Quarterly report pursuant to Section 13 or 15(d)

Stockholders' Equity

v3.23.1
Stockholders' Equity
 3 Months Ended
Mar. 31, 2023
Equity [Abstract]  
Stockholders' Equity Stockholders’ Equity
Redeemable Preferred Stock
The following is a summary of the Company’s series of cumulative redeemable preferred stock issued and outstanding as of March 31, 2023. In the event of a voluntary or involuntary liquidation, dissolution or winding up of the Company, each series of preferred stock will rank on parity with one another and rank senior to the Company’s common stock with respect to the payment of the dividends and the distribution of assets.
(dollars in thousands)
Class of Stock Issuance Date Shares Issued and Outstanding Carrying Value Contractual Rate
Redemption Eligible Date (1)
Fixed to Floating Rate Conversion Date (2)
Floating Annual Rate (3)
Series A March 14, 2017 5,321,451  $ 128,522  8.125  % April 27, 2027 April 27, 2027
3M LIBOR + 5.660%
Series B July 19, 2017 10,713,154  259,066  7.625  % July 27, 2027 July 27, 2027
3M LIBOR + 5.352%
Series C November 27, 2017 10,057,445  243,411  7.250  % January 27, 2025 January 27, 2025
3M LIBOR + 5.011%
Total 26,092,050  $ 630,999 
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(1)Subject to the Company’s right under limited circumstances to redeem the preferred stock earlier than the redemption eligible date disclosed in order to preserve its qualification as a REIT or following a change in control of the Company.
(2)The dividend rate on the fixed-to-floating rate redeemable preferred stock will remain at an annual fixed rate of the $25.00 per share liquidation preference from the issuance date up to but not including the transition date disclosed within. Effective as of the fixed-to-floating rate conversion date and onward, dividends will accumulate on a floating rate basis according to the terms disclosed in footnote (3) below.
(3)On and after the fixed-to-floating rate conversion date, the dividend will accumulate and be payable quarterly at a percentage of the $25.00 per share liquidation preference equal to an annual floating rate of three-month LIBOR plus the spread indicated within each preferred class. Each series that becomes callable at the time the stock begins to pay a LIBOR-based rate has existing LIBOR cessation fallback language.

For each series of preferred stock, the Company may redeem the stock on or after the redemption date in whole or in part, at any time or from time to time. The Company may also purchase shares of preferred stock from time to time in the open market by tender or in privately negotiated transactions. Each series of preferred stock has a par value of $0.01 per share and a liquidation and redemption price of $25.00, plus any accumulated and unpaid dividends thereon up to, but excluding, the redemption date. Through March 31, 2023, the Company had declared and paid all required quarterly dividends on the Company’s preferred stock.
Preferred Share Repurchase Program
On June 22, 2022, the Company’s Board of Directors authorized the repurchase of up to an aggregate of 5,000,000 shares of the Company’s preferred stock, which includes each series shown in the table above under the heading Redeemable Preferred Stock. Preferred shares may be repurchased from time to time through privately negotiated transactions or open market transactions, pursuant to trading plans in accordance with Rule 10b5-1 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 preferred share repurchases are subject to a variety of factors, including market conditions and applicable SEC rules. The preferred share repurchase program does not require the purchase of any minimum number of shares, and, subject to SEC rules, purchases may be commenced or suspended at any time without prior notice. The preferred share repurchase program does not have an expiration date. As of March 31, 2023, a total of 428,549 shares of the Company’s 8.125% Series A Cumulative Redeemable Preferred Stock, 786,846 shares of the Company’s 7.625% Series B Cumulative Redeemable Preferred Stock and 1,742,555 shares of the Company’s 7.25% Series C Cumulative Redeemable Preferred Stock had been repurchased by the Company under the program for an aggregate cost of $7.8 million, $13.8 million and $29.8 million, respectively, all during the three months ended December 31, 2022.
Common Stock
Reverse Stock Split
On September 21, 2022, the Company’s board of directors approved a one-for-four reverse stock split of its outstanding shares of common stock. The reverse stock split was effected on November 1, 2022 at 5:01 p.m. Eastern Time. At the effective time, every four issued and outstanding shares of the Company’s common stock were converted into one share of common stock. No fractional shares were issued in connection with the reverse stock split; instead, each stockholder holding fractional shares was entitled to receive, in lieu of such fractional shares, cash in an amount determined on the basis of the volume weighted average price of the Company’s common stock on the NYSE on November 1, 2022. In connection with the reverse stock split, the number of authorized shares of the Company’s common stock was also reduced on a one-for-four basis, from 700,000,000 to 175,000,000. The par value of each share of common stock remained unchanged. All per share amounts, common shares outstanding and common equity-based awards for all periods presented have been adjusted on a retroactive basis to reflect the reverse stock split.
Public Offerings
On February 6, 2023, the Company completed a public offering of 10,000,000 shares of its common stock. The underwriters purchased the shares from the Company at a price of $17.59 per share, for net proceeds to the Company of approximately $175.6 million after deducting offering expenses. The underwriters did not exercise any portion of their 30-day overallotment option to purchase up to 1,500,000 additional shares.
As of March 31, 2023, the Company had 96,664,318 shares of common stock outstanding. The following table presents a reconciliation of the common shares outstanding for the three months ended March 31, 2023 and 2022:
Number of common shares
Common shares outstanding, December 31, 2021 85,977,831 
Issuance of common stock 4,868 
Non-cash equity award compensation (1)
50,355 
Common shares outstanding, March 31, 2022 86,033,054 
Common shares outstanding, December 31, 2022 86,428,845 
Issuance of common stock 10,121,107 
Non-cash equity award compensation (1)
114,366 
Common shares outstanding, March 31, 2023 96,664,318 
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(1)See Note 17 - Equity Incentive Plans for further details regarding the Company’s Equity Incentive Plans.

Distributions to Stockholders
The following table presents cash dividends declared by the Company on its preferred and common stock during the three months ended March 31, 2023 and 2022:
Three Months Ended
March 31,
(dollars in thousands) 2023 2022
Class of Stock Amount Per Share Amount Per Share
Series A Preferred Stock $ 2,702  $ 0.51  $ 2,920  $ 0.51 
Series B Preferred Stock $ 5,106  $ 0.48  $ 5,480  $ 0.48 
Series C Preferred Stock $ 4,557  $ 0.45  $ 5,347  $ 0.45 
Common Stock
 $ 58,381  $ 0.60  $ 58,811  $ 0.68 
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 limitations detailed in the plan prospectus. The plan allows for the issuance of up to an aggregate of 937,500 shares of the Company’s common stock. As of March 31, 2023, 117,345 shares have been issued under the plan for total proceeds of approximately $6.1 million, of which 3,680 and 4,868 shares were issued for total proceeds of $0.1 million and $0.1 million during the three months ended March 31, 2023 and 2022, respectively.
Common Share Repurchase Program
The Company’s common share repurchase program allows for the repurchase of up to an aggregate of 9,375,000 shares of the Company’s common stock. Common 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 Exchange Act, or by any combination of such methods. The manner, price, number and timing of common share repurchases are subject to a variety of factors, including market conditions and applicable SEC rules. The common share repurchase program does not require the purchase of any minimum number of shares, and, subject to SEC rules, purchases may be commenced or suspended at any time without prior notice. The common share repurchase program does not have an expiration date. As of March 31, 2023, a total of 3,043,575 shares had been repurchased by the Company under the program for an aggregate cost of $201.5 million. No shares were repurchased during the three months ended March 31, 2023 and 2022.
At-the-Market Offerings
The Company is party to an equity distribution agreement under which the Company is authorized to sell up to an aggregate of 11,000,000 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 March 31, 2023, 2,300,605 shares of common stock had been sold under the current or prior equity distribution agreements for total accumulated net proceeds of approximately $136.9 million, of which, 117,427 shares were sold for net proceeds of $2.1 million during the three months ended March 31, 2023. No shares were sold during the three months ended March 31, 2022.
Accumulated Other Comprehensive Loss
Accumulated other comprehensive loss at March 31, 2023 and December 31, 2022 was as follows:
(in thousands) March 31,
2023		 December 31,
2022
Available-for-sale securities:
Unrealized gains $ 32,908  $ 47,656 
Unrealized losses (185,688) (326,367)
Accumulated other comprehensive loss
 $ (152,780) $ (278,711)

Reclassifications out of Accumulated Other Comprehensive Loss
The Company reclassifies unrealized gains and losses on AFS securities in accumulated other comprehensive loss to net (loss) income upon the recognition of any realized gains and losses on sales as individual securities are sold. For the three months ended March 31, 2023 and 2022, the Company reclassified $63.2 million in unrealized losses and $8.4 million in unrealized gains, respectively, on sold AFS securities from accumulated other comprehensive loss to gain (loss) on investment securities on the condensed consolidated statements of comprehensive loss.