Shareholders' Equity and Share-Based Compensation (Notes)

3 Months Ended

Mar. 31, 2020

Shareholders' Equity and Share-based Compensation

SHAREHOLDERS’ EQUITY AND SHARE-BASED COMPENSATION

Preferred Stock. The Company's articles of incorporation authorize the issuance of up to 50,000,000 shares of preferred stock, par value $0.01 per share. During the three months ended March 31, 2020, the Company’s Board of Directors designated 6,600,000 shares for issuance of 6.90% Series C Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock and subsequently sold 4,460,000 shares through a public offering for which it received proceeds of $107,988, net of $3,512 in broker commissions and other expenses. The Company used the proceeds to redeem all 2,300,000 outstanding shares of its 8.50% Series A Preferred Stock at an aggregate redemption price of approximately $25.35 per share, which included accumulated and unpaid dividends declared as of the redemption date March 14, 2020. The Company also used the proceeds to partially redeem 1,700,000 shares of its 7.625% Series B Preferred Stock at an aggregate redemption price of approximately $25.32 per share, which included accumulated and unpaid dividends declared as of the redemption date March 16, 2020. The excess of the $25.00 liquidation price per share over the carrying value of the preferred stock redeemed resulted in a charge of $(3,914) to net income to common shareholders for the three months ended March 31, 2020.

The Preferred Stock has no stated maturity, is not subject to any sinking fund or mandatory redemption, and will remain outstanding indefinitely unless redeemed or otherwise repurchased or converted into common stock pursuant to the terms of the Preferred Stock. The Company had 2,788,330 shares of its Series B Preferred Stock remaining as of March 31, 2020, which may be redeemed at any time and from time to time at the Company's option at a cash redemption price of $25.00 per share plus any accumulated and unpaid dividends. Except under certain limited circumstances described in Article IIIC of the Company’s Restated Articles of Incorporation, as amended, the Company may not redeem the Series C Preferred Stock prior to April 15, 2025. On or after that date, the Series C Preferred Stock may be redeemed at any time and from time to time at the Company's option at a cash redemption price of $25.00 per share plus any accumulated and unpaid dividends. 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.

The Series B Preferred Stock pays a cumulative cash dividend equivalent to 7.625% of the $25.00 liquidation preference per share each year. The Series C Preferred stock pays a cumulative cash dividend equivalent to 6.90% of the $25.00 liquidation preference per share each year until April 15, 2025 upon which date and thereafter, the Company will pay cumulative cash dividends at a percentage of the $25.00 liquidation value per share equal to an annual floating rate of three-month LIBOR plus a spread of 5.461%. The Company paid its regular quarterly dividend of $0.4765625 per share of Series B Preferred Stock and a partial dividend of $0.259 per share of Series C Preferred Stock on April 15, 2020 to shareholders of record as of April 1, 2020. The partial dividend for the Series C reflects the period outstanding from, and including, the initial issuance date of February 21, 2020 to, but excluding, April 15, 2020.

Common Stock. The following table summarizes information regarding monthly dividend declarations on the Company’s common stock during the three months ended March 31, 2020:

Three Months Ended

March 31, 2020

Declaration Date

Amount Declared

Record Date

Payment Date

January 13, 2020

0.15

January 24, 2020

February 3, 2020

February 14, 2020

0.15

February 24, 2020

March 2, 2020

March 10, 2020

0.15

March 23, 2020

April 1, 2020

Stock and Incentive Plans. The Company’s 2018 Stock and Incentive Plan reserves for issuance up to 1,000,000 common shares for eligible employees, non-employee directors, consultants, and advisors to the Company to be granted in the form of stock options, restricted stock awards, restricted stock units, stock appreciation rights, performance units, and performance cash awards. Total stock-based compensation expense recognized by the Company for the three months ended March 31, 2020 was $307 compared to $298 for the three months ended March 31, 2019. The following table presents a rollforward of the restricted stock activity for the periods indicated:


	Three Months Ended
	March 31,
	2020				2019
	Shares	Weighted Average Grant Date Fair Value Per Share		Shares ⁽¹⁾	Weighted Average Grant Date Fair Value Per Share ⁽¹⁾
Restricted stock outstanding as of beginning of period	119,213	$	18.56	113,904	$	19.19
Restricted stock granted	67,511	17.10		50,817	18.30
Restricted stock vested	(48,569)	19.02		(50,380)	19.12
Restricted stock outstanding as of end of period	138,155	$	17.69	114,341	$	18.83

(1) Amounts have been adjusted to reflect the effect of the 1-for-3 reverse stock split.

As of March 31, 2020, the grant date fair value of the Company’s remaining nonvested restricted stock is $2,105 which will be amortized into compensation expense over a weighted average period of 2.3 years.