Stockholders' Equity

3 Months Ended

Mar. 31, 2020


NOTE 6. STOCKHOLDERS' EQUITY

Preferred Stock and Common Stock

People’s United is authorized to issue (i) 50.0 million shares of preferred stock, par value of $0.01 per share, of which 10.0 million shares were outstanding at both March 31, 2020 and December 31, 2019, and (ii) 1.95 billion shares of common stock, par value of $0.01 per share, of which 533.5 million shares and 532.8 million shares were issued at March 31, 2020 and December 31, 2019, respectively.

Treasury Stock

Treasury stock includes (i) common stock repurchased by People’s United, either directly or through agents, in the open market at prices and terms satisfactory to management in connection with stock repurchases authorized by its Board of Directors (106.4 million shares and 86.6 million shares at March 31, 2020 and December 31, 2019, respectively) and (ii) common stock purchased in the open market by a trustee with funds provided by People’s United and originally intended for awards under the People’s United Financial, Inc. 2007 Recognition and Retention Plan (the “RRP”) (2.6 million shares at both March 31, 2020 and December 31, 2019). Following shareholder approval of the People’s United Financial, Inc. 2014 Long-Term Incentive Plan in 2014, no new awards may be granted under the RRP.

In June 2019, the Company’s Board of Directors authorized the repurchase of up to 20.0 million shares of People’s United’s outstanding common stock. Such shares may be repurchased, either directly or through agents, in the open market at prices and terms satisfactory to management. During the first quarter of 2020, the Company completed the repurchase authorization by purchasing 19.8 million shares of People's United common stock at a total cost of $304.4 million.

Comprehensive Income

Comprehensive income represents the sum of net income and items of “other comprehensive income or loss,” including (on an after-tax basis): (i) net actuarial gains and losses, prior service credits and costs, and transition assets and obligations related to People’s United’s pension and other postretirement plans; (ii) net unrealized gains and losses on debt securities available-for-sale; (iii) net unrealized gains and losses on debt securities transferred to held-to-maturity; and (iv) net unrealized gains and losses on derivatives accounted for as cash flow hedges. People’s United’s total comprehensive income for the three months ended March 31, 2020 and 2019 is reported in the Consolidated Statements of Comprehensive Income.

The following is a summary of the changes in the components of accumulated other comprehensive income loss ("AOCL"), which are included in People’s United’s stockholders’ equity on an after-tax basis:


(in millions)	Pension and Other Postretirement Plans		Net Unrealized Gains (Losses) on Debt Securities Available-for-Sale		Net Unrealized Gains (Losses) on Debt Securities Transferred to Held-to-Maturity		Net Unrealized Gains (Losses) on Derivatives Accounted for as Cash Flow Hedges		Total AOCL
Balance at December 31, 2019	$	(176.2)	$	20.8	$	(11.8)	$	0.3	$	(166.9)
Other comprehensive income before reclassifications	—		71.6		—		—		71.6
Amounts reclassified from AOCL (1)	1.6		—		1.0		—		2.6
Current period other comprehensive income	1.6		71.6		1.0		—		74.2

Balance at March 31, 2020	$	(174.6)	$	92.4	$	(10.8)	$	0.3	$	(92.7)


(in millions)	Pension and Other Postretirement Plans		Net Unrealized Gains (Losses) on Debt Securities Available-for-Sale		Net Unrealized Gains (Losses) on Debt Securities Transferred to Held-to-Maturity		Net Unrealized Gains (Losses) on Derivatives Accounted for as Cash Flow Hedges		Total AOCL
Balance at December 31, 2018	$	(192.5)	$	(47.0)	$	(15.3)	$	(2.0)	$	(256.8)
Other comprehensive income before reclassifications	—		29.0		—		0.5		29.5
Amounts reclassified from AOCL (1)	1.8		—		0.6		0.3		2.7
Current period other comprehensive income	1.8		29.0		0.6		0.8		32.2

Balance at March 31, 2019	$	(190.7)	$	(18.0)	$	(14.7)	$	(1.2)	$	(224.6)

(1)See the following table for details about these reclassifications.

The following is a summary of the amounts reclassified from AOCL:


	Amounts Reclassified from AOCL					Affected Line Item in the Statement Where Net Income is Presented
	Three Months Ended March 31,
(in millions)	2020		2019
Details about components of AOCL:
Amortization of pension and other postretirement plans items:
Net actuarial loss	$	(2.0)	$	(1.3)	(1)

	(2.0)		(1.3)		Income before income tax expense
	0.4		(0.5)		Income tax expense
	(1.6)		(1.8)		Net income
Reclassification adjustment for net realized gains (losses) on debt securities available-for-sale	—		—		Income before income tax expense (2)
	—		—		Income tax expense
	—		—		Net income
Amortization of unrealized losses on debt securities transferred to held-to-maturity	(1.3)		(0.8)		Income before income tax expense (3)
	0.3		0.2		Income tax expense
	(1.0)		(0.6)		Net income
Amortization of unrealized gains and losses on cash flow hedges:
Interest rate swaps	—		(0.4)		(5)
Interest rate locks (4)	—		—		(5)
	—		(0.4)		Income before income tax expense
	—		0.1		Income tax expense
	—		(0.3)		Net income
Total reclassifications for the period	$	(2.6)	$	(2.7)

(1)Included in the computation of net periodic benefit income (expense) reflected in other non-interest expense (see Note 9 for additional details).

(2)Included in other non-interest income.

(3)Included in interest and dividend income - securities.

(4)Amount reclassified from AOCL totaled less than $0.1 million for both periods

(5)Included in interest expense - notes and debentures.