Stockholders' Equity and Accumulated Other Comprehensive Income (Loss)

NOTE 15. SHAREHOLDERS' EQUITY AND ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table presents a summary of the non-cumulative perpetual preferred stock as of December 31:


													2020		2019
	Issuance Date	Earliest Redemption Date	Dividend Rate (1)			Liquidation Amount		Liquidation preference per Share		Liquidation preference per Depositary Share		Ownership Interest per Depositary Share	Carrying Amount		Carrying Amount
	(Dollars in millions)
Series A	11/1/2012	12/15/2017	6.375	%		$	500	$	1,000	$	25	1/40th	$	387	$	387
Series B	4/29/2014	9/15/2024	6.375	%	(2)	500		1,000		25		1/40th	433		433
Series C	4/30/2019	5/15/2029	5.700	%	(3)	500		1,000		25		1/40th	490		490
Series D	6/5/2020	9/15/2025	5.750	%	(4)	350		100,000		1,000		1/100th	346		—
						$	1,850						$	1,656	$	1,310

(1)Dividends on all series of preferred stock, if declared, accrue and are payable quarterly in arrears.

(2)Dividends, if declared, will be paid quarterly at an annual rate equal to (i) for each period beginning prior to September 15, 2024, 6.375%, and (ii) for each period beginning on or after September 15, 2024, three-month LIBOR plus 3.536%.

(3)Dividends, if declared, will be paid quarterly at an annual rate equal to (i) for each period beginning prior to August 15, 2029, 5.700%, and (ii) for each period beginning on or after August 15, 2029, three-month LIBOR plus 3.148%.

(4)Dividends, if declared, will be paid quarterly at an annual rate equal to (i) for each period beginning prior to September 15, 2025, 5.750%, and (ii) for each period beginning on or after September 15, 2025, the five-year treasury rate as of the most recent reset dividend determination date plus 5.426%.

All series of preferred stock have no stated maturity and redemption is solely at Regions' option, subject to regulatory approval, in whole, or in part, after the earliest redemption date or in whole, but not in part, within 90 days following a regulatory capital treatment event for the Series A preferred stock or at any time following a regulatory capital treatment event for the Series B, Series C, and Series D preferred stock.

The Board of Directors declared a total of $64 million in cash dividends on both Series A and Series B Preferred Stock during both 2020 and 2019. In 2020 and 2019, the Board of Directors declared $28 million and $15 million in cash dividends on Series C Preferred stock, respectively. The initial quarterly dividend for the Series D Preferred Stock was declared in the third quarter of 2020. In 2020, the Board of Directors declared a total of $11 million in cash dividends on Series D preferred stock. In total the Board of Directors declared $103 million and $79 million in cash dividends on preferred stock in 2020 and 2019, respectively.

In the event Series A, Series B, Series C, Series D preferred shares are redeemed at the liquidation amounts, $113 million, $67 million, $10 million, or $4 million in excess of the redemption amount over the carrying amount will be recognized, respectively. Approximately $100 million of Series A preferred dividends that were recorded as a reduction of preferred stock, including related surplus, will be recorded as a reduction to retained earnings, and approximately $13 million of related issuance costs that were recorded as a reduction of preferred stock, including related surplus, will be recorded as a reduction to net income available to common shareholders. Approximately $52 million of Series B preferred dividends that were recorded as a reduction of preferred stock, including related surplus, will be recorded as a reduction to retained earnings, and approximately $15 million of related issuance costs that were recorded as a reduction of preferred stock, including related surplus, will be recorded as a reduction to net income available to common shareholders. Approximately $10 million of Series C issuance costs that were recorded as a reduction of preferred stock, including related surplus, will be recorded as a reduction to net income available to common shareholders. Approximately $4 million of Series D issuance costs that were recorded as a reduction of preferred stock, including related surplus, will be recorded as a reduction to net income available to common shareholders.

On June 25, 2020, the Federal Reserve indicated that the Company exceeded all minimum capital levels under the supervisory stress test. The capital plan submitted to the Federal Reserve reflected no share repurchases through year-end 2020 and Regions is in compliance with the capital plan. Prior to the supervisory stress test submission, the Board had authorized for the repurchase of $1.370 billion of the Company's common stock repurchase plan, permitting repurchases from the beginning of the third quarter of 2019 through the second quarter of 2020.

During the third quarter of 2020, the Federal Reserve mandated that banks must not increase their quarterly per share common dividend and implemented an earnings-based payout restriction in connection with the supervisory stress test, requiring the third quarter 2020 dividend to not exceed the average of the prior four quarters of net income excluding preferred dividends. This mandate was subsequently extended through the first quarter of 2021.

Regions declared $0.62 per share in cash dividends for 2020, $0.59 for 2019, and $0.46 for 2018.

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following tables present the balances and activity in AOCI on a pre-tax and net of tax basis for the years ended December 31:


	2020
	Pre-tax AOCI Activity		Tax Effect (1)		Net AOCI Activity
	(In millions)
Total accumulated other comprehensive income (loss), beginning of period	$	(120)	$	30	$	(90)

Unrealized losses on securities transferred to held to maturity:
Beginning balance	$	(29)	$	7	$	(22)
Reclassification adjustments for amortization on unrealized losses (2)	8		(2)		6
Ending balance	$	(21)	$	5	$	(16)
Unrealized gains (losses) on securities available for sale:
Beginning balance	$	274	$	(69)	$	205
Unrealized holding gains (losses) arising during the period	792		(200)		592
Reclassification adjustments for securities (gains) losses realized in net income (3)	(4)		1		(3)
Change in AOCI from securities available for sale activity in the period	788		(199)		589
Ending balance	$	1,062	$	(268)	$	794
Unrealized gains (losses) on derivative instruments designated as cash flow hedges:
Beginning balance	$	430	$	(108)	$	322
Unrealized holding gains (losses) on derivatives arising during the period	1,440		(363)		1,077
Reclassification adjustments for (gains) losses realized in net income (2)	(260)		65		(195)
Change in AOCI from derivative activity in the period	1,180		(298)		882
Ending balance	$	1,610	$	(406)	$	1,204
Defined benefit pension plans and other post employment benefit plans:
Beginning balance	$	(795)	$	200	$	(595)
Net actuarial gains (losses) arising during the period	(144)		36		(108)
Reclassification adjustments for amortization of actuarial (gains) losses and settlements realized in net income (4)	47		(11)		36
Change in AOCI from defined benefit pension plans and other post employment benefits activity in the period	(97)		25		(72)
Ending balance	$	(892)	$	225	$	(667)

Total other comprehensive income	1,879		(474)		1,405
Total accumulated other comprehensive income, end of period	$	1,759	$	(444)	$	1,315


	2019
	Pre-tax AOCI Activity		Tax Effect (1)		Net AOCI Activity
	(In millions)
Total accumulated other comprehensive income (loss), beginning of period	$	(1,289)	$	325	$	(964)

Unrealized losses on securities transferred to held to maturity:
Beginning balance	$	(36)	$	9	$	(27)
Reclassification adjustments for amortization on unrealized losses (2)	7		(2)		5
Ending balance	$	(29)	$	7	$	(22)
Unrealized gains (losses) on securities available for sale:
Beginning balance	$	(531)	$	134	$	(397)
Unrealized holding gains (losses) arising during the period	777		(196)		581
Reclassification adjustments for securities (gains) losses realized in net income (3)	28		(7)		21
Change in AOCI from securities available for sale activity in the period	805		(203)		602
Ending balance	$	274	$	(69)	$	205
Unrealized gains (losses) on derivative instruments designated as cash flow hedges:
Beginning balance	$	(84)	$	21	$	(63)
Unrealized holding gains (losses) on derivatives arising during the period	490		(123)		367
Reclassification adjustments for (gains) losses realized in net income (2)	24		(6)		18
Change in AOCI from derivative activity in the period	514		(129)		385
Ending balance	$	430	$	(108)	$	322
Defined benefit pension plans and other post employment benefit plans:
Beginning balance	$	(638)	$	161	$	(477)
Net actuarial gains (losses) arising during the period	(200)		50		(150)
Reclassification adjustments for amortization of actuarial (gains) losses and settlements realized in net income (4)	43		(11)		32
Change in AOCI from defined benefit pension plans and other post employment benefits activity in the period	(157)		39		(118)
Ending balance	$	(795)	$	200	$	(595)

Total other comprehensive income	1,169		(295)		874
Total accumulated other comprehensive income (loss), end of period	$	(120)	$	30	$	(90)


	2018
	Pre-tax AOCI Activity		Tax Effect (1)		Net AOCI Activity
	(In millions)
Total accumulated other comprehensive income (loss), beginning of period	$	(1,002)	$	253	$	(749)

Unrealized losses on securities transferred to held to maturity:
Beginning balance	$	(45)	12		$	(33)
Reclassification adjustments for amortization on unrealized losses (2)	9		(3)		6
Ending balance	$	(36)	9		$	(27)
Unrealized gains (losses) on securities available for sale:
Beginning balance	$	(204)	$	51	$	(153)
Unrealized holding gains (losses) arising during the period	(327)		83		(244)


Ending balance	$	(531)	$	134	$	(397)
Unrealized gains (losses) on derivative instruments designated as cash flow hedges:
Beginning balance	$	(68)	$	17	$	(51)
Unrealized holding gains (losses) on derivatives arising during the period	(4)		1		(3)
Reclassification adjustments for (gains) losses realized in net income (2)	(12)		3		(9)
Change in AOCI from derivative activity in the period	(16)		4		(12)
Ending balance	$	(84)	$	21	$	(63)
Defined benefit pension plans and other post employment benefit plans:
Beginning balance	$	(685)	$	173	$	(512)
Net actuarial gains (losses) arising during the period	11		(4)		7
Reclassification adjustments for amortization of actuarial (gains) losses and settlements realized in net income (4)	36		(8)		28
Change in AOCI from defined benefit pension plans and other post employment benefits activity in the period	47		(12)		35
Ending balance	$	(638)	$	161	$	(477)

Total other comprehensive income	(287)		72		(215)
Total accumulated other comprehensive income (loss), end of period	$	(1,289)	$	325	$	(964)

(1)The tax impact of each component of AOCI is calculated using an effective tax rate of approximately 25%.

(2)Reclassification amount is recognized in net interest income in the consolidated statements of income.

(3)Reclassification amount is recognized in securities gains (losses), net in the consolidated statements of income.

(4)Reclassification amount is recognized in other non-interest expense in the consolidated statements of income. Additionally, these accumulated other comprehensive income (loss) components are included in the computation of net periodic pension cost (see Note 18 for additional details).