Quarterly report pursuant to Section 13 or 15(d)

Stockholders' Equity (Notes)

v2.4.0.8
Stockholders' Equity (Notes)
 9 Months Ended
Sep. 30, 2013
Stockholders' Equity Attributable to Parent [Abstract]  
Stockholders' Equity
Stockholders’ Equity
Distributions to Stockholders
The following table presents cash dividends declared by the Company on its common stock from October 28, 2009 through September 30, 2013:
Declaration Date
 
Record Date
 
Payment Date
 
Cash Dividend Per Share
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

December 17, 2012
 
December 31, 2012
 
January 18, 2013
 
$
0.55

September 12, 2012
 
September 24, 2012
 
October 22, 2012
 
$
0.36

June 12, 2012
 
June 22, 2012
 
July 20, 2012
 
$
0.40

March 14, 2012
 
March 26, 2012
 
April 20, 2012
 
$
0.40

December 14, 2011
 
December 27, 2011
 
January 20, 2012
 
$
0.40

September 14, 2011
 
September 26, 2011
 
October 20, 2011
 
$
0.40

June 14, 2011
 
June 24, 2011
 
July 20, 2011
 
$
0.40

March 2, 2011
 
March 14, 2011
 
April 14, 2011
 
$
0.40

December 8, 2010
 
December 17, 2010
 
January 20, 2011
 
$
0.40

September 13, 2010
 
September 30, 2010
 
October 21, 2010
 
$
0.39

June 14, 2010
 
June 30, 2010
 
July 22, 2010
 
$
0.33

March 12, 2010
 
March 31, 2010
 
April 23, 2010
 
$
0.36

December 21, 2009
 
December 31, 2009
 
January 26, 2010
 
$
0.26



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 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 would be distributed, on a pro rata basis, to the Company’s stockholders of record at the close of business on 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 paid on or about April 24, 2013.
Accumulated Other Comprehensive Income
Accumulated other comprehensive income at September 30, 2013 and December 31, 2012 was as follows:
(in thousands)
September 30,
2013
 
December 31,
2012
Available-for-sale securities, at fair value
 
 
 
Unrealized gains
$
693,225

 
$
724,696

Unrealized losses
(180,451
)
 
(28,238
)
Accumulated other comprehensive income
$
512,774

 
$
696,458


Reclassifications out of Accumulated Other Comprehensive Income
The following table summarizes reclassifications out of accumulated other comprehensive income for the three and nine months ended September 30, 2013 and 2012:
(in thousands)
 
Affected Line Item in the Condensed Consolidated Statements of Comprehensive Income
 
Amount Reclassified out of Accumulated Other Comprehensive Income
 
 
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
 
 
2013
 
2012
 
2013
 
2012
Other-than-temporary-impairments on AFS securities
 
Total other-than-temporary impairment losses
 
$
—

 
$
559

 
$
1,662

 
$
9,310

Realized (gains) losses on sales of AFS securities
 
(Loss) gain on investment securities
 
187,007

 
803

 
123,089

 
(6,342
)
 
 
 
 
$
187,007

 
$
1,362

 
$
124,751

 
$
2,968



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 September 30, 2013, 138,036 shares have been issued under the plan for total proceeds of $1.5 million.
Share Repurchase Program
On October 5, 2011, the Company’s board of directors authorized a share repurchase program, which allows the Company to repurchase up to 10,000,000 shares of its common stock. On November 14, 2012, the board of directors authorized an increase in the share repurchase program of 15,000,000, for a total of 25,000,000 shares. 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 will be subject to a variety of factors, including market conditions and applicable SEC rules. As of September 30, 2013, 2,450,700 shares had been repurchased by the Company under the program 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. As of September 30, 2013, 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 nine months ended September 30, 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 September 30, 2013, warrant holders exercised 619,370 warrants to purchase 664,365 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 nine months ended September 30, 2013 were approximately $102.3 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 nine months ended September 30, 2013. No proceeds were received by the Company as a result of the cashless exercises.
As of September 30, 2013, 4,091,369 warrants to purchase approximately 4,388,811 shares of common stock remained outstanding and will expire at 5:00 p.m. EST on November 7, 2013, pursuant to the terms of the warrant agreement.