XML 56 R44.htm IDEA: XBRL DOCUMENT v3.10.0.1
Equity (Tables)
 9 Months Ended
Sep. 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 nine months ended September 30, 2018 and 2017.
Table 16.1 – Changes in Accumulated Other Comprehensive Income by Component
 
 
Three Months Ended September 30, 2018
 
Three Months Ended September 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
 
$
106,725

 
$
(31,105
)
 
$
114,364

 
$
(44,688
)
Other comprehensive (loss) income
before reclassifications (1)
 
(2,408
)
 
4,801

 
13,158

 
321

Amounts reclassified from other
accumulated comprehensive income (2)
 
(5,686
)
 
—

 
(853
)
 
14

Net current-period other comprehensive (loss) income
 
(8,094
)
 
4,801

 
12,305

 
335

Balance at End of Period
 
$
98,631

 
$
(26,304
)
 
$
126,669

 
$
(44,353
)
 
 
Nine Months Ended September 30, 2018
 
Nine Months Ended September 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)
 
(9,749
)
 
16,649

 
17,899

 
(375
)
Amounts reclassified from other
accumulated comprehensive income (2)
 
(19,821
)
 
—

 
(7,103
)
 
42

Net current-period other comprehensive income (loss)
 
(29,570
)
 
16,649

 
10,796

 
(333
)
Balance at End of Period
 
$
98,631

 
$
(26,304
)
 
$
126,669

 
$
(44,353
)
(1)
Amounts presented for net unrealized gains on available-for-sale securities are net of tax benefit (provision) of zero and $0.1 million for the three and nine months ended September 30, 2018, respectively, and zero and $(0.1) million for the three and nine months ended September 30, 2017, respectively.
(2)
Amounts are presented net of tax provision of $2 million for both the three and nine months ended September 30, 2018.
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 nine months ended September 30, 2018 and 2017.
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
 
2018
 
2017
Net Realized (Gain) Loss on AFS Securities
 
 
 
 
 
 
Other than temporary impairment (1)
 
Investment fair value changes, net
 
$
33

 
$
3

Gain on sale of AFS securities
 
Realized gains, net
 
(7,247
)
 
(856
)
Gain on sale of AFS securities
 
Provision for income taxes
 
1,528

 
—

 
 
 
 
$
(5,686
)
 
$
(853
)
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
 
Nine Months Ended September 30,
(In Thousands)
 
Income Statement
 
2018
 
2017
Net Realized (Gain) Loss on AFS Securities
 
 
 
 
 
 
Other than temporary impairment (1)
 
Investment fair value changes, net
 
$
89

 
$
248

Gain on sale of AFS securities
 
Realized gains, net
 
(21,438
)
 
(7,351
)
Gain on sale of AFS securities
 
Provision for income taxes
 
1,528

 
—

 
 
 
 
$
(19,821
)
 
$
(7,103
)
Net Realized Loss on Interest Rate
Agreements Designated as Cash Flow Hedges
 
 
 
 
 
 
Amortization of deferred loss
 
Interest expense
 
$
—

 
$
42

 
 
 
 
$
—

 
$
42

(1)
For the three months ended September 30, 2018, other-than-temporary impairments were $0.4 million, of which less than $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 nine months ended September 30, 2018, other-than-temporary impairments were $0.6 million, of which $0.1 million were recognized through our consolidated statements of income and $0.5 million were recognized in Accumulated other comprehensive income, a component of our consolidated balance sheet. For the nine months ended September 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 nine months ended September 30, 2018 and 2017.
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)
 
2018
 
2017
 
2018
 
2017
Basic Earnings per Common Share:
 
 
 
 
 
 
 
 
Net income attributable to Redwood
 
$
40,921

 
$
36,180

 
$
120,513

 
$
109,473

Less: Dividends and undistributed earnings allocated to participating securities
 
(1,231
)
 
(948
)
 
(3,766
)
 
(2,800
)
Net income allocated to common shareholders
 
$
39,690

 
$
35,232

 
$
116,747

 
$
106,673

Basic weighted average common shares outstanding
 
80,796,856

 
76,850,830

 
77,211,188

 
76,803,324

Basic Earnings per Common Share
 
$
0.49

 
$
0.46

 
$
1.51

 
$
1.39

Diluted Earnings per Common Share:
 
 
 
 
 
 
 
 
Net income attributable to Redwood
 
$
40,921

 
$
36,180

 
$
120,513

 
$
109,473

Less: Dividends and undistributed earnings allocated to participating securities
 
(1,284
)
 
(986
)
 
(3,867
)
 
(2,926
)
Add back: Interest expense on convertible notes for the period, net of tax
 
8,666

 
6,564

 
23,642

 
18,639

Net income allocated to common shareholders
 
$
48,303

 
$
41,758

 
$
140,288

 
$
125,186

Weighted average common shares outstanding
 
80,796,856

 
76,850,830

 
77,211,188

 
76,803,324

Net effect of dilutive equity awards
 
443,191

 
298,955

 
251,935

 
215,141

Net effect of assumed convertible notes conversion to common shares
 
33,442,641

 
25,553,323

 
30,328,906

 
22,379,401

Diluted weighted average common shares outstanding
 
114,682,688

 
102,703,108

 
107,792,029

 
99,397,866

Diluted Earnings per Common Share
 
$
0.42

 
$
0.41

 
$
1.30

 
$
1.26