Note 12 — Equity

Preferred Stock

In February 2014, the Company completed an underwritten public offering of 900,000 shares of 8.50% Series C cumulative redeemable preferred stock with a liquidation preference of $25.00 per share, generating net proceeds of approximately $21.6 million after deducting the underwriting discount and other offering expenses.

In May 2013, the Company completed an underwritten public offering of 1,200,000 shares of 7.75% Series B cumulative redeemable preferred stock with a liquidation preference of $25.00 per share, generating net proceeds of approximately $28.9 million after deducting the underwriting discount and other offering expenses. Also in May 2013, the underwriters exercised a portion of their over-allotment option for 60,000 shares providing additional net proceeds of approximately $1.5 million.

In February 2013, the Company completed an underwritten public offering of 1,400,000 shares of 8.25% Series A cumulative redeemable preferred stock with a liquidation preference of $25.00 per share, generating net proceeds of approximately $33.6 million after deducting the underwriting discount and other offering expenses. Also in February 2013, the underwriters exercised a portion of their over-allotment option for 151,500 shares providing additional net proceeds of approximately $3.7 million.

Common Stock

In February 2014, the Company entered into an “At-The-Market” (“ATM”) equity offering sales agreement with JMP Securities LLC (“JMP”) whereby, in accordance with the terms of the agreement, from time to time the Company may issue and sell through JMP up to 7,500,000 shares of its common stock. Sales of the shares are made by means of ordinary brokers’ transactions or otherwise at market prices prevailing at the time of sale, or at negotiated prices. As of September 30, 2014, the Company sold 1,000,000 shares for net proceeds of $6.5 million.

In September 2013, the Company completed a public offering in which it sold 6,000,000 shares of its common stock for $7.08 per share, and received net proceeds of approximately $40.9 million after deducting the underwriting discount and other offering expenses.

In March 2013, the Company completed a public offering in which it sold 5,625,000 shares of its common stock for $8.00 per share, and received net proceeds of approximately $43.0 million after deducting the underwriting discount and other offering expenses.

In December 2012, the Company entered into an ATM equity offering sales agreement with JMP whereby, in accordance with the terms of the agreement, from time to time the Company could issue and sell through JMP up to 6,000,000 shares of its common stock. Sales of the shares were made by means of ordinary brokers’ transactions or otherwise at market prices prevailing at the time of sale, or at negotiated prices. As of the first quarter of 2013, the Company sold all of the 6,000,000 shares for net proceeds of $45.6 million.

The Company used the net proceeds from its preferred and common offerings to make investments, to repurchase or pay liabilities and for general corporate purposes.

As of November 7, 2014, the Company has $330.4 million available under its $500.0 million shelf registration statement that was declared effective by the SEC in August 2013.

Distributions

The following table presents dividends declared (on a per share basis) for the nine months ended September 30, 2014:

Common Stock			Preferred Stock
				Dividend (1)
Declaration Date	Dividend		Declaration Date	Series A		Series B		Series C

February 12, 2014	$	0.13	February 3, 2014	$	0.515625	$	0.484375	N/A
April 29, 2014	$	0.13	April 29, 2014	$	0.515625	$	0.484375	$	0.5549
July 30, 2014	$	0.13	July 30, 2014	$	0.515625	$	0.484375	$	0.53125

(1)

The dividend declared on February 3, 2014 for the Series A and B preferred stock was for the period December 1, 2013 through February 28, 2014. The dividend declared on April 29, 2014 for the Series A and B preferred stock was for the period March 1, 2014 through May 31, 2014, and for the Series C preferred stock, February 25, 2014 through May 31, 2014. The dividend declared on July 30, 2014 for the Series A, B and C preferred stock was for the period June 1, 2014 through August 31, 2014.

Common Stock — On November 5, 2014, the Board of Directors declared a cash dividend of $0.13 per share of common stock. The dividend is payable on December 1, 2014 to common stockholders of record as the close of business on November 19, 2014.

Preferred Stock — On October 31, 2014, the Board of Directors declared a cash dividend of $0.515625 per share of 8.25% Series A preferred stock; a cash dividend of $0.484375 per share of 7.75% Series B preferred stock; and a cash dividend of $0.53125 per share of 8.50% Series C preferred stock. These amounts reflect dividends from September 1, 2014 through November 30, 2014 and are payable on December 1, 2014 to preferred stockholders of record on November 15, 2014.

Deferred Compensation

In May 2014, the Company issued 278,000 shares of restricted common stock under the 2014 Stock Incentive Plan (the “Plan”) to certain employees of the Company and ACM with a total grant date fair value of $2.0 million and recorded $0.3 million to employee compensation and benefits and $0.3 million to selling and administrative expense in the Company’s Consolidated Statements of Income in the second quarter of 2014. One third of the shares vested as of the date of grant, one third will vest in May 2015, and the remaining third will vest in May 2016. In May 2014, the Company also issued 63,000 shares of fully vested common stock to the independent members of the Board of Directors under the Plan and recorded $0.4 million to selling and administrative expense in its Consolidated Statements of Income in the second quarter of 2014. During the nine months ended September 30, 2013, the Company recorded $0.9 million to selling and administrative expense and $0.2 million to employee compensation in its Consolidated Statements of Income related to the immediate vesting of stock grants. As of September 30, 2014, unvested restricted stock consisted of 138,584 shares granted to employees of ACM with a grant date fair value of $1.0 million, which is subject to remeasurement each reporting period, and 110,666 shares granted to employees of the Company with a grant date fair value of $0.8 million. Expense is recognized ratably over the vesting period in the Company’s Consolidated Statements of Income in selling and administrative expense and employee compensation and benefits expense, respectively. During the three months ended September 30, 2014 and 2013, the Company recorded the ratable portion of the unvested restricted stock to employees as employee compensation and benefits for $0.1 million for both periods, and for non-employees to selling and administrative expense for $0.2 million and $0.1 million, respectively. During the nine months ended September 30, 2014 and 2013, the Company recorded the ratable portion of the unvested restricted stock to employees as employee compensation and benefits for $0.3 million and $0.2 million, respectively and for non-employees to selling and administrative expense for $0.3 million and $0.2 million, respectively.

Vesting is dependent on a service requirement. Dividends paid on restricted shares are recorded as dividends on shares of the Company’s common stock whether or not they are vested. For accounting purposes, the Company measures the compensation costs for these shares as of the date of the grant, with subsequent remeasurement for any unvested shares granted to non-employees of the Company with such amounts expensed against earnings, at the grant date (for the portion that vest immediately) or ratably over the respective vesting periods.

Warrants

In connection with a debt restructuring with Wachovia Bank in 2009, the Company issued Wachovia 1,000,000 warrants at an average strike price of $4.00 and an expiration date in July 2015. On July 1, 2014, all of the warrants were acquired and canceled by the Company in return for the payment of $2.6 million, recorded to additional paid in capital, which reflects a 5% discount to the prior day closing price of the Company’s common stock of $6.95.

Accumulated Other Comprehensive Loss

At September 30, 2014, accumulated other comprehensive loss was $17.2 million and consisted of $17.5 million of net unrealized losses on derivatives designated as cash flow hedges and a $0.4 million unrealized gain related to available-for-sale securities. At December 31, 2013, accumulated other comprehensive loss was $25.2 million and consisted of $26.3 million of net unrealized losses on derivatives designated as cash flow hedges and a $1.1 million unrealized gain related to available-for-sale securities.

Reclassifications out of accumulated other comprehensive loss for the nine months ended September 30, 2014 and 2013 were as follows:

	Nine Months Ended September 30,
	2014			2013			Statement of Income Caption
Net realized losses on derivatives designated as cash flow hedges:
Interest Rate Swaps	$	(9,614,701	)	$	(10,564,021	)	Interest expense (1)
Net realized gain on sale of available-for-sale investments:
RMBS investment	$	431,476		$	100,000		Other income (2)

(1)

See Note 8 — “Derivative Financial Instruments” for additional details.

(2)

See Note 4 — “Securities” for additional details.

Noncontrolling Interest

The Company had a noncontrolling interest representing a third party’s one third interest in the equity of a consolidated subsidiary that owns an investment that carried a note payable related to the exchange of a profits interest transaction. In the fourth quarter of 2013, the entity’s operating agreement was amended to provide joint control to the members of the entity, and therefore, the entity was deconsolidated. Upon completion of this transaction, the Company deconsolidated the entity and noncontrolling interest was reduced to zero. For the three months ended September 30, 2013, the Company recorded income of less than $0.1 million as well as distributions of $1.0 million attributable to the noncontrolling interest. For the nine months ended September 30, 2013, the Company recorded income of $0.1 million as well as distributions of $1.1 million attributable to the noncontrolling interest.