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Equity | 9 Months Ended
--- | ---
Sep. 30, 2021
Equity [Abstract] |
Equity | Equity The following table provides a summary of changes to accumulated other comprehensive income by component for the three and nine months ended September 30, 2021 and 2020. Table 17.1 – Changes in Accumulated Other Comprehensive Income (Loss) by Component
|  | Three Months Ended September 30, 2021 |  | Three Months Ended September 30, 2020
(In Thousands) |  | Available-for-Sale Securities |  | Interest Rate Agreements Accounted for as Cash Flow Hedges |  | Available-for-Sale Securities |  | Interest Rate Agreements Accounted for as Cash Flow Hedges
Balance at beginning of period |  | $ | 88,251 |  |  | $ | (78,511) |  |  | $ | 53,246 |  |  | $ | (82,637) |
Other comprehensive (loss) income before reclassifications |  | (2,658) |  |  | — |  |  | 8,236 |  |  | — |
Amounts reclassified from other accumulated comprehensive income (loss) |  | (6,200) |  |  | 1,041 |  |  | (445) |  |  | 1,040 |
Net current-period other comprehensive (loss) income |  | (8,858) |  |  | 1,041 |  |  | 7,791 |  |  | 1,040 |
Balance at End of Period |  | $ | 79,393 |  |  | $ | (77,470) |  |  | $ | 61,037 |  |  | $ | (81,597) |
|  | Nine Months Ended September 30, 2021 |  | Nine Months Ended September 30, 2020
(In Thousands) |  | Available-for-Sale Securities |  | Interest Rate Agreements Accounted for as Cash Flow Hedges |  | Available-for-Sale Securities |  | Interest Rate Agreements Accounted for as Cash Flow Hedges
Balance at beginning of period |  | $ | 76,336 |  |  | $ | (80,557) |  |  | $ | 92,452 |  |  | $ | (50,939) |
Other comprehensive income (loss) before reclassifications |  | 19,552 |  |  | — |  |  | (19,890) |  |  | (32,806) |
Amounts reclassified from other accumulated comprehensive income (loss) |  | (16,495) |  |  | 3,087 |  |  | (11,525) |  |  | 2,148 |
Net current-period other comprehensive income (loss) |  | 3,057 |  |  | 3,087 |  |  | (31,415) |  |  | (30,658) |
Balance at End of Period |  | $ | 79,393 |  |  | $ | (77,470) |  |  | $ | 61,037 |  |  | $ | (81,597) |
The following table provides a summary of reclassifications out of accumulated other comprehensive income for the three and nine months ended September 30, 2021 and 2020. Table 17.2 – Reclassifications Out of Accumulated Other Comprehensive Income (Loss)
|  |  |  | Amount Reclassified From Accumulated Other Comprehensive Income
|  | Affected Line Item in the |  | Three Months Ended September 30,
(In Thousands) |  | Income Statement |  | 2021 |  | 2020
Net Realized (Gain) Loss on AFS Securities |  |  |  |  |  |
Decrease in allowance for credit losses on AFS securities |  | Investment fair value changes, net |  | $ | — |  |  | $ | (445) |
Gain on sale of AFS securities |  | Realized gains, net |  | (6,200) |  |  | — |
|  |  |  | $ | (6,200) |  |  | $ | (445) |
Net Realized Loss on Interest Rate Agreements Designated as Cash Flow Hedges |  |  |  |  |  |
Amortization of deferred loss |  | Interest expense |  | $ | 1,041 |  |  | $ | 1,040 |
|  |  |  | $ | 1,041 |  |  | $ | 1,040 |
|  |  |  | Amount Reclassified From Accumulated Other Comprehensive Income
|  | Affected Line Item in the |  | Nine Months Ended September 30,
(In Thousands) |  | Income Statement |  | 2021 |  | 2020
Net Realized (Gain) Loss on AFS Securities |  |  |  |  |  |
(Decrease) increase in allowance for credit losses on AFS securities |  | Investment fair value changes, net |  | $ | (388) |  |  | $ | 1,026 |
Gain on sale of AFS securities |  | Realized gains, net |  | (16,107) |  |  | (12,552) |
|  |  |  | $ | (16,495) |  |  | $ | (11,526) |
Net Realized Loss on Interest Rate Agreements Designated as Cash Flow Hedges |  |  |  |  |  |
Amortization of deferred loss |  | Interest expense |  | $ | 3,087 |  |  | $ | 2,148 |
|  |  |  | $ | 3,087 |  |  | $ | 2,148 |
Issuance of Common Stock We have an established program to sell up to an aggregate of $175 million of common stock from time to time in at-the-market ("ATM") offerings. During the nine months ended September 30, 2021, we issued 1,466,669 common shares for net proceeds of $18 million under this program. At September 30, 2021, approximately $92 million remained outstanding for future offerings under this program. Direct Stock Purchase and Dividend Reinvestment Plan During the nine months ended September 30, 2021, we issued 119,040 shares of common stock for net proceeds of $1 million through our Direct Stock Purchase and Dividend Reinvestment Plan. During the nine months ended September 30, 2020, we did not issue any shares of common stock through our Direct Stock Purchase and Dividend Reinvestment Plan. At September 30, 2021, approximately 6 million shares remained outstanding for future offerings under this plan. Earnings (Loss) per Common Share The following table provides the basic and diluted earnings (loss) per common share computations for the three and nine months ended September 30, 2021 and 2020. Table 17.3 – Basic and Diluted Earnings (Loss) per Common Share
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
(In Thousands, except Share Data) |  | 2021 |  | 2020 |  | 2021 |  | 2020
Basic Earnings (Loss) per Common Share: |  |  |  |  |  |  |  |
Net income (loss) attributable to Redwood |  | $ | 88,286 |  |  | $ | 141,812 |  |  | $ | 275,568 |  |  | $ | (636,142) |
Less: Dividends and undistributed earnings allocated to participating securities |  | (2,984) |  |  | (4,067) |  |  | (8,979) |  |  | (1,427) |
Net income (loss) allocated to common shareholders |  | $ | 85,302 |  |  | $ | 137,745 |  |  | $ | 266,589 |  |  | $ | (637,569) |
Basic weighted average common shares outstanding |  | 112,995,847 |  |  | 113,403,102 |  |  | 112,754,691 |  |  | 113,952,308 |
Basic Earnings (Loss) per Common Share |  | $ | 0.75 |  |  | $ | 1.21 |  |  | $ | 2.36 |  |  | $ | (5.60) |
Diluted Earnings (Loss) per Common Share: |  |  |  |  |  |  |  |
Net income (loss) attributable to Redwood |  | $ | 88,286 |  |  | $ | 141,812 |  |  | $ | 275,568 |  |  | $ | (636,142) |
Less: Dividends and undistributed earnings allocated to participating securities |  | (2,747) |  |  | (3,512) |  |  | (8,151) |  |  | (1,427) |
Add back: Interest expense on convertible notes for the period, net of tax |  | 6,870 |  |  | 6,990 |  |  | 20,585 |  |  | — |
Net income (loss) allocated to common shareholders |  | $ | 92,409 |  |  | $ | 145,290 |  |  | $ | 288,002 |  |  | $ | (637,569) |
Weighted average common shares outstanding |  | 112,995,847 |  |  | 113,403,102 |  |  | 112,754,691 |  |  | 113,952,308 |
Net effect of dilutive equity awards |  | 292,749 |  |  | — |  |  | 253,819 |  |  | — |
Net effect of assumed convertible notes conversion to common shares |  | 28,566,875 |  |  | 28,566,875 |  |  | 28,566,875 |  |  | — |
Diluted weighted average common shares outstanding |  | 141,855,471 |  |  | 141,969,977 |  |  | 141,575,385 |  |  | 113,952,308 |
Diluted Earnings (Loss) per Common Share |  | $ | 0.65 |  |  | $ | 1.02 |  |  | $ | 2.03 |  |  | $ | (5.60) |
We included participating securities, which are certain equity awards that have non-forfeitable dividend participation rights, in the calculations of basic and diluted earnings per common share as we determined that the two-class method was more dilutive than the alternative treasury stock method for these shares. Dividends and undistributed earnings allocated to participating securities under the basic and diluted earnings per share calculations require specific shares to be included that may differ in certain circumstances. During the three and nine months ended September 30, 2021 and the three months ended September 30, 2020, certain of our convertible notes were determined to be dilutive and were included in the calculation of diluted EPS under the "if-converted" method. Under this method, the periodic interest expense (net of applicable taxes) for dilutive notes is added back to the numerator and the weighted average number of shares that the notes are entitled to (if converted, regardless of whether they are in or out of the money) are included in the denominator. For the nine months ended September 30, 2020, 32.2 million of common shares related to the assumed conversion of our convertible notes were antidilutive and were excluded in the calculation of diluted earnings per share. For the three and nine months ended September 30, 2021, the number of outstanding equity awards that were antidilutive totaled 22,102 and 18,736, respectively. For the three and nine months ended September 30, 2020, the number of outstanding equity awards that were antidilutive totaled 13,560 and 15,457, respectively. Stock Repurchases In February 2018, our Board of Directors approved an authorization for the repurchase of our common stock, increasing the total amount authorized for repurchases of common stock to $100 million, and also authorized the repurchase of outstanding debt securities, including convertible and exchangeable debt. This authorization increased the previous share repurchase authorization approved in February 2016 and has no expiration date. This repurchase authorization does not obligate us to acquire any specific number of shares or securities. Under this authorization, shares or securities may be repurchased in privately negotiated and/or open market transactions, including under plans complying with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended. During the nine months ended September 30, 2021, we did not repurchase any shares. At September 30, 2021, $78 million of the current authorization remained available for the repurchase of shares of our common stock and we also continued to be authorized to repurchase outstanding debt securities.

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- Definition The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 14 -Subparagraph (c) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496171-112644 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 14 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496171-112644 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.3-04) -URI http://asc.fasb.org/extlink&oid=120397183&loc=d3e187085-122770 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 18 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496189-112644 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (g) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644 Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI http://asc.fasb.org/topic&trid=2208762 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 18 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496189-112644 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (h) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 14 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496171-112644 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 18 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496189-112644 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 16 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496180-112644 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (i) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644 Reference 15: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(e)(1)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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