Redwood Trust . 9.125% Seni Stock Earnings Reports

Redwood reported a strong Q1 2026 operating quarter with record mortgage banking volume of $8.5 billion and consolidated non-GAAP earnings available for distribution (EAD) of $27 million ($0.21/share), which covered the dividend. Key growth drivers were Sequoia (record $6.5 billion locks, improved cost per loan to ~18 bps, gain-on-sale margins ~96 bps) and Aspire (growing flow, inaugural securitization, ~4% market share in Q1 with plans to double). CoreVest is repositioning toward smaller-balance RTL/DSCR products and pursuing profitability in 2026 after modest restructuring charges. Management highlighted operational efficiencies from AI (2,500 agentic workflows in Q1) and high capital turnover (volume ~10x GAAP book value), enabling scaling without commensurate capital raises. Strategic financing developments included an $~8 billion Sequoia capital partnership with Castlelake and an anticipated Aspire JV to add third‑party capital; Brooke Carillo guided potential incremental annual EPS contribution of roughly $0.12–$0.15 from the Sequoia JV as it scales. Legacy investments are being wound down (legacy capital ~15% at 3/31, targeted <10% by year-end and <5% by year-end to free capital), reducing the legacy drag on EAD. Liquidity remains solid ($202 million unrestricted cash, ~ $3.9 billion excess warehouse capacity, no unsecured maturities in next five quarters). Management sees potential regulatory tailwinds from the reproposed Basel III Endgame but cautioned about macro volatility (Middle East conflict) and spread dynamics. Overall message: strong operating momentum, improving capital efficiency, significant third‑party capital partnerships to scale production, and a path to improved ROE as legacy assets are redeployed.