SHAREHOLDERS' EQUITY

Preferred Stock

The Company has 2,300,000 shares of its 8.50% Series A Cumulative Redeemable Preferred Stock and 2,250,000 shares of its 7.625% Series B Cumulative Redeemable Preferred Stock issued and outstanding as of December 31, 2013 (collectively, the "Preferred Stock"). The Preferred Stock has no maturity and will remain outstanding indefinitely unless redeemed or otherwise repurchased or converted into common stock pursuant to the terms of the Preferred Stock. Except under certain limited circumstances intended to preserve the Company's REIT status, upon the occurrence of a change in control as defined in Article IIIA, Section 7(d) of the Company’s Articles of Incorporation, or to avoid the direct or indirect imposition of a penalty tax in respect of, or to protect the tax status of, any of the Company’s real estate mortgage investment conduits (“REMIC”) interests or a REMIC in which the Company may acquire an interest (as permitted by the Company’s Articles of Incorporation), the Company may not redeem the Series A Preferred Stock prior to July 31, 2017 or the Series B Preferred Stock prior to April 30, 2018. On or after these dates, at any time and from time to time, the Preferred Stock may be redeemed in whole, or in part, at the Company's option at a cash redemption price of $25.00 per share plus any accumulated and unpaid dividends. The Series A Preferred Stock pays a cumulative cash dividend equivalent to 8.50% of the $25.00 liquidation preference per share each year and the Series B Preferred Stock pays a cumulative cash dividend equivalent to 7.625% of the $25.00 liquidation preference per share each year. Because the Preferred Stock is redeemable only at the option of the issuer, it is classified as equity on the Company's consolidated balance sheet.

Common Stock

The following table presents a summary of the changes in the number of common shares outstanding for the periods presented:



	2013		2012
Balance as of January 1,	54,268,915		40,382,530
Common stock issued under DRIP	515,257		13,480
Common stock issued under ATM program	180,986		402,494
Common stock issued or redeemed under stock and incentive plans	270,158		241,663
Common stock issued via public offering	—		13,332,748
Common stock forfeited for tax withholding on share-based compensation	(52,385	)	—
Common stock repurchased during the period (weighted average price of $8.09 and $8.86 per share, respectively)	(872,447	)	(104,000	)
Balance as of December 31,	54,310,484		54,268,915

The Company has approximately 7,416,520 shares of common stock that remain available to offer and sell through its sales agent, JMP Securities LLC, under its "at the market", or "ATM" program, as of December 31, 2013.

The Company's Dividend Reinvestment and Share Purchase Plan ("DRIP") allows registered shareholders to automatically reinvest some or all of their quarterly common stock dividends in shares of the Company’s common stock and provides an opportunity for investors to purchase shares of the Company’s common stock, potentially at a discount to the prevailing market price. Of the 3,000,000 shares reserved for issuance under the Company's DRIP, there are 2,466,898 shares remaining for issuance as of December 31, 2013. The Company has declared a fourth quarter common stock dividend of $0.27 per share payable on January 31, 2014 to shareholders of record as of December 31, 2013. There was no discount for shares purchased through the DRIP during the fourth quarter of 2013.

The following table summarizes dividends declared per share of common stock for years ending December 31, 2013, 2012, and 2011 and their related tax characterization:



			Tax Characterization
	Dividends Declared per Common Share		Ordinary		Capital Gain		Return of Capital
Year ended December 31, 2013	$	1.1200	$	1.0650	$	0.0550	$	—
Year ended December 31, 2012	1.1500		1.0038		0.1462		—
Year ended December 31, 2011	1.0900		0.9822		0.1078		—

Of the $50,000 authorized by the Company's Board of Directors for the repurchase of its common stock through December 31, 2014, approximately $42,145 remains available for repurchase at the Company's option as of December 31, 2013.

Incentive Plans. Pursuant to the Company’s 2009 Stock and Incentive Plan, the Company may grant stock-based compensation to eligible employees, directors or consultants or advisers to the Company, including stock awards, stock options, SARs, dividend equivalent rights, performance shares, incentive awards, and restricted stock units. Of the 2,500,000 shares of common stock authorized for issuance under this plan, 1,550,118 shares remain available for issuance as of December 31, 2013. Total stock-based compensation expense recognized by the Company for the year ended December 31, 2013 was $2,354 compared to $1,828 and $917 for the years ended December 31, 2012 and December 31, 2011, respectively.

The following table presents a rollforward of the restricted stock activity for the periods indicated:



	Year Ended
	December 31,
	2013		2012
Restricted stock outstanding as of beginning of period	448,283		365,506
Restricted stock granted	255,158		220,821
Restricted stock vested	(182,472	)	(138,044	)
Restricted stock outstanding as of end of period	520,969		448,283

The restricted stock granted during the year ended December 31, 2013 and December 31, 2012 had fair values of $2,708 and $2,073, respectively, at their grant dates. As of December 31, 2013, the balance of the Company’s outstanding restricted stock remaining to be amortized into compensation expense is $3,311 of which $1,643 is expected to be amortized in 2014, $1,155 in 2015, $447 in 2016, and $66 in 2017.

During the year ended December 31, 2013, the Company's remaining 27,500 SARs were exercised pursuant to the Company's 2004 Stock Incentive Plan at their exercise price of $7.06 per share. There are no other awards outstanding under the 2004 Stock Incentive Plan, and no new awards may be granted under this plan.