Exhibit 11.1
Redwood Trust, Inc.
Computation of Per Share Earnings
                     
    Three Months   Nine Months
    Ended   Ended
    September 30,   September 30,
    2005   2005
         
Basic:
               
 
Average common shares outstanding
    24,712,536       24,554,475  
             
   
Total
    24,712,536       24,554,475  
             
 
Net Income
  $ 55,899,971     $ 157,376,101  
             
 
Per Share Amount
  $ 2.26     $ 6.41  
             
Diluted:
               
 
Average common shares outstanding
    24,712,536       24,554,475  
 
Net effect of dilutive stock options outstanding during the period — based on the treasury stock method
    601,779       605,144  
             
   
Total
    25,314,315       25,159,619  
             
 
Net Income
  $ 55,899,971     $ 157,376,101  
             
 
Per Share Amount
  $ 2.21     $ 6.26