SunTrust 2011 Annual Report Download - page 158
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Please find page 158 of the 2011 SunTrust annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.Notes to Consolidated Financial Statements (Continued)
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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%, or 4.00%. Dividends on the shares are noncumulative. 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 September 15,
2011, the Series A Preferred Stock became 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. During 2009, the Company repurchased 3,275 shares of the Series A Preferred Stock.
On December 15, 2011, the Company issued depositary shares representing ownership interests in 1,025 shares of Perpetual
Preferred Stock, Series B, no par value and $100,000 liquidation preference per share (the "Series B Preferred Stock"). The Series
B 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 B Preferred Stock, if declared, will accrue and be payable quarterly at a rate per annum equal to the greater of three-
month LIBOR plus 0.65%, or 4.00%. Dividends on the shares are noncumulative. Shares of the Series B 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 B
Preferred Stock have been declared for that period, and sufficient funds have been set aside to make payment. The Series B
Preferred Stock were immediately redeemable upon issuance 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 B Preferred Stock does not
have any voting rights.
On November 14, 2008, as part of the CPP established by the U.S. Treasury under the EESA, the Company entered into a Purchase
Agreement with the U.S. Treasury pursuant to which the Company issued and sold to the U.S. 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.
On December 31, 2008, as part of the CPP established by the U.S. Treasury under the EESA, the Company entered into a Purchase
Agreement with the U.S. Treasury dated December 31, 2008, pursuant to which the Company issued and sold to the U.S. Treasury
13,500 shares of the Company’s Fixed Rate Cumulative Perpetual Preferred Stock, Series D, having a liquidation preference of
$100,000 per share (the “Series D Preferred Stock”), and a ten-year warrant to purchase up to 6,008,902 shares of the Company’s
common stock, par value $1.00 per share, at an initial exercise price of $33.70 per share, for an aggregate purchase price of $1.4
billion in cash.
The Company repurchased the aforementioned Series C and D Cumulative Perpetual Preferred Stock on March 30, 2011. On
September 22, 2011, the U.S. Treasury auctioned a total of 17.9 million of the Company's warrants to purchase 11.9 million shares
of SunTrust common stock at an exercise price of $44.15 per share (Series B warrants) and 6 million shares of SunTrust common
stock at an exercise price of $33.70 per share (Series A warrants). The warrants were issued by SunTrust to the U.S. Treasury in
connection with its investment in SunTrust Banks, Inc. under the CPP and have expiration dates of November 2018 (Series B)
and December 2018 (Series A). In conjunction with the U.S. Treasury's auction, the Company acquired 4 million of the Series A
warrants for $11 million and retired them.
Common and Preferred Dividends
The Company remains subject to certain restrictions on its ability to increase the dividend on common shares as a result of
participating in the U.S. Treasury’s CPP. If the Company increases its dividend above $0.54 per share per quarter prior to the tenth
anniversary of its participation in the CPP, then the anti-dilution provision within the warrants issued in connection with the
Company’s participation in the CPP will require the exercise price and number of shares to be issued upon exercise to be
proportionately adjusted. The amount of such adjustment is determined by a formula and depends in part on the extent to which
the Company raises its dividend. The formulas are contained in the warrant agreements which were filed as exhibits to Form 8-
As filed on September 23, 2011.
During the years ended December 31, 2011, 2010 and 2009, SunTrust paid cash dividends on perpetual preferred stock totaling
$67 million, $239 million and $246 million, respectively. SunTrust also declared and paid common dividends totaling $64 million,
or $0.12 per common share, $20 million, or $0.04 per common share, and $83 million, or $0.22 per common share during the
years ended December 31, 2011, 2010, and 2009, respectively.