Stockholders' Equity

9 Months Ended

Sep. 30, 2021

Stockholders Equity Note [Abstract]

Stockholders' Equity

7. Stockholders’ Equity

Common Shares Outstanding

Common shares outstanding excludes treasury shares totaling 4.6 million at September 30, 2021 and 4.5 million at December 31, 2020, with a first-in-first-out cost basis of $151.3 million and $150.7 million at September 30, 2021 and December 31, 2020, respectively. Shares outstanding also excludes unvested restricted share awards totaling 1.6 million and 1.7 million at September 30, 2021 and December 31, 2020, respectively.

Stock Buyback Program

On April 22, 2021, the Company’s board of directors approved a stock buyback program whereby the Company is authorized to repurchase up to 4.3 million shares of its common stock through the program’s expiration date of December 31, 2022. The program allows the Company to repurchase its common shares in the open market, by block purchase, through accelerated share repurchase programs, in privately negotiated transactions, or otherwise, in one or more transactions. The Company is not obligated to purchase any shares under this program, and the board of directors has the ability to terminate or amend the program at any time prior to the expiration date. During the third quarter of 2021, the Company repurchased 56,349 shares of its common stock at an average cost of $44.52 per share, inclusive of commissions.

Prior to its expiration date of December 31, 2020, the Company had in place a stock buyback program that authorized the repurchase of up to 5.5 million shares of its common stock. The program, as amended, allowed the Company to repurchase its common shares on the open market, by block purchase, through accelerated share repurchase programs, in privately negotiated transactions, or as otherwise determined by the Company, in one or more transactions. The Company was not obligated to purchase any shares under this program, and the board of directors had the ability to terminate or amend the program at any time prior to the expiration date. In total, the Company repurchased 4.9 million of the 5.5 million authorized shares under this buyback program at an average cost of $37.65 per share, inclusive of commissions.

The Company was party to an accelerated share repurchase (“ASR”) agreement with Morgan Stanley & Co. LLC whereby the Company made a $185 million payment to Morgan Stanley and received from Morgan Stanley an initial delivery of 3,611,870 shares

of the Company’s common stock, which represented 75% of the estimated total number of shares to be repurchased, based on the closing price of the Company’s common stock on October 18, 2019. Final settlement of the ASR agreement occurred on March 18, 2020. Pursuant to the terms of the settlement, the Company received cash of approximately $12.1 million and a final delivery of 1,001,472 shares of its common stock.

In January 2020, the Company repurchased 315,851 shares of its common stock at a cost of $40.26 in a privately negotiated transaction.

Accumulated Other Comprehensive Income (Loss)

The components of Accumulated Other Comprehensive Income (Loss) and changes in those components are presented in the following table.

	Available for Sale Securities			HTM Securities Transferred from AFS			Employee Benefit Plans			Cash Flow Hedges			Equity Method Investment			Total
(in thousands)
Balance, December 31, 2019	$	28,950		$	639		$	(101,278	)	$	17,399		$	(434	)	$	(54,724	)
Net change in unrealized gain or loss		176,009			—			—			46,180			(4,935	)		217,254
Reclassification of net income or loss realized and included in earnings		—			—			4,656			(11,249	)		—			(6,593	)
Valuation adjustment to employee benefit plans		—			—			(10,251	)		—			—			(10,251	)
Amortization of unrealized net gain or loss on securities transferred to HTM		—			(378	)		—			—			—			(378	)
Income tax expense (benefit)		39,817			(85	)		(1,265	)		7,903			—			46,370
Balance, September 30, 2020	$	165,142		$	346		$	(105,608	)	$	44,427		$	(5,369	)	$	98,938
Balance, December 31, 2020	$	171,224		$	276		$	(125,573	)	$	39,511		$	(5,369	)	$	80,069
Net change in unrealized gain or loss		(144,715	)		—			—			353			438			(143,924	)
Reclassification of net income or loss realized and included in earnings		2,166			—			3,970			(19,941	)		4,468			(9,337	)
Valuation adjustments to pension plan attributable to VERIP and curtailment		—			—			59,606			—			—			59,606
Other valuation adjustments to employee benefit plans		—			—			(10,651	)		—			—			(10,651	)
Amortization of unrealized net gain or loss on securities transferred to HTM		—			(134	)		—			—			—			(134	)
Income tax expense (benefit)		(31,952	)		(30	)		11,783			(4,370	)		—			(24,569	)
Balance, September 30, 2021	$	60,627		$	172		$	(84,431	)	$	24,293		$	(463	)	$	198

Accumulated Other Comprehensive Income or Loss (“AOCI”) is reported as a component of stockholders’ equity. AOCI can include, among other items, unrealized holding gains and losses on securities available for sale (“AFS”), including the Company’s share of unrealized gains and losses reported by a partnership accounted for under the equity method, gains and losses associated with pension or other post-retirement benefits that are not recognized immediately as a component of net periodic benefit cost, and gains and losses on derivative instruments that are designated as, and qualify as, cash flow hedges. Net unrealized gains and losses on AFS securities reclassified as securities held to maturity (“HTM”) also continue to be reported as a component of AOCI and will be amortized over the estimated remaining life of the securities as an adjustment to interest income. Subject to certain thresholds, unrealized losses on employee benefit plans will be reclassified into income as pension and post-retirement costs are recognized over the remaining service period of plan participants. Accumulated gains or losses on cash flow hedges of variable rate loans described in Note 6 will be reclassified into income over the life of the hedge. Gains and losses within AOCI are net of deferred income taxes, where applicable.  

The following table shows the line items of the consolidated statements of income affected by amounts reclassified from AOCI.

	Nine Months Ended
Amount reclassified from AOCI (a)	September 30,						Affected line item on
(in thousands)	2021			2020			the statement of income
Loss on sale of AFS securities	$	(2,166	)	$	—		Noninterest income
Tax effect		487			—		Income taxes
Net of tax		(1,679	)		—		Net income
Amortization of unrealized net gain on securities transferred to HTM		134			378		Interest income
Tax effect		(30	)		(85	)	Income taxes
Net of tax		104			293		Net income
Amortization of defined benefit pension and post-retirement items		(3,970	)		(4,656	)	Other noninterest expense (b)
Tax effect		884			1,053		Income taxes
Net of tax		(3,086	)		(3,603	)	Net income
Reclassification of unrealized gain on cash flow hedges		18,771			12,602		Interest income
Tax effect		(4,188	)		(2,851	)	Income taxes
Net of tax		14,583			9,751		Net income
Amortization of gain (loss) on terminated cash flow hedges		1,170			(1,353	)	Interest income
Tax effect		(261	)		306		Income taxes
Net of tax		909			(1,047	)	Net income
Reclassification of unrealized loss on equity method investment		(4,468	)		—		Noninterest income
Tax effect		—			—		Income taxes
Net of tax		(4,468	)		—		Net income
Total reclassifications, net of tax	$	6,363		$	5,394		Net income

(a) Amounts in parentheses indicate reduction in net income.

(b) These AOCI components are included in the computation of net periodic pension and post-retirement cost that is reported with other noninterest expense (see Note 11 – Retirement Plans for additional details).

On March 27, 2020, the Office of the Comptroller of the Currency (“OCC”), the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation issued an interim final rule that provides an option to delay the estimated impact on regulatory capital stemming from the implementation of CECL for a transition period of five years. The five-year rule provides a full delay of the estimated impact of CECL on regulatory capital transition (0%) for the first two years, followed by a three-year transition (25% of the impact included in 2022, 50% in 2023, 75% in 2024 and 100% thereafter). The two-year delay includes the full impact of day one CECL plus the estimated impact of current CECL activity calculated quarterly as 25% of the current ACL over the day one balance (“modified transition amount”). The modified transition amount was and will be recalculated each quarter in 2020 and 2021, with the December 31, 2021 impact carrying through the remaining three years of the transition. The Company elected the five-year transition period option upon issuance of the interim final rule.