Loans (Tables)

9 Months Ended

Sep. 30, 2013

Commercial Loans

Summary of Classifications and Carrying Value of Loans

The following table summarizes the classifications and carrying value of commercial loans at September 30, 2013 and December 31, 2012.

(In Thousands)	September 30, 2013		December 31, 2012
Held-for-sale
Fair value	$	27,413	$	-
Lower of cost or fair value		-		8,500
Held-for-investment		352,440		304,510
Total Commercial Loans	$	379,853	$	313,010

Carrying Value for Loans Held-for-Investment

The following table provides additional information for our commercial loans held-for-investment at September 30, 2013 and December 31, 2012.

(In Thousands)	September 30, 2013		December 31, 2012
Principal balance	$	361,759	$	312,400
Unamortized discount, net		(2,815)		(3,806)
Recorded investment		358,944		308,594
Allowance for loan losses		(6,504)		(4,084)
Carrying Value	$	352,440	$	304,510

Summary of Activity in Allowance for Loans Losses

The following table summarizes the activity in the allowance for commercial loan losses for the three and nine months ended September 30, 2013 and 2012.

	Three Months Ended September 30,				Nine Months Ended September 30,
(In Thousands)	2013		2012		2013		2012
Balance at beginning of period	$	5,660	$	1,258	$	4,084	$	608
Charge-offs, net		-		-		-		-
Provision for loan losses		844		506		2,420		1,156
Balance at End of Period	$	6,504	$	1,764	$	6,504	$	1,764

Commercial Loans | Collectively Evaluated for Impairment

Loans Evaluated for Impairment

The following table summarizes the balances for loans collectively evaluated for impairment at September 30, 2013 and December 31, 2012.

(In Thousands)	September 30, 2013		December 31, 2012
Principal balance	$	361,759	$	312,400
Recorded investment		358,944		308,594
Related allowance		6,504		4,084

Residential Loans

Summary of Classifications and Carrying Value of Loans

The following table summarizes the classifications and carrying value of the residential loans owned at Redwood and at consolidated Sequoia entities at September 30, 2013 and December 31, 2012.

September 30, 2013 (In Thousands)	Redwood		Sequoia		Total
Held-for-sale
Fair value	$	726,161	$	-	$	726,161
Lower of cost or fair value		1,718		-		1,718
Held-for-investment		-		1,864,653		1,864,653
Total Residential Loans	$	727,879	$	1,864,653	$	2,592,532
December 31, 2012 (In Thousands)	Redwood		Sequoia		Total
Held-for-sale
Fair value	$	553,576	$	-	$	553,576
Lower of cost or fair value		9,082		-		9,082
Held-for-investment		-		2,272,812		2,272,812
Total Residential Loans	$	562,658	$	2,272,812	$	2,835,470

Carrying Value for Loans Held-for-Investment

The following table details the carrying value for residential loans held-for-investment at September 30, 2013 and December 31, 2012. These loans are owned at Sequoia securitization entities that we consolidate for financial reporting purposes.

(In Thousands)	September 30, 2013		December 31, 2012
Principal balance	$	1,869,726	$	2,278,069
Unamortized premium, net		18,142		23,247
Recorded investment		1,887,868		2,301,316
Allowance for loan losses		(23,215)		(28,504)
Carrying Value	$	1,864,653	$	2,272,812

Recorded Investment in Residential Loans Held-For-Investment Organized by Year of Origination

The following table displays our recorded investment in residential loans held-for-investment at September 30, 2013 and December 31, 2012, organized by year of origination.

(In Thousands)	September 30, 2013		December 31, 2012
2003 & Earlier	$	942,405	$	1,131,200
2004		528,728		569,379
2005		66,821		71,792
2006		151,067		164,333
2007		-		-
2008		-		-
2009		30,395		58,628
2010		102,385		197,964
2011		66,067		108,020
Total Recorded Investment	$	1,887,868	$	2,301,316

Summary of Activity in Allowance for Loans Losses

The following table summarizes the activity in the allowance for loan losses for the three and nine months ended September 30, 2013 and 2012.

	Three Months Ended September 30,				Nine Months Ended September 30,
(In Thousands)	2013		2012		2013		2012
Balance at beginning of period	$	23,150	$	55,449	$	28,504	$	66,881
Charge-offs, net		(818)		(2,514)		(3,363)		(7,653)
Provision for (reversal of) provision for loan losses		883		813		(1,926)		(902)
Deconsolidation adjustment		-		-		-		(4,578)
Balance at End of Period	$	23,215	$	53,748	$	23,215	$	53,748

Loan Modifications Determined to be Troubled Debt Restructuring

The following table presents the details of the loan modifications determined to be TDRs for the three and nine months ended September 30, 2013 and 2012.

	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in Thousands)	2013		2012		2013		2012
TDRs
Number of modifications		5		4		12		10
Pre-modification outstanding recorded investment	$	1,144	$	1,337	$	2,939	$	3,848
Post-modification outstanding recorded investment		898		1,397		2,838		3,823
Loan modification effect on net interest income after provision and other MVA		(555)		(410)		(863)		(1,007)
TDRs that Subsequently Defaulted
Number of modifications		1		2		4		6
Recorded investment	$	201	$	1,301	$	788	$	2,987

Residential Loans | Collectively Evaluated for Impairment

Loans Evaluated for Impairment

The following table summarizes the balances for loans collectively evaluated for impairment at September 30, 2013 and December 31, 2012.

(In Thousands)	September 30, 2013		December 31, 2012
Principal balance	$	1,861,027	$	2,272,104
Recorded investment		1,879,355		2,295,471
Related allowance		22,332		27,891

Recorded Investment and Past Due Status of Loans

The following table summarizes the recorded investment and past due status of residential loans collectively evaluated for impairment at September 30, 2013 and December 31, 2012.

	30-59 Days		60-89 Days		90+ Days
(In Thousands)	Past Due		Past Due		Past Due		Current		Total Loans
September 30, 2013	$	37,850	$	15,778	$	69,236	$	1,756,491	$	1,879,355
December 31, 2012		29,345		17,593		62,937		2,185,596		2,295,471

Residential Loans | Individually Evaluated for Impairment

Recorded Investment and Past Due Status of Loans

The following table summarizes the recorded investment and past due status of residential loans individually evaluated for impairment at September 30, 2013 and December 31, 2012.

	30-59 Days		60-89 Days		90+ Days
(In Thousands)	Past Due		Past Due		Past Due		Current		Total Loans
September 30, 2013	$	1,399	$	381	$	193	$	6,540	$	8,513
December 31, 2012		160		645		-		5,040		5,845

Loans Evaluated for Impairment

The following table summarizes the balances for loans individually evaluated for impairment, all of which had an allowance, at September 30, 2013 and December 31, 2012.

(In Thousands)	September 30, 2013		December 31, 2012
Principal balance	$	8,699	$	5,965
Recorded investment		8,513		5,845
Related allowance		883		613