PR Newswire
MILL VALLEY, Calif., July 28, 2021
MILL VALLEY, Calif., July 28, 2021 /PRNewswire/ -- Redwood Trust, Inc. (NYSE:RWT), a leader in expanding access to housing for homebuyers and renters, today reported its financial results for the quarter ended June 30, 2021.
Key Financial Results and Metrics
Operating Business Highlights
Business Purpose Lending
Residential Lending
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(1) | Economic return on book value is based on the period change in GAAP book value per common share plus dividends declared per common share in the period. |
(2) | Recourse leverage ratio is defined as recourse debt at Redwood divided by tangible stockholders' equity. Recourse debt excludes $7.8 billion of consolidated securitization debt (ABS issued and servicer advance financing) and other debt that is non-recourse to Redwood, and tangible stockholders' equity excludes $49 million of intangible assets. |
(3) | Does not account for potential fallout from pipeline that typically occurs through the lending process. |
(4) | Includes estimated potential fallout from locked pipeline that typically occurs through the lending process. |
Residential Lending (Continued)
Portfolio and Financing Highlights
RWT Horizons Highlights
ESG First Half 2021 Highlights
"We're excited about our performance in the second quarter, which saw very strong earnings and book value growth despite a challenging interest rate environment. These results reflect the durable earnings power of a diverse product mix across our residential and BPL platforms, and very strong portfolio credit performance. We continue to demonstrate leadership across the non-agency mortgage sector, where macro trends and regulatory changes are expanding our addressable market. By continuing to invest in our infrastructure, and forming strategic partnerships, we see a path to realizing transformative scale in the near and long-term," said Chris Abate, Chief Executive Officer of Redwood Trust.
Second Quarter 2021 Redwood Review Available Online
A further discussion of Redwood's business and financial results is included in the second quarter 2021 Redwood Review and the second quarter 2021 Investor Presentation which are available within the "Financials-Redwood Review" and "Events and Presentations" sections, respectively, on the Company's investor relations website at ir.redwoodtrust.com.
Conference Call and Webcast
Redwood will host an earnings call today, July 28, 2021, at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time to discuss its second quarter 2021 financial results. The number to dial in order to listen to the conference call is 1-877-423-9813 in the U.S. and Canada. International callers must dial 1-201-689-8573. A replay of the call will be available through midnight on August 11, 2021, and can be accessed by dialing 1-844-512-2921 in the U.S. and Canada or 1-412-317-6671 internationally and entering access code #13721503.
The conference call will be webcast live in listen-only mode through the Events and Presentations section of Redwood Trust's Investor Relations website at https://ir.redwoodtrust.com/events-and-presentations/events. To listen to the webcast, please go to Redwood's website at least 15 minutes before the call to register and to download and install any needed audio software. An audio replay of the call will also be available on Redwood's website following the call. Redwood plans to file its Quarterly Report on Form 10-Q with the Securities and Exchange Commission by Monday, August 9, 2021, and also make it available on Redwood's website.
About Redwood Trust
Redwood Trust, Inc. (NYSE: RWT) is a specialty finance company focused on several distinct areas of housing credit. Our operating platforms occupy a unique position in the housing finance value chain, providing liquidity to growing segments of the U.S. housing market not served by government programs. We deliver customized housing credit investments to a diverse mix of investors, through our best-in-class securitization platforms; whole-loan distribution activities; and our publicly-traded shares. Our consolidated investment portfolio has evolved to incorporate a diverse mix of residential, business purpose and multifamily investments. Our goal is to provide attractive returns to shareholders through a stable and growing stream of earnings and dividends, capital appreciation, and a commitment to technological innovation that facilitates risk-minded scale. Since going public in 1994, we have managed our business through several cycles, built a track record of innovation, and a best-in-class reputation for service and a common-sense approach to credit investing. Redwood Trust is internally managed, and structured as a real estate investment trust ("REIT") for tax purposes. For more information about Redwood, please visit our website at www.redwoodtrust.com or connect with us on LinkedIn, Twitter, or Facebook.
Forward-Looking Statements: This press release and the related conference call contain forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements related to the amount of residential mortgage loans that we identified for purchase during the second quarter of 2021 and at June 30, 2021, and expected fallout and the corresponding volume of residential mortgage loans expected to be available for purchase, statements relating to our estimates of our available capital, our estimates of REIT taxable income, statements relating to macroeconomic trends and regulatory changes expanding our addressable market, and the expected timing for the filing of Redwood's Quarterly Report on Form 10-Q. Forward-looking statements involve numerous risks and uncertainties. Redwood's actual results may differ from Redwood's beliefs, expectations, estimates, and projections and, consequently, you should not rely on these forward-looking statements as predictions of future events. Forward-looking statements are not historical in nature and can be identified by words such as "anticipate," "estimate," "will," "should," "expect," "believe," "intend," "seek," "plan" and similar expressions or their negative forms, or by references to strategy, plans, or intentions. These forward-looking statements are subject to risks and uncertainties, including, among other things, those described in our Annual Report on Form 10-K for the year ended December 31, 2020 under the caption "Risk Factors". Other risks, uncertainties, and factors that could cause actual results to differ materially from those projected may be described from time to time in reports we file with the Securities and Exchange Commission, including reports on Forms 10-Q and 8-K. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
REDWOOD TRUST, INC. | ||||||||||||
Financial Performance | Three Months Ended | |||||||||||
($ in millions, except per share data) | 6/30/2021 | 3/31/2021 | 6/30/2020 | |||||||||
GAAP net income | $ | 90 | $ | 97 | $ | 165 | ||||||
GAAP net income per diluted common share | $ | 0.66 | $ | 0.72 | $ | 1.00 | ||||||
REIT taxable income (loss) (estimated) | $ | 12 | $ | 10 | $ | (58) | ||||||
REIT taxable income (loss) per share (estimated) | $ | 0.11 | $ | 0.09 | $ | (0.50) | ||||||
GAAP book value per share | $ | 11.46 | $ | 10.76 | $ | 8.15 | ||||||
Dividends per common share | $ | 0.18 | $ | 0.16 | $ | 0.125 |
Consolidated Income Statements (1) | Three Months Ended | |||||||||||||||||||
($ in millions, except share and per share data) | 6/30/21 | 3/31/21 | 12/31/20 | 9/30/20 | 6/30/20 | |||||||||||||||
Interest income | $ | 139 | $ | 128 | $ | 122 | $ | 122 | $ | 130 | ||||||||||
Interest expense | (108) | (103) | (98) | (100) | (103) | |||||||||||||||
Net interest income | 31 | 26 | 24 | 22 | 27 | |||||||||||||||
Non-interest income | ||||||||||||||||||||
Mortgage banking activities, net | 54 | 83 | 54 | 59 | (6) | |||||||||||||||
Investment fair value changes, net | 49 | 45 | 23 | 107 | 152 | |||||||||||||||
Other income | 2 | 4 | — | — | 1 | |||||||||||||||
Realized gains, net | 8 | 3 | — | 1 | 26 | |||||||||||||||
Total non-interest income (loss), net | 114 | 134 | 77 | 167 | 173 | |||||||||||||||
General and administrative expenses | (41) | (44) | (30) | (28) | (29) | |||||||||||||||
Loan acquisition costs | (4) | (4) | (3) | (2) | (2) | |||||||||||||||
Other expenses | (4) | (4) | (4) | (8) | (5) | |||||||||||||||
Provision for income taxes | (7) | (12) | (8) | (9) | — | |||||||||||||||
Net income | $ | 90 | $ | 97 | $ | 54 | $ | 142 | $ | 165 | ||||||||||
Weighted average diluted shares (thousands) (2) | 141,761 | 141,039 | 140,641 | 141,970 | 147,099 | |||||||||||||||
Diluted earnings per common share | $ | 0.66 | $ | 0.72 | $ | 0.42 | $ | 1.02 | $ | 1.00 | ||||||||||
Regular dividends declared per common share | $ | 0.18 | $ | 0.16 | $ | 0.14 | $ | 0.14 | $ | 0.125 | ||||||||||
(1) | Certain totals may not foot due to rounding. |
(2) | In the periods presented above, weighted average diluted shares included shares from the assumed conversion of our convertible and/or exchangeable debt in accordance with GAAP diluted EPS provisions. Actual shares outstanding at June 30, 2021, March 31, 2021, December 31, 2020, September 30, 2020, and June 30, 2020 were 113,053, 112,999, 112,090, 111,904, and 114,940, respectively. |
REDWOOD TRUST, INC. | ||||||||
Consolidated Income Statements (1) | Six Months Ended June 30, | |||||||
($ in millions, except share and per share data) | 2021 | 2020 | ||||||
Interest income | $ | 267 | $ | 328 | ||||
Interest expense | (211) | (249) | ||||||
Net interest income | 56 | 79 | ||||||
Non-interest income (loss) | ||||||||
Mortgage banking activities, net | 137 | (35) | ||||||
Investment fair value changes, net | 95 | (719) | ||||||
Other income | 6 | 4 | ||||||
Realized gains, net | 11 | 30 | ||||||
Total non-interest income (loss) | 249 | (720) | ||||||
General and administrative expenses | (84) | (57) | ||||||
Loan acquisition costs | (7) | (6) | ||||||
Other expenses | (8) | (96) | ||||||
(Provision for) benefit from income taxes | (18) | 22 | ||||||
Net income (loss) | $ | 187 | $ | (778) | ||||
Weighted average diluted shares (thousands) | 141,139 | 114,230 | ||||||
Diluted earnings (loss) per common share | $ | 1.38 | $ | (6.82) | ||||
Regular dividends declared per common share | $ | 0.34 | $ | 0.445 | ||||
(1) | Certain totals may not foot due to rounding. |
REDWOOD TRUST, INC. | |||||||||||||||||||||
Consolidated Balance Sheets (1) | |||||||||||||||||||||
($ in millions, except share and per share data) | 6/30/21 | 3/31/21 | 12/31/20 | 9/30/20 | 6/30/20 | ||||||||||||||||
Residential loans | $ | 5,743 | $ | 4,702 | $ | 4,249 | $ | 4,495 | $ | 4,534 | |||||||||||
Business purpose loans | 4,409 | 4,172 | 4,136 | 3,956 | 3,782 | ||||||||||||||||
Multifamily loans | 485 | 490 | 492 | 491 | 489 | ||||||||||||||||
Real estate securities | 355 | 364 | 344 | 351 | 316 | ||||||||||||||||
Other investments | 309 | 323 | 348 | 385 | 430 | ||||||||||||||||
Cash and cash equivalents | 421 | 426 | 461 | 451 | 529 | ||||||||||||||||
Other assets | 275 | 420 | 324 | 273 | 281 | ||||||||||||||||
Total assets | $ | 11,996 | $ | 10,897 | $ | 10,355 | $ | 10,402 | $ | 10,362 | |||||||||||
Short-term debt | $ | 1,485 | $ | 1,254 | $ | 523 | $ | 483 | $ | 663 | |||||||||||
Other liabilities | 195 | 317 | 195 | 158 | 168 | ||||||||||||||||
Asset-backed securities issued | 7,537 | 6,672 | 7,101 | 7,172 | 6,856 | ||||||||||||||||
Long-term debt, net | 1,484 | 1,438 | 1,425 | 1,536 | 1,738 | ||||||||||||||||
Total liabilities | 10,701 | 9,681 | 9,244 | 9,349 | 9,425 | ||||||||||||||||
Stockholders' equity | 1,295 | 1,216 | 1,111 | 1,053 | 937 | ||||||||||||||||
Total liabilities and equity | $ | 11,996 | $ | 10,897 | $ | 10,355 | $ | 10,402 | $ | 10,362 | |||||||||||
Shares outstanding at period end (thousands) | 113,053 | 112,999 | 112,090 | 111,904 | 114,940 | ||||||||||||||||
GAAP book value per share | $ | 11.46 | $ | 10.76 | $ | 9.91 | $ | 9.41 | $ | 8.15 | |||||||||||
(1) | Certain totals may not foot due to rounding |
CONTACTS |
Lisa M. Hartman |
SVP, Head of Investor Relations |
Phone: 866-269-4976 |
Email: [email protected] |
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SOURCE Redwood Trust, Inc.
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