News Column

SUNTRUST BANKS INC FILES (8-K) Disclosing Entry into a Material Definitive Agreement, Other Events

July 3, 2014



Item 1.01 Entry Into a Material Definitive Agreement

On July 3, 2014, SunTrust Mortgage, Inc. and the United States of America, represented by the United States Attorney for the Western District of Virginia reached an agreement to settle certain claims that arose from SunTrust Mortgage's administration of the federal Home Affordable Modification Program (HAMP) primarily from March 2009 and through December 2010. Specifically, SunTrust's commitment under the agreement includes an estimated $179 million in consumer remediation (up to a maximum of $274 million), $20 million to fund housing counseling for homeowners, $10 million paid toward restitution to the Federal National Mortgage Association ("Fannie Mae") and the Federal Home Loan Mortgage Corporation ("Freddie Mac"), and a cash payment of $16 million to the United States Treasury. The Company will incur a $204 million pre-tax charge in connection with this matter, which reflects SunTrust Mortgage's commitment under the agreement, including its estimate of the consumer relief remediation obligation. A copy of the Restitution and Remediation Agreement is filed as Exhibit 10.1 to this report and is incorporated herein by reference. The foregoing summary of the Restitution and Remediation Agreement is qualified in its entirety by reference to the full text of the agreement.

Item 8.01 Other Events.

On June 2, 2014, the Company completed the sale of its asset management subsidiary, RidgeWorth Capital Management, Inc. ("RidgeWorth") to RidgeWorth employees alongside investment funds affiliated with Lightyear Capital LLC. The Company will record a $105 million pre-tax gain as a result of the sale.

The aggregate financial impact of the aforementioned matters, which will be recorded in the Company's second quarter 2014 financial results, will be $(0.13) per share.

Important Cautionary Statement This report contains forward-looking statements. For example, statements regarding the estimated financial impact of a settlement are forward-looking statements. Forward-looking statements are subject to significant risks and uncertainties. Investors are cautioned against placing undue reliance on such statements. Actual results may differ materially from those set forth in the forward-looking statements. Forward-looking statements are based upon the current beliefs and expectations of management and on information currently available to management. Our statements speak as of the date hereof, and we do not assume any obligation to update these statements or to update the reasons why actual results could differ from those contained in such statements in light of new information or future events. Factors that could cause actual results to differ materially from those described in the forward-looking statements can be found in Part I, "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2013 and in other periodic reports that we file with the SEC.

Item 9.01 Exhibits

10.1 Restitution and Remediation Agreement dated as of July 3, 2014 between SunTrust Mortgage, Inc. and the United States of America.

99.1 News release dated July 3, 2014.

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Source: Edgar Glimpses


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