Common and Preferred Shares and Warrants

12 Months Ended

Dec. 31, 2017

Common And Preferred Shares And Warrants [Text Block]

NOTE 17

Common and Preferred Shares

The following table shows authorized shares and provides a reconciliation of common shares issued and outstanding for the years ended December 31:

(Millions, except where indicated)	2017	2016	2015
Common shares authorized (billions)^(a)	3.6	3.6	3.6
Shares issued and outstanding at beginning of year	904	969	1,023
Repurchases of common shares	(50)	(70)	(59)
Other, primarily stock option exercises and restricted stock awards granted	5	5	5
Shares issued and outstanding as of December 31	859	904	969

Of the common shares authorized but unissued as of December 31, 2017, approximately 29 million shares are reserved for issuance under employee stock and employee benefit plans.

On September 26, 2016, the Board of Directors authorized the repurchase of 150 million of common shares over time in accordance with the Company’s capital distribution plans submitted to the Board of Governors of the Federal Reserve System (the Federal Reserve) and subject to market conditions. This authorization replaces all prior repurchase authorizations. During 2017, 2016 and 2015, the Company repurchased 50 million common shares with a cost basis of $4.3 billion, 70 million common shares with a cost basis of $4.4 billion, and 59 million common shares with a cost basis of $4.5 billion, respectively. The cost basis includes commissions paid of $2.9 million, $1.2 million and $1.1 million in 2017, 2016 and 2015, respectively. As of December 31, 2017, the Company had approximately 85 million common shares remaining under the Board share repurchase authorization. Such authorization does not have an expiration date.

Common shares are generally retired by the Company upon repurchase (except for 2.9 million, 3.0 million and 3.0 million shares held as treasury shares as of December 31, 2017, 2016 and 2015, respectively); retired common shares and treasury shares are excluded from the shares outstanding in the table above. The treasury shares, with a cost basis of $217 million, $197 million and $242 million as of December 31, 2017, 2016 and 2015, respectively, are included as a reduction to additional paid-in capital in shareholders’ equity on the Consolidated Balance Sheets.

PREFERRED SHARES

The Board of Directors is authorized to permit the Company to issue up to 20 million Preferred Shares at a par value of $1.66^2/3 without further shareholder approval. The Company has the following perpetual Fixed Rate/Floating Rate Noncumulative Preferred Share series issued and outstanding as of December 31, 2017:

	Series B	Series C
Issuance date	November 10, 2014	March 2, 2015
Securities issued	750 Preferred Shares; represented by 750,000 depositary shares	850 Preferred Shares; represented by 850,000 depositary shares
Aggregate liquidation preference	$750 million	$850 million
Fixed dividend rate per annum	5.20%	4.90%
Semi-annual fixed dividend payment dates	Beginning May 15, 2015	Beginning September 15, 2015
Floating dividend rate per annum	3 month LIBOR+ 3.428%	3 month LIBOR+ 3.285%
Quarterly floating dividend payment dates	Beginning February 15, 2020	Beginning June 15, 2020
Fixed to floating rate conversion date^(a)	November 15, 2019	March 15, 2020

The date on which dividends convert from a fixed-rate calculation to a floating rate calculation.

In the event of the voluntary or involuntary liquidation, dissolution or winding up of the Company, the preferred stock then outstanding takes precedence over the Company’s common stock for the payment of dividends and the distribution of assets out of funds legally available for distribution to shareholders. Each outstanding series of Preferred Shares has a liquidation price of $1 million per Preferred Share, plus any accrued but unpaid dividends. The Company may redeem these Preferred Shares at $1 million per Preferred Share (equivalent to $1,000 per depositary share) plus any declared but unpaid dividends in whole or in part, from time to time, on any dividend payment date on or after the respective fixed to floating rate conversion date, or in whole, but not in part, within 90 days of certain bank regulatory changes.

There were no warrants issued and outstanding as of December 31, 2017, 2016 and 2015.