Equity (Tables)

12 Months Ended

Dec. 31, 2017

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, 2017 and 2016.

Table 15.1 – Changes in Accumulated Other Comprehensive Income by Component



	Years Ended December 31,
	2017						2016
(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	$	115,873		$	(44,020	)	$	139,356		$	(47,363	)
Other comprehensive income (loss) before reclassifications⁽¹⁾	22,864			1,022			(2,316		)	3,271
Amounts reclassified from other accumulated comprehensive income	(10,536		)	45			(21,167		)	72
Net current-period other comprehensive income (loss)	12,328			1,067			(23,483		)	3,343
Balance at End of Period	$	128,201		$	(42,953	)	$	115,873		$	(44,020	)


(1)	Amounts presented for net unrealized gains (losses) on available-for-sale securities are net of tax benefit (provision) of zero and $1 million for the years ended December 31, 2017 and 2016, respectively.

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, 2017 and 2016.

Table 15.2 – 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	2017			2016
Net Realized (Gain) Loss on AFS Securities
Other than temporary impairment ⁽¹⁾	Investment fair value changes, net	$	1,012		$	368
Gain on sale of AFS securities	Realized gains, net	(11,548		)	(21,535		)
		$	(10,536	)	$	(21,167	)
Net Realized Loss on Interest Rate Agreements Designated as Cash Flow Hedges
Amortization of deferred loss	Interest expense	$	45		$	72
		$	45		$	72

(1)

For the year ended December 31, 2017, other-than-temporary impairments were $1 million, of which $1 million were recognized through our consolidated statements of income and $0.4 million were recognized in Accumulated other comprehensive income, a component of our consolidated balance sheet. For the year ended December 31, 2016, other-than-temporary impairments were $3 million, of which $0.4 million were recognized through our consolidated statements of income, and $3 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, 2017, 2016, and 2015.

Table 15.3 – Basic and Diluted Earnings per Common Share



	Years Ended December 31,
(In Thousands, except Share Data)	2017			2016			2015
Basic Earnings per Common Share:
Net income attributable to Redwood	$	140,406		$	131,252		$	102,088
Less: Dividends and undistributed earnings allocated to participating securities	(3,632		)	(3,742		)	(2,806		)
Net income allocated to common shareholders	$	136,774		$	127,510		$	99,282
Basic weighted average common shares outstanding	76,792,957			76,747,047			82,945,103
Basic Earnings per Common Share	$	1.78		$	1.66		$	1.20
Diluted Earnings per Common Share:
Net income attributable to Redwood	$	140,406		$	131,252		$	102,088
Less: Dividends and undistributed earnings allocated to participating securities	(3,836		)	(4,035		)	(2,677		)
Add back: Interest expense on convertible notes for the period, net of tax	26,898			23,862			—
Net income allocated to common shareholders	$	163,468		$	151,079		$	99,411
Weighted average common shares outstanding	76,792,957			76,747,047			82,945,103
Net effect of dilutive equity awards	185,383			28,435			1,573,292
Net effect of assumed convertible notes conversion to common shares	24,996,668			21,133,608			—
Diluted weighted average common shares outstanding	101,975,008			97,909,090			84,518,395
Diluted Earnings per Common Share	$	1.60		$	1.54		$	1.18