EX-99.2 7 g18386exv99w2.htm EX-99.2 EX-99.2
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, 2008               
     
    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

 

 

 
(KPMG LLP)
 
 
 
 
SYNOVUS FINANCIAL CORP.
EMPLOYEE STOCK PURCHASE PLAN
Financial Statements
December 31, 2008, 2007, and 2006
(With Report of Independent Registered Public Accounting Firm Thereon)

 

 

(KPMG LOGO)
KPMG LLP
Suite 2000
303 Peachtree Street, NE
Atlanta, GA 30308
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, 2008 and 2007, and the related statements of operations and changes in plan equity for each of the years in the three-year period ended December 31, 2008. 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, 2008 and 2007, 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, 2008, in conformity with U.S. generally accepted accounting principles.
(KPMG LLP)
April 24, 2009

 

 

SYNOVUS FINANCIAL CORP.
EMPLOYEE STOCK PURCHASE PLAN
Statements of Financial Condition
December 31, 2008 and 2007
                 
    2008     2007  
Assets
                
Common stock of Synovus Financial Corp., at fair value — 3,503,606 shares (cost $61,576,914) in 2008 and 2,516,050 shares (cost $61,891,496) in 2007
   $ 29,079,931       60,586,481  
Dividends receivable
     205,084       508,893  
Contributions receivable
     734,039       777,124  
 
            
 
   $ 30,019,054       61,872,498  
 
            
 
                
Plan Equity
                
Plan equity (4,639 and 4,771 participants in 2008 and 2007, respectively)
   $ 30,019,054       61,872,498  
 
            
See accompanying notes to financial statements.

2

 

See accompanying notes to financial statements.
SYNOVUS FINANCIAL CORP.
EMPLOYEE STOCK PURCHASE PLAN
Statements of Operations and Changes in Plan Equity
Years ended December 31, 2008, 2007, and 2006
                         
    2008     2007     2006  
Dividend income
   $ 1,374,275       1,992,143       1,891,529  
Realized (loss) gain on distributions to participants (note 6)
     (10,211,752 )     3,672,475       3,983,085  
Unrealized (depreciation) appreciation of common stock of Synovus Financial Corp. (note 5)
     (31,191,969 )     (20,156,290 )     5,042,496  
Contributions (note 4):
                        
Participants
     12,704,261       12,289,728       10,935,315  
Participating Employers
     6,352,679       6,145,401       5,476,539  
 
                  
 
     (20,972,506 )     3,943,457       27,328,964  
 
                        
Withdrawals by participants — common stock of Synovus Financial Corp., at fair value (1,028,403 shares in 2008, 586,786 shares in 2007, and 703,082 shares in 2006)
(note 6)
     (10,880,938 )     (17,734,489 )     (19,576,133 )
 
                  
(Decrease) increase in Plan equity
     (31,853,444 )     (13,791,032 )     7,752,831  
Plan equity at beginning of year
     61,872,498       75,663,530       67,910,699  
 
                  
Plan equity at end of year
   $ 30,019,054       61,872,498       75,663,530  
 
                  
See accompanying notes to financial statements.

3

 

SYNOVUS FINANCIAL CORP.
EMPLOYEE STOCK PURCHASE PLAN
Notes to Financial Statements
December 31, 2008, 2007, and 2006
(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 by Synovus and its subsidiaries (the Participating Employers).
 
    Synovus serves as the Plan Administrator. The Plan agent is Mellon Investor Services, LLC, hereafter referred to as “Agent.”
 
    All employees who work twenty hours per week or more are 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 allowable contribution ranges from 3% to 7% of compensation based on years of service. 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, 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 on his or her behalf by the Agent.
 
    Participation in the Plan shall automatically terminate upon termination of a participant’s employment whether by death, retirement, or otherwise.

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SYNOVUS FINANCIAL CORP.
EMPLOYEE STOCK PURCHASE PLAN
Notes to Financial Statements
December 31, 2008, 2007, and 2006
    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 Participating 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 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.
 
    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 securities are traded. The December 31, 2008 and 2007 fair values were $8.30 and $24.08 per share, respectively.
 
    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.
 
    The realized gain or loss 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.
 
    Purchases and sales of Synovus common stock are reflected on a trade—date basis. Dividend income is accrued on the record date.
 
    Contributions by participants and Participating Employers are accounted for on the accrual basis. Withdrawals are accounted for upon distribution. At December 31, 2008, Plan investments include 28,850 shares held by 23 terminated employees who have not yet requested distribution in accordance with the terms of the Plan.
 
    Management of the Plan believes that the carrying amount of the receivables is a reasonable approximation of fair value due to their short-term nature.

5

 

SYNOVUS FINANCIAL CORP.
EMPLOYEE STOCK PURCHASE PLAN
Notes to Financial Statements
December 31, 2008, 2007, and 2006
(3)   Tax Status 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 Participating 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.

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SYNOVUS FINANCIAL CORP.
EMPLOYEE STOCK PURCHASE PLAN
Notes to Financial Statements
December 31, 2008, 2007, and 2006
(4)   Contributions
 
    Contributions by Participating Employers and by participants are as follows:
                                                 
    2008     2007     2006  
    Participating             Participating             Participating        
Participating Employers   Employers     Participants     Employers     Participants     Employers     Participants  
Synovus Financial Corp.
   $ 1,426,799       2,853,998       1,362,408       2,726,269       1,237,122       2,471,345  
Columbus Bank and Trust Company
     599,107       1,199,193       573,581       1,147,220       474,800       949,024  
Commercial Bank and Trust Company of Troup County
     34,335       68,662       37,236       74,448       32,634       65,268  
Commercial Bank of Thomasville
     74,832       149,661       72,805       145,545       67,409       134,813  
Security Bank and Trust Company of Albany
     62,458       124,909       57,525       115,048       49,890       99,776  
Sumter Bank and Trust Company
     44,819       89,639       48,271       96,542       48,259       96,515  
The Coastal Bank of Georgia
     74,253       148,502       71,857       143,773       62,753       125,427  
First State Bank and Trust Company
     47,269       94,536       47,769       95,346       46,711       93,293  
Cohutta Banking Company
     64,439       128,911       53,273       106,498       51,147       102,228  
Bank of Coweta
     63,172       126,335       62,367       124,704       62,632       125,244  
Citizens Bank & Trust of West Georgia
     70,159       140,306       98,015       195,869       92,512       184,875  
Synovus Securities, Inc.
     146,233       292,371       125,164       250,254       201,024       394,642  
Community Bank and Trust of Southeast Alabama
     58,572       117,143       49,290       98,580       42,029       84,056  
Tallahassee State Bank
     28,515       57,030       25,199       50,398       22,900       45,784  
CB&T Bank of Middle Georgia
     61,845       123,688       64,561       128,867       44,240       88,356  
First Community Bank of Tifton
     45,381       90,760       45,649       91,374       38,323       76,640  
CB&T of East Alabama
     49,096       98,192       42,991       86,080       39,960       79,920  
Sea Island Bank
     106,287       212,573       87,746       175,489       63,705       127,405  
Citizens First Bank
     47,662       95,323       46,668       93,332       43,033       86,047  
First Coast Community Bank
     32,093       64,140       31,197       62,393       29,246       57,952  
Bank of Pensacola
     137,531       275,062       126,789       253,541       107,707       215,240  
Vanguard Bank and Trust
     71,095       142,189       79,304       158,470       69,447       138,888  
The National Bank of Walton County
     29,204       58,406       39,739       79,478       38,189       75,849  
Athens First Bank & Trust Co.
     214,628       429,256       192,664       385,297       150,133       299,890  
Citizens Bank of Fort Valley
     —       —       —       —       18,885       37,770  
First Commercial Bank of Birmingham
     252,259       504,459       237,228       474,230       201,370       402,448  
First National Bank of Jasper
     96,379       192,750       97,241       194,476       95,648       191,209  
Sterling Bank
     67,672       134,865       66,592       132,484       53,255       106,230  
The Bank of Tuscaloosa
     67,584       135,165       70,844       141,681       63,515       126,972  
First Commercial Bank of Huntsville
     94,867       189,734       83,985       167,971       65,666       131,261  
Peachtree National Bank
     —       —       35,438       70,876       51,052       101,947  
Synovus Mortgage Corp.
     195,673       391,313       219,133       438,031       215,915       431,691  
Citizens & Merchants State Bank
     23,938       47,876       26,122       52,243       24,247       48,494  
Synovus Trust Company
     317,722       635,388       305,904       611,995       245,332       489,877  
The National Bank of South Carolina
     384,771       769,527       376,145       752,260       338,097       676,106  
Bank of North Georgia
     562,074       1,124,114       462,183       924,117       322,803       645,592  
Georgia Bank & Trust
     65,592       131,183       58,091       116,179       47,049       94,065  
Merit Leasing Corp.
     —       —       —       —       2,661       5,322  
Total Technology Ventures
     10,981       21,961       11,137       22,273       10,547       21,094  
Synovus Insurance of Georgia
     2,954       5,907       12,051       24,102       9,295       18,590  
Creative Financial Group
     108,516       216,977       105,252       210,190       83,317       165,657  
GLOBALT, Inc.
     70,590       139,741       62,789       125,511       56,392       112,782  
The Bank of Nashville
     73,976       147,941       69,010       138,015       53,341       106,667  
Synovus Investment Advisors
     —       —       —       —       42,362       84,551  
First Nation Bank
     —       —       41,820       83,584       56,992       113,346  
Synovus Bank of Jacksonville
     48,192       96,385       41,600       83,201       36,143       72,284  
Trust One Bank
     78,198       156,353       73,391       146,628       65,232       130,234  
Synovus Insurance of Florida
     195       388       212       425       516       1,033  
Synovus Insurance of Alabama
     84       168       605       1,210       240       480  
First Florida Bank
     35,133       70,202       55,155       110,307       30,339       60,677  
Cohutta Banking Company of Tennessee
     4,549       9,097       8,649       17,417       4,749       9,497  
Synovus Bank
     200,996       401,982       182,756       365,507       165,774       330,962  
 
                                      
Total contributions
   $ 6,352,679       12,704,261       6,145,401       12,289,728       5,476,539       10,935,315  
 
                                    

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SYNOVUS FINANCIAL CORP.
EMPLOYEE STOCK PURCHASE PLAN
Notes to Financial Statements
December 31, 2008, 2007, and 2006
(5)   Unrealized (Depreciation) Appreciation of Common Stock of Synovus Financial Corp.
 
    Changes in unrealized (depreciation) appreciation of Synovus common stock are as follows:
                         
    2008     2007     2006  
Unrealized (depreciation) appreciation at end of year
   $ (32,496,984 )     (1,305,015 )     18,851,275  
Unrealized (depreciation) appreciation at beginning of year
     (1,305,015 )     18,851,275       13,808,779  
 
                  
 
                        
Unrealized (depreciation) appreciation for the year
   $ (31,191,969 )     (20,156,290 )     5,042,496  
 
                  
(6)   Realized (Loss) Gain on Withdrawal/Distributions to Participants
 
    The (loss) gain realized on withdrawal/distributions to participants is summarized as follows:
                         
    2008     2007     2006  
Fair value at dates of distribution or redemption of shares of Synovus common stock
   $ 10,880,938       17,734,489       19,576,133  
Less cost (computed on an average cost basis) of shares of Synovus common stock distributed or redeemed
     21,092,690       14,062,014       15,593,048  
 
                  
 
                        
Total realized (loss) gain
   $ (10,211,752 )     3,672,475       3,983,085  
 
                  

8