Redwood Trust posted lower profits for the first quarter of 2016 as a result of falling interest income and the impact of lower interest rates.
The Mill Valley, Calif.-based real estate investment trust reported net income of $12 million, 20% lower than a year ago.
When accounting for mark-to-market changes on the fair value of loans, securities and derivatives due to lower interest rates and restructuring costs, Redwood's adjusted earnings expand to $37 million. Adjusted earnings per share of 35 cents beat the average estimate of Bloomberg analysts by eight cents.
Net interest income dropped 5% year-over-year to $38 million.
Non-interest income was $4 million versus a $5 million loss during the first quarter of 2015. Higher earnings from mortgage banking activities and mortgage servicing rights combined to offset the loss associated with the investment fair value changes.
