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Stockholders' Equity and Accumulated Other Comprehensive Income (Loss)
 9 Months Ended
Sep. 30, 2022
Equity [Abstract]  
Stockholders' Equity and Accumulated Other Comprehensive Income (Loss)
NOTE 5. SHAREHOLDERS’ EQUITY AND ACCUMULATED OTHER COMPREHENSIVE INCOME

PREFERRED STOCK

The following table presents a summary of the non-cumulative perpetual preferred stock:    
September 30, 2022December 31, 2021
Issuance DateEarliest Redemption Date
Dividend Rate (1)
Liquidation AmountLiquidation Preference per ShareLiquidation preference per Depositary ShareOwnership Interest per Depositary ShareCarrying AmountCarrying Amount
(Dollars in millions)
Series B4/29/20149/15/20246.375 %
(2)
$500 1,000 25 1/40th$433 $433 
Series C4/30/20195/15/20295.700 %
(3)
500 1,000 25 1/40th490 490 
Series D6/5/20209/15/20255.750 %
(4)
350 100,000 1,000 1/100th346 346 
Series E5/4/20216/15/20264.450 %400 1,000 25 1/40th390 390 
$1,750 $1,659 $1,659 
_________
(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, at any time following a regulatory capital treatment event for the Series B, Series C, Series D, and Series E preferred stock.
The Board declared a total of $61 million in cash dividends on Series B, Series C, and Series D preferred stock during both the first nine months of 2022 and 2021. The Board declared cash dividends of $13 million on Series E preferred stock for the first nine months of 2022; the initial quarterly dividend of $7 million for the Series E preferred stock was declared in the third quarter of 2021. Additionally, total cash dividends for the first nine months of 2021 includes $16 million in cash dividends
on Series A preferred stock, which were fully redeemed during the second quarter of 2021. Therefore, a total of $74 million in cash dividends on total preferred stock was declared in the first nine months of 2022 compared to the total of $84 million in cash dividends on total preferred stock for the same period in 2021.
In the event Series B, Series C, Series D or Series E preferred shares are redeemed at the liquidation amounts, $67 million, $10 million, $4 million, or $10 million in excess of the redemption amount over the carrying amount will be recognized, respectively. 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 common shareholders' equity. The remaining amounts listed represent issuance costs that were recorded as reductions to preferred stock, including related surplus, and will be recorded as reductions to net income available to common shareholders.
COMMON STOCK
As a result of Regions' voluntary participation in 2021 CCAR, effective October 1, 2021, Regions' SCB requirement for the fourth quarter of 2021 through the third quarter of 2022 was floored at 2.5 percent. Regions' 2022 stress testing results from the FRB reflected that the Company exceeded all minimum capital levels and the SCB will continue to be floored at 2.5 percent for the fourth quarter of 2022 through the third quarter of 2023.
As part of the Company's 2021 capital plan, the Board authorized the repurchase of up to $2.5 billion of the Company's common stock, permitting purchases from the second quarter of 2021 through the first quarter of 2022. During the three months ended March 31, 2022, Regions repurchased approximately 9.1 million shares of common stock at a total cost of $215 million and concluded the plan in the first quarter of 2022. All of these shares were immediately retired upon repurchase and therefore were not included in treasury stock.
On April 20, 2022, the Board authorized the repurchase of up to $2.5 billion of the Company's common stock, permitting purchases from the second quarter of 2022 through the fourth quarter of 2024. As of September 30, 2022, Regions had repurchased approximately 725 thousand shares of common stock at a total cost of $15 million under this plan. All of these shares were immediately retired upon repurchase and therefore were not included in treasury stock.
In the third quarter of 2022, the Board declared a cash dividend of $0.20. per share, an 18 percent increase to the quarterly common stock dividend. The cash dividends declared for both the first and second quarter of 2022 were $0.17 per share. Therefore, Regions declared a total of $0.54 per common share for the first nine months of 2022 compared to a total of $0.48 per share for the first nine months of 2021.
ACCUMULATED OTHER COMPREHENSIVE INCOME
The following tables present the balances and activity in AOCI on a pre-tax and net of tax basis for the three and nine months ended September 30, 2022 and 2021:
Three Months Ended September 30, 2022
Pre-tax AOCI Activity
Tax Effect (1)
Net AOCI Activity
(In millions)
Total accumulated other comprehensive income (loss), beginning of period$(2,772)$705 $(2,067)
Unrealized losses on securities transferred to held to maturity:
Beginning balance$(12)$3 $(9)
Reclassification adjustments for amortization of unrealized losses (2)
1 (1)— 
Ending balance$(11)$2 $(9)
Unrealized gains (losses) on securities available for sale:
Beginning balance$(2,211)$563 $(1,648)
Unrealized gains (losses) arising during the period(1,478)376 (1,102)
Reclassification adjustments for securities (gains) losses realized in net income(3)
1 — 1 
Change in AOCI from securities available for sale activity in the period(1,477)376 (1,101)
Ending balance$(3,688)$939 $(2,749)
Unrealized gains (losses) on derivative instruments designated as cash flow hedges:
Beginning balance$82 $(21)$61 
Unrealized holding gains (losses) on derivatives arising during the period(632)161 (471)
Ending balance$(550)$140 $(410)
Defined benefit pension plans and other post employment benefit plans:
Beginning balance$(631)$160 $(471)
Reclassification adjustments for amortization of actuarial gains (losses) and settlements realized in net income (4)
9 (2)7 
Ending balance$(622)$158 $(464)
Total other comprehensive income (loss)(2,099)534 (1,565)
Total accumulated other comprehensive income (loss), end of period$(4,871)$1,239 $(3,632)
Three Months Ended September 30, 2021
Pre-tax AOCI Activity
Tax Effect (1)
Net AOCI Activity
(In millions)
Total accumulated other comprehensive income (loss), beginning of period$871 $(220)$651 
Unrealized losses on securities transferred to held to maturity:
Beginning balance$(17)$4 $(13)
Reclassification adjustments for amortization of unrealized losses (2)
2 — 2 
Ending balance$(15)$4 $(11)
Unrealized gains (losses) on securities available for sale:
Beginning balance$606 $(153)$453 
Unrealized gains (losses) arising during the period(99)24 (75)
Reclassification adjustments for securities (gains) losses realized in net income(3)
(1)1 — 
      Change in AOCI from securities available for sale activity in the period(100)25 (75)
Ending balance$506 $(128)$378 
Unrealized gains (losses) on derivative instruments designated as cash flow hedges:
Beginning balance$1,147 $(289)$858 
Unrealized holding gains (losses) on derivatives arising during the period24 (6)18 
Reclassification adjustments for (gains) losses realized in net income (2)

(108)27 (81)
Change in AOCI from derivative activity in the period(84)21 (63)
Ending balance$1,063 $(268)$795 
Defined benefit pension plans and other post employment benefit plans:
Beginning balance$(865)$218 $(647)
Reclassification adjustments for amortization of actuarial gains (losses) and settlements realized in net income (4)
21 (4)17 
Ending balance$(844)$214 $(630)
Total other comprehensive income (loss)(161)42 (119)
Total accumulated other comprehensive income (loss), end of period$710 $(178)$532 
Nine Months Ended September 30, 2022
Pre-tax AOCI Activity
Tax Effect (1)
Net AOCI Activity
(In millions)
Total accumulated other comprehensive income (loss), beginning of period$387 $(98)$289 
Unrealized losses on securities transferred to held to maturity:
Beginning balance$(14)$3 $(11)
Reclassification adjustments for amortization of unrealized losses (2)
3 (1)2 
Ending balance$(11)$2 $(9)
Unrealized gains (losses) on securities available for sale:
Beginning balance$218 $(55)$163 
Unrealized gains (losses) arising during the period(3,907)994 (2,913)
Reclassification adjustments for securities (gains) losses realized in net income(3)

1 — 1 
Change in AOCI from securities available for sale activity in the period(3,906)994 (2,912)
Ending balance$(3,688)$939 $(2,749)
Unrealized gains (losses) on derivative instruments designated as cash flow hedges:
Beginning balance$830 $(209)$621 
Unrealized holding gains (losses) on active hedges arising during the period(1,192)301 (891)
Reclassification adjustments for (gains) losses realized in net income (2)
(188)48 (140)
Change in AOCI from derivative activity in the period(1,380)349 (1,031)
Ending balance$(550)$140 $(410)
Defined benefit pension plans and other post employment benefit plans:
Beginning balance$(647)$163 $(484)
Reclassification adjustments for amortization of actuarial gains (losses) and settlements realized in net income (4)
25 (5)20 
Ending balance$(622)$158 $(464)
Total other comprehensive income (loss)(5,258)1,337 (3,921)
Total accumulated other comprehensive income (loss), end of period$(4,871)$1,239 $(3,632)
Nine Months Ended September 30, 2021
Pre-tax AOCI Activity
Tax Effect (1)
Net AOCI Activity
(In millions)
Total accumulated other comprehensive income (loss), beginning of period$1,759 $(444)$1,315 
Unrealized losses on securities transferred to held to maturity:
Beginning balance$(21)$5 $(16)
Reclassification adjustments for amortization of unrealized losses (2)
6 (1)5 
Ending balance$(15)$4 $(11)
Unrealized gains (losses) on securities available for sale:
Beginning balance$1,062 $(268)$794 
Unrealized gains (losses) arising during the period(553)139 (414)
Reclassification adjustments for securities (gains) losses realized in net income(3)

(3)1 (2)
Change in AOCI from securities available for sale activity in the period(556)140 (416)
Ending balance$506 $(128)$378 
Unrealized gains (losses) on derivative instruments designated as cash flow hedges:
Beginning balance$1,610 $(406)$1,204 
Unrealized holding gains (losses) on derivatives arising during the period(233)59 (174)
Reclassification adjustments for (gains) losses realized in net income (2)
(314)79 (235)
Change in AOCI from derivative activity in the period(547)138 (409)
Ending balance$1,063 $(268)$795 
Defined benefit pension plans and other post employment benefit plans:
Beginning balance$(892)$225 $(667)
Amounts reclassified for amortization of actuarial gains (losses) and settlements realized in net income (4)
48 (11)37 
Ending balance$(844)$214 $(630)
Total other comprehensive income (1,049)266 (783)
Total accumulated other comprehensive income, end of period$710 $(178)$532 
_________
(1)The impact of all AOCI activity is shown net of the related tax impact, 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 7 for additional details).