Redwood Trust (RWT) 10-Q 2001 Q3 Quarterly report

Exhibit 11.1

Redwood Trust, Inc.
Statement Re: Computation of Per Share Earnings

			Three Months		Nine Months
			Ended		Ended
			September 30, 2001		September 30, 2001
Basic:
	Average common shares outstanding			10,392,820		9,379,286
		Total		10,392,820		9,379,286
	Net Income		$	8,064,694	$	21,207,893
	Per Share Amount		$	0.78	$	2.26
Diluted:
	Average common shares outstanding			10,392,820		9,379,286
	Net effect of dilutive stock options outstanding during the period — based on the treasury stock method			359,242		286,850
		Total		10,752,062		9,666,136
	Net Income		$	8,064,694	$	21,207,893
	Per Share Amount		$	0.75	$	2.19