MILL VALLEY, Calif.--(BUSINESS WIRE)--Nov. 15, 2004--Redwood
Trust, Inc. (NYSE:RWT), a financial institution that invests in,
credit-enhances, and securitizes residential and commercial real
estate loans and securities, today announced the declaration of a
regular dividend and a special dividend for the fourth quarter of
2004.
Regular Dividend
Redwood's Board of Directors authorized the payment of a fourth
quarter regular cash dividend of $0.67 per share, payable on January
21, 2005 to stockholders of record on December 31, 2004.
"For 2005, our Board of Directors has indicated that it intends to
authorize an increase in Redwood's regular dividend rate to $0.70 per
share per quarter," said George Bull, Redwood's Chairman and CEO.
"Sustaining our regular dividend rate over time is our primary
financial goal."
Special Dividend
Redwood's Board of Directors also authorized payment of a special
cash dividend of $5.50 per share, payable on December 10, 2004 to
stockholders of record on November 30, 2004.
Bull commented, "As I said last year, management is proud to
deliver a special dividend to stockholders. The continuation of an
exceptional housing market has made a special dividend of this size
possible. While the payment of a special dividend could recur, it
should not be relied upon going forward. I am saying this once again
for a reason. It is important to understand that Redwood's regular
dividend rate is meant to give an indication to stockholders of the
level of dividend distribution that management and the Board believe
Redwood can reasonably support in the future. The special dividend
that we are paying to our stockholders at this time reflects better
than anticipated returns on our investments over the last few years."
Bull concluded, "I believe all businesses are cyclical, including
ours, and this special dividend reflects the benefits of a very strong
cycle."
Harold Zagunis, Redwood's CFO, said, "The November 2004 special
dividend represents the distribution of a portion of the REIT taxable
income we earned in 2004. As we did in prior years, we also intend to
defer until 2005 the distribution of a portion of this year's REIT
taxable income. We currently expect that the amount we will defer will
equal two to three quarters of dividends at our 2005 regular dividend
rate. We also intend to retain approximately 10% of the ordinary REIT
taxable income we earned during 2004 and to retain income we earned at
our taxable subsidiaries. Retaining earnings helps to build book value
per share, and should help to support long-term earnings and dividend
growth. We currently expect that our November 2004 special dividend
will be the only special dividend we will need to declare in order to
meet our REIT distribution requirements for 2004 income."
"We expect to designate a portion of our dividends declared during
2004 as a distribution of long-term capital gain income earned by
Redwood during 2004," Zagunis continued. "Many of our tax-paying
stockholders should benefit to the extent that they can take advantage
of the lower tax rate on long-term capital gain distributions. We will
distribute information on the composition of our 2004 dividends prior
to January 31, 2005."
Form 10-Q Filing
Redwood filed its Form 10-Q for the third quarter of 2004 on
November 15, 2004. The auditors completed their review of the quarter,
and there were no changes to third quarter results as released last
week.
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. Among the terms indicating forward-looking statements
are words such as "may," "should," "believe," "intend" or "expect."
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 2003 Annual Report on Form 10-K and September 2004
Prospectus Supplement (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.
CONTACT: Redwood Trust, Inc.
Harold Zagunis, 415-389-7373
Nicole Klock, 415-389-7373
SOURCE: Redwood Trust, Inc.