EQUITY

Preferred Stock

The following table presents the details of the classes of preferred stock outstanding as of the dates indicated:



	December 31, 2013		December 31, 2012
	(Dollars in thousands)
Preferred stock, $1.00 par value; authorized: 2,000,000 shares:
Series B, issued and outstanding (contingently convertible): 0 shares at December 31, 2013 and 401 shares at December 31, 2012; liquidation value: $100,000 per share	$	—	$	58,089
Series D, 6.95% Non-Cumulative Perpetual, issued and outstanding: 50,000 shares at December 31, 2013, 0 shares at December 31, 2012; liquidation preference: $1,000 per share	47,753		—
Total preferred stock	$	47,753	$	58,089

On April 24, 2013, the Company closed the public offering of 2,000,000 depositary shares (the “Depositary Shares”) pursuant to an Underwriting Agreement dated April 17, 2013, previously disclosed by the Company. Each Depositary Share represents a 1/40th interest in a share of the Company’s 6.95% Non-Cumulative Perpetual Preferred Stock, Series D, par value $1.00 per share and liquidation preference of $1,000 per share (the “Series D preferred stock”). The Company received $47.8 million from the issuance, after issuance costs.

Upon the issuance of the Series D preferred stock on April 24, 2013, the ability of the Company to declare and pay dividends on, or purchase, redeem or otherwise acquire, shares of its preferred stock or any securities of the Company that rank junior to the Series D preferred stock was subject to certain restrictions in the event that the Company does not declare and pay (or set aside) dividends on the Series D preferred stock for the last preceding quarterly dividend period.

Also on April 24, 2013, the Company repurchased all 400.81221 shares of the Company’s Series B Non-Cumulative Perpetual Contingent Convertible Preferred Stock, par value $1.00 per share (the “Series B preferred stock”), held by BP Holdco, L.P., a subsidiary of The Carlyle Group, L.P. (“Carlyle”), pursuant to a Stock Repurchase Agreement, dated as of April 16, 2013, previously disclosed by the Company.

The Series B Preferred stock was convertible into approximately 7.3 million shares of common stock at $5.52 per share, and participated in dividends payable on common stock on an as-converted basis. There were no mandatory redemption features and holders had no rights to require redemption. The conversion price was able to be adjusted upon various changes in outstanding shares of the Company such as the declaration of stock dividends, stock splits, issuance of stock purchase rights, self-tender offers, or a rights plan.

The Series B Preferred stock was initially issued as part of an investment agreement with Carlyle. The Company received approximately $75 million in capital. Under that agreement, Carlyle was issued Series A Preferred stock, Series B Preferred stock, and warrants to purchase shares of common stock. The Series A Preferred stock converted into common stock. In February 2012, the Company repurchased all of the warrants issued in conjunction with this transaction. During 2013, through a series of transactions, Carlyle sold its remaining common stock holdings in the Company to independent third parties on the open market and no longer holds any equity interest in the Company.

Common Stock

The Company has 170 million shares of common stock authorized for issuance. At December 31, 2013, it had 79,837,612 shares outstanding and 90,162,388 shares available for future issuance, including shares reserved for future issuance pursuant to the Company’s stock-based compensation plans, as discussed in Part II. Item 8. “Financial Statements and Supplementary Data—Note 18: Employee Benefits.” At December 31, 2012, it had 78,743,518 shares outstanding and 91,256,482 shares available for future issuance,

Warrants to purchase common stock

The Company currently has one class of warrants to purchase common stock outstanding. These warrants were initially issued to the U.S. Department of the Treasury (the “Treasury”) (the “TARP warrants”). The following table summarizes the terms of the TARP warrant agreements outstanding at December 31, 2013:

Name of warrants

Number of

warrants

Original

warrant

number

Current

warrant

number (2)

Original

exercise

price of

warrants

Current

exercise

price of

warrants (2)

Date

issued

Expiration

date

TARP Warrants (1)

2,887,500

1.00

1.03

$8.000

$7.804

11/21/2008

11/21/2018

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(1)	The TARP warrants, while initially issued to the Treasury, were purchased from the Treasury by unrelated third parties at a market rate.

(2)

Per the terms of the TARP warrants agreement, the exercise price and number of shares issuable upon exercise may be adjusted ratably for dividends paid on the Company’s common stock that exceed the dividend rate at the time the warrants were issued, at which time the Company paid quarterly dividends of $0.01 per share. The current warrant share number and current exercise price of the warrant reflect the warrant as adjusted for common stock dividends through February 21, 2014, the latest dividend payment date prior to the filing of this Annual Report.

Accumulated Other Comprehensive Income

Comprehensive income/ (loss) represents the change in equity of the Company during a year from transactions and other events and circumstances from non-shareholder sources. It includes all changes in equity during a year except those resulting from investments by shareholders and distributions to shareholders.

The following table presents the Company’s comprehensive income/ (loss) and related tax effect for the years ended December 31, 2013, 2012, and 2011:



	Other comprehensive income/(loss):
	Pre-tax			Tax expense/ (benefit)			Net
	(In thousands)
2013
Unrealized gain/ (loss) on securities available for sale	$	(11,797	)	$	(4,656	)	$	(7,141	)
Less: Adjustment for realized gains, net	49			21			28
Net unrealized gain/ (loss) on securities available for sale	(11,846		)	(4,677		)	(7,169		)
Unrealized gain/ (loss) on cash flow hedge	15			13			2
Add: scheduled reclass and other	2,083			879			1,204
Net unrealized gain/ (loss) on cash flow hedge	2,098			892			1,206
Net unrealized gain/ (loss) on other	(652		)	(294		)	(358		)
Other comprehensive gain/ (loss)	(10,400		)	(4,079		)	(6,321		)
Net income attributable to the Company (1)	102,843			32,308			70,535
Total comprehensive income	$	92,443		$	28,229		$	64,214
2012
Unrealized gain/ (loss) on securities available for sale	$	(1,577	)	$	(640	)	$	(937	)
Less: Adjustment for realized gains, net	871			314			557
Less: Adjustment for discontinued operations	(35		)	(12		)	(23		)
Net unrealized gain/ (loss) on securities available for sale	(2,413		)	(942		)	(1,471		)
Unrealized gain/ (loss) on cash flow hedges	(1,638		)	(760		)	(878		)
Add: scheduled reclass and other	1,757			742			1,015
Net unrealized gain/ (loss) on cash flow hedges	119			(18		)	137
Net unrealized gain/ (loss) on other	(216		)	(80		)	(136		)
Other comprehensive gain/ (loss)	(2,510		)	(1,040		)	(1,470		)
Net income attributable to the Company (1)	73,601			20,330			53,271
Total comprehensive income	$	71,091		$	19,290		$	51,801
2011
Unrealized gain/ (loss) on securities available for sale	$	5,987		$	2,261		$	3,726
Less: Adjustment for realized gains, net	798			308			490
Net unrealized gain/ (loss) on securities available for sale	5,189			1,953			3,236
Unrealized gain/ (loss) on cash flow hedges	(4,838		)	(2,008		)	(2,830		)
Add: scheduled reclass and other	1,872			777			1,095
Net unrealized gain/ (loss) on cash flow hedges	(2,966		)	(1,231		)	(1,735		)
Unrealized gain/ (loss) on other	78			30			48
Less: Adjustment for realized gains, net	(1,074		)	(377		)	(697		)
Net unrealized gain/ (loss) on other	1,152			407			745
Other comprehensive gain/ (loss)	3,375			1,129			2,246
Net income attributable to the Company (1)	53,417			14,280			39,137
Total comprehensive income	$	56,792		$	15,409		$	41,383

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(1)	Pre-tax net income attributable to the Company is calculated as income before income taxes, plus net income from discontinued operations, less net income attributable to noncontrolling interests.

The following table presents a summary of the amounts reclassified from accumulated other comprehensive income/ (loss) for the years ended December 31, 2013, 2012, and 2011:



Description of component of accumulated other comprehensive income/ (loss)	Year ended December 31,									Affected line item in Statement of Operations
	2013			2012			2011			Affected line item in Statement of Operations
	(In thousands)
Adjustment for realized gains on securities available for sale, net:
Pre-tax	$	49		$	871		$	798		Gain on sale of investments, net
Tax expense/ (benefit)	21			314			308			Income tax expense
Net	$	28		$	557		$	490		Net income attributable to the Company
Adjustment for discontinued operations for securities available for sale, net:
Pre-tax	$	—		$	(35	)	$	—		Net income from discontinued operations
Tax expense/ (benefit)	—			(12		)	—			Net income from discontinued operations
Net	$	—		$	(23	)	$	—		Net income from discontinued operations
Net realized gain/ (loss) on cash flow hedges:
Hedge related to junior subordinated debentures:
Pre-tax	$	1,894		$	1,757		$	1,872		Interest expense on junior subordinated debentures
Tax expense/ (benefit)	799			742			777			Income tax expense
Net	$	(1,095	)	$	(1,015	)	$	(1,095	)	Net income attributable to the Company
Hedge related to deposits
Pre-tax	$	189		$	—		$	—		Interest expense on deposits
Tax expense/ (benefit)	80			—			—			Income tax expense
Net	$	(109	)	$	—		$	—		Net income attributable to the Company
Realized gains on other, net:
SERP settlement
Pre-tax	$	—		$	—		$	659		Salaries and employee benefits
Tax expense/ (benefit)	—			—			232			Income tax expense
Net	$	—		$	—		$	427		Net income attributable to the Company
SERP expense
Pre-tax	$	—		$	—		$	415		Salaries and employee benefits
Tax expense/ (benefit)	—			—			145			Income tax expense
Net	$	—		$	—		$	270		Net income attributable to the Company
Total reclassifications for the period, net of tax	$	(1,204	)	$	(1,038	)	$	(523	)

The following table presents the components of the Company’s accumulated other comprehensive income/ (loss) as of December 31:



	2013			2012			2011
	(In thousands)
Unrealized gain/ (loss) on securities available for sale, net of tax	$	(1,757	)	$	5,412		$	6,883
Unrealized gain/ (loss) on cash flow hedges, net of tax	(1,763		)	(2,969		)	(3,106		)
Unrealized gain/ (loss) on other, net of tax	(677		)	(319		)	(183		)
Accumulated other comprehensive income/ (loss)	$	(4,197	)	$	2,124		$	3,594