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Stockholders' Equity | 3 Months Ended
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Mar. 31, 2020
Stockholders' Equity Note [Abstract] |
Stockholders' Equity | Stockholders’ Equity (a) Preferred Stock 7.50% Series B Cumulative Redeemable Preferred Stock (“Series B Preferred Stock”) On April 15, 2013, the Company completed the issuance of 8.0 million shares of its 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. As a result of the turmoil in the financial markets resulting from the spread of the novel coronavirus and the global COVID-19 pandemic, and in order to preserve liquidity, on March 25, 2020, the Company revoked the previously announced first quarter 2020 quarterly cash dividends on each of the Company's common stock and Series B Preferred Stock. The Series B Preferred Stock dividend of $0.46875 per share had been declared on February 14, 2020, and was to be paid on March 31, 2020, to stockholders of record as of the close of business March 2, 2020. Unpaid dividends on the Company's Series B Preferred Stock will accrue without interest. No dividends may be paid or set apart on shares of the Company's common stock unless full cumulative dividends on the Series B Preferred Stock for all past dividend periods that have ended have been or contemporaneously are paid in cash, or a sum sufficient for such payment is set apart for payment. In addition, pursuant to the forbearance agreements that the Company entered into subsequent to quarter end, the Company is prohibited from paying dividends on its Series B Preferred Stock during the forbearance period (see Note 16). The Company will continue to monitor market conditions and the potential impact the ongoing volatility and uncertainty may have on its business. Related thereto, the Company's Board of Directors will continue to evaluate liquidity and the payment of dividends as market conditions evolve. At March 31, 2020, the unpaid cumulative dividends in arrears on the Company’s Series B Preferred Stock were $3.8 million ($0.46875 per share). Issuance of 6.50% Series C Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock (“Series C Preferred Stock”) On February 28, 2020, the Company amended its charter through the filing of articles supplementary to reclassify 12,650,000 shares of the Company’s authorized but unissued common stock as shares of the Company’s Series C Preferred Stock. On March 2, 2020, the Company completed the issuance of 11.0 million shares of its Series C 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 total net proceeds the Company received from the offering were approximately $266.0 million, after deducting offering expenses and the underwriting discount. The Company’s Series C Preferred Stock is entitled to receive dividends (i) from and including the original issue date to, but excluding, March 31, 2025, at a fixed rate of 6.50% per year on the $25.00 liquidation preference and (ii) from and including March 31, 2025, at a floating rate equal to three-month LIBOR plus a spread of 5.345% per year of the $25.00 per share 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 C Preferred Stock are payable quarterly in arrears on or about March 31, June 30, September 30 and December 31 of each year. The Series C Preferred Stock is not redeemable by the Company prior to March 31, 2025, except under circumstances where it is necessary to preserve the Company’s qualification as a REIT for U.S. federal income tax purposes and upon the occurrence of certain specified change in control transactions. On or after March 31, 2025, the Company may, at its option, subject to certain procedural requirements, redeem any or all of the shares of the Series C Preferred Stock for cash at a redemption price of $25.00 per share, plus any accrued and unpaid dividends thereon (whether or not authorized or declared) to, but excluding, the redemption date. The Series C 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 Preferred Stock will be entitled to vote to elect two additional directors to the Company’s 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 C Preferred Stock cannot be made without the affirmative vote of holders of at least 66 2/3 of the outstanding shares of Series C Preferred Stock. At March 31, 2020, the unpaid cumulative dividends in arrears on the Company’s Series C Preferred Stock were $1.4 million ($0.12639 per share). Pursuant to the forbearance agreements that the Company entered into subsequent to quarter end, the Company is prohibited from paying dividends on its Series C Preferred Stock during the forbearance period (see Note 16). (b) Dividends on Common Stock As discussed above, on March 25, 2020, the Company revoked its previously announced first quarter 2020 quarterly cash dividends on each of the Company's common stock and Series B Preferred Stock. The quarterly cash dividend of $0.20 per share on the Company's common stock had been declared on March 11, 2020, and was to be paid on April 30, 2020, to all stockholders of record as of the close of business March 31, 2020. No dividends may be paid or set apart on shares of the Company's common stock unless full cumulative dividends on the Series B Preferred Stock and Series C Preferred Stock for all past dividend periods that have ended have been or contemporaneously are paid in cash, or a sum sufficient for such payment is set apart for payment. In addition, pursuant to the forbearance agreements that the Company entered into subsequent to quarter end, the Company is prohibited from paying dividends on its common stock during the forbearance period (see Note 16). (c) Discount Waiver, Direct Stock Purchase and Dividend Reinvestment Plan (“DRSPP”) On October 15, 2019, 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) under 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 9.0 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, 2020, approximately 8.8 million shares of common stock remained available for issuance pursuant to the DRSPP shelf registration statement. During the three months ended March 31, 2020, the Company issued 106,949 shares of common stock through the DRSPP, raising net proceeds of approximately $691,979. Since the inception of the DRSPP in September 2003 through March 31, 2020, the Company issued 34,485,717 shares pursuant to the DRSPP, raising net proceeds of $287.3 million. (d) At-the-Market Offering Program On August 16, 2019 the Company entered into a distribution agreement under the terms of which the Company may offer and sell shares of its common stock having an aggregate gross sales price of up to $400.0 million (the “ATM Shares”), from time to time, through various sales agents, pursuant to an at-the-market equity offering program (the “ATM Program”). Sales of the ATM Shares, if any, may be made in negotiated transactions or by transactions that are deemed to be “at-the-market” offerings, as defined in Rule 415 under the 1933 Act, including sales made directly on the New York Stock Exchange (“NYSE”) or sales made to or through a market maker other than an exchange. The sales agents are entitled to compensation of up to two percent of the gross sales price per share for any shares of common stock sold under the distribution agreement. During the three months ended March 31, 2020, the Company did no t sell any shares of common stock through the ATM Program. At March 31, 2020, approximately $390.0 million remained outstanding for future offerings under this program. (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, 2020. At March 31, 2020, 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, 2020:
|  | Three Months Ended March 31, 2020
(In Thousands) |  | Net Unrealized Gain/(Loss) on AFS Securities |  | Net (Loss) on Swaps |  | Total AOCI
Balance at beginning of period |  | $ | 392,722 |  |  | $ | (22,675 | ) |  | $ | 370,047 |
OCI before reclassifications |  | 124,410 |  |  | (50,127 | ) |  | 74,283 |
Amounts reclassified from AOCI (1) |  | (368,222 | ) |  | 1,594 |  |  | (366,628 | )
Net OCI during the period (2) |  | (243,812 | ) |  | (48,533 | ) |  | (292,345 | )
Balance at end of period |  | $ | 148,910 |  |  | $ | (71,208 | ) |  | $ | 77,702 |
(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, 2019:
|  | Three Months Ended March 31, 2019
(In Thousands) |  | Net Unrealized Gain/(Loss) on AFS Securities |  | Net Gain 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 information about the significant amounts reclassified out of the Company’s AOCI for the three months ended March 31, 2020:
|  | Three Months Ended March 31, 2020 |  |
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 |  | $ | (23,953 | ) |  | Net realized (loss)/gain on sales of residential mortgage securities and residential whole loans
Impairment recognized in earnings |  | (344,269 | ) |  | Other, net
Total AFS Securities |  | $ | (368,222 | ) |  |
Swaps designated as cash flow hedges: |  |  |  |
Amortization of de-designated hedging instruments |  | 1,594 |  |  | Other, net
Total Swaps designated as cash flow hedges |  | $ | 1,594 |  |  |
Total reclassifications for period |  | $ | (366,628 | ) |  |
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 (loss)/gain on sales of residential mortgage securities and residential whole loans
Total AFS Securities |  | $ | (17,009 | ) |  |
Amortization of de-designated hedging instruments |  | (341 | ) |  |
Total reclassifications for period |  | $ | (17,350 | ) |  |

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- Definition The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI http://asc.fasb.org/topic&trid=2208762 + Details
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