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Equity (Tables)
 6 Months Ended
Jun. 30, 2019
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, 2019 and 2018.
Table 17.1 – Changes in Accumulated Other Comprehensive Income by Component
 
 
Three Months Ended June 30, 2019
 
Three Months Ended June 30, 2018
(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
 
$
92,567

 
$
(39,883
)
 
$
114,577

 
$
(34,522
)
Other comprehensive income (loss)
before reclassifications (1)
 
8,562

 
(9,501
)
 
(3,104
)
 
3,417

Amounts reclassified from other
accumulated comprehensive income
 
(2,822
)
 
—

 
(4,748
)
 
—

Net current-period other comprehensive income (loss)
 
5,740

 
(9,501
)
 
(7,852
)
 
3,417

Balance at End of Period
 
$
98,307

 
$
(49,384
)
 
$
106,725

 
$
(31,105
)
 
 
Six Months Ended June 30, 2019
 
Six Months Ended June 30, 2018
(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
 
$
95,342

 
$
(34,045
)
 
$
128,201

 
$
(42,953
)
Other comprehensive income (loss)
before reclassifications (1)
 
15,280

 
(15,339
)
 
(7,341
)
 
11,848

Amounts reclassified from other
accumulated comprehensive income
 
(12,315
)
 
—

 
(14,135
)
 
—

Net current-period other comprehensive income (loss)
 
2,965

 
(15,339
)
 
(21,476
)
 
11,848

Balance at End of Period
 
$
98,307

 
$
(49,384
)
 
$
106,725

 
$
(31,105
)
(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.
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, 2019 and 2018.
Table 17.2 – 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
 
2019
 
2018
Net Realized (Gain) Loss on AFS Securities
 
 
 
 
 
 
Other than temporary impairment (1)
 
Investment fair value changes, net
 
$
—

 
$
56

Gain on sale of AFS securities
 
Realized gains, net
 
(2,822
)
 
(4,804
)
 
 
 
 
$
(2,822
)
 
$
(4,748
)

 
 
 
 
Amount Reclassified From Accumulated Other Comprehensive Income
 
 
Affected Line Item in the
 
Six Months Ended June 30,
(In Thousands)
 
Income Statement
 
2019
 
2018
Net Realized (Gain) Loss on AFS Securities
 
 
 
 
 
 
Other than temporary impairment (1)
 
Investment fair value changes, net
 
$
—

 
$
56

Gain on sale of AFS securities
 
Realized gains, net
 
(12,315
)
 
(14,191
)
 
 
 
 
$
(12,315
)
 
$
(14,135
)
(1)
For both the three and six months ended June 30, 2019, there were no other-than-temporary impairments. For both 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.
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, 2019 and 2018.
Table 17.3 – Basic and Diluted Earnings per Common Share
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(In Thousands, except Share Data)
 
2019
 
2018
 
2019
 
2018
Basic Earnings per Common Share:
 
 
 
 
 
 
 
 
Net income attributable to Redwood
 
$
31,266

 
$
32,747

 
$
85,730

 
$
79,592

Less: Dividends and undistributed earnings allocated to participating securities
 
(877
)
 
(1,074
)
 
(2,417
)
 
(2,535
)
Net income allocated to common shareholders
 
$
30,389

 
$
31,673

 
$
83,313

 
$
77,057

Basic weighted average common shares outstanding
 
96,983,764

 
75,380,715

 
94,846,431

 
75,388,638

Basic Earnings per Common Share
 
$
0.31

 
$
0.42

 
$
0.88

 
$
1.02

Diluted Earnings per Common Share:
 
 
 
 
 
 
 
 
Net income attributable to Redwood
 
$
31,266

 
$
32,747

 
$
85,730

 
$
79,592

Less: Dividends and undistributed earnings allocated to participating securities
 
(1,053
)
 
(1,156
)
 
(2,595
)
 
(2,584
)
Add back: Interest expense on convertible notes for the period, net of tax
 
8,698

 
6,335

 
17,385

 
14,976

Net income allocated to common shareholders
 
$
38,911

 
$
37,926

 
$
100,520

 
$
91,984

Weighted average common shares outstanding
 
96,983,764

 
75,380,715

 
94,846,431

 
75,388,638

Net effect of dilutive equity awards
 
270,550

 
277,788

 
210,360

 
156,307

Net effect of assumed convertible notes conversion to common shares
 
33,442,640

 
24,773,490

 
33,442,640

 
28,746,235

Diluted weighted average common shares outstanding
 
130,696,954

 
100,431,993

 
128,499,431

 
104,291,180

Diluted Earnings per Common Share
 
$
0.30

 
$
0.38

 
$
0.78

 
$
0.88