SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] Annual report pursuant to section 13 or 15(d) of the Securities Exchange
Act of 1934 for the fiscal year ended December 31, 2002 or
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[ ] Transition report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from to
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Commission file number 1-10312
SYNOVUS FINANCIAL CORP.
(Exact Name of Registrant as specified in its charter)
Georgia 58-1134883
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
One Arsenal Place, 901 Front Avenue
Suite 301, Columbus, Georgia 31901
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) (706) 649-5220
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
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Common Stock, $1.00 Par Value New York Stock Exchange
Common Stock Purchase Rights New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
NONE
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO___________
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Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
Indicate by check mark whether the Registrant is an accelerated filer
(as defined in Rule 12b-2 of the Act).
YES X NO___________
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As of February 17, 2003, 300,449,238 shares of the $1.00 par value
common stock of Synovus Financial Corp. were outstanding. The aggregate market
value of the shares of $1.00 par value common stock of Synovus Financial Corp.
held by nonaffiliates on December 31, 2002 was approximately $6,323,807,000
(based upon the closing share price of such stock on June 28, 2002).
Portions of Registrant's Proxy Statement, including Financial Appendix,
dated March 21, 2003 are incorporated in Parts I, II, III and IV of this report.
Registrant's Documents Incorporated by Reference
Part Number and Item
Document Incorporated Number of Form 10-K Into
by Reference Which Incorporated
- -------------------- ------------------------
Pages F-12 and F-13, F-19 and F-20, Part I, Item 1, Business
F-23 and F-24, and F-30 through F-53
of the Financial Appendix to Registrant's
Proxy Statement in connection with its
Annual Shareholders' Meeting to be
held on April 24, 2003
Pages F-16 through F-19 Part I, Item 2, Properties
of the Financial Appendix to
Registrant's Proxy Statement in connection
with its Annual Shareholders' Meeting
to be held on April 24, 2003
Pages F-17 through F-19 of Part I, Item 3, Legal
the Financial Appendix to Registrant's
Proceedings Proxy Statement in connection
with its Annual Shareholders' Meeting to
be held on April 24, 2003
Pages F-20 and F-21, and F-48 and F-49 Part II, Item 5, Market
of the Financial Appendix to Registrant's for Registrant's Common
Proxy Statement in connection with Equity and Related
its Annual Shareholders' Meeting to be Stockholder Matters
held on April 24, 2003
Page F-29 of the Financial Part II, Item 6,
Appendix to Registrant's Selected Financial Data
Proxy Statement in connection with
its Annual Shareholders' Meeting to be
held on April 24, 2003
Pages F-30 through F-53 Part II, Item 7,
of the Financial Appendix to Registrant's Management's Discussion
Proxy Statement in connection with and Analysis of Financial
its Annual Shareholders' Meeting to be Condition and Results of
held on April 24, 2003 Operations
Pages F-45 and F-46, and F-6 through F-12 Part II, Item 7A, Quantitative
of the Financial Appendix to Registrant's and Qualitative Disclosures
Proxy Statement in connection with About Market Risk
its Annual Shareholders' Meeting to be
held on April 24, 2003
Pages F-2 through F-26, F-28, and F-53 Part II, Item 8,
of the Financial Appendix to Registrant's Financial Statements and
Proxy Statement in connection with Supplementary Data
its Annual Shareholders' Meeting to be
held on April 24, 2003
Pages 3 through 7, 10, and 24 Part III, Item 10,
of Registrant's Proxy Directors and Executive
Statement in connection with Officers of the Registrant
its Annual Shareholders' Meeting
to be held April 24, 2003
Page 9, pages 11 through 14, and 18 Part III, Item 11,
of Registrant's Proxy Executive Compensation
Statement in connection with its
Annual Shareholders' Meeting
to be held April 24, 2003
Pages F-20 and F-21 of the Financial Part III, Item 12,
Appendix and pages 10 and 11, and Security Ownership of
20 through 22 of Registrant's Proxy Certain Beneficial Owners
Statement in connection with its and Management and Related
Annual Shareholders' Stockholder Matters
Meeting to be held April 24, 2003
Page 19, and pages 21 through 24 Part III, Item 13,
of Registrant's Proxy Statement in Certain Relationships
connection with its Annual Shareholders' and Related Transactions
Meeting to be held April 24, 2003
Pages F-2 through F-26, and F-28 Part IV, Item 15,
of the Financial Appendix to Exhibits, Financial Statement
Registrant's Proxy Statement in Schedules and Reports on
connection with its Annual Shareholders' Form 8-K
Meeting to be held on April 24, 2003
Table of Contents
Item No. Caption Page No.
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Part I
Safe Harbor Statement 1
1. Business 2
2. Properties 12
3. Legal Proceedings 13
4. Submission of Matters to a Vote of 13
Security Holders
Part II
5. Market for Registrant's Common Equity 13
and Related Stockholder Matters
6. Selected Financial Data 14
7. Management's Discussion and Analysis 14
of Financial Condition and Results
of Operations
7A. Quantitative and Qualitative Disclosures About
Market Risk 14
8. Financial Statements and Supplementary Data 14
9. Changes In and Disagreements With 14
Accountants on Accounting and Financial Disclosure
Part III
10. Directors and Executive Officers of the Registrant 15
11. Executive Compensation 15
12. Security Ownership of Certain 15
Beneficial Owners and Management and Related
Stockholder Matters
13. Certain Relationships and Related 15
Transactions
14. Controls and Procedures 16
Part IV
15. Exhibits, Financial Statement Schedules, 16
and Reports on Form 8-K
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Part I
Safe Harbor Statement
Certain statements contained in this document and the exhibits hereto
which are not statements of historical fact constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
(the "Act"). In addition, certain statements in future filings by Synovus
Financial Corp. ("Synovus") with the Securities and Exchange Commission, in
press releases, and in oral and written statements made by or with the approval
of Synovus which are not statements of historical fact constitute
forward-looking statements within the meaning of the Act. Examples of
forward-looking statements include, but are not limited to: (i) projections of
revenues, income or loss, earnings or loss per share, the payment or non-payment
of dividends, capital structure and other financial items; (ii) statements of
plans and objectives of Synovus or its management or Board of Directors,
including those relating to banking and non-banking products or services; (iii)
statements of future economic performance; and (iv) statements of assumptions
underlying such statements. Words such as "believes," "anticipates," "expects,"
"intends," "targeted," and similar expressions are intended to identify
forward-looking statements but are not the exclusive means of identifying such
statements.
Prospective investors are cautioned that forward-looking statements are
not guarantees of future performance and involve risks and uncertainties, and
that actual results may differ materially from those contemplated by the
forward-looking statements. A number of factors could cause actual results to
differ materially from those contemplated by the forward-looking statements.
Many of these factors are beyond Synovus' ability to control or predict. These
factors include, but are not limited to:
* Synovus' inability to increase its revenues derived from Financial
Management Services and insurance;
* Total System Services Inc.'s ("TSYS") inability to achieve its
net income goals for 2003;
* Synovus' inability to achieve its net income goals for
banking services;
* Synovus' inability to control Financial Services' expenses;
* the strength of the U.S. economy in general and the strength of the
local economies in which operations are conducted;
* the effects of and changes in trade, monetary and fiscal policies
and laws, including interest rate policies of the Board of
Governors of the Federal Reserve System;
* inflation, interest rate, market and monetary fluctuations;
* the timely development of and acceptance of new products and
services and perceived overall value of these products and services
by users;
* changes in consumer spending, borrowing and saving habits;
* technological changes are more difficult or expensive than
anticipated;
* acquisitions;
* the ability to increase market share and control expenses;
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* the effect of changes in laws and regulations (including laws and
regulations concerning taxes, banking, securities and insurance)
with which Synovus and its subsidiaries must comply;
* the effect of changes in accounting policies and practices, as may
be adopted by the regulatory agencies, the Financial Accounting
Standards Board or other authoritative bodies;
* changes in Synovus' organization, compensation and benefit plans;
* the costs and effects of litigation and of unexpected or adverse
outcomes in such litigation;
* a deterioration in credit quality or a reduced demand for credit;
* Synovus' inability to successfully manage any impact from slowing
economic conditions or consumer spending;
* the occurrence of catastrophic events that could impact Synovus or
TSYS or its major customers' operating facilities, communication
systems and technology or that have a material negative impact on
current economic conditions or levels of consumer spending;
* successfully managing the potential both for patent protection and
patent liability in the context of rapidly developing legal
framework for expansive software patent protection;
* hostilities in the Middle East or elsewhere; and
* the success of Synovus at managing the risks involved in the
foregoing.
These forward-looking statements speak only as of the date on which the
statements are made, and Synovus undertakes no obligation to update any
forward-looking statement to reflect events or circumstances after the date on
which the statement is made to reflect the occurrence of unanticipated events.
Item 1. Business
Business and Business Segments
Synovus is a $19 billion asset diverse financial services company which
is a registered bank holding company. Synovus conducts a broad range of
financial services through its banking and non-banking subsidiaries at more than
300 locations. Synovus is based in Columbus, Georgia and its stock is traded on
the New York Stock Exchange under the symbol "SNV."
Synovus is engaged in two reportable business segments: Financial
Services (which is primarily involved in commercial banking activities and also
provides retail banking, financial management, mortgage banking, leasing and
insurance services), and Transaction Processing Services (which includes
consumer credit, debit, commercial, retail and stored value card processing and
related services as well as debt collection and bankruptcy management services
and the provision of software solutions for commercial card management
programs). See Note 16 of Notes to Consolidated Financial Statements on pages
F-23 and F-24 of the Financial
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Appendix to Synovus' Proxy Statement in connection with its Annual Shareholders'
Meeting to be held on April 24, 2003 which is specifically incorporated herein
by reference.
Financial Services Subsidiaries
As of December 31, 2002, Synovus had 37 wholly owned first and second
tier banking subsidiaries located in five states (the "Banks"). Of the 37 bank
subsidiaries, 23 are located in Georgia and earn 60% of Financial Services'
revenues, seven are located in Alabama and earn 17% of Financial Services'
revenues, one is located in South Carolina and earns 13% of Financial Services'
revenues, five are located in Florida and earn 9% of Financial Services'
revenues and one is located in Tennessee and earns 1% of Financial Services'
revenues.
The Banks offer commercial banking services, including commercial,
financial, agricultural and real estate loans, and retail banking services,
including accepting customary types of demand and savings deposits; making
individual, consumer, installment, first mortgage and second mortgage loans;
offering money transfers, safe deposit services, trust, investment, IRA and
Keogh services; leasing services; automated banking and electronic switch
services; automated fund transfers; and bank credit card services, including
MasterCard and Visa services.
The bank-related wholly owned subsidiaries of Synovus are: (1) Synovus
Securities, Inc., Columbus, Georgia, which specializes in professional portfolio
management for fixed-income securities, the execution of securities transactions
as a broker/dealer and the provision of individual investment advice on equity
and other securities; (2) Synovus Trust Company, N.A., Columbus, Georgia, which
provides trust services; (3) Synovus Mortgage Corp., Birmingham, Alabama, which
offers mortgage services; (4) Synovus Insurance Services, Columbus, Georgia,
which offers insurance agency services; (5) Creative Financial Group, LTD.,
Atlanta, Georgia, which provides financial planning services; and (6) GLOBALT,
Inc., Atlanta, Georgia, which provides asset management services.
Transaction Processing and Other Affiliates
During a portion of 2002, Synovus had one wholly owned subsidiary
included in the Transaction Processing Services segment, ProCard, Inc., Golden,
Colorado, which offers software solutions for commercial card management
programs. ProCard was acquired from Synovus by TSYS on October 15, 2002.
Total System Services, Inc.
Business. Established in 1983 as an outgrowth of an on-line accounting
and bankcard data processing system developed for Synovus' subsidiary, Columbus
Bank and Trust Company, TSYS is now one of the world's largest electronic
payment processors of consumer credit, debit, commercial, stored value and
retail cards. Based in Columbus, Georgia, and traded on the New York Stock
Exchange under the symbol "TSS," TSYS provides the electronic link between
buyers and sellers with a comprehensive on-line system of data processing
services servicing
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financial and nonfinancial institutions throughout the United States, Canada,
Mexico, Honduras, the Caribbean and Europe, representing more than 245 million
cardholder accounts on file as of December 31, 2002. TSYS currently offers
merchant services to financial institutions and other organizations in Japan
through its majority owned subsidiary, GP Network Corporation, and in the United
States through its joint venture, Vital Processing Services L.L.C. TSYS also
offers value added products and services to support its core processing
services. Value added products and services include: risk management tools and
techniques, such as credit evaluation, fraud detection and prevention and
behavior analysis tools; and revenue enhancement tools, such as loyalty programs
and bonus rewards. Synovus owns 81 percent of TSYS.
As of January 1, 2003, TSYS had five wholly owned subsidiaries: (1)
Columbus Depot Equipment Company, which sells and leases computer related
equipment associated with TSYS' transaction processing services; (2) Columbus
Productions, Inc., which provides full-service commercial printing and related
services; (3) TSYS Canada, Inc., which provides programming support and
assistance with the conversion of card portfolios to TS2; (4) TSYS Total Debt
Management, Inc., which provides debt collection and bankruptcy management
services; and (5) ProCard, Inc., which provides software and Internet tools
designed to assist organizations with the management of purchasing, travel and
fleet card programs.
TSYS also holds: (1) a 49% equity interest in a joint venture company
named Total System Services de Mexico, S.A. de C.V., which provides credit card
related services to Mexican banks; (2) a 50% interest in Vital Processing
Services L.L.C., a joint venture with Visa U.S.A. Inc., that offers fully
integrated merchant transaction and related electronic transaction processing
services to financial and nonfinancial institutions and their merchant
customers; and (3) a 51.46% equity interest in GP Network Corporation, a company
which provides merchant processing services to financial institutions and
retailers in Japan.
Seasonality. Due to the somewhat seasonal nature of the credit card
industry, TSYS' revenues and results of operations have generally increased in
the fourth quarter of each year because of increased transaction and
authorization volumes during the traditional holiday shopping season.
Major Customers. A significant amount of TSYS' revenues are derived
from long-term contracts with significant customers, including certain major
customers. For the year ended December 31, 2002, Bank of America Corporation and
Providian Financial Corporation accounted for approximately 19% and 13%,
respectively, of TSYS' total revenues. As a result, the loss of Bank of America
Corporation or Providian Financial Corporation or other major or significant
customers, could have a material adverse effect on TSYS' financial condition,
results of operations and cash flows.
See "Non-Interest Income" under the "Financial Review" Section on pages
F-34 through F-36, "Non-Interest Expense" under the "Financial Review" Section
on pages F-36 through F-38, and Note 16 of Notes to Consolidated Financial
Statements on pages F-23 and F-24 of the
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Financial Appendix to Synovus' Proxy Statement which are specifically
incorporated herein by reference.
Intellectual Property
Synovus owns the federally registered service marks of Synovus
Financial Corp., Synovus, the stylized S logo, Synovus Mortgage Corp., Synovus
Securities, Inc. and Synovus Trust Company. Synovus also owns additional
registered service marks and other service marks. In the opinion of management
of Synovus, the loss of the right to use such marks would not materially affect
Synovus' business.
TSYS' intellectual property portfolio is a component of its ability to
be a leading electronic payment services provider. TSYS diligently protects and
works to build its intellectual property rights through patent, servicemark and
trade secret laws. TSYS also uses various licensed intellectual property to
conduct its business. In addition to using intellectual property in its own
operations, TSYS grants licenses to certain of its clients to use its
intellectual property.
Acquisitions
Synovus has pursued a strategy of acquiring banks and financial
services companies which are used to augment Synovus' internal growth. See Note
2 of Notes to Consolidated Financial Statements on pages F-12 and F-13 and
"Acquisitions" under the "Financial Review" Section on page F-31 of the
Financial Appendix to Synovus' Proxy Statement which are specifically
incorporated herein by reference.
On February 26, 2003, Synovus completed the acquisition of FNB Newton
Bankshares, Inc. in Covington, Georgia and on February 28, 2003, Synovus
completed the acquisition of United Financial Holdings, Inc. in St. Petersburg,
Florida.
Supervision, Regulation and Other Factors
General. Synovus is a registered bank holding company subject to
supervision and regulation by the Board of Governors of the Federal Reserve
System ("Board") under the Bank Holding Company Act ("BHC Act"), and by the
Georgia Banking Department under the bank holding company laws of the State of
Georgia. Synovus became a financial holding company under the Gramm-Leach-Bliley
Act of 1999 (the "GLB Act") in April 2000. Synovus' affiliate national banking
associations are subject to regulation and examination primarily by the Office
of the Comptroller of the Currency ("OCC") and, secondarily, by the Federal
Deposit Insurance Corporation ("FDIC") and the Board. Synovus' state-chartered
banks which are not members of the Federal Reserve System are subject to primary
federal regulation and examination by the FDIC. Synovus' state-chartered banks
that are members of the Federal Reserve System are subject to primary federal
regulation and examination by the Board. In addition, all of our
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state-chartered banks are regulated and examined by their respective state
banking departments. Numerous other federal and state laws, as well as
regulations promulgated by the Board, the state banking regulators, the OCC and
the FDIC govern almost all aspects of the operations of the Banks. Various
federal and state bodies regulate and supervise Synovus' non-banking
subsidiaries including its brokerage, investment advisory, insurance agency and
processing operations. These include, but are not limited to, the Securities and
Exchange Commission, the National Association of Securities Dealers, Inc.,
federal and state banking regulators and various state regulators of insurance
and brokerage activities.
GLB Act. The GLB Act allows bank holding companies to engage in a wider
range of non-banking activities, including greater authority to engage in
securities and insurance activities. Under the GLB Act, a bank holding company
that elects to become a financial holding company may engage in any activity
that the Board, in consultation with the Secretary of the Treasury, determines
by regulation or order is: (1) financial in nature; (2) incidental to any such
financial activity; or (3) complementary to any such financial activity and does
not pose a substantial risk to the safety or soundness of depository
institutions or the financial system generally. The GLB Act makes significant
changes in U.S. banking law, principally by repealing certain restrictive
provisions of the 1933 Glass-Steagall Act. The GLB Act specifies certain
activities that are deemed to be financial in nature, including lending,
exchanging, transferring, investing for others, or safeguarding money or
securities; underwriting and selling insurance; providing financial, investment,
or economic advisory services; underwriting, dealing in or making a market in,
securities; and any activity currently permitted for bank holding companies by
the Board under Section 4(c)(8) of the BHC Act. The Act does not authorize banks
or their affiliates to engage in commercial activities that are not financial in
nature. A bank holding company may elect to be treated as a financial holding
company only if all depository institution subsidiaries of the holding company
are well-capitalized, well-managed and have at least a satisfactory rating under
the Community Reinvestment Act.
National banks are also authorized by the GLB Act to engage, through
"financial subsidiaries," in any activity that is permissible for a financial
holding company (as described above) and any activity that the Secretary of the
Treasury, in consultation with the Board, determines is financial in nature or
incidental to any such financial activity, except: (1) insurance underwriting;
(2) real estate development or real estate investment activities (unless
otherwise permitted by law); (3) insurance company portfolio investments; and
(4) merchant banking. The authority of a national bank to invest in a financial
subsidiary is subject to a number of conditions, including, among other things,
requirements that the bank must be well-managed and well-capitalized (after
deducting from the bank's capital outstanding investments in financial
subsidiaries). The GLB Act provides that state banks may invest in financial
subsidiaries (assuming they have the requisite investment authority under
applicable state law) subject to the same conditions that apply to national bank
investments in financial subsidiaries.
Monetary Policy and Economic Controls. The earnings of the Banks, and
therefore the earnings of Synovus, are affected by the policies of regulatory
authorities, including the Board. An important function of the Board is to
promote orderly economic growth by influencing
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interest rates and the supply of money and credit. Among the methods that have
been used to achieve this objective are open market operations in United States
government securities, changes in the discount rate for member bank borrowings
and changes in reserve requirements against bank deposits. These methods are
used in varying combinations to influence overall growth and distribution of
bank loans, investments and deposits, interest rates on loans and securities,
and rates paid for deposits.
The effects of the various Board policies on the future business and
earnings of Synovus cannot be predicted. Synovus cannot predict the nature or
extent of any effects that possible future governmental controls or legislation
might have on its business and earnings.
Dividends. Under the laws of the State of Georgia, Synovus, as a
business corporation, may declare and pay dividends in cash or property unless
the payment or declaration would be contrary to restrictions contained in its
Articles of Incorporation, and unless, after payment of the dividend, it would
not be able to pay its debts when they become due in the usual course of its
businesses or its total assets would be less than the sum of its total
liabilities. Synovus is also subject to certain contractual and regulatory
capital restrictions that limit the amount of cash dividends that Synovus may
pay.
The primary sources of funds for Synovus' payment of dividends to its
shareholders are dividends and fees to Synovus from its banking and nonbanking
affiliates. Various federal and state statutory provisions and regulations limit
the amount of dividends that the subsidiary banks of Synovus may pay. Pursuant
to the regulations of the Georgia Banking Department, a Georgia bank must have
approval of the Georgia Banking Department to pay cash dividends if, at the time
of such payment: (1) the ratio of Tier 1 Capital to its adjusted total assets is
less than 6%; (2) the aggregate amount of dividends to be declared or
anticipated to be declared during the current calendar year exceeds 50% of its
net after-tax profit for the previous calendar year; or (3) its total classified
assets in its most recent regulatory examination exceeded 80% of its Tier 1
Capital plus its allowance for loan losses as reflected in the examination. In
general, the approval of the Alabama Banking Department, the Florida Banking
Department and the Tennessee Department of Financial Institutions, as
applicable, is required if the total of all dividends declared by an Alabama,
Florida or Tennessee bank, as the case may be, in any year would exceed the
total of its net profits, as defined by the regulatory agencies, for that year
combined with its retained net profits for the preceding two years less any
required transfers to surplus. In addition, the approval of the OCC is required
for a national bank to pay dividends in excess of the bank's retained net
income, as defined by the OCC, for the current year plus retained net income for
the preceding two years. Approval of the Board is required for payment of any
dividend by a state chartered bank that is a member of the Federal Reserve
System and is sometimes referred to as a state member bank, if the total of all
dividends declared by the bank in any calendar year would exceed the total of
its net profits, as defined by regulatory agencies, for that year combined with
its retained net profits for the preceding two years. In addition, a state
member bank may not pay a dividend in an amount greater than its net profits
then on hand.
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Federal and state banking regulations applicable to Synovus and its
banking subsidiaries require minimum levels of capital which limit the amounts
available for payment of dividends. See "Parent Company" under the "Financial
Review" Section on page F-50 and Note 11 of Notes to Consolidated Financial
Statements on pages F-19 and F-20 of the Financial Appendix to Synovus' Proxy
Statement which are specifically incorporated herein by reference.
Capital Requirements. Synovus is required to comply with the capital
adequacy standards established by the Board and its banking subsidiaries must
comply with similar capital adequacy standards established by the OCC, FDIC and
the Board, as applicable. As a financial holding company, Synovus and each of
its banking subsidiaries are required to maintain capital levels required for a
well-capitalized institution, as defined in "Prompt Corrective Action" below.
There are two basic measures of capital adequacy for bank holding companies and
their banking subsidiaries that have been promulgated by the Board, the FDIC and
the OCC: a risk-based measure and a leverage measure. All applicable capital
standards must be satisfied for a bank holding company or a bank to be
considered in compliance. See "Capital Resources" and "Dividends" under the
"Financial Review" Section on pages F-48 and F-49 and Note 11 of Notes to
Consolidated Financial Statements on pages F-19 and F-20 of the Financial
Appendix to Synovus' Proxy Statement which are specifically incorporated herein
by reference.
Failure to meet capital guidelines could subject a bank to a variety of
enforcement remedies, including issuance of a capital directive, the termination
of deposit insurance by the FDIC, a prohibition on the taking of brokered
deposits, and certain other restrictions on its business. As described below,
substantial additional restrictions can be imposed upon FDIC insured depository
institutions that fail to meet applicable capital requirements. See "Prompt
Corrective Action" below.
Commitments to Subsidiary Banks. Under the Board's policy, Synovus is
expected to act as a source of financial strength to its subsidiary banks and to
commit resources to support its subsidiary banks in circumstances when it might
not do so absent such policy. In addition, any capital loans by Synovus to any
of its subsidiary banks would also be subordinate in right of payment to
depositors and to certain other indebtedness of such bank.
In the event of Synovus' bankruptcy, any commitment by Synovus to a
federal bank regulatory agency to maintain the capital of a banking subsidiary
will be assumed by the bankruptcy trustee and entitled to a priority of payment.
In addition, the Federal Deposit Insurance Act provides that any financial
institution whose deposits are insured by the FDIC generally shall be liable for
any loss incurred by the FDIC in connection with the default of, or any
assistance provided by the FDIC to, a commonly controlled financial institution.
All of the Banks are FDIC-insured depository institutions.
Prompt Corrective Action. The Federal Deposit Insurance Corporation
Improvement Act of 1991 ("FDICIA") establishes a system of prompt corrective
action to resolve the problems of undercapitalized institutions. Under this
system the federal banking regulators are required to rate supervised
institutions on the basis of five capital categories (well capitalized,
adequately
8
capitalized, undercapitalized, significantly undercapitalized and
critically undercapitalized) and to take certain mandatory supervisory actions,
and are authorized to take other discretionary actions, with respect to
institutions in the three undercapitalized categories, the severity of which
will depend upon the capital category in which the institution is placed.
Generally, subject to a narrow exception, FDICIA requires the banking regulator
to appoint a receiver or conservator for an institution that is critically
undercapitalized. The federal banking agencies have specified by regulation the
relevant capital level for each category.
Pursuant to FDICIA, the Board, the FDIC, the OCC and the Office of
Thrift Supervision ("OTS") have adopted regulations setting forth a five-tier
scheme for measuring the capital adequacy of the financial institutions they
supervise. Under the regulations, an institution would be placed in one of the
following capital categories:
* well capitalized (an institution that has a Total Capital ratio of
at least 10%, a Tier 1 Capital ratio of at least 6% and a Tier 1
Leverage Ratio of at least 5%);
* adequately capitalized (an institution that has a Total Capital
ratio of at least 8%, a Tier 1 Capital ratio of at least 4% and a
Tier 1 Leverage Ratio of at least 4%);
* undercapitalized (an institution that has a Total Capital ratio
of under 8%, a Tier 1 Capital ratio of under
4% or a Tier 1 Leverage Ratio of under 4%);
* significantly undercapitalized (an institution that has a Total
Capital ratio of under 6%, a Tier 1 Capital ratio of under 3% or a
Tier 1 Leverage Ratio of under 3%); and
* critically undercapitalized (an institution whose tangible equity
is not greater than 2% of total tangible assets).
The regulations permit the appropriate federal banking regulator to
downgrade an institution to the next lower category if the regulator determines
(1) after notice and opportunity for hearing or response, that the institution
is in an unsafe or unsound condition or (2) that the institution has received,
and not corrected, a less-than-satisfactory rating for any of the categories of
asset quality, management, earnings or liquidity in its most recent examination.
Supervisory actions by the appropriate federal banking regulator depend upon an
institution's classification within the five categories. Synovus' management
believes that Synovus and its significant bank subsidiaries have the requisite
capital levels to qualify as well capitalized institutions under the FDICIA
regulations. See Note 11 of Notes to Consolidated Financial Statements on pages
F-19 and F-20 of the Financial Appendix to Synovus' Proxy Statement which is
specifically incorporated herein by reference.
FDICIA generally prohibits a depository institution from making any
capital distribution (including payment of a dividend) or paying any management
fee to its holding company if the depository institution would thereafter be
undercapitalized. Undercapitalized depository institutions are subject to
restrictions on borrowing from the Federal Reserve System. In addition,
undercapitalized depository institutions are subject to growth limitations and
are required to submit capital restoration plans. A depository institution's
holding company must guarantee the capital plan, up to an amount equal to the
lesser of 5% of the depository institution's assets at the time it becomes
undercapitalized or the amount of the capital deficiency
9
when the institution fails to comply with the plan. Federal banking agencies may
not accept a capital plan without determining, among other things, that the plan
is based on realistic assumptions and is likely to succeed in restoring the
depository institution's capital. If a depository institution fails to submit an
acceptable plan, it is treated as if it is significantly undercapitalized.
Significantly undercapitalized depository institutions may be subject
to a number of requirements and restrictions, including orders to sell
sufficient voting stock to become adequately capitalized, requirements to reduce
total assets and cessation of receipt of deposits from correspondent banks.
Critically undercapitalized depository institutions are subject to appointment
of a receiver or conservator.
Safety and Soundness Standards. The Federal Deposit Insurance Act, as
amended by FDICIA and the Riegle Community Development and Regulatory
Improvement Act of 1994, requires the federal bank regulatory agencies to
prescribe standards, by regulations or guidelines, relating to internal
controls, information systems and internal audit systems, loan documentation,
credit underwriting, interest rate risk exposure, asset growth, asset quality,
earnings, stock valuation and compensation, fees and benefits and such other
operational and managerial standards as the agencies deem appropriate. The
federal bank regulatory agencies have adopted a set of guidelines prescribing
safety and soundness standards pursuant to FDICIA. The guidelines establish
general standards relating to internal controls and information systems,
internal audit systems, loan documentation, credit underwriting, interest rate
exposure, asset growth and compensation, fees and benefits. In general, the
guidelines require, among other things, appropriate systems and practices to
identify and manage the risks and exposures specified in the guidelines. The
guidelines prohibit excessive compensation as an unsafe and unsound practice and
describe compensation as excessive when the amounts paid are unreasonable or
disproportionate to the services performed by an executive officer, employee,
director or principal stockholders. The federal banking agencies determined that
stock valuation standards were not appropriate. In addition, the agencies
adopted regulations that authorize, but do not require, an agency to order an
institution that has been given notice by an agency that it is not satisfying
any of such safety and soundness standards to submit a compliance plan. If,
after being so notified, an institution fails to submit an acceptable compliance
plan, the agency must issue an order directing action to correct the deficiency
and may issue an order directing other actions of the types to which an
undercapitalized institution is subject under the prompt corrective action
provisions of FDICIA. See "Prompt Corrective Action" above. If an institution
fails to comply with such an order, the agency may seek to enforce such order in
judicial proceedings and to impose civil money penalties.
Depositor Preference Statute. Federal law provides that deposits and
certain claims for administrative expenses and employee compensation against an
insured depository institution are afforded a priority over other general
unsecured claims against such institution, including federal funds and letters
of credit, in the liquidation or other resolution of the institution by any
receiver.
10
TSYS. TSYS is subject to being examined, and is indirectly regulated,
by federal and state financial institution regulatory agencies which regulate
the financial institutions for which TSYS provides electronic payment processing
services. Matters reviewed and examined by these federal and state financial
institution regulatory agencies have included TSYS' internal controls in
connection with its present performance of electronic payment processing
services, and the agreements pursuant to which TSYS provides such services.
As the Federal Reserve Bank of Atlanta has approved Synovus' indirect
ownership of TSYS through Columbus Bank and Trust Company, TSYS is subject to
direct regulation by the Board. TSYS was formed with the prior written approval
of, and is subject to regulation and examination by, the Georgia Banking
Department as a subsidiary of Columbus Bank and Trust Company. In addition, as
TSYS and its subsidiaries operate as subsidiaries of Columbus Bank and Trust
Company, they are subject to regulation by the FDIC.
Competition
Financial Services. The commercial banking business is highly
competitive and the Banks compete actively with national and state banks for
deposits, loans and trust accounts, and with savings and loan associations and
credit unions for deposits and loans. In addition, Synovus and its banks and
bank related subsidiaries compete with other financial institutions, including
securities brokers and dealers, personal loan companies, insurance companies,
finance companies, leasing companies, mortgage companies and certain
governmental agencies, all of which actively engage in marketing various types
of loans, deposit accounts and other services.
As of December 31, 2002, Synovus was the second largest bank holding
company headquartered in Georgia, based on assets. Customers for banking
services are generally influenced by convenience, quality of service, personal
contacts, price of services and availability of products. Although the market
share of Synovus varies in different markets, Synovus believes that its
affiliates effectively compete with other banks and thrifts in their relevant
market areas.
Transaction Processing. TSYS encounters vigorous competition in
providing card processing services from several different sources. Most of the
national market in third party card processors is presently being provided by
approximately four vendors. TSYS believes that it is the second largest third
party card processor in the United States. In addition, TSYS competes with
in-house processors and with software vendors which provide their products to
institutions which process in-house. TSYS is presently encountering, and in the
future anticipates continuing to encounter, substantial competition from card
associations, data processing and card computer service firms and other such
third party vendors located throughout the United States. Based upon available
market share data, TSYS believes that at the end of 2002 it held a 21% share of
the domestic Visa and MasterCard consumer card processing market, an 86% share
of the Visa and MasterCard domestic commercial card processing market, an 18%
share of the domestic retail card processing market and a 4% share of the
domestic off-line debit processing market. In addition to processing cards for
United States clients, TSYS also holds an approximately 25% market share of the
Mexican credit card processing market, an approximately
11
33% share of the Canadian credit card processing market and an approximately 21%
share of the United Kingdom credit card processing market. TSYS believes that as
of December 31, 2002 it is the world's largest third party processor of
international accounts.
TSYS' major competitor in the card processing industry is First Data
Resources, Inc., a wholly owned subsidiary of First Data Corporation, which is
headquartered in Omaha, Nebraska, and provides card processing services,
including authorization and data entry services. The principal methods of
competition between TSYS and First Data Resources are price, quality, features
and functionality, and reliability of service. Certain other subsidiaries of
First Data Corporation also compete with TSYS. In addition, there are a number
of other companies which have the necessary financial resources and the
technological ability to develop or acquire products and, in the future, to
provide services similar to those being offered by TSYS.
Employees
On December 31, 2002, Synovus had 10,406 full time employees, 5,121 of
whom are employees of TSYS.
Selected Statistical Information
The "Financial Review" Section, which is set forth on pages F-30
through F-52 and the "Summary of Quarterly Financial Data" Section which is set
forth on page F-53 of the Financial Appendix to Synovus' Proxy Statement, which
includes the information encompassed within "Selected Statistical Information,"
are specifically incorporated herein by reference.
Website Access
Synovus' website address is www.synovus.com. You may obtain free
electronic copies of our annual reports on Form 10-K, quarterly reports on Form
10-Q, current reports on Form 8-K, and all amendments to those reports at the
investor relations section of our website under the heading "Financial
Information." These reports are available on our website as soon as reasonably
practicable after we electronically file then with the SEC.
Item 2. Properties
Synovus and its subsidiaries own, in some cases subject to mortgages or
other security interests, or lease all of the real property and/or buildings on
which it is located. All of such buildings are in a good state of repair and are
appropriately designed for the purposes for which they are used.
Synovus and its Financial Services subsidiaries own 271 facilities
encompassing approximately 2,078,500 square feet and lease 91 facilities
encompassing approximately 545,500 square feet.
12
See Note 7 and Note 10 of Notes to Consolidated Financial Statements on
pages F-16 through F-19 of the Financial Appendix to Synovus' Proxy Statement
which are specifically incorporated herein by reference.
TSYS owns a 377,000 square foot production center which is located on a
40.4 acre tract of land in north Columbus, Georgia. Primarily a production
center, this facility houses TSYS' primary data processing computer operations,
statement preparation, mail handling, microfiche production, purchasing and card
production, as well as other related operations.
TSYS owns a 110,000 square foot building on a 23 acre site in Columbus,
Georgia, which accommodates current and future office space needs. TSYS also
owns a 104,000 square foot building on an 18 acre site in Columbus which
functions as a second data center.
TSYS entered into an operating lease for the purpose of financing its
540,000 square foot new campus type facility on approximately 46 acres of land
in downtown Columbus, Georgia, which lease was renewed for a period of up to
twelve months in November, 2002. The campus facility serves as TSYS' corporate
headquarters and houses administrative, client contact and programming team
members. The campus facility consolidated most of TSYS' multiple Columbus
locations.
Item 3. Legal Proceedings
See Note 10 of Notes to Consolidated Financial Statements on pages F-17
through F-19 of the Financial Appendix to Synovus' Proxy Statement which is
specifically incorporated herein by reference.
The lawsuit seeking class action treatment that was previously pending
against one of Synovus' Alabama banking subsidiaries that involved the receipt
of commissions by that subsidiary in connection with the sale of credit life
insurance to its consumer credit customers and the charging of an interest
surcharge and a processing fee in connection with the consumer loans made by
that subsidiary was settled by Synovus through a $3,500 payment to the named
plaintiff. The lawsuit was dismissed, with prejudice to the named plaintiff, and
without prejudice to the class claims, on February 27, 2003.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Part II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
Shares of common stock of Synovus are traded on the New York Stock
Exchange under the symbol "SNV." See "Capital Resources" and "Dividends" under
the "Financial Review"
13
Section which are set forth on pages F-48 and F-49 and Note 13 of Notes to
Consolidated Financial Statements on pages F-20 and F-21 of the Financial
Appendix to Synovus' Proxy Statement which are specifically incorporated herein
by reference.
On May 31, 2002, Synovus completed the acquisition of GLOBALT, Inc. See
Note 2 of Notes to Consolidated Financial Statements on pages F-12 and F-13 of
the Financial Appendix to Synovus' Proxy Statement which is specifically
incorporated herein by reference. The shares of Synovus stock issued in
connection with the acquisition of GLOBALT were issued pursuant to the exemption
from registration set forth in Section 4(2) of the Securities Act of 1933.
Item 6. Selected Financial Data
The "Selected Financial Data" Section which is set forth on page F-29
of the Financial Appendix to Synovus' Proxy Statement is specifically
incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The "Financial Review" Section which is set forth on pages F-30 through
F-52 and the "Summary of Quarterly Financial Data" Section which is set forth on
page F-53 of the Financial Appendix to Synovus' Proxy Statement which include
the information encompassed by "Management's Discussion and Analysis of
Financial Condition and Results of Operations," are specifically incorporated
herein by reference.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
See "Market Risk and Interest Rate Sensitivity" and "Derivative
Instruments for Interest Rate Risk Management" under the "Financial Review"
Section which are set forth on pages F-45 and F-46 and Note 1 of Notes to
Consolidated Financial Statements on pages F-6 through F-12 of the Financial
Appendix to Synovus' Proxy Statement which are specifically incorporated herein
by reference.
Item 8. Financial Statements and Supplementary Data
The "Summary of Quarterly Financial Data" Section which is set forth on
page F-53 and the "Consolidated Balance Sheets, Consolidated Statements of
Income, Consolidated Statements of Changes in Shareholders' Equity, Consolidated
Statements of Cash Flows, Notes to Consolidated Financial Statements and
Independent Auditors' Report" Sections which are set forth on pages F-2 through
F-26 and F-28 of the Financial Appendix to Synovus' Proxy Statement are
specifically incorporated herein by reference.
Item 9. Changes In and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
14
Part III
Item 10. Directors and Executive Officers of the Registrant
The "ELECTION OF DIRECTORS" Section which is set forth on pages 3
through 7, the "EXECUTIVE OFFICERS" Section which is set forth on page 10 and
the "SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE SECTION" which is
set forth on page 24 of Synovus' Proxy Statement are specifically incorporated
herein by reference.
Item 11. Executive Compensation
The "DIRECTORS' COMPENSATION" Section which is set forth on page 9, the
"EXECUTIVE COMPENSATION - Summary Compensation Table; Stock Option Exercises and
Grants; and Employment Contracts and Change in Control Arrangements" Sections
which are set forth on pages 11 through 14 and the "COMPENSATION COMMITTEE
INTERLOCKS AND INSIDER PARTICIPATION" Section which is set forth on page 18 of
Synovus' Proxy Statement are specifically incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
See Note 13 of Notes to Consolidated Financial Statements on pages F-20
and F-21 of the Financial Appendix to Synovus' Proxy Statement which is
specifically incorporated herein by reference.
The "STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS" Section which
is set forth on pages 10 and 11, the "PRINCIPAL SHAREHOLDERS" Section which is
set forth on page 20, and the "RELATIONSHIPS BETWEEN SYNOVUS, COLUMBUS BANK,
TSYS AND CERTAIN OF SYNOVUS' SUBSIDIARIES AND AFFILIATES - TSYS Stock Ownership
of Directors and Management" Section which is set forth on pages 21 and 22 of
Synovus' Proxy Statement are specifically incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions
The "TRANSACTIONS WITH MANAGEMENT" Section which is set forth on page
19, the "RELATIONSHIPS BETWEEN SYNOVUS, COLUMBUS BANK, TSYS AND CERTAIN OF
SYNOVUS' SUBSIDIARIES AND AFFILIATES - Beneficial Ownership of TSYS Stock by
Columbus Bank" Section which is set forth on page 21, the "RELATIONSHIPS BETWEEN
SYNOVUS, COLUMBUS BANK, TSYS AND CERTAIN OF SYNOVUS' SUBSIDIARIES AND AFFILIATES
- - Interlocking Directorates of Synovus, Columbus Bank and TSYS" Section which is
set forth on page 21 and the "RELATIONSHIPS BETWEEN SYNOVUS, COLUMBUS BANK, TSYS
AND CERTAIN OF SYNOVUS' SUBSIDIARIES AND AFFILIATES - Transactions and
Agreements Between Synovus, Columbus Bank, TSYS and
15
Certain of Synovus' Subsidiaries" Section which is set forth on pages 22 through
24 of Synovus' Proxy Statement are specifically incorporated herein by
reference.
Item 14. Controls and Procedures
We have evaluated the effectiveness of the design and operation of our
disclosure controls and procedures within 90 days of the filing date of this
annual report. This evaluation was carried out under the supervision and with
the participation of our management, including our chief executive officer and
chief financial officer. Based on this evaluation, the chief executive officer
and chief financial officer have concluded that the design and operation of our
disclosure controls and procedures are effective in all material respects,
including those to ensure that information required to be disclosed in reports
filed or submitted under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported within the time periods specified in the
SEC's rules and forms, and is accumulated and communicated to management,
including the chief executive officer and chief financial officer, as
appropriate to allow timely decisions regarding required disclosure. There were
no significant changes to our internal controls or in other factors that could
significantly affect internal controls subsequent to the date of their
evaluation.
Part IV
Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) 1. Financial Statements
The following Consolidated Financial Statements of Synovus
Financial Corp. and its subsidiaries are specifically
incorporated by reference from pages F-2 through F-26 and F-28
of the Financial Appendix to Synovus' Proxy Statement in
response to Item 8, Part II, Financial Statements and
Supplementary Data.
Consolidated Balance Sheets - December 31, 2002 and 2001
Consolidated Statements of Income - Years Ended December 31,
2002, 2001 and 2000
Consolidated Statements of Changes in Shareholders' Equity -
Years Ended December 31, 2002, 2001 and 2000
Consolidated Statements of Cash Flows - Years Ended
December 31, 2002, 2001 and 2000
Notes to Consolidated Financial Statements - December 31,
2002, 2001 and 2000
Independent Auditors' Report
16
2. Financial Statement Schedules
Financial Statement Schedules - None applicable because the
required information has been incorporated in the Consolidated
Financial Statements of Synovus Financial Corp. and its
subsidiaries incorporated by reference herein.
3. Exhibits
Exhibit
Number Description
------- -----------
3.1 Articles of Incorporation, as amended, of Synovus
Financial Corp. ("Synovus") incorporated by
reference to Exhibit 4(a) of Synovus' Registration
Statement on Form S-8 filed with the Securities
and Exchange Commission on July 23, 1990
(File No. 33-35926).
3.2 Bylaws, as amended, of Synovus, incorporated by
reference to Exhibit 4.2 of Synovus' Registration
Statement on Form S-4 filed with the Securities
and Exchange Commission on January 16, 2003
(File No. 333-102370).
4.1 Form of Rights Agreement incorporated by
reference to Exhibit 4.1 of Synovus' Registration
Statement on Form 8-A dated April 28, 1999 filed
with the Commission on April 28, 1999 pursuant to
Section 12 of the Securities Exchange Act of 1934,
as amended.
10. EXECUTIVE COMPENSATION PLANS AND ARRANGEMENTS
10.1 Employment Agreement of James D. Yancey with
Synovus incorporated by reference to Exhibit 10.1
of Synovus' Registration Statement on Form S-1
filed with the Commission on December 18, 1990
(File No. 33-38244).
10.2 Incentive Bonus Plan of Synovus incorporated by
reference to Exhibit 10.5 of Synovus' Registration
Statement on Form S-1 filed with the Commission on
December 18, 1990 (File No. 33-38244).
10.3 Director Stock Purchase Plan of Synovus
incorporated by reference to Exhibit 10.3 of
Synovus' Annual Report on Form 10-K for the fiscal
year ended December 31, 1999, as filed with the
Commission on March 22, 2000.
17
10.4 Synovus Financial Corp. 2002 Long-Term Incentive
Plan incorporated by reference to Exhibit 10.4 of
Synovus' Annual Report on Form 10-K for the fiscal
year ended December 31, 2001, as filed with the
Commission on March 21, 2002.
10.5 Synovus Financial Corp. Deferred Stock Option Plan
incorporated by reference to Exhibit 10.5 of
Synovus' Annual Report on Form 10-K for the fiscal
year ended December 31, 2001, as filed with the
Commission on March 21, 2002.
10.6 Consulting Agreement of H. Lynn Page with Synovus
incorporated by reference to Exhibit 10.6 of
Synovus' Annual Report on Form 10-K for the fiscal
year ended December 31, 1992, as filed with the
Commission on March 29, 1993.
10.7 Synovus Financial Corp. Directors' Deferred
Compensation Plan incorporated by reference to
Exhibit 10.7 of Synovus' Annual Report on Form
10-K for the fiscal year ended December 31, 2001,
as filed with the Commission on March 21, 2002.
10.8 Wage Continuation Agreement of Synovus
incorporated by reference to Exhibit 10.8 of
Synovus' Annual Report on Form 10-K for the fiscal
year ended December 31, 1992, as filed with the
Commission on March 29, 1993.
10.9 1991 Stock Option Plan for Key Executives of
Synovus incorporated by reference to Exhibit 10.9
of Synovus' Annual Report on Form 10-K for the
fiscal year ended December 31, 1992, as filed with
the Commission on March 29, 1993.
10.10 Synovus Financial Corp. 1992 Long-Term Incentive
Plan incorporated by reference to Exhibit 10.10 of
Synovus' Annual Report on Form 10-K for the fiscal
year ended December 31, 1992, as filed with the
Commission on March 29, 1993.
10.11 Agreement in Connection with Use of Aircraft
incorporated by reference to Exhibit 10.11 of
Synovus' Annual Report on Form 10-K for the fiscal
year ended December 31, 1992, as filed with the
Commission on March 29, 1993.
10.12 Life Insurance Trusts incorporated by reference to
Exhibit 10.12 of Synovus' Annual Report on Form
10-K for the fiscal year ended December 31, 1992,
as filed with the Commission on March 29, 1993.
18
10.13 Supplemental Compensation Agreement,
Incentive Compensation Agreements and
Performance Compensation Agreement with
Richard E. Anthony; which Agreements were
assumed by Synovus on December 31, 1992 as a
result of its acquisition of First
Commercial Bancshares, Inc.; and which stock
awards made pursuant to the Agreements were
converted at a ratio of 1.5 to 1, the
exchange ratio applicable to the merger
incorporated by reference to Exhibit 10.13
of Synovus' Annual Report on Form 10-K for
the fiscal year ended December 31, 1992, as
filed with the Commission on March 29, 1993.
10.14 1993 Split Dollar Insurance Agreement of Synovus
incorporated by reference to Exhibit 10.14 of
Synovus' Annual Report on Form 10-K for the fiscal
year ended December 31, 1993, as filed with the
Commission on March 28, 1994.
10.15 1995 Split Dollar Insurance Agreement of
Synovus incorporated by reference to Exhibit
10.15 of Synovus' Annual Report on Form 10-K
for the fiscal year ended December 31, 1994,
as filed with the Commission on March 24,
1995.
10.16 Synovus Financial Corp. 1994 Long-Term Incentive
Plan incorporated by reference to Exhibit 10.16 of
Synovus' Annual Report on Form 10-K for the fiscal
year ended December 31, 1994, as filed with the
Commission on March 24, 1995.
10.17 Synovus Financial Corp./Total System Services,
Inc. Deferred Compensation Plan incorporated by
reference to Exhibit 10.17 of Synovus' Annual
Report on Form 10-K for the fiscal year ended
December 31, 2001, as filed with the Commission
on March 21, 2002.
10.18 Synovus Financial Corp. Executive Bonus Plan
incorporated by reference to Exhibit 10.18 of
Synovus' Annual Report on Form 10-K for the fiscal
year ended December 31, 1995, as filed with the
Commission on March 25, 1996.
10.19 Change of Control Agreements incorporated by
reference to Exhibit 10.19 of Synovus' Annual
Report on Form 10-K for the fiscal year ended
December 31, 1995, as filed with the Commission
on March 25, 1996.
10.20 Consulting Agreement of Joe E. Beverly
incorporated by reference to Exhibit 10.20
of Synovus' Annual Report on Form 10-K for the
19
fiscal year ended December 31, 1996, as
filed with the Commission on March 6, 1997.
10.21 Employment Agreement of James H. Blanchard
incorporated by reference to Exhibit 10 of
Synovus' Quarterly Report on Form 10-Q for the
quarter ended September 30, 1999, as filed with
the Commission on November 15, 1999.
10.22 Synovus Financial Corp. 2000 Long-Term Incentive
Plan incorporated by reference to Exhibit 10.22 of
Synovus' Annual Report on Form 10-K for the fiscal
year ended December 31, 1999, as filed with the
Commission on March 22, 2000.
20.1 Proxy Statement, including Financial
Appendix, for the Annual Meeting of
Shareholders of Synovus to be held on April
24, 2003, certain specified pages of which
are specifically incorporated herein by
reference.
21.1 Subsidiaries of Synovus Financial Corp.
23.1 Independent Auditors' Consents.
24.1 Powers of Attorney contained on the signature
pages of the 2002 Annual Report on Form 10-K.
99.1 Annual Report on Form 11-K for the Synovus
Financial Corp. Employee Stock Purchase Plan
for the year ended December 31, 2002 (to be
filed as an amendment hereto within 120 days
of the end of the period covered by this
report).
99.2 Annual Report on Form 11-K for the Synovus
Financial Corp. Director Stock Purchase Plan
for the year ended December 31, 2002 (to be
filed as an amendment hereto within 120 days
of the end of the period covered by this
report).
99.3 Certification of Chief Executive Officer pursuant
to Section 906 of the Sarbanes-Oxley
Act of 2002.
99.4 Certification of Chief Executive Officer pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
Synovus agrees to furnish the Commission, upon request, a copy of each
instrument with respect to issues of long-term debt. The principal amount of any
individual instrument, which has
20
not been previously filed, does not exceed ten percent of the total assets of
Synovus and its subsidiaries on a consolidated basis.
(b) Reports on Form 8-K
On October 15, 2002, Synovus filed a Form 8-K with the
Commission in connection with the announcement of its earnings for the third
quarter of 2002.
21
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, Synovus Financial Corp. has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.
SYNOVUS FINANCIAL CORP.
(Registrant)
March 20, 2003 By: /s/James H. Blanchard
------------------------------------------
James H. Blanchard,
Chairman of the Board and
Principal Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints James H. Blanchard, James D. Yancey and
Richard E. Anthony, and each of them, his or her true and lawful
attorney(s)-in-fact and agent(s), with full power of substitution and
resubstitution, for him or her and in his or her name, place and stead, in any
and all capacities, to sign any or all amendments to this report and to file the
same, with all exhibits and schedules thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney(s)-in-fact and agent(s) full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney(s)-in-fact and
agent(s), or their substitute(s), may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of Section 13 or 15(d) the Securities
Exchange Act of 1934, as amended, this report has been signed by the following
persons in the capacities and on the dates indicated.
/s/William B. Turner Date: March 20, 2003
- --------------------------------------------
William B. Turner,
Director and Chairman of
the Executive Committee
/s/James H. Blanchard Date: March 20, 2003
- --------------------------------------------
James H. Blanchard,
Chairman of the Board and
Principal Executive Officer
22
/s/James D. Yancey Date: March 20, 2003
- --------------------------------------------
James D. Yancey,
President and Director
/s/Richard E. Anthony Date: March 20, 2003
- --------------------------------------------
Richard E. Anthony,
Vice Chairman of the Board
/s/Walter M. Deriso, Jr. Date: March 20, 2003
- --------------------------------------------
Walter M. Deriso, Jr.,
Vice Chairman of the Board
/s/Elizabeth R. James Date: March 20, 2003
- --------------------------------------------
Elizabeth R. James,
Vice Chairman of the Board
/s/Thomas J. Prescott Date: March 20, 2003
- --------------------------------------------
Thomas J. Prescott,
Executive Vice President,
Principal Accounting and Financial Officer
Date: March __, 2003
- --------------------------------------------
Daniel P. Amos,
Director
Date: March __, 2003
- --------------------------------------------
Joe E. Beverly,
Director
/s/Richard Y. Bradley Date: March 20, 2003
- --------------------------------------------
Richard Y. Bradley,
Director
Date: March __, 2003
- --------------------------------------------
C. Edward Floyd,
Director
23
/s/Gardiner W. Garrard, Jr. Date: March 20, 2003
- --------------------------------------------
Gardiner W. Garrard, Jr.,
Director
Date: March __, 2003
- --------------------------------------------
V. Nathaniel Hansford,
Director
/s/John P. Illges, III Date: March 20, 2003
- --------------------------------------------
John P. Illges, III,
Director
Date: March __, 2003
- --------------------------------------------
Alfred W. Jones III,
Director
/s/Mason H. Lampton Date: March 20, 2003
- --------------------------------------------
Mason H. Lampton,
Director
Date: March __, 2003
- --------------------------------------------
Elizabeth C. Ogie,
Director
/s/H. Lynn Page Date: March 20, 2003
- --------------------------------------------
H. Lynn Page,
Director
Date: March __, 2003
- --------------------------------------------
Melvin T. Stith,
Director
24
Certification of Chief Executive Officer
I, James H. Blanchard, certify that:
1. I have reviewed this annual report on Form 10-K of Synovus Financial
Corp.;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
annual report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this annual report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons
performing the equivalent function):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
25
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
Date: March 20, 2003 /s/James H. Blanchard
------------------------------------
James H. Blanchard
Chief Executive Officer
26
Certification of Chief Financial Officer
I, Thomas J. Prescott, certify that:
1. I have reviewed this annual report on Form 10-K of Synovus Financial
Corp.;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
annual report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this annual report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons
performing the equivalent function):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
27
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
Date: March 20, 2003 /s/Thomas J. Prescott
-------------------------------
Thomas J. Prescott
Chief Financial Officer
28