Equity

The following table provides a summary of changes to accumulated other comprehensive income by component for the years ended December 31, 2016 and 2015.

Table 16.1 – Changes in Accumulated Other Comprehensive Income by Component



	Years Ended December 31,
	2016						2015
(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	$	139,356		$	(47,363	)	$	186,737		$	(46,049	)
Other comprehensive income (loss) before reclassifications⁽¹⁾	(2,316		)	3,271			(17,955		)	(1,409		)
Amounts reclassified from other accumulated comprehensive income	(21,167		)	72			(29,426		)	95
Net current-period other comprehensive income (loss)	(23,483		)	3,343			(47,381		)	(1,314		)
Balance at End of Period	$	115,873		$	(44,020	)	$	139,356		$	(47,363	)


(1)	Amounts presented for unrealized gains (losses) on available-for-sale securities are net of tax benefit (provision) of $1 million and $(0.4) million for the years ended December 31, 2016 and 2015, respectively.

The following table provides a summary of reclassifications out of accumulated other comprehensive income for the years ended December 31, 2016 and 2015.

Table 16.2 – 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	2016			2015
Net Realized (Gain) Loss on AFS Securities
Other than temporary impairment ⁽¹⁾	Investment fair value changes, net	$	368		$	246
Gain on sale of AFS securities	Realized gains, net	(21,535		)	(29,672		)
		$	(21,167	)	$	(29,426	)
Net Realized Loss on Interest Rate Agreements Designated as Cash Flow Hedges
Amortization of deferred loss	Interest expense	$	72		$	95
		$	72		$	95

(1)

For the year ended December 31, 2016, other-than-temporary impairments were $3 million, of which $0.4 million were recognized through the consolidated statements of income and $3 million were recognized in Accumulated other comprehensive income, a component of our consolidated balance sheet. For the year ended December 31, 2015, other-than-temporary impairments were $0.4 million, of which $0.2 million were recognized through our consolidated statements of income, and $0.2 million were recognized in Accumulated other comprehensive income, a component of our consolidated balance sheet.

Earnings per Common Share

The following table provides the basic and diluted earnings per common share computations for the years ended December 31, 2016, 2015, and 2014.

Table 16.3 – Basic and Diluted Earnings per Common Share



	Years Ended December 31,
(In Thousands, except Share Data)	2016			2015			2014
Basic Earnings per Common Share:
Net income attributable to Redwood	$	131,252		$	102,088		$	100,569
Less: Dividends and undistributed earnings allocated to participating securities	(3,742		)	(2,806		)	(2,612		)
Net income allocated to common shareholders	$	127,510		$	99,282		$	97,957
Basic weighted average common shares outstanding	76,747,047			82,945,103			82,837,369
Basic Earnings per Common Share	$	1.66		$	1.20		$	1.18
Diluted Earnings per Common Share:
Net income attributable to Redwood	$	131,252		$	102,088		$	100,569
Less: Dividends and undistributed earnings allocated to participating securities	(4,035		)	(2,677		)	(2,524		)
Add back: Interest expense on convertible notes for the period, net of tax	23,862			—			—
Net income allocated to common shareholders	$	151,079		$	99,411		$	98,045
Weighted average common shares outstanding	76,747,047			82,945,103			82,837,369
Net effect of dilutive equity awards	28,435			1,573,292			2,261,210
Net effect of assumed convertible notes conversion to common shares	21,133,608			—			—
Diluted weighted average common shares outstanding	97,909,090			84,518,395			85,098,579
Diluted Earnings per Common Share	$	1.54		$	1.18		$	1.15

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 year ended December 31, 2016, certain 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 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 year ended December 31, 2016, no common shares related to the assumed conversion of our convertible notes were antidilutive and excluded from the calculation of diluted earnings per share. For the years ended December 31, 2015 and 2014, 21,292,309 and 12,811,041 common shares, respectively, related to the assumed conversion of the convertible notes were antidilutive and were excluded in the calculation of diluted earnings per share.

For the years ended December 31, 2016, 2015, and 2014, the number of outstanding equity awards that were antidilutive totaled zero, 103,253, and 59,230, respectively.

Stock Repurchases

In August 2015, our Board of Directors authorized the repurchase of up to $100 million of our common stock. During the first quarter of 2016, we repurchased 839,130 common shares for $11 million, utilizing the remaining availability under this authorization.

In February 2016, our Board of Directors 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 replaced all previous share repurchase plans 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. Under this authorization, during the year ended December 31, 2016, we repurchased 1,103,924 shares pursuant to this authorization for $14 million. At December 31, 2016, approximately $86 million of this current authorization remained available for the repurchase of shares of our common stock.