Shareholders' Equity

9 Months Ended

Sep. 30, 2021

Equity [Abstract]

Shareholders' Equity

Shareholders' Equity

Preferred Stock

    The following table summarizes selected terms of each of the series of the preferred stock issued and outstanding as of September 30, 2021:

Preferred Stock(1):	Issuance Date	Depositary Shares Issued	Amount outstanding (in millions)		Ownership Interest Per Depositary Share	Liquidation Preference Per Share		Liquidation Preference Per Depositary Share		Per Annum Dividend Rate	Dividend Payment Frequency	Carrying Value as of September 30, 2021 (In millions)		Redemption Date(2)
Series D	February 2014	30,000,000	$	750	1/4,000th	$	100,000	$	25	5.90% to but excluding March 15, 2024, then a floating rate equal to the three-month LIBOR plus 3.108%	Quarterly	$	742	March 15, 2024
Series F(3)	May 2015	250,000	250		1/100th	100,000		1,000		5.25% to but excluding September 15, 2020, then a floating rate equal to the three-month LIBOR plus 3.597%, or 3.7130% effective September 15, 2021	Quarterly	247		September 15, 2020
Series G	April 2016	20,000,000	500		1/4,000th	100,000		25		5.35% to but excluding March 15, 2026, then a floating rate equal to the three-month LIBOR plus 3.709%	Quarterly	493		March 15, 2026
Series H	September 2018	500,000	500		1/100th	100,000		1,000		5.625% to but excluding December 15, 2023, then a floating rate equal to the three-month LIBOR plus 2.539%	Semi-annually	494		December 15, 2023

(1) The preferred stock and corresponding depositary shares may be redeemed at our option in whole, but not in part, prior to the redemption date upon the occurrence of a regulatory capital treatment event, as defined in the certificate of designation, at a redemption price equal to the liquidation price per share and liquidation price per depositary share plus any declared and unpaid dividends, without accumulation of any undeclared dividends.

(2) On the redemption date, or any dividend payment date thereafter, the preferred stock and corresponding depositary shares may be redeemed by us, in whole or in part, at the liquidation price per share and liquidation price per depositary share plus any declared and unpaid dividends, without accumulation of any undeclared dividends.

(3) Series F preferred stock is redeemable on September 15, 2020 and on each succeeding dividend payment date. We did not elect redemption on September 15, 2020, December 15, 2020, June 15, 2021 or September 15, 2021.

On March 15, 2021, we redeemed an aggregate of $500 million, or 5,000 of the 7,500 outstanding shares of our non-cumulative perpetual preferred stock, Series F, for cash at a redemption price of $100,000 per share (equivalent to $1,000 per depositary share) plus all declared and unpaid dividends.

The following table presents the dividends declared for each of the series of preferred stock issued and outstanding for the periods indicated:

	Three Months Ended September 30,
	2021						2020
(Dollars in millions, except per share amounts)	Dividends Declared per Share		Dividends Declared per Depositary Share		Total		Dividends Declared per Share		Dividends Declared per Depositary Share		Total
Preferred Stock:
Series D	$	1,475	$	0.37	$	11	$	1,475	$	0.37	$	11
Series F	950		9.50		2		2,625		26.25		20
Series G	1,338		0.33		7		1,338		0.33		7
Series H	—		—		—		—		—		—
Total					$	20					$	38
	Nine Months Ended September 30,
	2021						2020
(Dollars in millions, except per share amounts)	Dividends Declared per Share		Dividends Declared per Depositary Share		Total		Dividends Declared per Share		Dividends Declared per Depositary Share		Total
Preferred Stock:
Series C	$	—	$	—	$	—	$	1,313	$	0.33	$	6
Series D	4,425		1.11		33		4,425		1.11		33
Series F	2,869		28.69		11		5,250		52.50		40
Series G	4,014		0.99		21		4,014		0.99		21
Series H	2,813		28.13		14		2,813		28.13		14
Total					$	79					$	114

In October 2021, we declared dividends on our series D, F, G and H preferred stock of approximately $1,475, $939, $1,338 and $2,813, respectively, per share, or approximately $0.37, $9.39, $0.33 and $28.13, respectively, per depositary share. These dividends total approximately $11 million, $2 million, $7 million and $14 million on our series D, F, G and H preferred stock, respectively, which will be paid in December 2021.

Common Stock

In September 2021, we completed a public offering of approximately 21.7 million shares of our common stock. The offering price was $87.60 per share and net proceeds totaled approximately $1.9 billion. We expect to use these net proceeds to finance our proposed acquisition of the BBH Investor Services business.

In June 2019, our Board approved a common share repurchase program authorizing the repurchase of up to $2.0 billion of our common stock from July 1, 2019 through June 30, 2020 (the 2019 Program). We repurchased $500 million of our common stock in each of the third and fourth quarters of 2019 and the first quarter of 2020 under the 2019 Program.

On March 16, 2020, we, along with the other U.S. G-SIBs, suspended common share repurchases and maintained this suspension through the fourth quarter of 2020 in response to the COVID-19 pandemic. This suspension was consistent with limitations imposed by the Federal Reserve beginning in the second quarter of 2020. As a result, we had no repurchases of our common stock in the second, third or fourth quarters of 2020.

In December 2020, the Federal Reserve issued results of 2020 resubmission stress tests and authorized us to continue to pay common stock dividends at current levels and to resume repurchasing common shares in the first quarter of 2021. In January 2021, our Board authorized a share repurchase program for the repurchase of up to $475 million of our common stock through March 31, 2021. In April 2021, our Board authorized a share repurchase program for the repurchase of up to $425 million of our common stock through June 30, 2021, consistent with the limit set by the Federal Reserve. In July 2021, our Board authorized a share repurchase program for the repurchase of up to $3.0 billion of our common stock through the end of 2022.

In connection with our proposed acquisition of the BBH Investor Services business, we did not purchase any common stock during the third quarter of 2021 under the common share repurchase plan approved by our Board in July 2021, and we do not intend to repurchase any common stock during the fourth quarter of 2021 and the first quarter of 2022. We intend to resume our common share repurchases during the second quarter of 2022.

The tables below present the activity under our common share repurchase program for the periods indicated:

Three Months Ended September 30, 2021					Nine Months Ended September 30, 2021
Shares Acquired (In millions)	Average Cost per Share		Total Acquired (In millions)		Shares Acquired (In millions)	Average Cost per Share		Total Acquired (In millions)
—	$	—	$	—	11.2	$	80.00	$	900

	Three Months Ended September 30, 2020					Nine Months Ended September 30, 2020
	Shares Acquired (In millions)	Average Cost per Share		Total Acquired (In millions)		Shares Acquired (In millions)	Average Cost per Share		Total Acquired (In millions)
2019 Program	—	$	—	$	—	6.5	$	77.35	$	500

The table below presents the dividends declared on common stock for the periods indicated:

	Three Months Ended September 30,
	2021				2020
	Dividends Declared per Share		Total (In millions)		Dividends Declared per Share		Total (In millions)
Common Stock	$	0.57	$	209	$	0.52	$	184
	Nine Months Ended September 30,
	2021				2020
	Dividends Declared per Share		Total (In millions)		Dividends Declared per Share		Total (In millions)
Common Stock	$	1.61	$	570	$	1.56	$	550

Accumulated Other Comprehensive Income (Loss)

The following table presents the after-tax components of AOCI for the periods indicated:

	Nine Months Ended September 30,
(In millions)	2021		2020
Net unrealized gains (losses) on cash flow hedges	$	41	$	82
Net unrealized gains (losses) on available-for-sale securities portfolio	353		976
Net unrealized gains (losses) related to reclassified available-for-sale securities	(39)		(68)
Net unrealized gains (losses) on available-for-sale securities	314		908
Net unrealized (losses) on available-for-sale securities designated in fair value hedges	(24)		(36)
Net unrealized gains (losses) on hedges of net investments in non-U.S. subsidiaries	18		(54)
Other-than-temporary impairment on held-to-maturity securities related to factors other than credit	(2)		(2)
Net unrealized (losses) on retirement plans	(166)		(172)
Foreign currency translation	(863)		(837)
Total	$	(682)	$	(111)

The following table presents changes in AOCI by component, net of related taxes, for the periods indicated:

(In millions)	Net Unrealized Gains (Losses) on Cash Flow Hedges		Net Unrealized Gains (Losses) on Available-for-Sale Securities		Net Unrealized Gains (Losses) on Hedges of Net Investments in Non-U.S. Subsidiaries		Other-Than-Temporary Impairment on Held-to-Maturity Securities		Net Unrealized Losses on Retirement Plans		Foreign Currency Translation		Total
Balance as of December 31, 2020	$	57	$	848	$	(204)	$	(2)	$	(178)	$	(334)	$	187
Other comprehensive income (loss) before reclassifications	35		(558)		222		—		—		(529)		(830)
Amounts reclassified into (out of) accumulated other comprehensive loss	(51)		—		—		—		12		—		(39)
Other comprehensive income (loss)	(16)		(558)		222		—		12		(529)		(869)
Balance as of September 30, 2021	$	41	$	290	$	18	$	(2)	$	(166)	$	(863)	$	(682)

(In millions)	Net Unrealized Gains (Losses) on Cash Flow Hedges		Net Unrealized Gains (Losses) on Available-for-Sale Securities		Net Unrealized Gains (Losses) on Hedges of Net Investments in Non-U.S. Subsidiaries		Other-Than-Temporary Impairment on Held-to-Maturity Securities		Net Unrealized Losses on Retirement Plans		Foreign Currency Translation		Total
Balance as of December 31, 2019	$	(70)	$	409	$	46	$	(2)	$	(187)	$	(1,072)	$	(876)
Other comprehensive income (loss) before reclassifications	189		462		(100)		—		—		235		786
Amounts reclassified into (out of) accumulated other comprehensive loss	(37)		1		—		—		15		—		(21)
Other comprehensive income (loss)	152		463		(100)		—		15		235		765
Balance as of September 30, 2020	$	82	$	872	$	(54)	$	(2)	$	(172)	$	(837)	$	(111)

The following table presents after-tax reclassifications into earnings for the periods indicated:

	Three Months Ended September 30,
	2021		2020
(In millions)	Amounts Reclassified (into) out of Earnings				Affected Line Item in Consolidated Statement of Income
Cash flow hedges:
(Gain) reclassified from accumulated other comprehensive income into income, net of related taxes of $6 and $7, respectively	$	(18)	$	(17)	Net interest income reclassified from other comprehensive income
Retirement plans:
Amortization of actuarial losses, net of related taxes of $1 and $1, respectively	2		1		Compensation and employee benefits expenses
Total reclassifications into (out of) Accumulated other comprehensive loss	$	(16)	$	(16)
	Nine Months Ended September 30,
	2021		2020
(In millions)	Amounts Reclassified (into) out of Earnings				Affected Line Item in Consolidated Statement of Income
Available-for-sale securities:
Net realized gains (losses) from sales of available-for-sale securities, net of related taxes of $0 and $1, respectively	$	—	$	1	Net gains (losses) from sales of available-for-sale securities
Cash flow hedges:
(Gain) reclassified from accumulated other comprehensive income into income, net of related taxes of $19 and $14, respectively	(51)		(37)		Net interest income reclassified from other comprehensive income
Retirement plans:
Amortization of actuarial losses, net of related taxes of $5 and $5, respectively	12		15		Compensation and employee benefits expenses
Total reclassifications into (out of) Accumulated other comprehensive loss	$	(39)	$	(21)