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Shareholders' Equity
12 Months Ended
Dec. 31, 2017
Equity [Abstract]  
SHAREHOLDERS' EQUITY
NOTE 16—SHAREHOLDERS' EQUITY

Preferred Stock
Preferred stock outstanding at December 31, 2017 and 2016 is summarized as follows (in millions except total shares outstanding and per share data):
 
 
 
 
 
 
 
 
 
 
 
 
Carrying Value at December 31,
 
 
Description
 
Issuance Date
 
Per Annum Dividend Rate
 
Total Shares Outstanding
 
Liquidation Preference per Share
 
2017
 
2016
Series A
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed-to-Floating Rate Non-Cumulative
 
8/25/2016
 
5.875% to, but excluding, 9/15/2026; 3-mo LIBOR + 4.435% thereafter
 
400,000

 
$
1,000

 
$
394

 
$
394

Series B
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed-to-Floating Rate Non-Cumulative
 
12/6/2017
 
5.30% to, but excluding, 3/15/2023; 3-mo LIBOR + 3.16% thereafter
 
3,000

 
$
100,000

 
295

 

Total
 
 
 
 
 
 
 
403,000

 
 
 
$
689

 
$
394


Series A
On August 25, 2016, the Company issued 400,000 shares of Series A fixed-to-floating rate non-cumulative perpetual preferred stock for gross proceeds of $400 million. Net proceeds, after issuance cost, were $394 million. The shares have a par value of $0.01 and liquidation preference of $1,000 per share. Dividends are non-cumulative and are payable semi-annually at a rate of 5.875% from the original issue date to, but excluding, September 15, 2026. Dividends thereafter are payable at a floating rate equal to the three-month US dollar LIBOR on the related dividend determination date plus 4.435%. The Company used the proceeds of the issuance, along with existing corporate cash, to fund the acquisition of OptionsHouse.
On February 2, 2017, the Company's Board of Directors declared a dividend of $32.64 per share, or $13 million, to holders of record of the Series A preferred stock as of February 28, 2017. The dividend was paid on March 15, 2017. On August 2, 2017, the Company's Board of Directors declared a dividend of $29.38 per share, or $12 million, to holders of record of the Series A preferred stock as of August 31, 2017. The dividend was paid on September 15, 2017. On February 8, 2018, the Company's Board of Directors declared a dividend of $29.38 per share, or $12 million, to holders of record of the Series A preferred stock as of February 28, 2018. The dividend will be paid on March 15, 2018.
Series B
On December 6, 2017, the Company issued 300,000 depositary shares, each representing 1/100th ownership interest in a share, of Series B fixed-to-floating rate non-cumulative perpetual preferred stock for gross proceeds of $300 million. Net proceeds, after issuance cost, were $295 million. The shares have a par value of $0.01 and liquidation preference of $100,000 per share, equivalent to $1,000 per depositary share. Dividends are non-cumulative and are payable semi-annually at a rate of 5.30% from the original issue date to, but excluding, March 15, 2023. Dividends thereafter are payable at a floating rate equal to the three-month US dollar LIBOR on the related dividend determination date plus 3.16%. The Company intends to use the proceeds of the issuance to fund the acquisition of TCA in the first half of 2018.
Upon the issuance of preferred stock, the Company's ability to declare or pay dividends or distributions on, or repurchase, redeem or otherwise acquire for consideration, shares of its junior stock became subject to certain restrictions in the event that the Company fails to declare and pay full dividends, or declare and set aside a sum sufficient for the payment thereof, on its preferred stock. Junior stock includes the Company's common stock.
Share Repurchases
On July 20, 2017, the Company announced that its Board of Directors authorized the repurchase of up to $1 billion of shares of its common stock. As of December 31, 2017, the Company repurchased a total of $362 million, or 8.5 million shares, of common stock under this program. As of December 31, 2017, $638 million remained available for additional repurchases. As of February 16, 2018, the Company has subsequently repurchased an additional 1.1 million shares of common stock at an average price of $49.99. The Company accounts for share repurchases retired after repurchase by allocating the excess repurchase price over par to additional paid-in-capital.
Accumulated Other Comprehensive Loss
The following tables present after-tax changes in each component of accumulated other comprehensive loss for the years ended December 31, 2017, 2016 and 2015 (dollars in millions):
 
Available-for-Sale
Securities
 
Foreign 
Currency
Translation
 
Total
Balance, December 31, 2016
$
(139
)
 
$
2

 
$
(137
)
Other comprehensive income before reclassifications
137

 

 
137

Amounts reclassified from accumulated other comprehensive loss
(24
)
 
(2
)
 
(26
)
Net change
113


(2
)

111

Balance, December 31, 2017
$
(26
)

$


$
(26
)
 
Available-for-Sale
Securities
 
Foreign 
Currency
Translation
 
Total
Balance, December 31, 2015
$
(101
)
 
$
2

 
$
(99
)
Other comprehensive loss before reclassifications
(5
)
 

 
(5
)
Amounts reclassified from accumulated other comprehensive loss
(33
)
 

 
(33
)
Net change
(38
)
 

 
(38
)
Balance, December 31, 2016
$
(139
)
 
$
2

 
$
(137
)
 
Available-for-Sale
Securities
 
Cash Flow 
Hedging
Instruments
 
Foreign 
Currency
Translation
 
Total
Balance, December 31, 2014
$
7

 
$
(261
)
 
$
5

 
$
(249
)
Other comprehensive loss before reclassifications
(84
)
 
(10
)
 
(3
)
 
(97
)
Amounts reclassified from accumulated other comprehensive loss
(24
)
 
271

 

 
247

Net change
(108
)
 
261

 
(3
)
 
150

Balance, December 31, 2015
$
(101
)
 
$

 
$
2

 
$
(99
)
The following table presents other comprehensive income (loss) activity and the related tax effect for the years ended December 31, 2017, 2016 and 2015 (dollars in millions):
 
Year Ended December 31,
 
2017
 
2016
 
2015
 
Before Tax
 
Tax Effect
 
After Tax
 
Before Tax
 
Tax Effect
 
After Tax
 
Before Tax
 
Tax Effect
 
After Tax
Other comprehensive income (loss)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Available-for-sale securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrealized gains (losses), net
$
213

 
$
(76
)
 
$
137

 
$
(10
)
 
$
5

 
$
(5
)
 
$
(136
)
 
$
52

 
$
(84
)
Reclassification into earnings, net
(39
)
 
15

 
(24
)
 
(53
)
 
20

 
(33
)
 
(39
)
 
15

 
(24
)
Net change from available-for-sale securities
174


(61
)

113

 
(63
)
 
25

 
(38
)
 
(175
)
 
67

 
(108
)
Cash flow hedging instruments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrealized losses, net

 

 

 

 

 

 
(17
)
 
7

 
(10
)
Reclassification into earnings, net

 

 

 

 

 

 
439

 
(168
)
 
271

Net change from cash flow hedging instruments

 

 

 

 

 

 
422

 
(161
)
 
261

Foreign currency translation:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency translation losses, net

 

 

 

 

 

 
(3
)
 

 
(3
)
Reclassification into earnings, net
(2
)
 

 
(2
)
 

 

 

 

 

 

Net change from foreign currency translation
(2
)
 

 
(2
)
 

 

 

 
(3
)
 

 
(3
)
Other comprehensive income (loss)
$
172

 
$
(61
)
 
$
111

 
$
(63
)
 
$
25

 
$
(38
)
 
$
244

 
$
(94
)
 
$
150


The following table presents the consolidated statement of income line items impacted by reclassifications out of accumulated other comprehensive loss for the years ended December 31, 2017, 2016 and 2015 (dollars in millions):
Accumulated Other Comprehensive Loss Components
 
Amounts Reclassified from Accumulated Other Comprehensive Loss
 
Affected Line Items in the Consolidated Statement of Income
 
 
Year Ended December 31,
 
 
 
 
2017
 
2016
 
2015
 
 
Available-for-sale securities:
 
$
39

 
$
53

 
$
39

 
Gains (losses) on securities and other, net
 
 
(15
)
 
(20
)
 
(15
)
 
Income tax expense
 
 
$
24

 
$
33

 
$
24

 
Reclassification into earnings, net
 
 
 
 
 
 
 
 
 
Cash flow hedging instruments:
 
$

 
$

 
$
(370
)
 
Gains (losses) on securities and other, net
 
 

 

 
(69
)
 
Interest expense
 
 

 

 
(439
)
 
Reclassification into earnings, before tax
 
 

 

 
168

 
Income tax benefit
 
 

 

 
(271
)
 
Reclassification into earnings, net
 
 
 
 
 
 
 
 
 
Foreign currency translation:
 
$
2

 
$

 
$

 
Other non-interest expenses
 
 
$
2

 
$

 
$

 
Reclassification into earnings, net

For additional information on the $370 million reclassification during the year ended December 31, 2015, see Note 8—Derivative Instruments and Hedging Activities.