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.

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, 2016 through December 31, 2018:



Year	Declaration Date	Record Date	Payment Date	Dividend Per Share
2018	November 26, 2018	December 7, 2018	December 28, 2018	$0.46875
	August 20, 2018	September 7, 2018	September 28, 2018	0.46875
	May 17, 2018	June 4, 2018	June 29, 2018	0.46875
	February 20, 2018	March 2, 2018	March 30, 2018	0.46875

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

(b) Dividends on Common Stock

The following table presents cash dividends declared by the Company on its common stock from January 1, 2016 through December 31, 2018:



Year	Declaration Date	Record Date	Payment Date	Dividend Per Share
2018	December 12, 2018	December 28, 2018	January 31, 2019	$0.20	(1)
	September 13, 2018	October 1, 2018	October 31, 2018	0.20
	June 7, 2018	June 29, 2018	July 31, 2018	0.20
	March 7, 2018	March 29, 2018	April 30, 2018	0.20

2017	December 13, 2017	December 28, 2017	January 31, 2018	$0.20
	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

(1) At December 31, 2018, the Company had accrued dividends and dividend equivalents payable of $90.2 million related to the common stock dividend declared on December 12, 2018.

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, 2018, 2017 and 2016, the portions of the Company’s common stock dividends that were deemed to be capital gains were $0.1290, $0.0831 and $0.0361 per share of common stock, respectively.

The table below presents information with respect to shares of the Company’s common stock issued through public offerings during the years ended December 31, 2018 and 2017.



Share Issue Date	Shares Issued			Gross Proceeds Per Share		Gross Proceeds
(In Thousands, Except Per Share Amounts)
August 7, 2018	50,875	(1	)	$	7.78	$	395,807	(1)
May 10, 2017	23,000			$	7.85	$	180,550	(2)

(1) Includes approximately 875,000 shares issued on September 5, 2018 pursuant to the exercise of the underwriters’ option to purchase additional shares. The Company incurred approximately $6.4 million of underwriting discounts and related expenses in connection with this equity offering.

(2) 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, 2018, approximately 11.8 million shares of common stock remained available for issuance pursuant to the DRSPP shelf registration statement.

During the years ended December 31, 2018, 2017 and 2016, the Company issued 379,903, 2,293,192 and 653,793 shares of common stock through the DRSPP, raising net proceeds of approximately $2.8 million, $18.5 million and $1.2 million, respectively. From the inception of the DRSPP in September 2003 through December 31, 2018, the Company issued 34,055,880 shares pursuant to the DRSPP, raising net proceeds of $284.2 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, 2018. At December 31, 2018, 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, 2018, 2017 and 2016:



	For the Year Ended December 31,
	2018									2017									2016
(In Thousands)	Net Unrealized Gain/(Loss) on AFS Securities			Net Gain/(Loss) on Swaps			Total AOCI			Net Unrealized Gain/(Loss) on AFS Securities			Net Gain/(Loss) on Swaps			Total AOCI			Net Unrealized Gain/(Loss) on AFS Securities			Net Gain/(Loss) on Swaps			Total AOCI
Balance at beginning of period	$	620,648		$	(11,424	)	$	609,224		$	620,403		$	(46,721	)	$	573,682		$	585,250		$	(69,399	)	$	515,851
OCI before reclassifications	(150,642		)	14,545			(136,097		)	39,984			35,297			75,281			72,560			22,678			95,238
Amounts reclassified from AOCI (1)	(52,839		)	—			(52,839		)	(39,739		)	—			(39,739		)	(37,407		)	—			(37,407		)
Net OCI during period (2)	(203,481		)	14,545			(188,936		)	245			35,297			35,542			35,153			22,678			57,831
Balance at end of period	$	417,167		$	3,121		$	420,288		$	620,648		$	(11,424	)	$	609,224		$	620,403		$	(46,721	)	$	573,682

(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, 2018, 2017, and 2016:



	For the Year Ended December 31,
	2018			2017			2016
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	$	(51,580	)	$	(38,707	)	$	(36,922	)	Net realized gain on sales of residential mortgage securities
OTTI recognized in earnings	(1,259		)	(1,032		)	(485		)	Other, net
Total AFS Securities	$	(52,839	)	$	(39,739	)	$	(37,407	)
Total reclassifications for period	$	(52,839	)	$	(39,739	)	$	(37,407	)

On securities for which OTTI had been recognized in prior periods, the Company had $224,000 unrealized losses recorded in AOCI at December 31, 2018 and did not have any unrealized losses recorded in AOCI at December 31, 2017.