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Equity (Tables)
 3 Months Ended
Mar. 31, 2017
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 months ended March 31, 2017 and 2016.
Table 15.1 – Changes in Accumulated Other Comprehensive Income by Component
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended March 31, 2017
 
Three Months Ended March 31, 2016
(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
 
$
115,873

 
$
(44,020
)
 
$
139,356

 
$
(47,363
)
Other comprehensive income (loss)
before reclassifications (1)
 
2,930

 
1,733

 
(10,103
)
 
(14,243
)
Amounts reclassified from other
accumulated comprehensive income
 
(3,928
)
 
14

 
(10,953
)
 
18

Net current-period other comprehensive income (loss)
 
(998
)
 
1,747

 
(21,056
)
 
(14,225
)
Balance at End of Period
 
$
114,875

 
$
(42,273
)
 
$
118,300

 
$
(61,588
)
(1)
Amounts presented for net unrealized gains on available-for-sale securities are net of tax (provision) benefit of $(0.1) million and $0.1 million for the three months ended March 31, 2017 and 2016, respectively.
Reclassifications out of Accumulated Other Comprehensive Income
The following table provides a summary of reclassifications out of accumulated other comprehensive income for three months ended March 31, 2017 and 2016.
Table 15.2 – Reclassifications Out of Accumulated Other Comprehensive Income
 
 
 
 
 
 
 
 
 
 
 
Amount Reclassified From Accumulated Other Comprehensive Income
 
 
Affected Line Item in the
 
Three Months Ended March 31,
(In Thousands)
 
Income Statement
 
2017
 
2016
Net Realized (Gain) Loss on AFS Securities
 
 
 
 
 
 
Other than temporary impairment (1)
 
Investment fair value changes, net
 
$
117

 
$
—

Gain on sale of AFS securities
 
Realized gains, net
 
(4,045
)
 
(10,953
)
 
 
 
 
$
(3,928
)
 
$
(10,953
)
Net Realized Loss on Interest Rate
Agreements Designated as Cash Flow Hedges
 
 
 
 
 
 
Amortization of deferred loss
 
Interest expense
 
$
14

 
$
18

 
 
 
 
$
14

 
$
18


(1)
For the three months ended March 31, 2017, other-than-temporary impairments were $0.2 million, of which $0.1 million were recognized through the consolidated statements of income and $0.1 million were recognized in Accumulated other comprehensive income, a component of our consolidated balance sheet. For the three months ended March 31, 2016, there were no other-than-temporary impairments.
Basic and Diluted Earnings Per Common Share
The following table provides the basic and diluted earnings per common share computations for the three months ended March 31, 2017 and 2016.
Table 15.3 – Basic and Diluted Earnings per Common Share
 
 
Three Months Ended March 31,
(In Thousands, except Share Data)
 
2017
 
2016
Basic Earnings per Common Share:
 
 
 
 
Net income attributable to Redwood
 
$
36,969

 
$
12,063

Less: Dividends and undistributed earnings allocated to participating securities
 
(968
)
 
(701
)
Net income allocated to common shareholders
 
$
36,001

 
$
11,362

Basic weighted average common shares outstanding
 
76,738,202

 
77,137,682

Basic Earnings per Common Share
 
$
0.47

 
$
0.15

Diluted Earnings per Common Share:
 
 
 
 
Net income attributable to Redwood
 
$
36,969

 
$
12,063

Less: Dividends and undistributed earnings allocated to participating securities
 
(1,005
)
 
(701
)
Add back: Interest expense on convertible notes for the period, net of tax
 
5,870

 
—

Net income allocated to common shareholders
 
$
41,834

 
$
11,362

Weighted average common shares outstanding
 
76,738,202

 
77,137,682

Net effect of dilutive equity awards
 
111,197

 
—

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

 
—

Diluted weighted average common shares outstanding
 
97,946,137

 
77,137,682

Diluted Earnings per Common Share
 
$
0.43

 
$
0.15