Q2 2025 Redwood Review July 30, 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, and mortgage banking volumes, current target annualized non-GAAP EAD returns on equity, current target returns related to capital deployment opportunities, estimates of upside and potential earnings in our Redwo ...

[Redwood Trust Q2 2025 Earnings Release](index=1&type=section&id=Redwood%20Trust%20Q2%202025%20Earnings%20Release) [Executive Summary & Strategic Update](index=1&type=section&id=Executive%20Summary%20%26%20Strategic%20Update) The company is accelerating its transition to a scalable, fee-driven operating model by reallocating capital from legacy investments to core platforms - The company is accelerating its shift to a scalable business model focused on growing and durable fee streams by reallocating capital from legacy investments to high-performing platforms[3](index=3&type=chunk) - Dispositions will focus on unsecuritized bridge loans and other non-core assets, now categorized under a new 'Legacy Investments' reporting segment[4](index=4&type=chunk) - The strategic shift is expected to generate up to **$200-$250 million of incremental capital** by the end of 2025 for redeployment into core operations[4](index=4&type=chunk) - The common stock repurchase authorization has been increased to **$150 million**, with plans to expand repurchase activity in Q3 2025[3](index=3&type=chunk)[4](index=4&type=chunk) [Q2 2025 Financial Highlights](index=2&type=section&id=Q2%202025%20Financial%20Highlights) The company reported a GAAP net loss of $(0.76) per share and a book value decrease to $7.49, though core segment earnings remained positive Q2 2025 Key Financial Metrics | ($ in millions, except per share data) | 6/30/2025 | 3/31/2025 | | :--- | :--- | :--- | | **Book Value per Common Share** | $7.49 | $8.39 | | **Economic Return on Book Value** | (8.6)% | 1.3% | | **Net (Loss) Income per Basic Common Share** | $(0.76) | $0.10 | | **Non-GAAP Core Segments EAD per Basic Common Share** | $0.18 | $0.20 | | **Dividends per Common Share** | $0.18 | $0.18 | - The GAAP net loss of **$(100.2) million** was primarily driven by fair value adjustments and resolutions within the newly formed Legacy Investments segment[8](index=8&type=chunk)[17](index=17&type=chunk) - The company reported Non-GAAP Core Segments Earnings Available for Distribution ("Core Segments EAD") of **$25.0 million**, or **$0.18 per share**, showcasing the performance of its ongoing business operations[8](index=8&type=chunk) - Unrestricted cash and cash equivalents stood at **$302 million** at the end of the quarter[8](index=8&type=chunk) [Segment Performance](index=3&type=section&id=Segment%20Performance) Core Segments generated strong net income, which was offset by a significant loss in the new Legacy Investments segment due to asset dispositions GAAP Segment Net (Loss) Income Summary ($ in millions) | Segment | Q2 2025 (6/30/2025) | Q1 2025 (3/31/2025) | | :--- | :--- | :--- | | **Total Core Segments** | **$40.2** | **$53.8** | | Sequoia Mortgage Banking | $22.2 | $25.8 | | CoreVest Mortgage Banking | $6.1 | $3.0 | | Redwood Investments | $11.9 | $25.0 | | **Total Legacy Investments Segment** | **$(104.0)** | **$(2.1)** | | **Total Corporate/Other** | **$(36.4)** | **$(37.4)** | | **GAAP Net (Loss) Income** | **$(100.2)** | **$14.3** | [Core Segments Performance](index=3&type=section&id=Core%20Segments%20Performance) Core mortgage banking and investment segments delivered strong results with high returns on equity and increased business volume - **Sequoia Mortgage Banking:** Reported **$22.2 million in net income**, with a **19% annualized GAAP ROE**. On-the-run jumbo lock volume increased 15% from Q1 2025 to its highest level since 2021[13](index=13&type=chunk) - **CoreVest Mortgage Banking:** Reported **$6.1 million in net income**, with a **27% annualized GAAP ROE**. Funded $509 million in loans and distributed a record $583 million[13](index=13&type=chunk) - **Redwood Investments:** Reported **$11.9 million in net income** and deployed ~$100 million of capital into retained operating investments with mid-teens target returns. Recourse leverage remained low at 1.1x[13](index=13&type=chunk) [Legacy Investments Performance](index=4&type=section&id=Legacy%20Investments%20Performance) The new Legacy Investments segment reported a substantial net loss driven by fair value adjustments on assets slated for disposition - This new segment was created in Q2 2025 to house assets in the process of active sale, run-off, or other disposition[17](index=17&type=chunk) - The segment's GAAP net loss of **$(104.0) million** was mainly due to fair value adjustments on legacy bridge loans and other non-core assets[17](index=17&type=chunk) - Capital allocated to Legacy Investments declined by **$107 million (17%)** from Q1 2025, reflecting progress in the wind-down[17](index=17&type=chunk) [Capital and Financing](index=4&type=section&id=Capital%20and%20Financing) Recourse leverage increased to 3.2x due to higher warehouse utilization for mortgage banking growth, while marginable securities repo financing was reduced Recourse Debt and Leverage | Metric | 6/30/2025 | 3/31/2025 | | :--- | :--- | :--- | | Recourse Debt | $3.3 billion | $2.9 billion | | Recourse Leverage Ratio | 3.2x | 2.5x | - The quarter-over-quarter increase in recourse debt and leverage was partially driven by higher warehouse utilization, reflecting continued growth in mortgage banking pipelines[17](index=17&type=chunk) - Marginable securities repo was reduced to **$93 million** from $236 million in the prior quarter, following the sale of third-party assets[17](index=17&type=chunk) [Q3 2025 Highlights to Date](index=4&type=section&id=Q3%202025%20Highlights%20to%20Date) Quarter-to-date, the company has locked or funded $1.6 billion in loans and repurchased 0.8 million shares of common stock - Locked or funded a combined **$1.6 billion** of loans across mortgage banking platforms[17](index=17&type=chunk) - Distributed approximately **$0.7 billion** of loans through various channels[17](index=17&type=chunk) - Repurchased **0.8 million shares** of common stock and increased the total repurchase authorization to **$150 million**[17](index=17&type=chunk) [Financial Statements](index=7&type=section&id=Financial%20Statements) Consolidated statements show a quarterly net loss of $100.2 million, an increase in total assets to $21.3 billion, and a decrease in stockholders' equity [Consolidated Income Statement](index=7&type=section&id=Consolidated%20Income%20Statement) The income statement reflects a net loss of $98.5 million for Q2, driven by lower net interest income and significant investment fair value losses Consolidated Income Statement Highlights ($ in millions) | Line Item | Q2 2025 (6/30/25) | Q1 2025 (3/31/25) | | :--- | :--- | :--- | | Net Interest Income | $13.8 | $27.9 | | Total non-interest income, net | $(51.9) | $45.9 | | *Investment fair value changes, net* | *$(84.7)* | *$(5.2)* | | Net (loss) income | $(98.5) | $16.1 | | Net (loss) income available to common stockholders | $(100.2) | $14.4 | | (Loss) earnings per basic common share | $(0.76) | $0.10 | [Consolidated Balance Sheet](index=8&type=section&id=Consolidated%20Balance%20Sheet) The balance sheet shows asset growth to $21.3 billion, but a larger increase in liabilities led to a reduced book value per share of $7.49 Consolidated Balance Sheet Highlights ($ in millions) | Line Item | 6/30/25 | 3/31/25 | | :--- | :--- | :--- | | Total assets | $21,333 | $19,872 | | Total liabilities | $20,280 | $18,688 | | Stockholders' equity | $1,053 | $1,183 | | GAAP book value per common share | $7.49 | $8.39 | [Non-GAAP Disclosures](index=11&type=section&id=Non-GAAP%20Disclosures) The company introduced a new 'Core Segments EAD' non-GAAP measure to isolate the profitability of its ongoing operations from legacy asset dispositions - The company introduced a new non-GAAP measure, Core Segments EAD, to analyze the combined performance of its mortgage banking platforms and related investments (Sequoia, CoreVest, and Redwood Investments), excluding the Legacy Investments segment[30](index=30&type=chunk)[32](index=32&type=chunk) - Management believes Core Segments EAD helps investors analyze the company's transition to a capital-efficient business model by isolating the performance of core operations from the wind-down of legacy holdings[30](index=30&type=chunk) [Reconciliation of GAAP to non-GAAP Core Segments EAD](index=13&type=section&id=Reconciliation%20of%20GAAP%20to%20non-GAAP%20Core%20Segments%20EAD) Reconciliation adjusts the GAAP net loss of $(100.2) million to a positive Core Segments EAD of $25.0 million by excluding the Legacy segment's results Core Segments EAD Reconciliation ($ in millions) | Description | Q2 2025 (6/30/2025) | | :--- | :--- | | GAAP Net (loss) income available to common stockholders | $(100.2) | | Adjustment to exclude Legacy Investments Segment | $117.4 | | EAD adjustments relating to Core Segments | $7.8 | | **Non-GAAP Core Segments EAD** | **$25.0** | | **Non-GAAP Core Segments EAD per Basic Common Share** | **$0.18** | [Reconciliation of GAAP to non-GAAP EAD](index=14&type=section&id=Reconciliation%20of%20GAAP%20to%20non-GAAP%20EAD) The traditional EAD reconciliation shows a combined positive EAD of $48.0 million from Core Segments, offset by losses from Legacy and Corporate segments Non-GAAP EAD by Segment - Q2 2025 ($ in millions) | Segment | GAAP Net Income (Loss) | Non-GAAP EAD | | :--- | :--- | :--- | | Sequoia Mortgage Banking | $22.2 | $22.2 | | CoreVest Mortgage Banking | $6.1 | $7.7 | | Redwood Investments | $11.9 | $18.1 | | Legacy Investments | $(104.0) | $(31.1) | | Corporate/Other | $(36.4) | $(36.3) | | **Total** | **$(100.2)** | **$(19.4)** |

Core Viewpoint - The market anticipates Redwood Trust (RWT) to report flat earnings of $0.13 per share for the quarter ended June 2025, with revenues expected to rise by 28.8% to $32.59 million compared to the previous year [1][3]. Earnings Expectations - The upcoming earnings report is scheduled for July 30, and the stock price may increase if actual results exceed expectations, while a miss could lead to a decline [2]. - The consensus EPS estimate has been revised down by 26.23% over the last 30 days, indicating a bearish sentiment among analysts [4]. Earnings Surprise Prediction - The Most Accurate Estimate for Redwood Trust is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -55.00%, which suggests a challenging outlook for beating the consensus EPS estimate [12]. - The stock currently holds a Zacks Rank of 4, further complicating the prediction of an earnings beat [12]. Historical Performance - In the last reported quarter, Redwood Trust was expected to earn $0.17 per share but only achieved $0.14, resulting in a surprise of -17.65% [13]. - Over the past four quarters, the company has beaten consensus EPS estimates twice [14]. Conclusion - Redwood Trust does not appear to be a strong candidate for an earnings beat, and investors should consider additional factors before making investment decisions [17].

Company Overview - Redwood Trust, Inc. (NYSE: RWT) is a real estate investment trust (REIT) that specializes in owning mortgages, categorized as a mortgage REIT (mREIT) [1] - The company offers common shares, a high-yielding preferred share (RWT.PR.A), and three baby bonds, two of which have a 9.125% coupon [1] Investment Focus - The company is currently focused on income investing through common shares, preferred shares, or bonds [1] - The investment strategy includes occasional analysis of the broader economy or specific situations involving researched companies [1] Background Information - The company has a background in history/political science and holds a Masters in Business Administration with a specialization in Finance and Economics [1] - The CEO has been investing since 2000 and currently manages an independent living retirement community in Illinois [1]

Group 1 - Redwood Trust Inc (NYSE: RWT) has a business model that allows it to achieve high returns while minimizing balance sheet risks [1] - The stock is currently trading at 0.7 times price-to-book (P/B) ratio, indicating potential undervaluation [1]

PART I — FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Redwood Trust reported Q1 2025 net income of $16.1 million ($0.10 diluted EPS), down from $30.3 million in Q1 2024, with total assets growing to $19.9 billion - The company declared a common dividend of **$0.18 per share** for the first quarter of 2025[18](index=18&type=chunk) Q1 2025 Key Financial Highlights | Financial Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Interest Income | $27.9M | $24.2M | | Net Income | $16.1M | $30.3M | | Diluted EPS | $0.10 | $0.21 | | Total Assets (End of Period) | $19.9B | $15.1B | | Total Liabilities (End of Period) | $18.7B | $13.8B | | Total Equity (End of Period) | $1.18B | $1.22B | [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased by $1.6 billion to $19.9 billion, driven by residential consumer loans, while total liabilities rose by $1.6 billion to $18.7 billion Balance Sheet Comparison (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$19,871,775** | **$18,258,344** | | Residential consumer loans, at fair value | $12,752,258 | $11,077,823 | | Residential investor loans, at fair value | $4,439,834 | $4,587,090 | | Cash and cash equivalents | $259,918 | $245,165 | | **Total Liabilities** | **$18,688,281** | **$17,070,481** | | Asset-backed securities issued, net | $14,458,243 | $13,270,204 | | Debt obligations, net | $3,760,685 | $3,462,880 | | **Total Equity** | **$1,183,494** | **$1,187,863** | [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income) Q1 2025 net income was $16.1 million, down from $30.3 million in Q1 2024, primarily due to a negative swing in investment fair value changes Income Statement Summary (in thousands) | Account | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net Interest Income | $27,942 | $24,210 | | Mortgage banking activities, net | $33,053 | $14,556 | | Investment fair value changes, net | $(5,188) | $21,837 | | Total non-interest income, net | $45,906 | $50,339 | | General and administrative expenses | $(37,471) | $(34,569) | | **Net Income** | **$16,147** | **$30,262** | | **Diluted EPS** | **$0.10** | **$0.21** | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities significantly increased to $1.95 billion in Q1 2025, primarily due to higher held-for-sale loan purchases Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(1,952,505) | $(954,171) | | Net cash provided by investing activities | $658,757 | $350,287 | | Net cash provided by financing activities | $1,327,296 | $575,483 | | **Net increase (decrease) in cash** | **$33,548** | **$(28,401)** | [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail the company's three operating segments, fair value measurements, and management of residential loan portfolios and debt facilities [Note 4. Segment Information](index=12&type=section&id=Note%204.%20Segment%20Information) Sequoia Mortgage Banking and Redwood Investments were key contributors to Q1 2025 net income, offset by a corporate-level net loss Segment Contribution (Net Income/Loss, in thousands) | Segment | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Sequoia Mortgage Banking | $25,817 | $7,019 | | CoreVest Mortgage Banking | $1,338 | $(5,509) | | Redwood Investments | $22,868 | $57,492 | | Corporate/Other | $(33,876) | $(28,740) | | **Total Net Income** | **$16,147** | **$30,262** | [Note 7. Residential Consumer Loans](index=21&type=section&id=Note%207.%20Residential%20Consumer%20Loans) Residential consumer loans increased to $12.8 billion in Q1 2025, driven by $2.3 billion in loan acquisitions Activity of Residential Consumer Loans Held-for-Sale (in thousands) | Activity | Three Months Ended March 31, 2025 | | :--- | :--- | | Principal balance of loans acquired | $2,337,185 | | Principal balance of loans sold | $420,513 | | Principal balance of loans transferred from HFS to HFI | $1,623,900 | - The company had **$2.3 billion** in commitments to fund residential consumer loans as of March 31, 2025, including a **$1 billion** commitment to acquire a pool of seasoned jumbo loans[91](index=91&type=chunk) [Note 8. Residential Investor Loans](index=24&type=section&id=Note%208.%20Residential%20Investor%20Loans) The $4.4 billion residential investor loan portfolio is actively managed for credit risk, with $206 million in modifications and $342 million on non-accrual status - In Q1 2025, the company modified or placed into forbearance residential investor loans with a total unpaid principal balance of **$206 million**[128](index=128&type=chunk) - As of March 31, 2025, residential investor loans with an aggregate unpaid principal balance of **$342 million** were on non-accrual status[134](index=134&type=chunk) - The fair value of residential investor bridge loans declined from **$1.94 billion to $1.88 billion**, reflecting payoffs and negative fair value changes from higher delinquencies on 2021 and 2022 vintage loans[128](index=128&type=chunk) [Note 18. Debt Obligations, Net](index=44&type=section&id=Note%2018.%20Debt%20Obligations%2C%20Net) Total debt obligations increased to $3.76 billion, supported by $5.2 billion in warehouse facilities, with $90 million in new senior notes issued Debt Obligations Summary (in thousands) | Debt Type | Carrying Value (Mar 31, 2025) | Facility Capacity (Mar 31, 2025) | | :--- | :--- | :--- | | Residential consumer loan warehouse facilities | $1,210,265 | $2,875,000 | | Residential investor loan warehouse facilities | $786,891 | $2,330,000 | | Corporate Debt (Convertible, Senior, etc.) | $733,003 | N/A | | **Total Debt Obligations** | **$3,760,685** | | - In January 2025, Redwood issued **$90 million** of 9.125% Senior Notes due in 2030[230](index=230&type=chunk) [Note 19. Commitments and Contingencies](index=46&type=section&id=Note%2019.%20Commitments%20and%20Contingencies) Significant funding commitments include $350 million for bridge loan advances and equity capital commitments to joint ventures - Commitment to fund up to **$350 million** of additional advances on existing residential investor bridge loans[234](index=234&type=chunk) - Committed approximately **$100 million** of equity capital to a joint venture established in Q1 2024, with **$25 million** contributed to date[235](index=235&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=51&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reported strong Sequoia segment performance, a capital-light strategy for CoreVest, and efforts to reduce legacy bridge loans, targeting 9-12% ROE in H2 2025 - Sequoia jumbo lock volumes rose **73%** from the prior quarter to **$4 billion**, the highest quarterly volume since Q3 2021[278](index=278&type=chunk) - CoreVest funded **$482 million** in loans in Q1 2025, a **48% increase year-over-year**, with a strategy to reduce on-balance sheet holdings and distribute through private credit partnerships[280](index=280&type=chunk) - The company is taking steps to accelerate the reduction of its legacy bridge loan portfolio to focus capital on strategic go-forward activities[282](index=282&type=chunk) - Management expects to achieve annualized returns on equity in the **9% to 12% range** in the second half of 2025[275](index=275&type=chunk) [Results of Operations by Segment](index=61&type=section&id=Results%20of%20Operations%20by%20Segment) Q1 2025 segment performance was led by Sequoia's rebound and CoreVest's profitability, while Redwood Investments' contribution declined due to legacy bridge loan losses Segment Contribution Summary (in thousands) | Segment | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Sequoia Mortgage Banking | $25,817 | $21,799 | $7,019 | | CoreVest Mortgage Banking | $1,338 | $1,526 | $(5,509) | | Redwood Investments | $22,868 | $2,761 | $57,492 | [Sequoia Mortgage Banking Segment](index=61&type=section&id=Sequoia%20Mortgage%20Banking%20Segment) Sequoia's contribution surged to $25.8 million in Q1 2025, driven by a 73% sequential increase in loan lock volumes to $4.0 billion - Loan purchase commitments (locks) increased to **$3.3 billion** in Q1 2025, up from **$1.9 billion** in Q4 2024 and **$1.3 billion** in Q1 2024[326](index=326&type=chunk) - Locked a **$1 billion** bulk transaction of seasoned loans from a large bank in Q1 2025[329](index=329&type=chunk) - Gain on sale margin was **123 basis points** in Q1 2025, remaining above the historical target range of 75-100 basis points[332](index=332&type=chunk) [CoreVest Mortgage Banking Segment](index=64&type=section&id=CoreVest%20Mortgage%20Banking%20Segment) CoreVest returned to profitability with a $1.3 million contribution, driven by $481 million in funding volume and a capital-light distribution strategy CoreVest Funding Activity (in thousands) | Activity | Three Months Ended March 31, 2025 | | :--- | :--- | | Fundings (Term & Bridge) | $481,449 | | Sales | $(370,316) | | Transfers between segments | $(105,799) | - Distribution activity was strong in Q1 2025, with **$421 million** distributed through whole loan sales and sales to joint ventures[353](index=353&type=chunk) [Redwood Investments Segment](index=66&type=section&id=Redwood%20Investments%20Segment) Redwood Investments' contribution declined to $22.9 million due to a $34.0 million loss from legacy bridge loans, despite gains from other investment strategies Redwood Investments Earnings by Strategy (in thousands) | Strategy | Q1 2025 Contribution | | :--- | :--- | | Retained Operating Investments | $23,031 | | Third-Party Portfolio Investments | $33,788 | | Legacy Bridge Investments | $(33,951) | | **Total Segment Contribution** | **$22,868** | - 90 day+ delinquencies on residential investor bridge loans were higher in Q1 2025, primarily driven by two sponsor relationships and concentrated in 2021 and 2022 vintages[371](index=371&type=chunk) - The company is actively working to reduce exposure in the legacy bridge loan portfolio, with a **10% payoff rate** (by UPB) during Q1 2025[371](index=371&type=chunk) [Liquidity and Capital Resources](index=74&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with $1.94 billion in total capital and $5.2 billion in warehouse facilities, expecting to repay $124 million in maturing notes Capital and Liquidity Summary (as of March 31, 2025) | Metric | Amount | | :--- | :--- | | Total Capital | $1.94 billion | | Total Equity Capital | $1.18 billion | | Unrestricted Cash & Equivalents | $260 million | | Unencumbered Assets | $291 million | - The company's **5.75% exchangeable senior notes** with an outstanding principal of **$124 million** mature in October 2025 and are expected to be repaid with cash on hand[431](index=431&type=chunk) - At March 31, 2025, **$101 million** remained available under the common stock repurchase authorization[422](index=422&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=78&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes in market risk exposure were reported since December 31, 2024, beyond those discussed in MD&A - No material changes in market risk exposure were reported since the fiscal year ended December 31, 2024[450](index=450&type=chunk) [Controls and Procedures](index=78&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during Q1 2025 - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[452](index=452&type=chunk) - No changes in internal control over financial reporting occurred during Q1 2025 that have materially affected, or are reasonably likely to materially affect, internal controls[453](index=453&type=chunk) PART II — OTHER INFORMATION [Legal Proceedings](index=79&type=section&id=Item%201.%20Legal%20Proceedings) No significant updates to legal proceedings were reported since the Annual Report on Form 10-K - There are no significant updates regarding litigation matters since the last Annual Report[241](index=241&type=chunk)[455](index=455&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=79&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered equity securities were sold or shares repurchased in Q1 2025, with $101 million remaining for common stock repurchases - No shares of common or preferred stock were repurchased during Q1 2025[457](index=457&type=chunk) - As of March 31, 2025, the remaining repurchase authorization was **$101 million** for common stock and **$70 million** for preferred stock[457](index=457&type=chunk)

Core Viewpoint - Redwood Trust (RWT) is positioned as a strong investment opportunity due to its improving earnings outlook and positive analyst sentiment [1][2]. Estimate Revisions - Analysts have shown growing optimism regarding Redwood Trust's earnings prospects, leading to a rising trend in estimate revisions, which typically correlates with stock price movements [2]. - The consensus earnings estimate for the current quarter is $0.20 per share, reflecting a year-over-year increase of +53.85%, with a 9.59% rise in estimates over the last 30 days [4]. - For the full year, the expected earnings are $0.82 per share, indicating a year-over-year change of +57.69%, with a 9.78% increase in consensus estimates over the past month [5]. Zacks Rank - Redwood Trust has achieved a Zacks Rank 1 (Strong Buy), indicating strong potential for outperformance based on the positive estimate revisions [6]. - Historically, stocks with a Zacks Rank 1 have generated an average annual return of +25% since 2008, suggesting a favorable investment environment [3][6]. Stock Performance - Over the past four weeks, Redwood Trust shares have increased by 10.1%, indicating investor confidence in the company's earnings growth prospects [7].

Core Viewpoint - Redwood Trust (RWT) shares have increased by 10.1% in the past four weeks, closing at $5.89, with a potential upside indicated by Wall Street analysts' price targets suggesting a mean estimate of $7.47, representing a 26.8% increase from the current price [1] Price Targets and Analyst Estimates - The mean estimate consists of nine short-term price targets with a standard deviation of $0.73, where the lowest estimate is $6 (1.9% increase) and the highest is $8.50 (44.3% increase) [2] - A low standard deviation indicates a high degree of agreement among analysts regarding the stock's price movement, which can serve as a starting point for further research [9] Earnings Estimates and Market Sentiment - Analysts have shown increasing optimism about RWT's earnings prospects, with a strong consensus in revising EPS estimates higher, which correlates with potential stock price increases [11] - Over the last 30 days, one estimate has increased while there were no negative revisions, leading to a 9.8% increase in the Zacks Consensus Estimate [12] Zacks Rank and Investment Potential - RWT holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate factors, indicating strong potential for upside in the near term [13]

Core Insights - Redwood Trust reported revenue of $27.9 million for Q1 2025, a 16.3% year-over-year increase, but fell short of the Zacks Consensus Estimate of $31.31 million by -10.89% [1] - The company’s EPS for the quarter was $0.14, compared to $0.08 a year ago, but also missed the consensus estimate of $0.17 by -17.65% [1] Financial Performance Metrics - Net interest income was reported at $27.90 million, below the average estimate of $30.09 million from four analysts [4] - Total non-interest income (loss), net, was $45.90 million, exceeding the average estimate of $43.75 million based on four analysts [4] - Non-interest income (loss) from other income, net, was $1.60 million, significantly lower than the average estimate of $7.25 million [4] - Non-interest income (loss) from investment fair value changes, net, was reported at -$5.20 million, compared to the average estimate of $4.13 million from two analysts [4] Stock Performance - Redwood Trust shares have returned +2.8% over the past month, outperforming the Zacks S&P 500 composite, which saw a -0.2% change [3] - The stock currently holds a Zacks Rank 1 (Strong Buy), indicating potential for outperformance in the near term [3]

Core Viewpoint - Redwood Trust reported quarterly earnings of $0.14 per share, missing the Zacks Consensus Estimate of $0.17 per share, but showing an improvement from $0.08 per share a year ago, indicating a -17.65% earnings surprise [1] - The company posted revenues of $27.9 million for the quarter, missing the consensus estimate by 10.89%, compared to $24 million in the same quarter last year [2] Earnings Performance - Over the last four quarters, Redwood Trust has surpassed consensus EPS estimates two times [2] - The company had an earnings surprise of -18.75% in the previous quarter, where it was expected to post earnings of $0.16 per share but delivered $0.13 [1] Stock Performance - Redwood Trust shares have declined approximately 4.8% since the beginning of the year, while the S&P 500 has seen a decline of 5.5% [3] Future Outlook - The company's earnings outlook is crucial for investors, with current consensus EPS estimates for the upcoming quarter at $0.20 on revenues of $30.55 million, and $0.82 on revenues of $126.96 million for the current fiscal year [7] - The estimate revisions trend for Redwood Trust is currently favorable, resulting in a Zacks Rank 1 (Strong Buy) for the stock, suggesting expected outperformance in the near future [6] Industry Context - The REIT and Equity Trust industry, to which Redwood Trust belongs, is currently ranked in the bottom 43% of over 250 Zacks industries, indicating potential challenges ahead [8]