SunTrust 2008 Annual Report Download - page 135

SUNTRUST BANKS, INC.
Notes to Consolidated Financial Statements (Continued)
Note 14 – Capital
The Company is subject to various regulatory capital requirements which involve quantitative measures of the Company’s
assets.
As of December 31,
2008 2007
(Dollars in millions) Amount Ratio Amount Ratio
SunTrust Banks, Inc.
Tier 1 capital $17,614 10.87 % $11,425 6.93 %
Total capital 22,743 14.04 16,994 10.30
Tier 1 leverage 10.45 6.90
SunTrust Bank
Tier 1 capital 12,565 7.88 12,338 7.60
Total capital 17,331 10.87 16,944 10.44
Tier 1 leverage 7.60 7.56
Substantially all of the Company’s retained earnings are undistributed earnings of SunTrust Bank, which are restricted by
various regulations administered by federal and state bank regulatory authorities. Retained earnings of SunTrust Bank
available for payment of cash dividends to the parent company under these regulations totaled approximately $0.6 billion at
December 31, 2007. There was no capacity for payment of cash dividends to the parent company under these regulations at
December 31, 2008. The Company also has amounts of cash reserves required by the Federal Reserve. As of December 31,
2008 and 2007, these reserve requirements totaled $914.8 million and $882.0 million, respectively.
Preferred Stock
The following provides detail of the Company’s preferred stock balances:
As of December 31,
(Dollars in thousands) 2008 2007
Series A (5,000 shares outstanding) $500,000 $500,000
Series C (35,000 shares outstanding) 3,404,841 -
Series D (13,500 shares outstanding) 1,316,862 -
$5,221,703 $500,000
On September 12, 2006, the Company issued depositary shares representing ownership interests in 5,000 shares of Perpetual
Preferred Stock, Series A, no par value and $100,000 liquidation preference per share (the “Series A Preferred Stock”). The
Company is authorized to issue 50,000 shares. The Series A Preferred Stock has no stated maturity and will not be subject to
any sinking fund or other obligation of the Company. Dividends on the Series A Preferred Stock, if declared, will accrue and
be payable quarterly at a rate per annum equal to the greater of three-month LIBOR plus 0.53 percent, or 4.00 percent.
Dividends on the shares are non-cumulative. Shares of the Series A Preferred Stock have priority over the Company’s
common stock with regard to the payment of dividends. As such, the Company may not pay dividends on or repurchase,
redeem, or otherwise acquire for consideration shares of its common stock unless dividends for the Series A Preferred Stock
have been declared for that period, and sufficient funds have been set aside to make payment. On or after September 15,
2011, the Series A Preferred Stock will be redeemable at the Company’s option at a redemption price equal to $100,000 per
share, plus any declared and unpaid dividends. Except in certain limited circumstances, the Series A Preferred Stock does not
have any voting rights.
On November 14, 2008, as part of the Capital Purchase Program established by the U.S. Department of the Treasury
(“Treasury”) under the Emergency Economic Stabilization Act of 2008 (the “EESA”), the Company entered into a Purchase
Agreement with Treasury pursuant to which the Company issued and sold to Treasury 35,000 shares of the Company’s Fixed
Rate Cumulative Perpetual Preferred Stock, Series C, having a liquidation preference of $100,000 per share (the “Series C
Preferred Stock”), and a ten-year warrant to purchase up to 11,891,280 shares of the Company’s common stock, par value
$1.00 per share, at an initial exercise price of $44.15 per share, for an aggregate purchase price of $3.5 billion in cash.
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