FOR
IMMEDIATE RELEASE
|
CONTACT:
Martin S. Hughes
|
Redwood
Trust, Inc.
|
(415)
380-3455
|
Wednesday,
May 9, 2007
|
CONSOLIDATED
INCOME
|
First
|
Fourth
|
Third
|
Second
|
First
|
|||||||||||
STATEMENT
|
Quarter
|
Quarter
|
Quarter
|
Quarter
|
Quarter
|
|||||||||||
2007
|
2006
|
2006
|
2006
|
2006
|
||||||||||||
Interest
income
|
$
|
215
|
$
|
218
|
$
|
224
|
$
|
218
|
$
|
226
|
||||||
Interest
expense
|
(168
|
)
|
(173
|
)
|
(175
|
)
|
(173
|
)
|
(181
|
)
|
||||||
Net
interest income
|
47
|
45
|
49
|
45
|
45
|
|||||||||||
|
||||||||||||||||
Operating
expenses
|
(16
|
)
|
(14
|
)
|
(13
|
)
|
(16
|
)
|
(13
|
)
|
||||||
Severance
expense
|
(2
|
)
|
─
|
─
|
0
|
─
|
||||||||||
Gains
on sales and calls, net
|
1
|
7
|
5
|
8
|
1
|
|||||||||||
Valuation
adjustments
|
(10
|
)
|
(1
|
)
|
(5
|
)
|
(3
|
)
|
(3
|
)
|
||||||
Provision
for income taxes
|
(2
|
)
|
(1
|
)
|
(4
|
)
|
(3
|
)
|
(2
|
)
|
||||||
GAAP
earnings
|
$
|
18
|
$
|
36
|
$
|
32
|
$
|
31
|
$
|
28
|
||||||
Less:
severance expense(1)
|
2
|
─
|
─
|
─
|
─
|
|||||||||||
Less:
gains on sales and calls, net
|
(1
|
)
|
(7
|
)
|
(5
|
)
|
(8
|
)
|
(1
|
)
|
||||||
Less:
valuation adjustments
|
10
|
1
|
5
|
3
|
3
|
|||||||||||
Core
earnings (2)
|
$
|
30
|
$
|
30
|
$
|
32
|
$
|
26
|
$
|
30
|
||||||
Average
diluted shares (thousands)
|
27,684
|
27,122
|
26,625
|
26,109
|
25,703
|
|||||||||||
GAAP
earnings per share (diluted)
|
$
|
0.66
|
$
|
1.32
|
$
|
1.22
|
$
|
1.20
|
$
|
1.09
|
||||||
Core
earnings per share (diluted) (2)
|
$
|
1.08
|
$
|
1.12
|
$
|
1.20
|
$
|
0.97
|
$
|
1.16
|
||||||
Regular
dividends per share
|
$
|
0.75
|
$
|
0.70
|
$
|
0.70
|
$
|
0.70
|
$
|
0.70
|
||||||
Special
dividends per share
|
─
|
3.00
|
─
|
─
|
─
|
|||||||||||
Total
dividends per share
|
$
|
0.75
|
$
|
3.70
|
$
|
0.70
|
$
|
0.70
|
$
|
0.70
|
(1) |
Cost
associated with re-alignment of senior management in our commercial
operations.
|
(2) |
Core
earnings are not a measure of earnings in accordance with GAAP. We
attempt to strip some of the elements out of GAAP earnings that are
temporary, one-time, or non-economic in nature or that relate to
the past
rather than the future, so that the underlying on-going “core” trend of
earnings is clearer, at least in certain respects. We exclude gains
(and losses) on sales and calls. We sell assets from time to time as
part of our on-going portfolio management activities. These
occasional sales can produce material gains and losses that could
obscure
the underlying trend of our long-term portfolio earnings, so we exclude
them from core earnings. Similarly, we exclude gains from calls of
securities, as these are essentially sales of assets that produce
a highly
variable stream of income that may obscure some underlying income
generation trends. GAAP earnings also include valuation adjustments
for
certain of our assets and interest rate agreements. These are
unrealized market value fluctuations - we exclude them from core
earnings.
Management believes that core earnings provide relevant and useful
information regarding results from operations in addition to GAAP
measures
of performance. This is, in part, because market valuation
adjustments on only a portion of the company’s assets and none of its
liabilities are recognized through the income statement under GAAP
and
thus GAAP valuation adjustments may not be fully indicative of changes
in
market values on the balance sheet as a whole or a reliable guide
to
current operating performance. Furthermore, gains or losses realized
upon sales of assets vary based on portfolio management decisions;
a sale
of an asset for a gain or a loss may or may not affect on going earnings
from operations. Because all companies and analysts do not calculate
non-GAAP measures such as core earnings in the same fashion, core
earnings
as calculated by the company may not be comparable to similarly titled
measures reported by other companies. Core earnings may not foot
from GAAP
earnings due to rounding to
millions of dollars.
|
REDWOOD
TRUST, INC.
(All
dollars in millions, except share
data)
|
CONSOLIDATED
BALANCE SHEET
|
31-Mar
|
31-Dec
|
30-Sep
|
30-Jun
|
31-Mar
|
|||||||||||
2007
|
2006
|
2006
|
2006
|
2006
|
||||||||||||
Real
estate loans
|
$
|
8,706
|
$
|
9,352
|
$
|
9,875
|
$
|
10,491
|
$
|
12,045
|
||||||
Real
estate securities
|
3,601
|
3,233
|
2,912
|
2,661
|
2,529
|
|||||||||||
Other
real estate investments
|
50
|
─
|
─
|
─
|
─
|
|||||||||||
Cash
and cash equivalents
|
92
|
168
|
113
|
106
|
85
|
|||||||||||
Other
assets
|
498
|
277
|
300
|
272
|
320
|
|||||||||||
Total
consolidated assets
|
$
|
12,947
|
$
|
13,030
|
$
|
13,200
|
$
|
13,530
|
$
|
14,979
|
||||||
|
||||||||||||||||
Redwood
debt
|
$
|
1,880
|
$
|
1,856
|
$
|
510
|
$
|
529
|
$
|
─
|
||||||
Consolidated
asset-back securities issued
|
9,947
|
9,979
|
11,554
|
11,898
|
13,930
|
|||||||||||
Other
liabilities
|
96
|
92
|
93
|
99
|
82
|
|||||||||||
Junior
subordinated notes
|
100
|
100
|
─
|
─
|
─
|
|||||||||||
Equity
|
924
|
1,003
|
1,043
|
1,004
|
967
|
|||||||||||
Total
consolidated liabilities and equity
|
$
|
12,947
|
$
|
13,030
|
$
|
13,200
|
$
|
13,530
|
$
|
14,979
|
||||||
|
||||||||||||||||
Shares
outstanding at period end (thousands)
|
27,129
|
26,733
|
26,053
|
25,668
|
25,382
|
|||||||||||
GAAP
equity (GAAP book value) per share
|
$
|
34.06
|
$
|
37.51
|
$
|
40.02
|
$
|
39.13
|
$
|
38.11
|