EQUITY

Preferred Stock

The Company has 2,000,000 depositary shares outstanding at both December 31, 2017 and December 31, 2016 (the “Depositary Shares”). 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”). This represents the entire $47.8 million balance of preferred stock on the Company’s balance sheet at both December 31, 2017 and December 31, 2016. 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 is 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. The Company may redeem the Series D preferred stock on any dividend payment date on or after June 15, 2018; or within 90 days of a change, proposed change, administrative decision, or re-interpretation in the laws, regulations, or guidelines regarding the regulatory capital treatment of the Series D preferred stock.

Common Stock

The Company has 170 million shares of common stock authorized for issuance. At December 31, 2017, it had 84,208,538 shares outstanding and 85,791,462 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, 2016, it had 83,731,769 shares outstanding and 86,268,231 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 agreement outstanding at December 31, 2017:

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)

1,692,755

1.00

1.14

$8.000

$7.011

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 warrant 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 2, 2018, the latest dividend record date prior to the filing of this Annual Report.

Accumulated Other Comprehensive Income

Other 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, 2017, 2016, and 2015:



	2017						2016									2015
	Pre- tax		Tax effect		Net of Tax		Pre- tax			Tax effect			Net of Tax			Pre- tax			Tax effect			Net of Tax
	(In thousands)
Unrealized gain/ (loss) on securities available-for-sale
Net gains/ (losses) arising during period	$	7,782	$	3,063	$	4,719	$	(18,913	)	$	(7,555	)	$	(11,358	)	$	(2,494	)	$	(1,145	)	$	(1,349	)
Less: Adjustment for realized gains/ (losses), net	376		154		222		521			190			331			236			97			139
Net change	7,406		2,909		4,497		(19,434		)	(7,745		)	(11,689		)	(2,730		)	(1,242		)	(1,488		)
Unrealized gain/ (loss) on cash flow hedges
Net gains/ (losses) arising during period	325		135		190		(793		)	(332		)	(461		)	(2,642		)	(1,088		)	(1,554		)
Add: scheduled reclass and other	1,179		491		688		1,666			687			979			4,052			1,698			2,354
Net change	1,504		626		878		873			355			518			1,410			610			800
Unrealized gain/ (loss) on other
Net gains/ (losses) arising during period	84		34		50		200			77			123			(193		)	(78		)	(115		)
Net change	84		34		50		200			77			123			(193		)	(78		)	(115		)
Total other comprehensive income/ (loss)	8,994		3,569		5,425		(18,361		)	(7,313		)	(11,048		)	(1,513		)	(710		)	(803		)
Net income attributable to the Company (1)	86,787		46,196		40,591		102,591			30,963			71,628			95,317			30,392			64,925
Total comprehensive income	$	95,781	$	49,765	$	46,016	$	84,230		$	23,650		$	60,580		$	93,804		$	29,682		$	64,122

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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, 2017, 2016, and 2015:



Description of component of accumulated other comprehensive income/ (loss)	Year ended December 31,									Affected line item in Statement of Operations
	2017			2016			2015			Affected line item in Statement of Operations
	(In thousands)
Adjustment for realized gains/(losses) on securities available-for-sale, net:
Pre-tax	$	376		$	521		$	236		Gain/ (loss) on sale of investments, net
Tax expense/ (benefit)	154			190			97			Income tax expense
Net	$	222		$	331		$	139		Net income attributable to the Company
Net realized gain/ (loss) on cash flow hedges:
Hedge related to junior subordinated debentures:
Pre-tax	$	—		$	—		$	1,879		Interest expense on junior subordinated debentures
Tax expense/ (benefit)	—			—			804			Income tax expense
Net	$	—		$	—		$	(1,075	)	Net income attributable to the Company
Hedge related to deposits
Pre-tax	$	1,179		$	1,666		$	2,173		Interest expense on deposits
Tax expense/ (benefit)	491			687			894			Income tax expense
Net	$	(688	)	$	(979	)	$	(1,279	)	Net income attributable to the Company
Total reclassifications for the period, net of tax	$	(688	)	$	(979	)	$	(2,354	)

The following table presents the after-tax changes in the components of the Company’s accumulated other comprehensive income/ (loss) for the years ended December 31, 2017, 2016, and 2015:



	Components of accumulated other comprehensive income/ (loss)
	Unrealized gain/ (loss) on securities available-for-sale			Unrealized gain/ (loss) on cash flow hedges			Unrealized gain/ (loss) on other			Accumulated other comprehensive income/ (loss)
	(In thousands)
Balance at December 31, 2014	$	1,983		$	(1,923	)	$	(757	)	$	(697	)
Other comprehensive income/ (loss) before reclassifications	(1,349		)	(1,554		)	(115		)	(3,018		)
Amounts reclassified from other comprehensive income/ (loss)	(139		)	2,354			—			2,215
Other comprehensive income/ (loss), net	(1,488		)	800			(115		)	(803		)
Balance at December 31, 2015	495			(1,123		)	(872		)	(1,500		)
Other comprehensive income/ (loss) before reclassifications	(11,358		)	(461		)	123			(11,696		)
Amounts reclassified from other comprehensive income/ (loss)	(331		)	979			—			648
Other comprehensive income/ (loss), net	(11,689		)	518			123			(11,048		)
Balance at December 31, 2016	(11,194		)	(605		)	(749		)	(12,548		)
Other comprehensive income/ (loss) before reclassifications	4,719			190			50			4,959
Amounts reclassified from other comprehensive income/ (loss)	(222		)	688			—			466
Other comprehensive income/ (loss), net	4,497			878			50			5,425
Reclassification due to the adoption of ASU 2018-02	(1,443		)	59			(151		)	(1,535		)
Balance at December 31, 2017	$	(8,140	)	$	332		$	(850	)	$	(8,658	)