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• GAAP Earnings: $13 million or $0.09 per share for Q3 2024.

• Earnings Available for Distribution (EAD): $25 million or $0.18 per share for Q3 2024.

• Book Value per Share: Increased slightly to $8.74 from $8.73 as of June 30.

• Residential Consumer Mortgage Banking Return on Capital: 30% in Q3, up from 16% in Q2.

• Residential Investor Segment EAD Return on Capital: 58% in Q3, compared to 13% in Q2.

• Loan Lock Volume: $2.2 billion during Q3, compared to $2.7 billion in Q2.

• Sequoia Securitizations: $1.5 billion completed during Q3.

• Residential Investor Loan Funding: $458 million during Q3.

• Net Interest Income: Positively impacted by increased capital allocation towards Sequoia and third-party investment portfolios.

• Total Recourse Leverage: Increased to 2.5 times in Q3 from 2.1 times in Q2.

• Total Financing Capacity: $7.7 billion, including $4.8 billion undrawn.

• Cash Position: Ended the quarter at $254 million.

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Release Date: October 30, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Redwood Trust Inc (NYSE:RWT) increased its common dividend for the first time since 2021, reflecting continued growth in operating activities.

• The company's mortgage banking returns were the highest in over three years, driven by strong margins and expanded distribution channels.

• Redwood Trust Inc (NYSE:RWT) maintained a flat book value despite rate volatility, showcasing effective hedging and distribution strategies.

• The company reported a significant increase in earnings available for distribution, reaching $25 million, up from $19 million in the prior quarter.

• Redwood Trust Inc (NYSE:RWT) has a diversified loan sourcing strategy, locking loans with over 160 discrete originators, ensuring no single seller represents more than 7% of total flow volume.

Negative Points

• The company's GAAP earnings slightly decreased to $13 million from $14 million in the prior quarter.

• Lock volumes decreased from $2.7 billion in the second quarter to $2.2 billion in the third quarter, reflecting market conditions.

• Interest rate volatility remains a concern, with rates nearly 70 basis points higher than their September lows.

• Delinquencies in the bridge loan portfolio increased by approximately 1% from the second quarter.

• The company's net interest income was negatively impacted by a reduction in the weighted average accrual rate of the bridge loan portfolio.