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Equity (Tables)
6 Months Ended
Jun. 30, 2020
Equity [Abstract]  
Changes to Accumulated Other Comprehensive Income by Component
The following table provides a summary of changes to accumulated other comprehensive income by component for the three and six months ended June 30, 2020 and 2019. During the three and six months ended June 30, 2020, we recognized net unrealized gains (losses) on our Level 3 AFS securities which we owned as of June 30, 2020 of $52 million and negative $24 million, respectively.
Table 17.1 – Changes in Accumulated Other Comprehensive Income by Component
Three Months Ended June 30, 2020Three Months Ended June 30, 2019
(In Thousands)Net Unrealized Gains (Losses) on Available-for-Sale SecuritiesNet Unrealized Losses on Interest Rate Agreements Accounted for as Cash Flow HedgesNet Unrealized Gains on Available-for-Sale SecuritiesNet Unrealized Losses on Interest Rate Agreements Accounted for as Cash Flow Hedges
Balance at beginning of period$(1,865) $(83,666) $92,567  $(39,883) 
Other comprehensive income (loss)
before reclassifications
52,393  —  8,562  (9,501) 
Amounts reclassified from other
accumulated comprehensive income
2,718  1,029  (2,822) —  
Net current-period other comprehensive income (loss)55,111  1,029  5,740  (9,501) 
Balance at End of Period$53,246  $(82,637) $98,307  $(49,384) 
Six Months Ended June 30, 2020Six Months Ended June 30, 2019
(In Thousands)Net Unrealized Gains on Available-for-Sale SecuritiesNet Unrealized Losses on Interest Rate Agreements Accounted for as Cash Flow HedgesNet Unrealized Gains on Available-for-Sale SecuritiesNet Unrealized Losses on Interest Rate Agreements Accounted for as Cash Flow Hedges
Balance at beginning of period$92,452  $(50,939) $95,342  $(34,045) 
Other comprehensive income (loss)
before reclassifications
(28,126) (32,806) 15,280  (15,339) 
Amounts reclassified from other
accumulated comprehensive income
(11,080) 1,108  (12,315) —  
Net current-period other comprehensive income (loss)(39,206) (31,698) 2,965  (15,339) 
Balance at End of Period$53,246  $(82,637) $98,307  $(49,384) 
Reclassifications out of Accumulated Other Comprehensive Income
The following table provides a summary of reclassifications out of accumulated other comprehensive income for the three and six months ended June 30, 2020 and 2019.
Table 17.2 – Reclassifications Out of Accumulated Other Comprehensive Income
Amount Reclassified From
Accumulated Other Comprehensive Income
Affected Line Item in theThree Months Ended June 30,
(In Thousands)Income Statement20202019
Net Realized (Gain) Loss on AFS Securities
Credit loss recovery on AFS securitiesInvestment fair value changes, net$(54) $—  
Gain on sale of AFS securitiesRealized gains, net2,772  (2,822) 
$2,718  $(2,822) 
Net Realized Loss on Interest Rate
Agreements Designated as Cash Flow Hedges
Amortization of deferred lossInterest expense$1,029  $—  
$1,029  $—  
Amount Reclassified From
Accumulated Other Comprehensive Income
Affected Line Item in theSix Months Ended June 30,
(In Thousands)Income Statement20202019
Net Realized (Gain) Loss on AFS Securities
Credit loss expense on AFS securitiesInvestment fair value changes, net$1,471  $—  
Gain on sale of AFS securitiesRealized gains, net(12,551) (12,315) 
$(11,080) $(12,315) 
Net Realized Loss on Interest Rate
Agreements Designated as Cash Flow Hedges
Amortization of deferred lossInterest expense$1,108  $—  
$1,108  $—  
Basic and Diluted Earnings Per Common Share
The following table provides the basic and diluted earnings (loss) per common share computations for the three and six months ended June 30, 2020 and 2019.
Table 17.3 – Basic and Diluted Earnings (Loss) per Common Share
Three Months Ended June 30,Six Months Ended June 30,
(In Thousands, except Share Data)2020201920202019
Basic Earnings (Loss) per Common Share:
Net income (loss) attributable to Redwood$165,444  $31,266  $(777,954) $85,730  
Less: Dividends and undistributed earnings allocated to participating securities(4,528) (877) (1,011) (2,417) 
Net income (loss) allocated to common shareholders$160,916  $30,389  $(778,965) $83,313  
Basic weighted average common shares outstanding114,383,289  96,983,764  114,229,928  94,846,431  
Basic Earnings (Loss) per Common Share$1.41  $0.31  $(6.82) $0.88  
Diluted Earnings (Loss) per Common Share:
Net income (loss) attributable to Redwood$165,444  $31,266  $(777,954) $85,730  
Less: Dividends and undistributed earnings allocated to participating securities(3,116) (1,053) (1,011) (2,595) 
Adjust for interest expense and gain on extinguishment of convertible notes for the period, net of tax(15,835) 8,698  —  17,385  
Net income (loss) allocated to common shareholders$146,493  $38,911  $(778,965) $100,520  
Weighted average common shares outstanding114,383,289  96,983,764  114,229,928  94,846,431  
Net effect of dilutive equity awards—  270,550  —  210,360  
Net effect of assumed convertible notes conversion to common shares32,715,790  33,442,640  —  33,442,640  
Diluted weighted average common shares outstanding147,099,079  130,696,954  114,229,928  128,499,431  
Diluted Earnings (Loss) per Common Share$1.00  $0.30  $(6.82) $0.78