Will Things Go Better Without Coke?

Feeling the credit crunch, banks and Wall Street firms have been selling off nonessential businesses. Merrill Lynch's sale of its stake in Bloomberg is a case in point.

But few investments are as old and intertwined with history as the big holding that SunTrust Bank has in Coca-Cola.

The bank began unwinding its 1.9 percent stake in Coke last year, with the sale of 4.5 million shares. Today, the bank announced that it had sold another 10 million shares in the second quarter, for a gain of $548.8 million. And the bank donated 3.6 million Coke shares to its charitable foundation.

"Our capital position solidified during the quarter as a result of the Coke stock-related transactions which make SunTrust even better prepared to address the challenges of the current environment, as well as strengthen our position for the long-term," said James Wells III, the bank's chief executive.

Unwinding the huge Coke investment not only helps its capital position, but may make the bank a more attractive acquisition target. Its position in fast-growing markets in the South has long made it desirable, but suitor banks may have been put off by the idea of getting in the beverage business by default.

SunTrust has been Coke's second largest shareholder, behind Warren Buffett's Berkshire Hathaway. But its stake goes all the way back to Coke's beginnings. Ernest Woodruff, whose son Robert would make Coca-Cola a giant, was president of the Trust Co., a predecessor bank of SunTrust. In 1919, the Atlanta bank helped what was then a local beverage start-up go public. The bank received as an underwriting fee what would become, thanks to stock splits, more than 48 million shares. At the time, they were valued at $110,000. Today, 48 million shares have a market value of $2.5 billion. Not a bad investment.

Even when the bank sells its remaining 30 million shares, it may still have an important piece of Coke: the secret formula for Coca-Cola is kept in a vault in a SunTrust bank in Atlanta.