Stockholders' Equity and EPS

12 Months Ended

Dec. 31, 2019

Equity and Earnings Per Share [Abstract]

Accumulated Other Comprehensive Income

The following table summarizes the items reclassified out of accumulated other comprehensive income into the Consolidated Statements of Income for 2019, 2018 and 2017:



		Year ended December 31,
(Dollars in thousands)	Income Statement Location	2019			2018			2017
Reclassification adjustment for losses on available-for-sale securities included in net income	Gains on investment securities, net	$	3,905		$	740		$	5,189
Related tax benefit	Income tax expense	(1,087		)	(205		)	(2,098		)
Reclassification adjustment for losses on cash flow hedges included in net income	Net interest income	5,358			—			—
Related tax benefit	Income tax expense	(1,489		)	—			—
Total reclassification adjustment for losses included in net income, net of tax		$	6,687		$	535		$	3,091

The table below summarizes the activity relating to net gains and losses on our cash flow hedges included in accumulated other comprehensive income for 2019, 2018 and 2017. Over the next 12 months, we expect that approximately $3.2 million in accumulated other comprehensive income ("AOCI") at December 31, 2019, related to our cash flow hedges will be reclassified out of AOCI and recognized in net income.



	Year ended December 31,
(Dollars in thousands)	2019			2018		2017
Balance, beginning of period, net of tax	$	—		$	—	$	—
Net decrease in fair value, net of tax	(5,999		)	—		—
Net realized loss reclassified to net income, net of tax	3,869			—		—
Balance, end of period, net of tax	$	(2,130	)	$	—	$	—

EPS

Basic EPS is the amount of earnings available to each share of common stock outstanding during the reporting period. Diluted EPS is the amount of earnings available to each share of common stock outstanding during the reporting period adjusted to include the effect of potentially dilutive common shares. Potentially dilutive common shares include incremental shares issuable for stock option and restricted stock unit awards outstanding under our 2006 Equity Incentive Plan and our ESPP. Potentially dilutive common shares are excluded from the computation of dilutive EPS in periods in which the effect would be antidilutive. The following is a reconciliation of basic EPS to diluted EPS for 2019, 2018 and 2017:



	Year ended December 31,
(Dollars and shares in thousands, except per share amounts)	2019		2018		2017
Numerator:
Net income available to common stockholders	$	1,136,856	$	973,840	$	490,506
Denominator:
Weighted average common shares outstanding—basic	51,915		53,078		52,588
Weighted average effect of dilutive securities:
Stock options and ESPP	227		377		385
Restricted stock units	169		317		333
Weighted average common shares outstanding—diluted	52,311		53,772		53,306
Earnings per common share:
Basic	$	21.90	$	18.35	$	9.33
Diluted	21.73		18.11		9.20

The following table summarizes the weighted average common shares excluded from the diluted EPS calculation due to the antidilutive effect for 2019, 2018 and 2017:



	Year ended December 31,
(Shares in thousands)	2019	2018	2017
Stock options	167	59	73
Restricted stock units	250	85	1
Total	417	144	74

Stock Repurchase Programs

On November 13, 2018, the Company announced the Stock Repurchase Program to repurchase up to $500 million of our outstanding common stock. The program completed on July 1, 2019, after we repurchased 2.2 million shares of common stock for $499.6 million under the Stock Repurchase Program.

On October 24, 2019, our Board of Directors authorized a new stock repurchase program that enables us to repurchase up to $350 million of our outstanding common stock. This program expires on October 29, 2020. As of December 31, 2019, we have not repurchased any shares of our common stock under the new stock repurchase program.

Preferred Stock

On December 9, 2019, the Company issued depositary shares representing an ownership interest in 350,000 shares of Series A Preferred Stock with $0.001 par value and liquidation preference of $1,000 per share, or $25 per depositary share. All preferred shares were issued in the form of depositary shares, with each depositary share representing a 1/40th ownership interest in a share of the preferred stock. The Series A Preferred Stock has no stated maturity and is not subject to any sinking fund or other obligation of the Company. Dividends are approved by the Board of Directors and, if declared, are payable quarterly, in arrears, at a rate per annum equal to 5.25 percent. The Series A Preferred Stock is redeemable at the Company’s option, in whole or in part, on or after February 15, 2025. Prior to February 15, 2025, the Series A Preferred Stock is redeemable at the Company’s option, in whole and not in part, following any change in laws or regulations that would not allow the Company to treat the full

liquidation value of the Series A Preferred Stock as Tier 1 capital for purposes of the capital adequacy guidelines of the FRB. The redemption amount is computed at the per share liquidation preference plus any declared but unpaid dividends. Redemptions are subject to certain regulatory provisions, including approval of FRB.

As of December 31, 2019, there were 350,000 shares issued and outstanding of Series A Preferred Shares, which had a carrying value of $340.1 million and liquidation preference of $350.0 million.

The following table summarizes our preferred stock at December 31, 2019:



Series	Description	Amount outstanding (in millions)		Carrying value (in millions)		Shares issued and outstanding	Par Value		Ownership interest per depository share	Liquidation preference per depository share		2019 dividends paid per depository share
Series A	5.250% Fixed-Rate Non-Cumulative Perpetual Preferred Stock	$	350	$	340.1	350,000	$	0.001	1/40th	$	25	$	—