EX-99.3 8 g13012exv99w3.htm EX-99.3 ANNUAL REPORT ON FORM 11-K EX-99.3 ANNUAL REPORT ON FORM 11-K
 

Exhibit 99.3
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. DIRECTOR STOCK PURCHASE PLAN
SYNOVUS FINANCIAL CORP.
1111 BAY AVENUE
SUITE 500
COLUMBUS, GEORGIA 31901
(706) 649-5220

 

 

Exhibit 99.3
(KPMG LOGO)
SYNOVUS FINANCIAL CORP.
DIRECTOR 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.
Director Stock Purchase Plan:
We have audited the accompanying statements of financial condition of the Synovus Financial Corp. Director 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.
DIRECTOR STOCK PURCHASE PLAN
Statements of Financial Condition
December 31, 2007 and 2006
                 
    2007     2006  
Assets
                
Common stock of Synovus Financial Corp. at fair value — 1,733,107 shares (cost $27,249,013) in 2007 and 1,895,619 shares (cost $27,240,833) in 2006
   $ 41,733,206       58,441,935  
Dividends receivable
     356,285       372,127  
 
            
 
   $ 42,089,491       58,814,062  
 
            
Plan Equity
                
Plan equity (575 and 655 participants in 2007 and 2006, respectively)
   $ 42,089,491       58,814,062  
 
            
See accompanying notes to financial statements.

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SYNOVUS FINANCIAL CORP.
DIRECTOR STOCK PURCHASE PLAN
Statements of Operations and Changes in Plan Equity
Years ended December 31, 2007, 2006, and 2005
                         
    2007     2006     2005  
Dividend income
   $ 1,453,090       1,507,791       1,444,278  
Realized gain on distributions to participants (note 5)
     5,401,937       3,870,811       3,400,566  
Unrealized (depreciation) appreciation of common stock of Synovus Financial Corp. (note 4)
     (16,716,909 )     3,620,138       (6,525,615 )
Contributions (note 3):
                        
Participants
     2,550,700       2,600,931       2,442,783  
Synovus Financial Corp. and participating subsidiaries
     1,275,350       1,300,465       1,221,392  
 
                  
 
     (6,035,832 )     12,900,136       1,983,404  
 
                        
Withdrawals by participants — common stock of Synovus Financial Corp. at fair value (349,619 shares in 2007, 268,895 shares in 2006, and 218,826 shares in 2005) (note 5)
     (10,688,739 )     (7,560,840 )     (6,093,636 )
 
                  
(Decrease) increase in Plan equity for the year
     (16,724,571 )     5,339,296       (4,110,232 )
Plan equity at beginning of year
     58,814,062       53,474,766       57,584,998  
 
                  
Plan equity at end of year
   $ 42,089,491       58,814,062       53,474,766  
 
                  
See accompanying notes to financial statements.

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SYNOVUS FINANCIAL CORP.
DIRECTOR STOCK PURCHASE PLAN
Notes to Financial Statements
December 31, 2007, 2006, and 2005
(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. 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. 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 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. A participant who terminates his or her 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 her, 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, 2007, 2006, and 2005
(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 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 Companies are accounted for on the accrual basis.
 
    Withdrawals are accounted for upon distribution. At December 31, 2007, plan investments include 1,703 shares held by one terminated director who has 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 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 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.
DIRECTOR STOCK PURCHASE PLAN
Notes to Financial Statements
December 31, 2007, 2006, and 2005
(3)   Contributions
 
    Contributions by Participating Companies and by participants are as follows:
                                                 
    2007     2006     2005  
    Participating             Participating             Participating        
Participating Company   Companies     Participants     Companies     Participants     Companies     Participants  
Synovus Financial Corp.
   $ 230,000       460,000       230,000       460,000       202,500       405,000  
Columbus Bank and Trust Company
     81,333       162,667       81,667       163,333       81,000       162,000  
Commercial Bank and Trust Company of Troup County
     34,000       68,000       32,667       65,333       30,668       61,336  
Commercial Bank of Thomasville
     26,000       52,000       26,500       53,000       24,000       48,000  
Security Bank and Trust Company of Albany
     45,333       90,667       46,500       93,000       51,333       102,666  
Sumter Bank and Trust Company
     18,667       37,333       24,000       48,000       24,000       48,000  
The Coastal Bank of Georgia
     36,333       72,667       38,667       77,333       41,500       83,000  
First State Bank and Trust Company
     30,667       61,333       30,667       61,333       30,667       61,334  
Cohutta Banking Company
     16,611       33,221       14,999       29,999       13,610       27,221  
Bank of Coweta
     20,000       40,000       19,500       39,000       20,000       40,000  
Citizens Bank and Trust of West Georgia
     30,000       60,000       36,500       73,000       31,447       62,894  
First Community Bank of Tifton
     20,000       40,000       20,000       40,000       20,000       40,000  
Community Bank & Trust of Southeast Alabama
     18,000       36,000       18,000       36,000       18,000       36,000  
CB&T Bank of Middle Georgia
     42,000       84,000       28,000       56,000       25,500       51,000  
First Coast Community Bank
     16,000       32,000       18,000       36,000       20,000       40,000  
CB&T of East Alabama *
     12,944       25,888       14,722       29,444       14,500       29,000  
Sea Island Bank
     33,167       66,333       29,333       58,667       29,833       59,666  
Citizens First Bank
     23,167       46,333       24,000       48,000       25,667       51,334  
Athens First Bank and Trust Co.
     24,383       48,767       23,450       46,900       23,300       46,600  
Vanguard Bank and Trust
     22,000       44,000       26,833       53,667       20,000       40,000  
Bank of Pensacola
     35,333       70,667       38,500       77,000       38,667       77,333  
First Commercial Bank of Birmingham
     26,000       52,000       26,000       52,000       25,333       50,666  
The Bank of Tuscaloosa
     47,833       95,667       47,833       95,667       45,833       91,667  
Sterling Bank
     20,000       40,000       20,667       41,333       24,000       48,000  
First National Bank of Jasper
     20,167       40,333       20,667       41,333       21,500       43,000  
First Commercial Bank of Huntsville
     16,389       32,778       14,555       29,111       24,500       49,000  
Tallahassee State Bank
     16,000       32,000       16,667       33,333       10,000       20,000  
Peachtree National Bank
     14,000       28,000       31,500       63,000       27,833       55,667  
Citizens Bank of Fort Valley **
     —       —       14,055       28,111       10,667       21,333  
Citizens & Merchants State Bank
     42,867       85,734       28,300       56,600       20,000       40,000  
The National Bank of South Carolina
     34,833       69,667       33,333       66,667       35,000       70,000  
Bank of North Georgia
     72,991       145,981       72,283       144,567       55,450       110,900  
Georgia Bank & Trust
     16,000       32,000       16,667       33,333       14,000       28,000  
The Bank of Nashville
     12,500       25,000       12,000       24,000       8,500       17,000  
First Nation Bank
     12,000       24,000       18,167       36,333       20,100       40,200  
Trust One Bank
     21,500       43,000       21,267       42,533       15,817       31,633  
Synovus Bank of Jacksonville
     21,332       42,664       20,000       40,000       18,500       37,000  
Cohutta Banking Company of Tennessee
     5,833       11,667       6,333       12,667       5,167       10,333  
First Florida Bank
     12,000       24,000       5,833       11,667       —       —  
Synovus Bank of Tampa Bay
     47,167       94,333       51,833       103,667       53,000       106,000  
 
                                    
Total contributions
   $ 1,275,350       2,550,700       1,300,465       2,600,931       1,221,392       2,442,783  
 
                                    
 
*   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.
(Continued)

6

 

SYNOVUS FINANCIAL CORP.
DIRECTOR 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 appreciation at end of year
   $ 14,484,193       31,201,102       27,580,964  
Unrealized appreciation at beginning of year
     31,201,102       27,580,964       34,106,579  
 
                  
Unrealized (depreciation) appreciation for the year
   $ (16,716,909 )     3,620,138       (6,525,615 )
 
                  
(5)   Realized Gain on Withdrawal/Distributions to Participants
 
    The realized gain on withdrawal/distributions to participants is summarized as follows:
                         
    2007     2006     2005  
Fair value at date of distribution or redemption of shares of Synovus common stock
   $ 10,688,738       7,560,840       6,093,636  
Less cost (computed on an average cost basis) of shares of Synovus common stock distributed or redeemed
     5,286,801       3,690,029       2,693,070  
 
                  
Total realized gain
   $ 5,401,937       3,870,811       3,400,566  
 
                  

7