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North Bay Business Journal

Monday, May 20, 2013, 5:55 am

Earnings quadruple at Hennessy Advisors

Also: Redwood Trust calls quarter strongest since recession

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    Fueled by an acquisition that significantly increased its assets under management, Hennessy Advisors, Inc. (OTCBB: HNNA) announced a 400 percent increase in second-quarter earnings on a per-share basis.

    Those earnings were equivalent to 20 cents per share, compared with 4 cents per a year before. Net income for the quarter was $1.1 million, up more than 350 percent. Total revenue of $5.9 million represented an annual increase of more than 250 percent.

    After completing its acquisition of fund assets under FBR & Co. in October of last year, assets under management at Hennessy Advisors have increased by 258 percent and were $3.4 billion at the end of the quarter.

    The investment management firm’s board of directors announced a quarterly dividend of 3-and-one-eigth cents per share, payable on June 17 to shareholders of record as of May 24. The company noted that its stock price at the close of trading on May 8, $6.43 per share, made for a 1.9 percent annualized yield.

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    Redwood Trust, Inc. (NYSE: RWT) announced net income of $61 million for the first quarter of 2013, equivalent to 69 cents per diluted share and up 45.2 percent versus earnings in the first three months of last year.

    Calling those earnings its strongest in the post-recession economy, the real estate investment and lending firm credited its earnings on the resale of purchased residential and commercial loans for helping to fuel that increase.

    The company noted several highlights for the quarter, including four residential loan securitizations totaling $2.2 billion. The company identified $3.1 billion in residential loans for purchase during the quarter, up from $2.1 billion identified in the prior quarter.

    Net interest income for the first quarter was $35 million, up from $4 million in the prior quarter. Revenue from mortgage banking was $44 million, up from $24 million in the prior quarter. Revenue from real estate investment trust activity was $16 million, compared to $10 million in the first quarter of 2012.

    Redwood Trust had total assets of $4.8 billion at the end of the quarter, up from $4.4 billion in the prior quarter and down from $5.4 one year prior. The company issued a 28 cent dividend to common shareholders for the quarter, compared to 25 cents in each quarter in the year prior.

    Submit items for this column to Staff Writer Eric Gneckow at 707-521-4259 or eric.gneckow@busjrnl.com.

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