SunTrust 2014 Annual Report Download - page 140

Notes to Consolidated Financial Statements, continued
117
and unpaid dividends. Except in certain limited circumstances,
the Series B Preferred Stock does not have any voting rights.
In December 2012, the Company authorized 5,000 shares
and issued 4,500 shares of Perpetual Preferred Stock, Series E,
no par value and $100,000 liquidation preference per share (the
Series E Preferred Stock). The Series E Preferred Stock has no
stated maturity and will not be subject to any sinking fund or
other obligation of the Company to redeem, repurchase, or retire
the shares. Dividends on the shares are noncumulative and, if
declared, will accrue and be payable quarterly at a rate per annum
of 5.875%. Shares of the Series E Preferred Stock have priority
over the Company's common stock with regard to the payment
of dividends and rank equally with the Company's outstanding
Perpetual Preferred Stock, Series A and Series B and, 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 E Preferred Stock have been
declared for that period and sufficient funds have been set aside
to make payment. The Series E Preferred Stock is redeemable,
at the option of the Company, on any dividend payment date
occurring on or after March 15, 2018, at a redemption price equal
to $100,000 per share, plus any declared and unpaid dividends,
without regard to any undeclared dividends. Except in certain
limited circumstances, the Series E Preferred Stock does not have
any voting rights.
In November 2014, the Company issued depositary shares
representing ownership interest in 5,000 shares of Perpetual
Preferred Stock, Series F, with no par value and $100,000
liquidation preference per share (the "Series F Preferred Stock").
As a result of this issuance, the Company received net proceeds
of $496 million after the underwriting discount, but before
expenses, and used the net proceeds for general corporate
purposes. The Series F Preferred Stock has no stated maturity
and will not be subject to any sinking fund or other obligation
of the Company to redeem, repurchase, or retire the shares.
Dividends for the shares are noncumulative and, if declared, will
be payable semi-annually beginning on June 15, 2015 through
December 15, 2019 at a rate per annum of 5.625%, and payable
quarterly beginning on March 15, 2020 at a rate per annum equal
to the three-month LIBOR plus 3.86%. By its terms, the
Company may redeem the Series F Preferred Stock on any
dividend payment date occurring on or after December 15, 2019
or at any time within 90 days following a regulatory capital event,
at a redemption price of $1,000 per depositary share plus any
declared and unpaid dividends. Except in certain limited
circumstances, the Series F Preferred Stock does not have any
voting rights.
The Company repurchased its Series C and D Cumulative
Perpetual Preferred Stock from the U.S. Treasury in March 2011.
In September 2011, the U.S. Treasury sold, in a public auction,
a total of 17.9 million of the Company's warrants to purchase
11.9 million shares of the Company's common stock at an
exercise price of $44.15 per share (Series B warrants) and 6
million shares of the Company's common stock at an exercise
price of $33.70 per share (Series A warrants). The warrants were
issued by the Company to the U.S. Treasury in connection with
its investment in the Company 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.
NOTE 14 - INCOME TAXES
The components of income tax provision included in the Consolidated Statements of Income during the years ended December 31
were as follows:
(Dollars in millions) 2014 2013 2012
Current income tax expense/(benefit):
Federal $365 ($158) $592
State 29 (15) 26
Total 394 (173) 618
Deferred income tax expense/(benefit):
Federal 99 444 229
State —51 (35)
Total 99 495 194
Total income tax expense $493 $322 $812
The Company adopted accounting guidance effective January 1,
2014, which allowed amortization expense related to qualified
affordable housing investments to be presented net of the income
tax credits in the provision for income taxes. Prior to 2014, these
amortization expenses were recognized in other noninterest
expense. The standard is required to be applied retrospectively;
therefore, prior periods have been reclassified. See Note 1,
“Significant Accounting Policies,” for further information
related to this new guidance.
The income tax provision does not reflect the tax effects of
unrealized gains and losses and other income and expenses
recorded in AOCI. For additional information on AOCI, see Note
21, “Accumulated Other Comprehensive (Loss)/Income.”