Redwood Trust(RWT) - 2024 Q2 - Quarterly Results

Financial Performance - GAAP net income available to common stockholders was $13.8 million, or $0.10 per basic and diluted common share[2] - The company reported a net income of $15.5 million in Q2 2024, a decrease from $30.3 million in Q1 2024[1] - GAAP net income available to common stockholders for the three months ended June 30, 2024, was $13.8 million, compared to $28.5 million for the three months ended March 31, 2024[24] - Non-GAAP Earnings Available for Distribution ("EAD") was $18.6 million, or $0.13 per basic common share[2] - Non-GAAP Earnings Available for Distribution (EAD) was $18.6 million for the three months ended June 30, 2024, up from $11.0 million for the three months ended March 31, 2024[24] - EAD per basic common share increased to $0.13 for the three months ended June 30, 2024, compared to $0.08 for the three months ended March 31, 2024[24] - GAAP Return on Common Equity (annualized) was 4.8% for the three months ended June 30, 2024, down from 10.0% for the three months ended March 31, 2024[24] - EAD Return on Common Equity (non-GAAP, annualized) improved to 6.5% for the three months ended June 30, 2024, compared to 3.9% for the three months ended March 31, 2024[24] Loan Activity - Locked $2.7 billion of loans in Q2 2024, a 49% increase from $1.8 billion in Q1 2024[2] - Funded $459 million of loans in Q2 2024, a 41% increase from $326 million in Q1 2024[3] - Distributed $1.4 billion of jumbo loans through three securitizations in Q2 2024[2] - Residential loans increased to $9,210.2 million in Q2 2024, up from $7,616.6 million in Q1 2024, indicating strong demand in the mortgage market[22] Financial Position - GAAP book value per common share was $8.73 at June 30, 2024, down from $8.78 at March 31, 2024[2] - Total assets reached $16,491.1 million as of June 30, 2024, compared to $15,058.0 million at the end of Q1 2024, reflecting a significant growth in residential loans[22] - Unrestricted cash and cash equivalents were $276 million at June 30, 2024[4] - Total excess warehouse financing capacity was $3.8 billion at June 30, 2024[4] - Secured recourse leverage ratio was 0.6x at June 30, 2024, down from 0.9x at March 31, 2024[3] Income Sources - Income from Residential Consumer Mortgage Banking rose by 49% quarter over quarter, contributing to an increase in overall mortgage banking income[18] - Income from Residential Investor Mortgage Banking increased by 41% quarter over quarter, benefiting from improved distribution economics[18] Expenses and Adjustments - General and administrative expenses decreased by 20% compared to Q1 2024, primarily due to lower fixed employee compensation[19] - Acquisition-related expenses amounted to $2.2 million for the three months ended June 30, 2024, slightly down from $2.8 million for the three months ended March 31, 2024[24] - Organizational restructuring charges were not reported for the three months ended June 30, 2024, but were $2.8 million for the three months ended March 31, 2024[24] - The tax effect of adjustments for the three months ended June 30, 2024, was $3.7 million, compared to a tax effect of $(0.8) million for the three months ended March 31, 2024[24] Other Financial Metrics - Investment fair value changes, net, resulted in a loss of $1.1 million for the three months ended June 30, 2024, compared to a loss of $21.8 million for the three months ended March 31, 2024[24] - Declared and paid a regular quarterly dividend of $0.16 per common share[2] - The weighted average diluted common shares outstanding increased to 132,124 thousand in Q2 2024 from 131,570 thousand in Q1 2024[1] - HEI income, net increased in Q2 2024, supported by improved home price appreciation trends[19] Reporting Changes - The company has made changes to its calculation of EAD and consolidated income statements to enhance clarity and comparability with industry peers[24]