you as you registered out front, you would have gotten agenda and the rules of the meeting and these are now in effect. I now officially call the 20 17 Bank of America Corporation and the meeting of shareholders this call to order. First, I want to introduce your Board of Directors who've done a fabulous job for your company and I'd like them to stand and meet the shareholders for the Board's family. One of the things we focus on Bank of America is strong corporate governance. One of the things that makes that easy for us to do is having a great fleet Independent Director.
I'd like to introduce our lead Independent Director, Jack Bovinder, to make a few comments. Jack?
Thank you, everyone, and good morning to you, and welcome to our 2017 meeting. On behalf of all the independent directors, I want to thank you for your participation today and to thank you for your investment in Bank of America. I've had the privilege again this year to meet with many of you and other shareholders. This has provided me and the independent directors with important perspective and insight that helps us to govern and guide the company. Moreover, these meetings have sharpened our thinking and approach to communications to you leading up to this meeting.
Thus, I hope you have found the Annual Report, the proxy statement and environmental, social and governance supplement more precise, direct, informative, conversational and less technical than in the past. Many of our shareholders over the last couple of weeks have told us they have found these changes and formats most helpful. In these materials, you've learned more about the developments at our company, the Board's oversight and support of our strategy, our responsible growth goals and the return of capital back to you, our shareholders and other topics of interest. We made great progress in 2016 and we are well positioned for 2017 to continue to deliver long term value to you and all our shareholders. Today, you will hear from Brian, our Chairman and CEO, and other members of our management team.
They will talk about our company's growth and progress. Thank you again for joining us today. I appreciate your involvement in and support of Bank of America. Thank you. Thanks, Jack.
Thank you, Jack. Now I'm going to introduce Ross Jeffries, our Corporate Secretary. Ross will view the meeting rules quickly and give the Corporate Secretary's report. Ross?
Good morning. Thank you, Brian. There are 8 items that we'll consider today for stockholder votes. After these items are presented, you'll have a chance to comment on them. When that portion of the meeting is completed, we will tabulate the vote.
While we wait for the results, there will be an update on the company. Following the presentations, we will announce the preliminary results of the votes. Then there will be a general question and answer period for issues unrelated to the proposal. Most of you have already submitted your proxy to vote on these matters and you do not need to vote again unless you want to change your vote. If you want a ballot to cast your vote, please raise your hand now.
Let me remind you of a few items. Stockholders presenting proxy statement proposals will have up to 3 minutes to discuss their proposals. Stockholders wishing to comment on the proposals will be limited to 1 minute. You do not need to form a line to ask questions. Just raise the numbered card that was provided in your admission package.
Once Brian recognizes you, please move to the end of the aisle where a Bank of America team member will be holding a microphone. Please then state your name and the proposal you wish to speak about. In order to give all stockholders who wish to speak the opportunity to do so, please limit your remarks to 1 minute. A chime will sound to remind you when your time is up. If your remarks concern an item that will be voted on today, please let us hear from you during the first Q and A session so that your remarks may be considered during the voting process.
All other questions should be held until the second Q and A session. If you have a personal matter to discuss or personal financial matter to discuss, we have customer service representatives available
at the
back of the room to assist you with those matters. Anyone not following these rules of conduct will be asked to leave the meeting. David Leach, our General Counsel, has joined us today to assist with clarification of the rules if necessary. David? I will now present the Corporate Secretary's report.
Notice of today's meeting and the related proxy materials or a notice of Internet availability of these materials were mailed beginning March 15, 2017 to all stockholders of record as of March 2, 2017. Proof of the mailing will be filed with the records of this meeting. Rebecca Fincher of Computershare Trust Company has been appointed Inspector of Election. She has advised me that holders of shares representing at least 86.5% of the shares entitled to vote are present in person or represented by proxy, which constitutes a quorum. Brian?
Thank you, Ross. That's the rules of the meeting. Thanks, Ross. Thank you, Ross. I'll declare a quorum as present.
The meeting is now convened. I'd like to recognize our Bank of America teammates who are serving as your proxies and ask them to Stan. First, we have Ann Walker. Ann? Ann is our Chief Operating Officer for our CFO team of 5,000 teammates and our Corporate Financial Planning Executive and also drives our SIEM program, which we'll talk about a little later.
Then we have Aether Williams. Aether runs our global transaction services and you saw some of the capabilities out there, $7,000,000,000 revenue stream for our company and does a terrific job. Thank you, Ann and Ather. We're now going to consider the items that are up for shareholder vote in the proxy statement. The management proposals are and these are all in your proxy statement for your review.
Proposal 1 to elect our director nominees. Proposal 2 to adopt an advisory vote to prove the executive compensation. Proposal 3 to adopt an advisory vote to prove the frequency of which we'll have a say on pay resolution Proposal 4, to ratify the appointment of PricewaterhouseCoopers as the company's independent accountant for 2017. In addition, there are 4 shareholder proposals that were included in our proxy statement and they'll now be presented. After all 4 of the shareholder proposals have been presented, we'll have the Q and A comments on those proposals as Ross told you about.
The first stockholder proposal relates to our clawback policy and was submitted by Mr. John Sheveden. Ms. Mona Lita Carr is here to present the proposal on behalf of Mr. Sheveden.
As a reminder, you have 3 minutes to present your proposal, Ms. Carr.
Callback amended sponsored by John Shepponen of Redondo Beach, California. Resolved, shareholders urge our Board of Directors to amend the general callback policy to provide that a substantial portion of annual total compensation of executive officers identified by the Board shall be deferred and be forfeited in part or in whole at the discretion of the Board to help satisfy any monetary penalty associated with any violation of law regardless of any determined responsibility by any individual officer and that this annual deferred compensation be paid to the officers no sooner than 10 years after the absence of any monetary penalty and that any forfeiture in relevant circumstances be reported to the shareholders. These amendments should operate prospectively and be implemented in a way that does not violate any contract, compensation plan, law or regulation. President William Dooley of New York Federal Reserve outlined the utility of what he called a performance bond. In the case of a large fine, the senior management will forfeit their performance bond.
Each individual's ability to realize their deferred debt compensation would not depend only on their own behavior, but also on the behavior of their colleagues. This would create a strong incentive for individuals to monitor the actions of their colleagues and call attention to any issues. Importantly, individuals would not be able to opt out of the firm as a way of escaping the problem. If a person knew that something is amiss and decided to leave the firm, their deferred debt compensation would still be at risk. The statute of limitations under the FIRREA is 10 years, meaning that annual deferred period should be 10 years.
Please vote to
protect shareholder value. Thank you, Mr. Carr. The next proposal relates to divestiture
and division study. It was proposed by Bartlett Naylor who is not here. Mr. Davitt is going to present the proposal on behalf of Mr. Naylor.
Mr. Davitt, you have 3 minutes.
My name is Richard Davitt, and I'm here on behalf of Bartlett Nader and Public Citizen. I formally move Proposal 6 as explained in the proxy statement. The proposal asked the Board to establish a committee retaining independent experts to study reconstituting the bank into 1 or more parts. In principle, Public Citizen calls for a return to Glass Steagall to separate commercial banking funded by government backed deposits and investment banking. Despite recent strength in stock valuations, Bank of America still trades way below the pre cash level of $50 per share.
Only recently has the firm's book value come close to its stock market value. Public Citizen believes that part of this is due to the fact that the bank is too big to manage with roughly $2,000,000,000,000 in assets, Bank of America is 3 times the size of Exxon, the world's largest oil company. The most glaring evidence of Bank of America's size is that the unmanageable and multiple settlements and massive fraud. The bank also suffered a $4,000,000,000 accounting error that festered for years. Joining Commercial and Investment Banking can lead to culture problems.
As former Citi CEO, John Reed explained, Traditional banking attracts one kind of talent where is entirely different from the kinds drawn towards investment banking and trading. Traditional bankers tend to be extroverts, sociable people who are focused on longer term relationships. They are in many respects risk adverse investment bankers and their traders are short term are short termists. They are comfortable with and even seek out risk and more focused on immediate reward. In addition, investment banking organizations tend to organize and focus on products rather than customers.
This creates fundamental differences in value. REIT calls for a return to Glass Steagall. President Trump supports Glass Steagall as do the platform of both political parties. Because of this real political possibility, Public Citizen believes that the Board should prepare an independent study of what would mean for the company and share the findings with shareholders. Public Citizen urges support for this resolution.
Thank you, Mr. Davitt. The next proposal relates to
an independent Board Chair and was submitted by Mr. Kenneth Steiner. Mr. Steiner is also not here. Again, Ms.
Mona Lita Carr is here to present the proposal on behalf of Ms. Steiner. Ms. Carr? All
right. I'm here to present Proposal 7 on behalf of Kenneth Steiner of Great Neck New York. Shareholders request our Board of Directors to adopt as policy and amend our governing documents as necessary to require the Chair of the Board of Directors whenever possible to be an independent member of the Board. The Board would have the discretion to phase in this policy for the next CEO transition implemented so it does not violate any existing agreement. If the Board determines that a Chair who was independent when selected is no longer independent, the Board shall select a new Chair who satisfies the requirements of the policy within a reasonable amount of time.
Compliance with this policy is waived if no independent director is available and willing to serve as chair. This policy requests that all the necessary steps be taken to accomplish the above. For example, Caterpillar reversed itself by naming an independent Board Chairman in October 2016. Caterpillar had opposed a shareholder proposal for its Independent Board Chairman as recent as its June 2016 Annual Meeting. Wells Fargo also reversed itself and named an Independent Board Chairman in October of 2016.
Having a Board Chairman who is independent of management is a practice that will promote greater management accountability to shareholders and lead to a more objective evaluation of management. Please vote to enhance shareholder value.
Thank you, Ms. Carr. The last stockholder proposal was presented relates to Generpay Equity and was submitted by James and Anne Blaine. They're not here. They've asked Catherine Krone to present the proposal on behalf of the Blaine.
Ms. Krone?
Good morning, Mr. Chairman, members of the Board and fellow shareholders. My name is Catherine Krone, and I'm here to move Proposal 8 filed by Arjun Capital and Balto Brothers on behalf of James and Anne Blaine. Specifically, we are asking the Board to publish a report on the company's policies and goals to reduce the gender pay gap. The median income for a woman working full time in the United States is reported to be 79% of that type of male counterparts and forecasts indicate that at the current rate of change, women will not reach pay parity until 2,059.
Of note, the gap for African American and Latina women is wider at 60% 55%, respectively. Gender pay disparity is not only one of the biggest social justice issues of our time, it poses a risk to company's performance, brand and investor returns. This issue is particularly salient to the finance industry, which struggles to attract and retain female talent. In fact, women executives are 20% to 30% more likely to leave a finance career than any other career. Female financial advisors are reported to face the widest pay gap of any occupation, making only $0.61 on the dollar.
And while Bank of America has not reported its company wide pay gap, Payscale reports the company has a mean pay gap of 16% over $12,000 that gap beyond wider for top range earners at 18% or near $20,000 Research indicates gender diverse teams are more productive, innovative and drive better results. Clearly, a failure to and retain qualified female employees is detrimental to Bank of America's ability to innovate and compete. Bank of America has disclosed that 56% of our company's workforce is female, yet only 34% of our leadership is made up of women. Our company is best served by a proactive approach to address the structural biases, including pay inequities that prevent women from entering and staying in the field and from moving into positions of leadership. Given the material business risks gender inequality presents, investors expect transparent, honest disclosures and quantitative goals.
Employees expect a new level of structural support that addresses root causes and empowers fair negotiation, promotion and ultimately equal pay. Implementing the proposal would represent a proactive step towards closing the gender pay gap. We believe the company would benefit from taking a leadership position on this issue, along with Financial Services peers, Schroeder's and Virgin Money and other S and P 500 peers, as research indicates attracting and retaining diverse teams yield strong financial performance benefits. Thank you.
Thank you. Thank you, Ms. Krone. We're now going to have comments on the proposals. As a reminder, we're going to have a general Q and A session later.
So please keep these comments specifically to these proposals. You have 1 minute. You'll see the timer go up. Raise your card, I'll recognize it. When the teammates will come to your aisle, you can walk out and they'll have a microphone for you.
So who'd like to be first? You got to raise the number and I can.
All right, Mr. Davitt.
Recall last year's meeting when a shareholder expressed dismay at your refusal as Board Chairman to answer questions, you made a condescending remark and I quote, Mr. Davitt has been sending letters for 15 to 20 years and we answer them. In the old neighborhood, we call this such a response cute as it belies the truth in a myriad of ways. Earlier this month, I sent you a letter calling to your attention a judgment entry of 107 pages for $48,000,000 regarding your mortgage model. And it was widely publicized in the press with comments like brazen and heartless, left the people in the state of battle fatigue demoralization, won't be lapped off at the moment.
Thank you.
Other comments on the proposal? Any other comments on Mr. Davitt, you can make another comment.
I have a comment of Mr. Bovender. Earlier this year, I mean earlier this month, I sent a copy of the letter I sent to you as long and also to all members of the Board. And I suggested in there that Mr. Moynihan adopt my suggestion to pay that judgment and to take the steps to resolve the issues that were presented by that judgment.
As a separate issue, I ask the Board to undertake an independent counsel or retain an independent counsel and do an investigation pursuant to Sarbanes Oxley and do it in detail for any law violations omitted in that judgment entry and I want
to know if that's been done. We had Sharon, do you want to Sharon Allen, Head of Audit Committee, Sharon, do you want to address the Audit Committee booked up letter yesterday if you can get Sharon on the mic? She's the Chair of the Audit Committee, so that handles here.
We had an exchange last year. Okay, Jack,
do you
want to Ms. Allen made some commitments and she reneged on those in less than a
month later. Mr. Debit. Okay. This litigation relates to activities from many years ago that was a subject of consent orders, reviews and everything that I can guarantee you the rest of the shareholders in this room are glad we're not going to talk about today.
Well, And I will ask them to do it. So Sharon has your letter and she's looked at it and she'll talk about it on behalf of the Board.
I don't think shareholders are, because how could this happen after years of bringing this to your
You're mistaking what happened in the timeframe of the judgment. Is the last that Sharon, why don't you tell what the audit committee has done? Yes.
And the audit committee has reviewed as we do all of our litigation with our legal counsel and advisors to appropriately address this litigation and believe that we've done the right thing and will as we go forward.
Thank you, Mr. Davitt. Mr. Davitt, thank you. Thank you, Mr.
Davitt. I want to know why. We conduct this company with high governance standards. Thank you. Any other questions or comments on the proposal?
There being no, that concludes the Q and A period for the line of business presented for consideration at this annual meeting of shareholders. I now declare the poll is open. Has anybody got a ballot? Could you raise your hand and we'll collect it? Anybody else, raise your hand.
We got all the ballots. I now declare the polls closed. Now we've completed the formal portion of the meeting and we wait for the voting results, we're going to do a couple of things. We're going to talk about the company's performance and then we're going to talk a little bit with some teammates about some of the activities of the company. So let's start with the company performance.
In 2016, the company that I have the honor of leading on behalf of all of you raised $721,000,000,000 in capital to grow the business in the market. We grew core loan balances of over $44,000,000,000 We helped more than 260,000 families 260,250,250,000 families buy a home with $79,000,000,000 in financing. We helped small business owners get started and grow with more than $11,600,000,000 in new credit granted to small businesses last year. And we continue to deploy 1,000,000,000 of dollars through community development lending, our philanthropic efforts and the communities we serve. Today, we're going to talk about the 3 areas.
First, we're going to talk about the performance and progress creating value for all of you as shareholders. 2nd, we're going to talk about responsible growth. And third, we're going to have, as I said, a panel led by Anne Panukin, our Vice Chair, who will lead a discussion on how we share success with our communities. To start, this is a placement. This is how we run the company.
If you were my teammates, you would be tired of seeing this. It goes up at every town hall, the many thousands we do in the company. It lays out the simple thing of why we come to work every day. We come to live our values, to deliver on our purpose, to drive responsible growth through 8 lines of business. We're going to talk about responsible growth a little bit later in more detail.
We have an integrated business model that serves 3 groups of customers. 1 of the shareholders told me they came to their first meeting 9 years ago and you would have heard the exact same thing. We have an integrated business model that serves 9 groups 8 groups of customers, the 3 groups of customers, 8 lines of business. There are only a handful of companies in the world that have these capabilities and we serve through the 8 lines of business you see here as they go to market and you saw in the Expo outside capabilities we have. When you go to the earnings, you've seen the significant earnings of the company improve.
In 2016, we earned nearly $18,000,000,000 up 13% from a year ago. This is the 2nd most profitable year in the company's history. And we achieved this by growing revenue, continuing to manage expenses well, continuing to manage our risk well and investing in our workforce and capabilities. That earnings power carried forward in 2017 as our Q1 earnings were $4,900,000,000 up 40% from last year's Q1. When you look at business results across these businesses that work with the customers I spoke about earlier, you can see all of them year over year grew their earnings and did have a good operating leverage.
And this performance at the business line level also continued in the Q1. We do this by driving operating leverage. When you run a business, you have to have revenues growing faster than your expenses and that's what we've been able to do. As you can see here, we reduced expenses last year by $3,000,000,000 while we continue to invest heavily supporting our companies, our clients, our customers and in our businesses. That resulted in 7% operating leverage in the Q1 alone.
As you've seen, as we've put the past behind us, the earnings have become much more stable, less volatile and they continue to produce good steady returns for you as shareholders. When you look at how those returns are going towards our financial targets, on the left hand side, you can see how we moved up to 88 basis points. Our financial targets are 1% return on average assets and the left and runs at a 12% return on tangible common equity. On the right hand side, you can see that the 1st quarter approached 10.3%. These metrics continue to improve in the 1st quarter despite some annual impacts that don't go in the rest of the quarters, and if you normalize those, we're about out the targets today.
We've also increased shareholder value. The book value of the company is your investment in our company. As you can see, it's risen in each year up 20% at book value and 29% contained book value. The total shareholder return that you can see here was 5 years on the right hand side, 3 years on the second one in, 1 year in the last year or Q1, you can see us leading our both our peers in the S and P index and shareholder returns. Now as we've earned more money and stabilized earnings stream and has become more predictable, we've able to start returning capital with more velocity.
On the left hand side, you can see our dividends paid each year over the last 5 years. We're now running at a $0.075 a quarter or 0.30 dollars annualized rate. So for 2017, it will continue to increase and we'll see what the CCAR process brings later on this year. On the right hand side, we've also got excess capital we don't need to support our customers and clients. We can do a good job growing loans and deposits with the capital we have.
So we're starting to return it through share buybacks and you can see those grow over the years. We're now the 3rd highest valued financial services enterprise in the world. You can see here that we've got the American banks and some of the Chinese banks leading the way and you can see that we're 3rd. As you think about that, the question I address in the annual report is the enterprise value on the right hand side of the slide is as high as it's ever been as a company. On the left hand side, you can see where we started at the last peak in 2006.
In that year, we earned $21,000,000,000 the highest earnings we earned, we only had 4,600,000,000 shares outstanding. So when you do the math, that produced a share price of $53 We now made it back to around $24 and we'll continue to drive that. The tangible common equity ratio of this company in 2,006 was 4%. It's now 8%. And so the enterprise value is the highest it's ever been.
The share price will recover as the share count comes down and that's what we have to drive. That's why we keep returning capital in buybacks. If you look at the share count, we're starting to make progress. You can see up through 2,008 before the acquisitions, Countrywide Merrill Lynch took place, we were running about 4,600,000,000 shares. Through those acquisitions, we ran up to about $9,800,000,000 in the crisis related offerings we had to do.
And then you can see we peaked with a 1,000,000,000 shares we had to do as they've changed the capital rules and increased them in the early 2010, 2011 timeframe. We peaked at $11,600,000,000 We've now crossed under $11,000,000,000 to $10,900,000,000 and we look forward to further reductions here. So how do we do that? How do we produce sustainable returns, good returns, share buyback, dividend increase? How do we do that?
We did that by driving responsible growth. There's 4 basic elements to it. You got to grow and win in a market. No excuses. That means we're competitive and we can win against competition.
We have to stay within the customer focused strategy, how we drive our business teams to start customer first and work back towards how we run the business. We have to stay within our risk framework, how we manage credit operational and other types of risk, and we have to do it in a sustainable manner. So we're going to go through each of these pillars quickly and give you a few examples. So we have to grow and win in the market, no excuses. Simple way to measure that is are we growing loans, meaning we're winning
in the
competitive base of our clients and are we growing those loans on a consistent basis. You can see as the Q1 of the last 5 years as we've had loans run off that weren't core loans, you see the buildup of loans continue and that will do well for our net interest income going forward. But what that really represents is more customers doing more with our company. If you go to the deposit side, you can see this is a growth in deposits for the last 5 years. This is $182,000,000,000 in deposit growth.
There are only 6 banks in the United States that are larger than that deposit growth than one of them is us. So we have grown the equivalent of about the 5th or 6th largest bank over 5 years. That's through the hard work they do, through technology, capabilities you saw outside, through working with customers one at a time and driving a good business model. To do that, we have to be customer focused. We start with our customers and work our way in.
We come to work every day to do a better job for our customers and clients. We start with something nobody else has, industry leading positions across all our businesses, whether it's in our consumer banking team, as you can see number 1 deposit share and some of the other characteristics on the left hand side of the slide here, number 2, small business center, Number 3, Credit Card balances. You can see the size and scale and capability. We've got our Wealth Management business, the 2 best brands in the business, Merrill Lynch and U. S.
Trust and working and a great capital markets team behind that. And then to our markets business, we have a great cash management business, a great lending platform, and a great capital markets team behind that. And then to our markets business, and you can see our ratings, one of which is the number one research team for 6 years in a row. As we put and deploy the capabilities and the customer focus, you can see the customer satisfaction in the company continue to rise. We're now back at all time high levels and that's on the left hand side at the basic line.
Importantly, the experience people have with us, which is the right hand side of the slide, shows you all the different statistics. These are the top 2 box 9 or 10 on a 10 point scale for all the different points of interface for our consumer clients. Now how do we do that? We do that by having great teammates in the branches and on the phones. We do have a great product design, the teammates that do that.
We do that by having tremendous capabilities in phones and ATMs and branches and distribution, but we also do it by how we can drive our digital adoption. So here we talk about the consumer side. You can see over the last 5 years from 12,500,000 consumers to 22,000,000 consumers actively using our mobile application, which is every 30 days they have to be using it. You can see the checks deposited total deposits up to 20%. To give you a sense, that's 1,000 financial centers that have activity that allows us to keep driving.
What's next? You saw some of it out in the Expo hopefully. You can see some of the capabilities we invest in. We've invested over $1,000,000,000 in this platform in the last 4 or 5 years and we continue to invest significantly to make sure it does a great job. When you flip to the commercial side of the house, it's the same drive, driving the digitization of the company.
How do we do that? You can see in things like the virtual account management, which simplifies the management for our business customers their accounts and account structure. You can see it in our digital disbursement capabilities that ability to pay people individuals to what people would like to call B2P, a business paying an individual. We have in our digital trade applying blockchain and other things in the far out technologies to start to take that trade process and make it more efficient than we have in CashPro Mobile. The product and capability allows corporate treasurers and people who work to initiate transactions as they off their mobile devices.
So that's the 2nd pillar, customer focused strategy. The third is, while you're doing that, you got to watch your risk and stay within your risk framework. Bank holding companies, financial services companies have many pillars of risk. The core ones are credit risk. And you can see here our charge offs continue to decline on both the commercial and the consumer side in this company.
This is why we're growing the portfolios and this is why we continue to have assets running off that we weren't put on by in the last 7 or 8 years. When you go to the trading side, this is one of the interesting things. Many years ago, Tom Montag and the team repositioned our trading business to be driven off our customer focus and be an interface between our issuing clients, our companies and our investing clients. We backed that with a number one research team and what we've been able to do is take our value at risk, that's the risk of a measure of risk in this business down by 90% or whatever that would show and get a better return on that. When you put all that together to give you a simple way to think about it, last year in 2016 with all the volatility, Brexit unexpected, an unexpected outcome in elections around the world, different things happen.
We made money trading every day but 3. And so there's a lot of discussion about risk. This business basically on a really tough day makes $30,000,000 or $40,000,000 on a good day makes more than that. It's a throughput machine because of the franchise we have. Then we have our operational and reputational risk.
We're going to spend a little more time on reputational risk when we get to the panel, but this is how we think about operational risk. We have to manage this enterprise doing all these things every day. To open the doors in the morning, a lot goes on in this company. The team does a great job of keeping that risk down and doing it in one way. So you can see some of the statistics here.
The last pillar is to be sustainable. Many people when we say this lead to definitions that people have in their mind about environment and things like that. Sustainability has all kinds of things. In the end of day, think about this company that we all have a wonderful company and a wonderful interest and think about this company. The earliest parts of it are 230 years old.
Many parts are 150 to 200 years old. It is here because it had a sustainable model. Your management team's job is to and your Board of Directors' time is to steward that sustainability over time. It is defined differently now. We talk about it in how we work with our teammates.
We talk about it in how we work with our philanthropic and our communities. We talk about it in how we work with our customer focus. All these play into the idea of being sustainable. We talk about it in how we govern ourselves, the highest standards of corporate governance. We talk about how we invest for the future.
In a low growth environment, United States economy growing at less than 2% in 2016, projected to grow a little over 2% this year, you have to create the investment dollar. So one of the things that I'm going to address and I'll turn it over to our teammates is to talk about how we drive that investment dollar given a low growth for the big company. We have significantly improved our cost structure in the company. From the left hand side to now you can see a $20,000,000,000 reduction in expense. This is operating expenses, pure operating expenses, not litigation.
To give you a sense of scale, we have taken out of this company the operating expense base of American Express today, the entire operating expense base. So, it would be as if tomorrow morning American Express opens its doors without any operating expenses. That's the scale. Team's done a great job. Why do we do that?
How do we do that? We did it by driving a culture of efficiency. Initiatives we called SIM that Anne runs for our team. You figure out how the cost of work is done, you figure out how to design that work to get rid of the work that we don't need to do, and you figure out how to manage that work through our oral health work. By doing this, we are creating that investment dollar on a continuous basis that we can invest for 10 year returns while we're driving the current shareholder returns to the company.
When you think about that, you start to think about the size and scale of investments we have made and you can see with the various business here is the type of things, dollars 1,000,000,000 in the GTS business that Acer runs to make it more capable and continue the conversion to digital capacity. You can see the Merrill Edge guided portfolios that you have seen out there Merrill Edge product that have been launched and driving. You can see what we've done for 3,500 digital ambassadors to help our clients. So we invest in people, sales force has grown, technology $3,000,000,000 a year, physical plant, hundreds of new branches, hundreds of refurbished branches and we're doing all that with our expense base coming down. And that's through the hard work we have and the culture efficiency that we drive in this company.
So to touch on the other aspects, our teammates, our communities and responsible lending, I'm going to have Ann Fanucan, our Vice Chair of the company, come up with some of our teammates and talk about that. Ann?
Thanks, Brian. This idea of responsible growth and sustainability, sustainability is driven on so many dimensions, people, our customers and our communities that we thought that we would spend a few minutes to give you a sense of to make that growth real and tangible and in fact to have great financial results, you have to have a commitment to the people that we hire, the communities in which we work and live and the customers which we serve. So I thought I would begin by asking Sherri Bronstein, who is the Global Human Resources Executive Steve Bolan, who is our Consumer Lending Executive and Andrew Plepler, who I work with every day, who is the Head of ESG, to share with us their thoughts. So I'm going to start with you, Cher, if I could. Diversity inclusion, everyone's talking about it.
So could you just talk about it plays such an important role in our company and in our community. Could you talk a little bit that and how we
look at it? Sure. And Ann, as you noted, this topic is getting a lot of attention. But for us, this has been something that's been core to our values for a long time. Brian, even in his CEO role, remains the Chair of our Diversity and Inclusion Council.
That council is made up of senior line leaders as well as staff leaders and they're really passed under Brian's leadership with ensuring that we make progress every year on our practices both qualitatively and quantitatively. We also have a team of diversity and inclusion specialists who work on my team and they ensure that we're sharing best practices and that we're continuing to evolve in this area. And really, we've been focused on this for a long time, as I mentioned, and it's really paying off. Let me just maybe share a few statistics. First of all, our Board is 46% of our independent directors are diverse and 31% are women.
Coming internally to the company, our management team is over 40% women and our broad population, we have over 50% women and our U. S. Workforce is over 40% racially and ethnically diverse. And I'm really excited. We've been focused on our entry level as well and continuing to bring in the diverse pipeline.
And I'm really proud to say this year will be our most diverse class ever. We're at 42% women and 51% racially and ethnically diverse entry level talent that's joining us for campus. We've also been acknowledged externally, which is nice by Euromoney as the best bank for diversity and on Bloomberg has a Gender Equality Index. That's been running for 2 years. We've been in it both years with 1 of the highest scores at 92 out of 100.
That's great stuff. But as
you know, we had a shareholder proposal on gender pay equity, and I'd love to hear what you have to say about that.
Sure. Again, this is a topic that is core to our values. We've been focused on it. We've embedded for many years inspection processes into our compensation processes as governed by our compensation committee as well as internally by management and human resources. But equally as important as we do analysis across the majority of our 200,000 employees, we look at them individually, We ensure that we are providing equal pay for equal work across both gender and ethnicity.
But for the better part of a decade, just to ensure that we're doing a great job of that, we've worked with an independent consultant who is an expert in this area and they help us make sure that we're doing analysis at that individual level. They provide any differences that they might find. It's a very few, but they do find a handful. They give those to us during the compensation process. They look at both base salary as well as incentive compensation and we make adjustments as appropriate.
So the combination of both our internal processes, the governance we have around it and an external third party that helps us with this process gives us really strong confidence that we do pay equally across gender and race.
And we've been doing this for a decade, right? A decade, yes. Great. Steve, so we're also talking about deploying capital and investing in our communities through our customers and we have 46,000,000 households. Can you tell us how
we're doing that? Yes, sure, Ann. So simply stated
what we focus on is life priority. We're trying to find out what it is our clients are trying to achieve, whether they want to start a business, they want to save for retirement, and then we want to figure out how we can help them with that. So an example is just take our consumer bank. At the end of 2016, we had $260,000,000,000 in outstanding loan balances. And that's an example of how we're taking our capital and we're deploying it to drive activity in local communities.
Some examples, small business, small business is the lifeblood of local communities. And last year, we had in new loans for small businesses over $11,000,000,000 And if you think about outstanding balances for small businesses, dollars 34,000,000,000 that we had. So that would make us the 2nd largest small business lender in the country. You think about our home loans business and we did $80,000,000,000 in loans to and that represents, if you think about over a quarter 1000000 families where we help people, whether they want to buy a house, they want to refinance, lower their monthly debt, access the equity in their home to enable their life's ambition. And you can move on and you think about credit card, it's the same story.
We opened up 5,000,000 almost 5,000,000 new credit cards last year. And the growth that we saw year over year, we have outstanding balances of $92,000,000,000 $93,000,000,000 that was up 3% year over year. But I mean even more importantly, the spend on our card,
dollars 250,000,000,000
that's how we the clients that use to make purchases. And so we're helping our clients with their everyday lives. Now that talks about how we land in our capital, but then you kind of take it to where we are. So we are where our clients are physically, where they are digitally. Physically, we have 1300 financial centers that are in low and moderate income communities.
Employees that are in those financial centers are well equipped to help our clients with their diverse financial needs. And the core of that really is creating transparent, easy to use solutions. So you can look at our safe balance account, which enables clients to only spend what they have in their account, Affordable loan solutions, Andrew and I worked together on that. And that is a solution that helps clients to be able to obtain financing to buy a home where they only have modest means for a down payment. And you look at our secured cards, clients are able to start establishing or building credit.
Now that's the physical, but then you take the digital. We've literally put the ability to control your financial lives in the palm of your hand. In some ways, you think about
it where people are able
to make payments or transfer money or check the balance on their account, There's also solutions like our spending and budgeting tool. So clients can create a budget. They can look at what they are spending on and be able to adjust their behaviors. And what's neat about the tool is, again, right from your device, you have links to financial education with better money habits that can help you figure out, hey, where do I need to make adjustments? And we're seeing just a great uptick.
This year alone, we've seen 600,000 new users and it's a really big deal with millennials, over 60% is millennials. So when you think about it and you put it all together, every day we're working hard to live our purpose, help our clients live their financial lives and make their financial lives better and those are some
of the examples of how we're trying to get it.
Thanks. Andrew, so we've had a lot of help from all the lines of business and also our National Community Advisory Council, who's helped us along the way figure out policies and products working with Steve and Sherry, myself, our entire management team. And then it gets to the communities. How are we deploying all that and interacting with our communities? Can you talk a little bit about that?
Sure. Thanks, Ann. It really is an extension of really what Sherri and Steve talked about. And it's thinking about what our role in society is, how can we deploy and harness all the resources of this company to be an engine for economic growth. I mean, that is the philosophy of how we bring to bear all of what Sherry talked about with our people and what Steve talked about with our capital and drive that into communities to be an engine for the economy.
That's a very different view of your role in society than we had 10 years ago, when a lot of this was just very specifically around philanthropy and volunteerism and it was almost a silo that you did over on one side of the company. And today, we think about responsible growth and sustainable growth is how do you bring all of the resources of the company to bear, really the capital, how are you in hinging for economic growth. And so the E is how do we bring financial capital to drive the transition to a low carbon economy,
dollars 15,000,000,000
$16,000,000,000 in 2016, we delivered globally to transition from high carbon to low carbon economy. That's one of the real capabilities that we have to help this transition. When you think about the S in ESG, it's the social and what Sherry talked about, It starts with how you treat your own people, how do you pay your people, how do you provide benefits, how do you provide a diverse and inclusive environment, so people can be successful professionally, they can live their family lives and come to work and really build a career and build a life here that is sustainable. And then we talk about responsible business practices. I spend an enormous amount of time with Steve and others, sometimes much to his frustration, talking about how we build products that can be safe, fair, transparent, and really serve the needs of communities across all income levels.
That's really how we think about the S. And then affordable housing is an area in the S. How do we deploy $4,000,000,000 of capital to build affordable housing across the country. These and then the G is how do we govern all of this. Under your leadership on the ESG committee, we bring all of the lines of business quarterly together to talk about these issues of what is responsible growth really mean for our communities and how do we do it the right way and how do we really harness all of our capabilities and sometimes challenge ourselves to have uncomfortable conversations to think about how we can do it better.
And that's really the engine that keeps this going and really continues to challenge us to get better at it. This is still we're still in the fairly early innings of thinking about ESG in this way. We think we have a long way to go and it's an enormously exciting opportunity and we can do it globally and then we can really deliver it locally. And so here in Charlotte, we look at the opportunity task force that we're involved in that Andrea Smith is going to co chair the implementation phase, really looking at a community and how do you deliver economic mobility to improve the lives of everyone in our community. We had a lot of challenges in this community over the last year and we think about what our company can bring to bear to be a source of not just our capital, but our people and how someone like Andrea and Kathy and the revitalization of North Tryon Street, all of these things are how you build a healthy community.
So we think about this philosophy globally, but we execute it just like any local bank can.
And that's really what ESG is about. It's how we behave and how we the lens through which we see each line of business in every staff area and trying to do better every year, year after year, under Brian's leadership. I thank you all for your thoughts. We thought we would close with a commitment we've had for 30 years with the Special Olympics. Special Olympics sort of brings new meaning to diversity and respect for all people.
And we've had a long term relationship with them. We have as you have seen, I don't have the card with me, but there was the card if you voted and you're all here, so you all voted. You all participated by for every shareholder who voted, stockholder that voted, we donated $1 to the Special Olympics. And this is very meaningful for them to be able to not only do what they do on a local basis, but on a global basis. So we thought we would share with you 2 brief pieces of video, 1 from the World Games in Austria that happened just a few weeks ago and then a message from the Chairman of Special Olympics, Tim Schreiber from the games in Panama.
So with that, I'd ask them to roll the video, please.
Let's remember that the world has old prejudices. There are a 1000000000 people on Earth with disabilities, and they have almost all been the victims of the most outrageous discrimination. These athletes come here to prove that you can rise to the top of the greatest mountains in the world and ski down them no matter what people tell you at birth, no matter what people tell you
in school. They are able to demonstrate the skills and the talent that make them very capable people.
I can't believe I'm here. I'm super
It's a wonderful, wonderful moment. It's been so positive and I'm so proud of this guy.
Special Olympics as a movement could never do everything it says.
Bank of America has invested in games. They've invested in leadership. They've invested in our athletes.
Special Olympics and Bank of America has had a
relationship for 30 plus years.
We share their values. Diversity and
inclusion is core to who
we are. As a company, we have a responsibility. And part of that responsibility is creating a more inclusive world for everybody.
Me being a leader, it will be in a great honor and opportunity to change life of people living with intellectual disabilities.
People should put down limits because there are no limits and we all have potential. We should pick up hope because we can do anything we set our minds to.
Hi, I'm Tim Schreiber and together with the entire community of Special Olympics leadership, Mary Davis, my colleagues on the Board of Directors and athletes from Special Olympics Latin America who are all gathered here today, we are here to thank the team at Bank of America. Bank of America stands for the values we share, for inclusion, for tolerance, for the idea that everybody has a gift and everybody belongs. You've been fantastic partners to our movement, most recently at our World Games in Austria, coming up soon at our National Games in Seattle. But it's an everyday proposition at Bank of America to believe in diversity, to invest in the talent of all your employees, to commit yourself to a community of financial institutions that believe together that we're all better when we're working together, when we're included and when everyone has a chance. From all of us at Bank of America, a big congratulations to Brian White and Anne, to his entire leadership team, to the Board of Directors who have been extraordinary stewards of the bank and also to all of you who have invested with us, whether it's in our athlete leadership work to promote financial literacy or the support work or simply the idea that we are all gifted in our own way, take a bold conclusion and continue making a difference.
Thank you on behalf of all of you for voting your shares and allowing us to continue our great contribution to Special Olympics and Enable Bayou. As I said earlier when I started, this is a very strong and great company. We're committed to continue to grow it, grow it the right way and we're doing that by delivering responsible growth. We've been delivering that in 2016 and the Q1 of 2017, you can see it coming through. We've made the progress to our financial targets.
We've improved the shareholder returns, increased the dividend and more stock buybacks, and we've done that by serving the needs of our customers the right way. So with that, thank you for taking the time to listen to the story about the company. We're now going to return to the preliminary voting results. Mr. Jefferies?
Thank you, Brian. Our Inspector of Election reports the following preliminary results, which are shown on the screen. All of the management proposals received the required majority support have been approved. None of the stockholder proposals received the required majority support. Final voting results will be reported on a Form 8 ks filing with Securities and Exchange Commission within 3 days of today's meeting.
Thank you.
Thank you, Ross. Okay. Now we're going to go to a general Q and A session. As a reminder, the rules of the meeting are still in effect. Fraser Card will recognize you.
1 of my teammates with a microphone will hold it for you to come out in the aisle. You have a minute to make your comment, the chime will sound and then we'll go to the next person. 201, we'll start here.
Thank you, Brian. My name is Jerry Blodgett. I have been a stockholder of Bank of America for 12 to 14 years. I live in the great state of Maine in Boston. My question is The snow
is almost gone up there.
Almost. My question is about your letter to shareholders in this year's report. I appreciate the fact that our dividend was raised 50%, but I note that if you take all the dividends we've been paid since 2,008, it still wouldn't equal probably 2 months of what we were paid prior to that difficult period. And you recognize the fact that it is that of the number of shares outstanding. But with all respect, I don't think that the simply using our funds to buy back shares is going to work in the long run because the shares are
going to get
increasingly expensive. So my question is really about addressing the root cause of the majority of that dilution that occurred And that was the coercion or the blackmail by the government in the purchase of Merrill Lynch. And I feel like the government has then been picking our pocket ever since then while they smacked us in the head. So why haven't they addressed that fact, which caused us a lot of loss during that period? And if they won't, could we do it as class action?
I don't not sure we could do it
as a class action. I'll ask David Leach to try to think that through. But we'll continue to increase the dividend and but with a 11,000,000,000, 10,900,000,000 shares, if you do the math you were doing and go the other way, you'd actually be paying out more than we earned. That is the dangerous spot we were in, in 2,007. And so when the earnings slowed down, we had to cut the dividend way back.
The lesson learned is to have a dividend, you can always sort of stand by. And that's why under both the regulations and the principles we have is to keep the dividend at a reasonable rate relative to the earnings power of the company. So if you had a fall off in earnings for economic matters out in the world, you'd be able to sustain it. So we'll keep raising it. We'll keep buying back the stock.
The math will work in your favor and it has over the last few years shown by the 5.31 and year to date track record. But it was a I get to hear about how much people would like the dividend go up a lot and we'll continue to drive it up. Thank you for your comments, Jerry. Next, 199, sir.
Thank you, Mr. Chairman. My name is Julian Martinez, and I represent SARE Jobs Progress National. SARE is a national nonprofit community based organization serving more than 1,300,000 people a year by assisting them with their employment and educational needs. We this year would like to thank Bank of America for investing in our efforts in our STAM robotics and drone programs for high school and middle school students.
This is proven to be a great success as attested to by their parents and teachers. Bank of America supports many other community programs across the country and should be commend for those as well. We are glad that you participated in the Hispanic Association of Corporate Responsibility's Annual Corporate Index Survey. You rang very high in the survey and much of the credit must go to your Board of Directors, which is one
of the most diversified in the Fortune 100 company. Thank you. Thank you, sir. Thank you. And we'll continue to hopefully generate top talent for our company and other companies for those training programs.
So thank you. Next comment, $285,000,000
I'm Gary Burgess, shareholders. Since about 2,008, we've had 70 $1,000,000,000 in fines and settlements and when you add in the litigation costs were in the 1,000,000,000,000 of dollars, a tenth of a $1,000,000,000,000 plus 100 $1,000,000,000 which is a lot of money. Much of it was blamed for things that you acquired, but in rough terms, is the Board being responsible for the additional $50,000,000,000 or so that you may be responsible for or under your leadership? I'm not sure you've got
the timing right, but we take accountability for the history of this company and that's why we if you look at the if you think back to the slide, it showed the earnings power. The litigation costs have been running under $1,000,000,000 total for the company for the year, maybe $1,100,000,000 for 'sixteen. It's way down. So I'm not sure where you're getting the numbers in 2016 and 2015 and 2014 and 2013. Going back to the settlements, the last big one was the Justice Department.
Those didn't cost us as much as because a lot of the work was making stuff available that we'd already made available. So the Board is fully accountable for it. We understand your position, but what we're doing is focused on how to drive this company forward. Well, whether it's $50,000,000,000 or $100,000,000,000 that's a lot of money. It wasn't.
Not always valid in our mind, but it was able us to at least go forward and fix the company and go and get it back to where it is. Thank you. Yes, sir. Brian?
I've been accumulating shares for about 35 years. I've never sold one and it's still growing. I think we've got a very good future. But just I want the Board and management to think in 2,008, the shares that I own generated a little bit over $100,000 a year in dividends. This year with substantially more shares, I got a little less than 14,000.
So we got a long ways to go. And my request is when you and the Board think about this year, buybacks are less important to me than the dividend side of it. And I would hope and expect that the dividend would at least double and perhaps more this year. So thank you for any thoughts. We'll work to
increase it as we did over the last couple of years at a rapid rate, but we'll take that into consideration. Thank you. 2.40.
Good morning, Mr. Moynihan and Board of Directors. My name is Natalie Clark, and this is my 4th year attending this meeting and expressing my concern. Last year, I asked about efficiency ratio and it went from 75.11 to 66.15 in the Q1 of last year to the Q1 of this year and I think that's super awesome. I really applaud the leaders of this bank for the changes in efficiency ratio and stock price, and I hope that continues to improve.
We're all in this room because we want this bank to succeed, but I just have a few concerns. Other than the questions and answers we've already heard from your presentation and the talk show presentation, I would like to know if you are in my place looking to pay for college in 18 months with better, but still the price stock and dividend prices, what question would you ask the CEO and what would your answer to that be?
The question I'd always ask myself is every day as we're doing everything to drive responsible growth. I get up every morning and you can only be CEO if you had a healthy amount of self doubt. So I asked myself of everything you saw out there, if you went through and spent the time, is that going to be state of the art, it's going to help us win in the market. I asked myself the work that Tom Montay's team does in the trading or they manage their risk well. But you have to always realize no matter all those accolades that I can show you, we know we can do better and that's the question we always have to answer is how can we do better?
And that is thank God I got 210,000 people to depend on to help me figure out that answer frankly, but that's the question.
And do you believe that you are doing everything you can?
We can do better tomorrow and we're doing it today, but I think we're doing decently now and we'll continue to do better. Thanks. Thanks. Other questions or comments? 215.
Mr. Moynihan and team, my name is Ivan Boyarsky. Thank you for the excellent work that you're doing. I'm an employee of Bank of America and Corporate Audit. So thank you for the work that you're doing.
My question is, how can we continue to cut down expenses and how are you doing it currently and how are you looking to do it in the future?
Thank you. Well, the what we tried to show you is through the efforts in simplify and improve, what we're really doing is aiming all the process in the company and your neurotic teammates help give us advice in that regard to find out how they can be improved, more technology applied, what work doesn't need to get done, what work build up because of processes or history that no longer needs to be done and we continue to look at every process and do that. So it's not magical. We're going to go from through a major we'll continue to go through a major data center reduction. I think we started with 50 or 60.
Kathy, data centers total were down to about 29. We'll push that down to 4 or 5. That cost $500,000,000 or $250,000,000 investment each new data center to consolidate into. And so you guys spend money to make something. And so it's just hard work.
Real estate continuing to consolidate down, continuing to work on the digitization of paper in the company and everywhere we look. Other questions? Yes, sir.
Again, Gary Burgess. I addressed this issue with you outside, but during the presidential election, we campaigned for several weeks in front of Jack in the Box, McDonald's and SunTrust. And on the Sunday before the election, we moved to at the entrance of Carolina Place Mall and 4 police cars and a guy on a bicycle or policeman on a bicycle ran us off. To me, I saw you interfering with the democratic process. How is that responsible action on Bank of America's part?
And then I think I said, you told me that it was the responsibility of security and kind of brushed me off.
I told you to talk
to people, might have an answer for it. But I think that is not our that's not our property. So I'll take your comments. I think we handle ourselves well when you think about the several 1000, 5000, 6000 locations we have operating every day and my guess is that was somebody else's property and they took action, but we'll try to figure out what happened. I have no clue.
Any other questions or comments? Mr. Davitt. Richard Davitt. Bethany McClain of Enron Fame talks about the American mortgage industry and how it affects financial institutions.
She says it's like water, it permeates every facet of your business. In 2,005, I was here and got the story that the audit committee was doing their job. At last year's meeting, I got the response that they're not going to undertake the Sarbanes Oxley review because they're doing their job. The only difference is it's cost shareholders $200,000,000,000 in equity in that same time period. And had they heeded that advice, shareholders would be in a lot better position today.
And what
is your response to that? We have repositioned our mortgage business dramatically over the last decade. But the primary result was acquiring Countrywide and it was practices that went on that were changed, but then we ended up paying for it. Just practice having gone on as company. And I think we know pretty well what went wrong.
There. And I think we've done a great job. We only originate mortgages directly to our customers. We don't have anything to do with correspondence, mortgage brokers or anything like that. Every mortgage we have, we've looked eye to eye to eye to customer and made sure it's done right.
That brought our market share from 20% down to 3. To accept that kind of decline in market share,
it was tough on the subject, all the GSE business model fatally flawed. What don't you understand about fatal? We don't sell to
the GSEs Fannie Mae at all anymore other than a few 1,000 MHA loans because the product is already there that we have to do.
But the business model is still in place.
That's not our business model, sir. Thank you.
Yes. Gary Burgess, when the transfer from MyQuick and Rally to Bank of America, I didn't get all my dividends. And thankfully, because of this meeting, I got my dividend. And after the well on November 28, I closed out my Bank of America account. I gave this letter to the branch manager.
She indicated she'd pass it along to you. About 20 minutes later, with her approval, I walked out with a check, closing my account. I've noticed that in my Discover, my FICO scores have gone down. The only reason I can suspect is because I get a $5 fee for not having any funds in the account that I closed. So, I addressed some issues in this letter.
I'd like to leave it to.
So Mr. Tyree, did I talk to you earlier outside, we'll take a look into what's going on. And how is
it responsible to not close an account and then charge me fees after I close
the account? We'll look into it, Tina. 152 hasn't going.
First of all, thank you for the management that you have been performing for Bank of America, it's a great improvement. My question deals with the branches.
The last several months when I
have gone to the branches and gone inside, I've had to wait quite a while in line.
And I've listened to a lot of
customers complain about there are not being enough tellers. I wonder if you could comment recognizing that I'm of an older generation than the many younger generations who probably don't use the tellers the way the older generations do. You could comment what Bank of America is trying to do as it assimilates these 2 different generations in running your financial centers? Thank you. Sure, sir.
And I think
you've put the issue on the table, which is one of the toughest issues, how do you manage the transition? So take it out of our business and talk about all the articles you've seen about the retailing transformation, who's missed it, who's not missed it. Our job as a company is to not miss it. So we've been driving, as you said, business models. It's not as discrete by age as you might think.
We've had 100 year old person sign up for mobile banking, which I think is good optimism in my guide. And whenever I mentioned that everybody has a race to see if they can find an older client that will sign up. But we're trying to manage both. And so what we have done in the branches is deployed many more sales teammates to try to help people solve their financial needs, whether it's questions or relationship with teammates, questions or answers and try to remove some of the activity. So we have 5,000,000 branch business a week.
They're absolutely critical to what goes on. Our job over time is to take more pure transactions and get them to things that are better for the customer. They don't have to go spend the time getting there, driving their car, whatever it is. And on the other hand, when they have a tough question, be able to have the right teammates there to spend as long as it takes to figure out. And so if any individual branch has a line, it's probably an issue that we didn't get it right that day.
I think of 4,600 of them operating at a given time, 30,000 teammates and once in a while something goes out, but we monitor real time. We literally monitor real time. So our teammate Tong Nguyen will pull out of his pocket and tell you all the ranches that ran out of cycle during the day and they go out and fix it, try to rectify as fast as they can. And so there's times that people get a person gets sick or something like that. So we staff to try to avoid that.
It doesn't happen very often. What happens, we try to fix it. But the broader question is, we are doing trying to do both in excellent way. And you saw those customer scores earlier. And one of the things the team is proudest of is that the branches, they also do them at the branch level, so they have the product and all the different things.
But if you go across the branches, we're basically getting everybody above 80% top two boxes, Every region in the country is just getting there. Think about that. 80% across 4,600 platforms every day with all those teammates involved. So I think we're trying to do a good job. It's a constant reminder.
I get customers who send me those notes saying, guys, I stood in line too long. And Tong, who runs that business, that side of the business for our teammates, gets to hear from me. So he's we're well aware of it. 201, please.
Brian, my criticisms are not directed at you and I think you've got dealt about as bad a hand in 2,009 as anyone could have. So just the fact you've stuck with it and kept pushing is a tribute to your fortitude and courage
at first. Thank you. But it's been a great company. It wasn't as hard as people thought, although we'll keep that mystery up for a while. But there's been a
couple of comments including my own about dividend versus stock buyback. Personally, I would rather have money returned to me. I could make a decision when to buy back the shares, but I would feel like it's under my control and I obviously have a different cost of capital than the bank does. Right. Keep that
in mind. Yes, we keep in mind. There is an implied restriction of 30% of earnings for dividends in the federal approval process. So just keep that in mind, even though so if you've listed so there is an inherent leave aside that where we would go as a company, but there is inherent things. So dollars 18,000,000,000 last year after preferred dividends made $17,000,000,000 that's $5,000,000,000 maximum capacity, that's $0.50 a share.
So, remember that there is a constraint and that's a good constraint because what it does is it makes sure that that dividend will never be interrupted. So, one of the things we test is dividend capacity after stress, all the stress results we do, how many quarters we could sustain it. Then the second thing and as part of the stress test itself, we test it every quarter on our own. The other thing we test is, given those stress that can be pretty draconian, if we take more mild stress, if the earnings are only 50%, how many quarters how many years can go, it's actually in perpetuity quite frankly, but and then 25%. And so we're always testing that, but we fully understand that.
And it's just that the math is a little tricky. As we bring the shares down, the dividend can go up per share because the same dollars go across less shares. That's part of the mathematics we're driving. So when we buy back stock, it's also helping on your cash flows dividend cash flow side. Okay.
And if we get it back, we're earning almost as much money. If we could get it back to there, we wouldn't be having this conversation, but it would be a lesser percentage of earnings that would be much more safe for you. The absolute danger that companies get into is when the dividend gets to the point where they can't earn it with a minor eruption and that won't happen based on the rules, but also how we run the company from a responsible growth standpoint. 174.
I'm a small business customer and a preferred customer. And I think you mentioned customers first and then go backwards. This is a recording from your That was the recording
I got when I called the phone number
on my credit card statement. And you can't keep putting automation and give a number to a guy to call and then not let him go anywhere.
Right. I don't think that happens, sir. But I'm happy to have teammates over here, Dean and Tong, talk to you afterwards. But I think they just offer you 100 dollars is what I heard, which I got to ask these guys why they're doing that also. But I think that's what that recording said, but you can talk to Dean and Tong after and he'll help you figure that out.
Just other questions or comments? 225.
Hi,
Mary your organization. I just want to as a shareholder myself and as a long term shareholder, just want to thank you for healing the organization back to health. In the last couple of years. You've done a tremendous job and I'm looking forward to continuation of that trend. Thank you.
It's the team that you see in front of you and the people they represent that did all the work, but thank you. Other comments or questions? All right. There is one more, 152. Sorry, I didn't see it go up there.
Thank you.
Do you have an estimate of what the buyback value will be over the next 12 months?
Not one that we would give out publicly, but let me just tell you what's actually going on. In the Q1, we repurchased $2,700,000,000 of the stock and we paid a dividend of $0.075 So, yes, dollars 7.25 $1,000,000,000 and so that's the Q1. So I can tell you what the facts are. I won't project out what the future is. We're going through a process called the CCAR, DFAS process, which out of that we'll have the results back at the end of June and we'll be able to tell you that.
Okay. Thank all of you for joining us. On behalf of Jack Bovender, our Lead Independent Director and the rest of the Board of Directors, we thank you for your support of our company. We look forward to seeing you here next year. Thank you.