MILL VALLEY --  Real estate investment trust Redwood Trust Inc. (NYSE: RWT) today reported its fourth-quarter estimated taxable loss was $6 million, or  per share, compared with $35 million such loss a year before and a $9 million such loss in the third quarter.

Estimated taxable losses per share were 7 cents in the fourth quarter, 44 cents at the end of 2009 and 11 cents in the third quarter.

Fourth-quarter net income was $15 million, or 18 cents per fully diluted share. That was a 62.5 percent decrease from $40 million, or 51 cents a share, a year before and a 25 percent decrease from $20 million, or 25 cents per share in the third quarter.

"As we look back, we realize we have come a long way over the past year," wrote Martin Hughes, president and chief executive officer, and Brett Nicholas, chief investment and operating officer, in the company's quarterly financial results commentary. "There is a real sense of momentum in our residential and commercial businesses, even though progress in 2010 was slower than we would have liked."

As of Dec. 31, GAAP book value was $13.63 per share, an increase of 61 cents per share from Sept. 30. Management's estimate of non-GAAP economic value was $14.31 per share, an increase of 58 cents per share from September 30, 2010.

During the fourth quarter of 2010, Redwood acquired $195 million of residential mortgage loans, originated $30 million of commercial loans and acquired $26 million of residential securities.

By year-end, cash and cash equivalents totaled $47 million, down from $189 million in September. The company said that big drop in cash shouldn't worry investors.

"In recent years, our quarter-end cash balance was a relatively good proxy for the amount of excess capital we had available to invest since we were only using cash to fund long-term investments," wrote Mr. Hughes and Mr. Nicholas. "More recently, we are using cash, along with short-term borrowings, to fund the accumulation of residential loans, on a temporary basis, prior to securitization. As a consequence, our cash balance now and going forward will reveal little about the capital we have available for long-term investments."

The price of the company's stock at the end of trading Thursday was $16.41, a 30 cent decrease, or 1.8 percent, below the closing price Wednesday.