Equity (Tables)

9 Months Ended

Sep. 30, 2013

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 three and nine months ended September 30, 2013.

Changes in Accumulated Other Comprehensive Income by Component

Three Months Ended September 30, 2013 (In Thousands)	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	$	145,349	$	(27,066)
Other comprehensive (loss) income before reclassifications		(633)		4,018
Amounts reclassified from other accumulated comprehensive income		(6,962)		62
Net current-period other comprehensive (loss) income		(7,595)		4,080
Balance at End of Period	$	137,754	$	(22,986)

Nine Months Ended September 30, 2013 (In Thousands)	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	$	186,580	$	(48,248)
Other comprehensive (loss) income before reclassifications		(29,615)		25,043
Amounts reclassified from other accumulated comprehensive income		(19,211)		219
Net current-period other comprehensive (loss) income		(48,826)		25,262
Balance at End of Period	$	137,754	$	(22,986)

Reclassifications out of Accumulated Other Comprehensive Income (Loss)

The following table provides a summary of reclassifications out of accumulated other comprehensive income for three and nine months ended September 30, 2013.

Reclassifications out of Accumulated Other Comprehensive Income

	Affected line item in the statement where net income           is presented	Amount reclassified from accumulated other comprehensive income
(In Thousands)		Three Months Ended September 30, 2013		Nine Months Ended September 30, 2013
Net realized gains (losses) on AFS securities
Other than temporary impairment	Other market valuations, net	$	-	$	(124)
Gain on sale of AFS securities	Realized gains, net		(6,962)		(19,087)
		$	(6,962)	$	(19,211)
Net realized gains on interest rate agreements designated as cash flow hedges
Amortization of deferred loss	Interest expense	$	62	$	219
		$	62	$	219

Basic and Diluted Earnings (Loss) Per Common Share

The following table provides the basic and diluted earnings per common share computations for the three and nine months ended September 30, 2013 and 2012.

Basic and Diluted Earnings Per Common Share

	Three Months Ended September 30,				Nine Months Ended September 30,
(In Thousands, Except Share Data)	2013		2012		2013		2012
Basic Earnings Per Common Share:
Net income attributable to Redwood	$	21,929	$	39,701	$	148,112	$	89,691
Less: Dividends and undistributed earnings allocated to participating securities		(565)		(1,104)		(4,209)		(2,631)
Net income allocated to common shareholders	$	21,364	$	38,597	$	143,903	$	87,060
Basic weighted average common shares outstanding		82,201,473		79,685,099		81,888,231		78,908,057
Basic Earnings Per Common Share	$	0.26	$	0.48	$	1.76	$	1.10
Diluted Earnings Per Common Share:
Net income attributable to Redwood	$	21,929	$	39,701	$	148,112	$	89,691
Less: Dividends and undistributed earnings allocated to participating securities		(565)		(861)		(3,030)		(2,200)
Add back: Interest expense on convertible notes		-		-		8,790		-
Net income allocated to common shareholders	$	21,364	$	38,840	$	153,872	$	87,491
Weighted average common shares outstanding		82,201,473		79,685,099		81,888,231		78,908,057
Net effect of dilutive equity awards		2,220,566		1,079,281		2,292,451		1,267,603
Net effect of assumed convertible notes conversion to common shares		-		-		9,053,183		-
Diluted weighted average common shares outstanding		84,422,039		80,764,380		93,233,865		80,175,660
Diluted Earnings Per Common Share	$	0.25	$	0.48	$	1.65	$	1.09