Shareholders' Equity |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shareholders' Equity |
Shareholders’ Equity
Common Stock
On June 28, 2018, following the Federal Reserve's non-objection to the Corporation's 2018 Comprehensive Capital Analysis and Review (CCAR) capital plan, the Board of Directors (the Board) authorized the repurchase of approximately $20.6 billion in common stock from July 1, 2018 through June 30, 2019, including approximately $600 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. As part of the capital plan, on July 26, 2018, the Board declared a quarterly common stock dividend of $0.15 per share.
During the three and six months ended June 30, 2018, in connection with the previous authorizations, the Corporation repurchased and retired 165 million and 318 million shares of common stock, which reduced shareholders’ equity by $5.0 billion and $9.8 billion, respectively.
The Corporation has 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 138 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. As a result of the Corporation’s second-quarter 2018 dividend of $0.12 per common share, the exercise price of the warrants expiring on January 16, 2019 was adjusted to $12.666 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.
During the six months ended June 30, 2018, in connection with employee stock plans, the Corporation issued 66 million shares and repurchased 25 million shares of its common stock to satisfy tax withholding obligations. At June 30, 2018, the Corporation had reserved 801 million unissued shares of common stock for future issuances under employee stock plans, common stock warrants, convertible notes and preferred stock.
Preferred Stock
During the three months ended March 31, 2018 and June 30, 2018, the Corporation declared $428 million and $318 million of cash dividends on preferred stock, or a total of $746 million for the six months ended June 30, 2018. On May 16, 2018, the Corporation issued 54,000 shares of 6.00% Fixed Rate Non-Cumulative Preferred Stock, Series GG for $1.35 billion. Dividends are paid quarterly commencing on August 16, 2018. The Series GG 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. On July 24, 2018, the Corporation issued 34,160 shares of 5.875% Non-Cumulative Preferred Stock, Series HH for $854 million. Dividends are paid quarterly commencing on October 24, 2018. The Series HH preferred stock has a liquidation preference of $25,000 per share and is subject to certain restrictions in the event the Corporation fails to declare and pay full dividends. During the three months ended June 30, 2018, the Corporation partially redeemed Series K and D for $1.5 billion, and fully redeemed Series M for $1.3 billion. For more information on the Corporation's preferred stock, including liquidation preference, dividend requirements and redemption period, see Note 13 – Shareholders’ Equity to the Consolidated Financial Statements of the Corporation’s 2017 Annual Report on Form 10-K.
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