Redwood Trust Inc. (RWT) filed Quarterly Report for the period ended 2010-06-30.
Redwood Trust Inc. has a market cap of $1.24 billion; its shares were traded at around $15.94 with a P/E ratio of 10.6 and P/S ratio of 4.3. The dividend yield of Redwood Trust Inc. stocks is 6.3%.RWT is in the portfolios of Wallace Weitz of Weitz Wallace R & Co, Arnold Schneider of Schneider Capital Management, NWQ Managers of NWQ Investment Management Co, Diamond Hill Capital of Diamond Hill Capital Management Inc, Jim Simons of Renaissance Technologies LLC, Steven Cohen of SAC Capital Advisors.
This is the annual revenues and earnings per share of RWT over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of RWT.
Highlight of Business Operations:
Each of the first two quarters of 2010 included the benefit of significant gains: $44 million in the first quarter and $16 million in the second quarter. Of note, income excluding gains in the second quarter improved markedly from the first quarters level as a result of lower loan loss provisions, reduced negative market valuation adjustments, and lower operating expenses. These improvements were only partially offset by lower net interest income. In the second quarter, loan loss provisions of $4 million were at about half the level of the first quarters $9 million level. In the second quarter, we posted negative market valuation adjustments of $7 million versus $11 million negative adjustments in the first quarter.
Book value per share on a GAAP basis ended the second quarter at $12.71, representing a $0.13 decline from $12.84 at the end of the first quarter. Book value declined in the quarter even as earnings exceeded dividends principally due to the decline in the value of the interest rate hedges against our long term borrowings. Our non-GAAP estimate of economic value per share ended the second quarter at $13.37 as compared with $13.32 at the end of the first quarter. (See Table 2 below under Summary of Results of Operations, Financial Condition, Capital Resources and Liquidity for a reconciliation of GAAP book value per share to our non-GAAP estimate of economic value per share.) Neither our GAAP book value per share nor non-GAAP estimate of economic value per share was significantly impacted this quarter by changes in prices of the types of securities we hold, as prices generally closed the quarter about where they started. We continue to have ample liquidity and ended the second quarter with $288 million in cash, up from $242 million at March 31, 2010.
During the second quarter, we acquired $23 million and sold $116 million of non-agency mortgage-backed securities, reducing the size of our securities portfolio from $840 million at March 31, 2010 to $734 million at June 30, 2010. Credit losses on this portfolio have been in line with our expectations and prepayment rates on this portfolio have been at or above our expectations. In July 2010, we purchased
Summary of Results of Operations, Financial Condition, Capital Resources, and Liquidity Our reported GAAP net income was $29 million ($0.35 per share) for the second quarter of 2010, as compared to $7 million ($0.10 per share) for the second quarter of 2009. Our GAAP book value per common share was $12.71 at June 30, 2010, an increase from $10.35 at June 30, 2009. We declared regular quarterly dividends of $0.25 per share for both the first and second quarters of 2010 and 2009.
Realized gains, net, were $16 million for the second quarter of 2010 as compared to $26 million for the second quarter of 2009, a decrease of $10 million. This decrease was due to a $19 million gain on the deconsolidation of certain Sequoia securitization entities in the second quarter of 2009, partially offset by higher gains on the sale of securities in the second quarter of 2010.
Our estimated total taxable loss was $3 million ($0.03 per share) for the second quarter of 2010 as compared to a taxable loss of $12 million ($0.16 per share) for the second quarter of 2009, an improvement of $9 million. Our estimated REIT taxable income was $3 million ($0.04 per share) for the second quarter of 2010 as compared to a REIT taxable loss of $10 million ($0.13 per share) for the second quarter of 2009, an increase of $13 million. The increase in taxable income was primarily due to a decrease in realized credit