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STOCKHOLDERS' EQUITY AND EARNINGS PER SHARE | 12 Months Ended
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Dec. 31, 2011
STOCKHOLDERS' EQUITY AND EARNINGS PER SHARE |
STOCKHOLDERS' EQUITY AND EARNINGS PER SHARE |
24. STOCKHOLDERS' EQUITY AND EARNINGS PER SHARE Series A Preferred Stock Offering—In April 2008, the Company issued 200,000 shares of 8% Non-Cumulative Perpetual Convertible Preferred Stock, Series A ("Series A"), with a liquidation preference of $1,000 per share. The Company received $194.1 million of additional Tier 1 qualifying capital, after deducting stock issuance costs. The holders of the Series A preferred stock have the right at any time to convert each share of Series A preferred shares into 64.9942 shares of the Company's common stock, plus cash in lieu of fractional shares. This represents an initial conversion price of approximately $15.39 per share of common stock or a 22.5% conversion premium based on the closing price of the Company's common stock on April 23, 2008 of $12.56 per share. On or after May 1, 2013, the Company will have the right, under certain circumstances, to cause the Series A preferred shares to be converted into shares of the Company's common stock. Dividends on the Series A preferred shares, if declared, will accrue and be payable quarterly in arrears at a rate per annum equal to 8% on the liquidation preference of $1,000 per share. The proceeds from this offering were used to augment the Company's liquidity and capital positions and reduce its borrowings. As of December 31, 2011, 85,710 shares were outstanding. Series B Preferred Stock Offering—On December 5, 2008, the Company issued 306,546 shares of Fixed Rate Cumulative Perpetual Preferred Stock, Series B ("Series B"), with a liquidation preference of $1,000 per share. The Company received $306.5 million of additional Tier 1 qualifying capital from the U.S. Treasury by participating in the U.S. Treasury's Capital Purchase Program ("TCPP"). On December 29, 2010, in accordance with approvals received from the U.S. Treasury and the Federal Reserve Board, the Company repurchased all shares of the Series B preferred stock and the related accrued and unpaid dividends by using $308.4 million of available cash, without raising any capital or debt. As a result of repurchasing the Series B preferred stock, the Company accelerated the remaining accretion of the issuance discount on the Series B preferred stock of $17.5 million and recorded a corresponding charge to stockholders' equity and income available to common stockholders in the calculation of diluted earnings per share. While participating in the TCPP, we recorded $56.9 million in dividends and accretion, including $31.7 million in cash dividends and $25.2 million of accretion on the Series B preferred stock issuance discount. Repayment will save us approximately $15.3 million in annual dividends. Private Sales of Common Stock—On July 14, 2009, in private placement transactions, two customers of the Bank purchased 5,000,000 newly issued shares of the Company's common stock at a price of $5.50 per share. The Company received net proceeds of approximately $26.0 million, net of stock issuance costs, in conjunction with this common stock offering. The Company has registered these shares for resale to the public. Public Offering of Common Stock—On July 24, 2009, the Company completed a public offering of 11 million shares of its common stock priced at $6.35. The underwriter also exercised its option to purchase an additional 1.65 million shares of the Company's common stock. The Company received net proceeds of approximately $76.7 million, net of stock issuance costs, in conjunction with this common stock offering. Private Placement—On November 5, 2009, we entered into investment agreements with various investors, pursuant to which the investors purchased an aggregate of $500.0 million of our common stock and newly-issued shares of our Mandatorily Convertible Non-Voting Perpetual Preferred Stock, Series C ("Series C"), with a liquidation preference of $1,000 per share, in a private placement transaction which closed on November 6, 2009. In the private placement, we issued certain qualified institutional buyers and accredited investors, several of whom were already our largest institutional stockholders, an aggregate of 335,047 shares of our Series C preferred stock and an aggregate of 18,247,012 shares of common stock. On March 25, 2010, at a special meeting of the stockholders, our stockholders voted to approve the issuance of 37,103,734 shares of our common stock upon conversion of the 335,047 shares of the Series C preferred stock. Subsequently, on March 30, 2010, each share of the Series C preferred stock was automatically converted into 110.74197 shares of common stock at a per common share conversion price of $9.03, as adjusted in accordance with the terms of the Series C preferred stock. As a result, no shares of the Series C preferred stock remain outstanding as of December 31, 2011 and 2010. Warrants—During 2008, in conjunction with the Series B preferred stock offering, the Company issued to the U.S. Treasury warrants with an initial price of $15.15 per share of common stock for which the warrants may be exercised, with an allocated fair value of $25.2 million. The warrants could be exercised at any time on or before December 5, 2018. As of December 31, 2010, there were 1,517,555 warrants outstanding. On January 26, 2011 the Company repurchased the outstanding warrants for $14.5 million. Stock Repurchase Program—On January 19, 2012, it was announced that the Company's Board of Directors authorized a stock repurchase program to buy back up to $200.0 million of the Company's common stock. The Company did not repurchase any shares during the years ended December 31, 2011, 2010 and 2009. Quarterly Dividends—The Company's Board of Directors declared and paid quarterly preferred stock cash dividends of $20.00 per share on its Series A preferred stock during 2011 and 2010. The Board of Directors has also authorized the payment of quarterly dividends of $12.50 per share on the Company's Series B preferred stock during 2011 and 2010. Cash dividends totaling $6.9 million and $22.1 million were paid to the Company's Series A and Series B preferred stock shareholders during the years ended December 31, 2011 and 2010, respectively. The Company also paid quarterly dividends on its common stock of $0.01 per share for the first quarter of 2011 and $0.05 per share for the remaining quarters of 2011. In comparison, the Company paid quarterly dividends on its common stock of $0.01 per share for all quarters of 2010. Total quarterly dividends amounting to $23.9 million and $5.5 million were paid to the Company's common shareholders during the years ended December 31, 2011 and 2010, respectively. Accumulated Other Comprehensive (Loss)/Income—As of December 31, 2011, total accumulated other comprehensive loss was ($33.9) million which includes the following components: net unrealized loss on securities available for sale of ($34.8) million and foreign exchange translation adjustment of $908 thousand. As of December 31, 2010, total accumulated other comprehensive loss was ($12.4) million which includes the following components: net unrealized loss on securities available for sale of ($13.9) million and foreign exchange translation adjustment of $1.5 million. Earnings Per Share ("EPS")—The calculation of basic and diluted earnings (loss) per share for the years ended December 31, 2011, 2010 and 2009 is presented below:
|  | Net Income Available to Common Stockholders |  | Number of Shares |  | Per Share Amounts |
--- | --- | --- | --- | --- | --- | --- | ---
|  | (In thousands, except per share data) |
2011 |  |  |  |  |  |  |  |  |  |
Net income |  | $ | 245,234 |  |  | 147,093 |  |  |  |
Less: |  |  |  |  |  |  |  |  |  |
Preferred stock dividends and amortization of preferred stock discount |  |  | (6,857 | ) |  |  |  |  |  |
Basic EPS—income available to common stockholders |  | $ | 238,377 |  |  | 147,093 |  | $ | 1.62 |
Effect of dilutive securities: |  |  |  |  |  |  |  |  |  |
Stock options |  |  | — |  |  | 62 |  |  |  |
Restricted stock |  |  | 115 |  |  | 718 |  |  |  |
Convertible preferred stock |  |  | 6,857 |  |  | 5,571 |  |  |  |
Stock warrants |  |  | — |  |  | 23 |  |  |  |
Diluted EPS—income available to common stockholders |  | $ | 245,349 |  |  | 153,467 |  | $ | 1.60 |
2010 |  |  |  |  |  |  |  |  |  |
Net income |  | $ | 164,564 |  |  | 137,478 |  |  |  |
Less: |  |  |  |  |  |  |  |  |  |
Preferred stock dividends and amortization of preferred stock discount |  |  | (43,126 | ) |  | — |  |  |  |
Basic EPS—income available to common stockholders |  | $ | 121,438 |  |  | 137,478 |  | $ | 0.88 |
Effect of dilutive securities: |  |  |  |  |  |  |  |  |  |
Stock options |  |  | — |  |  | 142 |  |  |  |
Restricted stock |  |  | 15 |  |  | 370 |  |  |  |
Convertible preferred stock |  |  | — |  |  | 8,936 |  |  |  |
Stock warrants |  |  | — |  |  | 176 |  |  |  |
Diluted EPS—income available to common stockholders |  | $ | 121,453 |  |  | 147,102 |  | $ | 0.83 |
2009 |  |  |  |  |  |  |  |  |  |
Net income before extraordinary item |  | $ | 82,008 |  |  | 78,770 |  |  |  |
Less: |  |  |  |  |  |  |  |  |  |
Preferred stock dividends, amortization of preferred stock discount and inducement of preferred stock conversion |  |  | (49,115 | ) |  | — |  |  |  |
Income available to common stockholders before extraordinary item |  |  | 32,893 |  |  | 78,770 |  | $ | 0.42 |
Extraordinary item—impact of descuritization |  |  | (5,366 | ) |  | 78,770 |  |  | (0.07 | )
Basic EPS—income available to common stockholders after extraordinary item |  |  | 27,527 |  |  | 78,770 |  | $ | 0.35 |
Effect of dilutive securities: |  |  |  |  |  |  |  |  |  |
Stock options |  |  | — |  |  | 15 |  |  |  |
Restricted stock |  |  | — |  |  | 51 |  |  |  |
Convertible preferred stock |  |  | — |  |  | 5,687 |  |  |  |
Stock warrants |  |  | — |  |  | — |  |  |  |
Income available to common stockholders before extraordinary item |  | $ | 32,893 |  |  | 84,523 |  | $ | 0.39 |
Income impact of assumed conversions |  |  | 2 |  |  | — |  |  |  |
Extraordinary item—impact of descuritization |  |  | (5,366 | ) |  | 84,523 |  | $ | (0.06 | )
Diluted EPS—income available to common stockholders after extraordinary item plus assumed conversions |  | $ | 27,529 |  |  | 84,523 |  | $ | 0.33 |
The following outstanding convertible preferred stock, stock options, and restricted stock for years ended December 31, 2011, 2010 and 2009, respectively, were excluded from the computation of diluted EPS because including them would have had an antidilutive effect.
|  | For the Year Ended |
--- | --- | --- | ---
|  | 2011 |  | 2010 |  | 2009 |
|  | (In thousands) |
Convertible preferred stock |  |  | — |  |  | 5,573 |  |  | 9,293 |
Stock options |  |  | 857 |  |  | 1,043 |  |  | 1,848 |
Restricted stock |  |  | 317 |  |  | 326 |  |  | 463 |

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