Loans (Tables)

3 Months Ended

Mar. 31, 2014

Commercial Loans

Summary of Classifications and Carrying Value of Loans

The following table summarizes the classifications and carrying value of commercial loans at March 31, 2014 and December 31, 2013.

(In Thousands)	March 31, 2014		December 31, 2013
Held-for-sale, at fair value	$	77,155	$	89,111
Held-for-investment
At fair value		69,436		-
At amortized cost		344,684		343,344
Total Commercial Loans	$	491,275	$	432,455

Carrying Value for Loans Held-for-Investment

The following table provides additional information for our commercial loans held-for-investment at amortized cost at March 31, 2014 and December 31, 2013.

(In Thousands)	March 31, 2014		December 31, 2013
Principal balance	$	355,183	$	353,331
Unamortized discount, net		(2,471)		(2,614)
Recorded investment		352,712		350,717
Allowance for loan losses		(8,028)		(7,373)
Carrying Value	$	344,684	$	343,344

Summary of Activity in Allowance for Loans Losses

The following table summarizes the activity in the allowance for commercial loan losses for the three months ended March 31, 2014 and 2013.

	Three Months Ended March 31,
(In Thousands)	2014		2013
Balance at beginning of period	$	7,373	$	4,084
Charge-offs, net		-		-
Provision for loan losses		655		685
Balance at End of Period	$	8,028	$	4,769

Commercial Loans | Collectively Evaluated for Impairment

Loans Evaluated for Impairment

The following table summarizes the balances for loans collectively evaluated for impairment at March 31, 2014 and December 31, 2013.

(In Thousands)	March 31, 2014		December 31, 2013
Principal balance	$	355,183	$	353,331
Recorded investment		352,712		350,717
Related allowance		8,028		7,373

Commercial Loans Held For Investment

Commercial Loans Held-for-Investment by Risk Category

The following table presents the principal balance of commercial loans held-for-investment by risk category.

(In Thousands)	March 31, 2014		December 31, 2013
Pass	$	311,699	$	309,792
Watch list		43,484		43,539
Workout		-		-
Total Commercial Loans Held-for-Investment	$	355,183	$	353,331

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 March 31, 2014 and December 31, 2013.

March 31, 2014 (In Thousands)	Redwood		Sequoia		Total
Held-for-sale
Fair value - Conforming	$	149,749	$	-	$	149,749
Fair value - Jumbo		623,545		-		623,545
Lower of cost or fair value		1,642		-		1,642
Held-for-investment		-		1,689,994		1,689,994
Total Residential Loans	$	774,936	$	1,689,994	$	2,464,930

December 31, 2013 (In Thousands)	Redwood		Sequoia		Total
Held-for-sale
Fair value - Conforming	$	11,502	$	-	$	11,502
Fair value - Jumbo		391,100		-		391,100
Lower of cost or fair value		1,665		-		1,665
Held-for-investment		-		1,762,167		1,762,167
Total Residential Loans	$	404,267	$	1,762,167	$	2,166,434

Carrying Value for Loans Held-for-Investment

The following table details the carrying value for residential loans held-for-investment at March 31, 2014 and December 31, 2013. These loans are owned at Sequoia securitization entities that we consolidate for financial reporting purposes.

(In Thousands)	March 31, 2014		December 31, 2013
Principal balance	$	1,699,887	$	1,770,803
Unamortized premium, net		15,678		16,791
Recorded investment		1,715,565		1,787,594
Allowance for loan losses		(25,571)		(25,427)
Carrying Value	$	1,689,994	$	1,762,167

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 March 31, 2014 and December 31, 2013, organized by year of origination.

(In Thousands)	March 31, 2014		December 31, 2013
2003 & Earlier	$	840,351	$	881,364
2004		501,520		513,458
2005		62,313		62,675
2006		143,813		149,776
2007		-		-
2008		-		-
2009		21,765		25,860
2010		87,319		92,728
2011		58,484		61,733
Total Recorded Investment	$	1,715,565	$	1,787,594

Summary of Activity in Allowance for Loans Losses

The following table summarizes the activity in the allowance for loan losses for the three months ended March 31, 2014 and 2013.

	Three Months Ended March 31,
(In Thousands)	2014		2013
Balance at beginning of period	$	25,427	$	28,504
Charge-offs, net		(484)		(795)
Provision for loan losses		628		1,355
Balance at End of Period	$	25,571	$	29,064

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 months ended March 31, 2014 and 2013.

	Three Months Ended March 31,
(Dollars in Thousands)	2014		2013
TDRs
Number of modifications		5		3
Pre-modification outstanding recorded investment	$	1,915	$	764
Post-modification outstanding recorded investment		1,893		796
Loan modification effect on net interest income after provision and other MVA		(409)		(169)
TDRs that Subsequently Defaulted
Number of modifications		3		2
Recorded investment	$	919	$	409

Residential Loans | Collectively Evaluated for Impairment

Loans Evaluated for Impairment

The following table summarizes the balances for loans collectively evaluated for impairment at March 31, 2014 and December 31, 2013.

(In Thousands)	March 31, 2014		December 31, 2013
Principal balance	$	1,689,413	$	1,762,165
Recorded investment		1,705,306		1,779,161
Related allowance		24,690		24,762

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 March 31, 2014 and December 31, 2013.

(In Thousands)	30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Current		Total Loans
March 31, 2014	$	31,308	$	6,942	$	81,699	$	1,585,357	$	1,705,306
December 31, 2013		34,187		13,248		79,010		1,652,716		1,779,161

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 March 31, 2014 and December 31, 2013.

(In Thousands)	30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Current		Total Loans
March 31, 2014	$	1,545	$	-	$	560	$	8,154	$	10,259
December 31, 2013		1,560		-		567		6,306		8,433

Loans Evaluated for Impairment

The following table summarizes the balances for loans individually evaluated for impairment, all of which had an allowance, at March 31, 2014 and December 31, 2013.

(In Thousands)	March 31, 2014		December 31, 2013
Principal balance	$	10,474	$	8,638
Recorded investment		10,259		8,433
Related allowance		881		665