Redwood Trust, Inc. Announces the Public Offering of 1,500,000 Shares of Common Stock

Business Wire, July 24, 1997

MILL VALLEY, Calif.--(BUSINESS WIRE)--July 24, 1997--Redwood Trust, Inc. (NASDAQ:RWTI) today announced the public offering of 1,500,000 shares of common stock at an offering price of $45.00 per share.

Upon the close of this stock offering, the Company's equity base will total approximately $370 million.

The offering was managed by Montgomery Securities and Furman Selz LLC and is scheduled to close on July 30, 1997. A written prospectus supplement prepared in connection with this offering may be obtained by calling the Company at 415/389-7373 or by writing Frederick H. Borden, Secretary, Redwood Trust, Inc., 591 Redwood Highway, Suite No. 3100, Mill Valley, CA 94941.

The Company's Universal Shelf Prospectus was declared effective on July 22, 1997. In connection with the Securities and Exchange Commission review of that registration statement, on July 18, 1997 the Company filed a form 10-K/A for the year ended December 31, 1996 amending the MD&A and financial statements. These changes did not alter reported earnings, earnings per share, total assets, total liabilities or total shareholders' equity.

This release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sales of these securities in any state in which such offer, solicitation or sales would be unlawful prior to registration or qualification under the securities laws of any such state.

Redwood Trust, Inc. acquires and manages real estate mortgage assets throughout the United States, with an emphasis on high quality mortgages on single-family residential properties. Its mortgage asset acquisitions are financed by a combination of equity and proceeds from borrowings. The Company's principal source of earnings is net interest income, or interest income generated from its mortgage assets less the cost of borrowed funds and hedging.

The Company is a real estate investment trust (REIT). Prior to this offering, the Company had outstanding 13,309,124 shares of common stock (NASDAQ National Market, Symbol "RWTI"), 236,297 warrants (Symbol "RWTIW") and 909,518 shares of Class B Cumulative Convertible Preferred Stock (Symbol "RWTIP").

CONTACT: Redwood Trust, Inc.

Doug Hansen/George Bull, 415/389-7373