SunTrust 2015 Annual Report Download - page 140

Notes to Consolidated Financial Statements, continued
112
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 $100,000 per share plus any declared
and unpaid dividends. Except in certain limited circumstances,
the Series F Preferred Stock does not have any voting rights.
In 2008, the Company issued to the U.S. Treasury as part of
the CPP, Series C and D Fixed Rate Cumulative Perpetual
Preferred Stock and Series A and B warrants to purchase a total
of 17.9 million shares of the Company's common stock. The
Series A warrants entitle the holder to purchase 6 million shares
of the Company's common stock at an exercise price of $33.70
per share, while the Series B warrants entitle the holder to
purchase 11.9 million shares of the Company's common stock
at an exercise price of $44.15 per share. The Series A and B
warrants have expiration dates of December 2018 and November
2018, respectively.
In March 2011, the Company repurchased its Series C and
D Preferred Stock from the U.S. Treasury. In September 2011,
the U.S. Treasury held a public auction to sell the warrants to
purchase the 17.9 million shares of the Company's common
stock. In conjunction with the U.S. Treasury's auction, the
Company acquired 4 million of the stock purchase warrants,
Series A, for $11 million, which were then retired.
At December 31, 2015, 13.9 million warrants remained
outstanding and the Company had authority from its Board to
repurchase all of these outstanding stock purchase warrants;
however, any such repurchase would be subject to the non-
objection of the Federal Reserve through the capital planning
and stress testing process.
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) 2015 2014 2013
Current income tax provision/(benefit):
Federal $707 $365 ($158)
State 36 29 (15)
Total 743 394 (173)
Deferred income tax provision/(benefit):
Federal 27 99 444
State (6) — 51
Total 21 99 495
Total provision for income taxes 1$764 $493 $322
1 Amortization expense related to qualified affordable housing investment costs is recognized in the provision for income taxes for each of the periods presented as
allowed by an accounting standard adopted in 2014. Prior to 2014, these amounts were recognized in other noninterest expense.
The provision for income taxes 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.”