Equity (Tables)

12 Months Ended

Dec. 31, 2018

Changes to Accumulated Other Comprehensive Income (Loss) by Component

The following table provides a summary of changes to accumulated other comprehensive income by component for the years ended December 31, 2018 and 2017.

Table 17.1 – Changes in Accumulated Other Comprehensive Income by Component



	Years Ended December 31,
	2018						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	(7,298		)	8,908			22,864			1,022
Amounts reclassified from other accumulated comprehensive income ⁽¹⁾	(25,561		)	—			(10,536		)	45
Net current-period other comprehensive income (loss)	(32,859		)	8,908			12,328			1,067
Balance at End of Period	$	95,342		$	(34,045	)	$	128,201		$	(42,953	)


(1)	Amount is presented net of tax provision of $2 million for the year ended December 31, 2018.

Reclassifications out of Accumulated Other Comprehensive Income (Loss)

The following table provides a summary of reclassifications out of accumulated other comprehensive income for the years ended December 31, 2018 and 2017.

Table 17.2 – Reclassifications Out of Accumulated Other Comprehensive Income



		Amount Reclassified From Accumulated Other Comprehensive Income
	Affected Line Item in the	Years Ended December 31,
(In Thousands)	Income Statement	2018			2017
Net Realized (Gain) Loss on AFS Securities
Other than temporary impairment ⁽¹⁾	Investment fair value changes, net	$	89		$	1,012
Gain on sale of AFS securities	Realized gains, net	(27,178		)	(11,548		)
Gain on sale of AFS securities	Provision for income taxes	1,528			—
		$	(25,561	)	$	(10,536	)
Net Realized Loss on Interest Rate Agreements Designated as Cash Flow Hedges
Amortization of deferred loss	Interest expense	$	—		$	45
		$	—		$	45

(1)

For the year ended December 31, 2018, other-than-temporary impairments were $1 million, of which $0.1 million were recognized through our consolidated statements of income and $1 million were recognized in Accumulated other comprehensive income, a component of our consolidated balance sheet. For the year ended December 31, 2017, other-than-temporary impairments were $1 million, of which $1 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 (Loss) Per Common Share

The following table provides the basic and diluted earnings per common share computations for the years ended December 31, 2018, 2017, and 2016.

Table 17.3 – Basic and Diluted Earnings per Common Share



	Years Ended December 31,
(In Thousands, except Share Data)	2018			2017			2016
Basic Earnings per Common Share:
Net income attributable to Redwood	$	119,600		$	140,406		$	131,252
Less: Dividends and undistributed earnings allocated to participating securities	(3,754		)	(3,632		)	(3,742		)
Net income allocated to common shareholders	$	115,846		$	136,774		$	127,510
Basic weighted average common shares outstanding	78,724,912			76,792,957			76,747,047
Basic Earnings per Common Share	$	1.47		$	1.78		$	1.66
Diluted Earnings per Common Share:
Net income attributable to Redwood	$	119,600		$	140,406		$	131,252
Less: Dividends and undistributed earnings allocated to participating securities	(4,283		)	(3,836		)	(4,035		)
Add back: Interest expense on convertible notes for the period, net of tax	32,653			26,898			23,862
Net income allocated to common shareholders	$	147,970		$	163,468		$	151,079
Weighted average common shares outstanding	78,724,912			76,792,957			76,747,047
Net effect of dilutive equity awards	189,120			185,383			28,435
Net effect of assumed convertible notes conversion to common shares	31,113,738			24,996,668			21,133,608
Diluted weighted average common shares outstanding	110,027,770			101,975,008			97,909,090
Diluted Earnings per Common Share	$	1.34		$	1.60		$	1.54