Equity (Tables)

12 Months Ended

Dec. 31, 2019

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, 2019 and 2018.

Table 17.1 – Changes in Accumulated Other Comprehensive Income by Component



	Years Ended December 31,
	2019						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	17,077			(16,894		)	(7,298		)	8,908
Amounts reclassified from other accumulated comprehensive income ⁽¹⁾	(19,967		)	—			(25,561		)	—
Net current-period other comprehensive income (loss)	(2,890		)	(16,894		)	(32,859		)	8,908
Balance at End of Period	$	92,452		$	(50,939	)	$	95,342		$	(34,045	)

(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, 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	Years Ended December 31,
(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	(19,967		)	(27,178		)
Gain on sale of AFS securities	Provision for income taxes	—			1,528
		$	(19,967	)	$	(25,561	)

(1)

For the year ended December 31, 2019, there were no other-than-temporary impairments. 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.

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, 2019, 2018, and 2017.

Table 17.3 – Basic and Diluted Earnings per Common Share



	Years Ended December 31,
(In Thousands, except Share Data)	2019			2018			2017
Basic Earnings per Common Share:
Net income attributable to Redwood	$	169,183		$	119,600		$	140,406
Less: Dividends and undistributed earnings allocated to participating securities	(4,797		)	(3,754		)	(3,632		)
Net income allocated to common shareholders	$	164,386		$	115,846		$	136,774
Basic weighted average common shares outstanding	101,120,744			78,724,912			76,792,957
Basic Earnings per Common Share	$	1.63		$	1.47		$	1.78
Diluted Earnings per Common Share:
Net income attributable to Redwood	$	169,183		$	119,600		$	140,406
Less: Dividends and undistributed earnings allocated to participating securities	(5,273		)	(4,283		)	(3,836		)
Add back: Interest expense on convertible notes for the period, net of tax	36,212			32,653			26,898
Net income allocated to common shareholders	$	200,122		$	147,970		$	163,468
Weighted average common shares outstanding	101,147,225			78,724,912			76,792,957
Net effect of dilutive equity awards	251,100			189,120			185,383
Net effect of assumed convertible notes conversion to common shares	35,382,269			31,113,738			24,996,668
Diluted weighted average common shares outstanding	136,780,594			110,027,770			101,975,008
Diluted Earnings per Common Share	$	1.46		$	1.34		$	1.60