SunTrust 2013 Annual Report Download - page 100

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Parent Company Liquidity. Our primary measure of Parent Company liquidity is the length of time the Parent Company can
meet its existing and certain forecasted obligations using its cash resources. We measure and manage this metric, "Months to
Required Funding," using forecasts of both normal and adverse conditions. Under adverse conditions, we measure how long
the Parent Company can meet its capital and debt service obligations after experiencing material attrition of short-term,
unsecured funding and without the support of dividends from the Bank or access to the capital markets. At December 31,
2013, the Parent's Months to Required Funding remained well in excess of current ALCO and Board limits. The BRC regularly
reviews this and other liquidity risk metrics. In accordance with these risk limits established by ALCO and the Board, we
manage the Parent Company’s liquidity by structuring its net maturity schedule to minimize the amount of debt maturing
within a short period of time. No Parent Company debt matured during 2013 and no material Parent Company debt is scheduled
to mature in 2014 or 2015. A majority of the Parent Company’s liabilities are long-term in nature, coming from the proceeds
of issuances of our capital securities and long-term senior and subordinated notes.
The primary uses of Parent Company liquidity include debt service, dividends on capital instruments, the periodic purchase
of investment securities, loans to our subsidiaries, and common share repurchases. See further details of the authorized common
share repurchases in the "Capital Resources" section of this MD&A and in Item 5, "Market for Registrant's Common Equity,
Related Stockholder Matters, and Issuer Purchases of Equity Securities" in this Form 10-K. We fund corporate dividends with
Parent Company cash, the primary sources of which are dividends from our banking subsidiary and proceeds from the issuance
of debt and capital securities. We are subject to both state and federal banking regulations that limit our ability to pay common
stock dividends in certain circumstances.
Recent Developments. In January 2014, we issued $250 million of 3-year floating rate senior notes under our Global Bank
Note program. The notes pay a floating coupon rate of 3-month LIBOR plus 44 basis points. Also in January 2014, we issued
$600 million of 3-year senior notes under our Global Bank Note program. The notes pay a fixed annual coupon rate of 1.35%.
We may call both issuances beginning on January 15, 2017 and they will mature on February 15, 2017. We used the proceeds
from this offering for general corporate purposes.
Other Liquidity Considerations. Numerous legislative and regulatory proposals currently outstanding may have an effect on
our liquidity if they become effective. For example, on October 24, 2013, the Federal Reserve published proposed rules to
implement the LCR for U.S. banks. The LCR would require banks to hold unencumbered, high-quality, liquid assets sufficient
to withstand projected cash outflows under a prescribed liquidity stress scenario. The LCR is proposed to be phased-in as a
regulatory requirement beginning January 1, 2015. While the potential impact of this and other regulatory proposals cannot
be fully quantified at present, we believe that our strong core banking franchise and prudent liquidity management practices
will position us well to comply with the new standards as they become effective.
In 2011, the Federal Reserve published proposed measures to strengthen regulation and supervision of large bank holding
companies and systemically important nonbank financial firms, pursuant to Sections 165 and 166 of the Dodd-Frank Act.
These proposed regulations include a number of requirements related to liquidity that would be instituted in phases. The first
phase encompasses largely qualitative liquidity risk management practices, including internal liquidity stress testing. The
second phase would include certain quantitative liquidity requirements related to the proposed Basel III liquidity standards,
such as the LCR noted above. We believe that we will be well positioned to demonstrate compliance with these new
requirements and standards if and when they are adopted.
At December 31, 2013, our liability for UTBs was $291 million and the liability for interest related to these UTBs was $17
million. The UTBs represent the difference between tax positions taken or expected to be taken in our tax returns and the
benefits recognized and measured in accordance with the relevant accounting guidance for income taxes. The UTBs are based
on various tax positions in several jurisdictions, and if taxes related to these positions are ultimately paid, the payments would
be made from our normal operating cash flows, likely over multiple years. See additional discussion in the "Provision for
Income Taxes" section of this MD&A and Note 14, "Income Taxes," to the Consolidated Financial Statements in this Form
10-K.