Note 11—Equity

Preferred Share Information

On January 1, 2019, as part of the Company’s conversion to a corporation, the Company was authorized to issue 5,000,000 of preferred shares, in one or more series, with no par value. The Board of Directors has not authorized any of these shares to be issued and no rights have been established for any of these shares.

Common Share Information

The following table provides information about net income to common shareholders as well as provides information that pertains to weighted-average share counts that were used in per share calculations as presented on the Consolidated Statements of Operations:


	For the three months ended				For the six months ended
	June 30,				June 30,
(in thousands)	2019		2018		2019		2018
Net income (loss) from continuing operations	$	23,220	$	1,815	$	26,109	$	(594)
Net (loss) income from discontinued operations		(1)		947		(8)		21,696
Net income	$	23,219	$	2,762	$	26,101	$	21,102

Basic weighted-average shares (1)		5,884		5,697		5,883		5,673
Common stock equivalents (2)		─		377		─		─
Diluted weighted-average shares		5,884		6,074		5,883		5,673

⁽¹⁾

Includes common shares issued and outstanding, as well as deferred shares of non-employee directors that have vested but are not issued and outstanding.

⁽²⁾

At June 30, 2018, 380,000 stock options were exercisable and in-the-money and had a potential dilutive share impact of 377,162 and 381,833 for the three and six months ended June 30, 2018. For the six months ended June 30, 2018, the Company had a net loss from continuing operations and thus, any incremental shares would be anti-dilutive. All stock options were exercised as of December 31, 2018.

Common Shares

On March 9, 2018, the Company issued 125,000 common shares to Hunt for $4.1 million, or $33.00 per share. On June 26, 2018, the Company issued an additional 125,000 shares to Hunt for $4.3 million, or $34.00 per share.

Effective May 5, 2015, the Company adopted a Tax Benefits Rights Agreement (the “Rights Plan”) to help preserve the Company’s net operating losses (“NOLs”). In connection with adopting the Rights Plan, the Company declared a distribution of one right per common share to shareholders of record as of May 15, 2015. The rights do not trade apart from the current common shares until the distribution date, as defined in the Rights Plan. Under the Rights Plan, the acquisition by an investor (or group of related investors) of greater than a 4.9% stake in the Company, could result in all existing shareholders other than the new 4.9% holder having the right to acquire new shares for a nominal cost, thereby significantly diluting the ownership interest of the acquiring person. The Rights Plan will remain in effect until the earlier of (i) a period of five years or (ii) until the Board determines the plan is no longer required.

On January 3, 2018, the Board approved a waiver of the 4.9% ownership limitation for Hunt, increasing such limitation to the acquisition of 9.9% of the Company’s issued and outstanding shares in any rolling 12‑month period without causing a triggering event.

At June 30, 2019, the Company had three shareholders, including one of its executive officers, Michael L. Falcone, who held greater than a 4.9% interest in the Company. In order to facilitate satisfaction of share purchase obligations related to his 2017 bonus award and permitting his stock option awards to be exercised, the Board of Directors named Mr. Falcone an exempt person in accordance with the Rights Plan but only to the extent of settling such share purchase obligations and options. Mr. Falcone satisfied his share purchase obligations and exercised all of his share purchase option awards as of December 31, 2018, and, due to the aforementioned action of the Board of Directors, there was no triggering event for purposes of the Rights Plan.

Accumulated Other Comprehensive Income

The following table provides information related to the net change in AOCI for the three months ended June 30, 2019:


	Investments		Foreign
	in Debt		Currency
(in thousands)	Securities		Translation		AOCI
Balance, April 1, 2019	$	34,460	$	97	$	34,557
Net unrealized losses		(370)		(80)		(450)
Reclassification of realized gains on sold or redeemed bonds into the Consolidated Statements of Operations		(20,693)		─		(20,693)
Net change in AOCI		(21,063)		(80)		(21,143)
Balance, June 30, 2019	$	13,397	$	17	$	13,414

The following table provides information related to the net change in AOCI for the three months ended June 30, 2018:


			Income
	Investments		Tax		Foreign
	in Debt		(Expense)		Currency
(in thousands)	Securities		Benefit		Translation		AOCI
Balance, April 1, 2018	$	50,392	$	(256)	$	177	$	50,313
Net unrealized gains (losses)		4,465		─		(660)		3,805
Income tax benefit		─		242		─		242
Net change in AOCI		4,465		242		(660)		4,047
Balance, June 30, 2018	$	54,857	$	(14)	$	(483)	$	54,360

The following table provides information related to the net change in AOCI for the six months ended June 30, 2019:


	Investments		Foreign
	in Debt		Currency
(in thousands)	Securities		Translation		AOCI
Balance, January 1, 2019	$	37,625	$	72	$	37,697
Net unrealized gains (losses)		36		(55)		(19)
Reclassification of fair value gains on sold or redeemed bonds into the Consolidated Statements of Operations		(24,264)		─		(24,264)
Net change in AOCI		(24,228)		(55)		(24,283)
Balance, June 30, 2019	$	13,397	$	17	$	13,414

The following table provides information related to the net change in AOCI for the six months ended June 30, 2018:


	Investments		Income		Foreign
	in Debt		Tax		Currency
(in thousands)	Securities		Expense		Translation		AOCI
Balance, January 1, 2018	$	44,459	$	─	$	(3,306)	$	41,153
Net unrealized gains		1,118		─		2,823		3,941
Reclassification of credit-related gains to the Consolidated Statements of Operations related to bond investments assessed as OTTI		(135)		─		─		(135)
Reinstatement of fair value gains related to bond investments due to deconsolidation of consolidated property partnerships		9,415		─		─		9,415
Income tax expense		─		(14)		─		(14)
Net change in AOCI		10,398		(14)		2,823		13,207
Balance, June 30, 2018	$	54,857	$	(14)	$	(483)	$	54,360