SunTrust 2008 Annual Report Download - page 113

SUNTRUST BANKS, INC.
Notes to Consolidated Financial Statements (Continued)
See Note 21, “Contingencies,” to the Consolidated Financial Statements for information concerning auction rate securities
(“ARS”) added to trading assets in 2008.
The Company utilized trading securities for balance sheet management purposes and manages the potential market volatility
of these securities with appropriate duration and/or hedging strategies. The size, volume and nature of the trading securities
can vary based on economic and Company specific asset liability conditions. During 2007, the Company replaced $4.6
billion of trading securities that were pledged as collateral with letters of credit issued by the Federal Home Loan Bank
(“FHLB”). The Company elected to record these letters of credit at fair value pursuant to the provisions of SFAS No. 159. As
of December 31, 2008, $1.8 billion of these letters of credit remained outstanding.
Note 5 - Securities Available for Sale
Securities available for sale at December 31 were as follows:
2008
(Dollars in thousands)
Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Fair
Value
U.S. Treasury securities $125,585 $1,539 $1 $127,123
U.S. government-sponsored enterprises 338,981 20,350 301 359,030
States and political subdivisions 1,018,906 24,621 6,098 1,037,429
Asset-backed securities 54,139 3,062 7,633 49,568
Mortgage-backed securities 15,022,074 142,215 117,989 15,046,300
Corporate bonds 275,492 3,274 12,994 265,772
Common stock of The Coca-Cola Company 69 1,358,031 - 1,358,100
Other securities11,447,961 5,254 - 1,453,215
Total securities available for sale $18,283,207 $1,558,346 $145,016 $19,696,537
2007
(Dollars in thousands)
Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Fair
Value
U.S. Treasury securities $139,159 $1,557 $- $140,716
U.S. government-sponsored enterprises 244,000 5,597 1 249,596
States and political subdivisions 1,052,621 16,142 1,453 1,067,310
Asset-backed securities 241,700 33 31,383 210,350
Mortgage-backed securities 10,085,802 71,727 16,327 10,141,202
Corporate bonds 232,230 708 1,649 231,289
Common stock of The Coca-Cola Company 100 2,674,305 - 2,674,405
Other securities11,543,852 5,387 - 1,549,239
Total securities available for sale $13,539,464 $2,775,456 $50,813 $16,264,107
1Includes $493.2 million and $452.2 million of Federal Home Loan Bank of Cincinnati and Federal Home Loan Bank of Atlanta stock stated at
par value and $360.9 and $340.2 million of Federal Reserve Bank stock stated at par value as of December 31, 2008 and December 31, 2007,
respectively.
In June 2008, the Company sold 10 million shares of its holdings in The Coca-Cola Company (“Coke”). The sale of these
shares generated $548.8 million in net cash proceeds and before-tax gains, and an after-tax gain of approximately $345
million that was recorded in the Company’s financial results. In addition, these sales resulted in an increase of approximately
$345 million, or approximately 20 basis points, to Tier 1 Capital as of the transaction date.
In July 2008, the Company contributed 3.6 million shares of its holdings in Coke to a charitable foundation. The contribution
resulted in a $183.4 million non-taxable gain that was recorded in the Company’s financial results. In addition, the
contribution increased Tier 1 Capital by approximately 4 basis points as of the transaction date, and will reduce ongoing
charitable contribution expense.
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