STI 2018 Annual Report

52 As a result, we continue to evaluate the impact of the EGRRCPA, but anticipate that certain of its provisions could affect our capital planning and strategy execution. See the “Enhanced Prudential Standards,” “Mandatory Liquidity Coverage Ratio and Net Stable Funding Ratio,” and “Capital Planning and Stress Testing” sections of Part I, Item 1, “Business,” in this Form 10- K for more information on the EGRRCPA. In September 2018, the OCC, FRB, and FDIC issued an NPR that would revise the definition of high volatility commercial real estate exposure (“HVCRE”) to conform with the statutory definition of a high volatility commercial real estate acquisition, development, or construction loan, in accordance with the Act. The revised definition would exclude any loans made prior to January 1, 2015, and certain other loans currently classified as HVCRE. We are currently evaluating the impact of this NPR on our capital ratios. In October 2018, the OCC, FRB, and FDIC issued a joint NPR to address the tailoring provided for in the EGRRCPA that would establish four risk-based categories of standards for determining applicability of capital and liquidity requirements for large U.S. banking organizations. The proposal is consistent with a separate NPR issued concurrently by the FRB that would amend certain prudential standards, including standards relating to liquidity, risk management, stress testing, and single- counterparty credit limits, to reflect the risk profiles of banking organizations. In February 2019, the FRB announced that certain less- complex BHCs with less than $250 billion in assets, including the Company, would not be subject to supervisory stress testing, company-run stress testing, or CCAR for 2019. For more information on these NPRs and announcements, see the “Enhanced Prudential Standards,” “Mandatory Liquidity Coverage Ratio and Net Stable Funding Ratio,” and “Capital Planning and Stress Testing” sections of Part I, Item 1, “Business,” in this Form 10-K. Also in October 2018, the OCC, FRB, and FDIC issued an NPR that introduced a new approach for calculating the exposure amount of derivative contracts for regulatory capital purposes, the standardized approach for counterparty credit risk (“SA- CCR”). If finalized, we could elect to utilize the SA-CCR in place of the current exposure methodology for determining counterparty credit risk exposures, as the SA-CCR would be optional for non-advanced approaches banking institutions. Table 19 presents the Company's Basel III regulatory capital metrics: Regulatory Capital Metrics 1 Table 19 (Dollars in millions) December 31, 2018 December 31, 2017 December 31, 2016 Regulatory capital: CET1 $17,258 $17,141 $16,953 Tier 1 capital 19,306 19,622 18,186 Total capital 22,517 23,028 21,685 Assets: RWA $187,380 $175,950 $176,825 Average total assets for leverage ratio 208,482 200,141 197,272 Risk-based ratios 2 : CET1 9.21% 9.74% 9.59% Tier 1 capital 10.30 11.15 10.28 Total capital 12.02 13.09 12.26 Leverage 9.26 9.80 9.22 Total shareholders’ equity to assets 11.26 12.21 11.53 1 We calculated these measures based on the methodology specified by our primary regulator, which may differ from the calculations used by other financial services companies that present similar metrics. 2 Basel III capital ratios are calculated under the standardized approach using regulatory capital methodology applicable to us for each period presented. Our CET1 ratio decreased compared to December 31, 2017, driven primarily by growth in risk weighted assets and higher share repurchases, offset partially by an increase in retained earnings. The Tier 1 capital and Total capital ratios declined compared to December 31, 2017, due to the impact of our redemption of all outstanding shares of Series E Preferred Stock in the first quarter of 2018 as well as the aforementioned impacts to our CET1 ratio. Specifically, we used net proceeds from our November 2017 Series H Preferred Stock issuance to redeem all 4,500 shares of our outstanding higher cost Series E Preferred Stock in the first quarter of 2018. At December 31, 2018, our capital ratios were well above current regulatory requirements. SeeNote 15, “Capital,” to the Consolidated Financial Statements in this Form 10-K for additional information regarding our regulatory capital adequacy requirements and metrics. Capital Actions We declared and paid common dividends of $826 million, or $1.80 per common share, during the year ended December 31, 2018, compared to $634 million, or $1.32 per common share, during the year ended December 31, 2017 and $498 million, or $1.00 per common share, during the year ended December 31, 2016. Additionally, we paid dividends on our preferred stock of $107million, $94million, and $66million during the years ended December 31, 2018, 2017, and 2016, respectively.