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Equity | 12 Months Ended
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Dec. 31, 2023
Equity [Abstract] |
Equity | Equity The following table provides a summary of changes to accumulated other comprehensive income by component for the years ended December 31, 2023 and 2022. Table 18.1 – Changes in Accumulated Other Comprehensive Income (Loss) by Component
|  | Years Ended December 31,
|  | 2023 |  | 2022
(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 |  | $ | 3,435 |  |  | $ | (72,303) |  |  | $ | 67,503 |  |  | $ | (76,430) |
Other comprehensive income (loss) before reclassifications |  | 6,230 |  |  | — |  |  | (64,704) |  |  | — |
Amounts reclassified from other accumulated comprehensive income (loss) |  | 554 |  |  | 4,127 |  |  | 636 |  |  | 4,127 |
Net current-period other comprehensive income (loss) |  | 6,784 |  |  | 4,127 |  |  | (64,068) |  |  | 4,127 |
Balance at End of Period |  | $ | 10,219 |  |  | $ | (68,176) |  |  | $ | 3,435 |  |  | $ | (72,303) |
The following table provides a summary of reclassifications out of accumulated other comprehensive income (loss) for the years ended December 31, 2023 and 2022. Table 18.2 – Reclassifications Out of Accumulated Other Comprehensive Income (Loss)
|  |  |  | Amount Reclassified From Accumulated Other Comprehensive Income
|  | Affected Line Item in the |  | Year Ended December 31,
(In Thousands) |  | Income Statement |  | 2023 |  | 2022
Net Realized (Gain) Loss on AFS Securities |  |  |  |  |  |
Increase (decrease) in allowance for credit losses on AFS securities |  | Investment fair value changes, net |  | $ | (58) |  |  | $ | 2,541 |
Gain on sales and calls of AFS securities |  | Realized gains, net |  | 612 |  |  | (1,905) |
|  |  |  | $ | 554 |  |  | $ | 636 |
Net Realized Loss on Interest Rate Agreements Designated as Cash Flow Hedges |  |  |  |  |  |
Amortization of deferred loss |  | Interest expense |  | $ | 4,127 |  |  | $ | 4,127 |
|  |  |  | $ | 4,127 |  |  | $ | 4,127 |
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 years ended December 31, 2023, December 31, 2022 and December 31, 2021, we issued 16.8 million. 5.2 million and 1.6 million of common shares for net proceeds of $124 million, $67 million and $20 million under this program, respectively. During 2022, we increased the capacity of this program to $175 million, of which approximately $50 million remained outstanding for future offerings under this program at December 31, 2023. Issuance of Preferred Stock In January 2023, Redwood issued 2.8 million shares of 10.00% Series A Fixed-Rate Reset Cumulative Redeemable Preferred Stock ("Series A Preferred Stock") for gross proceeds of $70 million and net proceeds of approximately $67 million, after deducting the underwriting discount and other estimated expenses. The Series A Preferred Stock pays quarterly cumulative cash dividends through January 15, 2028 at a fixed annual rate of 10%, based on the stated liquidation preference of $25.00 per share, in arrears, when authorized by Redwood's Board of Directors and declared by the Company. Starting April 15, 2028, the annual dividend rate will reset to the five-year U.S. Treasury Rate plus a spread of 6.278%. The Series A Preferred Stock ranks senior to Redwood's common stock with respect to rights to the payment of dividends and the distribution of assets upon any liquidation, dissolution or winding up of the Company. During the year ended December 31, 2023, the Company declared preferred stock dividends of $2.47917 per share. At December 31, 2023, preferred dividends payable totaling $1 million for the fourth quarter 2023 dividend were included in Accrued expenses and other liabilities and were payable on January 16, 2024 to preferred stockholders of record on December 28, 2023. Direct Stock Purchase and Dividend Reinvestment Plan During the years ended December 31, 2023 and 2022, we did not issue shares of common stock through our Direct Stock Purchase and Dividend Reinvestment Plan. At December 31, 2023, approximately 6 million shares remained outstanding for future offerings under this plan. Earnings per Common Share The following table provides the basic and diluted earnings per common share computations for the years ended December 31, 2023, 2022, and 2021. Table 18.3 – Basic and Diluted Earnings per Common Share
|  | Years Ended December 31,
(In Thousands, except Share Data) |  | 2023 |  | 2022 |  | 2021
Basic (Loss) Earnings per Common Share: |  |  |  |  |  |
Net (loss) income (related) attributable to common stockholders |  | $ | (8,958) |  |  | $ | (163,520) |  |  | $ | 319,613 |
Less: Dividends and undistributed earnings allocated to participating securities |  | (3,999) |  |  | (4,335) |  |  | (10,635) |
Net (loss) income allocated to common stockholders |  | $ | (12,957) |  |  | $ | (167,855) |  |  | $ | 308,978 |
Basic weighted average common shares outstanding |  | 116,283,328 |  |  | 117,227,846 |  |  | 113,230,190 |
Basic (Loss) Earnings per Common Share |  | $ | (0.11) |  |  | $ | (1.43) |  |  | $ | 2.73 |
Diluted (Loss) Earnings per Common Share: |  |  |  |  |  |
Net (loss) income (related) attributable to common stockholders |  | $ | (8,958) |  |  | $ | (163,520) |  |  | $ | 319,613 |
Less: Dividends and undistributed earnings allocated to participating securities |  | (3,999) |  |  | (4,335) |  |  | (9,880) |
Add back: interest expense of convertible notes assumed converted for the period, net of tax |  | — |  |  | — |  |  | 27,463 |
Net (loss) income allocated to common stockholders |  | $ | (12,957) |  |  | $ | (167,855) |  |  | $ | 337,196 |
Weighted average common shares outstanding |  | 116,283,328 |  |  | 117,227,846 |  |  | 113,230,190 |
Net effect of dilutive equity awards |  | — |  |  | — |  |  | 273,236 |
Net effect of assumed convertible notes conversion to common shares |  | — |  |  | — |  |  | 28,566,875 |
Diluted weighted average common shares outstanding |  | 116,283,328 |  |  | 117,227,846 |  |  | 142,070,301 |
Diluted (Loss) Earnings per Common Share |  | $ | (0.11) |  |  | $ | (1.43) |  |  | $ | 2.37 |
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 years ended December 31, 2023 and 2022, none of our convertible notes were determined to be dilutive and were not included in the calculation of diluted EPS under the "if-converted" method. Under this method, for convertible and exchangeable notes due in 2023, 2024 and 2025, 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 convertible notes due in 2027, if the potential conversion of the debt is dilutive, then the number of shares needed to settle the conversion premium are added to the shares outstanding used to calculate dilutive EPS. For the year ended December 31, 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. For the years ended December 31, 2023 and 2022, 42,229,598 and 40,081,997 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 years ended December 31, 2023, 2022, and 2021, the number of outstanding equity awards that were antidilutive totaled 105,592, 226,975, and 18,736, respectively. Stock Repurchases In July 2022, our Board of Directors approved an authorization for the repurchase of up to $125 million of our common stock, and also authorized the repurchase of outstanding debt securities, including convertible and exchangeable debt. In May 2023, our Board of Directors approved an additional authorization for the repurchase of up to $70 million of our preferred stock. During the year ended December 31, 2023, we repurchased zero shares of our common stock, zero shares of our preferred stock, and repurchased $81 million of our convertible and exchangeable debt. During the year ended December 31, 2022, we repurchased 7.1 million shares of our common stock for $56 million and repurchased $32 million of our convertible notes. At December 31, 2023, $101 million of the current authorization remained available for the repurchase of shares of our common stock, $70 million remained available for repurchases of shares of our preferred stock, and we also continued to be authorized to repurchase outstanding debt securities.

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