Annual report pursuant to Section 13 and 15(d)

Stockholders' Equity (Notes)

v3.3.1.900
Stockholders' Equity (Notes)
 12 Months Ended
Dec. 31, 2015
Stockholders' Equity Note [Abstract]  
Stockholders' Equity
Stockholders’ Equity
Common Stock
As of December 31, 2015, the Company had 353,906,807 shares of common stock outstanding. The following table presents a reconciliation of the common shares outstanding from December 31, 2012 through December 31, 2015:
 
Number of common shares
Common shares outstanding, December 31, 2012
298,813,258

Issuance of common stock
67,511,609

Issuance of restricted stock (1)
1,061,001

Repurchase of common stock
(2,450,700
)
Common shares outstanding, December 31, 2013
364,935,168

Issuance of common stock
57,218

Issuance of restricted stock (1)
1,403,534

Common shares outstanding, December 31, 2014
366,395,920

Issuance of common stock
69,826

Issuance of restricted stock (1)
1,105,361

Repurchase of common stock
(13,664,300
)
Common shares outstanding, December 31, 2015
353,906,807

____________________
(1)
Represents shares of restricted stock granted under the Second Restated 2009 Equity Incentive Plan, of which 2,290,609 restricted shares remained subject to vesting requirements at December 31, 2015.

Distributions to Stockholders
The following table presents cash dividends declared by the Company on its common stock for the years ended December 31, 2015, 2014 and 2013:
Declaration Date
 
Record Date
 
Payment Date
 
Cash Dividend Per Share
December 16, 2015
 
December 30, 2015
 
January 20, 2016
 
$
0.26

September 16, 2015
 
September 30, 2015
 
October 22, 2015
 
$
0.26

June 17, 2015
 
June 30, 2015
 
July 21, 2015
 
$
0.26

March 18, 2015
 
March 31, 2015
 
April 21, 2015
 
$
0.26

December 16, 2014
 
December 30, 2014
 
January 20, 2015
 
$
0.26

September 16, 2014
 
September 30, 2014
 
October 21, 2014
 
$
0.26

June 17, 2014
 
July 2, 2014
 
July 22, 2014
 
$
0.26

March 17, 2014
 
March 31, 2014
 
April 21, 2014
 
$
0.26

December 17, 2013
 
December 27, 2013
 
December 31, 2013
 
$
0.26

September 11, 2013
 
September 26, 2013
 
October 23, 2013
 
$
0.28

June 18, 2013
 
June 28, 2013
 
July 23, 2013
 
$
0.31

March 18, 2013
 
April 2, 2013
 
April 24, 2013
 
$
0.32



Special Dividend of Silver Bay Common Stock
On March 18, 2013, the Company’s board of directors declared a special dividend pursuant to which the Company distributed 17,824,647 shares of Silver Bay common stock the Company received in exchange for the contribution of its equity interests in Two Harbors Property Investment LLC to Silver Bay on December 19, 2012, on a pro rata basis, to the Company’s stockholders of record as of April 2, 2013. The final distribution ratio for the stock dividend was determined to be 0.048825853 shares of Silver Bay common stock for each share of the Company’s common stock outstanding as of April 2, 2013. The dividend was distributed on or about April 24, 2013.
Accumulated Other Comprehensive Income
Accumulated other comprehensive income at December 31, 2015 and December 31, 2014 was as follows:
(in thousands)
December 31,
2015
 
December 31,
2014
Available-for-sale securities, at fair value
 
 
 
Unrealized gains
$
405,177

 
$
891,820

Unrealized losses
(46,116
)
 
(36,031
)
Accumulated other comprehensive income
$
359,061

 
$
855,789



Reclassifications out of Accumulated Other Comprehensive Income
The following table summarizes reclassifications out of accumulated other comprehensive income for the years ended December 31, 2015, 2014 and 2013:
 
 
Affected Line Item in the Consolidated Statements of Comprehensive (Loss) Income
 
Amount Reclassified out of Accumulated Other Comprehensive Income
 
 
 
 
Year Ended
(in thousands)
 
 
 
December 31,
 
 
 
 
2015
 
2014
 
2013
Other-than-temporary-impairments on AFS securities
 
Total other-than-temporary impairment losses
 
$
535

 
$
392

 
$
1,662

Realized (gains) losses on sales of certain AFS securities, net of tax
 
Gain (loss) on investment securities
 
(336,230
)
 
(52,931
)
 
44,780

Total
 
 
 
$
(335,695
)
 
$
(52,539
)
 
$
46,442



Public Offering
On March 22, 2013, the Company completed a public offering of 50,000,000 shares of its common stock and issued an additional 7,500,000 shares of common stock pursuant to the underwriters’ over-allotments at a price of $13.46 per share, for gross proceeds of approximately $774.0 million. Net proceeds to the Company were approximately $762.9 million, net of issuance costs of approximately $11.1 million.
Dividend Reinvestment and Direct Stock Purchase Plan
The Company sponsors a dividend reinvestment and direct stock purchase plan through which stockholders may purchase additional shares of the Company’s common stock by reinvesting some or all of the cash dividends received on shares of the Company’s common stock. Stockholders may also make optional cash purchases of shares of the Company’s common stock subject to certain limitation detailed in the plan prospectus. An aggregate of 7.5 million shares of the Company’s common stock were originally reserved for issuance under the plan. As of December 31, 2015, 283,292 shares have been issued under the plan for total proceeds of approximately $3.0 million, of which 69,826 shares were issued for total proceeds of $0.7 million during the year ended December 31, 2015. During the years ended December 31, 2014 and 2013, 57,218 and 71,961 shares were issued for total proceeds of $0.6 million and $0.8 million, respectively.
Share Repurchase Program
As of December 31, 2015, the Company’s share repurchase program allowed the Company to repurchase up to 25,000,000 shares of its common stock. (Subsequent to year end, the Company’s board of directors authorized an increase of 50,000,000 shares, for up to a total of 75,000,000 shares authorized under the program). Shares may be repurchased from time to time through privately negotiated transactions or open market transactions, pursuant to a trading plan in accordance with Rules 10b5-1 and 10b-18 under the Securities Exchange Act of 1934, as amended, or the Exchange Act, or by any combination of such methods. The manner, price, number and timing of share repurchases are subject to a variety of factors, including market conditions and applicable U.S. Securities and Exchange Commission, or SEC, rules. The share repurchase program does not require the purchase of any minimum number of shares, and purchases may be commenced or suspended at any time without prior notice. The share repurchase program does not have an expiration date. As of December 31, 2015, a total of16,115,000 shares had been repurchased by the Company under the program for an aggregate cost of $139.1 million; of these, 13,664,300 shares were repurchased for a total cost of $115.2 million during the year ended December 31, 2015. No shares were repurchased during the year ended December 31, 2014. The remaining 2,450,700 shares were repurchased during the year ended December 31, 2013 for a total cost of $23.9 million.
At-the-Market Offering
On May 25, 2012, the Company entered into an equity distribution agreement under which the Company may sell up to an aggregate of 20,000,000 shares of its common stock from time to time in any method permitted by law deemed to be an “at the market” offering as defined in Rule 415 under the Securities Act of 1933, as amended, or the Securities Act. On May 22, 2015, the Company entered into an amendment to the equity distribution agreement providing that any subsequent offers or sales of the Company’s common stock under the equity distribution agreement shall be made pursuant to a new prospectus supplement, which was filed on the same date. As of December 31, 2015, 7,585,869 shares of common stock have been sold under the equity distribution agreement for total accumulated net proceeds of approximately $77.6 million; however, no shares were sold during the years ended December 31, 2015, 2014 and 2013.
Warrants
From January 1, 2013 to April 2, 2013, warrant holders exercised 8,720,690 warrants to purchase 8,720,690 shares of the Company’s common stock, at an exercise price of $11.00 per share. On April 2, 2013, the exercise price of the warrants was lowered to $10.25 per warrant share and the number of shares of the Company’s common stock issuable for each warrant share exercised was increased to 1.0727 shares. These adjustments were required under the terms of the warrant agreement as a result of the special dividend of Silver Bay common stock. Calculation of the adjustments was determined based on, among other things, the closing price of the Company’s common stock on the business day immediately preceding the ex-dividend date for the stock dividend and the fair market value of the stock dividend to be received for each share of the Company’s common stock on the ex-dividend date.
From April 3, 2013 to the warrant expiration date, November 7, 2013, warrant holders exercised 1,130,460 warrants to purchase 1,212,607 shares of the Company’s common stock, at an exercise price of $10.25 per share. Total proceeds to the Company for warrant exercises during the year ended December 31, 2013 were approximately $107.5 million.
Additionally, certain Capitol founders holding warrants containing cashless exercise provisions exercised 100,000 warrants on a cashless basis, resulting in the surrender of 93,649 shares of common stock and the issuance of 6,351 shares of common stock during the year ended December 31, 2013. No proceeds were received by the Company as a result of the cashless exercises.
At 5:00 p.m. EST on November 7, 2013, 3,580,279 warrants expired pursuant to the terms of the warrant agreement. No warrants remained outstanding as of December 31, 2013.