB&T Bank of Middle Georgia 43,021 86,037 41,018 82,031 36,272 72,968
First Community Bank of Tifton 36,379 72,719 40,694 81,382 38,078 76,782
CB&T Bank of Russell County 35,676 71,348 34,326 68,647 35,272 70,540
Sea Island Bank 38,359 76,713 35,718 71,429 42,077 77,746
Citizens First Bank 42,016 84,026 41,777 83,547 39,006 78,109
First Coast Community Bank 29,167 58,331 24,932 49,861 20,358 41,329
Bank of Pensacola 80,753 161,498 76,836 153,334 38,046 76,086
Vanguard Bank and Trust 60,872 121,736 65,984 131,956 63,060 127,072
The National Bank of Walton County 39,987 79,969 37,535 75,064 36,448 72,890
Athens First Bank & Trust Co. 137,910 275,804 139,416 278,815 131,285 262,557
The Citizens Bank of Fort Valley 18,867 37,732 18,380 36,757 15,623 31,244
The Citizens Bank of Cochran -- -- 10,158 20,314 10,789 21,578
First Commercial Bank of Birmingham 169,228 338,440 124,945 249,877 109,881 219,761
First National Bank of Jasper 82,600 165,187 84,556 169,098 83,830 167,647
Sterling Bank 33,614 67,224 34,570 69,135 32,077 64,149
The Bank of Tuscaloosa 48,465 96,925 43,352 86,697 44,183 88,359
First Commercial Bank of Huntsville 53,218 106,430 43,909 87,812 39,329 78,652
Peachtree National Bank 51,604 103,202 48,987 97,967 48,824 97,642
Synovus Mortgage Corp. 233,986 467,959 217,767 435,517 198,435 392,059
Citizens & Merchants State Bank 23,968 47,933 25,424 50,845 27,189 54,374
Synovus Trust Company 190,747 381,439 161,567 323,119 138,387 277,526
The National Bank of South Carolina 250,003 499,970 253,789 507,539 247,187 494,371
Bank of North Georgia 258,871 517,621 248,713 497,407 205,409 410,911
Georgia Bank & Trust 49,634 99,262 34,056 68,107 28,504 57,002
Synovus Trust Company of Florida 2,164 4,328 12,456 24,911 9,755 19,509
Synovus Trust Company of Alabama 1,537 3,073 27,780 55,557 27,914 55,827
Charter Bank and Trust Co. 40,713 81,420 40,056 80,106 42,226 84,446
Merit Leasing Corp. 2,381 4,761 2,855 5,710 3,046 6,091
Mountain National Bank 39,746 79,487 38,291 76,577 36,096 72,187
Total Technology Ventures 4,465 8,930 3,029 6,057 3,006 6,012
ProCard -- -- 85,369 170,731 90,082 180,078
Synovus Insurance of Georgia 12,662 25,323 10,461 20,921 9,832 19,663
Pointpathbank -- -- -- -- 30,603 61,274
TSYS Total Debt Management, Inc. -- -- -- -- 50,266 101,323
Creative Financial Group 52,807 105,611 44,812 89,621 16,237 32,472
GLOBALT, Inc. 40,640 81,279 18,284 36,567 -- --
Machinery Leasing Co., Inc. 2,343 4,685 654 1,314 -- --
The Bank of Nashville 45,019 90,033 9,731 19,461 -- --
Synovus Investment Advisors 8,736 17,471 -- -- -- --
EPW Investment Management 1,870 3,740 -- -- -- --
United Trust Company 3,130 6,259 -- -- -- --
United Bank of the Gulf Coast 9,281 18,562 -- -- -- --
United Bank and Trust Company 42,113 84,222 -- -- -- --
First Nation Bank 33,569 67,134 -- -- -- --
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Total contributions $ 4,257,622 8,514,987 3,995,292 7,991,626 3,697,695 7,392,598
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SYNOVUS FINANCIAL CORP.
EMPLOYEE STOCK PURCHASE PLAN
Notes to Financial Statements
December 31, 2003, 2002, and 2001
(4) Unrealized (Depreciation) Appreciation of Synovus Common Stock
Changes in unrealized (depreciation) appreciation of Synovus common stock
are as follows:
2003 2002 2001
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Unrealized appreciation at end of year $ 28,472,512 6,919,216 25,610,103
Unrealized appreciation at
beginning of year 6,919,216 25,610,103 39,159,305
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Unrealized appreciation
(depreciation) for the year $ 21,553,296 (18,690,887) (13,549,202)
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(5) Realized Gain on Withdrawal Distributions to Participants
The realized gain on withdrawal distributions to participants is
summarized as follows:
2003 2002 2001
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Market value at dates of distribution or
redemption of shares of Synovus
common stock $ 12,428,727 13,435,715 17,437,311
Less cost (computed on an average
cost basis) of shares of Synovus
common stock distributed or
redeemed 9,406,9269 8,398,791 8,380,602
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Total realized gain $ 3,021,846 5,036,924 9,056,709
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