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Equity
 6 Months Ended
Jun. 30, 2022
Equity [Abstract]  
Equity Equity
The following table provides a summary of changes to accumulated other comprehensive income (loss) by component for the three and six months ended June 30, 2022 and 2021.
Table 17.1 – Changes in Accumulated Other Comprehensive Income (Loss) by Component
Three Months Ended June 30, 2022Three Months Ended June 30, 2021
(In Thousands)Available-for-Sale SecuritiesInterest Rate Agreements Accounted for as Cash Flow HedgesAvailable-for-Sale SecuritiesInterest Rate Agreements Accounted for as Cash Flow Hedges
Balance at beginning of period$48,938 $(75,412)$84,527 $(79,539)
Other comprehensive (loss) income
before reclassifications 		(33,409)— 11,224 — 
Amounts reclassified from other
accumulated comprehensive (income) loss		1,066 1,029 (7,500)1,028 
Net current-period other comprehensive (loss) income (32,343)1,029 3,724 1,028 
Balance at End of Period$16,595 $(74,383)$88,251 $(78,511)
Six Months Ended June 30, 2022Six Months Ended June 30, 2021
(In Thousands)Available-for-Sale SecuritiesInterest Rate Agreements Accounted for as Cash Flow HedgesAvailable-for-Sale SecuritiesInterest Rate Agreements Accounted for as Cash Flow Hedges
Balance at beginning of period$67,503 $(76,430)$76,336 $(80,557)
Other comprehensive (loss) income
before reclassifications 		(51,282)— 22,210 — 
Amounts reclassified from other
accumulated comprehensive (income) loss		374 2,047 (10,295)2,046 
Net current-period other comprehensive (loss) income (50,908)2,047 11,915 2,046 
Balance at End of Period$16,595 $(74,383)$88,251 $(78,511)
The following table provides a summary of reclassifications out of accumulated other comprehensive income (loss) for the three and six months ended June 30, 2022 and 2021.
Table 17.2 – Reclassifications Out of Accumulated Other Comprehensive Income (Loss)
Amount Reclassified From
Accumulated Other Comprehensive (Loss)
Affected Line Item in theThree Months Ended June 30,
(In Thousands)Income Statement20222021
Net Realized (Gain) Loss on AFS Securities
Increase (decrease) in allowance for credit losses on AFS securitiesInvestment fair value changes, net$1,066 $(13)
Gain on sale of AFS securitiesRealized gains, net— (7,487)
$1,066 $(7,500)
Net Realized Loss on Interest Rate
  Agreements Designated as Cash Flow Hedges
Amortization of deferred lossInterest expense$1,029 $1,028 
$1,029 $1,028 
Amount Reclassified From
Accumulated Other Comprehensive (Loss)
Affected Line Item in theSix Months Ended June 30,
(In Thousands)Income Statement20222021
Net Realized (Gain) Loss on AFS Securities
Increase (decrease) in allowance for credit losses on AFS securitiesInvestment fair value changes, net$1,771 $(388)
Gain on sale of AFS securitiesRealized gains, net(1,397)(9,907)
$374 $(10,295)
Net Realized Loss on Interest Rate
  Agreements Designated as Cash Flow Hedges
Amortization of deferred lossInterest expense$2,047 $2,046 
$2,047 $2,046 
Issuance of Common Stock
We have an established program to sell common stock from time to time in at-the-market ("ATM") offerings. During the six months ended June 30, 2022, we issued 5,232,869 common shares for net proceeds of $67 million under this program. During the three months ended March 31, 2022, we increased the capacity of this program to $175 million, all of which remained outstanding for future offerings under this program as of June 30, 2022.
Direct Stock Purchase and Dividend Reinvestment Plan
During the six months ended June 30, 2022, we did not issue any shares of common stock through our Direct Stock Purchase and Dividend Reinvestment Plan. At June 30, 2022, approximately 6 million shares remained outstanding for future offerings under this plan.
Earnings per Common Share
The following table provides the basic and diluted (loss) earnings per common share computations for the three and six months ended June 30, 2022 and 2021.
Table 17.3 – Basic and Diluted Earnings per Common Share
Three Months Ended June 30,Six Months Ended June 30,
(In Thousands, except Share Data)2022202120222021
Basic Earnings per Common Share:
Net (loss) income attributable to Redwood$(99,966)$90,025 $(69,051)$187,282 
Less: Dividends and undistributed earnings allocated to participating securities(1,159)(3,149)(2,286)(6,458)
Net (loss) income allocated to common shareholders$(101,125)$86,876 $(71,337)$180,824 
Basic weighted average common shares outstanding119,660,173 112,921,070 119,771,554 112,337,984 
Basic (Loss) Earnings per Common Share$(0.85)$0.77 $(0.60)$1.61 
Diluted Earnings per Common Share:
Net (loss) income attributable to Redwood$(99,966)$90,025 $(69,051)$187,282 
Less: Dividends and undistributed earnings allocated to participating securities(1,159)(2,869)(2,286)(5,829)
Add back: Interest expense on convertible notes for the period, net of tax— 6,990 — 13,971 
Net (loss) income allocated to common shareholders$(101,125)$94,146 $(71,337)$195,424 
Weighted average common shares outstanding119,660,173 112,921,070 119,771,554 112,337,984 
Net effect of dilutive equity awards— 273,139 — 234,353 
Net effect of assumed convertible notes conversion to common shares— 28,566,875 — 28,566,875 
Diluted weighted average common shares outstanding119,660,173 141,761,084 119,771,554 141,139,212 
Diluted (Loss) Earnings per Common Share$(0.85)$0.66 $(0.60)$1.38 
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 six months ended June 30, 2021, 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 three and six months ended June 30, 2022, 33,992,377 and 31,294,614 of common shares, respectively, 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 six months ended June 30, 2022, the number of outstanding equity awards that were antidilutive totaled 249,224 and 278,604, respectively. For the three and six months ended June 30, 2021, the number of outstanding equity awards that were antidilutive totaled 18,645 and 17,053, respectively.
Stock Repurchases
Our Board of Directors previously approved an authorization for the repurchase of up to $100 million of our common stock, and also authorized the repurchase of outstanding debt securities, including convertible and exchangeable debt. This authorization has no expiration date and does not obligate us to acquire any specific number of shares or securities. During the three months ended June 30, 2022, we repurchased 3.7 million shares of our common stock for a total cost of $33 million. At June 30, 2022, $46 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. In July 2022, our Board of Directors approved a new repurchase authorization – see Note 24 for further discussion.