Redwood Trust Inc (RWT) Q3 2024 Earnings Call Highlights: Strong Mortgage Banking Returns and ...

GuruFocus.com10-31

GAAP Earnings: $13 million or $0.09 per share for Q3 2024. Earnings Available for Distribution (EAD): $25 million or $0.18 per share for Q3 2024. Book Value per Share: Increased slightly to $8.74 from...

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overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nRedwood Trust Inc (RWT) Q3 2024 Earnings Call Highlights: Strong Mortgage Banking Returns and ...\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-10-31 15:19 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://finance.yahoo.com/news/redwood-trust-inc-rwt-q3-071938859.html><strong>GuruFocus.com</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>GAAP Earnings: $13 million or $0.09 per share for Q3 2024.\nEarnings Available for Distribution (EAD): $25 million or $0.18 per share for Q3 2024.\nBook Value per Share: Increased slightly to $8.74 from...</p>\n\n<a href=\"https://finance.yahoo.com/news/redwood-trust-inc-rwt-q3-071938859.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"RWTN","symbol_name":"Redwood Trust Inc","start_time":0,"source_url":"https://finance.yahoo.com/news/redwood-trust-inc-rwt-q3-071938859.html","article_id":"2479722218","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/pRzablUN1q2DiIH9VriWXQ--~B/aD00NDg7dz00NDg7YXBwaWQ9eXRhY2h5b24-/https://media.zenfs.com/en/us.finance.gurufocus/85905df34ef61273b929f2c3ce57a2f4"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2479722218","pubTimestamp":1730359178,"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"GAAP Earnings: $13 million or $0.09 per share for Q3 2024.Earnings Available for Distribution : $25 million or $0.18 per share for Q3 2024.Book Value per Share: Increased slightly to $8.74 from $8.73 as of June 30.Residential Consumer Mortgage Banking Return on Capital: 30% in Q3, up from 16% in Q2.Residential Investor Segment EAD Return on Capital: 58% in Q3, compared to 13% in Q2.Loan Lock Volume: $2.2 billion during Q3, compared to $2.7 billion in Q2.Residential Investor Loan Funding: $458 million during Q3.Net Interest Income: Positively impacted by increased capital allocation towards Sequoia and third-party investment portfolios.Total Recourse Leverage: Increased to 2.5 times in Q3 from 2.1 times in Q2.Total Financing Capacity: $7.7 billion, including $4.8 billion undrawn.Cash Position: Ended the quarter at $254 million.GuruFocus has detected 5 Warning Signs with RWT.Redwood Trust Inc  increased its common dividend for the first time since 2021, reflecting continued growth in ope","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":["earning"],"viewcount":null,"language":"en","relate_stocks":{"RWTN":"Redwood Trust Inc","RWT":"Redwood Trust Inc"},"translate_title":"Redwood Trust Inc(RWT)2024年第三季度收益看涨期权亮点：强劲的抵押贷款银行回报和……","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"RWT":1,"RWTN":1},"content_text":"GAAP Earnings: $13 million or $0.09 per share for Q3 2024.\nEarnings Available for Distribution (EAD): $25 million or $0.18 per share for Q3 2024.\nBook Value per Share: Increased slightly to $8.74 from $8.73 as of June 30.\nResidential Consumer Mortgage Banking Return on Capital: 30% in Q3, up from 16% in Q2.\nResidential Investor Segment EAD Return on Capital: 58% in Q3, compared to 13% in Q2.\nLoan Lock Volume: $2.2 billion during Q3, compared to $2.7 billion in Q2.\nSequoia Securitizations: $1.5 billion completed during Q3.\nResidential Investor Loan Funding: $458 million during Q3.\nNet Interest Income: Positively impacted by increased capital allocation towards Sequoia and third-party investment portfolios.\nTotal Recourse Leverage: Increased to 2.5 times in Q3 from 2.1 times in Q2.\nTotal Financing Capacity: $7.7 billion, including $4.8 billion undrawn.\nCash Position: Ended the quarter at $254 million.\n\n\nWarning! GuruFocus has detected 5 Warning Signs with RWT.\n High Yield Dividend Stocks in Gurus' Portfolio\nThis Powerful Chart Made Peter Lynch 29% A Year For 13 Years\nHow to calculate the intrinsic value of a stock?\n\nRelease Date: October 30, 2024\nFor the complete transcript of the earnings call, please refer to the full earnings call transcript.\n Positive Points \n\nRedwood Trust Inc (NYSE:RWT) increased its common dividend for the first time since 2021, reflecting continued growth in operating activities.\nThe company's mortgage banking returns were the highest in over three years, driven by strong margins and expanded distribution channels.\nRedwood Trust Inc (NYSE:RWT) maintained a flat book value despite rate volatility, showcasing effective hedging and distribution strategies.\nThe company reported a significant increase in earnings available for distribution, reaching $25 million, up from $19 million in the prior quarter.\nRedwood Trust Inc (NYSE:RWT) has a diversified loan sourcing strategy, locking loans with over 160 discrete originators, ensuring no single seller represents more than 7% of total flow volume.\n\n Negative Points \n\nThe company's GAAP earnings slightly decreased to $13 million from $14 million in the prior quarter.\nLock volumes decreased from $2.7 billion in the second quarter to $2.2 billion in the third quarter, reflecting market conditions.\nInterest rate volatility remains a concern, with rates nearly 70 basis points higher than their September lows.\nDelinquencies in the bridge loan portfolio increased by approximately 1% from the second quarter.\nThe company's net interest income was negatively impacted by a reduction in the weighted average accrual rate of the bridge loan portfolio.\n\n Q & A Highlights \nQ: Can you elaborate on the net discount on the portfolio and its implications? A: Dashiell Robinson, President, explained that the discount is spread across several principal classes, with the majority in the reperforming loan portfolio, which continues to perform strongly. Christopher Abate, CEO, added that a significant portion of the discount is due to spread widening since the Fed's tightening began, and they are optimistic about recovery as the easing cycle begins.\nQ: How did the mortgage banking gains break down this quarter, and what are the expectations for future earnings? A: Brooke Carillo, CFO, noted that about half of the mortgage banking revenue was driven by rates, with the rest evenly split between spread tightening and gain on sale and carry. They expect margins to normalize to historical ranges, but are optimistic about the current quarter's start.\nQ: How has the recent rate increase affected book value and earnings available for distribution (EAD)? A: Christopher Abate, CEO, stated that book value remained flat despite rate increases, highlighting effective hedging and distribution management. They expect EAD to continue its momentum, although Q3 margins were elevated due to one-time items.\nQ: What are the current thoughts on the dividend, and how does the company plan to sustain it? A: Christopher Abate, CEO, expressed satisfaction with the recent dividend increase and emphasized the importance of a growing dividend. Brooke Carillo, CFO, added that they expect GAAP earnings to meet or exceed EAD over the next cycle, providing room for future dividend growth.\nQ: What are the expectations for loan limit increases from the GSEs, and how might this impact Redwood Trust? A: Christopher Abate, CEO, mentioned that the increases are largely priced in and not as significant as in previous years. However, they are well-positioned with competitive pricing and a strong product mix to capitalize on any opportunities that arise.\nFor the complete transcript of the earnings call, please refer to the full earnings call transcript.This article first appeared on \nGuruFocus.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2479722218"}