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Bank of America started out the third quarter with 10,133,190,000 common shares outstanding. It also had 3,943,660 preferred shares outstanding. Warren Buffett received 700 million warrants with today’s deal, which may convert to common shares and have an impact on current shareholders at a later date. The company had also issued several million shares of warrants which the U.S. Treasury auctioned in March 2010 under TARP. There are now warrants to purchase 121.8 million shares of common stock at $30.79 per share and 150.4 million shares at an exercise price of $13.30 per share.
In aggregate, Bank of America therefore has about 274 million in warrants outstanding. Including the 700 million given to Buffett the total equals about 974 million. Since the bank has about 10 billion shares outstanding currently, shareholders can expect the transactions to dilute their shares by about 10%.
Bank of America Chief Executive Brian Moynihan stated on a conference call in July that there was no need to raise capital, but that it could get the necessary capital to meet Tier 1 common equity requirements through earnings. He has also mentioned selling assets. Only days after that statement, Bank of America is raising capital through a deal which looks great for Buffett.
This is the history of the recent share repurchases and issuances:
2006
In 2006, Bank of America spent $14.4 billion in share repurchases. It bought back 291,100,000 shares at an average price of $49.35 per share. That same year, the company made a major leap in revenue to $117 billion from $84 billion in 2005, and had nonperforming loans and leases of .25% of total loans and leases outstanding.
2007
In 2007, the company spent far less on share repurchases – $3.8 billion total on 73 million shares at an average price of $51.42 per share. Nonperforming loans and leases had increased to .64% of total loans and leases.
2008
The financial crisis of 2008 spelled the end of the company’s streak of share repurchases and the beginning of many offerings. Shareholders’ equity increased $30.2 billion by the end of the year due to issuance of preferred stock, including $15 billion to the U.S. Treasury under the TARP Capital Repurchase Program. The company also issued a public stock offering of $9.9 billion, and another $4.2 billion in common stock in connection with the Countrywide acquisition.
They issued 580,000 shares at an estimated price of $24 each. By the end of the year they had 5.018 billion shares outstanding. From 2008 to 2009 was when it issued the warrants to purchase about 170 million shares mentioned earlier.
The company did authorize a share repurchase program that year with a $13.5 billion limit. It expired on January 23, 2010.
2009
In 2009, the bank issued 1.4 billion shares in connection with its acquisition of Merrill Lynch.
Also that year, it issued 1.3 billion shares of common stock at an average price of $10.77 per share through an at-the-market issuance program from which it raised $13.5 billion. In addition, the company issued warrants to purchase approximately 199.1 million shares of common stock in connection with preferred stock issuances to the U.S. government. It reserved another 1.3 billion for future issuances.
Agreements were made with holders of preferred stock to exchange their holdings of approximately $7.3 billion liquidation preference for approximately 545 million shares of common stock. In addition, Bank of America exchanged approximately $3.9 billion aggregate liquidation preferred stock for approximately 200 million shares of common stock in an exchange offer. Together, the deal resulted in $11.3 billion of preferred stock exchanged into approximately 745 million shares of common stock.
Bank of America’s total common shares outstanding climbed to 8.7 billion by the end of 2009.
2010
Bank of America’s common shares outstanding increased to 10.085 billion in 2010, from 8.65 billion in 2009. The increase was due to the reconciliation of year end common shares outstanding to year end tangible common shares outstanding.
The company authorized an amendment in 2010 to increase the number of authorized shares of common stock from 10 billion to 11.3 billion in February 2010. In April, it raised the limit to 12.8 billion.
It issued 98.6 million shares under employee stock plans and by the end of the year still reserved 1.5 billion unissued shares of common stock for future issuances under employee stock plans, common stock warrants, convertible notes and preferred stock.
The company also repurchased no shares in 2010 except for shares acquired under equity incentive plans and there is no existing authorized share repurchase program.
As of June 30, 2011, Bank of America has 10.133 billion shares outstanding.
This is the history of total shares outstanding for Bank of America. It is from the 10-year financial charts.
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