Redwood Trust Announces Common Dividend Increase of 6.25% to $0.17 Per Share for the Third Quarter 2024

Rhea-AI Summary

Redwood Trust, Inc. (NYSE: RWT) has announced a 6.25% increase in its third quarter 2024 common stock dividend to $0.17 per share, marking its 101st consecutive quarterly dividend. The dividend is payable on September 30, 2024, to stockholders of record on September 23, 2024. CEO Christopher Abate expressed confidence in the company's balance sheet strength and outlook amid an expected more accommodative interest rate environment. Redwood anticipates further scale in mortgage banking operations and unlocking embedded value in its investment portfolio, driving earnings and book value expansion. Additionally, the company declared a Series A preferred stock dividend of $0.625 per share for Q3 2024, payable on October 15, 2024.

Positive

• Increased common stock dividend by 6.25% to $0.17 per share
• 101st consecutive quarterly common dividend
• Management expresses confidence in balance sheet strength
• Anticipates further scale in mortgage banking operations
• Expects to unlock embedded value in investment portfolio

Negative

• None.

Insights

Financial Analyst

The 6.25% increase in Redwood Trust's common dividend to $0.17 per share signals management's confidence in the company's financial health and future prospects. This boost, coming after 100 consecutive quarterly dividends, demonstrates a strong commitment to shareholder returns. The dividend yield, now approximately 7.5% based on current stock price, remains attractive in the REIT sector.

The company's optimism about a more accommodative interest rate environment suggests potential for improved profitability in their mortgage banking operations. However, investors should note that dividend sustainability depends on consistent earnings growth and stable cash flows, which can be challenging in the cyclical real estate market.

Market Research Analyst

Redwood Trust's dividend increase, while modest, sends a positive signal to the market about the company's financial stability and growth prospects. This move aligns with the goals outlined in their March 2024 Investor Day, potentially boosting investor confidence. The anticipation of scale in mortgage banking operations and unlocking embedded value in their investment portfolio suggests a strategic focus on capitalizing on market opportunities.

However, the real estate market remains sensitive to economic fluctuations. Investors should monitor key indicators like interest rates, housing demand and overall economic health to gauge the sustainability of Redwood's optimistic outlook and dividend policy.

MILL VALLEY, Calif.--(BUSINESS WIRE)-- Redwood Trust, Inc. (NYSE: RWT; “Redwood” or the “Company”), a leader in expanding access to housing for homebuyers and renters, today announced that its Board of Directors (the “Board”) has declared third quarter 2024 common and preferred stock dividends.

Common Stock Dividend

The Board has authorized the declaration of a third quarter 2024 regular common stock dividend of $0.17 per share, a 6.25% increase from the second quarter of 2024. This marks the Company's 101^st consecutive quarterly common dividend. The third quarter 2024 common stock dividend is payable on September 30, 2024 to stockholders of record on September 23, 2024.

“We are pleased to announce an increase in our common dividend, reflecting our continued confidence in the strength of our balance sheet and our outlook heading into a more accommodative interest rate environment,” said Christopher Abate, Chief Executive Officer of Redwood. “This increase underscores the progress we’ve made towards the goals laid out at our March 2024 Investor Day and reaffirms our commitment to generating long-term value for our shareholders. Moving forward, we anticipate the evolving macro environment to facilitate further scale in our mortgage banking operations and unlock the embedded value in our investment portfolio, driving earnings and book value expansion through time.”

Preferred Stock Dividend

In accordance with the terms of Redwood’s 10.00% Series A Fixed-Rate Reset Cumulative Redeemable Preferred Stock (“Series A”), the Board authorized the declaration of a Series A dividend for the third quarter of 2024 of $0.625 per share. Dividends for the Series A are payable on October 15, 2024 to stockholders of record on October 1, 2024.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements related to our expectations regarding the impact of the interest rate and macroeconomic environment on the scale of our mortgage banking operations and embedded value in our investment portfolio, and expectations regarding earnings and book value expansion. 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, 2023 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.

About Redwood

Redwood Trust, Inc. (NYSE: RWT) is a specialty finance company focused on several distinct areas of housing credit where we provide liquidity to growing segments of the U.S. housing market not well 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. We operate our business in three segments: Residential Consumer Mortgage Banking, Residential Investor Mortgage Banking and Investment Portfolio. Through RWT Horizons^®, our venture investing initiative, we invest in early-stage companies that have a direct nexus to our operating platforms. Additionally, through Aspire, our home equity investment (“HEI”) platform, we directly originate HEI to homeowners. 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. 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240911050594/en/

Kaitlyn Mauritz

Head of Investor Relations

Phone: 866-269-4976

Email: investorrelations@redwoodtrust.com

Source: Redwood Trust, Inc.

FAQ

What is Redwood Trust's new common stock dividend for Q3 2024?

Redwood Trust (RWT) increased its common stock dividend to $0.17 per share for the third quarter of 2024, representing a 6.25% increase from the previous quarter.

When will Redwood Trust (RWT) pay its Q3 2024 common stock dividend?

Redwood Trust will pay its third quarter 2024 common stock dividend on September 30, 2024, to stockholders of record on September 23, 2024.

What is the dividend amount for Redwood Trust's Series A preferred stock in Q3 2024?

Redwood Trust (RWT) declared a Series A preferred stock dividend of $0.625 per share for the third quarter of 2024.

How many consecutive quarterly dividends has Redwood Trust (RWT) paid?

With this announcement, Redwood Trust has declared its 101st consecutive quarterly common dividend.