Press Releases

REDWOOD TRUST, INC.

Consolidated Income Statements ⁽¹⁾

First

Fourth

Third

Second

First

($ in millions, except share data)

Quarter

Quarter

Quarter

Quarter

Quarter

2014

2013

2013

2013

2013

Interest income

$

55

$

57

$

58

$

58

$

54

Interest expense

(19)

(20)

(22)

(21)

(18)

Net interest income

36

38

36

36

35

(Provision for) reversal of provision for loan losses

(1)

(4)

(2)

3

(2)

Net interest income after provision

35

34

34

39

33

Noninterest income

  Mortgage banking activities, net

(1)

17

(9)

48

46

  MSR income, net

1

6

3

11

1

  Other market valuation adjustments, net

(6)

1

-

(6)

-

  Realized gains, net

1

2

11

-

12

  Total noninterest income (loss), net

(5)

25

5

53

59

Operating expenses 

(20)

(19)

(22)

(23)

(20)

Other expense

-

(12)

-

-

-

Benefit from (provision for) income taxes

2

(2)

5

(3)

(11)

Net income

$

12

$

25

$

22

$

66

$

61

Average diluted shares (thousands)

84,941

84,395

84,422

96,172

87,345

Diluted earnings per share

$

0.14

$

0.29

$

0.25

$

0.71

$

0.69

Regular dividends declared per common share

$

0.28

$

0.28

$

0.28

$

0.28

$

0.28

(1) Certain totals may not foot due to rounding.

REDWOOD TRUST, INC.

Consolidated Balance Sheets ⁽¹⁾

31-Mar

31-Dec

30-Sep

30-Jun

31-Mar

($ in millions, except share data)

2014

2013

2013

2013

2013

Residential loans

$

2,465

$

2,166

$

2,593

$

3,219

$

2,965

Commercial loans

491

432

380

495

401

Real estate securities

1,743

1,683

1,325

1,314

1,231

Mortgage servicing rights

65

65

60

43

18

Cash and cash equivalents

150

173

205

208

79

Other assets

93

89

98

156

103

Total Assets

$

5,007

$

4,609

$

4,660

$

5,435

$

4,797

Short-term debt 

$

1,289

$

863

$

838

$

1,446

$

721

Other liabilities

100

81

81

122

80

Asset-backed securities issued

1,854

1,943

2,062

2,214

2,365

Long-term debt 

513

476

472

444

444

Total liabilities  

3,756

3,363

3,452

4,226

3,609

Stockholders' equity 

1,251

1,246

1,207

1,209

1,188

Total Liabilities and Equity

$

5,007

$

4,609

$

4,660

$

5,435

$

4,797

Shares outstanding at period end (thousands)

82,620

82,505

82,389

82,332

81,706

GAAP book value per share

$

15.14

$

15.10

$

14.65

$

14.69

$

14.54

(1) Certain totals may not foot due to rounding. See notes to consolidating balance sheet on page 5.

REDWOOD TRUST, INC.

The following tables show the estimated effect that activities At Redwood and our Consolidated Sequoia Entities had on GAAP income for the three months ended March 31, 2014.

Consolidating Income Statement ⁽¹⁾

Three Months Ended March 31, 2014

($ in millions)

 At 

 Consolidated 

 Redwood 

     Redwood ⁽²⁾

 Sequoia Entities 

Consolidated

Interest income

$

38

$

8

$

45

Net discount (premium) amortization

11

(1)

10

Total interest income

49

7

55

Interest expense

(14)

(5)

(19)

Net interest income

35

1

36

Provision for loan losses

(1)

(1)

(1)

Net interest income after provision

34

1

35

Noninterest income

  Mortgage banking activities, net

(1)

-

(1)

  MSR income, net

1

-

1

  Other market valuation adjustments, net

(6)

-

(6)

  Realized gains, net

1

-

1

  Total noninterest income (loss), net

(5)

-

(5)

Operating expenses

(19)

-

(20)

Other expense

-

-

-

Benefit from income taxes

2

-

2

Net Income

$

12

$

1

$

12

(1) Certain totals may not foot due to rounding.

(2) The interest income and interest expense related to the Residential Resecuritization we engaged in during the third quarter of 2011 and the Commercial Securitization we engaged in during the fourth quarter of 2012 are included in the "At Redwood" column.

REDWOOD TRUST, INC.

We present this table to highlight the estimated effect that At Redwood and our Consolidated Sequoia Entities had on our GAAP balance sheet at March 31, 2014.

Consolidating Balance Sheet ⁽¹⁾

March 31, 2014

($ in millions)

 At 

 Consolidated 

 Redwood 

    Redwood ⁽²⁾

 Sequoia Entities 

 Consolidated 

Residential loans

$

775

$

1,690

$

2,465

Commercial loans

491

-

491

Real estate securities

1,743

-

1,743

Mortgage servicing rights

65

-

65

Cash and cash equivalents

150

-

150

3,224

1,690

4,914

Other assets

87

6

93

Total Assets

$

3,311

$

1,696

$

5,007

Short-term debt

$

1,289

$

-

$

1,289

Other liabilities

99

1

100

Asset-backed securities issued

230

1,625

1,854

Long-term debt 

513

-

513

Total liabilities

2,130

1,626

3,756

Stockholders' equity

1,180

71

1,251

Total Liabilities and Equity

$

3,311

$

1,696

$

5,007

(1) We are required under GAAP to consolidate the assets and liabilities of certain securitization entities we have sponsored for financial reporting purposes. However, the securitized assets of these entities are not legally ours and we own only the securities and interests that we acquired from these securitization entities. Similarly, the liabilities of these entities are obligations payable only from the cash flow generated by their securitized assets and are not obligations of Redwood.
Certain totals may not foot due to rounding.

(2) Included in the "At Redwood" column are the assets and liabilities of the Residential Resecuritization and Commercial Securitization transactions we completed in 2011 and 2012, respectively. These transactions are treated as secured borrowings under GAAP. At March 31, 2014, the Residential Resecuritization accounted for $257 million of assets ($256 million of available-for-sale securities at fair value and $1 million of other assets) and $82 million of asset-backed securities issued (at amortized cost). Our $175 million investment in this resecuritization, as estimated for GAAP, equals the difference between these assets and liabilities. At March 31, 2014, the Commercial Securitization accounted for $262 million of assets ($257 million of commercial real estate loans at historical cost and $5 million of other assets) and $148 million of asset-backed securities issued (at amortized cost). Our $114 million investment in this securitization, as estimated for GAAP, equals the difference between these assets and liabilities.