What was the purpose of this 8-K filing?

This 8-K was filed to report the closing of BB&T Corporation's sale of 1,600,000 depositary shares, which represent an interest in its Series H Non-Cumulative Perpetual Preferred Stock.

What are depositary shares and preferred stock?

Depositary shares are a convenient way to trade preferred stock. In this case, 1,000 depositary shares represent one full share of BB&T's Series H Non-Cumulative Perpetual Preferred Stock. Preferred stock is a class of ownership that has a higher claim on assets and earnings than common stock, often with fixed dividend payments.

Why did BB&T issue more preferred stock?

The filing indicates this was a partial exercise of an option by the underwriters. This suggests that the initial offering was well-received, and BB&T decided to sell additional shares to raise more capital. Issuing preferred stock is a common way for financial institutions to strengthen their capital base.

What are the implications of 'Non-Cumulative' for the preferred stock?

'Non-Cumulative' means that if BB&T misses a dividend payment on its Series H Preferred Stock, that missed payment does not accrue or accumulate. The company is not obligated to pay any missed past dividends in the future.

TRUIST FINANCIAL CORP 8-K SEC Disclosure

Summary

BB&T Corporation (now Truist Financial Corp following its merger with SunTrust Banks) filed this 8-K on March 11, 2016, to report the closing of the sale of 1,600,000 depositary shares. These depositary shares represent ownership of its Series H Non-Cumulative Perpetual Preferred Stock. This issuance was a result of a partial exercise of an option by the underwriters, indicating strong demand or a strategic decision to raise additional capital through this preferred stock offering. This event is significant for investors as it represents a capital-raising activity by the company. The issuance of preferred stock can impact the company's capital structure, potentially strengthening its balance sheet and regulatory capital ratios. While preferred stock provides a stable source of capital, it also involves dividend payments which are a fixed obligation, and the non-cumulative nature means missed dividends do not accrue.

Key Highlights

1BB&T Corporation closed the sale of 1,600,000 depositary shares on March 11, 2016.
2Each depositary share represents 1/1,000th ownership of BB&T's Series H Non-Cumulative Perpetual Preferred Stock.
3The preferred stock has a liquidation preference of $25,000 per share.
4The sale was a partial exercise of an option by underwriters, suggesting demand for the offering.
5The securities were registered under a Form S-3 registration statement filed previously.
6Key legal opinions regarding the validity of the depositary shares and preferred stock are included as exhibits.

TRUIST FINANCIAL CORP 8-K Report, Corporate Update (Mar 11, 2016)

Summary

Key Highlights

Frequently Asked Questions