Redwood Trust Inc (RWT) Reports Q3 2023 Financial Results
GAAP book value per common share decreased by 5.3% from $9.26 per share at June 30, 2023, to $8.77 at September 30, 2023.
Redwood Trust Inc (NYSE:RWT) reported a GAAP net loss related to common stockholders of $(33) million or $(0.29) per diluted common share.
Non-GAAP Earnings Available for Distribution ("EAD") of $11 million or $0.09 per basic common share.
Residential Mortgage Banking locked $1.6 billion of jumbo loans, up from $567 million in the second quarter 2023.
Redwood Trust Inc (NYSE:RWT), a leader in expanding access to housing for homebuyers and renters, announced its financial results for the quarter ended September 30, 2023, on October 30, 2023. The company reported a decrease in GAAP book value per common share and a net loss related to common stockholders.
Financial Performance
Redwood Trust Inc (NYSE:RWT) reported a GAAP book value per common share of $8.77 at September 30, 2023, marking a 5.3% decrease from $9.26 per share at June 30, 2023. The company also reported a GAAP net loss related to common stockholders of $(33) million or $(0.29) per diluted common share. However, the company's Non-GAAP Earnings Available for Distribution ("EAD") stood at $11 million or $0.09 per basic common share.
Operational Business Highlights
In the Residential Mortgage Banking segment, Redwood Trust Inc (NYSE:RWT) locked $1.6 billion of jumbo loans, up from $567 million in the second quarter 2023, and purchased $815 million of jumbo loans, up from $184 million in the second quarter 2023. The company significantly grew its jumbo loan seller network, including over 50 new or re-established relationships with depository institutions.
In the Business Purpose Mortgage Banking segment, the company funded $411 million of business purpose lending ("BPL") loans in the third quarter 2023, up from $406 million in the second quarter 2023. The company also began selling BPL bridge loans into a joint venture ("JV") with Oaktree Capital Management, L.P. ("Oaktree") and established a new dedicated financing line for the JV.
CEO Commentary
The mortgage market is in a state of significant transition on the heels of an evolving bank regulatory backdrop," said Christopher Abate, Chief Executive Officer of Redwood. "In the third quarter, we saw continued progress in our Residential Mortgage Banking business, where we've driven volume higher through onboarding new sellers and deepening our overall wallet share. Importantly, despite choppy markets, we were successful during the quarter efficiently securitizing and selling our production across both of our operating businesses. As we look ahead, we expect to formalize other partnerships complementary to our traditional distribution channels, driven by significant interest in our asset creation and sourcing abilities."
Looking Forward
Redwood Trust Inc (NYSE:RWT) plans to file its Quarterly Report on Form 10-Q with the Securities and Exchange Commission by Thursday, November 9, 2023. The company continues to focus on providing 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.
Explore the complete 8-K earnings release (here) from Redwood Trust Inc for further details.
This article first appeared on GuruFocus.
