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Equity (Tables)
 9 Months Ended
Sep. 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 nine months ended September 30, 2019 and 2018.
Table 17.1 – Changes in Accumulated Other Comprehensive Income by Component
 
 
Three Months Ended September 30, 2019
 
Three Months Ended September 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
 
$
98,307

 
$
(49,384
)
 
$
106,725

 
$
(31,105
)
Other comprehensive income (loss)
before reclassifications (1)
 
4,484

 
(11,791
)
 
(2,408
)
 
4,801

Amounts reclassified from other
accumulated comprehensive income
 
(3,492
)
 
—

 
(5,686
)
 
—

Net current-period other comprehensive income (loss)
 
992

 
(11,791
)
 
(8,094
)
 
4,801

Balance at End of Period
 
$
99,299

 
$
(61,175
)
 
$
98,631

 
$
(26,304
)
 
 
Nine Months Ended September 30, 2019
 
Nine Months Ended September 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)
 
19,764

 
(27,130
)
 
(9,749
)
 
16,649

Amounts reclassified from other
accumulated comprehensive income
 
(15,807
)
 
—

 
(19,821
)
 
—

Net current-period other comprehensive income (loss)
 
3,957

 
(27,130
)
 
(29,570
)
 
16,649

Balance at End of Period
 
$
99,299

 
$
(61,175
)
 
$
98,631

 
$
(26,304
)
(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.
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, 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 September 30,
(In Thousands)
 
Income Statement
 
2019
 
2018
Net Realized (Gain) Loss on AFS Securities
 
 
 
 
 
 
Other than temporary impairment (1)
 
Investment fair value changes, net
 
$
—

 
$
33

Gain on sale of AFS securities
 
Realized gains, net
 
(3,492
)
 
(7,247
)
Gain on sale of AFS securities
 
Provision for income taxes
 
—

 
1,528

 
 
 
 
$
(3,492
)
 
$
(5,686
)

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

 
$
89

Gain on sale of AFS securities
 
Realized gains, net
 
(15,807
)
 
(21,438
)
Gain on sale of AFS securities
 
Provision for income taxes
 
—

 
1,528

 
 
 
 
$
(15,807
)
 
$
(19,821
)
(1)
For both the three and nine months ended September 30, 2019, there were no other-than-temporary impairments. 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.
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, 2019 and 2018.
Table 17.3 – Basic and Diluted Earnings per Common Share
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
(In Thousands, except Share Data)
 
2019
 
2018
 
2019
 
2018
Basic Earnings per Common Share:
 
 
 
 
 
 
 
 
Net income attributable to Redwood
 
$
34,310

 
$
40,921

 
$
120,040

 
$
120,513

Less: Dividends and undistributed earnings allocated to participating securities
 
(856
)
 
(1,231
)
 
(3,260
)
 
(3,766
)
Net income allocated to common shareholders
 
$
33,454

 
$
39,690

 
$
116,780

 
$
116,747

Basic weighted average common shares outstanding
 
101,872,126

 
80,796,856

 
97,214,064

 
77,211,188

Basic Earnings per Common Share
 
$
0.33

 
$
0.49

 
$
1.20

 
$
1.51

Diluted Earnings per Common Share:
 
 
 
 
 
 
 
 
Net income attributable to Redwood
 
$
34,310

 
$
40,921

 
$
120,040

 
$
120,513

Less: Dividends and undistributed earnings allocated to participating securities
 
(1,036
)
 
(1,284
)
 
(3,625
)
 
(3,867
)
Add back: Interest expense on convertible notes for the period, net of tax
 
8,887

 
8,666

 
26,271

 
23,642

Net income allocated to common shareholders
 
$
42,161

 
$
48,303

 
$
142,686

 
$
140,288

Weighted average common shares outstanding
 
101,872,126

 
80,796,856

 
97,214,064

 
77,211,188

Net effect of dilutive equity awards
 
362,743

 
443,191

 
261,155

 
251,935

Net effect of assumed convertible notes conversion to common shares
 
34,287,840

 
33,442,641

 
33,727,470

 
30,328,906

Diluted weighted average common shares outstanding
 
136,522,709

 
114,682,688

 
131,202,689

 
107,792,029

Diluted Earnings per Common Share
 
$
0.31

 
$
0.42

 
$
1.09

 
$
1.30