22. STOCKHOLDERS’ EQUITY AND EARNINGS PER SHARE

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 December 31, 2012, 85,710 shares were outstanding.

Series B Preferred Stock Offering—On December 5, 2008, the Company issued 306,546 shares of Fixed Rate Cumulative Perpetual Preferred Stock, Series B (“Series B”), with a liquidation preference of $1,000 per share. The Company received $306.5 million of additional Tier 1 qualifying capital from the U.S. Treasury by participating in the U.S. Treasury’s Capital Purchase Program (“TCPP”). On December 29, 2010, in accordance with approvals received from the U.S. Treasury and the Federal Reserve Board, the Company repurchased all shares of the Series B preferred stock and the related accrued and unpaid dividends by using $308.4 million of available cash, without raising any capital or debt. As a result of repurchasing the Series B preferred stock, the Company accelerated the remaining accretion of the issuance discount on the Series B preferred stock of $17.5 million and recorded a corresponding charge to stockholders’ equity and income available to common stockholders in the calculation of diluted earnings per share. While participating in the TCPP, we recorded $56.9 million in dividends and accretion, including $31.7 million in cash dividends and $25.2 million of accretion on the Series B preferred stock issuance discount. Repayment saved us approximately $15.3 million in annual dividends.

Private Placement—On November 5, 2009, we entered into investment agreements with various investors, pursuant to which the investors purchased an aggregate of $500.0 million of our common stock and newly-issued shares of our Mandatorily Convertible Non-Voting Perpetual Preferred Stock, Series C (“Series C”), with a liquidation preference of $1,000 per share, in a private placement transaction which closed on November 6, 2009. In the private placement, we issued certain qualified institutional buyers and accredited investors, several of whom were already our largest institutional stockholders, an aggregate of 335,047 shares of our Series C preferred stock and an aggregate of 18,247,012 shares of common stock. On March 25, 2010, at a special meeting of the stockholders, our stockholders voted to approve the issuance of 37,103,734 shares of our common stock upon conversion of the 335,047 shares of the Series C preferred stock. Subsequently, on March 30, 2010, each share of the Series C preferred stock was automatically converted into 110.74197 shares of common stock at a per common share conversion price of $9.03, as adjusted in accordance with the terms of the Series C preferred stock. As a result, no shares of the Series C preferred stock remain outstanding as of December 31, 2012 and 2011.

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 outstanding warrants for $14.5 million.

Stock Repurchase Program—On January 19, 2012, it was announced that 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. During 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 years ended December 31, 2011 and 2010.

Quarterly Dividends—The Company’s Board of Directors declared and paid quarterly preferred stock cash dividends of $20.00 per share on its Series A preferred stock during 2012 and 2011. Cash dividends totaling $6.9 million were paid to the Company’s Series A preferred stock shareholders during the years ended December 31, 2012 and 2011.

The Company also paid quarterly dividends on its common stock of $0.10 per share for each quarter of 2012. In comparison, the Company paid quarterly dividends on its common stock of $0.01 per share for the first quarter of 2011 and $0.05 per share for the remaining quarters of 2011. Total quarterly dividends amounting to $57.6 million and $23.9 million were paid to the Company’s common shareholders during the years ended December 31, 2012 and 2011, respectively.

Accumulated Other Comprehensive Income/(Loss) - As of December 31, 2012, total accumulated other comprehensive income was $4.7 million which includes the following components: net unrealized gain on securities available for sale of $4.6 million and unrealized gain on other asset investment of $26 thousand. As of December 31, 2011, total accumulated other comprehensive loss was ($33.9) million which includes the following components: net unrealized loss on securities available for sale of ($34.8) million, foreign exchange translation adjustment of $900 thousand, and unrealized gain on other asset investment of $8 thousand. As of December 31, 2010, total accumulated other comprehensive loss was ($12.4) million which includes the following components: net unrealized loss on securities available for sale of ($13.9) million, foreign exchange translation adjustment of $1.7 million, and unrealized loss on other asset investment of ($151) thousand.

Activity in accumulated other comprehensive income (loss), net of tax, for the years ended December 31, 2012, 2011, and 2010 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, 2009	$	602		$	(29	)	$	26		$	599
Period Change	(14,529		)	1,693			(177		)	(13,013		)
Balance, December 31, 2010	$	(13,927	)	$	1,664		$	(151	)	$	(12,414	)
Period Change	(20,921		)	(764		)	159			(21,526		)
Balance, December 31, 2011	$	(34,848	)	$	900		$	8		$	(33,940	)
Period Change	39,491			(900		)	18			38,609
Balance, December 31, 2012	$	4,643		$	—		$	26		$	4,669

The following table sets forth the tax effects allocated to each component of other comprehensive income (loss) for the years ended December 31, 2012, 2011, and 2010:

				Tax
	Before-Tax			(Expense)			Net-of-Tax
	Amount			or Benefit			Amount
				(In thousands)
For the year ended December 31, 2012
Unrealized gain on investment securities available-for-sale:
Unrealized holding gains arising during period	$	73,910		$	(31,042	)	$	42,868
Less: reclassification adjustment for gains included in income	(757		)	318			(439		)
Net unrealized gains	73,153			(30,724		)	42,429
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	53			(22		)	31
Less: reclassification adjustment for gains included in income	(23		)	10			(13		)
Other comprehensive income	$	66,565		$	(27,956	)	$	38,609

				Tax
	Before-Tax			(Expense)			Net-of-Tax
	Amount			or Benefit			Amount
				(In thousands)
For the year ended December 31, 2011
Unrealized loss on investment securities available-for-sale:
Unrealized holding loss arising during period	$	(21,264	)	$	8,931		$	(12,333	)
Less: reclassification adjustment for gains included in income	(9,703		)	4,075			(5,628		)
Net unrealized loss	(30,967		)	13,006			(17,961		)
Noncredit-related impairment loss on securities	(5,103		)	2,143			(2,960		)
Foreign currency translation adjustments	(1,317		)	553			(764		)
Unrealized gain on other asset investment	334			(140		)	194
Less: reclassification adjustment for gains included in income	(61		)	26			(35		)
Other comprehensive loss	$	(37,114	)	$	15,588		$	(21,526	)

				Tax
	Before-Tax			(Expense)			Net-of-Tax
	Amount			or Benefit			Amount
				(In thousands)
For the year ended December 31, 2010
Unrealized loss on investment securities available-for-sale:
Unrealized holding gains arising during period	$	21,645		$	(9,091	)	$	12,554
Less: reclassification adjustment for gains included in income	(31,237		)	13,120			(18,117		)
Net unrealized loss	(9,592		)	4,029			(5,563		)
Noncredit-related impairment loss on securities	(15,458		)	6,492			(8,966		)
Foreign currency translation adjustments	2,919			(1,226		)	1,693
Unrealized loss on other asset investment	(305		)	128			(177		)
Less: reclassification adjustment for gains included in income	—			—			—
Other comprehensive loss	$	(22,436	)	$	9,423		$	(13,013	)

Earnings Per Share (“EPS”)—The calculation of basic and diluted earnings per share for the years ended December 31, 2012, 2011 and 2010 is presented below:

				Number	Per
				of	Share
	Net Income			Shares	Amounts
	(In thousands, except per share data)
2012
Net income	$	281,065
Less:
Preferred stock dividends	(6,857		)
Earnings allocated to participating securities	(3,271		)
Basic EPS – income allocated to common stockholders(1)	$	270,937		141,457	$	1.92
Effect of dilutive securities:
Stock options	—			29
Restricted stock units	47			118
Convertible preferred stock	6,857			5,571
Diluted EPS – income allocated to common stockholders(1)	$	277,841		147,175	$	1.89

2011
Net income	$	245,234
Less:
Preferred stock dividends	(6,857		)
Basic EPS – income available to common stockholders	$	238,377		147,093	$	1.62
Effect of dilutive securities:
Stock options	—			62
Restricted stock awards	115			718
Convertible preferred stock	6,857			5,571
Stock warrants	—			23
Diluted EPS – income available to common stockholders	$	245,349		153,467	$	1.60

2010
Net income	$	164,564
Less:
Preferred stock dividends and amortization of preferred stock discount	(43,126		)
Basic EPS – income available to common stockholders	121,438			137,478	$	0.88
Effect of dilutive securities:
Stock options	—			142
Restricted stock awards	15			370
Convertible preferred stock	—			8,936
Stock warrants	—			176
Diluted EPS – income available to common stockholders	$	121,453		147,102	$	0.83

The following outstanding convertible preferred stock, stock options, and restricted stock awards for years ended December 31, 2012, 2011, and 2010, respectively, were excluded from the computation of diluted EPS because including them would have had an antidilutive effect.

	For the Year Ended
	2012		2011	2010
	(In thousands)
Convertible preferred stock	—		—	5,573
Stock options	340		857	1,043
Restricted stock awards	5	(1)	317	326

(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.