EX-99.2 7 g13012exv99w2.htm EX-99.2 ANNUAL REPORT ON FORM 11-K EX-99.2 ANNUAL REPORT ON FORM 11-K
 

Exhibit 99.2
FORM 11-K
(Mark One)
þ ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
     
For the fiscal year ended
 December 31, 2007
 
   
OR
o 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.
1111 BAY AVENUE
SUITE 500
COLUMBUS, GEORGIA 31901
(706) 649-5220

 

 

Exhibit 99.2
(KPMG LOGO)
SYNOVUS FINANCIAL CORP.
EMPLOYEE STOCK PURCHASE PLAN
Financial Statements
December 31, 2007, 2006, and 2005
(With Report of Independent Registered Public Accounting Firm Thereon)

 

 

(LETTERHEAD)
Report of Independent Registered Public Accounting Firm
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 (the Plan) as of December 31, 2007 and 2006, and the related statements of operations and changes in plan equity for each of the years in the three-year period ended December 31, 2007. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
     We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). 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 Plan as of December 31, 2007 and 2006, 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, 2007 in conformity with U.S. generally accepted accounting principles.
         
     
  -s- KPMG LLP    
     
     
 
Atlanta, Georgia
April 25, 2008
KPMG LLP, a U.S. limited liability partnership, is the U.S.
member firm of KPMG International, a Swiss cooperative.

 

 

SYNOVUS FINANCIAL CORP.
EMPLOYEE STOCK PURCHASE PLAN
Statements of Financial Condition
December 31, 2007 and 2006
                 
    2007     2006  
Assets
                
Common stock of Synovus Financial Corp. at fair value —
2,516,050 shares (cost $61,891,496) in 2007 and
2,416,444 shares (cost $55,647,706) in 2006
   $ 60,586,481       74,498,981  
Dividends receivable
     508,893       472,734  
Contributions receivable
     777,124       691,815  
 
            
 
   $ 61,872,498       75,663,530  
 
            
 
                
Plan Equity
                
Plan equity (4,771 and 4,476 participants in 2007 and 2006, respectively)
   $ 61,872,498       75,663,530  
 
            
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, 2007, 2006, and 2005
                         
    2007     2006     2005  
Dividend income
   $ 1,992,143       1,891,529       1,843,710  
Realized gain on distributions to participants (note 5)
     3,672,475       3,983,085       5,394,207  
Unrealized (depreciation) appreciation of common stock of Synovus Financial Corp. (note 4)
     (20,156,290 )     5,042,496       (9,198,096 )
Contributions (note 3):
                        
Participants
     12,289,728       10,935,315       9,993,103  
Participating Employers
     6,145,401       5,476,539       4,996,579  
 
                  
 
     3,943,457       27,328,964       13,029,503  
 
                        
Withdrawals by participants — common stock of Synovus Financial Corp. at fair value (586,786 shares in 2007, 703,082 shares in 2006, and 675,345 shares in 2005) (note 5)
     (17,734,489 )     (19,576,133 )     (19,295,801 )
 
                  
(Decrease) increase in Plan equity for the year
     (13,791,032 )     7,752,831       (6,266,298 )
Plan equity at beginning of year
     75,663,530       67,910,699       74,176,997  
 
                  
Plan equity at end of year
   $ 61,872,498       75,663,530       67,910,699  
 
                  
See accompanying notes to financial statements.

3

 

SYNOVUS FINANCIAL CORP.
EMPLOYEE STOCK PURCHASE PLAN
Notes to Financial Statements
December 31, 2007, 2006, and 2005
(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. The Plan agent is Mellon Investor Services, LLC, hereafter referred to as “Agent.”
 
    Through June 30, 2002, all employees who worked 20 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.
 
    The Plan provides that upon termination of participation in the Plan, each former participant will receive, at his or her discretion, (i) the full number of shares of Synovus common stock held on his or her behalf by the Agent, together with a check for any fractional share interest, or (ii) a lump-sum cash distribution for the proceeds of the sale of all shares held by the Agent on his or her behalf.
 
    Participation in the Plan shall automatically terminate upon termination of a participant’s employment whether by death, retirement, or otherwise.
(Continued)

4

 

SYNOVUS FINANCIAL CORP.
EMPLOYEE STOCK PURCHASE PLAN
Notes to Financial Statements
December 31, 2007, 2006, and 2005
    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 her, or his or her 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 Significant Accounting Policies
 
    The investment in Synovus common stock is stated at fair 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, 2007 and 2006 fair values were $24.08 and $30.83 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 fair value per share at the date of the distribution to the participants, less transaction costs.
 
    Dividend income is accrued on the record date.
 
    The Plan’s investment in the common stock of Synovus 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 are accounted for on the accrual basis.
 
    Withdrawals are accounted for upon distribution. At December 31, 2007, plan investments include 1,296 shares held by 13 terminated employees who have not yet requested distribution in accordance with the terms of the Plan.
 
    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 the receivables is a reasonable approximation of the fair value due to the short-term nature.
 
    The preparation of financial statements in conformity with U.S. generally accepted accounting principles 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.
EMPLOYEE STOCK PURCHASE PLAN
Notes to Financial Statements
December 31, 2007, 2006, and 2005
(3)   Contributions
 
    Contributions by Participating Employers and by participants are as follows:
                                                 
    2007     2006     2005  
    Participating             Participating             Participating        
Participating Employers   Employers     Participants     Employers     Participants     Employers     Participants  
 
                                                
Synovus Financial Corp.
   $ 1,362,408       2,726,269       1,237,122       2,471,345       950,392       1,900,728  
Columbus Bank and Trust Company
     573,581       1,147,220       474,800       949,024       413,281       826,478  
Commercial Bank and Trust Company of Troup County
     37,236       74,448       32,634       65,268       34,721       69,435  
Commercial Bank of Thomasville
     72,805       145,545       67,409       134,813       59,711       119,416  
Security Bank and Trust Company of Albany
     57,525       115,048       49,890       99,776       45,679       91,353  
Sumter Bank and Trust Company
     48,271       96,542       48,259       96,515       48,785       97,564  
The Coastal Bank of Georgia
     71,857       143,773       62,753       125,427       53,951       107,895  
First State Bank and Trust Company
     47,769       95,346       46,711       93,293       44,225       88,445  
Cohutta Banking Company
     53,273       106,498       51,147       102,228       54,388       108,771  
Bank of Coweta
     62,367       124,704       62,632       125,244       62,721       125,436  
Citizens Bank & Trust of West Georgia
     98,015       195,869       92,512       184,875       101,758       203,503  
Synovus Securities, Inc.
     125,164       250,254       201,024       394,642       310,009       620,433  
Community Bank and Trust of Southeast Alabama
     49,290       98,580       42,029       84,056       34,664       69,323  
Tallahassee State Bank
     25,199       50,398       22,900       45,784       26,833       53,663  
CB&T Bank of Middle Georgia
     64,561       128,867       44,240       88,356       47,846       95,686  
First Community Bank of Tifton
     45,649       91,374       38,323       76,640       40,044       80,084  
CB&T of East Alabama *
     42,991       86,080       39,960       79,920       38,073       76,141  
Sea Island Bank
     87,746       175,489       63,705       127,405       53,008       106,010  
Citizens First Bank
     46,668       93,332       43,033       86,047       44,537       89,069  
First Coast Community Bank
     31,197       62,393       29,246       57,952       29,517       59,030  
Bank of Pensacola
     126,789       253,541       107,707       215,240       103,597       207,185  
Vanguard Bank and Trust
     79,304       158,470       69,447       138,888       66,796       133,582  
The National Bank of Walton County
     39,739       79,478       38,189       75,849       43,807       87,609  
Athens First Bank & Trust Co.
     192,664       385,297       150,133       299,890       150,307       300,600  
Citizens Bank of Fort Valley **
     —       —       18,885       37,770       18,803       37,604  
First Commercial Bank of Birmingham
     237,228       474,230       201,370       402,448       175,218       350,418  
First National Bank of Jasper
     97,241       194,476       95,648       191,209       95,440       190,867  
Sterling Bank
     66,592       132,484       53,255       106,230       44,039       88,073  
The Bank of Tuscaloosa
     70,844       141,681       63,515       126,972       62,944       125,881  
First Commercial Bank of Huntsville
     83,985       167,971       65,666       131,261       59,169       118,330  
Peachtree National Bank
     35,438       70,876       51,052       101,947       50,629       101,252  
Synovus Mortgage Corp.
     219,133       438,031       215,915       431,691       171,157       342,303  
Citizens & Merchants State Bank
     26,122       52,243       24,247       48,494       24,744       49,486  
Synovus Trust Company
     305,904       611,995       245,332       489,877       233,262       466,506  
The National Bank of South Carolina
     376,145       752,260       338,097       676,106       296,227       592,421  
Bank of North Georgia
     462,183       924,117       322,803       645,592       316,769       633,512  
Georgia Bank & Trust
     58,091       116,179       47,049       94,065       42,612       85,217  
Merit Leasing Corp. ***
     —       —       2,661       5,322       3,029       6,057  
Total Technology Ventures
     11,137       22,273       10,547       21,094       7,439       14,878  
Synovus Insurance of Georgia
     12,051       24,102       9,295       18,590       12,672       25,343  
Creative Financial Group
     105,252       210,190       83,317       165,657       68,498       136,991  
GLOBALT, Inc.
     62,789       125,511       56,392       112,782       50,618       101,234  
Machinery Leasing Co., Inc. ****
     —       —       —       —       2,349       4,698  
The Bank of Nashville
     69,010       138,015       53,341       106,667       51,561       103,117  
Synovus Investment Advisors ***
     —       —       42,362       84,551       46,022       92,042  
First Nation Bank
     41,820       83,584       56,992       113,346       54,256       108,506  
Synovus Bank of Jacksonville
     41,600       83,201       36,143       72,284       27,738       55,474  
Trust One Bank
     73,391       146,628       65,232       130,234       63,388       126,772  
Synovus Insurance of Florida
     212       425       516       1,033       414       831  
Synovus Insurance of Alabama
     605       1,210       240       480       —       —  
First Florida Bank
     55,155       110,307       30,339       60,677       —       —  
Cohutta Banking Company of Tennessee
     8,649       17,417       4,749       9,497       1,622       3,244  
Synovus Bank of Tampa Bay
     182,756       365,507       165,774       330,962       157,310       314,607  
 
                                    
Total contributions
   $ 6,145,401       12,289,728       5,476,539       10,935,315       4,996,579       9,993,103  
 
                                    
 
*   On August 1, 2005, CB&T Bank of Russell County changed its name to CB&T of East Alabama.
 
**   On January 16, 2007, this entity was merged with CB&T Bank of Middle Georgia.
 
***   These entities were dissolved during 2007.
 
****   This entity had no employees during 2007 and 2006.
(Continued)

6

 

SYNOVUS FINANCIAL CORP.
EMPLOYEE STOCK PURCHASE PLAN
Notes to Financial Statements
December 31, 2007, 2006, and 2005
(4)   Unrealized (Depreciation) Appreciation of Common Stock of Synovus Financial Corp.
 
    Changes in unrealized (depreciation) appreciation of Synovus common stock are as follows:
                         
    2007     2006     2005  
Unrealized (depreciation) appreciation at end of year
   $ (1,305,015 )     18,851,275       13,808,779  
Unrealized appreciation at beginning of year
     18,851,275       13,808,779       23,006,875  
 
                  
Unrealized (depreciation) appreciation for the year
   $ (20,156,290 )     5,042,496       (9,198,096 )
 
                  
(5)   Realized Gain on Withdrawal/Distributions to Participants
 
    The gain realized on withdrawal/distributions to participants is summarized as follows:
                         
    2007     2006     2005  
Fair value at dates of distribution or redemption of shares of Synovus common stock
   $ 17,734,489       19,576,133       19,295,801  
Less cost (computed on an average cost basis) of shares of Synovus common stock distributed or redeemed
     14,062,014       15,593,048       13,901,594  
 
                  
Total realized gain
   $ 3,672,475       3,983,085       5,394,207  
 
                  

7