SunTrust 2011 Annual Report Download - page 77
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Capital Ratios
(Dollars in millions)
Tier 1 capital
Total capital
RWA
Tier 1 common equity:
Tier 1 capital
Less:
Qualifying trust preferred securities
Preferred stock
Allowable minority interest
Tier 1 common equity
Risk-based ratios:
Tier 1 common equity
Tier 1 capital
Total capital
Tier 1 leverage ratio
Total shareholders’ equity to assets
As of December 31
2011
$14,490
18,177
132,940
$14,490
1,854
275
107
$12,254
9.22%
10.90
13.67
8.75
11.35
2010
$18,156
21,967
132,819
$18,156
2,350
4,942
127
$10,737
8.08%
13.67
16.54
10.94
13.38
Table 24
2009
$18,069
22,895
139,380
$18,069
2,356
4,917
104
$10,692
7.67%
12.96
16.43
10.90
12.94
In March 2011, the Federal Reserve completed its CCAR to evaluate capital plans of the nineteen largest U.S. bank holding
companies. Upon completion of their review, the Federal Reserve did not object to our capital plan submitted as part of the
CCAR in January 2011. As such, during March 2011, we initiated and completed certain elements of our capital plan, including
issuing $1.0 billion of common stock and $1.0 billion of senior debt. We then used the proceeds from those offerings, as well
as other available funds, to repurchase $3.5 billion of Fixed Rate Cumulative Preferred Stock, Series C, and $1.4 billion of
Fixed Rate Cumulative Preferred Stock, Series D, that we had issued to the U.S. Treasury under the CPP. As a result of the
repurchase of Series C and D Preferred Stock, we incurred a one-time, non-cash charge to net income available to common
shareholders of $74 million related to accelerating the outstanding discount accretion on the Series C and D Preferred Stock.
On September 22, 2011, the U.S. Treasury sold, in a public auction, 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). We had issued the warrants to the U.S. Treasury in connection
with its investment under the CPP. The warrants have expiration dates of November 2018 (Series B) and December 2018
(Series A). In conjunction with the auction, we reacquired and retired 4 million of the Series A warrants for $11 million.
We terminated certain RCCs in September 2011. We conducted a successful consent solicitation of the holders of our 6%
subordinated notes due 2026 which allowed us to terminate all of the RCCs. Previously, the RCCs limited our ability to
repurchase certain of our hybrid capital securities which generally do not qualify as Tier 1 common equity.
On December 15, 2011, we issued 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 SunTrust. 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 our common stock with regard to the
payment of dividends. As such, we may not pay dividends on or repurchase, redeem, or otherwise acquire for consideration
shares of our 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 was immediately redeemable upon issuance at our
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.
During the year ended December 31, 2011, our common equity increased by $1.6 billion, predominantly due to the common
stock offering, net income, and an increase in AOCI driven by higher unrealized gains from securities. Conversely, total
shareholders’ equity decreased by $3.1 billion from December 31, 2010, predominantly due to the repurchase of the Series
C and D Preferred Stock.
Tier 1 common equity, Tier 1 capital, and Total capital ratios were 9.22%, 10.90%, and 13.67%, respectively, at December 31,
2011 compared with 8.08%, 13.67%, and 16.54%, respectively, at December 31, 2010. At December 31, 2010, our Tier 1
Capital ratio excluding preferred stock issued to the U.S. Treasury was 10.08%. At December 31, 2011, our capital ratios
remain strong and well in excess of current and proposed regulatory requirements to be considered "well capitalized" according