Note 7

Preferred Stock

At March 31, 2017 and December 31, 2016, the Company had authority to issue 50 million shares of preferred stock. The number of shares issued and outstanding and the carrying amount of each outstanding series of the Company’s preferred stock were as follows:


	March 31, 2017								December 31, 2016
(Dollars in Millions)	Shares Issued and Outstanding		Liquidation Preference		Discount		Carrying Amount		Shares Issued and Outstanding		Liquidation Preference		Discount		Carrying Amount
Series A		12,510	$	1,251	$	145	$	1,106		12,510	$	1,251	$	145	$	1,106
Series B		40,000		1,000		–		1,000		40,000		1,000		–		1,000
Series F		44,000		1,100		12		1,088		44,000		1,100		12		1,088
Series G		–		–		–		–		43,400		1,085		10		1,075
Series H		20,000		500		13		487		20,000		500		13		487
Series I		30,000		750		5		745		30,000		750		5		745
Series J		40,000		1,000		7		993		–		–		–		–
Total preferred stock (a)		186,510	$	5,601	$	182	$	5,419		189,910	$	5,686	$	185	$	5,501

(a)

The par value of all shares issued and outstanding at March 31, 2017 and December 31, 2016, was $1.00 per share.

During the first quarter of 2017, the Company issued depositary shares representing an ownership interest in 40,000 shares of Series J Non-Cumulative Perpetual Preferred Stock with a liquidation preference of $25,000 per share (the “Series J Preferred Stock”). The Series J Preferred Stock has no stated maturity and will not be subject to any sinking fund or other obligation of the Company. Dividends, if declared, will accrue and be payable semiannually, in arrears, at a rate per annum equal to 5.300 percent from the date of issuance to, but excluding, April 15, 2027, and thereafter will accrue and be payable quarterly at a floating rate per annum equal to three-month LIBOR plus 2.914 percent. The Series J Preferred Stock is redeemable at the Company’s option, in whole or in part, on or after April 15, 2027. The Series J Preferred Stock is redeemable at the Company’s option, in whole, but not in part, prior to April 15, 2027 within 90 days following an official administrative or judicial decision, amendment to, or change in the laws or regulations that would not allow the Company to treat the full liquidation value of the Series J Preferred Stock as Tier 1 capital for purposes of the capital adequacy guidelines of the Federal Reserve Board.

During the first quarter of 2017, the Company provided notice of its intent to redeem all outstanding shares of the Series G Non-Cumulative Perpetual Preferred Stock (the “Series G Preferred Stock”) during the second quarter of 2017. The Company removed the outstanding liquidation preference amount of the Series G Preferred Stock from shareholders’ equity and included it in other liabilities on the Consolidated Balance Sheet as of March 31, 2017, because upon the notification date it became mandatorily redeemable. The liquidation preference amount equals the redemption price for all outstanding shares of the Series G Preferred Stock. The Company included a $10 million loss in the computation of earnings per diluted common share for the first quarter of 2017, which represents the stock issuance costs recorded in preferred stock upon the issuance of the Series G Preferred Stock that were reclassified to retained earnings on the notification date. Effective April 15, 2017, the Company redeemed all outstanding shares of the Series G Preferred Stock.