Shareholders' Equity |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||
| Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||
| Shareholders' Equity |
The table below presents the declared quarterly cash dividends on common stock in 2016 and through August 1, 2016.
On June 29, 2016, the Corporation announced that the Federal Reserve completed its 2016 Comprehensive Capital Analysis and Review (CCAR) and advised that it did not object to the 2016 capital plan. The requested capital actions included a request to repurchase $5.0 billion in common stock over four quarters beginning in the third quarter of 2016, and to increase the quarterly common stock dividend from $0.05 per share to $0.075 per share.
During the three and six months ended June 30, 2016, the Corporation repurchased and retired 55.2 million and 113.2 million shares of common stock in connection with the 2015 CCAR capital plan, which reduced shareholders' equity by $783 million and $1.6 billion. On March 18, 2016, the Corporation announced that the Board of Directors authorized additional repurchases of common stock up to $800 million outside of the scope of the 2015 CCAR capital plan to offset the share count dilution resulting from equity incentive compensation awarded to retirement-eligible employees, to which the Federal Reserve did not object. During the three and six months ended June 30, 2016, the Corporation repurchased and retired 40.8 million and 55.3 million shares of common stock in connection with this additional authorization, which reduced shareholders' equity by $600 million and $800 million.
During the six months ended June 30, 2016, in connection with employee stock plans, the Corporation issued approximately 9 million shares and repurchased approximately 4 million shares of its common stock to satisfy tax withholding obligations. At June 30, 2016, the Corporation had reserved 1.6 billion unissued shares of common stock for future issuances under employee stock plans, common stock warrants, convertible notes and preferred stock.
The Corporation has certain warrants outstanding and exercisable to purchase 150 million shares of its common stock, expiring on January 16, 2019 and warrants outstanding and exercisable to purchase 122 million shares of its common stock, expiring on October 28, 2018. 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. As a result of the Corporation's second-quarter 2016 dividend of $0.05 per common share, the exercise price of these warrants was adjusted to $13.032. The warrants expiring on October 28, 2018 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.
During the three months ended March 31, 2016 and June 30, 2016, the Corporation declared $457 million and $361 million of cash dividends on preferred stock, or a total of $818 million for the six months ended June 30, 2016.
On April 25, 2016, the Corporation issued 36,000 shares of its 6.000% Non-Cumulative Preferred Stock, Series EE for $900 million. Dividends are paid quarterly commencing on July 25, 2016. Series EE preferred stock has a liquidation preference of $25,000 per share and is subject to certain restrictions in the event that the Corporation fails to declare and pay full dividends.
During the six months ended June 30, 2016, the Corporation granted 163 million restricted stock unit (RSU) awards to certain employees under the Bank of America Corporation Key Employee Equity Plan. Generally, one-third of the RSUs vest on each of the first three anniversaries of the grant date provided that the employee remains continuously employed with the Corporation during that time. The RSUs are authorized to settle predominantly in shares of common stock of the Corporation, and are expensed ratably over the vesting period, net of estimated forfeitures, for non-retirement eligible employees based on the grant-date fair value of the shares. Certain RSUs will be settled in cash or contain settlement provisions that subject these awards to variable accounting whereby compensation expense is adjusted to fair value based on changes in the fair value of the Corporation's common stock up to the settlement date. Awards granted in prior years were predominantly cash settled. For RSUs granted to employees who are retirement eligible or will become retirement eligible during the vesting period, the RSUs are expensed as of the grant date or ratably over the period from the grant date to the date the employee becomes retirement eligible, net of estimated forfeitures. For additional information, see Note 18 – Stock-based Compensation Plans to the Consolidated Financial Statements of the Corporation's 2015 Annual Report on Form 10-K.
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