STI 2018 Annual Report

Notes to Consolidated Financial Statements, continued 128 NOTE 15 – CAPITAL During 2018, pursuant to the Federal Reserve’s non-objection to the Company’s capital plan in conjunction with the 2018 CCAR, the Company increased its quarterly common stock dividend from $0.40 to $0.50 per share beginning in the third quarter of 2018, maintained dividend payments on its preferred stock, and repurchased $1.25 billion of its outstanding common stock at market value (approximately 18.9million shares) under the 2018 capital plan. During the first half of 2018, theCompany repurchased $660 million of its outstanding common stock, which completed its authorized repurchase of common equity under the 2017 CCAR capital plan, which effectively expired on June 30, 2018. At December 31, 2018, the Company had remaining capacity under its 2018 capital plan to repurchase an additional $750 million of its outstanding common stock through June 30, 2019. Dividends declared on the Company’s common and preferred stock were as follows: Year Ended December 31 (Dollars in millions, except per share data) 2018 2017 2016 Common stock: Dividends declared $826 $634 $498 Dividends declared per share 1.80 1.32 1.00 Preferred stock: Dividends declared $107 $94 $66 Dividends declared per share: Series A 4,056 4,056 4,067 Series B 4,056 4,056 4,067 Series E 1 1,469 5,875 5,875 Series F 5,625 5,625 5,625 Series G 5,050 3,128 — Series H 5,566 669 — 1 All 4,500 shares of outstanding Series E Preferred Stock were redeemed in the first quarter of 2018. 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, 2018 and 2017, retained earnings of the Bank available for payment of cash dividends to the Parent Company under these regulations totaled approximately $2.2 billion and $2.5 billion, respectively. Additionally, the FRB requires the Company to maintain cash or deposit reserves with the Federal Reserve Bank. For the years ended December 31, 2018 and 2017, the average required reserve balance was $1.3 billion and $1.2 billion, respectively, which was fulfilled with a combination of cash on hand and deposits at the Federal Reserve. Regulatory Capital The Company is subject to the following minimum capital requirements: CET1 ratio of 4.5%; Tier 1 capital ratio of 6%; Total capital ratio of 8%; and Leverage ratio of 4%. The following table presents regulatory capital metrics for SunTrust and the Bank at December 31: 2018 2017 (Dollars in millions) Amount Ratio Amount Ratio SunTrust Banks, Inc. CET1 $17,258 9.21% $17,141 9.74% Tier 1 capital 19,306 10.30 19,622 11.15 Total capital 22,517 12.02 23,028 13.09 Leverage 9.26 9.80 SunTrust Bank CET1 $20,137 11.01% $19,474 11.29% Tier 1 capital 20,160 11.02 19,496 11.31 Total capital 22,564 12.33 22,132 12.83 Leverage 9.95 9.97 The Company is also subject to a 2.5% capital conservation buffer that became applicable on January 1, 2016 and was phased-in through December 31, 2018. The capital conservation buffer is an amount above the minimum levels designed to ensure that banks remain well-capitalized, even in adverse economic scenarios. Preferred Stock Preferred stock at December 31 consisted of the following: (Dollars in millions) 2018 2017 2016 Series A $172 $172 $172 Series B 103 103 103 Series E 1 — 450 450 Series F 500 500 500 Series G 750 750 — Series H 500 500 — Total preferred stock $2,025 $2,475 $1,225 1 All 4,500 shares of outstanding Series E Preferred Stock were redeemed in the first quarter of 2018.