Redwood Trust Inc. reported growth in profits in the fourth quarter, largely as a result of higher realized gains on the sales of residential securities.
The Mill Valley, Calif.-based company posted net income of $41 million, a 51.8% jump from the fourth quarter of 2014.
Redwood sold $130 million in residential securities in the fourth quarter, which produced realized gains of $20 million and $123 million of capital that it could reinvest after repaying the associated debt, the company noted in its quarterly "
The realized gains on these residential securities sales joined with increases in mortgage servicing rights and other income to outweigh a $4 million loss from mortgage banking and investment activities. During the same period a year ago, those activities had contributed $15 million in profits.
Net interest income after the provision for loan losses increased 10%, to $44 million. The company's total assets dropped to $6.23 billion from $6.27 billion in the linked quarter, on reductions in residential loans, commercial loans, and cash and cash equivalents.
Redwood also detailed its ongoing share repurchase efforts. The company reported repurchasing $53.4 million in shares during the fourth quarter. That left the company with approximately $11 million in remaining share repurchases based on its authorization, which the company said it had substantially fulfilled in the first quarter thus far.
The company's board of directors approved an additional authorization for the repurchase of up to $100 million in stock and the repurchase of all outstanding debt securities in February. The new authorization has no expiration date.
