EX-99.2 7 ex99-2.txt ANNUAL REPORT ON FORM 11-K 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, 2003 ----------------------------------------------------- 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, 2003, 2002, and 2001 (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, 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. Director 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. DIRECTOR STOCK PURCHASE PLAN Statements of Financial Condition December 31, 2003 and 2002
Assets 2003 2002 ------------------- ------------------- Common stock of Synovus Financial Corp. at market value - 2,355,286 shares (cost $23,958,032) in 2003 and 2,506,568 shares (cost $22,782,686) in 2002 (note 2) $ 68,114,873 48,627,422 Dividends receivable 382,930 356,126 ------------------- ------------------- $ 68,497,803 48,983,548 =================== =================== Liabilities and Plan Equity Plan equity (605 and 567 participants in 2003 and 2002, respectively) $ 68,497,803 48,983,548 =================== ===================
See accompanying notes to financial statements. 2 SYNOVUS FINANCIAL CORP. DIRECTOR STOCK PURCHASE PLAN Statements of Financial Condition December 31, 2003 and 2002
2003 2002 2001 ------------------ ------------------ ------------------ Dividend income $ 1,602,239 1,416,585 1,260,072 Realized gain on distributions to participants (note 5) 4,951,277 2,566,158 7,142,245 Unrealized appreciation (depreciation) of common stock of Synovus Financial Corp. (note 4) 18,312,105 (16,297,840) (11,790,479) Contributions (notes 1 and 3): Participants 2,191,935 2,147,462 2,154,189 Synovus Financial Corp. and participating subsidiaries 1,095,967 1,073,731 1,077,111 ------------------ ------------------ ------------------ 28,153,523 (9,093,904) (156,862) Withdrawals by participants - common stock of Synovus Financial Corp. at market value (381,705 shares in 2003, 167,638 shares in 2002, and 356,420 shares in 2001) - (note 5) (8,639,268) (4,023,197) (9,715,476) ------------------ ------------------ ------------------ Increase (decrease) in Plan equity for the year 19,514,255 (13,117,101) (9,872,338) Plan equity at beginning of year 48,983,548 62,100,649 71,972,987 ------------------ ------------------ ------------------ Plan equity at end of year $ 68,497,803 48,983,548 62,100,649 ================== ================== ==================
See accompanying notes to financial statements. 3 SYNOVUS FINANCIAL CORP. DIRECTOR STOCK PURCHASE PLAN Notes to Financial Statements December 31, 2003, 2002, and 2001 (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. 4 (Continued) SYNOVUS FINANCIAL CORP. DIRECTOR STOCK PURCHASE PLAN Notes to Financial Statements December 31, 2003, 2002, and 2001 (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 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 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. DIRECTOR STOCK PURCHASE PLAN Statements of Financial Condition December 31, 2003 and 2002 (3) Contributions Contributions by Participating Companies and by participants are as follows:
2003 2002 2001 -------------------------- --------------------------- -------------------------- Participating Participating Participating Participating company Companies Participants Companies Participants Companies Participants --------------------------------- ------------ ------------ ------------ ------------ ------------ ------------ Synovus Financial Corp. $ 127,500 255,000 149,667 299,334 168,334 336,667 Columbus Bank and Trust Company 80,333 160,667 83,000 166,000 88,668 177,332 Commercial Bank and Trust Company of Troup County 30,501 61,003 28,667 57,334 28,667 57,333 Commercial Bank of Thomasville 33,167 66,333 24,000 48,000 24,000 48,000 Security Bank and Trust Company of Albany 50,500 101,000 36,000 72,000 39,000 78,000 Sumter Bank and Trust Company 25,333 50,667 24,000 48,000 21,000 42,000 The Coastal Bank of Georgia 42,500 85,000 42,000 84,000 37,834 75,666 First State Bank and Trust Company 31,000 62,000 29,000 58,000 26,000 52,000 Bank of Hazlehurst -- -- 15,000 30,000 16,000 32,000 Cohutta Banking Company 12,610 25,219 12,722 25,444 13,334 26,666 Bank of Coweta 20,000 40,000 22,000 44,000 25,500 51,000 Citizens Bank and Trust of West Georgia 32,668 65,336 35,334 70,668 38,556 77,111 First Community Bank of Tifton 22,000 44,000 22,500 45,000 21,000 41,999 The Quincy State Bank 22,667 45,333 24,166 48,332 27,334 54,666 Community Bank & Trust of Southeast Alabama 18,334 36,667 19,500 39,000 16,500 33,000 CB&T Bank of Middle Georgia 28,000 56,000 26,833 53,667 25,667 51,333 First Coast Community Bank 18,000 36,000 16,608 33,217 17,834 35,666 CB&T Bank of Russell County 12,833 25,666 11,833 23,667 12,112 24,222 Sea Island Bank 25,334 50,667 24,167 48,333 24,667 49,333 Citizens First Bank 24,000 48,000 22,000 44,000 22,834 45,666 Athens First Bank and Trust Co. 22,000 44,000 21,500 43,000 24,000 48,000 Vanguard Bank and Trust 22,000 44,000 22,000 44,000 18,500 37,000 Bank of Pensacola 40,333 80,666 40,000 80,000 22,556 45,111 First Commercial Bank of Birmingham 36,000 72,000 27,667 55,333 24,667 49,333 The Bank of Tuscaloosa 40,333 80,667 40,167 80,333 39,000 78,000 Sterling Bank 24,000 48,000 24,667 49,333 24,000 47,999 First National Bank of Jasper 22,667 45,333 22,667 45,333 22,667 45,333 First Commercial Bank of Huntsville 24,444 48,888 27,056 54,112 25,334 50,666 Tallahassee State Bank 12,000 24,000 11,833 23,667 10,000 20,000 Peachtree National Bank 26,000 52,000 27,000 54,000 25,000 50,000 Citizens Bank of Fort Valley 7,833 15,667 12,500 25,000 10,667 21,333 The Citizens Bank of Cochran -- -- 8,167 16,333 8,278 16,555 Charter Bank and Trust Co. 18,333 36,667 17,000 34,000 15,667 31,333 Citizens & Merchants State Bank 14,333 28,667 16,000 32,000 24,500 49,000 The National Bank of South Carolina 39,667 79,333 36,166 72,333 37,667 75,333 Bank of North Georgia 34,744 69,489 41,844 83,689 41,100 82,200 Georgia Bank & Trust 10,500 21,000 7,000 14,000 6,667 13,333 Synovus Trust Company -- -- 1,500 3,000 2,000 4,000 The Bank of Nashville 7,000 14,000 -- -- -- -- United Bank of the Gulf Coast 13,500 27,000 -- -- -- -- United Bank and Trust 16,500 33,000 -- -- -- -- First Nation Bank 6,500 13,000 -- -- -- -- ------------ ------------ ------------ ------------ ------------ ------------ Total contributions $ 1,095,967 2,191,935 1,073,731 2,147,462 1,077,111 2,154,189 ============ ============ ============ ============ ============ ============
6 (Continued) SYNOVUS FINANCIAL CORP. DIRECTOR STOCK PURCHASE PLAN Statements of Financial Condition December 31, 2003 and 2002 (4) Unrealized (Depreciation) Appreciation of Synovus Common Stock Changes in unrealized (depreciation) appreciation of Synovus common stock are as follows:
2003 2002 2001 ------------- ------------- ------------- Unrealized appreciation at end of year $ 44,156,841 25,844,736 42,142,576 Unrealized appreciation at beginning of year 25,844,736 42,142,576 53,933,055 ------------- ------------- ------------- Unrealized appreciation (depreciation) for the year $ 18,312,105 (16,297,840) (11,790,479) ============= ============= =============
(5) Realized Gain on Withdrawal Distributions to Participants The realized gain on withdrawal distributions to participants is summarized as follows:
2003 2002 2001 ------------- ------------- ------------- Market value at date of distribution or redemption of shares of Synovus common stock $ 8,639,268 4,023,197 9,715,476 Less cost (computed on an average cost basis) of shares of Synovus common stock distributed or redeemed 3,687,991 1,457,039 2,573,231 ------------- ------------- ------------- $ 4,951,277 2,566,158 7,142,245 ============= ============= =============
7