Exhibit 11.1
Redwood Trust, Inc.
Computation of Per Share Earnings
                 
    Three Months     Six Months  
    Ended     Ended  
    June 30, 2005     June 30, 2005  
Basic:
               
Average common shares outstanding
    24,591,223       24,474,134  
Total
    24,591,223       24,474,134  
 
           
Net Income
  $ 40,914,151     $ 101,476,130  
 
           
Per Share Amount
  $ 1.66     $ 4.15  
 
           
Diluted:
               
Average common shares outstanding
    24,591,223       24,474,134  
Net effect of dilutive stock options outstanding during the period — based on the treasury stock method
    605,063       635,256  
Total
    25,196,286       25,109,390  
 
           
Net Income
  $ 40,914,151     $ 101,476,130  
 
           
Per Share Amount
  $ 1.62     $ 4.04  
 
           

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