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Core Insights - Redwood Trust reported a revenue of $15 million for the quarter ended September 2025, reflecting a decline of 41.2% year-over-year and falling short of the Zacks Consensus Estimate of $30.01 million by 50.02% [1] - The company's EPS was $0.20, an increase from $0.18 in the same quarter last year, resulting in a positive EPS surprise of 25% against the consensus estimate of $0.16 [1] Financial Performance Metrics - Net interest income was reported at $15 million, significantly below the three-analyst average estimate of $29.98 million [4] - Non-interest income from Sequoia mortgage banking activities was $28.7 million, exceeding the average estimate of $25.02 million [4] - Total non-interest income was $39.4 million, which was lower than the average estimate of $51.23 million [4] - Non-interest income from mortgage banking activities was $40.1 million, slightly above the estimated $38.76 million [4] - HEI income netted $0.5 million, falling short of the average estimate of $5.37 million [4] - CoreVest mortgage banking activities generated $11.4 million, below the average estimate of $13.75 million [4] Stock Performance - Over the past month, Redwood Trust shares have returned -3.3%, contrasting with the Zacks S&P 500 composite's increase of +3.8% [3] - The stock currently holds a Zacks Rank 2 (Buy), suggesting potential for outperformance in the near term [3]

Redwood Trust (RWT) came out with quarterly earnings of $0.2 per share, beating the Zacks Consensus Estimate of $0.16 per share. This compares to earnings of $0.18 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of +25.00%. A quarter ago, it was expected that this specialty finance company would post earnings of $0.19 per share when it actually produced earnings of $0.18, delivering a surprise of -5.26%.Over the last four quarter ...

Redwood Trust (NYSE:RWT) Q3 2025 Earnings Call October 29, 2025 05:00 PM ET Company ParticipantsEric Hagen - Managing DirectorDash Robinson - PresidentChris Abate - CEODon Fandetti - Managing DirectorKaitlyn Mauritz - Head of Investor RelationsBrooke Carillo - CFOBose George - Managing DirectorConference Call ParticipantsRick Shane - Research Division AnalystSteve Delaney - Managing Director and Senior Equity AnalystDoug Harter - Equity Research AnalystOperatorGood afternoon and welcome to the Redwood Trust ...

Redwood Trust (NYSE:RWT) Q3 2025 Earnings Call October 29, 2025 05:00 PM ET Company ParticipantsEric Hagen - Managing DirectorDash Robinson - PresidentChris Abate - CEODon Fandetti - Managing DirectorKaitlyn Mauritz - Head of Investor RelationsBrooke Carillo - CFOBose George - Managing DirectorConference Call ParticipantsRick Shane - Research Division AnalystSteve Delaney - Managing Director and Senior Equity AnalystDoug Harter - Equity Research AnalystOperatorGood afternoon and welcome to the Redwood Trust ...

Financial Data and Key Metrics Changes - The company reported a GAAP net loss of $9.5 million or $0.08 per share for Q3 2025, a significant improvement from a loss of $100 million or $0.76 per share in Q2 2025 [17] - Book value per common share decreased to $7.35 at September 30 from $7.49 at June 30, with an economic return on book value of 0.5% [17][20] - Core segment earnings available for distribution (EAD) was $27 million or $0.20 per share, representing a 17% return on equity [18] Business Line Data and Key Metrics Changes - Sequoia locked $5.1 billion of loans in Q3, a 53% increase from Q2, marking a record for the platform [10] - Aspire locked $1.2 billion in loans, nearly four times the volume from Q2, with a record month of $550 million in September [12] - Corvus achieved its highest quarterly volume since mid-2022, with funding volume of $521 million, up 14% year over year [19] Market Data and Key Metrics Changes - The company estimates its seller network now covers approximately 80% of market share for jumbo production, up from 20% to 30% as recently as 2023 [10] - The estimated jumbo market share increased to 7%, up from 1% to 2% over the same period [10] - The residential mortgage market benefits from more rigorous underwriting standards and enhanced transparency compared to previous cycles [8] Company Strategy and Development Direction - The company is transitioning to a more scalable and simplified operating model, aiming to reduce legacy exposure from 33% to 20% by year-end [4] - The partnership with CPP Investments has been expanded, increasing the corporate-secured borrowing facility to $400 million from $250 million [6] - The focus is on capturing market share in a subdued housing market, with optimism for strong growth in the housing finance sector in the coming year [9] Management Comments on Operating Environment and Future Outlook - Management noted ongoing pressure in certain consumer asset-backed sectors but emphasized the strength of the current residential mortgage market [8] - The company is optimistic about the housing finance sector resuming strong growth due to declining mortgage rates and potential monetary easing [9] - The management highlighted the importance of AI-driven infrastructure to enhance operational efficiency and risk management [6] Other Important Information - The company significantly reduced its capital allocated to legacy investments, now representing approximately 25% of total capital [16] - Total operating expenses decreased by 3% from the previous quarter, driven by lower portfolio management costs [20] - The company has maintained mortgage banking segment ROEs above 20% for five consecutive quarters [18] Q&A Session Summary Question: Long-term earnings power and legacy assets - Management indicated that as legacy assets are rolled off, consolidated earnings will align more closely with current core EAD of $0.20, with redeployment of freed capital into mortgage banking segments expected to generate greater than 20% ROEs [25][26] Question: ROE on Redwood Investments - The decline in ROE for Redwood Investments was attributed to lower net interest income from the investment portfolio, with a shift in capital towards mortgage banking contributing to improved performance [27] Question: Capital allocation across core businesses - Management stated that capital freed up from legacy investments will be quickly deployed into mortgage banking, with significant growth opportunities in Sequoia and Aspire [30][31] Question: ROE expansion factors - The expansion in ROE is attributed to capital efficiency, improved operating efficiency, and synergies between Aspire and Sequoia [33][34] Question: Corporate expenses and maximizing ROE - Management emphasized the importance of operating leverage and productivity, stating that scaling the business is more critical than reducing infrastructure costs [37][38] Question: Growth of Aspire non-QM market - Management sees significant organic growth potential in the Aspire market, driven by an increasing number of consumers with non-traditional income and greater awareness among originators [41][42] Question: Credit performance in the BPL portfolio - Management noted that delinquencies in the securitized bridge portfolio are below 3%, with efficient resolution of delinquencies contributing to stability [55][56]

Q3 2025 Redwood Review October 29, 2025 R E D W O O D T R U S T . C O M Cautionary Statement; Forward-Looking Statements This presentation contains forward-looking statements, including statements regarding our 2025 forward outlook and strategic priorities, key drivers to increase earnings, book value, mortgage banking volumes, and target capital allocations between our Core and Legacy Investments Segments. Forward-looking statements involve numerous risks and uncertainties. Our actual results may differ fr ...

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Exhibit 99.1 "The third quarter was extremely productive at Redwood," said Christopher Abate, Chief Executive Officer. "We achieved record mortgage banking production of nearly $7 billion, underscoring the strength of our operating model and ability to significantly grow market share. We meaningfully reduced legacy portfolio holdings as we reposition our balance sheet for increased transaction activity as rates begin to fall. Together, these accomplishments demonstrate strong momentum and our continued focu ...