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&lt;h2 style="text-align: left; padding-bottom: 3pt; text-transform: none; text-indent: 0pt; margin: 0pt; padding-left: 4px; padding-right: 0pt; font: bold 10pt/12pt serif; padding-top: 5pt;"&gt;Note 15. Equity &lt;/h2&gt;
&lt;p style="text-align: left; padding-bottom: 3pt; text-transform: none; text-indent: 20px; margin: 0pt; padding-left: 4px; padding-right: 0pt; font: 10pt/12pt serif; padding-top: 3pt;"&gt;The following table provides a summary of changes to stockholders' equity for the three and six months ended June 30, 2010. &lt;/p&gt;
&lt;h3 style="text-align: left; padding-bottom: 3pt; text-transform: none; text-indent: 0pt; margin: 0pt; padding-left: 4px; padding-right: 0pt; font: bold italic 10pt/12pt serif; padding-top: 5pt;"&gt;Stockholders' Equity &lt;/h3&gt;
&lt;p style="text-align: left; padding-bottom: 3pt; text-transform: none; text-indent: 0pt; margin: 0pt; padding-left: 4px; padding-right: 0pt; font: 10pt/12pt serif; padding-top: 3pt;"&gt; &lt;/p&gt;
&lt;div style="text-align: center;"&gt;
&lt;table style="text-align: left; padding-bottom: 3pt; text-transform: none; font-variant: normal; font-style: normal; text-indent: 0px; margin: -24pt 0pt 0pt; padding-left: 0pt; padding-right: 0pt; font-family: serif; font-size: 10pt; vertical-align: text-bottom; font-weight: normal; padding-top: 3pt;" cellspacing="0" cellpadding="0"&gt;
&lt;tr&gt;&lt;td&gt; &lt;/td&gt;
&lt;td style="border-bottom: medium none; text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td colspan="3"&gt; &lt;/td&gt;
&lt;td style="border-bottom: medium none; text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td colspan="3"&gt; &lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td style="border-bottom: black 1pt solid; text-align: left; line-height: normal; font-size: 8pt; vertical-align: text-bottom; font-weight: bold;"&gt;(In Thousands)&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 1pt solid; text-align: center; line-height: normal; font-size: 8pt; vertical-align: text-bottom; font-weight: bold;" colspan="3"&gt;Three Months&lt;br /&gt;Ended&lt;br /&gt;June 30,&lt;br /&gt;2010&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 1pt solid; text-align: center; line-height: normal; font-size: 8pt; vertical-align: text-bottom; font-weight: bold;" colspan="3"&gt;Six Months&lt;br /&gt;Ended&lt;br /&gt;June 30,&lt;br /&gt;2010&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="background-color: #ccffcc;"&gt;&lt;td style="text-indent: 0pt; padding-left: 10pt; vertical-align: text-bottom;"&gt;Balance at beginning of period&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; vertical-align: text-bottom;"&gt;$&lt;/td&gt;
&lt;td style="text-align: right; vertical-align: text-bottom;"&gt;997,606&lt;/td&gt;
&lt;td style="text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; vertical-align: text-bottom;"&gt;$&lt;/td&gt;
&lt;td style="text-align: right; vertical-align: text-bottom;"&gt;971,721&lt;/td&gt;
&lt;td style="text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="background-color: white;"&gt;&lt;td style="text-indent: 0pt; padding-left: 10pt; vertical-align: text-bottom;"&gt;Issuance of new equity capital, net&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: right; vertical-align: text-bottom;"&gt;3,740&lt;/td&gt;
&lt;td style="text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: right; vertical-align: text-bottom;"&gt;9,939&lt;/td&gt;
&lt;td style="text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="background-color: #ccffcc;"&gt;&lt;td style="text-indent: 0pt; padding-left: 10pt; vertical-align: text-bottom;"&gt;Unrealized losses on securities and derivatives, net&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: right; vertical-align: text-bottom;"&gt;(19,398&lt;/td&gt;
&lt;td style="text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;)&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: right; vertical-align: text-bottom;"&gt;(26,661&lt;/td&gt;
&lt;td style="text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;)&amp;nbsp;&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="background-color: white;"&gt;&lt;td style="text-indent: 0pt; padding-left: 10pt; vertical-align: text-bottom;"&gt;Distributions to shareholders&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: right; vertical-align: text-bottom;"&gt;(20,014&lt;/td&gt;
&lt;td style="text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;)&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: right; vertical-align: text-bottom;"&gt;(39,908&lt;/td&gt;
&lt;td style="text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;)&amp;nbsp;&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="background-color: #ccffcc;"&gt;&lt;td style="border-bottom: white 1pt solid; text-indent: 0pt; padding-left: 10pt; vertical-align: text-bottom;"&gt;Net income attributable to Redwood Trust, Inc.&lt;/td&gt;
&lt;td style="border-bottom: white 1pt solid; text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 1pt solid; text-align: left; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 1pt solid; text-align: right; vertical-align: text-bottom;"&gt;28,601&lt;/td&gt;
&lt;td style="border-bottom: white 1pt solid; text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: white 1pt solid; text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 1pt solid; text-align: left; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 1pt solid; text-align: right; vertical-align: text-bottom;"&gt;75,444&lt;/td&gt;
&lt;td style="border-bottom: white 1pt solid; text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="background-color: white;"&gt;&lt;td style="border-bottom: white 3px double; text-indent: 0pt; padding-left: 10pt; vertical-align: text-bottom; font-weight: bold;"&gt;Balance at End of Period&lt;/td&gt;
&lt;td style="border-bottom: white 3px double; text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 3px double; text-align: left; vertical-align: text-bottom;"&gt;$&lt;/td&gt;
&lt;td style="border-bottom: black 3px double; text-align: right; vertical-align: text-bottom;"&gt;990,535&lt;/td&gt;
&lt;td style="border-bottom: white 3px double; text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: white 3px double; text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 3px double; text-align: left; vertical-align: text-bottom;"&gt;$&lt;/td&gt;
&lt;td style="border-bottom: black 3px double; text-align: right; vertical-align: text-bottom;"&gt;990,535&lt;/td&gt;
&lt;td style="border-bottom: white 3px double; text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;&lt;/tr&gt;&lt;/table&gt;&lt;/div&gt;
&lt;h3 style="text-align: left; padding-bottom: 3pt; text-transform: none; text-indent: 0pt; margin: 0pt; padding-left: 4px; padding-right: 0pt; font: bold italic 10pt/12pt serif; padding-top: 5pt;"&gt;Accumulated Other Comprehensive Income &lt;/h3&gt;
&lt;p style="text-align: left; padding-bottom: 3pt; text-transform: none; text-indent: 20px; margin: 0pt; padding-left: 4px; padding-right: 0pt; font: 10pt/12pt serif; padding-top: 3pt;"&gt;The following table provides a summary of the components of accumulated other comprehensive income as of June 30, 2010 and December 31, 2009. &lt;/p&gt;
&lt;p style="text-align: left; padding-bottom: 3pt; text-transform: none; text-indent: 0pt; margin: 0pt; padding-left: 4px; padding-right: 0pt; font: 10pt/12pt serif; padding-top: 3pt;"&gt; &lt;/p&gt;
&lt;div style="text-align: center;"&gt;
&lt;table style="text-align: left; padding-bottom: 3pt; text-transform: none; font-variant: normal; font-style: normal; text-indent: 0px; margin: -24pt 0pt 0pt; padding-left: 0pt; padding-right: 0pt; font-family: serif; font-size: 10pt; vertical-align: text-bottom; font-weight: normal; padding-top: 3pt;" cellspacing="0" cellpadding="0"&gt;
&lt;tr&gt;&lt;td&gt; &lt;/td&gt;
&lt;td style="border-bottom: medium none; text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td colspan="3"&gt; &lt;/td&gt;
&lt;td style="border-bottom: medium none; text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td colspan="3"&gt; &lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td style="border-bottom: black 1pt solid; text-align: left; line-height: normal; font-size: 8pt; vertical-align: text-bottom; font-weight: bold;"&gt;(In Thousands)&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 1pt solid; text-align: center; line-height: normal; font-size: 8pt; vertical-align: text-bottom; font-weight: bold;" colspan="3"&gt;June 30,&lt;br /&gt;2010&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 1pt solid; text-align: center; line-height: normal; font-size: 8pt; vertical-align: text-bottom; font-weight: bold;" colspan="3"&gt;December 31,&lt;br /&gt;2009&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="background-color: #ccffcc;"&gt;&lt;td style="text-indent: 0pt; padding-left: 10pt; vertical-align: text-bottom;"&gt;Net unrealized gains on real estate securities&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; vertical-align: text-bottom;"&gt;$&lt;/td&gt;
&lt;td style="text-align: right; vertical-align: text-bottom;"&gt;75,231&lt;/td&gt;
&lt;td style="text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; vertical-align: text-bottom;"&gt;$&lt;/td&gt;
&lt;td style="text-align: right; vertical-align: text-bottom;"&gt;80,716&lt;/td&gt;
&lt;td style="text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="background-color: white;"&gt;&lt;td style="border-bottom: white 1pt solid; text-indent: 0pt; padding-left: 10pt; vertical-align: text-bottom;"&gt;Less: Unrealized losses attributable to noncontrolling interest&lt;/td&gt;
&lt;td style="border-bottom: white 1pt solid; text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 1pt solid; text-align: left; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 1pt solid; text-align: right; vertical-align: text-bottom;"&gt;(4,525&lt;/td&gt;
&lt;td style="border-bottom: white 1pt solid; text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;)&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: white 1pt solid; text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 1pt solid; text-align: left; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 1pt solid; text-align: right; vertical-align: text-bottom;"&gt;(6,614&lt;/td&gt;
&lt;td style="border-bottom: white 1pt solid; text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;)&amp;nbsp;&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="background-color: #ccffcc;"&gt;&lt;td style="text-indent: 0pt; padding-left: 10pt; vertical-align: text-bottom;"&gt;Net unrealized gains on real estate securities recognized in equity&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: right; vertical-align: text-bottom;"&gt;79,756&lt;/td&gt;
&lt;td style="text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: right; vertical-align: text-bottom;"&gt;87,330&lt;/td&gt;
&lt;td style="text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="background-color: white;"&gt;&lt;td style="border-bottom: white 1pt solid; text-indent: 0pt; padding-left: 10pt; vertical-align: text-bottom;"&gt;Net unrealized losses on interest rate agreements accounted for as cash flow hedges&lt;/td&gt;
&lt;td style="border-bottom: white 1pt solid; text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 1pt solid; text-align: left; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 1pt solid; text-align: right; vertical-align: text-bottom;"&gt;(41,557&lt;/td&gt;
&lt;td style="border-bottom: white 1pt solid; text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;)&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: white 1pt solid; text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 1pt solid; text-align: left; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 1pt solid; text-align: right; vertical-align: text-bottom;"&gt;(22,470&lt;/td&gt;
&lt;td style="border-bottom: white 1pt solid; text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;)&amp;nbsp;&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="background-color: #ccffcc;"&gt;&lt;td style="border-bottom: white 3px double; text-indent: 0pt; padding-left: 10pt; vertical-align: text-bottom; font-weight: bold;"&gt;Total Accumulated Other Comprehensive Income&lt;/td&gt;
&lt;td style="border-bottom: white 3px double; text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 3px double; text-align: left; vertical-align: text-bottom;"&gt;$&lt;/td&gt;
&lt;td style="border-bottom: black 3px double; text-align: right; vertical-align: text-bottom;"&gt;38,199&lt;/td&gt;
&lt;td style="border-bottom: white 3px double; text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: white 3px double; text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 3px double; text-align: left; vertical-align: text-bottom;"&gt;$&lt;/td&gt;
&lt;td style="border-bottom: black 3px double; text-align: right; vertical-align: text-bottom;"&gt;64,860&lt;/td&gt;
&lt;td style="border-bottom: white 3px double; text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;&lt;/tr&gt;&lt;/table&gt;&lt;/div&gt;
&lt;p style="text-align: left; padding-bottom: 3pt; text-transform: none; text-indent: 20px; margin: 0pt; padding-left: 4px; padding-right: 0pt; font: 10pt/12pt serif; padding-top: 3pt;"&gt;At June 30, 2010, the net unrealized gains on AFS securities were $75 million, a $6 million decrease from the net unrealized gains of $81 million at December 31, 2009. During the first six months of 2010, $5 million of net unrealized losses were reclassified to earnings upon recognition of OTTI, a $32 million decrease in unrealized gains was recognized on the sale of securities, and $21 million of fair value increases in securities were recognized in net unrealized gains. A portion of these net unrealized losses, $5 million at June 30, 2010 and $7 million at December 31, 2009, were attributable to the noncontrolling interest on AFS securities owned by the Fund. &lt;/p&gt;
&lt;p style="text-align: left; padding-bottom: 3pt; text-transform: none; text-indent: 20px; margin: 0pt; padding-left: 4px; padding-right: 0pt; font: 10pt/12pt serif; padding-top: 3pt;"&gt;At June 30, 2010, interest rate agreements, previously or currently accounted for as cash flow hedges, had an unrealized loss of $42 million. The portion attributable to previously accounted for cash flow hedges ($20 million), will be expensed through our consolidated statements of income (loss) over the remaining lives of previously designated hedged items (See &lt;i&gt;Note 10&lt;/i&gt;), which will generally be $1 million per quarter. The balance associated with the currently accounted for cash flow hedge ($22 million) will not be expensed until such time that the hedge matures or is otherwise terminated. &lt;/p&gt;
&lt;h3 style="text-align: left; padding-bottom: 3pt; text-transform: none; text-indent: 0pt; margin: 0pt; padding-left: 4px; padding-right: 0pt; font: bold italic 10pt/12pt serif; padding-top: 5pt;"&gt;Noncontrolling Interest &lt;/h3&gt;
&lt;p style="text-align: left; padding-bottom: 3pt; text-transform: none; text-indent: 20px; margin: 0pt; padding-left: 4px; padding-right: 0pt; font: 10pt/12pt serif; padding-top: 3pt;"&gt;Of the total equity on our balance sheet at June 30, 2010, $12 million is noncontrolling interest. Noncontrolling interest represents the aggregate limited partnership (LP) interests in the Fund held by third parties. As of June 30, 2010, the noncontrolling interest represents a 48% third-party interest in the Fund. Income allocated to the noncontrolling interest is based on the third party LP ownership percentage. The ownership percentage is determined by dividing the number of units held by third party LP investors by the total units outstanding. Subsequent changes, if any, in our ownership percentage would be treated as equity transactions and result in a reallocation between shareholders' equity and noncontrolling interest in our consolidated balance sheets. &lt;/p&gt;
&lt;h3 style="text-align: left; padding-bottom: 3pt; text-transform: none; text-indent: 0pt; margin: 0pt; padding-left: 4px; padding-right: 0pt; font: bold italic 10pt/12pt serif; padding-top: 5pt;"&gt;Earnings Per Common Share &lt;/h3&gt;
&lt;p style="text-align: left; padding-bottom: 3pt; text-transform: none; text-indent: 20px; margin: 0pt; padding-left: 4px; padding-right: 0pt; font: 10pt/12pt serif; padding-top: 3pt;"&gt;The following table provides the basic and diluted earnings (loss) per common share computations for the three and six months ended June 30, 2010 and 2009. &lt;/p&gt;
&lt;h3 style="text-align: left; padding-bottom: 3pt; text-transform: none; text-indent: 0pt; margin: 0pt; padding-left: 4px; padding-right: 0pt; font: bold italic 10pt/12pt serif; padding-top: 5pt;"&gt;Basic and Diluted Earnings (Loss) Per Common Share &lt;/h3&gt;
&lt;p style="text-align: left; padding-bottom: 3pt; text-transform: none; text-indent: 0pt; margin: 0pt; padding-left: 4px; padding-right: 0pt; font: 10pt/12pt serif; padding-top: 3pt;"&gt; &lt;/p&gt;
&lt;div style="text-align: center;"&gt;
&lt;table style="text-align: left; padding-bottom: 3pt; text-transform: none; font-variant: normal; font-style: normal; text-indent: 0px; margin: -24pt 0pt 0pt; padding-left: 0pt; padding-right: 0pt; font-family: serif; font-size: 10pt; vertical-align: text-bottom; font-weight: normal; padding-top: 3pt;" cellspacing="0" cellpadding="0"&gt;
&lt;tr&gt;&lt;td&gt; &lt;/td&gt;
&lt;td style="border-bottom: medium none; text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td colspan="3"&gt; &lt;/td&gt;
&lt;td style="border-bottom: medium none; text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td colspan="3"&gt; &lt;/td&gt;
&lt;td style="border-bottom: medium none; text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td colspan="3"&gt; &lt;/td&gt;
&lt;td style="border-bottom: medium none; text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td colspan="3"&gt; &lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td style="text-align: left; line-height: normal; font-size: 8pt; vertical-align: text-bottom; font-weight: bold;"&gt; &lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 1pt solid; text-align: center; line-height: normal; font-size: 8pt; vertical-align: text-bottom; font-weight: bold;" colspan="7"&gt;Three Months Ended June 30,&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 1pt solid; text-align: center; line-height: normal; font-size: 8pt; vertical-align: text-bottom; font-weight: bold;" colspan="7"&gt;Six Months Ended June 30,&lt;/td&gt;&lt;/tr&gt;
&lt;tr&gt;&lt;td style="border-bottom: black 1pt solid; text-align: left; line-height: normal; font-size: 8pt; vertical-align: text-bottom; font-weight: bold;"&gt;(In Thousands, Except Share Data)&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 1pt solid; text-align: center; line-height: normal; font-size: 8pt; vertical-align: text-bottom; font-weight: bold;" colspan="3"&gt;2010&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 1pt solid; text-align: center; line-height: normal; font-size: 8pt; vertical-align: text-bottom; font-weight: bold;" colspan="3"&gt;2009&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 1pt solid; text-align: center; line-height: normal; font-size: 8pt; vertical-align: text-bottom; font-weight: bold;" colspan="3"&gt;2010&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 1pt solid; text-align: center; line-height: normal; font-size: 8pt; vertical-align: text-bottom; font-weight: bold;" colspan="3"&gt;2009&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="background-color: white;"&gt;&lt;td style="text-indent: 0pt; padding-left: 10pt; vertical-align: text-bottom; font-weight: bold;"&gt;Basic Earnings (Loss) Per Common Share:&lt;br /&gt;&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: right; vertical-align: text-bottom;"&gt;&amp;nbsp;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: right; vertical-align: text-bottom;"&gt;&amp;nbsp;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: right; vertical-align: text-bottom;"&gt;&amp;nbsp;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: right; vertical-align: text-bottom;"&gt;&amp;nbsp;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="background-color: #ccffcc;"&gt;&lt;td style="text-indent: 0pt; padding-left: 10pt; vertical-align: text-bottom;"&gt;Net income (loss) attributable to Redwood&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; vertical-align: text-bottom;"&gt;$&lt;/td&gt;
&lt;td style="text-align: right; vertical-align: text-bottom;"&gt;28,601&lt;/td&gt;
&lt;td style="text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; vertical-align: text-bottom;"&gt;$&lt;/td&gt;
&lt;td style="text-align: right; vertical-align: text-bottom;"&gt;6,723&lt;/td&gt;
&lt;td style="text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; vertical-align: text-bottom;"&gt;$&lt;/td&gt;
&lt;td style="text-align: right; vertical-align: text-bottom;"&gt;75,444&lt;/td&gt;
&lt;td style="text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; vertical-align: text-bottom;"&gt;$&lt;/td&gt;
&lt;td style="text-align: right; vertical-align: text-bottom;"&gt;(28,222&lt;/td&gt;
&lt;td style="text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;)&amp;nbsp;&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="background-color: white;"&gt;&lt;td style="border-bottom: white 1pt solid; text-indent: 0pt; padding-left: 10pt; vertical-align: text-bottom;"&gt;Less: Dividends and undistributed earnings allocated to participating securities&lt;/td&gt;
&lt;td style="border-bottom: white 1pt solid; text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 1pt solid; text-align: left; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 1pt solid; text-align: right; vertical-align: text-bottom;"&gt;795&lt;/td&gt;
&lt;td style="border-bottom: white 1pt solid; text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: white 1pt solid; text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 1pt solid; text-align: left; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 1pt solid; text-align: right; vertical-align: text-bottom;"&gt;84&lt;/td&gt;
&lt;td style="border-bottom: white 1pt solid; text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: white 1pt solid; text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 1pt solid; text-align: left; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 1pt solid; text-align: right; vertical-align: text-bottom;"&gt;2,111&lt;/td&gt;
&lt;td style="border-bottom: white 1pt solid; text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: white 1pt solid; text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 1pt solid; text-align: left; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 1pt solid; text-align: right; vertical-align: text-bottom;"&gt;&amp;#8212;&lt;/td&gt;
&lt;td style="border-bottom: white 1pt solid; text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="background-color: #ccffcc;"&gt;&lt;td style="border-bottom: white 3px double; text-indent: 0pt; padding-left: 10pt; vertical-align: text-bottom;"&gt;Net income (loss) allocated to common shareholders&lt;/td&gt;
&lt;td style="border-bottom: white 3px double; text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 3px double; text-align: left; vertical-align: text-bottom;"&gt;$&lt;/td&gt;
&lt;td style="border-bottom: black 3px double; text-align: right; vertical-align: text-bottom;"&gt;27,806&lt;/td&gt;
&lt;td style="border-bottom: white 3px double; text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: white 3px double; text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 3px double; text-align: left; vertical-align: text-bottom;"&gt;$&lt;/td&gt;
&lt;td style="border-bottom: black 3px double; text-align: right; vertical-align: text-bottom;"&gt;6,639&lt;/td&gt;
&lt;td style="border-bottom: white 3px double; text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: white 3px double; text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 3px double; text-align: left; vertical-align: text-bottom;"&gt;$&lt;/td&gt;
&lt;td style="border-bottom: black 3px double; text-align: right; vertical-align: text-bottom;"&gt;73,333&lt;/td&gt;
&lt;td style="border-bottom: white 3px double; text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: white 3px double; text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 3px double; text-align: left; vertical-align: text-bottom;"&gt;$&lt;/td&gt;
&lt;td style="border-bottom: black 3px double; text-align: right; vertical-align: text-bottom;"&gt;(28,222&lt;/td&gt;
&lt;td style="border-bottom: white 3px double; text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;)&amp;nbsp;&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="background-color: white;"&gt;&lt;td style="text-indent: 0pt; padding-left: 10pt; vertical-align: text-bottom;"&gt;Basic weighted average common shares outstanding&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: right; vertical-align: text-bottom;"&gt;77,800,642&lt;/td&gt;
&lt;td style="text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: right; vertical-align: text-bottom;"&gt;65,697,887&lt;/td&gt;
&lt;td style="text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: right; vertical-align: text-bottom;"&gt;77,739,279&lt;/td&gt;
&lt;td style="text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: right; vertical-align: text-bottom;"&gt;59,137,864&lt;/td&gt;
&lt;td style="text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="background-color: #ccffcc;"&gt;&lt;td style="text-indent: 0pt; padding-left: 10pt; vertical-align: text-bottom; font-weight: bold;"&gt;Basic Earnings (Loss) Per Common Share&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; vertical-align: text-bottom;"&gt;$&lt;/td&gt;
&lt;td style="text-align: right; vertical-align: text-bottom;"&gt;0.36&lt;/td&gt;
&lt;td style="text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; vertical-align: text-bottom;"&gt;$&lt;/td&gt;
&lt;td style="text-align: right; vertical-align: text-bottom;"&gt;0.10&lt;/td&gt;
&lt;td style="text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; vertical-align: text-bottom;"&gt;$&lt;/td&gt;
&lt;td style="text-align: right; vertical-align: text-bottom;"&gt;0.94&lt;/td&gt;
&lt;td style="text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; vertical-align: text-bottom;"&gt;$&lt;/td&gt;
&lt;td style="text-align: right; vertical-align: text-bottom;"&gt;(0.48&lt;/td&gt;
&lt;td style="text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;)&amp;nbsp;&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="background-color: white;"&gt;&lt;td style="text-indent: 0pt; padding-left: 10pt; vertical-align: text-bottom; font-weight: bold;"&gt;Diluted Earnings (Loss) Per Common Share:&lt;br /&gt;&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: right; vertical-align: text-bottom;"&gt;&amp;nbsp;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: right; vertical-align: text-bottom;"&gt;&amp;nbsp;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: right; vertical-align: text-bottom;"&gt;&amp;nbsp;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: right; vertical-align: text-bottom;"&gt;&amp;nbsp;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="background-color: #ccffcc;"&gt;&lt;td style="text-indent: 0pt; padding-left: 10pt; vertical-align: text-bottom;"&gt;Net income (loss) attributable to Redwood&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; vertical-align: text-bottom;"&gt;$&lt;/td&gt;
&lt;td style="text-align: right; vertical-align: text-bottom;"&gt;28,601&lt;/td&gt;
&lt;td style="text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; vertical-align: text-bottom;"&gt;$&lt;/td&gt;
&lt;td style="text-align: right; vertical-align: text-bottom;"&gt;6,723&lt;/td&gt;
&lt;td style="text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; vertical-align: text-bottom;"&gt;$&lt;/td&gt;
&lt;td style="text-align: right; vertical-align: text-bottom;"&gt;75,444&lt;/td&gt;
&lt;td style="text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; vertical-align: text-bottom;"&gt;$&lt;/td&gt;
&lt;td style="text-align: right; vertical-align: text-bottom;"&gt;(28,222&lt;/td&gt;
&lt;td style="text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;)&amp;nbsp;&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="background-color: white;"&gt;&lt;td style="border-bottom: white 1pt solid; text-indent: 0pt; padding-left: 10pt; vertical-align: text-bottom;"&gt;Less: Dividends and undistributed earnings allocated to participating securities&lt;/td&gt;
&lt;td style="border-bottom: white 1pt solid; text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 1pt solid; text-align: left; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 1pt solid; text-align: right; vertical-align: text-bottom;"&gt;685&lt;/td&gt;
&lt;td style="border-bottom: white 1pt solid; text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: white 1pt solid; text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 1pt solid; text-align: left; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 1pt solid; text-align: right; vertical-align: text-bottom;"&gt;188&lt;/td&gt;
&lt;td style="border-bottom: white 1pt solid; text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: white 1pt solid; text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 1pt solid; text-align: left; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 1pt solid; text-align: right; vertical-align: text-bottom;"&gt;1,710&lt;/td&gt;
&lt;td style="border-bottom: white 1pt solid; text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: white 1pt solid; text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 1pt solid; text-align: left; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 1pt solid; text-align: right; vertical-align: text-bottom;"&gt;&amp;#8212;&lt;/td&gt;
&lt;td style="border-bottom: white 1pt solid; text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="background-color: #ccffcc;"&gt;&lt;td style="border-bottom: white 3px double; text-indent: 0pt; padding-left: 10pt; vertical-align: text-bottom;"&gt;Net income (loss) allocated to common shareholders&lt;/td&gt;
&lt;td style="border-bottom: white 3px double; text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 3px double; text-align: left; vertical-align: text-bottom;"&gt;$&lt;/td&gt;
&lt;td style="border-bottom: black 3px double; text-align: right; vertical-align: text-bottom;"&gt;27,916&lt;/td&gt;
&lt;td style="border-bottom: white 3px double; text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: white 3px double; text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 3px double; text-align: left; vertical-align: text-bottom;"&gt;$&lt;/td&gt;
&lt;td style="border-bottom: black 3px double; text-align: right; vertical-align: text-bottom;"&gt;6,535&lt;/td&gt;
&lt;td style="border-bottom: white 3px double; text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: white 3px double; text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 3px double; text-align: left; vertical-align: text-bottom;"&gt;$&lt;/td&gt;
&lt;td style="border-bottom: black 3px double; text-align: right; vertical-align: text-bottom;"&gt;73,734&lt;/td&gt;
&lt;td style="border-bottom: white 3px double; text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: white 3px double; text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 3px double; text-align: left; vertical-align: text-bottom;"&gt;$&lt;/td&gt;
&lt;td style="border-bottom: black 3px double; text-align: right; vertical-align: text-bottom;"&gt;(28,222&lt;/td&gt;
&lt;td style="border-bottom: white 3px double; text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;)&amp;nbsp;&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="background-color: white;"&gt;&lt;td style="text-indent: 0pt; padding-left: 10pt; vertical-align: text-bottom;"&gt;Basic weighted average common shares outstanding&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: right; vertical-align: text-bottom;"&gt;77,800,642&lt;/td&gt;
&lt;td style="text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: right; vertical-align: text-bottom;"&gt;65,697,887&lt;/td&gt;
&lt;td style="text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: right; vertical-align: text-bottom;"&gt;77,739,279&lt;/td&gt;
&lt;td style="text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: right; vertical-align: text-bottom;"&gt;59,137,864&lt;/td&gt;
&lt;td style="text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="background-color: #ccffcc;"&gt;&lt;td style="border-bottom: white 1pt solid; text-indent: 0pt; padding-left: 10pt; vertical-align: text-bottom;"&gt;Net effect of dilutive equity awards&lt;/td&gt;
&lt;td style="border-bottom: white 1pt solid; text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 1pt solid; text-align: left; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 1pt solid; text-align: right; vertical-align: text-bottom;"&gt;1,051,617&lt;/td&gt;
&lt;td style="border-bottom: white 1pt solid; text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: white 1pt solid; text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 1pt solid; text-align: left; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 1pt solid; text-align: right; vertical-align: text-bottom;"&gt;664,836&lt;/td&gt;
&lt;td style="border-bottom: white 1pt solid; text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: white 1pt solid; text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 1pt solid; text-align: left; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 1pt solid; text-align: right; vertical-align: text-bottom;"&gt;922,363&lt;/td&gt;
&lt;td style="border-bottom: white 1pt solid; text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: white 1pt solid; text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 1pt solid; text-align: left; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 1pt solid; text-align: right; vertical-align: text-bottom;"&gt;&amp;#8212;&lt;/td&gt;
&lt;td style="border-bottom: white 1pt solid; text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="background-color: white;"&gt;&lt;td style="border-bottom: white 3px double; text-indent: 0pt; padding-left: 10pt; vertical-align: text-bottom;"&gt;Diluted weighted average common shares outstanding&lt;/td&gt;
&lt;td style="border-bottom: white 3px double; text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 3px double; text-align: left; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 3px double; text-align: right; vertical-align: text-bottom;"&gt;78,852,259&lt;/td&gt;
&lt;td style="border-bottom: white 3px double; text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: white 3px double; text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 3px double; text-align: left; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 3px double; text-align: right; vertical-align: text-bottom;"&gt;66,362,723&lt;/td&gt;
&lt;td style="border-bottom: white 3px double; text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: white 3px double; text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 3px double; text-align: left; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 3px double; text-align: right; vertical-align: text-bottom;"&gt;78,661,642&lt;/td&gt;
&lt;td style="border-bottom: white 3px double; text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: white 3px double; text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 3px double; text-align: left; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="border-bottom: black 3px double; text-align: right; vertical-align: text-bottom;"&gt;59,137,864&lt;/td&gt;
&lt;td style="border-bottom: white 3px double; text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="background-color: #ccffcc;"&gt;&lt;td style="text-indent: 0pt; padding-left: 10pt; vertical-align: text-bottom; font-weight: bold;"&gt;Diluted Earnings (Loss) Per Common Share&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; vertical-align: text-bottom;"&gt;$&lt;/td&gt;
&lt;td style="text-align: right; vertical-align: text-bottom;"&gt;0.35&lt;/td&gt;
&lt;td style="text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; vertical-align: text-bottom;"&gt;$&lt;/td&gt;
&lt;td style="text-align: right; vertical-align: text-bottom;"&gt;0.10&lt;/td&gt;
&lt;td style="text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; vertical-align: text-bottom;"&gt;$&lt;/td&gt;
&lt;td style="text-align: right; vertical-align: text-bottom;"&gt;0.94&lt;/td&gt;
&lt;td style="text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: center; vertical-align: text-bottom;"&gt;&amp;nbsp;&lt;/td&gt;
&lt;td style="text-align: left; vertical-align: text-bottom;"&gt;$&lt;/td&gt;
&lt;td style="text-align: right; vertical-align: text-bottom;"&gt;(0.48&lt;/td&gt;
&lt;td style="text-align: left; white-space: nowrap; vertical-align: text-bottom;"&gt;)&amp;nbsp;&lt;/td&gt;&lt;/tr&gt;&lt;/table&gt;&lt;/div&gt;
&lt;p style="text-align: left; padding-bottom: 3pt; text-transform: none; text-indent: 20px; margin: 0pt; padding-left: 4px; padding-right: 0pt; font: 10pt/12pt serif; padding-top: 3pt;"&gt;For the three and six months ended June 30, 2010, there were 1,051,617 and 922,363 dilutive equity awards under the two-class method, respectively. Participating securities were included in the calculation of diluted earnings per common share using the two-class method for the three and six months ended June 30, 2010 and for the three months ended June 30, 2009, as this computation was more dilutive than using the treasury stock method. For the six months ended June 30, 2009, there were no dilutive equity awards based on our reported net loss for this period. For the three and six months ended June 30, 2010, the number of outstanding equity awards that were antidilutive totaled 681,705 and 582,582, respectively, under the two-class method. For the three and six months ended June 30, 2009, the number of outstanding equity awards that were antidilutive totaled 571,723 and 1,129,834, respectively. There were no other participating securities during these periods. &lt;/p&gt;
&lt;h3 style="text-align: left; padding-bottom: 3pt; text-transform: none; text-indent: 0pt; margin: 0pt; padding-left: 4px; padding-right: 0pt; font: bold italic 10pt/12pt serif; padding-top: 5pt;"&gt;Stock Repurchases &lt;/h3&gt;
&lt;p style="text-align: left; padding-bottom: 3pt; text-transform: none; text-indent: 20px; margin: 0pt; padding-left: 4px; padding-right: 0pt; font: 10pt/12pt serif; padding-top: 3pt;"&gt;We announced a stock repurchase authorization in November 2007 for the repurchase of up to 5,000,000 common shares. This plan replaced all previous share repurchase plans and has no expiration date. During the three and six months ended June 30, 2010 and 2009, there were no shares acquired under the plan. As of June 30, 2010, there remained 4,658,071 shares available for repurchase under this plan.&lt;/p&gt;&lt;/div&gt; &lt;/div&gt;</NonNumbericText>
          <NonNumericTextHeader>Note 15. Equity
The following table provides a summary of changes to stockholders' equity for the three and six months ended June 30, 2010.
Stockholders'</NonNumericTextHeader>
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      <ElementDefenition>Disclosures related to accounts comprising shareholders' equity, including other comprehensive income.  Includes: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables; effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure.</ElementDefenition>
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