Marin County’s Redwood Trust reports $582M loss for 2020

MILL VALLEY — Redwood Trust Inc. (NYSE: RWT) on Wednesday reported fourth-quarter profit of $54 million.

On a per-share basis, the Mill Valley-based specialty housing finance company said it had profit of 42 cents. Earnings, adjusted for non-recurring gains, came to 26 cents per share.

The specialty finance company posted revenue of $122 million in the period, down from $192 million a year before. Its adjusted revenue was $24 million, falling short of Wall Street forecasts. Three analysts surveyed by Zacks expected $29.7 million.

For the year, the company reported a loss of $582 million, or $5.12 per share, swinging to a loss from $169 million in earnings for 2019. Net interest income was reported as $124 million for the year, down from $142 million for 2019.

"We entered 2021 in a renewed position of strength, achieving another quarter of record lock volumes in residential lending and strong volumes and contribution from business purpose lending. Overall credit performance in our investment portfolio has strengthened as delinquencies have continued to decrease since their peak in the summer and strong home price appreciation has kept actual credit losses low," said Chris Abate, CEO of Redwood Trust, in a news release. "Demand for single-family detached housing has grown significantly, further validating our core investment thesis. Looking ahead, our strategic priorities include allocating ample capital into our operating platforms, doubling down on our technology investments to scale our business and continuing to support and develop our team members. With two of the largest and most highly regarded issuance platforms in the private label securitization market, we're positioned to generate durable margins and attractive assets that we expect will result in high-quality earnings. Factoring all this in,it gives us great confidence that we can safely support a stable to growing dividend in 2021."

Redwood Trust shares have risen 10% since the beginning of the year. In the final minutes of trading on Wednesday, shares hit $9.70, a fall of 45% in the last 12 months.