
14.	SHAREHOLDERS’ EQUITY

Preferred Stock

Preferred stock is without par value and has a liquidation preference of $1,000 per share, or $25 per depositary share. Except for Series I and J, all preferred shares were issued in the form of depositary shares, with each depositary share representing a 1/40^th ownership interest in a share of the preferred stock. All preferred shares are registered with the SEC.

In general, preferred shareholders may receive asset distributions before common shareholders; however, preferred shareholders have only limited voting rights generally with respect to certain provisions of the preferred stock, the issuance of senior preferred stock, and the election of directors. Preferred stock dividends reduce earnings available to common shareholders and are paid on the 15th day of the months indicated in the following schedule. Dividends are approved by the Board of Directors and are subject to regulatory approval. Redemption of the preferred stock is at the Company’s option after the expiration of any applicable redemption restrictions. The redemption amount is computed at the per share liquidation preference plus any declared but unpaid dividends. Redemptions are subject to certain regulatory provisions.

Preferred stock is summarized as follows:

(Amounts in thousands)	Carrying value at December 31,				Shares at December 31, 2013			Dividends payable	Earliest redemption date	Rate following earliest redemption date	Dividends payable after rate change
(Amounts in thousands)	2013		2012		Authorized	Outstanding	Rate	Dividends payable	Earliest redemption date	Rate following earliest redemption date	Dividends payable after rate change
										(when applicable)
Series A	$	66,127	$	60,220	140,000	66,000	> of 4.0% or 3mL+0.52%	Qtrly Mar,Jun,Sep,Dec	Dec 15, 2011
Series C	—		924,332
Series F	143,750		143,750		250,000	143,750	7.9%	Qtrly Mar,Jun,Sep,Dec	Jun 15, 2017
Series G	171,827		—		200,000	171,827	6.3%	Qtrly Mar,Jun,Sep,Dec	Mar 15, 2023	annual float-ing rate = 3mL+4.24%
Series H	126,221		—		126,221	126,221	5.75%	Qtrly Mar,Jun,Sep,Dec	Jun 15, 2019
Series I	300,893		—		300,893	300,893	5.8%	Semi-annually Jun,Dec	Jun 15, 2023	annual float-ing rate = 3mL+3.8%	Qtrly Mar,Jun,Sep,Dec
Series J	195,152		—		195,152	195,152	7.2%	Semi-annually Mar,Sep	Sep 15, 2023	annual float-ing rate = 3mL+4.44%	Qtrly Mar,Jun,Sep,Dec
	$	1,003,970	$	1,128,302

Series C Preferred Stock Redemption

On September 15, 2013, we redeemed all of the outstanding $800 million par amount (799,467 shares) of our 9.5% Series C preferred stock at 100% of the $25 per depositary share redemption amount. As shown in the previous schedule, the summation of December 31, 2013 carrying values for Series G, H, I and J, plus the change in carrying value for Series A between December 31, 2013 and 2012 (reflecting the reopening of Series A preferred shares in 2013), equal the $800 million used to fund this redemption. The Federal Reserve did not object to the element of our Capital Plan to redeem the entire $800 million of our Series C preferred stock subject to issuing an equivalent amount of new preferred shares.

The redemption reduced preferred stock by the $926 million carrying value (at the time of redemption) of the Series C preferred stock. The difference from the par amount, or $126 million, related to the intrinsic value of the beneficial conversion feature (“BCF”) associated with the convertible subordinated debt. The BCF represented the difference on the original commitment date of the fair values of the convertible subordinated debt and the preferred stock into which the debt was convertible. The total BCF of $203 million was included in common stock when the subordinated debt was modified to convertible subordinated debt in June 2009. The Company has “no par” common stock and all additional paid-in capital transactions such as this are recorded in common stock.

Portions of the BCF have been transferred since July 2009 from common stock to preferred stock as holders of convertible subordinated debt exercised rights to convert to the Series C preferred stock. Prior to the redemption, these BCF transfers amounted to $0.2 million in 2013, $15.2 million in 2012, and $43.1 million in 2011. Amounts transferred became part of the carrying value of the preferred stock. The $126 million BCF transfer was recorded as a preferred stock redemption in the 2013 statement of income. At December 31, 2013, the remaining balance in common stock of the BCF was approximately $76.4 million. Although the legal right to convert continues to exist, if no further conversions occur or the convertible debt matures, the current amount of the BCF will remain in common stock.

Other Preferred Stock Redemptions

The Series D preferred stock was redeemed in two equal installments by September 26, 2012. The total of $1.4 billion had been issued by the U.S. Department of the Treasury under the Troubled Asset Relief Program (“TARP”) Capital Purchase Program (“CPP”). The associated warrants to purchase 5.8 million shares of common stock were auctioned by the U.S. Treasury in December 2012. The Company did not receive any proceeds from the warrant auction. The warrants have an exercise price of $36.27 per share and expire November 14, 2018. The TARP redemption accelerated the amortization to preferred stock dividends in 2012 of the entire remaining unamortized discount. Amortization amounted to $44.7 million in 2012 and $21.6 million in 2011.

The entire Series E preferred stock of $142.5 million was redeemed on its call date of June 15, 2012. Commissions and fees of $3.8 million previously recorded in common stock were charged to retained earnings. Proceeds from the Series F preferred stock were used to redeem the Series E preferred stock.

Common Stock

In 2011, we issued $25.5 million of new common stock under a common equity distribution agreement. The issuance consisted of approximately 1.1 million shares at an average price of $23.89 per share. Net of commissions and fees, this issuances added $25.0 million to common stock.

In addition to the TARP warrants previously discussed, we have issued a total of 29.3 million common stock warrants that can each be exercised for a share of common stock at an initial price of $36.63 through May 22, 2020.

Accumulated Other Comprehensive Income

Effective January 1, 2013, we adopted ASU 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. This new guidance under ASU 220, Comprehensive Income, follows ASUs 2011-12 and 2011-05 and finalizes the reporting requirements for reclassifications out of AOCI. Companies must present reclassifications by component when reporting changes in AOCI. Items reclassified in their entirety out of AOCI to net income must have the effect of the reclassification disclosed according to the respective income statement line item. Items not reclassified in their entirety must be cross-referenced to other disclosures in the footnotes. The entire reclassification information must be disclosed in one location, either on the face of the financial statements by income statement line item, or in a footnote. We have elected to present the information in a footnote and include the comparison to the previous year.

Changes in AOCI by component are as follows:

(In thousands)	Net unrealized gains (losses) on investment securities				Net unrealized gains (losses) on derivative instruments				Pension and post-retirement			Total
2013:

Balance at December 31, 2012		$	(397,616	)		$	1,794		$	(50,335	)	$	(446,157	)

Other comprehensive income (loss) before reclassifications, net of tax		127,648				(431		)	20,577			147,794
Amounts reclassified from AOCI, net of tax		102,936				(1,580		)	4,906			106,262
Other comprehensive income (loss)		230,584				(2,011		)	25,483			254,056
Balance at December 31, 2013		$	(167,032	)		$	(217	)	$	(24,852	)	$	(192,101	)

Income tax expense (benefit) included in other comprehensive income (loss)		$	144,343			$	(861	)	$	16,625		$	160,107

2012:

Balance at December 31, 2011		$	(546,763	)		$	9,404		$	(54,725	)	$	(592,084	)

Other comprehensive income (loss) before reclassifications, net of tax		90,924				232			(976		)	90,180
Amounts reclassified from AOCI, net of tax		58,223				(7,842		)	5,366			55,747
Other comprehensive income (loss)		149,147				(7,610		)	4,390			145,927
Balance at December 31, 2012		$	(397,616	)		$	1,794		$	(50,335	)	$	(446,157	)

Income tax expense (benefit) included in other comprehensive income (loss)		$	93,213			$	(5,063	)	$	2,870		$	91,020



										Statement of income (SI) Balance sheet (BS)
(In thousands)	Amounts reclassified from AOCI ¹
Details about AOCI components	2013			2012			2011				Affected line item

Net realized gains (losses) on investment securities	$	(2,898	)	$	19,544		$	11,868		SI	Fixed income securities gains (losses), net
Income tax expense (benefit)	(1,123		)	7,340			4,476
	(1,775		)	12,204			7,392

Net unrealized losses on investment securities	(164,732		)	(103,720		)	(32,914		)	SI	Net impairment losses on investment securities
Income tax benefit	(64,829		)	(40,156		)	(12,670		)
	(99,903		)	(63,564		)	(20,244		)

Accretion of securities with noncredit-related impairment losses not expected to be sold	(2,106		)	(11,351		)	(665		)	BS	Investment securities, held-to-maturity
Deferred income taxes	848			4,488			255			BS	Other assets
	$	(102,936	)	$	(58,223	)	$	(13,262	)

Net unrealized gains on derivative instruments	$	2,647		$	13,062		$	37,273		SI	Interest and fees on loans
Income tax expense	1,067			5,220			15,019
	$	1,580		$	7,842		$	22,254

Amortization of net actuarial loss	$	(8,127	)	$	(8,983	)	$	(5,149	)	SI	Salaries and employee benefits
Amortization of prior service credit	27			120			120			SI	Salaries and employee benefits
Income tax benefit	(3,194		)	(3,497		)	(1,979		)
	$	(4,906	)	$	(5,366	)	$	(3,050	)

¹ Negative reclassification amounts indicate decreases to earnings in the statement of income and increases to balance sheet assets. The opposite applies to positive reclassification amounts.

Deferred Compensation

Deferred compensation consists of invested assets, including the Company’s common stock, which are held in rabbi trusts for certain employees and directors. At both December 31, 2013 and 2012, the cost of the common stock included in retained earnings was approximately $15.0 million. We consolidate the fair value of invested assets of the trusts along with the total obligations and include them in other assets and other liabilities, respectively, in the balance sheet. At December 31, 2013 and 2012, total invested assets were approximately $83.7 million and $72.2 million and total obligations were approximately $98.7 million and $87.2 million, respectively.

Noncontrolling Interests

On June 3, 2013, we removed the entire noncontrolling interest amount of approximately $4.8 million at that time from the Company’s balance sheet following settlement with the remaining owner.