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, 2019 through March 31, 2019:



Declaration Date	Record Date	Payment Date	Dividend Per Share
February 15, 2019	March 3, 2019	March 29, 2019	$	0.46875

(b) Dividends on Common Stock

The following table presents cash dividends declared by the Company on its common stock from January 1, 2019 through March 31, 2019:



Declaration Date (1)	Record Date	Payment Date	Dividend Per Share
March 6, 2019	March 29, 2019	April 30, 2019	$	0.20	(1)

(1) At March 31, 2019, the Company had accrued dividends and dividend equivalents payable of $90.4 million related to the common stock dividend declared on March 6, 2019.

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, 2018:



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)

(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.

(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 March 31, 2019, approximately 11.7 million shares of common stock remained available for issuance pursuant to the DRSPP shelf registration statement.

During the three months ended March 31, 2019, the Company issued 74,463 shares of common stock through the DRSPP, raising net proceeds of approximately $545,000. From the inception of the DRSPP in September 2003 through March 31, 2019, the Company issued 34,130,343 shares pursuant to the DRSPP, raising net proceeds of $284.7 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 months ended March 31, 2019. At March 31, 2019, 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 three months ended March 31, 2019:



	Three Months Ended March 31, 2019
(In Thousands)	Net Unrealized Gain/(Loss) on AFS Securities			Net Gain/(Loss) on Swaps			Total AOCI
Balance at beginning of period	$	417,167		$	3,121		$	420,288
OCI before reclassifications	22,103			(10,445		)	11,658
Amounts reclassified from AOCI (1)	(17,009		)	(341		)	(17,350		)
Net OCI during the period (2)	5,094			(10,786		)	(5,692		)
Balance at end of period	$	422,261		$	(7,665	)	$	414,596

(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 changes in the balances of each component of the Company’s AOCI for the three months ended March 31, 2018:



	Three Months Ended March 31, 2018
(In Thousands)	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
OCI before reclassifications	(37,540		)	19,669			(17,871		)
Amounts reclassified from AOCI (1)	(8,623		)	—			(8,623		)
Net OCI during the period (2)	(46,163		)	19,669			(26,494		)
Balance at end of period	$	574,485		$	8,245		$	582,730

(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 three months ended March 31, 2019:



	Three Months Ended March 31, 2019
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	$	(17,009	)	Net realized gain on sales of residential mortgage securities
Total AFS Securities	$	(17,009	)
Swaps designated as cash flow hedges:
Amortization of de-designated hedging instruments	(341		)	Other, net
Total Swaps designated as cash flow hedges	$	(341	)
Total reclassifications for period	$	(17,350	)

The following table presents information about the significant amounts reclassified out of the Company’s AOCI for the three months ended March 31, 2018:



	Three Months Ended March 31, 2018
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	(8,623		)	Net realized gain on sales of residential mortgage securities
Total AFS Securities	$	(8,623	)
Total reclassifications for period	$	(8,623	)

On securities for which OTTI had been recognized in prior periods, the Company did not have any unrealized losses recorded in AOCI at March 31, 2019 and had $224,000 unrealized losses recorded in AOCI at December 31, 2018.