SunTrust Banks, Inc. has completed its previously announced Common Stock offering and other initiatives that bring the Company to 96% of the Tier 1 common capital target indicated by the Federal Reserve’s Supervisory Capital Assessment Program (SCAP).
The Common Stock offering, which was announced 1 June, resulted in a total offering of 124.2 million shares and USD1.56 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. Through the combination of this equity offering and the completion of the previously announced “at the market” common stock offering, which raised approximately USD258 million through the sale of 17.7 million shares before being terminated 1 June, the Company has raised USD1.82 billion of Tier 1 common capital.
In addition, the Company has sold Visa shares for a net after-tax gain of USD70 million. SunTrust also expects that, due to the successful completion of these transactions, approximately USD190 million of potential deferred tax assets under the SCAP “more adverse” scenario will now contribute to the Company’s Tier 1 common capital buffer requirement. When combined with the equity offerings, these items total USD2.08 billion, or 96% of the previously announced USD2.16 billion of Tier 1 common indicated by the SCAP.
“The positive reaction to our stock offering underscores what we believe to be the market’s confidence in SunTrust, our strategies and, especially, our post-recession growth prospects,” says James M. Wells III, chairman and chief executive officer, SunTrust.
In addition, Wells noted that with less than USD100 million remaining, the Company has essentially completed its common equity capital-generation obligations under SCAP. “Given the success of the equity offerings and other measures, we are carefully evaluating our remaining initiatives to determine the most advantageous course of action to quickly put the “stress test” mandates behind us.”
L.D.