Marin County loan investor Redwood Trust first-half earnings rise 7.5%

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Mill-Valley based Redwood Trust Inc. (NYSE: RWT) reported a 6% dip in earnings in its second quarter 2019 income compared with the first quarter of the year.

The investor in residential property loans and a credit source for them reported $31 million in quarterly net income, down from $54 million in the first quarter and $33 million at midyear 2018. But half-year earnings, at $86 million, were 7.5% ahead of that pace last year.

“GAAP earnings per share declined in the second quarter, as we experienced a reduced benefit to investment fair value changes from spread tightening and lower realized gains from sales of available-for-sale securities,” the company wrote in a report released along with the financial results.

The company noted in its press release about the results that it deployed $136 million of capital into new investments in the second quarter and over $100 million in July.

“During the second quarter we demonstrated the strength and agility of our business model by delivering solid earnings on strong mortgage banking results and continuing our portfolio optimization activities,” CEO Chris Abate said in the announcement.

The company also talked about diversification efforts. Its 5 Arches business segment, which it completed purchasing earlier this year, originated $175 million in business-purpose mortgage loans. That company had been mainly a funder of fix-and-flip investments as well as long-term or bridge financing for single-family or under-100-unit properties

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