Back to GetFilings.com
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 1997 or
[ ] Transition report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from _______to_____________
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) 649-2387
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
- ----------------------------- -----------------------------------------
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___________
---------
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. [ ]
As of February 12, 1998, 175,265,721 shares of the $1.00 par value common
stock of Synovus Financial Corp. were outstanding, and the aggregate market
value of the shares of $1.00 par value common stock of Synovus Financial Corp.
held by non-affiliates was approximately $4,087,000,000 (based upon the closing
per share price of such stock on said date).
Portions of the 1997 Annual Report to Shareholders of Registrant are
incorporated in Parts I, II and IV of this report. Portions of the Proxy
Statement of Registrant dated March 13, 1998 are incorporated in Part III 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-10, F-21 through Part I, Item 1, Business
F-28, and F-32 through F-55
of Registrant's 1997 Annual Report
to Shareholders
Pages F-16, and F-21 through F-23 Part I, Item 2, Properties
of Registrant's 1997 Annual Report to
Shareholders
Pages F-21 through F-23 of Part I, Item 3, Legal
Registrant's 1997 Annual Report Proceedings
to Shareholders
Pages F-51 through F-53 Part II, Item 5, Market
of Registrant's 1997 Annual for Registrant's Common
Report to Shareholders Equity and Related
Stockholder Matters
Page F-32 of Registrant's Part II, Item 6,
1997 Annual Report to Selected
Shareholders Financial Data
Pages F-32 through F-54 Part II, Item 7,
of Registrant's Management's Discussion
1997 Annual Report to and Analysis of Financial
Shareholders Condition and Results of
Operations
Page F-50 of Registrant's 1997 Part II, Item 7A, Quantitative
Annual Report to Shareholders and Qualitative Disclosures
About Market Risk
Pages F-2 through F-30, and F-55 Part II, Item 8,
of Registrant's 1997 Financial Statements and
Annual Report to Shareholders Supplementary Data
Pages 3 through 6, 9 and 10, Part III, Item 10,
and 25 of Registrant's Proxy Directors and Executive
Statement in connection with Officers of the Registrant
its Annual Shareholders' Meeting
to be held April 23, 1998
Pages 10 through 14, and Part III, Item 11,
Page 18 of Registrant's Proxy Executive Compensation
Statement in connection with its
Annual Shareholders'
Meeting to be held April 23, 1998
Pages 6 through 8, and 20 through Part III, Item 12,
23 of Registrant's Proxy Statement Security Ownership of
in connection with its Annual Certain Beneficial Owners
Shareholders' Meeting to be held and Management
April 23, 1998
Pages 18 and 19, 22, 24, and 25 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 23, 1998
Pages F-2 through F-30 Part IV, Item 14,
of Registrant's 1997 Exhibits, Financial Statement
Annual Report to Shareholders Schedules and Reports on
Form 8-K
Table of Contents
Item No. Caption Page No.
- --------- ----------- ---------
Part I
1. Business 2
2. Properties 8
3. Legal Proceedings 9
4. Submission of Matters to a Vote of 9
Security Holders
Part II
5. Market for Registrant's Common Equity 9
and Related Stockholder Matters
6. Selected Financial Data 9
7. Management's Discussion and Analysis 9
of Financial Condition and Results
of Operations
7A. Quantitative and Qualitative Disclosures About Market Risk 9
8. Financial Statements and Supplementary 10
Data
9. Changes In and Disagreements With 10
Accountants on Accounting and Financial Disclosure
Part III
10. Directors and Executive Officers of the Registrant 10
11. Executive Compensation 10
12. Security Ownership of Certain 10
Beneficial Owners and Management
13. Certain Relationships and Related 11
Transactions
Part IV
14. Exhibits, Financial Statement Schedules, 11
and Reports on Form 8-K
Part I
Certain statements contained in this Annual Report on Form 10-K 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.(R) ("Synovus(R)") 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 it's management or Board of Directors,
including those relating to 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.
Forward-looking statements involve risks and uncertainties which may cause
actual results to differ materially from those in such statements. Factors that
could cause actual results to differ from those discussed in the forward-looking
statements include, but are not limited to: (i) the strength of the U.S. economy
in general and the strength of the local economies in which operations are
conducted; (ii) 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; (iii) inflation, interest rate, market and monetary
fluctuations; (iv) the timely development of and acceptance of new products and
services and perceived overall value of these products and services by users;
(v) changes in consumer spending, borrowing and saving habits; (vi)
technological changes; (vii) acquisitions; (viii) the ability to increase market
share and control expenses; (ix) 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; (x) the effect
of changes in accounting policies and practices, as may be adopted by the
regulatory agencies as well as the Financial Accounting Standards Board; (xi)
changes in Synovus' organization, compensation and benefit plans; (xii) the
costs and effects of litigation and of unexpected or adverse outcomes in such
litigation; and (xiii) the success of Synovus at managing the risks involved in
the foregoing.
Such forward-looking statements speak only as of the date on which such
statements are made, and Synovus undertakes no obligation to update any
forward-looking statement to reflect events or circumstances after the date on
which such statement is made to reflect the occurrence of unanticipated events.
1
Item 1. Business.
Business and Business Segments.
Synovus is an $9.3 billion asset multi-financial services company which is
a registered bank holding company as defined under federal law in the bank
Holding Company Act of 1956, as amended (the "BHCA"), and under the bank holding
company laws of the State of Georgia (the "Georgia Act"). As a bank holding
company, Synovus is subject to supervision and regulation by the Board of
Governors of the Federal Reserve System ("Board") and the Department of Banking
and Finance of the State of Georgia ("Georgia Banking Department"). Synovus
conducts a broad range of financial services through its banking and
bank-related subsidiaries and affiliates.
Synovus is engaged in two principal business segments: banking (which
encompasses commercial banking, trust services, mortgage banking, credit card
banking and certain securities brokerage operations), and bankcard data
processing. While each of these activities is directly related to the provision
of financial services, their separation for financial reporting purposes is
appropriate under Statement of Financial Accounting Standards No. 14 and the
rules of the Securities and Exchange Commission ("SEC"). See Note 12 of Notes to
Consolidated Financial Statements on page F-24 of Synovus' 1997 Annual Report to
Shareholders which is specifically incorporated herein by reference.
Banking and Bank-Related Subsidiaries and Services.
Synovus currently has thirty-four wholly owned first and second tier
commercial banking subsidiaries located in four states. Of the 34 bank
subsidiaries, 21 are located in Georgia with approximately $5.1 billion in
assets, seven are located in Alabama with approximately $2 billion in assets,
five are located in Florida with approximately $658 million in assets and one is
located in South Carolina with approximately $1.4 billion in assets. Synovus'
commercial banking subsidiaries are hereinafter sometimes collectively referred
to as the "Banks."
The Banks offer a broad range of commercial banking services, including
accepting customary types of demand and savings deposits, making individual,
consumer, commercial, installment, first mortgage and second mortgage loans,
offering money transfers, safe deposit services, trust, investment, IRA, Keogh
and corporate employee benefit and other fiduciary services, correspondent
banking services, automated banking and electronic switch services, automated
fund transfers and bank credit card services, including MasterCard and Visa
services. All of the Banks' commercial banking activities are conducted within
the United States.
- ------------------
Synovus Financial Corp., Synovus, Synovus Securities, Inc., Synovus
Mortgage Corp., Columbus Bank and Trust Company and CB&T are federally
registered service marks of Synovus Financial Corp. TSYS, TS2, Total System
Services, Inc. and THE TOTAL SYSTEM are federally registered service marks of
Total System Services, Inc.
2
Synovus owns the federally registered service marks of Synovus Financial
Corp., Synovus, the stylized S logo, Synovus Mortgage Corp. and Synovus
Securities, Inc. Synovus also owns 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.
The bank-related subsidiaries of Synovus are: (1) Synovus Securities,
Inc.(R), Columbus, Georgia ("Synovus Securities"), 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(sm),
Columbus, Georgia, one of the southeast's largest providers of trust services;
(3) Synovus Mortgage Corp.(R), Birmingham, Alabama, which offers mortgage
servicing; and (4) Synovus Technologies, Inc.(sm), Columbus, Georgia, which
facilitates the use of technology by and participates in the development of new
products and services for the Banks. (During 1997, Synovus Technologies, Inc.
was named Synovus Data Corp. and provided general bank data processing services
to the Banks.)
Bankcard Data Processing and Other Affiliates and Services.
Business. Established in 1983 as an outgrowth of an on-line accounting and
bankcard data processing system developed for Synovus' wholly owned subsidiary,
Columbus Bank and Trust Company(R) ("CB&T(R)"), Total System Services, Inc.(R)
("TSYS(R)") is now one of the world's largest credit, debit, commercial and
private-label card processing companies. Based in Columbus, Georgia, and traded
on the New York Stock Exchange under the symbol "TSS," TSYS provides a
comprehensive on-line system of data processing services marketed as THE TOTAL
SYSTEM(R), servicing issuing institutions throughout the United States, Puerto
Rico, Canada and Mexico, representing approximately 93 million cardholder
accounts. TSYS provides card production, domestic and international clearing,
statement preparation, customer service support, and management support. Synovus
owns 80.7 percent of TSYS.
During 1997, TSYS had four wholly owned subsidiaries: (1) Columbus Depot
Equipment Company(sm) ("CDEC(sm)"), which sells and leases computer related
equipment associated with TSYS' bankcard data processing services; (2) Mailtek,
Inc.(sm) ("Mailtek"), which provides full-service direct mail production
services and offers data processing, list management, laser printing, computer
output microfiche, card embossing, encoding and mailing services; (3) TSYS Total
Solutions, Inc.(sm) ("TSI")(formerly Lincoln Marketing, Inc.), which provides
correspondence, fulfillment, telemarketing, data processing and mailing
services; and (4) Columbus Productions, Inc.(sm) ("CPI"), which provides
full-service commercial printing and related services. On December 31, 1997,
Mailtek was merged into TSI and TSI continues to provide the services formerly
provided by Mailtek.
TSYS also holds 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 processing services to Mexican banks, and a 50% interest in Vital
Processing Services L.L.C., a joint venture with Visa U.S.A. Inc. that combines
the front-end authorization and back-end accounting and settlement processing of
merchants.
3
Due to the 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.
Service Marks. TSYS owns the federally registered service marks TSYS, TS2,
Total System Services, Inc. and THE TOTAL SYSTEM, to which TSYS believes strong
customer identification attaches. TSYS also owns other service marks. Management
does not believe the loss of such marks would have a material impact on the
business of TSYS.
Major Customers. A significant amount of TSYS' revenues are derived from
certain major customers who are processed under long-term contracts. For the
year ended December 31, 1997, AT&T Universal Card Services Corp. and NationsBank
accounted for 14.35% and 11.13%, respectively, of TSYS' total revenues. As a
result, the loss of one of TSYS' major customers could have a material adverse
effect on TSYS' results of operations.
See "Non-Interest Income" under the "Financial Review" Section on pages
F-36 and F-37, "Non-Interest Expense" under the "Financial Review" Section on
pages F-37 and F-38, and Note 10 of Notes to Consolidated Financial Statements
on pages F-21 through F-23 of Synovus' 1997 Annual Report to Shareholders which
are specifically incorporated herein by reference.
Supervision, Regulation and Other Factors.
Synovus is a registered multi-bank holding company, subject to supervision
and regulation by the Board under the BHCA, and by the Georgia Banking
Department under the Georgia Act. As a bank holding company, Synovus is required
to furnish the Board and the Georgia Banking Department with annual reports of
the financial condition, management and inter-company relationships of Synovus
and its subsidiaries and affiliates at the end of each fiscal year, and such
additional information as the Board and the Georgia Banking Department may
require from time to time. The Board and the Georgia Banking Department also
make examinations of Synovus and certain of its subsidiaries and affiliates.
The BHCA and the Georgia Act require each bank holding company to obtain
the prior approval of the Board and the Georgia Banking Department before: (i)
it may acquire direct or indirect ownership or control of any voting shares of
any bank, if, after such acquisition, such bank holding company will, directly
or indirectly, own or control more than 5% of the voting shares of such bank;
(ii) it or any of its subsidiaries, other than a bank, may acquire all or
substantially all of the assets of a bank; or (iii) it may merge or consolidate
with any other bank holding company. In addition, under the Georgia Act, it is
unlawful for any bank holding company to acquire, direct or indirect, ownership
or control of more than 5% of the voting shares of any presently operating bank,
unless such bank has been in existence and continuously operating as a bank for
a period of five years or more prior to the date of making application to the
Georgia
4
Banking Department for approval of said acquisition.
Under the Riegle-Neal Interstate Banking and Branching Efficiency Act of
1994 ("Interstate Banking Act"), effective September 29, 1995, bank holding
companies were permitted to acquire banks in any state. Under the Interstate
Banking Act, effective June 1, 1997, banks may merge or consolidate across state
lines, unless either of the states involved elected to prohibit such merger or
consolidation prior to May 31, 1997. Finally, under the Interstate Banking Act,
states may authorize banks from other states to engage in branching across state
lines.
In addition, a bank holding company is, with certain exceptions, prohibited
by the BHCA from engaging in, or acquiring or retaining direct or indirect
control of the voting shares of any company engaged in non-banking activities.
One of the principal exceptions to this prohibition is for activities found by
the Board to be so closely related to banking, or managing or controlling banks,
as to be a proper incident thereto.
The Board has issued guidelines for the implementation of risk-based
capital requirements by U.S. banks and Bank holding companies. See "Capital
Resources and Dividends" under the "Financial Review" Section on pages F-51
through F-53 and Note 13 of Notes to Consolidated Financial Statements on pages
F-25 through F-28 of Synovus' 1997 Annual Report to Shareholders which are
specifically incorporated herein by reference.
Under the Board's current 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.
As a result of the enactment of the Financial Institutions Reform, Recovery
and Enforcement Act of 1989 ("FIRREA"), a depository institution insured by the
Federal Deposit Insurance Corporation ("FDIC") can be held liable for any loss
incurred by, or reasonably expected to be incurred by, the FDIC in connection
with: (i) the default of a commonly controlled FDIC insured depository
institution; or (ii) any assistance provided by the FDIC to a commonly
controlled FDIC insured depository institution in danger of default. "Default"
is defined generally as the appointment of a conservator or receiver and "in
danger of default" is defined generally as the existence of certain conditions
indicating that a "default" is likely to occur in the absence of regulatory
assistance. All of Synovus' subsidiary banks are FDIC insured depository
institutions within the meaning of FIRREA.
The principal source of funds for the payment of dividends by Synovus is
dividends paid to it by its subsidiary banks. Various federal and state
statutory provisions limit the assessment of dividends that may be paid to
Synovus by its subsidiary banks. See "Parent Company" under the "Financial
Review" Section on page F-54, and Note 13 of Notes to Consolidated Financial
Statements on pages F-25 through F-28 of
5
Synovus' 1997 Annual Report to Shareholders which are specifically incorporated
herein by reference.
The Federal Deposit Insurance Corporation Improvement Act of 1991 "FDICIA"
required the various federal banking regulatory agencies to issue regulations on
a broad range of issues including capital standards, non-capital standards for
safety and soundness relating generally to operations and management, asset
quality and executive compensation, additional disclosure regarding loans and
deposits to enhance consumer protection, limits on state Bank powers, audit
requirements and examination requirements. Various federal regulatory agencies
have adopted regulations which, among other matters, implement provisions of
FDICIA that require or permit the respective federal regulatory agencies to take
specific supervisory actions when FDIC- insured institutions come within one of
five specific capital categories. The five capital categories are designated as
(1) well capitalized, (2) adequately capitalized, (3) undercapitalized, (4)
significantly under-capitalized, and (5) critically undercapitalized. FDICIA
defines well capitalized banks or bank holding companies as entities having a
total risk-based capital ratio of 10% or higher, a Tier 1 risk-based capital
ratio of 6% or higher and a leverage ratio of 5% or higher. At December 31, 1997
Synovus and its significant bank subsidiaries had adequate capital to be
classified as well capitalized institutions under the FDICIA regulations. See
Note 13 of Notes to Consolidated Financial Statements on pages F-25 through F-28
of Synovus' 1997 Annual Report to Shareholders which is specifically
incorporated herein by reference.
FIRREA and FDICIA provide the federal banking agencies with significantly
expanded powers to take enforcement action against institutions which fail to
comply with capital or other standards. Such action may include the termination
of deposit insurance by the FDIC.
Because Synovus is a registered multi-bank holding company, the Banks are
also subject to examination, supervision and regulation by the Board. The Banks
which are chartered under the banking laws of the States of Georgia, Florida and
Alabama are subject to examination, supervision and regulation by the Georgia
Banking Department, Florida Banking Department and the Alabama Banking
Department, respectively. The Banks which are chartered under the banking laws
of the United States are subject to examination, supervision and regulation by
the Office of the Comptroller of the Currency ("OCC"). In addition, the deposits
of the Banks are insured by the FDIC to the extent provided by law, and are
subject to examination, supervision and regulation by the FDIC.
The Georgia Banking Department, Florida Banking Department, Alabama Banking
Department, OCC and the FDIC regulate all areas of the Banks' banking and trust
operations, including, where appropriate, reserves, investments, loans, mergers,
the issuance of securities, payment of dividends, interest rates, extension of
credit to officers and directors, establishment of branches, maintenance of
capital and other aspects of their operations.
Also, the payment of management fees by banking subsidiaries of a bank
holding company is subject to supervision and regulation by the Georgia Banking
Department,
6
Florida Banking Department, Alabama Banking Department, the OCC, the Board and
the FDIC. The payment of management fees by non-banking subsidiaries of a bank
holding company is also subject to supervision and regulation by the Board.
Numerous other federal and state laws, as well as regulations promulgated
by the Board, the Georgia Banking Department, Florida Banking Department,
Alabama Banking Department, the OCC and the FDIC govern almost all aspects of
the operations of the Banks.
Employees.
On February 28, 1998, Synovus had 7,496 full time employees, 3,158 of whom
are employees of TSYS.
Competition.
Banking. Synovus and the Banks encounter vigorous competition from other
commercial banks, savings and loan associations and other financial institutions
and intermediaries in their respective market areas. Certain of the Banks are
smaller than many of the financial institutions in their respective market
areas.
The Banks compete with other banks in their respective market areas in
obtaining new deposits and accounts, making loans, obtaining branch banking
locations and providing other banking services. The Banks also compete with
savings institutions and credit unions in their respective markets for savings
and transaction deposits, certificates of deposit and various types of loans.
Competition for loans is also offered by other financial intermediaries,
including savings institutions, mortgage banking firms and real estate
investment trusts, small loan and finance companies, insurance companies, credit
unions, leasing companies and certain government agencies. Competition for time
deposits and, to a more limited extent, demand and transaction deposits is also
offered by a number of other financial intermediaries and investment
alternatives, including "money-market" mutual funds, brokerage firms, government
and corporate bonds and other securities.
In the offering of fiduciary services, the Banks and Synovus Trust Company,
a wholly owned subsidiary of CB&T, compete with commercial banks and savings
institutions having trust powers, trust companies, and investment advisory and
brokerage firms and other individuals and firms that offer fiduciary, escrow, or
corporate trust services.
Synovus Securities competes with full-service brokerage firms. In the
offering of investment advisory and securities brokerage services, Synovus
Securities competes with banking and brokerage concerns which provide investment
advisory and broker-dealer services for fixed income portfolios.
Bankcard Data Processing Subsidiary. TSYS encounters vigorous competition
7
in providing bankcard data processing services from several different sources.
The national market in third party bankcard data processors is presently being
provided by approximately five vendors. TSYS believes that it is the second
largest third party bankcard processor in the United States. In addition, TSYS
competes against 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 bankcard
associations, data processing and bankcard computer service firms and other such
third party vendors located throughout the United States.
TSYS' major competitor in the bankcard data processing industry is First
Data Resources, Inc., a wholly owned subsidiary of First Data Corporation, which
is headquartered in Omaha, Nebraska, and provides bankcard data 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.
Selected Statistical Information.
The "Financial Review" Section, which is set forth on pages F-32 through
F-55 of Synovus' 1997 Annual Report to Shareholders, which includes the
information encompassed within "Selected Statistical Information", is
specifically incorporated herein by reference.
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.
See Note 6 and Note 10 of Notes to Consolidated Financial Statements on
page F-16, and pages F-21 through F-23, of Synovus' 1997 Annual Report to
Shareholders which are specifically incorporated herein by reference.
CB&T occupies an approximately 225,000 square foot building known as the
Uptown Center in Columbus, Georgia which provides office space for most of its
operations.
TSYS occupies a 252,000 square foot production center which is located on a
40.4 acre tract of land in north Columbus, Georgia ("North Center"). Primarily a
production center, this facility houses TSYS' primary data processing computer
operations, statement preparation, mail handling, microfiche production and
purchasing, as well as other related operations. TSYS began expanding the North
Center in 1997 to add additional space to house TSYS' card production services.
8
A separate 72,000 square foot building was completed on the North Center
property in 1997 to serve as TSI's headquarters.
TSYS owns a 110,000 square foot building on a 23 acre site in Columbus,
Georgia which accommodates current and future space needs for technical staff.
During 1997, TSYS entered into an operating lease agreement for the purpose
of financing its 540,000 square foot new campus-type facility on approximately
46 acres of land in downtown Columbus, Georgia. The campus facility will
consolidate most of TSYS' multiple Columbus locations and will facilitate future
growth. The campus development will be a multi year phased project.
Item 3. Legal Proceedings.
See Note 10 of Notes to Consolidated Financial Statements on pages F-21
through F-23 of Synovus' 1997 Annual Report to Shareholders which is
specifically incorporated herein by reference.
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" Section which is set forth on pages F-51 through F-53 of
Synovus' 1997 Annual Report to Shareholders which is specifically incorporated
herein by reference.
Item 6. Selected Financial Data.
See "Five Year Selected Financial Data" under the "Financial Review"
Section which is set forth on page F-32 of Synovus' 1997 Annual Report to
Shareholders which 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-32 through
F-55 of Synovus' 1997 Annual Report to Shareholders, which includes the
information encompassed by "Management's Discussion and Analysis of Financial
Condition and Results of Operations", is specifically incorporated herein by
reference.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
9
See "Market Risk" under the "Financial Review" Section which is set forth
on page F-50 of Synovus' 1997 Annual Report to Shareholders which is
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- 55, and the "Consolidated Balance Sheets, Consolidated Statements of
Income, Consolidated Statements of Changes in Shareholders' Equity, Consolidated
Statements of Cash Flows, Summary of Significant Accounting Policies, Notes to
Consolidated Financial Statements and Independent Auditors' Report" Sections
which are set forth on pages F-2 through F-30 of Synovus' 1997 Annual Report to
Shareholders are specifically incorporated herein by reference.
Item 9. Changes In and Disagreements with Accountants on Accounting and
Financial Disclosure.
None.
Part III
Item 10. Directors and Executive Officers of the Registrant.
The "ELECTION OF DIRECTORS - Information Concerning Directors and Nominees"
Section which is set forth on pages 3 and 4, the "ELECTION OF DIRECTORS
- -Information Concerning Directors and Nominees for Class I Directors General
Information" Section which is set forth on pages 4 through 6, the "ELECTION OF
DIRECTORS - Executive Officers" Section which is set forth on pages 9 and 10,
and the "SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE SECTION" which
is set forth on page 25 of Synovus' Proxy Statement in connection with its
Annual Shareholders' Meeting to be held on April 23, 1998 are specifically
incorporated herein by reference.
Item 11. Executive Compensation.
The "EXECUTIVE COMPENSATION - Summary Compensation Table; Stock Option
Exercises and Grants; Compensation of Directors; Employment Contracts and Change
in Control Arrangements; and Compensation Committee Interlocks and Insider
Participation" Sections which are set forth on pages 10 through 14 and page 18
of Synovus' Proxy Statement in connection with its Annual Shareholders' Meeting
to be held on April 23, 1998 are specifically incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
The "ELECTION OF DIRECTORS - Information Concerning Directors and Nominees
for Class I Directors - Synovus Common Stock Ownership of Directors and
Management" Section which is set forth on pages 6 through 8, the "PRINCIPAL
10
SHAREHOLDERS" Section which is set forth on pages 20 and 21, and the
"RELATIONSHIPS BETWEEN SYNOVUS, COLUMBUS BANK, TSYS AND CERTAIN OF SYNOVUS'
SUBSIDIARIES AND AFFILIATES - TSYS Common Stock Ownership of Directors and
Management" Section which is set forth on pages 22 and 23 of Synovus' Proxy
Statement in connection with its Annual Shareholders' Meeting to be held on
April 23, 1998 are specifically incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions.
The "EXECUTIVE COMPENSATION - Compensation Committee Interlocks and Insider
Participation" Section which is set forth on page 18, "EXECUTIVE COMPENSATION
- -Transactions with Management" Section which is set forth on pages 18 and 19,
the "RELATIONSHIPS BETWEEN SYNOVUS, COLUMBUS BANK, TSYS AND CERTAIN OF SYNOVUS'
SUBSIDIARIES AND AFFILIATES - Beneficial Ownership of TSYS Common Stock by
Columbus Bank" Section which is set forth on page 22, 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 22, and the "RELATIONSHIPS BETWEEN SYNOVUS, COLUMBUS BANK,
TSYS AND CERTAIN OF SYNOVUS' SUBSIDIARIES AND AFFILIATES - Transactions and
Agreements Between Synovus, Columbus Bank, TSYS and Certain of Synovus'
Subsidiaries" Section which is set forth on pages 24 and 25 of Synovus' Proxy
Statement in connection with its Annual Shareholders' Meeting to be held on
April 23, 1998 are specifically incorporated herein by reference.
Part IV
Item 14. 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-30 of Synovus' 1997 Annual Report to
Shareholders, in response to Item 8, Part II,
Financial Statements and Supplementary Data.
Consolidated Balance Sheets - December 31,1997 and
1996
Consolidated Statements of Income - Years Ended
December 31, 1997, 1996 and 1995
Consolidated Statements of Changes in Shareholders'
Equity - Years Ended December 31, 1997, 1996 and
1995
Consolidated Statements of Cash Flows - Years Ended
11
December 31, 1997, 1996 and 1995
Summary of Significant Accounting Policies -
December 31, 1997, 1996 and 1995
Notes to Consolidated Financial Statements -
December 31, 1997, 1996 and 1995
Independent Auditors' Report
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
3.2 of Synovus' Annual Report on
Form 10-K for the fiscal year ended
December 31, 1996, as filed with the
Commission on March 6, 1997.
4.1 Form of Rights Agreement
incorporated by reference to Exhibit
1 of Synovus' Registration Statement
on Form 8-A dated May 3, 1989
pursuant to Section 12 of the
Securities Exchange Act of 1934, as
amended.
9.1 Voting Lease Agreement incorporated
by reference to Exhibit 9.1 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. EXECUTIVE COMPENSATION PLANS AND ARRANGEMENTS
10.1 Employment Agreements of James H.
Blanchard and James D. Yancey with
Synovus incorporated by
12
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(a) of Synovus'
Registration Statement on Form S-8
filed with the Commission on
December 3, 1984 (File No. 2-94639).
10.4 Key Executive Restricted Stock Bonus
Plan of Synovus incorporated by
reference to Exhibit 10.6 of
Synovus' Registration Statement on
Form S-1 filed with the Commission
on December 18, 1990 (File No.
33-38244).
10.5 1989 Stock Option Plan of Synovus
incorporated by reference to Exhibit
"A" of Synovus' Registration
Statement on Form S-8 filed with the
Commission on July 23, 1990 (File
No. 33-35926), which Option Plan was
amended on March 16, 1992 to
eliminate the stock appreciation
rights feature of the outstanding
options under the Plan and reduce
the exercise price from $16 5/8 per
share to $9.70 per share.
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 Excess Benefit Agreement of Synovus
incorporated by reference to Exhibit
10.7 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.
10.8 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.
13
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.
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.
14
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 Employment Agreement of Robert V.
Royall, Jr. incorporated by
reference to Exhibit 10.17 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.
10.18 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 fiscal
year ended December 31, 1996, as
filed with the Commission on March
6, 1997.
11.1 Statement of Computation of Net
Income Per Common Share.
13.1 Certain specified pages of Synovus'
1997 Annual Report to Shareholders
which are specifically incorporated
herein by reference.
20.1 Proxy Statement, for the Annual
Meeting of Shareholders of Synovus
to be held on April 23, 1998,
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
15
of the 1997 Annual Report on Form
10-K.
27.1 Financial Data Schedule (for SEC use
only).
27.2 Amended and Restated Financial Data
Schedule (for SEC use only).
27.3 Amended and Restated Financial Data
Schedule (for SEC use only).
27.4 Amended and Restated Financial Data
Schedule (for SEC use only).
99.1 Annual Report on Form 11-K for the
Synovus Financial Corp. Employee
Stock Purchase Plan for the year
ended December 31, 1997 (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, 1997 (to be filed
as an amendment hereto within 120
days of the end of the period
covered by this report).
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 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 November 25, 1997, Synovus filed a Report on Form 8-K with the
Commission in connection with its notification by Standard & Poor's that Synovus
would be added to the S&P 500 Index.
On March 9, 1998, Synovus filed a Report on Form 8-K with the Commission in
connection with: (1) its announcement of a 22.2% increase in its quarterly
dividend; and (2) the announcement by TSYS that it is engaged in negotiations
with Sears, Roebuck and Co. to support Sears' private label credit card
accounts.
filings\snv\10k.97
16
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, 1998 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 Stephen
L. Burts, Jr., 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, 1998
- -----------------------------------------------
William B. Turner,
Director and Chairman of
the Executive Committee
/s/James H. Blanchard Date: March 20, 1998
- -----------------------------------------------
James H. Blanchard,
Chairman of the Board and
Principal Executive Officer
17
/s/John T. Oliver, Jr. Date: March 20, 1998
- -----------------------------------------------
John T. Oliver, Jr.,
Director and Vice Chairman
of the Executive Committee
/s/James D. Yancey Date: March 20, 1998
- -----------------------------------------------
James D. Yancey,
Vice Chairman of the Board
/s/Richard E. Anthony Date: March 20, 1998
- -----------------------------------------------
Richard E. Anthony,
Vice Chairman of the Board
/s/Walter M. Deriso, Jr. Date: March 20, 1998
- -----------------------------------------------
Walter M. Deriso, Jr.,
Vice Chairman of the Board
/s/Stephen L. Burts, Jr. Date: March 20, 1998
- -----------------------------------------------
Stephen L. Burts, Jr.,
President
/s/Thomas J. Prescott Date: March 20, 1998
- ------------------------------------------------
Thomas J. Prescott,
Executive Vice President, Treasurer,
Principal Accounting and Financial Officer
/s/Joe E. Beverly Date: March 20, 1998
- ------------------------------------------------
Joe E. Beverly,
Director
/s/Richard Y. Bradley Date: March 20, 1998
- ------------------------------------------------
Richard Y. Bradley,
Director
/s/C. Edward Floyd Date: March 20, 1998
- ------------------------------------------------
C. Edward Floyd,
Director
18
/s/Gardiner W. Garrard, Jr. Date: March 20, 1998
- -----------------------------------------------
Gardiner W. Garrard, Jr.,
Director
/s/V. Nathaniel Hansford Date: March 20, 1998
- -----------------------------------------------
V. Nathaniel Hansford,
Director
/s/John P. Illges, III Date: March 20, 1998
- -----------------------------------------------
John P. Illges, III,
Director
/s/Mason H. Lampton Date: March 20, 1998
- ----------------------------------------------
Mason H. Lampton,
Director
/s/Elizabeth C. Ogie Date: March 20, 1998
- ----------------------------------------------
Elizabeth C. Ogie,
Director
/s/H. Lynn Page Date: March 20, 1998
- ----------------------------------------------
H. Lynn Page,
Director
/s/Robert V. Royall, Jr. Date: March 20, 1998
- ----------------------------------------------
Robert V. Royall, Jr.,
Director
/s/Melvin T. Stith Date: March 20, 1998
- ----------------------------------------------
Melvin T. Stith,
Director
/s/George C. Woodruff, Jr. Date: March 20, 1998
- ----------------------------------------------
George C. Woodruff, Jr.,
Director
filings\SNV\confo.sig
19