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Equity (Tables)
 9 Months Ended
Sep. 30, 2016
Equity [Abstract]  
Changes to Accumulated Other Comprehensive Income by Component
The following table provides a summary of changes to accumulated other comprehensive income by component for the three and nine months ended September 30, 2016 and 2015.
Table 16.1 – Changes in Accumulated Other Comprehensive Income by Component
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30, 2016
 
Three Months Ended September 30, 2015
(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
 
$
116,849

 
$
(70,518
)
 
$
179,659

 
$
(38,965
)
Other comprehensive income (loss)
before reclassifications
 
9,038

 
647

 
(5,673
)
 
(12,049
)
Amounts reclassified from other
accumulated comprehensive income
 
(1,319
)
 
18

 
(3,270
)
 
19

Net current-period other comprehensive income (loss)
 
7,719

 
665

 
(8,943
)
 
(12,030
)
Balance at End of Period
 
$
124,568

 
$
(69,853
)
 
$
170,716

 
$
(50,995
)
 
 
Nine Months Ended September 30, 2016
 
Nine Months Ended September 30, 2015
(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
 
$
139,356

 
$
(47,363
)
 
$
186,737

 
$
(46,049
)
Other comprehensive income (loss)
before reclassifications
 
5,195

 
(22,545
)
 
(5,701
)
 
(5,023
)
Amounts reclassified from other
accumulated comprehensive income
 
(19,983
)
 
55

 
(10,320
)
 
77

Net current-period other comprehensive income (loss)
 
(14,788
)
 
(22,490
)
 
(16,021
)
 
(4,946
)
Balance at End of Period
 
$
124,568

 
$
(69,853
)
 
$
170,716

 
$
(50,995
)
Reclassifications out of Accumulated Other Comprehensive Income
The following table provides a summary of reclassifications out of accumulated other comprehensive income for three and nine months ended September 30, 2016 and 2015.
Table 16.2 – Reclassifications Out of Accumulated Other Comprehensive Income
 
 
 
 
 
 
 
 
 
 
 
Amount Reclassified From Accumulated Other Comprehensive Income
 
 
Affected Line Item in the
 
Three Months Ended September 30,
(In Thousands)
 
Income Statement
 
2016
 
2015
Net Realized (Gain) Loss on AFS Securities
 
 
 
 
 
 
Other than temporary impairment (1)
 
Investment fair value changes, net
 
$
—

 
$
198

Gain on sale of AFS securities
 
Realized gains, net
 
(1,319
)
 
(3,468
)
 
 
 
 
$
(1,319
)
 
$
(3,270
)
Net Realized Loss on Interest Rate
Agreements Designated as Cash Flow Hedges
 
 
 
 
 
 
Amortization of deferred loss
 
Interest expense
 
$
18

 
$
19

 
 
 
 
$
18

 
$
19

 
 
 
 
Amount Reclassified From Accumulated Other Comprehensive Income
 
 
Affected Line Item in the
 
Nine Months Ended September 30,
(In Thousands)
 
Income Statement
 
2016
 
2015
Net Realized (Gain) Loss on AFS Securities
 
 
 
 
 
 
Other than temporary impairment (1)
 
Investment fair value changes, net
 
$
305

 
$
198

Gain on sale of AFS securities
 
Realized gains, net
 
(20,288
)
 
(10,518
)
 
 
 
 
$
(19,983
)
 
$
(10,320
)
Net Realized Loss on Interest Rate
Agreements Designated as Cash Flow Hedges
 
 
 
 
 
 
Amortization of deferred loss
 
Interest expense
 
$
55

 
$
77

 
 
 
 
$
55

 
$
77


(1)
For the three months ended September 30, 2016, there were no other-than-temporary impairments. For the nine months ended September 30, 2016, other-than-temporary impairments were $3 million, of which $0.3 million were recognized through our consolidated statements of income and $2 million were recognized in Accumulated other comprehensive income, a component of our consolidated balance sheet.
Basic and Diluted Earnings Per Common Share
The following table provides the basic and diluted earnings per common share computations for the three and nine months ended September 30, 2016 and 2015.
Table 16.3 – Basic and Diluted Earnings per Common Share
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
(In Thousands, except Share Data)
 
2016
 
2015
 
2016
 
2015
Basic Earnings per Common Share:
 
 
 
 
 
 
 
 
Net income attributable to Redwood
 
$
52,553

 
$
19,164

 
$
105,897

 
$
61,029

Less: Dividends and undistributed earnings allocated to participating securities
 
(1,485
)
 
(553
)
 
(3,040
)
 
(1,928
)
Net income allocated to common shareholders
 
$
51,068

 
$
18,611

 
$
102,857

 
$
59,101

Basic weighted average common shares outstanding
 
76,680,183

 
83,787,533

 
76,827,026

 
83,696,461

Basic Earnings per Common Share
 
$
0.67

 
$
0.22

 
$
1.34

 
$
0.71

Diluted Earnings per Common Share:
 
 
 
 
 
 
 
 
Net income attributable to Redwood
 
$
52,553

 
$
19,164

 
$
105,897

 
$
61,029

Less: Dividends and undistributed earnings allocated to participating securities
 
(1,439
)
 
(553
)
 
(3,226
)
 
(1,928
)
Add back: Interest expense on convertible notes for the period, net of tax
 
6,115

 
—

 
18,263

 
—

Net income allocated to common shareholders
 
$
57,229

 
$
18,611

 
$
120,934

 
$
59,101

Weighted average common shares outstanding
 
76,680,183

 
83,787,533

 
76,827,026

 
83,696,461

Net effect of dilutive equity awards
 
54,696

 
1,287,171

 
18,665

 
1,642,535

Net effect of assumed convertible notes conversion to common shares
 
21,096,738

 
—

 
21,145,987

 
—

Diluted weighted average common shares outstanding
 
97,831,617

 
85,074,704

 
97,991,678

 
85,338,996

Diluted Earnings per Common Share
 
$
0.58

 
$
0.22

 
$
1.23

 
$
0.69