Redwood Trust Stock Earnings Reports

Redwood reported a third consecutive record operating quarter with mortgage banking volume of $8.5 billion and earnings available for distribution (EAD) of $0.21 per share, covering the dividend. Key growth drivers were strong Sequoia performance (record $6.5 billion locks), continued scaling of Aspire (Q1 locks $1.6 billion, ~4% market share with plans to double H2), and progress at CoreVest (product mix shifts and joint-venture monetization with CPP). Operational efficiency improvements—driven in part by AI and automation—lowered cost per loan (Sequoia to ~18 bps) and improved capital turnover (volume ~10x GAAP book value; capital required per dollar of volume down ~10% Q/Q). Management announced a major Sequoia capital partnership with Castlelake (~$8 billion of purchasing power) and said an Aspire JV is forthcoming; the announced Sequoia JV is expected to be capital-efficient and potentially add about $0.12–$0.15 of incremental annual earnings per share as it scales. Legacy assets continue to be wound down (legacy capital 15% of total at 3/31, target well below 10% by year-end and <5% by end of year), which should reduce the drag on consolidated EAD. Financials: GAAP net loss of $7 million (book value $7.12/share, down ~3% Q/Q due to noncash marks and one-offs); Core segments EAD $0.28/share (19% ROE); liquidity strong ($202M unrestricted cash, ~$3.9B excess warehouse capacity). Management highlighted favorable potential policy/regulatory tailwinds from Basel III Endgame and emphasized partnerships with institutional capital to scale without needing to raise equivalent equity capital.