Redwood Trust (RWT) Tops Q4 EPS by 2c

Redwood Trust (NYSE: RWT) reported Q4 EPS of $0.39, $0.02 better than the analyst estimate of $0.37.

Financial Highlights

• GAAP net loss was $(1) million, or $(0.02) per diluted common share
• Non-GAAP core earnings(1) were $38 million, or $0.39 per diluted common share
• Book value per common share was $15.89 at December 31, 2018
• Economic return on book value(2) of (1.4)% for the fourth quarter and 7.8% for the year ended December 31, 2018
• Recourse debt-to-equity leverage ratio(3) of 3.5x at December 31, 2018

Business Highlights

• Deployed $235 million of capital into new investments in the fourth quarter of 2018, bringing year-to-date deployment to a record $810 million
• Recent investment activity has further diversified our exposure to housing credit, including investments in excess servicing off of seasoned non-Agency securitizations and in re-performing loan securities
• Purchased $1.6 billion of jumbo loans, bringing full-year purchases to $7.1 billion
• Closed our twelfth Sequoia securitization of 2018, bringing total securitization volume in 2018 to $5.0 billion
• In January 2019, raised $177 million of equity capital in a follow-on offering of common stock and announced our decision to exercise our option to acquire the remaining interest in 5 Arches

"The fourth quarter of 2018 capped a transformational year for Redwood Trust. We achieved record levels of capital deployment and while market volatility reached peak levels toward the end of the year, the quality of our cash flows remained very strong," commented Chris Abate, Chief Executive Officer of Redwood Trust. "We've taken early steps in our strategic evolution, expanding our access to unique investment opportunities across the single-family and multifamily credit spectrums. Having recently added business-purpose lending capabilities through our pending acquisition of 5 Arches, we are well prepared to seize on the opportunities we see ahead."

For earnings history and earnings-related data on Redwood Trust (RWT) click here.

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