Equity (Tables)

3 Months Ended

Mar. 31, 2018

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, 2018 and 2017.

Table 15.1 – Changes in Accumulated Other Comprehensive Income by Component



	Three Months Ended March 31, 2018						Three Months Ended March 31, 2017
(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	$	128,201		$	(42,953	)	$	115,873		$	(44,020	)
Other comprehensive (loss) income before reclassifications ⁽¹⁾	(4,237		)	8,431			2,930			1,733
Amounts reclassified from other accumulated comprehensive income	(9,387		)	—			(3,928		)	14
Net current-period other comprehensive (loss) income	(13,624		)	8,431			(998		)	1,747
Balance at End of Period	$	114,577		$	(34,522	)	$	114,875		$	(42,273	)


(1)	Amounts presented for net unrealized gains on available-for-sale securities are net of tax provision of $0.1 million for both the three months ended March 31, 2018 and 2017.

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, 2018 and 2017.

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	2018			2017
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	(9,387		)	(4,045		)
		$	(9,387	)	$	(3,928	)
Net Realized Loss on Interest Rate Agreements Designated as Cash Flow Hedges
Amortization of deferred loss	Interest expense	$	—		$	14
		$	—		$	14


(1)	For the three months ended March 31, 2018, there were no other-than-temporary impairments. For the three months ended March 31, 2017, other-than-temporary impairments were $0.2 million, of which $0.1 million were recognized through our consolidated statements of income and $0.1 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 months ended March 31, 2018 and 2017.

Table 15.3 – Basic and Diluted Earnings per Common Share



	Three Months Ended March 31,
(In Thousands, except Share Data)	2018			2017
Basic Earnings per Common Share:
Net income attributable to Redwood	$	46,845		$	36,969
Less: Dividends and undistributed earnings allocated to participating securities	(1,433		)	(968		)
Net income allocated to common shareholders	$	45,412		$	36,001
Basic weighted average common shares outstanding	75,396,649			76,738,202
Basic Earnings per Common Share	$	0.60		$	0.47
Diluted Earnings per Common Share:
Net income attributable to Redwood	$	46,845		$	36,969
Less: Dividends and undistributed earnings allocated to participating securities	(1,394		)	(1,005		)
Add back: Interest expense on convertible notes for the period, net of tax	8,641			5,870
Net income allocated to common shareholders	$	54,092		$	41,834
Weighted average common shares outstanding	75,396,649			76,738,202
Net effect of dilutive equity awards	34,827			111,197
Net effect of assumed convertible notes conversion to common shares	32,763,121			21,096,738
Diluted weighted average common shares outstanding	108,194,597			97,946,137
Diluted Earnings per Common Share	$	0.50		$	0.43