NOTE 13 – CAPITAL

Following the Federal Reserve's review of and non-objection to the Company's capital plan in conjunction with the 2014 CCAR, the Company increased its quarterly common stock dividend from $0.10 to $0.20 per share beginning in the second quarter of 2014, repurchased a total of $278 million, or approximately 8.5 million shares of its outstanding common stock, and maintained dividend payments on its preferred stock during 2014. Pursuant to its 2013 capital plan, the Company also repurchased $50 million of its outstanding common stock in the first quarter of 2014, bringing the total amount of common stock repurchased in 2014 pursuant to CCAR capital plans to $328 million. The Company has capacity under its 2014 capital plan to purchase an additional $120 million of its outstanding common stock prior to March 31, 2015. The Company has submitted its 2015 capital plan for review by the Federal Reserve in conjunction with the 2015 CCAR and awaits the completion of their review.

Additionally, during 2014, the Company recorded a $130 million tax benefit as a result of the completion of a tax authority examination, enabling the repurchase of an additional $130 million of outstanding common stock. The purchase of this additional common stock was incremental to the existing availability under the CCAR capital plans. See additional discussion of the realized tax benefit in Note 14, "Income Taxes."

During the years ended December 31, 2014, 2013, and 2012, the Company declared and paid common dividends totaling $371 million, or $0.70 per common share, $188 million, or $0.35 per common share, and $107 million, or $0.20 per common share, respectively. The Company also recognized dividends on perpetual preferred stock totaling $42 million, $37 million, and $12 million during the years ended December 31, 2014, 2013, and 2012, respectively. During 2014, the dividend per share was $4,056 for the Series A and Series B Perpetual Preferred Stock, and $5,875 for the Series E Perpetual Preferred Stock.

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-K filed on September 23, 2011.

Substantially all of the Company’s retained earnings are undistributed earnings of the Bank, which are restricted by various regulations administered by federal and state bank regulatory authorities. At December 31, 2014 and 2013, retained earnings of the Bank available for payment of cash dividends to the Parent Company under these regulations totaled approximately $2.9 billion and $2.6 billion, respectively. Additionally, the Federal Reserve requires the Company to maintain cash reserves. At December 31, 2014 and 2013, these reserve requirements totaled $1.5 billion and $2.0 billion, respectively and were fulfilled with a combination of cash on hand and deposits at the Federal Reserve.

Capital Ratios

The Company is subject to various regulatory capital requirements which involve quantitative measures of the Company’s assets. Capital ratios at December 31 consisted of the following:



	2014				2013
(Dollars in millions)	Amount		Ratio		Amount	Ratio
SunTrust Banks, Inc.
Tier 1 common		$15,594	9.60	%	$14,602	9.82	%
Tier 1 capital	17,554		10.80		16,073	10.81
Total capital	20,338		12.51		19,052	12.81
Tier 1 leverage			9.64			9.58
SunTrust Bank
Tier 1 capital		$17,036	10.67	%	$16,059	10.96	%
Total capital	19,619		12.29		18,810	12.84
Tier 1 leverage			9.57			9.78

On October 11, 2013, the Federal Reserve published final rules in the Federal Register implementing Basel III. These rules, which are effective for the Company and the Bank on January 1, 2015, include the following minimum capital requirements: CET 1 ratio of 4.5%; Tier 1 Capital ratio of 6%; Total Capital ratio of 8%; Leverage ratio of 4%; and a capital conservation buffer of 2.5% of RWA. The capital conservation buffer is applicable beginning on January 1, 2016 and will be phased-in through December 31, 2018.

At December 31, 2014, the Company had $627 million in trust preferred securities outstanding. The Basel III rules require the phase out of non-qualifying Tier 1 Capital instruments such as trust preferred securities. As such, beginning on January 1, 2015, approximately $627 million in principal amount of the Company's trust preferred and other hybrid capital securities currently outstanding will start to be phased out of Tier 1 capital, but instead will qualify for Tier 2 capital treatment. Accordingly, the Company anticipates that, by January 1, 2016, all $627 million of its outstanding trust preferred securities will lose Tier 1 capital treatment, and will be reclassified as Tier 2 capital.

Preferred Stock

Preferred stock at December 31 consisted of the following:




(Dollars in millions)	2014		2013
Series A (1,725 shares outstanding)		$172		$172
Series B(1,025 shares outstanding)	103		103
Series E (4,500 shares outstanding)	450		450
Series F (5,000 shares outstanding)	500		—
Total preferred stock		$1,225		$725

In September 2006, the Company authorized and issued depositary shares representing ownership interests in 5,000 shares of Perpetual Preferred Stock, Series A, no par value and $100,000 liquidation preference per share (the Series A Preferred Stock). The Series 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 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 A Preferred Stock have been declared for that period and sufficient funds have been set aside to make payment. During 2009, the Company repurchased 3,275 shares of the Series A Preferred Stock. In September 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.

In December 2011, the Company authorized 5,010 shares and 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 the Company. Dividends on the shares are noncumulative and, 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%. Shares of the Series B Preferred Stock have priority over the Company's common stock with regard to the payment of dividends 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 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 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.

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.