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.