SunTrust 2009 Annual Report Download - page 131

SUNTRUST BANKS, INC.
Notes to Consolidated Financial Statements (Continued)
• Also as part of the capital plan, the Company initiated a cash tender offer to repurchase a defined maximum
amount of its outstanding Series A preferred stock. 3,142 shares of the Company’s Series A preferred stock were
repurchased, resulting in a decrease in preferred stock of $314.2 million. An after-tax gain of $89.4 million was
included in net loss available to common shareholders and an increase of $91.0 million was realized in Tier 1
common equity during the three month period ended June 30, 2009. In addition, the Company also repurchased
approximately $0.4 billion of its 5.588% Parent Company junior subordinated notes due 2042, and approximately
$0.1 billion of its 6.10% Parent Company junior subordinated notes due 2036. These transactions resulted in a net
after-tax loss of $44.1 million, as a result of a $164.9 million after-tax loss related to the extinguishment of the
preferred stock forward sale agreement associated with the repurchase of the 5.588% Parent Company junior
subordinated notes, and a $120.8 million after-tax gain from the repurchase of the Parent Company junior
subordinated notes. The aggregate impact of the debt repurchases was a $120.8 million increase to Tier 1 common
equity.
• Another element of the capital plan involved the sale of Visa Class B shares resulting in an increase in Tier 1
common equity of $70.1 million, net of tax.
The Company is subject to various regulatory capital requirements which involve quantitative measures of the Company’s
assets.
As of December 31,
2009 2008
(Dollars in millions) Amount Ratio Amount Ratio
SunTrust Banks, Inc.
Tier 1 common $10,692 7.67 % $9,443 5.83 %
Tier 1 capital 18,069 12.96 17,614 10.87
Total capital 22,895 16.43 22,743 14.04
Tier 1 leverage 10.90 10.45
SunTrust Bank
Tier 1 capital $11,973 8.76 % $12,565 7.88 %
Total capital 16,377 11.98 17,331 10.87
Tier 1 leverage 7.51 7.60
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. There was no capacity for payment of cash
dividends to the parent company under these regulations at December 31, 2009 and 2008. The Company also has amounts of
cash reserves required by the Federal Reserve. As of December 31, 2009 and 2008, these reserve requirements totaled $1.1
billion and $914.8 million, respectively and were fulfilled with a combination of cash on hand and deposits at the Federal
Reserve.
Preferred Stock
As of December 31,
(Dollars in thousands) 2009 2008
Series A (1,858 shares outstanding) $172,511 $500,000
Series C (35,000 shares outstanding) 3,423,929 3,404,841
Series D (13,500 shares outstanding) 1,320,872 1,316,862
$4,917,312 $5,221,703
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,
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