PNC Bank 2015 Annual Report Download - page 65

Directors approved the termination of the 2007 common stock
repurchase program authorization, and replaced it with a new
stock repurchase program authorization in the amount of
100 million shares of PNC common stock, effective April 1,
2015. The extent and timing of share repurchases under this
authorization will depend on a number of factors including,
among others, market and general economic conditions,
economic and regulatory capital considerations, alternative
uses of capital, the potential impact on our credit ratings,
contractual and regulatory limitations, and the results of future
supervisory assessments of capital adequacy and capital
planning processes undertaken by the Federal Reserve as part
of the CCAR process.
In the first quarter of 2015, we repurchased 4.4 million
common shares for $.4 billion and completed our common
stock repurchase programs for the four quarter period that
began in second quarter 2014 with total repurchases over that
period of 17 million common shares for $1.5 billion. These
repurchases were included in our 2014 capital plan accepted
by the Federal Reserve as part of our 2014 CCAR submission.
In connection with the 2015 CCAR process, we submitted our
2015 capital plan, as approved by PNC’s Board of Directors,
to the Federal Reserve in January 2015. The Federal Reserve
accepted the capital plan and did not object to our proposed
capital actions in March 2015. As provided for in the 2015
capital plan, we announced new share repurchase programs of
up to $2.875 billion for the five quarter period beginning in
the second quarter of 2015. These programs include
repurchases of up to $375 million over the five quarter period
related to stock issuances under employee benefit-related
programs.
PNC repurchased 17.9 million common shares for $1.7 billion
in the second through fourth quarters of 2015 under the
current share repurchase programs described above.
For 2015, PNC repurchased a total of 22.3 million common
shares for $2.1 billion.
On May 4, 2015, we redeemed $500 million of PNC’s Fixed-
to-Floating Rate Non-Cumulative Perpetual Preferred Stock,
Series K, as well as all Depositary Shares representing
interests therein. All 50,000 shares of Series K Preferred
Stock, as well as all 500,000 Depositary Shares representing
interests therein, were redeemed. The redemption price was
$10,000 per share of Series K Preferred Stock equivalent to
$1,000 per Depositary Share, plus declared and unpaid
dividends up to but excluding the redemption date.
See the Supervision and Regulation section of Item 1 Business
in this Report for further information concerning the CCAR
process and the factors the Federal Reserve takes into
consideration in its evaluation of capital plans.
Table 18: Shareholders’ Equity
Dollars in millions
December 31
2015
December 31
2014
Change
$%
Shareholders’ equity
Preferred stock (a)
Common stock $ 2,708 $ 2,705 $ 3 –%
Capital surplus – preferred stock 3,452 3,946 (494) (13)%
Capital surplus – common stock and other 12,745 12,627 118 1%
Retained earnings 29,043 26,200 2,843 11%
Accumulated other comprehensive income 130 503 (373) (74)%
Common stock held in treasury at cost (3,368) (1,430) (1,938) (136)%
Total shareholders’ equity $44,710 $44,551 $ 159 –%
(a) Par value less than $.5 million at each date.
The increase in total shareholders’ equity compared to December 31, 2014 was mainly due to a $2.8 billion increase in retained
earnings, partially offset by common share repurchases of $2.1 billion and the redemption of $500 million of preferred stock. The
increase in retained earnings was driven by net income of $4.1 billion, reduced by $1.3 billion of common and preferred dividends
declared. Common shares outstanding were 504 million and 523 million at December 31, 2015 and 2014, respectively.
The PNC Financial Services Group, Inc. – Form 10-K 47