MILL VALLEY, Calif.--(BUSINESS WIRE)--May 1, 2003--Redwood Trust,
Inc. (NYSE:RWT), an investor in real estate loans, today reported GAAP
earnings of $0.88 per share for the first quarter of 2003, an increase
of 10% from the first quarter 2002 GAAP earnings per share of $0.80.
Core earnings, which exclude realized and unrealized gains and
losses in the market value of assets, were $0.88 per share in the
first quarter of 2003, a 14% increase from first quarter 2002 core
earnings of $0.77 per share and a 10% increase from fourth quarter
core earnings of $0.80 per share.
Doug Hansen, Redwood's President, said: "We are pleased to start
2003 with a strong quarter. Our credit results were excellent during
the first quarter of 2003. As a result, our real estate loan
portfolios generated an increased level of cash flow and profit."
"We started 2003 with excess capital," Mr. Hansen continued. "In
the first quarter, we invested in $1.4 billion of new real estate loan
assets, and thus made progress towards better capital utilization.
Opportunities to acquire new assets continue to be attractive."
First Quarter Review
During the first quarter of 2003, Redwood earned $14.9 million on
a reported GAAP basis ($0.88 per share) and $15.0 million on a core
basis ($0.88 per share).
We acquired $1.3 billion high-quality residential jumbo whole
loans, $37 million residential loan credit-enhancement securities, $2
million commercial real estate loans, and $43 million other
residential and commercial real estate loan securities.
The combined residential portfolios, including both the loans we
own and the loans we credit-enhance through the acquisition of
residential credit-enhancement securities, grew from $65 billion to
$68 billion during the first quarter of 2003.
Serious delinquencies in our combined residential portfolios
increased from 0.23% to 0.24% of current loan balances. Redwood's
delinquency ratios remain well below national averages for
conventional and jumbo residential real estate loans. The credit loss
rate on loans included in our combined residential portfolios remained
under one basis point (0.01%) per year.
Our operating profitability margin -- net interest income as a
percentage of equity -- improved from 20.9% in the fourth quarter of
2002 to 23.3% in the first quarter of 2003. Continued excellent credit
results drove most of this margin increase; favorable prepayment
trends and improved capital utilization also contributed to favorable
results.
Tax expense accruals rose to $2 million for the first quarter of
2003. If our taxable REIT income continues to exceed our regular
common dividend distributions, our current plan is to defer
distribution of a portion of our 2003 taxable REIT income into 2004
(thus incurring excise taxes) and to retain on a permanent basis up to
10% of our taxable REIT income (thus incurring income taxes). We would
expect that retained income may increase our earnings and
dividend-paying potential over time. In addition to retaining and
deferring any excess income that we may earn in 2003, we may
distribute a portion of such income as special dividends in 2003
and/or 2004.
Mr. Hansen concluded: "We continue to grow and evolve: enhancing
our operating capabilities, building closer relationships with
customers, improving our productivity, and strengthening our balance
sheet. We have been able to accumulate a large base of attractive real
estate assets that we believe should generate healthy cash flows in
most economic environments. As a result, we believe that we are in a
strong position to achieve our primary operating objective -- paying a
steady regular dividend to our shareholders."
For more information about Redwood Trust, Inc., please visit
www.redwoodtrust.com.
"Safe Harbor" Statement under the Private Securities Litigation
Reform Act of 1995: Certain matters discussed in this news release may
constitute forward-looking statements within the meaning of the
federal securities laws that inherently include certain risks and
uncertainties. Actual results and the timing of certain events could
differ materially from those projected in or contemplated by the
forward-looking statements due to a number of factors, including,
among other things, changes in interest rates on our mortgage assets
and borrowings, changes in prepayment rates on our mortgage assets,
general economic conditions, particularly as they affect the price of
mortgage assets and the credit status of borrowers, and the level of
liquidity in the capital markets, as it affects our ability to finance
our mortgage asset portfolio, and other risk factors outlined in the
Company's 2002 Annual Report on Form 10-K (available on the Company's
Web site or by request to the Contacts listed above). Other factors
not presently identified may also cause actual results to differ. No
one should assume that results or trends projected in or contemplated
by the forward-looking statements included above will prove to be
accurate in the future. We will revise our outlook from time to time
and frequently will not disclose such revisions publicly.
REDWOOD TRUST, INC.
(All dollars in thousands, except per share data)
First Fourth Third Second First
INCOME Quarter Quarter Quarter Quarter Quarter
STATEMENT 2003 2002 2002 2002 2002
-------------- --------- ---------- ---------- ---------- ----------
Interest
Income $61,125$54,155$42,093$36,252$30,716
Interest
Expense (36,933) (33,323) (24,291) (18,489) (15,602)
-------------- --------- ---------- ---------- ---------- ----------
Net Interest
Income 24,192 20,832 17,802 17,763 15,114
Operating
Expenses (6,472) (6,009) (4,290) (4,536) (3,546)
Taxes (2,077) (959) 0 0 0
Preferred
Dividends (681) (681) (681) (681) (681)
Mark-to-Market
Adjustments (30) 1,383 1,475 1,256 332
-------------- --------- ---------- ---------- ---------- ----------
GAAP Earnings $14,932$14,566$14,306$13,802$11,219
Less: Mark-to-
Market
Adjustments 30 (1,383) (1,475) (1,256) (332)
-------------- --------- ---------- ---------- ---------- ----------
Core Earnings
(1) $14,962$13,183$12,831$12,546$10,887
Average
Diluted
Shares 16,983,513 16,529,075 16,240,194 15,747,048 14,077,405
GAAP Earnings
per Share
(Diluted) $0.88$0.88$0.88$0.88$0.80
Core Earnings
per Share (1) $0.88$0.80$0.79$0.80$0.77
Common
Dividends per
Share
(Regular) $0.650 $0.630 $0.630 $0.630 $0.620
Common
Dividends per
Share
(Special) $0.000 $0.125 $0.125 $0.125 $0.000
-------------- --------- ---------- ---------- ---------- ----------
Total Common
Dividends per
Share $0.650 $0.755 $0.755 $0.755 $0.620
Yield on
Earning
Assets 3.31% 3.59% 4.07% 4.71% 4.92%
Cost of Funds 2.10% 2.35% 2.57% 2.69% 2.82%
-------------- --------- ---------- ---------- ---------- ----------
Interest Rate
Spread 1.21% 1.24% 1.50% 2.02% 2.10%
Net Interest
Margin 1.28% 1.35% 1.68% 2.25% 2.36%
Net Interest
Income / Core
Equity (2) 23.3% 20.9% 18.5% 19.1% 18.1%
Return on
Equity: GAAP
Earnings/
Reported
Equity 12.9% 13.7% 14.1% 15.4% 14.2%
Core Return on
Equity: Core
Earnings /
Core Equity 15.4% 14.2% 14.3% 14.5% 14.2%
(1) Core earnings is not a measure of earnings in accordance with
generally accepted accounting principles (GAAP). It is calculated as
GAAP earnings from ongoing operations less mark-to-market adjustments
(which include realized and unrealized gains and losses on certain
assets, hedges, and variable stock options). Management believes that
core earnings provides relevant and useful information regarding our
results of operations in addition to GAAP measures of performance.
This is, in part, because market valuation adjustments on only a
portion of our assets and stock options and none of our liabilities
are recognized through our income statement under GAAP and thus GAAP
valuation adjustments may not be fully indicative of changes in market
values on our balance sheet as a whole or a reliable guide to our
current operating performance. Furthermore, gains or losses realized
upon sales of assets vary based on portfolio management decisions; a
sale of an asset for a gain or a loss may or may not affect our
on-going earnings from operations. Because all companies and analysts
do not calculate non-GAAP measures such as core earnings in the same
fashion, core earnings as calculated by us may not be comparable to
similarly titled measures reported by other companies.
(2) Core equity is calculated as GAAP equity less unrealized gains and
losses on certain assets and hedges. Management believes measurements
based on core equity provide relevant useful information regarding our
results of operations in addition to GAAP measures of performance.
This is, in part, because market valuation adjustments reflected in
our GAAP equity represent unrealized gains and losses on a portion of
our balance sheet only and may not be reflective of the equity we are
have available to invest in our operations. Because all companies and
analysts do not calculate non-GAAP measures in the same fashion, core
equity and ratios using core equity as calculated by us may not be
comparable to similarly titled measures reported by other companies.
REDWOOD TRUST, INC.
(All dollars in thousands, except per share data)
31-Mar 31-Dec 30-Sep 30-Jun 31-Mar
BALANCE SHEET 2003 2002 2002 2002 2002
-------------- ---------- ---------- ---------- ---------- -----------
Residential
Real Estate
Loans $7,321,039$6,215,179$4,761,893$2,803,556$1,794,260
Residential
Loan Credit-
Enhancement
Securities 373,162 352,479 324,130 284,759 249,832
Commercial
Real Estate
Loans 31,214 29,270 50,664 49,798 49,380
Securities
Portfolio 366,307 335,697 491,756 512,489 609,432
Cash and Cash
Equivalents 42,882 39,169 20,606 13,155 9,960
Working
Capital and
Other Assets 37,459 35,978 25,253 26,025 26,974
-------------- ---------- ---------- ---------- ---------- -----------
Total Assets $8,172,063$7,007,772$5,674,302$3,689,782$2,739,838
Short-Term
Debt $475,717$99,714$834,081$1,005,003$1,122,513
Long-Term Debt 7,170,691 6,397,020 4,365,281 2,241,600 1,234,459
Working
Capital and
Other
Liabilities 40,253 38,005 29,212 25,249 18,422
Preferred
Equity 26,517 26,517 26,517 26,517 26,517
Common Equity 458,885 446,516 419,211 391,413 337,927
-------------- ---------- ---------- ---------- ---------- -----------
Total
Liabilities
and Equity $8,172,063$7,007,772$5,674,302$3,689,782$2,739,838
Total Reported
Equity $485,402$473,033$445,728$417,930$364,444
Less: Mark-to-
Market
Adjustments (68,077) (69,146) (54,148) (35,826) (11,015)
---------- ---------- ---------- ---------- -----------
Core Equity $417,325$403,887$391,580$382,104$353,429
Common Shares
Outstanding
at Period End 16,604,910 16,277,285 15,886,421 15,624,012 14,624,647
Reported
Equity (Book
Value) per
Common Share $27.64$27.43$26.39$25.05$23.11
Core Equity
per Common
Share $23.54$23.18$22.98$22.76$22.35
Net Premium /
(Discount)
Balance $(33,319) $(9,662) $(446) $(9,147) $(9,095)
Average Total
Assets $7,553,726$6,158,898$4,234,477$3,158,751$2,564,847
Average
Earning
Assets $7,393,566$6,042,042$4,131,870$3,080,165$2,498,565
Average
Interest
Bearing
Liabilities $7,036,183$5,680,238$3,781,717$2,752,215$2,211,927
Average Total
Reported
Equity
(Common and
Preferred) $489,086$450,464$432,310$385,887$341,766REDWOOD TRUST, INC.
(All dollars in thousands)
LEVERAGE 31-Mar 31-Dec 30-Sep 30-Jun 31-Mar
RATIOS (1) 2003 2002 2002 2002 2002
-------------- ---------- ---------- ---------- ---------- ----------
Total Report
Assets $8,172,063$7,007,772$5,674,302$3,689,782$2,739,838
Less: Non-
Recourse
Assets (7,210,944)(6,435,025)(4,394,493)(2,266,849)(1,252,881)
---------- ---------- ---------- ---------- ----------
Recourse
Assets $961,119$572,747$1,279,809$1,422,933$1,486,957
Total Reported
Debt $7,646,408$6,496,734$5,199,362$3,246,603$2,356,972
Less: Non-
Recourse Debt (7,170,691)(6,397,020)(4,365,281)(2,241,600)(1,234,459)
---------- ---------- ---------- ---------- ----------
Recourse Debt $475,717$99,714$834,081$1,005,003$1,122,513
Reported Debt
to Reported
Equity 15.8 13.7 11.7 7.8 6.5
Reported
Equity/Total
Reported
Assets 6% 7% 8% 11% 13%
Recourse Debt
to Reported
Equity 1.0 0.2 1.9 2.4 3.1
Reported
Equity/Recourse
Assets 51% 83% 35% 29% 25%
(1) The majority of our debt is non-recourse debt. Holders of
non-recourse debt can look only to the pledged assets -- and not to
Redwood -- for repayment. Therefore, management believes that another
useful measure of the leverage we employ is to compute leverage ratios
comparing our equity base to our recourse debt (reported debt less
non-recourse debt) and to our recourse assets (our assets for which we
are "at-risk", i.e., excluding those assets pledged to non-recourse
debt).
REDWOOD TRUST, INC.
(All dollars in thousands, except per share data)
First Fourth Third Second First
Residential Quarter Quarter Quarter Quarter Quarter
Real Estate 2003 2002 2002 2002 2002
Loans ----------- ---------- ---------- ---------- ----------
--------------
Start of
Period
Balances $6,215,179$4,761,893$2,803,556$1,794,260$1,474,862
Acquisitions 1,338,920 1,616,400 2,075,296 1,146,621 417,276
Sales Proceeds (73,137) 0 (2,960) (46,683) 0
Principal
Paydowns (152,768) (155,915) (109,896) (89,582) (95,924)
Net
Amortization
Expense (6,156) (5,754) (3,502) (1,060) (1,672)
Net Charge
Offs
(Recoveries) 31 0 236 0 0
Credit
Provisions (1,756) (1,660) (894) (472) (282)
Mark-to-Market
- Balance Sheet 0 0 0 0 0
Mark-to-Market
- Income Statement 726 215 57 472 0
-------------- ----------- ---------- ---------- ---------- ----------
End of Period
Balances $7,321,039$6,215,179$4,761,893$2,803,556$1,794,260
Average
Amortized
Cost During
Period $6,625,540$5,318,910$3,262,462$2,201,384$1,544,924
Yield 2.55% 2.80% 3.00% 3.56% 3.66%
Principal
Value of
Loans $7,297,515$6,190,674$4,736,646$2,795,628$1,790,239
Credit Reserve (9,996) (8,271) (6,611) (5,953) (5,481)
Net Premium
(Discount) to
be Amortized 33,520 32,776 31,858 13,881 9,502
Market
Valuation
Adjustments 0 0 0 0 0
-------------- ----------- ---------- ---------- ---------- ----------
Residential
Real Estate
Loans $7,321,039$6,215,179$4,761,893$2,803,556$1,794,260
Credit
Reserve,
Start of
Period $8,271$6,611$5,953$5,481$5,199
Net Charge-
Offs (NCO) (31) 0 (236) 0 0
Credit
Provisions 1,756 1,660 894 472 282
-------------- ----------- ---------- ---------- ---------- ----------
Credit
Reserve, End
of Period $9,996$8,271$6,611$5,953$5,481
Delinquencies
(90 days + FC
+ BK + REO) $1,159$4,127$1,387$3,257$4,926
Delinquencies
as % of
Residential
Loans 0.02% 0.07% 0.03% 0.12% 0.27%
NCO as % of
Residential
Loans
(annualized) 0.01% 0.00% 0.01% 0.00% 0.00%
Reserve as %
of Residential
Loans 0.14% 0.13% 0.14% 0.21% 0.31%
Reserve as %
of Delinquencies 862% 200% 477% 183% 111%
REDWOOD TRUST, INC.
(All dollars in thousands, except per share data)
First Fourth Third
Quarter Quarter Quarter
2003 2002 2002
------------- ----------- ----------
Residential Loan Credit-
Enhancement Securities
----------------------------
Start of Period Balances $352,479$324,130$284,759
Acquisitions 37,077 13,442 28,983
Sales Proceeds 0 0 0
Principal Paydowns (23,212) (13,573) (9,437)
Net Amortization Income 5,545 3,275 2,722
Mark-to-Market - Balance
Sheet 998 25,205 17,351
Mark-to-Market - Income
Statement 275 0 (248)
---------------------------- ------------- ----------- ----------
End of Period Balances $373,162$352,479$324,130
Average Amortized Cost
During Period $278,339$271,016$257,844
Yield 19.68% 16.65% 16.20%
Principal Value of Redwood's
Securities $614,111$559,186$542,669
Redwood's Credit Reserve (234,060) (224,891) (220,735)
Net Premium (Discount) to be
Amortized (84,648) (58,578) (49,360)
---------------------------- ------------- ----------- ----------
Net Investment in Credit-
Enhancement Securities $295,403$275,717$272,574
Market Valuation Adjustments 77,759 76,762 51,556
---------------------------- ------------- ----------- ----------
Residential Loan Credit-
Enhancement Securities $373,162$352,479$324,130
Securities Senior to
Redwood's Interests $60,072,291$58,036,745$67,876,543
Principal Value of Redwood's
Credit-Enhancement
Securities 614,111 559,186 542,669
Securities Junior to
Redwood's Interests 61,814 63,179 64,147
---------------------------- ------------- ----------- ----------
Underlying Mortgage Loan
Balances $60,748,216$58,659,110$68,483,359
Redwood's Credit Reserve $234,060$224,891$220,735
Securities Junior to
Redwood's Interests 61,814 63,179 64,147
---------------------------- ------------- ----------- ----------
Redwood's Total Credit
Protection $295,874$288,070$284,882
Delinquencies (90 days + FC
+ BK + REO) $161,498$146,226$151,507
Redwood's Net Charge-Offs $(684) $(214) $(47)
Losses to Securities Junior
to Redwood's Interests (456) (163) (103)
---------------------------- ------------- ----------- ----------
Total Underlying Loan Credit
Losses $(1,140) $(377) $(150)
Delinquencies as % of
Underlying Loans 0.27% 0.25% 0.22%
Total Pool Credit
Losses/Underlying Loans
(Annualized) 0.01% 0.01% 0.01%
Total Credit Protection as %
of Underlying Loans 0.49% 0.49% 0.42%
Total Credit Protection as %
of Delinquencies 183% 197% 188%
Second First
Quarter Quarter
2002 2002
------------ ------------
Residential Loan Credit-Enhancement
Securities
-------------------------------------------
Start of Period Balances $249,832$190,813
Acquisitions 25,849 59,157
Sales Proceeds (898) (5,037)
Principal Paydowns (15,801) (4,270)
Net Amortization Income 1,767 366
Mark-to-Market - Balance Sheet 21,795 8,758
Mark-to-Market - Income Statement 2,215 45
------------------------------------------- ------------ ------------
End of Period Balances $284,759$249,832
Average Amortized Cost During Period $238,282$201,540
Yield 15.12% 13.29%
Principal Value of Redwood's Securities $492,642$460,035
Redwood's Credit Reserve (206,343) (194,556)
Net Premium (Discount) to be Amortized (35,745) (28,058)
------------------------------------------- ------------ ------------
Net Investment in Credit-Enhancement
Securities $250,554$237,421
Market Valuation Adjustments 34,205 12,411
------------------------------------------- ------------ ------------
Residential Loan Credit-Enhancement
Securities $284,759$249,832
Securities Senior to Redwood's Interests $65,503,415$64,286,646
Principal Value of Redwood's
Credit-Enhancement Securities 492,642 460,035
Securities Junior to Redwood's Interests 65,102 79,924
------------------------------------------- ------------ ------------
Underlying Mortgage Loan Balances $66,061,159$64,826,605
Redwood's Credit Reserve $206,343$194,556
Securities Junior to Redwood's Interests 65,102 79,924
------------------------------------------- ------------ ------------
Redwood's Total Credit Protection $271,445$274,480
Delinquencies (90 days + FC + BK + REO) $149,960$129,849
Redwood's Net Charge-Offs $74$166
Losses to Securities Junior to Redwood's
Interests (189) (618)
------------------------------------------- ------------ ------------
Total Underlying Loan Credit Losses $(115) $(452)
Delinquencies as % of Underlying Loans 0.23% 0.20%
Total Pool Credit Losses/Underlying Loans
(Annualized) 0.01% 0.01%
Total Credit Protection as % of Underlying
Loans 0.41% 0.42%
Total Credit Protection as % of
Delinquencies 181% 211%
REDWOOD TRUST, INC.
(All dollars in thousands, except per share data)
First Fourth Third
COMBINED RESIDENTIAL LOAN Quarter Quarter Quarter
PORTFOLIOS 2003 2002 2002
---------------------------- ---------------- ----------- ------------
Residential Real Estate
Loans Owned $7,321,039$6,215,179$4,761,893
Residential Loans Credit-
Enhanced 60,748,216 58,659,110 68,483,359
---------------------------- ---------------- ----------- ------------
Total Residential Loans $68,069,255$64,874,289$73,245,252
Credit Reserve on
Residential Real Estate
Loans Owned $9,996$8,271$6,611
Internal Credit Reserve on
Loans Credit-Enhanced 234,060 224,891 220,735
---------------------------- ---------------- ----------- ------------
Redwood's Total Residential
Credit Reserve $244,056$233,162$227,346
External Credit Enhancement
on Loans Credit-Enhanced 61,814 63,179 64,147
---------------------------- ---------------- ----------- ------------
Redwood's Total Credit
Protection $305,870$296,341$291,493
Total Credit Protection as %
of Total Residential Loans 0.45% 0.46% 0.40%
Residential Real Estate
Loans Owned Delinquencies $1,159$4,127$1,387
Residential Loans Credit-
Enhanced Delinquencies 161,498 146,226 151,507
---------------------------- ---------------- ----------- ------------
Total Residential Loan
Delinquencies $162,657$150,353$152,894
Delinquencies as % of Total
Residential Loans 0.24% 0.23% 0.21%
Total Credit Protection as %
of Delinquencies 188% 197% 191%
Net Charge-Offs on
Residential Real Estate
Loans Owned $(31) $0 $(236)
Net Charge-Offs on
Residential Loan Credit-
Enhanced (684) (214) (47)
---------------------------- ---------------- ----------- ------------
Redwood's Shares of Net
Credit (Losses) Recoveries $(715) $(214) $(283)
Credit Losses to External
Credit Enhancement (456) (163) (103)
---------------------------- ---------------- ----------- ------------
Total Credit Losses $(1,171) $(377) $(386)
Total Credit Losses as % of
Total Residential Loans 0.01% 0.01% 0.01%
Second First
Quarter Quarter
COMBINED RESIDENTIAL LOAN PORTFOLIOS 2002 2002
--------------------------------------------- ----------- ------------
Residential Real Estate Loans Owned $2,803,556$1,794,260
Residential Loans Credit-Enhanced 66,061,159 64,826,605
--------------------------------------------- ----------- ------------
Total Residential Loans $68,864,715$66,620,865
Credit Reserve on Residential Real Estate
Loans Owned $5,953$5,481
Internal Credit Reserve on Loans Credit-
Enhanced 206,343 194,556
--------------------------------------------- ----------- ------------
Redwood's Total Residential Credit Reserve $212,296$200,037
External Credit Enhancement on Loans Credit-
Enhanced 65,102 79,924
--------------------------------------------- ----------- ------------
Redwood's Total Credit Protection $277,398$279,961
Total Credit Protection as % of Total
Residential Loans 0.40% 0.42%
Residential Real Estate Loans Owned
Delinquencies $3,257$4,926
Residential Loans Credit-Enhanced
Delinquencies 149,960 129,849
--------------------------------------------- ----------- ------------
Total Residential Loan Delinquencies $153,217$134,775
Delinquencies as % of Total Residential Loans 0.22% 0.20%
Total Credit Protection as % of Delinquencies 181% 208%
Net Charge-Offs on Residential Real Estate
Loans Owned $0$0
Net Charge-Offs on Residential Loan Credit-
Enhanced 74 166
--------------------------------------------- ----------- ------------
Redwood's Shares of Net Credit (Losses)
Recoveries $74$166
Credit Losses to External Credit Enhancement (189) (618)
--------------------------------------------- ----------- ------------
Total Credit Losses $(115) $(452)
Total Credit Losses as % of Total Residential
Loans 0.01% 0.01%
REDWOOD TRUST, INC.
(All dollars in thousands, except per share data)
First Fourth Third Second First
Commercial Real Estate Quarter Quarter Quarter Quarter Quarter
Loans 2003 2002 2002 2002 2002
------------------------ -------- -------- -------- -------- ---------
Start of Period Balances $29,270$50,664$49,798$49,380$51,084
Acquisitions 2,011 0 919 470 140
Sales Proceeds 0 0 0 0 0
Principal Paydowns (68) (21,068) (54) (53) (1,873)
Net Amortization Income 0 24 0 0 28
Mark-to-Market
- Balance Sheet 0 0 0 0 0
Mark-to-Market
- Income Statement 1 (350) 1 1 1
------------------------ -------- -------- -------- -------- ---------
End of Period Balances $31,214$29,270$50,664$49,798$49,380
Average Amortized Cost
During Period $30,889$47,935$50,102$49,369$50,170
Yield 10.57% 10.15% 9.99% 10.22% 10.12%
Principal Value of Loans $32,223$30,250$51,318$50,436$50,057
Net Premium (Discount)
to be Amortized (1,009) (980) (654) (638) (677)
Market Valuation
Adjustments 0 0 0 0 0
------------------------ -------- -------- -------- -------- ---------
Commercial Mortgage
Loans $31,214$29,270$50,664$49,798$49,380
Commercial Mortgage
Delinquencies $650$650$0$0$0
Commercial Mortgage Net
Charge-Offs $0$0$0$0$0
Commercial Mortgage
Credit Provisions $0$0$0$0$0
Commercial Mortgage
Credit Reserves $0$0$0$0$0
First Fourth Third Second First
Quarter Quarter Quarter Quarter Quarter
Securities Portfolio 2003 2002 2002 2002 2002
------------------------ -------- -------- -------- -------- ---------
Start of Period Balances $335,697$491,756$512,489$609,432$683,482
Acquisitions 42,955 196,279 6,811 23,026 76,701
Sales Proceeds 0 (315,308) 0 (56,802) (89,395)
Principal Paydowns (11,329) (31,009) (31,830) (65,618) (60,040)
Net Amortization Income
(Expense) 3 (24) (1,051) (1,249) (1,701)
Mark-to-Market -
Balance Sheet (944) (7,128) 970 3,017 (444)
Mark-to-Market - Income
Statement (75) 1,131 4,367 683 829
------------------------ -------- -------- -------- -------- ---------
End of Period Balances $366,307$335,697$491,756$512,489$609,432
Average Amortized Cost
During Period $360,084$320,154$493,997$529,843$676,692
Yield 4.66% 4.93% 4.63% 4.70% 5.03%
Principal Value of
Securities $370,187$335,402$477,950$502,684$601,926
Net Premium (Discount)
to be Amortized 1,597 4,828 11,214 8,183 8,901
Market Valuation
Adjustments (5,477) (4,533) 2,592 1,622 (1,395)
------------------------ -------- -------- -------- -------- ---------
Securities Portfolio $366,307$335,697$491,756$512,489$609,432 CONTACT: Redwood Trust, Inc.
Doug Hansen/George Bull, 415/389-7373
SOURCE: Redwood Trust, Inc.