EX-99.3 8 g18386exv99w3.htm EX-99.3 EX-99.3
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, 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. DIRECTOR STOCK PURCHASE PLAN
SYNOVUS FINANCIAL CORP.
1111 BAY AVENUE
SUITE 500
COLUMBUS, GEORGIA 31901
(706) 649-5220

 

 

 
(KPMG LOGO)
 
 
 
 
 
SYNOVUS FINANCIAL CORP.
DIRECTOR 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.
   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, 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.
DIRECTOR STOCK PURCHASE PLAN
Statements of Financial Condition
December 31, 2008 and 2007
                 
    2008     2007  
Assets
                
Common stock of Synovus Financial Corp., at fair value — 1,993,812 shares (cost $28,809,091) in 2008 and 1,733,107 shares (cost $27,249,013) in 2007
   $ 16,548,639       41,733,206  
Dividends receivable
     119,947       356,285  
 
            
 
   $ 16,668,586       42,089,491  
 
            
 
                
Plan Equity
                
Plan equity (563 and 575 participants in 2008 and 2007, respectively)
   $ 16,668,586       42,089,491  
 
            
See accompanying notes to financial statements.

2

 

SYNOVUS FINANCIAL CORP.
DIRECTOR STOCK PURCHASE PLAN
Statements of Operations and Changes in Plan Equity
Years ended December 31, 2008, 2007, and 2006
                         
    2008     2007     2006  
Dividend income
   $ 862,594       1,453,090       1,507,791  
Realized (loss) gain on distributions to participants (note 6)
     (1,078,302 )     5,401,937       3,870,811  
Unrealized (depreciation) appreciation of common stock of Synovus Financial Corp. (note 5)
     (26,744,645 )     (16,716,909 )     3,620,138  
Contributions (note 4):
                        
Participants
     2,433,362       2,550,700       2,600,931  
Synovus Financial Corp. and participating subsidiaries
     1,216,682       1,275,350       1,300,465  
 
                  
 
     (23,310,309 )     (6,035,832 )     12,900,136  
 
                        
Withdrawals by participants — common stock of Synovus Financial Corp., at fair value (211,257 shares in 2008, 349,619 shares in 2007, and 268,895 shares in 2006) (note 6)
     (2,110,596 )     (10,688,739 )     (7,560,840 )
 
                  
(Decrease) increase in Plan equity
     (25,420,905 )     (16,724,571 )     5,339,296  
Plan equity at beginning of year
     42,089,491       58,814,062       53,474,766  
 
                  
Plan equity at end of year
   $ 16,668,586       42,089,491       58,814,062  
 
                  
See accompanying notes to financial statements.

3

 

SYNOVUS FINANCIAL CORP.
DIRECTOR STOCK PURCHASE PLAN
Notes to Financial Statements
December 31, 2008, 2007, and 2006
(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 by Synovus and its 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 participating 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, 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 on his or her behalf by the Agent. 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 director 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.

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SYNOVUS FINANCIAL CORP.
DIRECTOR STOCK PURCHASE PLAN
Notes to Financial Statements
December 31, 2008, 2007, and 2006
(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 Companies are accounted for on the accrual basis. Withdrawals are accounted for upon distribution. At December 31, 2008, Plan investments include 6,524 shares held by one terminated director who has 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.
 
(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 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.

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SYNOVUS FINANCIAL CORP.
DIRECTOR STOCK PURCHASE PLAN
Notes to Financial Statements
December 31, 2008, 2007, and 2006
(4)   Contributions
 
    Contributions by Participating Companies and by participants are as follows:
                                                 
    2008     2007     2006  
    Participating             Participating             Participating        
Participating Company   Companies     Participants     Companies     Participants     Companies     Participants  
Synovus Financial Corp.
   $ 226,250       452,500       230,000       460,000       230,000       460,000  
Columbus Bank and Trust Company
     77,222       154,444       81,333       162,667       81,667       163,333  
Commercial Bank and Trust Company of Troup County
     33,333       66,667       34,000       68,000       32,667       65,333  
Commercial Bank of Thomasville
     26,000       52,000       26,000       52,000       26,500       53,000  
Security Bank and Trust Company of Albany
     44,667       89,333       45,333       90,667       46,500       93,000  
Sumter Bank and Trust Company
     18,000       36,000       18,667       37,333       24,000       48,000  
The Coastal Bank of Georgia
     38,789       77,578       36,333       72,667       38,667       77,333  
First State Bank and Trust Company
     30,667       61,333       30,667       61,333       30,667       61,333  
Cohutta Banking Company
     19,167       38,333       16,611       33,221       14,999       29,999  
Bank of Coweta
     18,667       37,333       20,000       40,000       19,500       39,000  
Citizens Bank and Trust of West Georgia
     —       —       30,000       60,000       36,500       73,000  
First Community Bank of Tifton
     20,000       40,000       20,000       40,000       20,000       40,000  
Community Bank & Trust of Southeast
                                                
Alabama
     17,500       35,000       18,000       36,000       18,000       36,000  
CB&T Bank of Middle Georgia
     42,667       85,333       42,000       84,000       28,000       56,000  
First Coast Community Bank
     16,000       32,000       16,000       32,000       18,000       36,000  
CB&T of East Alabama
     12,444       24,888       12,944       25,888       14,722       29,444  
Sea Island Bank
     34,000       68,000       33,167       66,333       29,333       58,667  
Citizens First Bank
     23,833       47,667       23,167       46,333       24,000       48,000  
Athens First Bank and Trust Co.
     25,478       50,956       24,383       48,767       23,450       46,900  
Vanguard Bank and Trust
     —       —       22,000       44,000       26,833       53,667  
Bank of Pensacola
     —       —       35,333       70,667       38,500       77,000  
Coastal Bank and Trust of Florida
     53,833       107,667       —       —       —       —  
First Commercial Bank of Birmingham
     24,833       49,667       26,000       52,000       26,000       52,000  
The Bank of Tuscaloosa
     46,000       92,000       47,833       95,667       47,833       95,667  
Sterling Bank
     20,000       40,000       20,000       40,000       20,667       41,333  
First National Bank of Jasper
     18,833       37,667       20,167       40,333       20,667       41,333  
First Commercial Bank of Huntsville
     18,167       36,333       16,389       32,778       14,555       29,111  
Tallahassee State Bank
     17,667       35,333       16,000       32,000       16,667       33,333  
Peachtree National Bank
     —       —       14,000       28,000       31,500       63,000  
Citizens Bank of Fort Valley
     —       —       —       —       14,055       28,111  
Citizens & Merchants State Bank
     —       —       42,867       85,734       28,300       56,600  
The National Bank of South Carolina
     38,333       76,667       34,833       69,667       33,333       66,667  
Bank of North Georgia
     134,055       268,111       72,991       145,981       72,283       144,567  
Georgia Bank & Trust
     15,167       30,333       16,000       32,000       16,667       33,333  
The Bank of Nashville
     16,000       32,000       12,500       25,000       12,000       24,000  
First Nation Bank
     —       —       12,000       24,000       18,167       36,333  
Trust One Bank
     17,444       34,889       21,500       43,000       21,267       42,533  
Synovus Bank of Jacksonville
     21,999       43,997       21,332       42,664       20,000       40,000  
Cohutta Banking Company of Tennessee
     —       —       5,833       11,667       6,333       12,667  
First Florida Bank
     —       —       12,000       24,000       5,833       11,667  
Synovus Bank
     49,667       99,333       47,167       94,333       51,833       103,667  
 
                                    
Total contributions
   $ 1,216,682       2,433,362       1,275,350       2,550,700       1,300,465       2,600,931  
 
                                    

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SYNOVUS FINANCIAL CORP.
DIRECTOR 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
   $ (12,260,452 )     14,484,193       31,201,102  
Unrealized appreciation at beginning of year
     14,484,193       31,201,102       27,580,964  
 
                  
 
                        
Unrealized (depreciation) appreciation for the year
   $ (26,744,645 )     (16,716,909 )     3,620,138  
 
                  
(6)   Realized (Loss) Gain on Withdrawal/Distributions to Participants
 
    The realized (loss) gain on withdrawal/distributions to participants is summarized as follows:
                         
    2008     2007     2006  
Fair value at date of distribution or redemption of shares of Synovus common stock
   $ 2,110,596       10,688,739       7,560,840  
Less cost (computed on an average cost basis) of shares of Synovus common stock distributed or redeemed
     3,188,898       5,286,802       3,690,029  
 
                  
 
                        
Total realized (loss) gain
   $ (1,078,302 )     5,401,937       3,870,811  
 
                  

7