NOTE 13 – CAPITAL

During 2017, pursuant to the Federal Reserve's non-objection to the Company's capital plan in conjunction with the 2017 CCAR, the Company increased its quarterly common stock dividend from $0.26 to $0.40 per share beginning in the third quarter of 2017, maintained dividend payments on its preferred stock, and repurchased $660 million of its outstanding common stock at market value (approximately 11.1 million shares) under the 2017 capital plan. During the first half of 2017, the Company repurchased $480 million of its outstanding common stock, which completed its authorized repurchase of common equity under the 2016 CCAR capital plan, which effectively expired on June 30, 2017. At December 31, 2017, the Company had remaining capacity under its 2017 capital plan to repurchase an additional $660 million of its outstanding common stock through June 30, 2018.

During the years ended December 31, 2017, 2016, and 2015, the Company declared and paid common dividends of $634 million, or $1.32 per common share, $498 million, or $1.00 per common share, and $475 million, or $0.92 per common share, respectively. The Company also recognized dividends on perpetual preferred stock of $94 million, $66 million, and $64 million during the years ended December 31, 2017, 2016, and 2015, respectively. During 2017, both the Series A and Series B Perpetual Preferred Stock dividend was $4,056 per share, the Series E Perpetual Preferred Stock dividend was $5,875 per share, the Series F Perpetual Preferred Stock dividend was $5,625 per share, the Series G Perpetual Preferred Stock dividend was $3,128 per share, and the Series H Perpetual Preferred Stock dividend was $669 per share.

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 (in the fourth quarter of 2018), 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 Registration Statements on Form 8-A 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 both December 31, 2017 and 2016, retained earnings of the Bank available for payment of cash dividends to the Parent Company under these regulations totaled approximately $2.5 billion. Additionally, the Federal Reserve requires the Company to maintain cash reserves. At December 31, 2017 and 2016, these reserve requirements totaled $1.2 billion and $1.3 billion, respectively, and were fulfilled with a combination of cash on hand and deposits at the Federal Reserve.

Regulatory Capital

The Company is subject to various regulatory capital requirements that involve quantitative measures of the Company’s assets. The following table presents regulatory capital metrics for SunTrust and the Bank at December 31:



	2017				2016
(Dollars in millions)	Amount		Ratio		Amount		Ratio
SunTrust Banks, Inc.
CET1		$17,141	9.74	%		$16,953	9.59	%
Tier 1 capital	19,622		11.15		18,186		10.28
Total capital	23,028		13.09		21,685		12.26
Leverage			9.80				9.22
SunTrust Bank
CET1		$19,474	11.29	%		$18,535	10.71	%
Tier 1 capital	19,496		11.31		18,573		10.73
Total capital	22,132		12.83		21,276		12.29
Leverage			9.97				9.63

In 2013, the Federal Reserve published final rules in the Federal Register implementing Basel III. These rules, which became effective for the Company and the Bank on January 1, 2015, include the following minimum capital requirements: CET1 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%. The capital conservation buffer became applicable on January 1, 2016 and is being phased-in through December 31, 2018.

Preferred Stock

Preferred stock at December 31 consisted of the following:



(Dollars in millions)	2017		2016		2015
Series A (1,725 shares outstanding)		$172		$172		$172
Series B(1,025 shares outstanding)	103		103		103
Series E (4,500 shares outstanding)	450		450		450
Series F (5,000 shares outstanding)	500		500		500
Series G (7,500 shares outstanding)	750		—		—
Series H (5,000 shares outstanding)	500		—		—
Total preferred stock		$2,475		$1,225		$1,225

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 October 2006, the Company authorized 5,010 shares of Perpetual Preferred Stock, Series B, and in December 2011, the Company 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 0.645%, 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 and issued depositary shares representing ownership interests in 5,000 shares and 4,500 shares, respectively, 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 or at any time within 90 days following a regulatory capital event, 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 authorized and 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"). 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 May 2017, the Company authorized and issued depositary shares representing ownership interest in 7,500 shares of Perpetual Preferred Stock, Series G, with no par value and $100,000 liquidation preference per share (the "Series G Preferred Stock"). The Series G 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 December 15, 2017 through June 15, 2022 at a rate per annum of 5.05%, and payable quarterly beginning on September 15, 2022 at a rate per annum equal to the three-month LIBOR plus 3.102%. By its terms, the Company may redeem the Series G Preferred Stock on any dividend payment date occurring on or after June 15, 2022 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 G Preferred Stock does not have any voting rights.

In November 2017, the Company authorized and issued depositary shares representing ownership interest in 5,000 shares of Perpetual Preferred Stock, Series H, with no par value and $100,000 liquidation preference per share (the "Series H Preferred Stock"). The Series H 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, 2018 through December 15, 2027 at a rate per annum of 5.125%, and payable quarterly beginning on March 15, 2028 at a rate per annum equal to the three-month LIBOR plus 2.786%. By its terms, the Company may redeem the Series H Preferred Stock on any dividend payment date occurring on or after December 15, 2027 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 H Preferred Stock does not have any voting rights.

In 2008, the Company issued to the U.S. Treasury as part of the CPP, 35,000 and 13,500 shares of Series C and D Fixed Rate Cumulative Perpetual Preferred Stock, respectively, 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.

In March 2011, the Company repurchased its Series C and D Preferred Stock from the U.S. Treasury, and in September 2011, the U.S. Treasury held a public auction to sell the Series A and B common stock purchase warrants. In conjunction with the U.S. Treasury's auction, the Company acquired 4 million of the common stock purchase warrants, Series A, for $11 million, which were then retired. In January and February of 2016, the Company acquired an additional 1.1 million of Series A common stock warrants and 5.4 million of Series B common stock warrants as part of its 2015 CCAR capital plan for a total of $24 million.

At December 31, 2017, 7.1 million warrants to purchase the Company's common stock remained outstanding and the Company had authority from its Board to repurchase all of these outstanding stock purchase warrants. The Series A and B warrants have expiration dates of December 2018 and November 2018, respectively.