Stockholders' Equity

9 Months Ended

Sep. 30, 2021

Equity [Abstract]

Stockholders' Equity

NOTE 9—STOCKHOLDERS’ EQUITY

Preferred Stock

The following table summarizes our preferred stock outstanding as of September 30, 2021 and December 31, 2020.

Table 9.1: Preferred Stock Outstanding(1)

			Redeemable by Issuer Beginning	Per Annum Dividend Rate	Dividend Frequency	Liquidation Preference per Share		Total Shares Outstanding as of September 30, 2021	Carrying Value (in millions)
Series	Description	Issuance Date							September 30, 2021		December 31, 2020
Series E(2)	Fixed-to-Floating Rate Non-Cumulative	May 14, 2015	June 1, 2020	5.550% through 5/31/2020; 3-mo. LIBOR + 380 bps thereafter	Semi-Annually through 5/31/2020; Quarterly thereafter	$	1,000	0	$	0	$	988
Series G	5.200% Non-Cumulative	July 29, 2016	December 1, 2021	5.200	Quarterly	1,000		600,000	583		583
Series H	6.000% Non-Cumulative	November 29, 2016	December 1, 2021	6.000	Quarterly	1,000		500,000	483		483
Series I	5.000% Non-Cumulative	September 11, 2019	December 1, 2024	5.000	Quarterly	1,000		1,500,000	1,462		1,462
Series J	4.800% Non-Cumulative	January 31, 2020	June 1, 2025	4.800	Quarterly	1,000		1,250,000	1,209		1,209
Series K	4.625% Non-Cumulative	September 17, 2020	December 1, 2025	4.625	Quarterly	1,000		125,000	122		122
Series L	4.375% Non-Cumulative	May 4, 2021	September 1, 2026	4.375	Quarterly	1,000		675,000	653		0
Series M	3.950% Fixed Rate Reset Non-Cumulative	June 10, 2021	September 1, 2026	3.950% through 8/31/2026; resets 9/1/2026 and every subsequent 5 year anniversary at 5-Year Treasury +3.157%	Quarterly	1,000		1,000,000	988		0
Series N	4.250% Non-Cumulative	July 29, 2021	September 1, 2026	4.250	Quarterly	1,000		425,000	412		0
Total									$	5,912	$	4,847

__________

(1)Except for Series E and Series M, ownership is held in the form of depositary shares, each representing a 1/40th interest in a share of fixed-rate non-cumulative perpetual preferred stock.

(2)On September 1, 2021, we redeemed all outstanding shares of our preferred stock Series E.

Accumulated Other Comprehensive Income

AOCI primarily consists of accumulated net unrealized gains or losses associated with securities available for sale, changes in fair value of derivatives in hedging relationships, and foreign currency translation adjustments.

The following table includes the AOCI impacts from the adoption of the CECL standard and the changes in AOCI by component for the three and nine months ended September 30, 2021 and 2020.

Table 9.2: AOCI

	Three Months Ended September 30, 2021
(Dollars in millions)	Securities Available for Sale		Hedging Relationships(1)		Foreign Currency Translation Adjustments(2)		Other		Total
AOCI as of June 30, 2021	$	1,089	$	730	$	(3)	$	(24)	$	1,792
Other comprehensive income (loss) before reclassifications	(206)		57		(27)		0		(176)
Amounts reclassified from AOCI into earnings	(2)		(252)		0		(2)		(256)
Other comprehensive income (loss), net of tax	(208)		(195)		(27)		(2)		(432)
AOCI as of September 30, 2021	$	881	$	535	$	(30)	$	(26)	$	1,360

	Nine Months Ended September 30, 2021
(Dollars in millions)	Securities Available for Sale		Hedging Relationships(1)		Foreign Currency Translation Adjustments(2)		Other		Total
AOCI as of December 31, 2020	$	2,186	$	1,362	$	(31)	$	(23)	$	3,494
Other comprehensive income (loss) before reclassifications	(1,300)		(88)		1		0		(1,387)
Amounts reclassified from AOCI into earnings	(5)		(739)		0		(3)		(747)
Other comprehensive income (loss), net of tax	(1,305)		(827)		1		(3)		(2,134)
AOCI as of September 30, 2021	$	881	$	535	$	(30)	$	(26)	$	1,360

	Three Months Ended September 30, 2020
(Dollars in millions)	Securities Available for Sale		Hedging Relationships(1)		Foreign Currency Translation Adjustments(2)		Other		Total
AOCI as of June 30, 2020	$	2,373	$	1,785	$	(151)	$	(26)	$	3,981
Other comprehensive income (loss) before reclassifications	20		(95)		28		0		(47)
Amounts reclassified from AOCI into earnings	(19)		(80)		0		(2)		(101)
Other comprehensive income (loss), net of tax	1		(175)		28		(2)		(148)
AOCI as of September 30, 2020	$	2,374	$	1,610	$	(123)	$	(28)	$	3,833

	Nine Months Ended September 30, 2020
(Dollars in millions)	Securities Available for Sale		Hedging Relationships(1)		Foreign Currency Translation Adjustments(2)		Other		Total
AOCI as of December 31, 2019	$	935	$	354	$	(107)	$	(26)	$	1,156
Cumulative effects from the adoption of the CECL standard	(8)		0		0		0		(8)
Other comprehensive income (loss) before reclassifications	1,466		1,540		(16)		0		2,990
Amounts reclassified from AOCI into earnings	(19)		(284)		0		(2)		(305)
Other comprehensive income (loss), net of tax	1,447		1,256		(16)		(2)		2,685
AOCI as of September 30, 2020	$	2,374	$	1,610	$	(123)	$	(28)	$	3,833

__________

(1)Includes amounts related to cash flow hedges as well as the excluded component of cross-currency swaps designated as fair value hedges.

(2)Includes other comprehensive gains of $66 million and $32 million for the three and nine months ended September 30, 2021, respectively, and other comprehensive loss of $75 million and gain of $59 million for the three and nine months ended September 30, 2020, respectively, from hedging instruments designated as net investment hedges.

The following table presents amounts reclassified from each component of AOCI to our consolidated statements of income for the three and nine months ended September 30, 2021 and 2020.

Table 9.3: Reclassifications from AOCI

(Dollars in millions)		Three Months Ended September 30,				Nine Months Ended September 30,
AOCI Components	Affected Income Statement Line Item	2021		2020		2021		2020
Securities available for sale:
	Non-interest income	$	2	$	25	$	6	$	25
	Income tax provision	0		6		1		6
	Net income	2		19		5		19
Hedging relationships:
Interest rate contracts:	Interest income	250		179		730		347
Foreign exchange contracts:	Interest income	0		1		1		10
	Interest expense	0		(1)		(2)		(3)
	Non-interest income	83		(73)		245		20
	Income from continuing operations before income taxes	333		106		974		374
	Income tax provision	81		26		235		90
	Net income	252		80		739		284
Other:
	Non-interest income and non-interest expense	3		2		4		2
	Income tax provision	1		0		1		0
	Net income	2		2		3		2
Total reclassifications		$	256	$	101	$	747	$	305

The table below summarizes other comprehensive income (loss) activity and the related tax impact for the three and nine months ended September 30, 2021 and 2020.

Table 9.4: Other Comprehensive Income (Loss)

	Three Months Ended September 30,
	2021						2020
(Dollars in millions)	Before Tax		Provision (Benefit)		After Tax		Before Tax		Provision (Benefit)		After Tax
Other comprehensive income (loss):
Net unrealized gains (losses) on securities available for sale	$	(270)	$	(62)	$	(208)	$	1	$	0	$	1
Net unrealized gains (losses) on hedging relationships	(255)		(60)		(195)		(231)		(56)		(175)
Foreign currency translation adjustments(1)	(6)		21		(27)		4		(24)		28
Other	(3)		(1)		(2)		(2)		0		(2)
Other comprehensive income (loss)	$	(534)	$	(102)	$	(432)	$	(228)	$	(80)	$	(148)

	Nine Months Ended September 30,
	2021						2020
(Dollars in millions)	Before Tax		Provision (Benefit)		After Tax		Before Tax		Provision (Benefit)		After Tax
Other comprehensive income (loss):
Net unrealized gains (losses) on securities available for sale	$	(1,716)	$	(411)	$	(1,305)	$	1,903	$	456	$	1,447
Net unrealized gains (losses) on hedging relationships	(1,089)		(262)		(827)		1,653		397		1,256
Foreign currency translation adjustments(1)	11		10		1		3		19		(16)
Other	(4)		(1)		(3)		(2)		0		(2)
Other comprehensive income (loss)	$	(2,798)	$	(664)	$	(2,134)	$	3,557	$	872	$	2,685

__________

(1)Includes the impact of hedging instruments designated as net investment hedges.