XML 93 R21.htm IDEA: XBRL DOCUMENT

STOCKHOLDERS' EQUITY

9 Months Ended

Sep. 30, 2012

NOTE 13 — STOCKHOLDERS’ EQUITY

Series A Preferred Stock Offering—In April 2008, the Company issued 200,000 shares of 8% Non-Cumulative Perpetual Convertible Preferred Stock, Series A (“Series A”), with a liquidation preference of $1,000 per share. The Company received $194.1 million of additional Tier 1 qualifying capital, after deducting stock issuance costs. The holders of the Series A preferred stock have the right at any time to convert each share of Series A preferred shares into 64.9942 shares of the Company’s common stock, plus cash in lieu of fractional shares. This represents an initial conversion price of approximately $15.39 per share of common stock or a 22.5% conversion premium based on the closing price of the Company’s common stock on April 23, 2008 of $12.56 per share. On or after May 1, 2013, the Company will have the right, under certain circumstances, to cause the Series A preferred shares to be converted into shares of the Company’s common stock. Dividends on the Series A preferred shares, if declared, will accrue and be payable quarterly in arrears at a rate per annum equal to 8% on the liquidation preference of $1,000 per share. The proceeds from this offering were used to augment the Company’s liquidity and capital positions and reduce its borrowings. As of September 30, 2012, 85,710 shares were outstanding.

Warrants—During 2008, in conjunction with the Series B preferred stock offering, the Company issued to the U.S. Treasury warrants with an initial price of $15.15 per share of common stock for which the warrants may be exercised, with an allocated fair value of $25.2 million. The warrants could be exercised at any time on or before December 5, 2018. On January 26, 2011 the Company repurchased the 1,517,555 warrants outstanding for $14.5 million.

Stock Repurchase Program—On January 19, 2012, the Company’s Board of Directors authorized a stock repurchase program to buy back up to $200.0 million of the Company’s common stock. As of September 30, 2012, the Company completed the authorized repurchase program, repurchasing 9,068,105 shares at a weighted average price of $22.02 per share and a total cost of $199.9 million. The Company did not repurchase any shares during the nine months ended September 30, 2011.

Quarterly Dividends—In July 2012, the Company declared the payment of third quarter dividends of $20.00 per share on the Company’s Series A preferred stock, payable on or about August 1, 2012 to shareholders of record as of July 15, 2012. Total cash dividends paid in conjunction with the Company’s Series A preferred stock amounted to $1.7 million and $5.1 million during the three and nine months ended September 30, 2012, respectively.

In July 2012, the Company’s Board of Directors also declared quarterly common stock cash dividends of $0.10 per share payable on or about August 24, 2012 to shareholders on record on August 10, 2012. Cash dividends totaling $14.2 million and $43.5 million were paid to the Company’s common shareholders during the three and nine months ended September 30, 2012, respectively.

Earnings Per Share (“EPS”)—The number of shares outstanding at September 30, 2012 was 140,300,832. The Company applies the two-class method of computing basic EPS. Under the two-class method, EPS is determined for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. The Company’s restricted stocks, which receive dividends as declared, qualify as participating securities. Restricted stock units issued by the Company are not considered participating securities, as they do not have dividend distribution rights during the vesting period. Diluted EPS is calculated on the basis of the weighted average number of shares outstanding during the period plus potential dilutive shares.

The following table sets forth earnings per share calculations for the three and nine months ended September 30, 2012 and 2011:

	Three Months Ended September 30, 2012
	Net Income			Number of Shares	Per Share Amounts
	(In thousands, except per share data)
Net income	$	71,110
Less:
Preferred stock dividends	(1,714		)
Earnings allocated to participating securities	(798		)
Basic EPS – income allocated to common stockholders (1)	$	68,598		139,621	$	0.49
Effect of dilutive securities:
Stock options	—			28
Restricted stock units	14			138
Convertible preferred stock	1,714			5,571
Diluted EPS – income allocated to common stockholders (1)	$	70,326		145,358	$	0.48

	Three Months Ended September 30, 2011
	Net Income			Number of Shares	Per Share Amounts
	(In thousands, except per share data)
Net income	$	62,432
Less:
Preferred stock dividends	(1,714		)
Basic EPS – income available to common stockholders	$	60,718		147,162	$	0.41
Effect of dilutive securities:
Stock options	—			37
Restricted stock awards	34			683
Convertible preferred stock	1,714			5,571
Diluted EPS – income available to common stockholders	$	62,466		153,453	$	0.41

	Nine Months Ended September 30, 2012
	Net Income			Number of Shares	Per Share Amounts
	(In thousands, except per share data)
Net income	$	209,750
Less:
Preferred stock dividends	(5,142		)
Earnings allocated to participating securities	(2,518		)
Basic EPS – income allocated to common stockholders (1)	$	202,090		142,348	$	1.42
Effect of dilutive securities:
Stock options	—			36
Restricted stock units	29			96
Convertible preferred stock	5,142			5,571
Diluted EPS – income allocated to common stockholders (1)	$	207,261		148,051	$	1.40

	Nine Months Ended September 30, 2011
	Net Income			Number of Shares	Per Share Amounts
	(In thousands, except per share data)
Net income	$	179,028
Less:
Preferred stock dividends	(5,143		)
Basic EPS – income available to common stockholders	$	173,885		147,013	$	1.18
Effect of dilutive securities:
Stock options	—			74
Restricted stock awards	75			681
Convertible preferred stock	5,143			5,571
Stock warrants	—			33
Diluted EPS – income available to common stockholders	$	179,103		153,372	$	1.17

The following outstanding stock options, and restricted stock awards for the three and nine months ended September 30, 2012 and 2011, respectively, were excluded from the computation of diluted EPS because including them would have had an antidilutive effect.

	Three Months Ended			Nine Months Ended
	September 30,			September 30,
	2012		2011	2012		2011
	(In thousands)
Stock options	320		936	350		851
Restricted stock awards	5	(1)	519	5	(1)	342

(1) On April 1, 2012, the Company revised its calculation of earnings per share to account for participating securities under the two-class method. This revision to the earnings per share calculation does not have an impact to previous periods as the amounts are immaterial.

Accumulated Other Comprehensive (Loss) Income—As of September 30, 2012, total accumulated other comprehensive loss was ($1.5) million which includes the following components: net unrealized loss on securities available for sale of ($1.5) million and unrealized gain on other asset investment of $17 thousand. As of September 30, 2011, total accumulated other comprehensive loss was ($21.6) million which includes the following components: net unrealized loss on securities available for sale of ($22.3) million, foreign exchange translation adjustment of $928 thousand, and unrealized loss on other asset investment of ($240) thousand.

Activity in accumulated other comprehensive (loss) income, net of tax, for the nine months ended September 30, 2012 and 2011, was as follows:

	Unrealized gain (loss) on
	investment securities			Foreign currency			Unrealized gain (loss) on
	available-for-sale			translation adjustments			other asset investment			Total
	(In thousands)
Balance, December 31, 2010	$	(13,927	)	$	1,664		$	(151	)	$	(12,414	)
Period Change	(8,356		)	(736		)	(89		)	(9,181		)
Balance, September 30, 2011	$	(22,283	)	$	928		$	(240	)	$	(21,595	)
Balance, December 31, 2011	$	(34,848	)	$	900		$	8		$	(33,940	)
Period Change	33,314			(900		)	9			32,423
Balance, September 30, 2012	$	(1,534	)	$	—		$	17		$	(1,517	)

The following table sets forth the tax effects allocated to each component of other comprehensive income for the three and nine months ended September 30, 2012 and 2011:

				Tax
	Before-Tax			(Expense)			Net-of-Tax
	Amount			or Benefit			Amount
	(In thousands)
Three Months Ended September 30, 2012
Unrealized gain on investment securities available-for-sale:
Unrealized gains on holding gains arising during period	$	26,474		$	(11,119	)	$	15,355
Less: reclassification adjustment for gains included in income	(93		)	39			(54		)
Net unrealized gains	26,381			(11,080		)	15,301
Noncredit-related impairment loss on securities	—			—			—
Foreign currency translation adjustments	(1,552		)	652			(900		)
Unrealized gain on other asset investment	9			(4		)	5
Other comprehensive income	$	24,838		$	(10,432	)	$	14,406

				Tax
	Before-Tax			(Expense)			Net-of-Tax
	Amount			or Benefit			Amount
	(In thousands)
Three Months Ended September 30, 2011
Unrealized loss on investment securities available-for-sale:
Unrealized loss on holding gains arising during period	$	(41,405	)	$	17,390		$	(24,015	)
Less: reclassification adjustment for gains included in income	(3,191		)	1,341			(1,850		)
Net unrealized loss	(44,596		)	18,731			(25,865		)
Noncredit-related impairment loss on securities	—			—			—
Foreign currency translation adjustments	98			(41		)	57
Unrealized loss on other asset investment	(374		)	157			(217		)
Other comprehensive loss	$	(44,872	)	$	18,847		$	(26,025	)

				Tax
	Before-Tax			(Expense)			Net-of-Tax
	Amount			or Benefit			Amount
	(In thousands)
Nine Months Ended September 30, 2012
Unrealized gain on investment securities available-for-sale:
Unrealized gains on holding gains arising during period	$	63,150		$	(26,523	)	$	36,627
Less: reclassification adjustment for gains included in income	(647		)	272			(375		)
Net unrealized gains	62,503			(26,251		)	36,252
Noncredit-related impairment loss on securities	(5,066		)	2,128			(2,938		)
Foreign currency translation adjustments	(1,552		)	652			(900		)
Unrealized gain on other asset investment	16			(7		)	9
Other comprehensive income	$	55,901		$	(23,478	)	$	32,423

				Tax
	Before-Tax			(Expense)		Net-of-Tax
	Amount			or Benefit		Amount
	(In thousands)
Nine Months Ended September 30, 2011
Unrealized loss on investment securities available-for-sale:
Unrealized loss on holding gains arising during period	$	(2,493	)	$	1,047	$	(1,446	)
Less: reclassification adjustment for gains included in income	(6,823		)	2,866		(3,957		)
Net unrealized loss	(9,316		)	3,913		(5,403		)
Noncredit-related impairment loss on securities	(5,091		)	2,138		(2,953		)
Foreign currency translation adjustments	(1,269		)	533		(736		)
Unrealized loss on other asset investment	(153		)	64		(89		)
Other comprehensive loss	$	(15,829	)	$	6,648	$	(9,181	)