Stockholders' Equity and EPS

3 Months Ended

Mar. 31, 2021

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 (unaudited) for the three months ended March 31, 2021 and 2020:


		Three months ended March 31,
(Dollars in thousands)	Income Statement Location	2021		2020
Reclassification adjustment for gains on available-for-sale securities included in net income	Gains on investment securities, net	$	—	$	(61,165)
Related tax expense	Income tax expense	—		16,953
Reclassification adjustment for gains on cash flow hedges included in net income	Net interest income	(15,657)		(2,089)
Related tax expense	Income tax expense	4,352		579
Total reclassification adjustment for gains included in net income, net of tax		$	(11,305)	$	(45,722)

The table below summarizes the activity relating to net gains and losses on our cash flow hedges included in accumulated other comprehensive income for the three months ended March 31, 2021 and 2020. Refer to Note 10 — “Derivative Financial Instruments” for additional information regarding the termination of our cash flow hedges during the quarter ended March 31, 2020. Over the next 12 months, we expect that approximately $62.5 million in accumulated other comprehensive income ("AOCI") at March 31, 2021, related to unrealized gains will be reclassified out of AOCI and recognized in net income.


	Three months ended March 31,
(Dollars in thousands)	2021		2020
Balance, beginning of period, net of tax	$	129,273	$	(2,130)
Net increase in fair value, net of tax	—		167,639
Net realized gain reclassified to net income, net of tax	(11,305)		(1,510)
Balance, end of period, net of tax	$	117,968	$	163,999

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, 2021 and 2020:


	Three months ended March 31,
(Dollars and shares in thousands, except per share amounts)	2021		2020
Numerator:
Net income available to common stockholders	$	532,220	$	132,253
Denominator:
Weighted average common shares outstanding—basic	52,180		51,565
Weighted average effect of dilutive securities:
Stock options and ESPP	294		217
Restricted stock units and awards	602		162
Weighted average common shares outstanding—diluted	53,076		51,944
Earnings per common share:
Basic	$	10.20	$	2.56
Diluted	10.03		2.55

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, 2021 and 2020:


	Three months ended March 31,
(Shares in thousands)	2021	2020
Stock options	—	206
Restricted stock units	18	119
Total	18	325

Common Stock

On March 22, 2021, to support the continued growth of our balance sheet, we issued and sold 2,000,000 shares of common stock at a price of $500.00 per share. We received net proceeds of $972.1 million after deducting underwriting discounts and commissions.

On April 14, 2021, the Company issued and sold additional shares of common stock. Refer to Note 19—“Subsequent Events” for additional information.

Preferred Stock

On December 9, 2019, the Company issued 5.25% Non-Cumulative Perpetual Series A Preferred Stock (''Series A Preferred Stock''). The public offering consists of 14,000,000 depositary shares, each representing a 1/40th ownership interest in a shares of the Series A preferred stock with $0.001 par value and liquidation preference of $1,000 per share, or $25 per depositary share. The Series A Preferred Stock is redeemable at the Company’s option, subject to all applicable regulatory approvals, on or after February 15, 2025.

On February 2, 2021, the Company issued 4.10% Non-Cumulative Perpetual Series B Preferred Stock (''Series B Preferred Stock''). The public offering consists of 750,000 depositary shares, each representing a 1/100th ownership interest in shares of Series B Preferred Stock with $0.001 par value and liquidation preferences of $100,000 per share, or $1,000 per depositary share. Dividends, if approved and declared by the Board of Directors, are payable quarterly, in arrears, at a rate per annum equal to (i) 4.10 percent from the original issue date to, but excluding, February 15, 2031 and (ii) for the February 15, 2031 dividend date and during each subsequent ten year period, the ten-year treasury rate (calculated three business days prior to each reset date as the five day average of the yields on actively traded U.S. treasury securities adjusted to constant maturity, for ten-year maturities) plus 3.064 percent.

As of March 31, 2021, there were 350,000 shares issued and outstanding of Series A Preferred Stock and 7,500 shares issued and outstanding of Series B Preferred Stock, which had a carrying value of $340.1 million and $739.2 million, respectively, and liquidation preferences of $350.0 million and $750.0 million, respectively.

The following table summarizes our preferred stock at March 31, 2021:


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		2021 dividends paid per depositary share
Series A	5.250% Fixed-Rate Non-Cumulative Perpetual Preferred Stock	$	350	$	340.1	350,000	$	0.001	1/40th	$	25	$	0.33
Series B	4.100% Fixed-Rate Non-Cumulative Perpetual Preferred Stock	750		739.2		7,500	0.001		1/100th	1,000		—