Exhibit 11
Redwood Trust, Inc.
Computation of Per Share Earnings
| Twelve Months | Twelve Months | Twelve Months | ||||||||||
| Ended | Ended | Ended | ||||||||||
| December 31, 2004 | December 31, 2003 | December 31, 2002 | ||||||||||
Basic: | ||||||||||||
| Average common shares outstanding | 21,437,253 | 17,759,346 | 15,177,449 | |||||||||
| Total | 21,437,253 | 17,759,346 | 15,177,449 | |||||||||
| Net Income | $ | 232,634,946 | $ | 131,698,361 | $ | 53,441,217 | ||||||
| Per Share Amount | $ | 10.85 | $ | 7.42 | $ | 3.52 | ||||||
Diluted: | ||||||||||||
| Average common shares outstanding | 21,437,253 | 17,759,346 | 15,177,449 | |||||||||
| Net effect of dilutive stock options outstanding during the period — based on the treasury stock method | 791,676 | 827,303 | 481,174 | |||||||||
| Net effect of preferred stock | — | 225,517 | — | |||||||||
| Total | 22,228,929 | 18,812,166 | 15,658,623 | |||||||||
| Net Income | $ | 232,634,946 | $ | 131,698,361 | $ | 53,441,217 | ||||||
| Per Share Amount | $ | 10.47 | $ | 7.04 | $ | 3.41 | ||||||
