Stockholders’ Equity

(a) Preferred Stock

On April 15, 2013, the Company completed the issuance of 8.0 million shares of its 7.50% Series B Cumulative Redeemable Preferred Stock (“Series B Preferred Stock”) with a par value of $0.01 per share, and a liquidation preference of $25.00 per share plus accrued and unpaid dividends, in an underwritten public offering. The Company’s Series B Preferred Stock is entitled to receive a dividend at a rate of 7.50% per year on the $25.00 liquidation preference before the Company’s common stock is paid any dividends and is senior to the Company’s common stock with respect to distributions upon liquidation, dissolution or winding up. Dividends on the Series B Preferred Stock are payable quarterly in arrears on or about March 31, June 30, September 30 and December 31 of each year. The Series B Preferred Stock is redeemable at $25.00 per share plus accrued and unpaid dividends (whether or not authorized or declared) exclusively at the Company’s option commencing on April 15, 2018 (subject to the Company’s right, under limited circumstances, to redeem the Series B Preferred Stock prior to that date in order to preserve its qualification as a REIT) and upon certain specified change in control transactions in which the Company’s common stock and the acquiring or surviving entity common securities would not be listed on the New York Stock Exchange (the “NYSE”), the NYSE American LLC or NASDAQ, or any successor exchange.

The Series B Preferred Stock generally does not have any voting rights, subject to an exception in the event the Company fails to pay dividends on such stock for six or more quarterly periods (whether or not consecutive). Under such circumstances, the Series B Preferred Stock will be entitled to vote to elect two additional directors to the Company’s Board of Directors (the “Board”), until all unpaid dividends have been paid or declared and set apart for payment. In addition, certain material and adverse changes to the terms of the Series B Preferred Stock cannot be made without the affirmative vote of holders of at least 66 2/3% of the outstanding shares of Series B Preferred Stock.

The following table presents cash dividends declared by the Company on its Series B Preferred Stock from January 1, 2015 through December 31, 2017:



Year	Declaration Date	Record Date	Payment Date	Dividend Per Share
2017	November 17, 2017	December 1, 2017	December 29, 2017	$0.46875
	August 10, 2017	September 1, 2017	September 29, 2017	0.46875
	May 16, 2017	June 2, 2017	June 30, 2017	0.46875
	February 17, 2017	March 6, 2017	March 31, 2017	0.46875

2016	November 22, 2016	December 6, 2016	December 30, 2016	$0.46875
	August 12, 2016	September 2, 2016	September 30, 2016	0.46875
	May 18, 2016	June 3, 2016	June 30, 2016	0.46875
	February 12, 2016	February 29, 2016	March 31, 2016	0.46875

2015	November 19, 2015	December 3, 2015	December 31, 2015	$0.46875
	August 24, 2015	September 9, 2015	September 30, 2015	0.46875
	May 18, 2015	June 2, 2015	June 30, 2015	0.46875
	February 13, 2015	February 27, 2015	March 31, 2015	0.46875

(b) Dividends on Common Stock

The following table presents cash dividends declared by the Company on its common stock from January 1, 2015 through December 31, 2017:



Year	Declaration Date	Record Date	Payment Date	Dividend Per Share
2017	December 13, 2017	December 28, 2017	January 31, 2018	$0.20	(1)
	September 14, 2017	September 28, 2017	October 31, 2017	0.20
	June 12, 2017	June 29, 2017	July 28, 2017	0.20
	March 8, 2017	March 29, 2017	April 28, 2017	0.20

2016	December 14, 2016	December 28, 2016	January 31, 2017	$0.20
	September 15, 2016	September 28, 2016	October 31, 2016	0.20
	June 14, 2016	June 28, 2016	July 29, 2016	0.20
	March 11, 2016	March 28, 2016	April 29, 2016	0.20

2015	December 9, 2015	December 28, 2015	January 29, 2016	$0.20
	September 17, 2015	September 29, 2015	October 30, 2015	0.20
	June 15, 2015	June 29, 2015	July 31, 2015	0.20
	March 13, 2015	March 27, 2015	April 30, 2015	0.20

(1) At December 31, 2017, the Company had accrued dividends and dividend equivalents payable of $79.8 million related to the common stock dividend declared on December 13, 2017.

In general, the Company’s common stock dividends have been characterized as ordinary income to its stockholders for income tax purposes. However, a portion of the Company’s common stock dividends may, from time to time, be characterized as capital gains or return of capital. For the years ended December 31, 2017, 2016 and 2015 a portion of the Company’s common stock dividends were deemed to be capitalized gains.

The table below presents information with respect to shares of the Company’s common stock issued through public offerings during the year ended December 31, 2017. The Company did not issue any common stock through public offerings during the years ended December 31, 2016 and 2015.



Share Issue Date	Shares Issued	Gross Proceeds Per Share		Gross Proceeds (1)
(In Thousands, Except Per Share Amounts)
May 10, 2017	23,000	$	7.85	$	180,550	(1)

(1) The Company incurred approximately $2.3 million of underwriting discounts and related expenses in connection with this equity offering.

(d) Discount Waiver, Direct Stock Purchase and Dividend Reinvestment Plan (“DRSPP”)

On September 16, 2016, the Company filed a shelf registration statement on Form S-3 with the SEC under the Securities Act of 1933, as amended (the “1933 Act”), for the purpose of registering additional common stock for sale through its DRSPP. Pursuant to Rule 462(e) of the 1933 Act, this shelf registration statement became effective automatically upon filing with the SEC and, when combined with the unused portion of the Company’s previous DRSPP shelf registration statements, registered an aggregate of 15 million shares of common stock. The Company’s DRSPP is designed to provide existing stockholders and new investors with a convenient and economical way to purchase shares of common stock through the automatic reinvestment of dividends and/or optional cash investments. At December 31, 2017, 12.0 million shares of common stock remained available for issuance pursuant to the DRSPP shelf registration statement.

During the years ended December 31, 2017, 2016 and 2015, the Company issued 2,293,192, 653,793 and 162,373 shares of common stock through the DRSPP, raising net proceeds of approximately $18.5 million, $4.7 million and $1.2 million, respectively. From the inception of the DRSPP in September 2003 through December 31, 2017, the Company issued 33,675,977 shares pursuant to the DRSPP, raising net proceeds of $281.4 million.

(e) Stock Repurchase Program

As previously disclosed, in August 2005, the Company’s Board authorized a stock repurchase program (the “Repurchase Program”) to repurchase up to 4.0 million shares of its outstanding common stock. The Board reaffirmed such authorization in May 2010. In December 2013, the Board increased the number of shares authorized under the Repurchase Program to an aggregate of 10.0 million. Such authorization does not have an expiration date and, at present, there is no intention to modify or otherwise rescind such authorization. Subject to applicable securities laws, repurchases of common stock under the Repurchase Program are made at times and in amounts as the Company deems appropriate, (including, in our discretion, through the use of one or more plans adopted under Rule 10b5-1 promulgated under the Securities Exchange Act of 1934, as amended (the “1934 Act”)) using available cash resources. Shares of common stock repurchased by the Company under the Repurchase Program are cancelled and, until reissued by the Company, are deemed to be authorized but unissued shares of the Company’s common stock. The Repurchase Program may be suspended or discontinued by the Company at any time and without prior notice. The Company did not repurchase any shares of its common stock during the three years ended December 31, 2017. At December 31, 2017, 6,616,355 shares remained authorized for repurchase under the Repurchase Program.

(f) Accumulated Other Comprehensive Income/(Loss)

The following table presents changes in the balances of each component of the Company’s AOCI for the years ended December 31, 2017, 2016 and 2015:



	For the Year Ended December 31,
	2017									2016									2015
(In Thousands)	Net Unrealized Gain/(Loss) on AFS Securities			Net Unrealized Gain/(Loss) on Swaps			Total AOCI			Net Unrealized Gain/(Loss) on AFS Securities			Net Unrealized Gain/(Loss) on Swaps			Total AOCI			Net Unrealized Gain/(Loss) on AFS Securities			Net Unrealized Gain/(Loss) on Swaps			Total AOCI
Balance at beginning of period	$	620,403		$	(46,721	)	$	573,682		$	585,250		$	(69,399	)	$	515,851		$	813,515		$	(59,062	)	$	754,453
OCI before reclassifications	39,984			35,297			75,281			72,560			22,678			95,238			(194,890		)	(10,337		)	(205,227		)
Amounts reclassified from AOCI (1)	(39,739		)	—			(39,739		)	(37,407		)	—			(37,407		)	(37,912		)	—			(37,912		)
Cumulative effect adjustment on adoption of revised accounting standard for repurchase agreement financing	—			—			—			—			—			—			4,537			—			4,537
Net OCI during period (2)	245			35,297			35,542			35,153			22,678			57,831			(228,265		)	(10,337		)	(238,602		)
Balance at end of period	$	620,648		$	(11,424	)	$	609,224		$	620,403		$	(46,721	)	$	573,682		$	585,250		$	(69,399	)	$	515,851

(1) See separate table below for details about these reclassifications.

(2) For further information regarding changes in OCI, see the Company’s consolidated statements of comprehensive income/(loss).

The following table presents information about the significant amounts reclassified out of the Company’s AOCI for the years ended December 31, 2017, 2016, and 2015:



	For the Year Ended December 31,
	2017			2016			2015
Details about AOCI Components	Amounts Reclassified from AOCI									Affected Line Item in the Statement Where Net Income is Presented
(In Thousands)
AFS Securities:
Realized gain on sale of securities	$	(38,707	)	$	(36,922	)	$	(37,207	)	Net gain on sales of MBS and U.S. Treasury securities
OTTI recognized in earnings	(1,032		)	(485		)	(705		)	Net impairment losses recognized in earnings
Total AFS Securities	$	(39,739	)	$	(37,407	)	$	(37,912	)
Total reclassifications for period	$	(39,739	)	$	(37,407	)	$	(37,912	)

On securities for which OTTI had been recognized in prior periods, the Company did not have any unrealized losses recorded in AOCI at December 31, 2017 and had $1.7 million unrealized losses recorded in AOCI at December 31, 2016.