Bank of America Corporation Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Shareholders' Equity

Shareholders' Equity

12 Months Ended

Dec. 31, 2017

Equity [Abstract]

Shareholders' Equity

Shareholders’ Equity

Common Stock




Declared Quarterly Cash Dividends on Common Stock ⁽¹⁾

Declaration Date	Record Date	Payment Date	Dividend Per Share
January 31, 2018	March 2, 2018	March 30, 2018	$	0.12
October 25, 2017	December 1, 2017	December 29, 2017	0.12
July 26, 2017	September 1, 2017	September 29, 2017	0.12
April 26, 2017	June 2, 2017	June 30, 2017	0.075
January 26, 2017	March 3, 2017	March 31, 2017	0.075


⁽¹⁾	In 2017 and through February 22, 2018.

The following table summarizes common stock repurchases during 2017, 2016 and 2015.




Common Stock Repurchase Summary

(in millions)	2017		2016		2015
Total share repurchases, including CCAR capital plan repurchases	509		333		140

Purchase price of shares repurchased and retired ⁽¹⁾
CCAR capital plan repurchases	$	9,347	$	4,312	$	2,374
Other authorized repurchases	3,467		800		—
Total shares repurchased	$	12,814	$	5,112	$	2,374


⁽¹⁾	Represents reductions to shareholders’ equity due to common stock repurchases.

On June 28, 2017, following the Federal Reserve’s non-objection to the Corporation’s 2017 Comprehensive Capital Analysis and Review (CCAR) capital plan, the Board of Directors (Board) authorized the repurchase of $12.0 billion of common stock from July 1, 2017 through June 30, 2018, plus repurchases expected to be approximately $900 million to offset the effect of equity-based compensation plans during the same period. The common stock repurchase authorization includes both common stock and warrants. The Corporation’s 2017 capital plan also included a request to increase the quarterly common stock dividend from $0.075 per share to $0.12 per share. On December 5, 2017, following approval by the Federal Reserve, the Board authorized the repurchase of an additional $5.0 billion of common stock through June 30, 2018.

In 2017, the Corporation repurchased $12.8 billion of common stock in connection with the 2017 and 2016 CCAR capital plans and pursuant to other repurchases approved by the Board and the Federal Reserve. Other authorized repurchases included $1.8 billion of common stock pursuant to the Corporation’s plan announced on January 13, 2017 and $1.7 billion under the authorization announced on December 5, 2017.

At December 31, 2017, the Corporation had warrants outstanding and exercisable to purchase 122 million shares of its common stock expiring on October 28, 2018, and warrants outstanding and exercisable to purchase 143 million shares of common stock expiring on January 16, 2019. These warrants were originally issued in connection with preferred stock issuances to the U.S. Department of the Treasury in 2009 and 2008, and are listed on the New York Stock Exchange. The exercise price of the warrants expiring on January 16, 2019 is subject to continued adjustment each time the quarterly cash dividend is in excess of $0.01 per common share to compensate the holders of the warrants for dilution resulting from an increased dividend. The Corporation had cash dividends of $0.12 per share for the third and fourth quarters of 2017, and cash dividends of $0.075 per share for the first and second quarter of 2017, or $0.39 per share for the year, resulting in an adjustment to the exercise price of these warrants in each quarter. As a result of the Corporation’s 2017 dividends of $0.39 per common share, the exercise price of the warrants expiring on January 16, 2019 was adjusted to $12.757 per share. The warrants expiring on October 28, 2018, which have an exercise price of $30.79 per share, also contain this anti-dilution provision except the adjustment is triggered only when the Corporation declares quarterly dividends at a level greater than $0.32 per common share.

On August 24, 2017, the holders of the Corporation’s Series T 6% Non-cumulative preferred stock (Series T) exercised warrants to acquire 700 million shares of the Corporation’s common stock. The carrying value of the preferred stock was $2.9 billion and, upon conversion, was recorded as additional paid-in capital. For more information, see Note 15 – Earnings Per Common Share.

In connection with employee stock plans, in 2017, the Corporation issued approximately 66 million shares and repurchased approximately 27 million shares of its common stock to satisfy tax withholding obligations. At December 31, 2017, the Corporation had reserved 869 million unissued shares of common stock for future issuances under employee stock plans, common stock warrants, convertible notes and preferred stock.

Preferred Stock

The cash dividends declared on preferred stock were $1.6 billion, $1.7 billion and $1.5 billion for 2017, 2016 and 2015, respectively. The following table presents a summary of perpetual preferred stock outstanding at December 31, 2017.

All series of preferred stock in the Preferred Stock Summary table have a par value of $0.01 per share, are not subject to the operation of a sinking fund, have no participation rights, and with the exception of the Series L Preferred Stock, are not convertible.

The holders of the Series B Preferred Stock and Series 1 through

5 Preferred Stock have general voting rights and vote together with the common stock. The holders of the other series included in the

table have no general voting rights. All outstanding series of preferred stock of the Corporation have preference over the Corporation’s common stock with respect to the payment of dividends and distribution of the Corporation’s assets in the event of a liquidation or dissolution. With the exception of the Series B, F, G and T Preferred Stock, if any dividend payable on these series is in arrears for three or more semi-annual or six or more quarterly dividend periods, as applicable (whether consecutive or not), the holders of these series and any other class or series of preferred stock ranking equally as to payment of dividends and upon which equivalent voting rights have been conferred and are exercisable (voting as a single class) will be entitled to vote for the election of two additional directors. These voting rights terminate when the Corporation has paid in full dividends on these series for at least two semi-annual or four quarterly dividend periods, as applicable, following the dividend arrearage.

The 7.25% Non-Cumulative Perpetual Convertible Preferred Stock, Series L (Series L Preferred Stock) does not have early redemption/call rights. Each share of the Series L Preferred Stock may be converted at any time, at the option of the holder, into 20 shares of the Corporation’s common stock plus cash in lieu of fractional shares. The Corporation may cause some or all of the Series L Preferred Stock, at its option, at any time or from time to time, to be converted into shares of common stock at the then-applicable conversion rate if, for 20 trading days during any period of 30 consecutive trading days, the closing price of common stock exceeds 130 percent of the then-applicable conversion price of the Series L Preferred Stock. If a conversion of Series L Preferred Stock occurs at the option of the holder, subsequent to a dividend record date but prior to the dividend payment date, the Corporation will still pay any accrued dividends payable.




Preferred Stock Summary

(Dollars in millions, except as noted)
Series	Description	Initial Issuance Date	Total Shares Outstanding	Liquidation Preference per Share (in dollars)		Carrying Value ⁽¹⁾		Per Annum Dividend Rate		Redemption Period ⁽²⁾
Series B	7% Cumulative Redeemable	June 1997	7,110	$	100	$	1	7.00	%	n/a
Series D ⁽³⁾	6.204% Non-Cumulative	September 2006	26,174	25,000		654		6.204	%	On or after September 14, 2011
Series E ⁽³⁾	Floating Rate Non-Cumulative	November 2006	12,691	25,000		317		3-mo. LIBOR + 35 bps ⁽⁴⁾		On or after November 15, 2011
Series F	Floating Rate Non-Cumulative	March 2012	1,409	100,000		141		3-mo. LIBOR + 40 bps ⁽⁴⁾		On or after March 15, 2012
Series G	Adjustable Rate Non-Cumulative	March 2012	4,926	100,000		493		3-mo. LIBOR + 40 bps ⁽⁴⁾		On or after March 15, 2012
Series I ⁽³⁾	6.625% Non-Cumulative	September 2007	14,584	25,000		365		6.625	%	On or after October 1, 2017
Series K ⁽⁵⁾	Fixed-to-Floating Rate Non-Cumulative	January 2008	61,773	25,000		1,544		8.00% to, but excluding, 1/30/18; 3-mo. LIBOR + 363 bps thereafter		On or after January 30, 2018
Series L	7.25% Non-Cumulative Perpetual Convertible	January 2008	3,080,182	1,000		3,080		7.25	%	n/a
Series M ⁽⁵⁾	Fixed-to-Floating Rate Non-Cumulative	April 2008	52,399	25,000		1,310		8.125% to, but excluding, 5/15/18; 3-mo. LIBOR + 364 bps thereafter		On or after May 15, 2018
Series T ⁽⁶⁾	6% Non-cumulative	September 2011	354	100,000		35		6.00	%	After May 7, 2019
Series U ⁽⁵⁾	Fixed-to-Floating Rate Non-Cumulative	May 2013	40,000	25,000		1,000		5.2% to, but excluding, 6/1/23; 3-mo. LIBOR + 313.5 bps thereafter		On or after June 1, 2023
Series V ⁽⁵⁾	Fixed-to-Floating Rate Non-Cumulative	June 2014	60,000	25,000		1,500		5.125% to, but excluding, 6/17/19; 3-mo. LIBOR + 338.7 bps thereafter		On or after June 17, 2019
Series W ⁽³⁾	6.625% Non-Cumulative	September 2014	44,000	25,000		1,100		6.625	%	On or after September 9, 2019
Series X ⁽⁵⁾	Fixed-to-Floating Rate Non-Cumulative	September 2014	80,000	25,000		2,000		6.250% to, but excluding, 9/5/24; 3-mo. LIBOR + 370.5 bps thereafter		On or after September 5, 2024
Series Y ⁽³⁾	6.500% Non-Cumulative	January 2015	44,000	25,000		1,100		6.500	%	On or after January 27, 2020
Series Z ⁽⁵⁾	Fixed-to-Floating Rate Non-Cumulative	October 2014	56,000	25,000		1,400		6.500% to, but excluding,10/23/24; 3-mo. LIBOR + 417.4 bps thereafter		On or after October 23, 2024
Series AA ⁽⁵⁾	Fixed-to-Floating Rate Non-Cumulative	March 2015	76,000	25,000		1,900		6.100% to, but excluding, 3/17/25; 3-mo. LIBOR + 389.8 bps thereafter		On or after March 17, 2025
Series CC ⁽³⁾	6.200% Non-Cumulative	January 2016	44,000	25,000		1,100		6.200	%	On or after January 29, 2021
Series DD⁽⁵⁾	Fixed-to-Floating Rate Non-Cumulative	March 2016	40,000	25,000		1,000		6.300% to, but excluding, 3/10/26; 3-mo. LIBOR + 455.3 bps thereafter		On or after March 10, 2026
Series EE⁽³⁾	6.000% Non-Cumulative	April 2016	36,000	25,000		900		6.000	%	On or after April 25, 2021
Series 1 ⁽⁷⁾	Floating Rate Non-Cumulative	November 2004	3,275	30,000		98		3-mo. LIBOR + 75 bps ⁽⁸⁾		On or after November 28, 2009
Series 2 ⁽⁷⁾	Floating Rate Non-Cumulative	March 2005	9,967	30,000		299		3-mo. LIBOR + 65 bps ⁽⁸⁾		On or after November 28, 2009
Series 3 ⁽⁷⁾	6.375% Non-Cumulative	November 2005	21,773	30,000		653		6.375	%	On or after November 28, 2010
Series 4 ⁽⁷⁾	Floating Rate Non-Cumulative	November 2005	7,010	30,000		210		3-mo. LIBOR + 75 bps ⁽⁴⁾		On or after November 28, 2010
Series 5 ⁽⁷⁾	Floating Rate Non-Cumulative	March 2007	14,056	30,000		422		3-mo. LIBOR + 50 bps ⁽⁴⁾		On or after May 21, 2012
Total			3,837,683			$	22,622


⁽¹⁾	Amounts shown are before third-party issuance costs and certain book value adjustments of $299 million.


⁽²⁾	The Corporation may redeem series of preferred stock on or after the redemption date, in whole or in part, at its option, at the liquidation preference plus declared and unpaid dividends. Series B and Series L Preferred Stock do not have early redemption/call rights.


⁽³⁾	Ownership is held in the form of depositary shares, each representing a 1/1,000th interest in a share of preferred stock, paying a quarterly cash dividend, if and when declared.


⁽⁴⁾	Subject to 4.00% minimum rate per annum.


⁽⁵⁾	Ownership is held in the form of depositary shares, each representing a 1/25th interest in a share of preferred stock, paying a semi-annual cash dividend, if and when declared, until the first redemption date at which time, it adjusts to a quarterly cash dividend, if and when declared, thereafter.


⁽⁶⁾	Represents shares that were not surrendered when the holders of Series T preferred stock exercised warrants to acquire 700 million shares of common stock in the third quarter of 2017.


⁽⁷⁾	Ownership is held in the form of depositary shares, each representing a 1/1,200th interest in a share of preferred stock, paying a quarterly cash dividend, if and when declared.


⁽⁸⁾	Subject to 3.00% minimum rate per annum.

n/a = not applicable