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Jun 30, 2023
Redwood Trust Q2 2023 Earnings Report
Reported financial results for the quarter ended June 30, 2023.
Key Takeaways
Redwood Trust reported a GAAP net income available to common stockholders of $1 million, or $0.00 per diluted common share, and non-GAAP Earnings Available for Distribution (EAD) of $16 million, or $0.14 per basic common share. The company's GAAP book value per common share was $9.26 at June 30, 2023, a 1.5% decrease from the previous quarter. They established new partnerships and relationships, and saw growth in their operating platforms.
GAAP book value per common share was $9.26 at June 30, 2023, a 1.5% decrease from $9.40 per share at March 31, 2023.
GAAP net income available to common stockholders of $1 million or $0.00 per diluted common share.
Non-GAAP Earnings Available for Distribution (EAD) of $16 million or $0.14 per basic common share.
Recourse leverage ratio of 2.2x at June 30, 2023.
Forward Guidance
Redwood secured some notable partnership and relationship wins that they believe will support the growth, scale, distribution and earnings power of their operating platforms going forward. With the Fed potentially nearing the end of its historic rate-hike cycle, Redwood expects its strategic relevance to a transforming housing finance sector to rise significantly.
Positive Outlook
- New forward flow jumbo loan relationships are expected to positively contribute to volumes in the third quarter of 2023 and beyond.
- Strategic partnerships are expected to support growth.
- Regulatory environment changes for banks may present significant opportunities.
- End of rate-hike cycle may increase strategic relevance.
- Expect continued momentum in volume in the third quarter 2023 and beyond.
Challenges Ahead
- Economic conditions could impact performance.
- Competition in the housing finance sector.
- Changes in interest rates.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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