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Equity (Tables)
 6 Months Ended
Jun. 30, 2018
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 six months ended June 30, 2018 and 2017.
Table 14.1 – Changes in Accumulated Other Comprehensive Income by Component
 
 
Three Months Ended June 30, 2018
 
Three Months Ended June 30, 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
 
$
114,577

 
$
(34,522
)
 
$
114,875

 
$
(42,273
)
Other comprehensive (loss) income
before reclassifications (1)
 
(3,104
)
 
3,417

 
1,811

 
(2,429
)
Amounts reclassified from other
accumulated comprehensive income
 
(4,748
)
 
—

 
(2,322
)
 
14

Net current-period other comprehensive (loss) income
 
(7,852
)
 
3,417

 
(511
)
 
(2,415
)
Balance at End of Period
 
$
106,725

 
$
(31,105
)
 
$
114,364

 
$
(44,688
)
 
 
Six Months Ended June 30, 2018
 
Six Months Ended June 30, 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 income (loss)
before reclassifications (1)
 
(7,341
)
 
11,848

 
4,741

 
(696
)
Amounts reclassified from other
accumulated comprehensive income
 
(14,135
)
 
—

 
(6,250
)
 
28

Net current-period other comprehensive income (loss)
 
(21,476
)
 
11,848

 
(1,509
)
 
(668
)
Balance at End of Period
 
$
106,725

 
$
(31,105
)
 
$
114,364

 
$
(44,688
)
(1)
Amounts presented for net unrealized gains on available-for-sale securities are net of tax benefit (provision) of $0.2 million and $0.1 million for the three and six months ended June 30, 2018, respectively, and $0.1 million and $(0.1) million for the three and six months ended June 30, 2017, respectively.
Reclassifications out of Accumulated Other Comprehensive Income
The following table provides a summary of reclassifications out of accumulated other comprehensive income for the three and six months ended June 30, 2018 and 2017.
Table 14.2 – Reclassifications Out of Accumulated Other Comprehensive Income
 
 
 
 
 
 
 
 
 
 
 
Amount Reclassified From Accumulated Other Comprehensive Income
 
 
Affected Line Item in the
 
Three Months Ended June 30,
(In Thousands)
 
Income Statement
 
2018
 
2017
Net Realized (Gain) Loss on AFS Securities
 
 
 
 
 
 
Other than temporary impairment (1)
 
Investment fair value changes, net
 
$
56

 
$
128

Gain on sale of AFS securities
 
Realized gains, net
 
(4,804
)
 
(2,450
)
 
 
 
 
$
(4,748
)
 
$
(2,322
)
Net Realized Loss on Interest Rate
Agreements Designated as Cash Flow Hedges
 
 
 
 
 
 
Amortization of deferred loss
 
Interest expense
 
$
—

 
$
14

 
 
 
 
$
—

 
$
14


 
 
 
 
Amount Reclassified From Accumulated Other Comprehensive Income
 
 
Affected Line Item in the
 
Six Months Ended June 30,
(In Thousands)
 
Income Statement
 
2018
 
2017
Net Realized (Gain) Loss on AFS Securities
 
 
 
 
 
 
Other than temporary impairment (1)
 
Investment fair value changes, net
 
$
56

 
$
245

Gain on sale of AFS securities
 
Realized gains, net
 
(14,191
)
 
(6,495
)
 
 
 
 
$
(14,135
)
 
$
(6,250
)
Net Realized Loss on Interest Rate
Agreements Designated as Cash Flow Hedges
 
 
 
 
 
 
Amortization of deferred loss
 
Interest expense
 
$
—

 
$
28

 
 
 
 
$
—

 
$
28

(1)
For the three and six months ended June 30, 2018, other-than-temporary impairments were $0.3 million, of which $0.1 million were recognized through our consolidated statements of income and $0.2 million were recognized in Accumulated other comprehensive income, a component of our consolidated balance sheet. For the three months ended June 30, 2017, other-than-temporary impairments were $0.5 million, of which $0.1 million were recognized through our consolidated statements of income and $0.3 million were recognized in Accumulated other comprehensive income, a component of our consolidated balance sheet. For the six months ended June 30, 2017, other-than-temporary impairments were $0.6 million, of which $0.2 million were recognized through our consolidated statements of income and $0.4 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 six months ended June 30, 2018 and 2017.
Table 14.3 – Basic and Diluted Earnings per Common Share
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(In Thousands, except Share Data)
 
2018
 
2017
 
2018
 
2017
Basic Earnings per Common Share:
 
 
 
 
 
 
 
 
Net income attributable to Redwood
 
$
32,747

 
$
36,324

 
$
79,592

 
$
73,293

Less: Dividends and undistributed earnings allocated to participating securities
 
(1,074
)
 
(884
)
 
(2,535
)
 
(1,852
)
Net income allocated to common shareholders
 
$
31,673

 
$
35,440

 
$
77,057

 
$
71,441

Basic weighted average common shares outstanding
 
75,380,715

 
76,819,703

 
75,388,638

 
76,779,178

Basic Earnings per Common Share
 
$
0.42

 
$
0.46

 
$
1.02

 
$
0.93

Diluted Earnings per Common Share:
 
 
 
 
 
 
 
 
Net income attributable to Redwood
 
$
32,747

 
$
36,324

 
$
79,592

 
$
73,293

Less: Dividends and undistributed earnings allocated to participating securities
 
(1,156
)
 
(935
)
 
(2,584
)
 
(1,940
)
Add back: Interest expense on convertible notes for the period, net of tax
 
6,335

 
6,205

 
14,976

 
12,075

Net income allocated to common shareholders
 
$
37,926

 
$
41,594

 
$
91,984

 
$
83,428

Weighted average common shares outstanding
 
75,380,715

 
76,819,703

 
75,388,638

 
76,779,178

Net effect of dilutive equity awards
 
277,788

 
235,273

 
156,307

 
173,235

Net effect of assumed convertible notes conversion to common shares
 
24,773,490

 
20,439,168

 
28,746,235

 
20,766,137

Diluted weighted average common shares outstanding
 
100,431,993

 
97,494,144

 
104,291,180

 
97,718,550

Diluted Earnings per Common Share
 
$
0.38

 
$
0.43

 
$
0.88

 
$
0.85