8-KOther Events

TRUIST FINANCIAL CORP 8-K Report, Corporate Update (Jun 23, 2009)

Filed June 23, 2009For Securities:TFCTFC-POTFC-PRTFC-PI

Summary

BB&T Corporation (now Truist Financial Corp) announced on June 23, 2009, its repurchase of all preferred stock issued to the U.S. Department of the Treasury under the Capital Purchase Program (CPP) as part of the Troubled Asset Relief Program (TARP). The company paid approximately $3.1 billion to redeem these shares, which included accrued dividends. This action signifies BB&T's exit from TARP, a positive development for investors as it reduces government stake and potential future dilution. While the repurchase will result in a one-time charge of approximately $48 million in the second quarter of 2009 due to accounting for the difference between cost and repurchase price, the company's ability to fund this repayment demonstrates its financial capacity and commitment to operating independently. BB&T also indicated its intent to repurchase the associated TARP warrant.

Key Highlights

  • 1BB&T repurchased all its Series C preferred stock from the U.S. Department of the Treasury for approximately $3.1 billion.
  • 2The repurchase includes accrued and unpaid dividends, totaling approximately $13.9 million.
  • 3This transaction marks BB&T's exit from the Troubled Asset Relief Program (TARP).
  • 4The company will record a charge of approximately $48 million in Q2 2009 related to the repurchase.
  • 5BB&T has notified the Treasury of its intent to repurchase the outstanding TARP warrant.
  • 6The preferred stock was originally issued under the Capital Purchase Program (CPP) in November 2008.

Frequently Asked Questions

This repurchase signifies BB&T's exit from the Troubled Asset Relief Program (TARP). For investors, this is generally a positive event as it indicates the company's financial strength and its ability to operate without government capital, reducing potential future dilution from the government's stake and warrant.

The total aggregate purchase price paid by BB&T to the Treasury was approximately $3.1 billion. This amount includes the liquidation preference of the preferred stock and approximately $13.9 million in accrued and unpaid dividends.

Yes, BB&T will record a charge of approximately $48 million in the second quarter of 2009. This charge accounts for the difference between the amortized cost of the preferred stock and the actual repurchase price, reflecting accounting treatment rather than a direct cash loss on the transaction itself.

BB&T has informed the Treasury of its intention to repurchase the outstanding warrant. This warrant allows the Treasury to purchase up to 13.9 million shares of BB&T's common stock. Repurchasing the warrant would eliminate any future dilution risk associated with it.