Equity

The following table provides a summary of changes in accumulated other comprehensive income by component for the years ended December 31, 2015 and 2014.

Table 16.1 – Changes in Accumulated Other Comprehensive Income by Component



	Years Ended December 31,
	2015						2014
(In Thousands)	Net Unrealized Gains on Available-for-Sale Securities			Net Unrealized Losses on Interest Rate Agreements Accounted for as Cash Flow Hedges			Net Unrealized Gains on Available-for-Sale Securities			Net Unrealized Losses on Interest Rate Agreements Accounted for as Cash Flow Hedges
Balance at beginning of period	$	186,737		$	(46,049	)	$	164,654		$	(15,888	)
Other comprehensive income (loss) before reclassifications	(17,955		)	(1,409		)	32,635			(30,325		)
Amounts reclassified from other accumulated comprehensive income	(29,426		)	95			(10,552		)	164
Net current-period other comprehensive income (loss)	(47,381		)	(1,314		)	22,083			(30,161		)
Balance at End of Period	$	139,356		$	(47,363	)	$	186,737		$	(46,049	)

The following table provides a summary of reclassifications out of accumulated other comprehensive income for the years ended December 31, 2015 and 2014.

Table 16.2 – Reclassifications Out of Accumulated Other Comprehensive Income



		Amount Reclassified From Accumulated Other Comprehensive Income
	Affected Line Item in the	Years Ended December 31,
(In Thousands)	Income Statement	2015			2014
Net realized (gain) loss on AFS securities
Other than temporary impairment ⁽¹⁾	Mortgage banking and investment activities, net	$	246		$	565
Gain on sale of AFS securities	Realized gains, net	(29,672		)	(11,117		)
		$	(29,426	)	$	(10,552	)
Net realized loss on interest rate agreements designated as cash flow hedges
Amortization of deferred loss	Interest expense	$	95		$	164
		$	95		$	164

(1)

For the year ended December 31, 2015, other-than-temporary impairments were $419, of which $246 were recognized through the Income Statement and $173 were recognized in Accumulated Other Comprehensive Income. For the year ended December 31, 2014, other-than-temporary impairments were $4,774, of which $565 were recognized through the Income Statement, and $4,209 were recognized in Accumulated Other Comprehensive Income.

Earnings Per Common Share

The following table provides the basic and diluted earnings per common share computations for the years ended December 31, 2015, 2014, and 2013.

Table 16.3 – Basic and Diluted Earnings Per Common Share



	Years Ended December 31,
(In Thousands, Except Share Data)	2015			2014			2013
Basic Earnings Per Common Share:
Net income attributable to Redwood	$	102,088		$	100,569		$	173,246
Less: Dividends and undistributed earnings allocated to participating securities	(2,806		)	(2,612		)	(4,899		)
Net income allocated to common shareholders	$	99,282		$	97,957		$	168,347
Basic weighted average common shares outstanding	82,945,103			82,837,369			81,985,897
Basic Earnings Per Common Share	$	1.20		$	1.18		$	2.05
Diluted Earnings Per Common Share:
Net income attributable to Redwood	$	102,088		$	100,569		$	173,246
Less: Dividends and undistributed earnings allocated to participating securities	(2,677		)	(2,524		)	(3,726		)
Add back: Interest expense on convertible notes for the period, net of tax	—			—			12,641
Net income allocated to common shareholders	$	99,411		$	98,045		$	182,161
Weighted average common shares outstanding	82,945,103			82,837,369			81,985,897
Net effect of dilutive equity awards	1,573,292			2,261,210			1,957,081
Net effect of assumed convertible notes conversion to common shares	—			—			9,751,946
Diluted weighted average common shares outstanding	84,518,395			85,098,579			93,694,924
Diluted Earnings Per Common Share	$	1.18		$	1.15		$	1.94

For the years ended December 31, 2015, 2014, and 2013, we determined certain equity awards outstanding during each of these periods qualified as participating securities. We included participating securities in the calculation of basic earnings per common share as well as diluted earnings per common share as we determined that the two-class method was more dilutive than the alternative treasury stock method for these shares. Dividends and undistributed earnings allocated to participating securities under the basic and diluted earnings per share calculations require specific shares to be included that may differ in certain circumstances. For the year ended December 31, 2013, 9,751,946 weighted average common shares related to the assumed conversion of the convertible notes were included in the calculation of diluted earnings per share as they were determined to be dilutive.

For the years ended December 31, 2015, 2014, and 2013, the number of outstanding equity awards that were antidilutive totaled 103,253, 59,230, and 224,241, respectively. There were no other participating securities during these periods. For the year ended December 31, 2015, 21,292,309 common shares related to the assumed conversion of our convertible notes were antidilutive and were excluded from the calculation of diluted earnings per share. For the year ended December 31, 2014, 11,825,450 common shares related to the assumed conversion of our convertible notes and 985,591 weighted average common shares related to the assumed conversion of our exchangeable notes were antidilutive and were excluded from the calculation of diluted earnings per share.

Stock Repurchases

In August 2015, our Board of Directors authorized the repurchase of up to $100 million of our common stock. During the year ended December 31, 2015, there were 6,452,313 shares repurchased pursuant to this authorization. During the years ended December 31, 2014 and 2013, there were no shares acquired under then-existing share repurchase authorizations. At December 31, 2015, approximately $11 million of this authorization remained available for the repurchase of shares of our common stock. During the first quarter of 2016, we repurchased shares representing the remaining $11 million under this repurchase authorization.

In February 2016, our Board of Directors approved an additional authorization for the repurchase of up to $100 million of our common stock and also authorized the repurchase of outstanding debt securities, including convertible and exchangeable debt. This authorization replaced all previous share repurchase plans and has no expiration date. Our repurchase authorization does not obligate us to acquire any specific number of shares or securities. Under this authorization, shares or securities may be repurchased in privately negotiated and/or open market transactions, including under plans complying with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended.