Stockholders' Equity and EPS

3 Months Ended

Mar. 31, 2022

Equity and Earnings Per Share [Abstract]

AOCI

The following table summarizes the items reclassified out of AOCI into the Consolidated Statements of Income (unaudited) for the three months ended March 31, 2022 and 2021:


		Three months ended March 31,
(Dollars in millions)	Income Statement Location	2022		2021
Reclassification adjustment for (gains) losses on AFS securities included in net income	Gains on investment securities, net	$	(49)	$	—
Related tax expense (benefit)	Income tax expense	14		—
Reclassification adjustment for (gains) losses on cash flow hedges included in net income	Net interest income	(15)		(16)
Related tax expense (benefit)	Income tax expense	4		4
Total reclassification adjustment for (gains) losses included in net income, net of tax		$	(46)	$	(12)

The table below summarizes the activity relating to net gains and losses on our cash flow hedges included in AOCI for the three months ended March 31, 2022 and 2021. Over the next 12 months, we expect that approximately $52 million in AOCI at March 31, 2022, related to unrealized gains will be reclassified out of AOCI and recognized in net income.


	Three months ended March 31,
(Dollars in millions)	2022		2021
Balance, beginning of period, net of tax	$	83	$	130

Net realized (gain) loss reclassified to net income, net of tax	(11)		(12)
Balance, end of period, net of tax	$	72	$	118

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 options 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 the three months ended March 31, 2022 and 2021:


	Three months ended March 31,
(Dollars in millions except per share amounts, shares in thousands)	2022		2021
Numerator:
Net income available to common stockholders	$	472	$	532
Denominator:
Weighted average common shares outstanding—basic	58,800		52,180
Weighted average effect of dilutive securities:
Stock options and ESPP	261		294
Restricted stock units and awards	538		602
Weighted average common shares outstanding—diluted	59,599		53,076
Earnings per common share:
Basic	$	8.03	$	10.20
Diluted	7.92		10.03

The following table summarizes the weighted-average common shares excluded from the diluted EPS calculation due to the antidilutive effect for the three months ended March 31, 2022 and 2021:


	Three months ended March 31,
(Shares in thousands)	2022	2021
Stock options	46	—
Restricted stock units	45	18
Total	91	18

Preferred Stock

The following table summarizes our preferred stock at March 31, 2022:


Series	Description	Amount outstanding (in millions)		Carrying value (in millions)		Shares issued and outstanding	Par Value		Ownership interest per depositary share	Liquidation preference per depositary share		2022 dividends paid per depositary share
Series A	5.250% Fixed-Rate Non-Cumulative Perpetual Preferred Stock	$	350	$	340	350,000	$	0.001	1/40th	$	25	$	0.33
Series B	4.100% Fixed-Rate Non-Cumulative Perpetual Preferred Stock	750		739		7,500	0.001		1/100th	1,000		10.25
Series C	4.000% Fixed-Rate Non-Cumulative Perpetual Preferred Stock	1,000		985		10,000	0.001		1/100th	1,000		10.00
Series D	4.250% Fixed-Rate Non-Cumulative Perpetual Preferred Stock	1,000		989		10,000	0.001		1/100th	1,000		12.63
Series E	4.700% Fixed-Rate Non-Cumulative Perpetual Preferred Stock	600		593		6,000	0.001		1/100th	1,000		13.97