Redwood Trust Reports Third Quarter 2024 Financial Results
Redwood Trust (NYSE:RWT) reported its Q3 2024 financial results with GAAP net income of $13.1 million ($0.09 per share) and non-GAAP Earnings Available for Distribution of $25.2 million ($0.18 per share). The company's book value per common share increased slightly to $8.74, delivering an economic return of 2.1% for Q3 and 6.8% YTD. The company increased its quarterly dividend by 6.25% to $0.17 per share. Residential Consumer Mortgage Banking achieved strong performance with $2.2 billion in loan locks and distributed $1.5 billion of jumbo loans. The Investment Portfolio deployed $157 million of capital, while maintaining a low recourse leverage ratio of 0.7x.
Redwood Trust (NYSE:RWT) ha riportato i risultati finanziari per il terzo trimestre del 2024, con un reddito netto GAAP di 13,1 milioni di dollari (0,09 dollari per azione) e un utile non GAAP disponibile per la distribuzione di 25,2 milioni di dollari (0,18 dollari per azione). Il valore di libro per azione ordinaria della società è aumentato leggermente a 8,74 dollari, generando un rendimento economico del 2,1% per il terzo trimestre e del 6,8% dall'inizio dell'anno. L'azienda ha aumentato il suo dividendo trimestrale del 6,25% a 0,17 dollari per azione. Il settore del Credito Residenziale ha registrato una forte performance con 2,2 miliardi di dollari in prestiti bloccati e ha distribuito 1,5 miliardi di dollari in prestiti jumbo. Il Portafoglio Investimenti ha impiegato 157 milioni di dollari di capitale, mantenendo un basso rapporto di leva di 0,7x.
Redwood Trust (NYSE:RWT) reportó sus resultados financieros del tercer trimestre de 2024, con un ingreso neto GAAP de 13.1 millones de dólares (0.09 dólares por acción) y ganancias no GAAP disponibles para distribución de 25.2 millones de dólares (0.18 dólares por acción). El valor contable por acción ordinaria de la compañía aumentó ligeramente a 8.74 dólares, proporcionando un retorno económico del 2.1% en el tercer trimestre y del 6.8% en lo que va del año. La compañía incrementó su dividendo trimestral en un 6.25% a 0.17 dólares por acción. La banca hipotecaria residencial tuvo un desempeño fuerte, con 2.2 mil millones de dólares en compromisos de préstamo y distribuyó 1.5 mil millones de dólares en préstamos jumbo. La cartera de inversión asignó 157 millones de dólares de capital, manteniendo un bajo ratio de apalancamiento de 0.7x.
레드우드 트러스트 (NYSE:RWT)는 2024년 3분기 재무 결과를 발표하며 GAAP 순이익이 1,310만 달러(주당 0.09 달러)이고, 배당 가능한 비GAAP 수익이 2,520만 달러(주당 0.18 달러)로 보고했습니다. 회사의 자산 가치는 보통주당 8.74 달러로 약간 증가하였으며, 3분기 동안 2.1%의 경제적 수익과 연초 대비 6.8%의 수익률을 제공했습니다. 회사는 분기 배당금을 6.25% 인상하여 주당 0.17 달러로 설정했습니다. 주택 소비자 모기지 은행 부문은 22억 달러의 대출 계약을 체결하며 강력한 성과를 거두었고, 15억 달러의 대형 대출을 배분했습니다. 투자 포트폴리오는 1억 5,700만 달러의 자본을 배정했으며, 낮은 책임 비율인 0.7배를 유지했습니다.
Redwood Trust (NYSE:RWT) a publié ses résultats financiers pour le troisième trimestre 2024, avec un revenu net GAAP de 13,1 millions de dollars (0,09 dollar par action) et un bénéfice non GAAP disponible pour distribution de 25,2 millions de dollars (0,18 dollar par action). La valeur comptable par action ordinaire de l'entreprise a légèrement augmenté pour atteindre 8,74 dollars, offrant un rendement économique de 2,1 % pour le T3 et de 6,8 % depuis le début de l'année. L'entreprise a augmenté son dividende trimestriel de 6,25 % à 0,17 dollar par action. La banque hypothécaire résidentielle a enregistré une performance solide avec 2,2 milliards de dollars en prêts bloqués et a distribué 1,5 milliard de dollars en prêts jumbo. Le portefeuille d'investissement a déployé 157 millions de dollars de capital, tout en maintenant un faible ratio de levier de 0,7x.
Redwood Trust (NYSE:RWT) hat seine Finanzzahlen für das 3. Quartal 2024 bekanntgegeben, mit einem GAAP-Nettoeinkommen von 13,1 Millionen Dollar (0,09 Dollar pro Aktie) und nicht-GAAP Gewinnen, die zur Ausschüttung bereit stehen, von 25,2 Millionen Dollar (0,18 Dollar pro Aktie). Der Buchwert pro Stammaktie des Unternehmens stieg leicht auf 8,74 Dollar, was eine wirtschaftliche Rendite von 2,1 % im 3. Quartal und 6,8 % seit Jahresbeginn bedeutet. Das Unternehmen erhöhte seine vierteljährliche Dividende um 6,25 % auf 0,17 Dollar pro Aktie. Das Wohnimmobilienkreditgeschäft erzielte eine starke Leistung mit 2,2 Milliarden Dollar an gesperrten Krediten und verteilte 1,5 Milliarden Dollar an Jumbo-Darlehen. Das Investitionsportfolio setzte 157 Millionen Dollar an Kapital ein und hielt dabei ein niedriges Rückgriff-Leverage-Verhältnis von 0,7x.
- GAAP net income of $13.1 million ($0.09 per share)
- 6.25% increase in quarterly dividend to $0.17 per share
- Strong mortgage banking performance with $2.2 billion in loan locks
- Successful distribution of $1.5 billion in jumbo loans through securitizations
- Low investment portfolio recourse leverage ratio of 0.7x
- Decline in lock volume from $2.7 billion in Q2 to $2.2 billion in Q3
- Increase in 90+ day delinquency rates for Residential Investor portfolio from 5.4% to 6.5%
- Increase in recourse leverage ratio from 2.1x to 2.5x
Insights
The Q3 2024 results demonstrate solid performance with several positive indicators. GAAP net income of
Notable strengths include exceptional gross margins in residential mortgage banking, strong capital deployment of
The recourse leverage ratio increase to 2.5x from 2.1x, while manageable, should be watched. The company maintains healthy liquidity with
Market conditions are showing favorable shifts for Redwood's business model. The
The company's strategic positioning in both consumer and investor mortgage segments provides diversification benefits. The expansion into ARM guidelines and strong securitization execution demonstrate adaptability to market demands. With
Key Q3 2024 Financial Results and Metrics
-
GAAP book value per common share was
at September 30, 2024, relative to$8.74 per share at June 30, 2024$8.73 -
Economic return on book value of
2.1% for the third quarter and6.8% year to date 2024(1)
-
Economic return on book value of
-
GAAP net income available to common stockholders of
or$13.1 million per basic and diluted common share$0.09 -
Non-GAAP Earnings Available for Distribution ("EAD") of
or$25.2 million per basic common share(2)$0.18 - Recourse leverage ratio of 2.5x at September 30, 2024, relative to 2.1x at June 30, 2024(3)
-
Declared and paid a regular quarterly dividend of
per common share, a$0.17 6.25% increase from the second quarter 2024
Q3 2024 Operational Business Highlights
Residential Consumer Mortgage Banking
-
Generated
30% annualized GAAP Return on Capital ("ROC") and non-GAAP EAD ROC -
Locked
of loans,(4) compared to$2.2 billion in the second quarter of 2024$2.7 billion - Achieved gross margins well in excess of our historical target range of 75bps to 100bps, driven by hedge outperformance and spread tightening on securitization execution during the quarter
- Fixed-rate bulk volume from banks increased 1.8x from Q2'24
-
Lock volume split evenly between bulk and flow, while we also saw a
6% increase in locks from independent mortgage banks ("IMBs") -
Refinance activity represented
27% of quarterly flow volume, up from12% in the second quarter 2024
-
Distributed
of jumbo loans across three securitizations$1.5 billion
Residential Investor Mortgage Banking
-
Generated
45% and58% annualized GAAP ROC and non-GAAP EAD ROC, respectively, on of capital$50 million -
Funded
of loans ($458 million 65% bridge and35% term), effectively flat from in the second quarter of 2024$459 million -
Bridge loan volume increased
24% QoQ, including a record quarter of fundings for single asset bridge ("SAB") loans - Term loan production declined as many borrowers awaited clarity from September's Federal Reserve interest rate decision
-
Bridge loan volume increased
-
Continued to deepen distribution channels, selling
of loans through whole loan sales and sales to joint ventures ("JVs") and an additional$288 million to existing bridge loan securitizations$63 million
Investment Portfolio
-
Accretively deployed approximately
of capital into internally sourced and third-party investments, the largest amount since the third quarter of 2022$157 million -
Re-performing loan ("RPL") and jumbo securities saw improvement in 90 day+ delinquency rates at
6.9% and0.2% , respectively; 90 day+ delinquency rates for our combined Residential Investor portfolio increased to6.5% from5.4% at June 30, 2024, partially offset by resolutions(5) -
Payoffs in the Residential Investor portfolio increased
19% in the third quarter to , including$380 million of bridge loans$226 million - Investment Portfolio recourse leverage ratio remained low at 0.7x at September 30, 2024
Financing / Corporate Highlights
-
Unrestricted cash and cash equivalents of
and unencumbered assets of approximately$254 million at September 30, 2024$300 million -
Total excess warehouse financing capacity of
at September 30, 2024$4.8 billion -
Successfully renewed or established financing facilities with key counterparties for
of capacity, including one additional line to support our JV with CPP Investments and another to support our Residential Consumer platform$1.7 billion
-
Successfully renewed or established financing facilities with key counterparties for
- Closed two non-marginable financing transactions backed by CAFL securities and subordinate and interest-only SEMT securities, unlocking capital for redeployment
-
Retired outstanding convertible debt maturing July 2024 with cash on hand; remaining convertible debt outstanding at September 30, 2024 totaled
$364 million
Q4 2024 Highlights to Date(7)
-
Distributed
of Residential Consumer jumbo loans through SEMT® securitizations of 30-year fixed rate jumbo loans ($1.5 billion ), seasoned hybrid adjustable-rate loans ("ARMs") ($0.4 billion ) and whole loan sales ($0.4 billion )(8)$0.7 billion -
Distributed over
of Residential Investor loans through whole loan sales and sales to JVs$250 million - Launched an expanded set of ARM guidelines within our Residential Consumer platform
-
Completed an opportunistic
reopening of our$40 million 7.75% convertible notes due 2027; predominant use of proceeds was to repurchase convertible notes due 2025, effectively extending the maturity of our convertible debt outstanding
"Our operating platforms delivered their strongest performance in over three years, underscoring our deepening partnerships, sustained product demand and enhanced distribution capabilities,” said Christopher Abate, Chief Executive Officer of Redwood Trust. "As evidenced by the recent increase to our common dividend, our results reflect continued progress in growing earnings and deploying capital accretively."
Continued Abate, “As we progress through the final quarter of the year, we are excited to embrace this new chapter for our Company, with several favorable tailwinds propelling us forward. A more accommodative monetary policy and increasing clarity in bank regulations underscore the opportunity we see for Redwood. We are witnessing increased demand for our products in the non-Agency market and are well-positioned to leverage our leadership, expertise, and innovative solutions to meet this growing need.”
_____________________
- 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.
- Earnings available for distribution is a non-GAAP measure. See Non-GAAP Disclosures section that follows for additional information on this measure.
-
Recourse leverage ratio is defined as recourse debt at Redwood divided by tangible stockholders' equity. Recourse debt excludes
of consolidated securitization debt (ABS issued and servicer advance financing), other liabilities and other debt that is non-recourse to Redwood, and tangible stockholders' equity excludes$14.3 billion of goodwill and intangible assets.$44.6 million - Lock volume represents loans identified for purchase from loan sellers. Lock volume does not account for potential fallout from pipeline that typically occurs through the lending process.
- Re-performing loan ("RPL") and jumbo securities delinquency rate calculations are weighted by notional balances of loans collateralizing each of our securities investments. Bridge loan and CAFL securities delinquency rates are calculated as BPL term loans in our consolidated CAFL securitizations, loans held at JVs, unsecuritized bridge loans held for investment, and bridge and term loans held for sale with a delinquent payment greater than 90 days, divided by the total notional balance of loans in consolidated CAFL securitizations, loans held at JVs, unsecuritized bridge loans held for investment, and bridge and term loans held for sale. Calculation excludes third-party purchased bridge loans.
- Secured recourse leverage ratio for our Investment Portfolio is defined as secured recourse debt financing our investment portfolio assets divided by capital allocated to our investment portfolio.
- Represents Q4'24 activity through October 29, 2024 unless otherwise noted.
- Includes securitizations and sales that have priced but not yet closed as of October 29, 2024.
Third Quarter 2024 Redwood Review and Supplemental Tables Available Online
A further discussion of Redwood's business and financial results is included in the third quarter 2024 Shareholder Letter and Redwood Review which are available under "Financial Info" within the Investor Relations section of the Company’s website at redwoodtrust.com/investor-relations. Additional supplemental financial tables can also be found within this section of the Company's website.
Conference Call and Webcast
Redwood will host an earnings call today, October 30, 2024, at 5:00 p.m. Eastern Time / 2:00 p.m. Pacific Time to discuss its third quarter 2024 financial results. The number to dial in order to listen to the conference call is 1-877-423-9813 in the
The conference call will be webcast live in listen-only mode through the News & Events section of Redwood’s Investor Relations website at https://www.redwoodtrust.com/investor-relations/news-events/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 Thursday, November 7, 2024, and also make it available on Redwood’s website.
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
Cautionary Statement; 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 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, opportunities, 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.
REDWOOD TRUST, INC. |
|||||||
($ in millions, except per share data) |
Three Months Ended |
||||||
|
9/30/2024 |
|
6/30/2024 |
||||
Financial Performance |
|
|
|
||||
Net income per diluted common share |
$ |
0.09 |
|
|
$ |
0.10 |
|
Net income per basic common share |
$ |
0.09 |
|
|
$ |
0.10 |
|
EAD per basic common share (non-GAAP) |
$ |
0.18 |
|
|
$ |
0.13 |
|
|
|
|
|
||||
Return on Common Equity ("ROE") (annualized) |
|
4.5 |
% |
|
|
4.8 |
% |
EAD Return on Common Equity ("EAD ROE") (annualized, non-GAAP) |
|
8.7 |
% |
|
|
6.5 |
% |
|
|
|
|
||||
Book Value per Common Share |
$ |
8.74 |
|
|
$ |
8.73 |
|
Dividend per Common Share |
$ |
0.17 |
|
|
$ |
0.16 |
|
Economic Return on Book Value (1) |
|
2.1 |
% |
|
|
1.3 |
% |
|
|
|
|
||||
Recourse Leverage Ratio (2) |
2.5x |
|
2.1x |
||||
Operating Metrics |
|||||||
Residential Investor Loans |
|
|
|
||||
Term fundings |
$ |
159 |
|
|
$ |
218 |
|
Bridge fundings |
|
299 |
|
|
|
241 |
|
Term sold |
|
207 |
|
|
|
253 |
|
Bridge sold |
|
81 |
|
|
|
162 |
|
Residential Consumer Loans |
|
|
|
||||
Locks |
$ |
2,226 |
|
|
$ |
2,662 |
|
Purchases |
|
2,024 |
|
|
|
1,902 |
|
Securitized |
|
1,528 |
|
|
|
1,424 |
|
Sold |
|
39 |
|
|
|
6 |
|
|
|
|
|
(1) |
Economic return on book value is based on the periodic change in GAAP book value per common share plus dividends declared per common share during the period. |
|
(2) |
Recourse leverage ratio is defined as recourse debt at Redwood divided by tangible stockholders' equity. At September 30, 2024, and June 30, 2024, recourse debt excluded |
REDWOOD TRUST, INC. |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Consolidated Income Statements (1) |
|
Three Months Ended |
||||||||||||||||||
($ in millions, except share and per share data) |
|
9/30/24 |
|
6/30/24 |
|
3/31/24 |
|
12/31/23 |
|
9/30/23 |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net Interest Income From: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment portfolio |
|
$ |
32.7 |
|
|
$ |
29.9 |
|
|
$ |
29.6 |
|
|
$ |
30.8 |
|
|
$ |
31.1 |
|
Residential consumer mortgage banking |
|
|
9.5 |
|
|
|
11.2 |
|
|
|
6.0 |
|
|
|
0.7 |
|
|
|
1.2 |
|
Residential investor mortgage banking |
|
|
1.8 |
|
|
|
1.5 |
|
|
|
0.9 |
|
|
|
0.9 |
|
|
|
0.7 |
|
Corporate/other |
|
|
(18.6 |
) |
|
|
(17.3 |
) |
|
|
(12.3 |
) |
|
|
(12.3 |
) |
|
|
(12.7 |
) |
Net Interest Income |
|
$ |
25.5 |
|
|
$ |
25.3 |
|
|
$ |
24.2 |
|
|
$ |
20.1 |
|
|
$ |
20.4 |
|
Non-interest income (loss) |
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential consumer mortgage banking activities, net |
|
|
26.7 |
|
|
|
6.2 |
|
|
|
7.8 |
|
|
|
8.4 |
|
|
|
9.0 |
|
Residential investor mortgage banking activities, net |
|
|
12.9 |
|
|
|
12.7 |
|
|
|
6.7 |
|
|
|
6.3 |
|
|
|
10.5 |
|
Investment fair value changes, net |
|
|
(12.2 |
) |
|
|
1.1 |
|
|
|
21.8 |
|
|
|
15.2 |
|
|
|
(41.7 |
) |
HEI income, net |
|
|
10.7 |
|
|
|
15.8 |
|
|
|
9.0 |
|
|
|
11.7 |
|
|
|
10.3 |
|
Other income, net |
|
|
6.0 |
|
|
|
6.3 |
|
|
|
4.5 |
|
|
|
1.8 |
|
|
|
2.3 |
|
Realized gains, net |
|
|
0.2 |
|
|
|
— |
|
|
|
0.4 |
|
|
|
0.6 |
|
|
|
0.1 |
|
Total non-interest income (loss), net |
|
$ |
44.2 |
|
|
$ |
42.2 |
|
|
$ |
50.3 |
|
|
$ |
44.0 |
|
|
$ |
(9.6 |
) |
General and administrative expenses |
|
|
(36.0 |
) |
|
|
(33.3 |
) |
|
|
(34.6 |
) |
|
|
(32.2 |
) |
|
|
(29.7 |
) |
Portfolio management costs |
|
|
(6.4 |
) |
|
|
(4.9 |
) |
|
|
(3.6 |
) |
|
|
(4.3 |
) |
|
|
(3.7 |
) |
Loan acquisition costs |
|
|
(3.2 |
) |
|
|
(3.7 |
) |
|
|
(2.2 |
) |
|
|
(2.6 |
) |
|
|
(1.9 |
) |
Other expenses |
|
|
(2.2 |
) |
|
|
(5.2 |
) |
|
|
(3.4 |
) |
|
|
(2.9 |
) |
|
|
(4.6 |
) |
(Provision for) benefit from income taxes |
|
|
(7.1 |
) |
|
|
(4.9 |
) |
|
|
(0.5 |
) |
|
|
(1.0 |
) |
|
|
(1.7 |
) |
Net income (loss) |
|
$ |
14.8 |
|
|
$ |
15.5 |
|
|
$ |
30.3 |
|
|
$ |
21.0 |
|
|
$ |
(30.8 |
) |
Dividends on preferred stock |
|
|
(1.8 |
) |
|
|
(1.8 |
) |
|
|
(1.8 |
) |
|
|
(1.8 |
) |
|
|
(1.8 |
) |
Net income (loss) available (related) to common stockholders |
|
$ |
13.1 |
|
|
$ |
13.8 |
|
|
$ |
28.5 |
|
|
$ |
19.3 |
|
|
$ |
(32.6 |
) |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted average basic common shares (thousands) |
|
|
132,218 |
|
|
|
132,116 |
|
|
|
131,570 |
|
|
|
121,927 |
|
|
|
115,466 |
|
Weighted average diluted common shares (thousands) (2) |
|
|
132,358 |
|
|
|
132,124 |
|
|
|
131,570 |
|
|
|
122,474 |
|
|
|
115,466 |
|
Earnings (loss) per basic common share |
|
$ |
0.09 |
|
|
$ |
0.10 |
|
|
$ |
0.21 |
|
|
$ |
0.15 |
|
|
$ |
(0.29 |
) |
Earnings (loss) per diluted common share |
|
$ |
0.09 |
|
|
$ |
0.10 |
|
|
$ |
0.21 |
|
|
$ |
0.15 |
|
|
$ |
(0.29 |
) |
Regular dividends declared per common share |
|
$ |
0.17 |
|
|
$ |
0.16 |
|
|
$ |
0.16 |
|
|
$ |
0.16 |
|
|
$ |
0.16 |
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Certain totals may not foot due to rounding. |
|
(2) |
Actual shares outstanding (in thousands) at September 30, 2024, June 30, 2024, December 31, 2023 and September 30, 2023 were 132,237, 132,216, 131,871, 131,486, and 118,504, respectively. |
Analysis of Income Statement - Changes from Second Quarter 2024 to Third Quarter 2024
- Net interest income increased from the second quarter due to accretive capital deployment, partially offset by a full quarter of expense on recently issued unsecured notes and lower interest income from residential consumer mortgage banking.
- Income from Residential Consumer Mortgage Banking increased from the second quarter, driven by a combination of spread tightening on securitization execution throughout the quarter and hedge outperformance. Gain on sale margins increased and were above our historic target range of 75 – 100 basis points.
- Income from Residential Investor Mortgage Banking activities increased slightly from the second quarter on relatively consistent volume and margins relative to the second quarter.
- Fair value changes on our Investment Portfolio in the third quarter primarily reflected improved credit performance and spread tightening on our SEMT and SLST securities, offset by incremental negative fair value changes on our bridge loans.
- HEI income, net decreased in the third quarter, as actual and projected trends in home price appreciation slowed, resulting in lower fair market value changes compared to the second quarter 2024.
- General and administrative (G&A) expenses increased from the second quarter primarily as a result of higher performance-based variable and equity compensation expenses relative to the second quarter given improved year-to-date earnings performance.
- Our provision for income taxes in the third quarter increased as a result of improved results from both our Residential Consumer and Residential Investor Mortgage Banking platforms.
REDWOOD TRUST, INC. |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||
Consolidated Balance Sheets (1) |
|
|
|
|
|
|
|
|
|
|
|||||
($ in millions, except share and per share data) |
|
9/30/24 |
|
6/30/24 |
|
3/31/24 |
|
12/31/23 |
|
9/30/23 |
|||||
|
|
|
|
|
|
|
|
|
|
|
|||||
Residential Consumer Loans |
|
$ |
11,157 |
|
$ |
9,210 |
|
$ |
7,617 |
|
$ |
7,051 |
|
$ |
5,847 |
Residential Investor Loans |
|
|
4,746 |
|
|
4,880 |
|
|
5,182 |
|
|
5,220 |
|
|
5,249 |
Consolidated Agency multifamily loans |
|
|
426 |
|
|
422 |
|
|
423 |
|
|
425 |
|
|
421 |
Real estate securities |
|
|
334 |
|
|
264 |
|
|
212 |
|
|
128 |
|
|
129 |
Home equity investments (HEI) |
|
|
590 |
|
|
574 |
|
|
561 |
|
|
550 |
|
|
431 |
Other investments |
|
|
342 |
|
|
350 |
|
|
337 |
|
|
344 |
|
|
340 |
Cash and cash equivalents |
|
|
254 |
|
|
276 |
|
|
275 |
|
|
293 |
|
|
204 |
Other assets |
|
|
579 |
|
|
515 |
|
|
451 |
|
|
493 |
|
|
399 |
Total assets |
|
$ |
18,427 |
|
$ |
16,491 |
|
$ |
15,058 |
|
$ |
14,504 |
|
$ |
13,021 |
|
|
|
|
|
|
|
|
|
|
|
|||||
Asset-backed securities issued, net |
|
$ |
13,020 |
|
$ |
11,556 |
|
$ |
10,628 |
|
$ |
9,812 |
|
$ |
8,392 |
Debt obligations, net |
|
|
3,801 |
|
|
3,415 |
|
|
2,959 |
|
|
3,239 |
|
|
3,306 |
Other liabilities |
|
|
383 |
|
|
300 |
|
|
247 |
|
|
251 |
|
|
217 |
Total liabilities |
|
$ |
17,204 |
|
$ |
15,270 |
|
$ |
13,834 |
|
$ |
13,302 |
|
$ |
11,915 |
|
|
|
|
|
|
|
|
|
|
|
|||||
Stockholders' equity |
|
|
1,223 |
|
|
1,221 |
|
|
1,224 |
|
|
1,203 |
|
|
1,106 |
|
|
|
|
|
|
|
|
|
|
|
|||||
Total liabilities and equity |
|
$ |
18,427 |
|
$ |
16,491 |
|
$ |
15,058 |
|
$ |
14,504 |
|
$ |
13,021 |
|
|
|
|
|
|
|
|
|
|
|
|||||
Common shares outstanding at period end (thousands) |
|
|
132,237 |
|
|
132,216 |
|
|
131,871 |
|
|
131,486 |
|
|
118,504 |
GAAP book value per common share |
|
$ |
8.74 |
|
$ |
8.73 |
|
$ |
8.78 |
|
$ |
8.64 |
|
$ |
8.77 |
|
|
|
|
|
|
|
|
|
|
|
(1) |
Certain totals may not foot due to rounding. |
Non-GAAP Disclosures
|
|
|
|
|
|
||||
Reconciliation of GAAP Net Income Available to Common Stockholders to non-GAAP EAD(1)(2) |
|
|
|||||||
|
|
Three Months Ended |
|||||||
($ in millions, except per share data) |
|
9/30/24 |
|
6/30/24 |
|
||||
|
|
|
|
|
|
||||
GAAP Net income available to common stockholders |
|
$ |
13.1 |
|
|
$ |
13.8 |
|
|
|
|
|
|
|
|
||||
Adjustments: |
|
|
|
|
|
||||
Investment fair value changes, net(3) |
|
|
12.2 |
|
|
|
(1.1 |
) |
|
Realized (gains)/losses, net(4) |
|
|
(0.2 |
) |
|
|
— |
|
|
Acquisition related expenses(5) |
|
|
2.2 |
|
|
|
2.2 |
|
|
Tax effect of adjustments(6) |
|
|
(2.1 |
) |
|
|
3.7 |
|
|
|
|
|
|
|
|
||||
Earnings available for distribution (non-GAAP) |
|
$ |
25.2 |
|
|
$ |
18.6 |
|
|
|
|
|
|
|
|
||||
Earnings per basic common share (GAAP) |
|
$ |
0.09 |
|
|
$ |
0.10 |
|
|
EAD per basic common share (non-GAAP) |
|
$ |
0.18 |
|
|
$ |
0.13 |
|
|
|
|
|
|
|
|
||||
GAAP Return on common equity (annualized) |
|
|
4.5 |
% |
|
|
4.8 |
% |
|
EAD Return on common equity (non-GAAP, annualized)(7) |
|
|
8.7 |
% |
|
|
6.5 |
% |
|
|
|
|
|
|
|
- Certain totals may not foot due to rounding.
- EAD and EAD ROE are non-GAAP measures derived from GAAP Net income (loss) available (related) to common stockholders and GAAP Return on common equity ("GAAP ROE" or "ROE"), respectively. EAD is defined as: GAAP net income (loss) available (related) to common stockholders adjusted to (i) exclude investment fair value changes, net; (ii) exclude realized gains and losses; (iii) exclude acquisition related expenses; (iv) exclude certain organizational restructuring charges (as applicable); and (v) adjust for the hypothetical income taxes associated with these adjustments. EAD ROE is defined as EAD divided by average common equity. We believe EAD and EAD ROE provide supplemental information to assist management and investors in analyzing the Company’s results of operations and help facilitate comparisons to industry peers. Management also believes that EAD and EAD ROE are metrics that can supplement its analysis of the Company’s ability to pay dividends, by providing an indication of the current income generating capacity of the Company's business operations as of the quarter being presented. EAD and EAD ROE should not be utilized in isolation, nor should they be considered as an alternative to GAAP net income (loss) available (related) to common stockholders, GAAP ROE or other measurements of results of operations computed in accordance with GAAP or for federal income tax purposes.
- Investment fair value changes, net includes all amounts within that same line item on our consolidated statements of income, which primarily represents both realized and unrealized gains and losses on our investments (excluding HEI) and associated hedges. As noted above, realized and unrealized gains and losses on our HEI investments are reflected in a new line item on our consolidated income statements titled "HEI income, net".
- Realized (gains)/losses, net includes all amounts within that line item on our consolidated statements of income.
- Acquisition related expenses include transaction costs paid to third parties, as applicable, and the ongoing amortization of intangible assets related to the Riverbend, CoreVest and 5 Arches acquisitions.
- Tax effect of adjustments represents the hypothetical income taxes associated with all adjustments used to calculate EAD.
- EAD ROE is calculated by dividing EAD by average common equity for each respective period.
Non-GAAP Disclosures (Continued)
|
|
|
|
|
|
|
|
|
||||||||
Reconciliation of GAAP Net Contribution to non-GAAP EAD |
|
|
|
|
||||||||||||
Net Contribution by Mortgage Banking Segment(1)(2) |
|
|
|
|
||||||||||||
|
|
Three Months Ended |
|
Three Months Ended |
||||||||||||
|
|
9/30/24 |
|
6/30/24 |
||||||||||||
($ in millions) |
|
Residential Consumer Mortgage Banking |
|
Residential Investor Mortgage Banking |
|
Residential Consumer Mortgage Banking |
|
Residential Investor Mortgage Banking |
||||||||
|
|
|
|
|
|
|
|
|
||||||||
GAAP Net contribution |
|
$ |
22.8 |
|
|
$ |
5.7 |
|
|
$ |
9.9 |
|
|
$ |
0.6 |
|
|
|
|
|
|
|
|
|
|
||||||||
Adjustments: |
|
|
|
|
|
|
|
|
||||||||
Acquisition related expenses(3) |
|
|
— |
|
|
|
2.2 |
|
|
|
— |
|
|
|
2.2 |
|
Tax effect of adjustments(4) |
|
|
— |
|
|
|
(0.6 |
) |
|
|
— |
|
|
|
(0.6 |
) |
|
|
|
|
|
|
|
|
|
||||||||
EAD Net contribution (non-GAAP) |
|
$ |
22.8 |
|
|
$ |
7.3 |
|
|
$ |
9.9 |
|
|
$ |
2.2 |
|
|
|
|
|
|
|
|
|
|
||||||||
Capital utilized (average for period) |
|
$ |
307 |
|
|
$ |
50 |
|
|
$ |
255 |
|
|
$ |
67 |
|
|
|
|
|
|
|
|
|
|
||||||||
Return on capital (GAAP) |
|
|
30 |
% |
|
|
45 |
% |
|
|
16 |
% |
|
|
4 |
% |
EAD Net Contribution return on capital (non-GAAP)(5) |
|
|
30 |
% |
|
|
58 |
% |
|
|
16 |
% |
|
|
13 |
% |
|
|
|
|
|
|
|
|
|
- Certain totals may not foot due to rounding.
- EAD Net contribution and EAD Net contribution ROC are non-GAAP measures derived from GAAP Net contribution and GAAP Return on capital ("GAAP ROC" or "ROC"), respectively. GAAP ROC is defined as: GAAP Net contribution by segment adjusted to (i) exclude investment fair value changes, net (as applicable); (ii) exclude realized gains and losses (as applicable); (iii) exclude acquisition related expenses; (iv) exclude certain organizational restructuring charges (as applicable); and (v) adjust for the hypothetical income taxes associated with these adjustments. Each of these adjustments to arrive at EAD Net contribution are the same adjustments used to calculate EAD, as applicable to each segment for which it is being calculated. EAD Net contribution ROC presents a measure of profitability relative to the amount of capital utilized in the operations of each segment during a period and is calculated by dividing annualized non-GAAP EAD Net contribution by the average capital utilized by the segment during the period. Management utilizes these measures internally in analyzing each of the Company’s business segments’ contribution to EAD. See prior page for a further description of how management utilizes EAD and why EAD may assist investors, as well as limitations related to using EAD-based metrics. We caution that EAD Net contribution and EAD Net contribution ROC should not be utilized in isolation, nor should they be considered as alternatives to GAAP Net Contribution, GAAP ROC or other measurements of results of operations computed in accordance with GAAP.
- Acquisition related expenses include transaction costs paid to third parties, as applicable, and the ongoing amortization of intangible assets related to the Riverbend, CoreVest and 5 Arches acquisitions.
- Tax effect of adjustments represents the hypothetical income taxes associated with all adjustments used to calculate EAD.
- EAD ROC is calculated by dividing EAD by average capital utilized for each respective period.
View source version on businesswire.com: https://www.businesswire.com/news/home/20241030023061/en/
Investor Relations
Kaitlyn Mauritz
Head of Investor Relations
Phone: 866-269-4976
Email: investorrelations@redwoodtrust.com
Source: Redwood Trust, Inc.
FAQ
What was Redwood Trust's (RWT) earnings per share in Q3 2024?
How much did Redwood Trust (RWT) increase its dividend in Q3 2024?
What was Redwood Trust's (RWT) book value per share in Q3 2024?