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SunTrust Inches Closer To Tier 1 Common Capital Target

BBR Staff Writer Published 10 June 2009

SunTrust Banks has completed common stock offering and other initiatives that has brought the company very close to the Tier 1 common capital target.

The common stock offering was announced on June 1. It resulted in a total offering of 124.2 million shares and $1.56 billion in new capital, comprised of a public offering of 108 million shares and 16.2 million shares, fully exercised by the underwriters under their option to purchase additional shares. In addition, the company has sold Visa shares for a net after-tax gain of $70 million.

SunTrust also expects that, due to the successful completion of these transactions, approximately $190 million of potential deferred tax assets, under the SCAP more adverse scenario, will now contribute to its Tier 1 common capital buffer requirement.

When combined with the equity offerings, these items total $2.08 billion, or 96% of the previously announced $2.16 billion of Tier 1 common, indicated by the Federal Reserve's Supervisory Capital Assessment Program (SCAP). With less than $100 million remaining, the company has essentially completed its common equity capital-generation obligations indicated by SCAP.

SunTrust Banks primary businesses include deposit, credit, trust and investment services. Through various subsidiaries, it provides mortgage banking, insurance, brokerage, investment management, equipment leasing and capital markets services.