Redwood Trust Reports Third Quarter 2025 Financial Results; Record Production Volumes Advance Transition to Core Operating Model
MILL VALLEY, Calif.--( BUSINESS WIRE)--Redwood Trust, Inc. (NYSE:RWT; "Redwood", the "Company"), a leader in expanding access to housing for homebuyers and renters, today reported its financial results for the quarter ended September 30, 2025.
Mortgage Banking Platforms Continue to Profitably Scale
Executed on Capital Management Initiatives
Key Financial Results and Metrics
“The third quarter was extremely productive at Redwood,” said Christopher Abate, Chief Executive Officer. “We achieved record mortgage banking production of nearly $7 billion, underscoring the strength of our operating model and ability to significantly grow market share. We meaningfully reduced legacy portfolio holdings as we reposition our balance sheet for increased transaction activity as rates begin to fall. Together, these accomplishments demonstrate strong momentum and our continued focus on delivering returns for shareholders.”
($ in millions, except per share data)
Three Months Ended
9/30/2025
6/30/2025
Financial Performance
Book Value per Common Share
$
7.35
$
7.49
Economic Return on Book Value (2)
0.5
%
(8.6
)%
Net (Loss) Income per Basic Common Share
$
(0.08
)
$
(0.76
)
Non-GAAP Core Segments EAD per Basic Common Share (3)
$
0.20
$
0.18
Dividends per Common Share
$
0.18
$
0.18
Q3 2025 Segment Highlights
GAAP Segment Net (Loss) Income Results Summary
($ in millions)
Three Months Ended
9/30/2025
6/30/2025
Core Segments:
Sequoia Mortgage Banking
$
34.3
$
22.2
CoreVest Mortgage Banking
3.5
6.1
Redwood Investments
10.3
11.9
Total Core Segments
$
48.2
$
40.2
Total Legacy Investments Segment
$
(22.2
)
$
(104.0
)
Total Corporate/Other
$
(35.4
)
$
(36.4
)
GAAP Net (Loss) Income
$
(9.5
)
$
(100.2
)
Sequoia Mortgage Banking
CoreVest Mortgage Banking
Redwood Investments (8)
Legacy Investments (9)
Capital and Financing
____________________
Third Quarter 2025 Redwood Review and Supplemental Tables Available Online
A further discussion of Redwood's business and financial results is included in the third quarter 2025 Shareholder Letter and Redwood Review which are available under "Financial Info" within the Investor Relations section of the Company’s website at redwoodtrust.com/investor-relations. Additional supplemental financial tables can also be found within this section of the Company's website.
Conference Call and Webcast
Redwood will host an earnings call today, October 29, 2025, at 5:00 p.m. Eastern Time / 2:00 p.m. Pacific Time to discuss its third quarter 2025 financial results. The number to dial in order to listen to the conference call is 1-877-423-9813 in the U.S. and Canada. International callers must dial 1-201-689-8573. A replay of the call will be available through midnight on Wednesday, November 12, 2025, and can be accessed by dialing 1-844-512-2921 in the U.S. and Canada or 1-412-317-6671 internationally and entering access code #13755968.
The conference call will be webcast live in listen-only mode through the News & Events section of Redwood’s Investor Relations website at https://www.redwoodtrust.com/investor-relations/news-events/events. To listen to the webcast, please go to Redwood's website at least 15 minutes before the call to register and to download and install any audio software needed. An audio replay of the call will also be available on Redwood's website following the call. Redwood plans to file its Quarterly Report on Form 10-Q with the Securities and Exchange Commission by Monday, November 10, 2025, and also make it available on Redwood’s website.
REDWOOD TRUST, INC.
Consolidated Income Statements (1)
Three Months Ended
($ in millions, except share and per share data)
9/30/25
6/30/25
Net Interest Income from:
Sequoia mortgage banking
$
21.2
$
15.5
CoreVest mortgage banking
1.5
1.8
Redwood investments
17.6
22.1
Legacy investments
(9.1
)
(9.4
)
Corporate/other
(16.3
)
(16.2
)
Net Interest Income
$
15.0
$
13.8
Non-interest income
Sequoia mortgage banking activities, net
28.7
24.4
CoreVest mortgage banking activities, net
11.4
16.5
Investment fair value changes, net
(7.0
)
(84.7
)
HEI income (loss), net
0.5
(12.9
)
Servicing income, net
1.4
1.6
Fee income, net
4.6
2.2
Other (loss) income, net
(0.2
)
0.4
Realized gains, net
—
0.6
Total non-interest income (loss), net
$
39.4
$
(51.9
)
General and administrative expenses
(38.7
)
(37.0
)
Portfolio management costs
(7.0
)
(10.0
)
Loan acquisition costs
(4.4
)
(4.8
)
Other expenses
(5.7
)
(4.0
)
(Provision for) income taxes
(6.4
)
(4.6
)
Net (loss) income
$
(7.7
)
$
(98.5
)
Dividends on preferred stock
(1.8
)
(1.8
)
Net (loss) income (related) available to common stockholders
$
(9.5
)
$
(100.2
)
Weighted average basic common shares (thousands)
129,018
133,006
Weighted average diluted common shares (thousands) (2)
129,018
133,006
(Loss) earnings per basic common share
$
(0.08
)
$
(0.76
)
(Loss) earnings per diluted common share
$
(0.08
)
$
(0.76
)
Regular dividends declared per common share
$
0.18
$
0.18
(1)
Certain totals may not foot due to rounding.
(2)
Actual shares outstanding (in thousands) at September 30, 2025 and June 30, 2025 were 126,753 and 131,680, respectively.
REDWOOD TRUST, INC.
Consolidated Balance Sheets (1)
($ in millions, except share and per share data)
9/30/25
6/30/25
Residential consumer loans
$
16,783
$
14,202
Residential investor loans
3,858
4,339
Consolidated agency multifamily loans
—
423
Real estate securities
419
265
Home equity investments (HEI)
326
588
Servicing investments
282
298
Strategic investments
82
78
Cash and cash equivalents
226
302
Other assets
624
838
Total assets
$
22,601
$
21,333
Asset-backed securities issued, net
$
16,825
$
15,985
Debt obligations, net
4,357
3,745
Other liabilities
420
549
Total liabilities
$
21,602
$
20,279
Stockholders' equity
999
1,053
Total liabilities and equity
$
22,601
$
21,333
Common shares outstanding at period end (thousands)
126,753
131,680
GAAP book value per common share
$
7.35
$
7.49
Certain totals may not foot due to rounding.
Segment Financial Information (1)
Three Months Ended September 30, 2025
(In Millions)
Sequoia
Mortgage
Banking
CoreVest
Mortgage
Banking
Redwood
Investments
Legacy
Investments
Corporate/
Other
Total
Interest income
$
47.9
$
4.1
$
225.5
$
21.5
$
0.6
$
299.5
Interest expense
(26.7
)
(2.6
)
(207.9
)
(30.5
)
(16.9
)
(284.5
)
Net interest income (expense)
21.2
1.5
17.6
(9.1
)
(16.3
)
15.0
Non-interest income (loss)
Mortgage banking activities, net
28.7
11.4
—
—
—
40.1
Investment fair value changes, net
—
—
(1.7
)
(6.7
)
1.5
(7.0
)
HEI income, net
—
—
0.7
(0.3
)
—
0.5
Servicing Income, net
—
—
1.4
—
—
1.4
Fee Income, net
—
5.2
0.3
(0.9
)
—
4.6
Other income, net
—
(0.9
)
0.4
(0.5
)
0.9
(0.2
)
Realized gains, net
—
—
—
—
—
—
Total non-interest income (loss), net
28.7
15.7
1.1
(8.5
)
2.3
39.4
General and administrative expenses
(7.8
)
(10.0
)
(1.6
)
—
(19.3
)
(38.7
)
Portfolio management costs
—
—
(3.5
)
(3.4
)
—
(7.0
)
Loan acquisition costs
(2.4
)
(1.8
)
—
(0.2
)
—
(4.4
)
Other expenses
—
(2.0
)
(3.2
)
(0.5
)
—
(5.7
)
Provision for income taxes
(5.5
)
—
—
(0.6
)
(0.3
)
(6.4
)
Net Income (Loss) (2)
$
34.3
$
3.5
$
10.3
$
(22.2
)
$
(33.6
)
$
(7.7
)
Total Assets
$
2,659.3
$
393.8
$
16,906.8
$
2,305.2
$
335.8
$
22,600.8
Certain totals may not foot due to rounding.
Net Income (Loss) by segment is also referred to as Segment Net Income (Loss).
Segment Financial Information (continued) (1)
Three Months Ended June 30, 2025
(In Millions)
Sequoia
Mortgage
Banking
CoreVest
Mortgage
Banking
Redwood
Investments
Legacy
Investments
Corporate/
Other
Total
Interest income
$
37.0
$
3.7
$
219.7
$
23.4
$
0.4
$
284.3
Interest expense
(21.5
)
(1.9
)
(197.6
)
(32.9
)
(16.6
)
(270.5
)
Net interest income (expense)
15.5
1.8
22.1
(9.4
)
(16.2
)
13.8
Non-interest income (loss)
Mortgage banking activities, net
24.4
16.5
—
—
—
40.9
Investment fair value changes, net
—
—
(9.0
)
(75.6
)
(0.1
)
(84.7
)
HEI income, net
—
—
0.1
(13.0
)
—
(12.9
)
Servicing Income, net
—
—
1.6
—
—
1.6
Fee Income, net
—
2.8
0.4
(1.0
)
—
2.2
Other income, net
—
0.7
0.4
—
(0.8
)
0.3
Realized gains, net
—
—
0.6
—
—
0.6
Total non-interest income (loss), net
24.4
20.0
(5.8
)
(89.6
)
(0.9
)
(51.9
)
General and administrative expenses
(7.2
)
(10.2
)
(1.5
)
(0.1
)
(18.0
)
(37.0
)
Portfolio management costs
—
—
(2.6
)
(7.4
)
—
(10.0
)
Loan acquisition costs
(1.3
)
(3.5
)
—
—
—
(4.8
)
Other expenses
—
(2.2
)
(1.8
)
—
—
(4.0
)
(Provision for) benefit from income taxes
(9.3
)
0.3
1.6
2.5
0.3
(4.6
)
Net Income (Loss) (2)
$
22.1
$
6.2
$
11.9
$
(104.0
)
$
(34.7
)
$
(98.5
)
Total Assets
$
1,689.1
$
338.0
$
15,982.4
$
2,917.4
$
406.2
$
21,333.1
(1)
Certain totals may not foot due to rounding.
(2)
Net Income (Loss) by segment is also referred to as Segment Net Income (Loss).
Non-GAAP Disclosures
To supplement consolidated and segment financial information prepared and presented in accordance with U.S. generally accepted accounting principles ("GAAP"), the Company also provides the following non-GAAP measures:
Management believes these non-GAAP measures provide supplemental information to assist management and investors in analyzing the Company’s results of operations and help facilitate comparisons to industry peers. Management also believes that these non-GAAP measures are metrics that can supplement its analysis of the Company’s ability to pay dividends, by providing an indication of the current income generating capacity of the Company's operating platforms as of the quarter being presented. In addition, management believes its non-GAAP Core Segments EAD measure provides supplemental information to assist management and investors in analyzing the Company’s in progress transition to a more scalable and simplified business model, which includes a wind-down of legacy portfolio holdings within its recently-established Legacy Investments segment.
These non-GAAP measures should not be utilized in isolation, nor should they be considered as an alternative to GAAP net income (loss) available (related) to common stockholders, GAAP ROE or other measurements of results of operations computed in accordance with GAAP or for federal income tax purposes.
Core Segments EAD. Core Segments EAD and Core Segments EAD ROE are non-GAAP measures established in the second quarter 2025 and are used to present management’s non-GAAP analysis (based on its non-GAAP Earnings Available for Distribution (“EAD”) measure further described below) of the combined performance the Company’s mortgage banking platforms and related investments (which consist of the Company’s Sequoia Mortgage Banking, CoreVest Mortgage Banking and Redwood Investments segments and are defined as the Company’s “Core Segments”, inclusive of an allocated portion of the Company’s Corporate segment relating to those segments).
A further discussion of Core Segments EAD and a reconciliation of our non-GAAP Core Segments EAD measures to comparable GAAP measures is set forth below under the heading “Reconciliation of GAAP to non-GAAP Core Segments EAD”.
EAD. Earnings Available for Distribution (“EAD”) and EAD ROE are non-GAAP measures that the Company has historically reported and continue to be used to present management’s non-GAAP analysis of the performance of the Company’s different business segments, and that continue to be calculated exclusive of any allocation of the Company’s Corporate segment.
A further discussion of EAD and a reconciliation of our non-GAAP EAD measures to comparable GAAP measures is set forth below under the heading “Reconciliation of GAAP to non-GAAP EAD”.
Supplemental Non-GAAP Table - Illustrating EAD With Allocated Corporate Segment.
Management is also presenting a supplemental non-GAAP table in this section under the heading “Supplemental Table - EAD With Allocated Corporate Segment” to clearly illustrate a key distinction between the methodology for calculating the two non-GAAP measures described above – namely, Core Segments EAD and EAD. That key distinction relates to whether or not the non-GAAP measure allocates the Company’s Corporate segment across its other reporting segments for purposes of calculating the non-GAAP measure of performance. Management believes this supplemental table assists management and investors in comparing the Company’s two distinct non-GAAP measures described above.
Non-GAAP Disclosures (continued)
Reconciliation of GAAP to non-GAAP Core Segments EAD (1)(2)
Three Months Ended
($ in millions, except per share data)
9/30/2025
6/30/25
GAAP Net (loss) income (related) available to common stockholders
$
(9.5
)
$
(100.2
)
Adjustments to exclude Legacy Investments Segment:
GAAP net loss from Legacy Investments Segment
22.2
104.0
Allocation of Corporate Segment relating to Legacy Investments Segment (3)
12.0
13.4
EAD adjustments relating to Core Segments and Corporate Segment:
Investment fair value changes, net (4)
0.2
9.0
Realized (gains)/losses, net (5)
—
(0.6
)
Acquisition related expenses (6)
2.0
2.2
Tax effect of adjustments (7)
—
(2.8
)
Non-GAAP Core Segments EAD
$
27.1
$
25.0
Net (Loss) Income per Basic Common Share (GAAP)
$
(0.08
)
$
(0.76
)
Non-GAAP Core Segments EAD per Basic Common Share (8)
$
0.20
$
0.18
GAAP Return on Equity ("ROE") (annualized)
(3.9
)%
(36.6
)%
Non-GAAP Core Segments EAD Return on Equity (annualized) ("Core Segments EAD ROE") (9)
16.8
%
14.5
%
Non-GAAP Disclosures (continued)
Reconciliation of GAAP to non-GAAP EAD - Third Quarter 2025 (1)(2)
Three Months Ended September 30, 2025
($ in millions)
Sequoia
Mortgage
Banking
CoreVest
Mortgage
Banking
Redwood
Investments
Legacy
Investments
Corporate/
Other
Total
GAAP Net Income (Loss)
$
34.3
$
3.5
$
10.3
$
(22.2
)
$
(35.4
)
$
(9.5
)
EAD Adjustments:
Investment fair value changes, net (3)
—
—
1.7
6.7
(1.5
)
7.0
Realized (gains)/losses, net (4)
—
—
—
—
0.1
0.1
Acquisition related expenses (5)
—
2.0
—
—
—
2.0
Tax effect of adjustments (6)
—
(0.5
)
0.1
0.7
0.4
0.6
Non-GAAP EAD
$
34.3
$
5.0
$
12.2
$
(14.8
)
$
(36.4
)
$
0.2
Capital utilized (average for period)
$
476
$
66
$
466
$
498
$
(543
)
$
964
Return on Equity ("ROE") (annualized)
28.8
%
21.0
%
8.9
%
(17.9
)%
N/A
(3.9
)%
Non-GAAP EAD Return on Equity ("EAD ROE") (annualized) (7)
28.8
%
30.0
%
10.4
%
(11.9
)%
N/A
0.1
%
See footnotes to table on next page
Non-GAAP Disclosures (continued)
Reconciliation of GAAP to non-GAAP EAD - Second Quarter 2025 (1)(2)
Three Months Ended June 30, 2025
($ in millions)
Sequoia
Mortgage
Banking
CoreVest
Mortgage
Banking
Redwood
Investments
Legacy
Investments
Corporate/
Other
Total
GAAP Net Income (Loss)
$
22.2
$
6.1
$
11.9
$
(104.0
)
$
(36.4
)
$
(100.2
)
EAD Adjustments:
Investment fair value changes, net (3)
—
—
9.0
75.6
0.1
84.7
Realized (gains)/losses, net (4)
—
—
(0.6
)
—
—
(0.6
)
Acquisition related expenses (5)
—
2.2
—
—
—
2.2
Tax effect of adjustments (6)
—
(0.6
)
(2.2
)
(2.6
)
—
(5.4
)
Non-GAAP EAD
$
22.2
$
7.7
$
18.1
$
(31.1
)
$
(36.3
)
$
(19.4
)
Capital utilized (average for period)
$
457
$
90
$
441
$
576
$
(469
)
$
1,095
Return on Equity ("ROE") (annualized)
19.4
%
27.2
%
10.8
%
(72.2
)%
N/A
(36.6
)%
Non-GAAP EAD Return on Equity ("EAD ROE") (annualized) (7)
19.4
%
34.2
%
16.4
%
(21.6
)%
N/A
(7.1
)%
Non-GAAP Disclosures (continued)
Supplemental Table - Non-GAAP EAD with Allocated Corporate Segment - Third Quarter 2025 (1)(2)
Three Months Ended September 30, 2025
($ in millions)
Sequoia
Mortgage
Banking
CoreVest
Mortgage
Banking
Redwood
Investments
Total
Core
Segments
Legacy
Investments
Corporate/
Other
Total
GAAP Net Income (Loss)
$
34.3
$
3.5
$
10.3
$
48.1
$
(22.2
)
$
(35.4
)
$
(9.5
)
Adjustment for allocation of Corporate segment (3)
(11.5
)
(1.6
)
(11.3
)
(24.4
)
(12.0
)
36.4
—
Net Income (Loss) After Allocation
$
22.8
$
1.9
$
(1.0
)
$
23.7
$
(34.2
)
$
1.0
$
(9.5
)
EAD Adjustments:
Investment fair value changes, net (4)
—
—
1.7
1.7
6.7
(1.5
)
7.0
Realized (gains)/losses, net (5)
—
—
—
—
—
0.1
0.1
Acquisition related expenses (6)
—
2.0
—
2.0
—
—
2.0
Tax effect of adjustments (7)
—
(0.5
)
0.1
(0.4
)
0.7
0.4
0.6
Non-GAAP EAD with Allocated Corporate Segment
$
22.8
$
3.4
$
0.8
$
27.1
$
(26.8
)
$
—
$
0.2
Capital utilized (average for period)
$
476
$
66
$
466
$
1,008
$
498
$
(543
)
$
964
See footnotes to table on next page
Non-GAAP Disclosures (continued)
Supplemental Table - Non-GAAP EAD with Allocated Corporate Segment - Second Quarter 2025 (1)(2)
Three Months Ended June 30, 2025
($ in millions)
Sequoia
Mortgage
Banking
CoreVest
Mortgage
Banking
Redwood
Investments
Total
Core
Segments
Legacy
Investments
Corporate/
Other
Total
GAAP Net Income (Loss)
$
22.2
$
6.1
$
11.9
$
40.2
$
(104.0
)
$
(36.4
)
$
(100.2
)
Adjustment for allocation of Corporate segment (3)
(10.6
)
(2.1
)
(10.2
)
(22.9
)
(13.4
)
36.3
—
Net Income (Loss) After Allocation
$
11.6
$
4.0
$
1.7
$
17.3
$
(117.4
)
$
(0.1
)
$
(100.2
)
EAD Adjustments:
Investment fair value changes, net (4)
—
—
9.0
9.0
75.6
0.1
84.7
Realized (gains)/losses, net (5)
—
—
(0.6
)
(0.6
)
—
—
(0.6
)
Acquisition related expenses (6)
—
2.2
—
2.2
—
—
2.2
Tax effect of adjustments (7)
—
(0.6
)
(2.2
)
(2.8
)
(2.6
)
—
(5.4
)
Non-GAAP EAD with Allocated Corporate Segment
$
11.6
$
5.6
$
7.9
$
25.1
$
(44.5
)
$
—
$
(19.4
)
Capital utilized (average for period)
$
457
$
90
$
441
$
988
$
576
$
(469
)
$
1,095
About Redwood
Redwood Trust, Inc. (NYSE: RWT) is a specialty finance company focused on several distinct areas of housing credit where we provide liquidity to growing segments of the U.S. housing market not well served by government programs. We deliver customized housing credit investments to a diverse mix of investors, through our best-in-class securitization platforms, whole-loan distribution activities, joint ventures and our publicly traded shares. We operate through three core residential housing-focused operating platforms — Sequoia, Aspire, and CoreVest — alongside our complementary Redwood Investments portfolio which is primarily composed of assets we source through these platforms. In addition, through RWT Horizons®, our venture investing initiative, we invest in early-stage companies that have a direct nexus to our operating platforms. Our goal is to provide attractive returns to shareholders through a stable and growing stream of earnings and dividends, capital appreciation, and a commitment to technological innovation that facilitates risk-minded scale. Redwood Trust is internally managed and structured as a real estate investment trust ("REIT") for tax purposes. For more information about Redwood, please visit our website at www.redwoodtrust.com or connect with us on LinkedIn.
Cautionary Statement; Forward-Looking Statements:
This press release and the related conference call contain forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding the expected timing for the filing of Redwood's Quarterly Report on Form 10-Q. Forward-looking statements involve numerous risks and uncertainties. Redwood's actual results may differ from Redwood's beliefs, expectations, estimates, and projections and, consequently, you should not rely on these forward-looking statements as predictions of future events. Forward-looking statements are not historical in nature and can be identified by words such as “anticipate,” “estimate,” “will,” “should,” “expect,” “believe,” “intend,” “seek,” “plan” and similar expressions or their negative forms, or by references to strategy, plans, opportunities, or intentions. These forward-looking statements are subject to risks and uncertainties, including, among other things, those described in our Annual Report on Form 10-K for the year ended December 31, 2024 under the caption “Risk Factors”. Other risks, uncertainties, and factors that could cause actual results to differ materially from those projected may be described from time to time in reports we file with the Securities and Exchange Commission, including reports on Forms 10-K, 10-Q and 8-K. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.