Redwood Trust, Inc. · NYSE:RWT
Redwood Trust — Q3 2025 Earnings Presentation
42 slides from Redwood Trust's earnings presentation, Oct 29, 2025
Slide 1: Q3 2025 Redwood Review
Q3 2025 Redwood Review October 29, 2025 REDWOODTRUST.COM
Slide 2: Cautionary Statement; Forward-Looking Statements
Cautionary Statement; Forward-Looking Statements This presentation contains forward-looking statements, These forward-looking statements are subject to risks and including statements regarding our 2025 forward outlook uncertainties, including, among other things, those described and strategic priori
Slide 3: Redwood Trust – Business Overview
Redwood Trust – Business Overview For Banks & Lenders We support lower rates by purchasing mortgages from lenders, allowing them to recycle Our Core Segments their capital and make new loans Operating Platforms For Institutional Investors We distribute customized mortgage and other housing Jumbo Alt
Slide 4: Redwood Has a Long Track Record of Providing Liquidity to the Housing Market
Redwood Has a Long Track Record of Providing Liquidity to the Housing Market 30+ $2.5bn ~370% Year Track Record Cumulative Dividends Total Shareholder Publicly Traded (NYSE: RWT) Since Inception Return Since Inception #1 177 $135bn Non-Bank Distributor of Securitizations Across Loans Originated / Lo
Slide 5: Redwood is the Leading Private Sector Alternative to the Government Agencies Focused on Conventional Loans
Redwood is the Leading Private Sector Alternative to the Government Agencies Focused on Conventional Loans Government Agencies Similarities ▪ Transparent underwriting and credit guidelines ▪ Does not originate or service loans to homeowners ▪ Not a depository institution ▪ Mission-driven focus on ho
Slide 6: Third Quarter 2025 Key Accomplishments
Third Quarter 2025 Key Accomplishments Profitably Grew Core Reduced Disciplined Segments Legacy Portfolio(1) Capital Management in Capital Incremental Delivered Non-GAAP 22% Allocated to $150 17% Core Segments EAD ROE* Reduction Legacy mm Funding Capacity(1) Investments Produced Capital Unlocked $6.
Slide 7: Our Consumer Platforms are Growing Faster than the Market
Our Consumer Platforms are Growing Faster than the Market Redwood Trust vs. Industry Volume Growth(1) Quarter Over Quarter Change Year Over Year Change 183% 75% 58% 44% 20% (1)% Sequoia & Aspire All Mortgages (Industry) Jumbo & Non-QM (Industry) Detailed Endnotes are included at the end of this pres
Slide 8: Accelerated Shift Towards Operating Model with Wind-Down of Legacy Portfolio Holdings
Accelerated Shift Towards Operating Model with Wind-Down of Legacy Portfolio Holdings Developments Since Q2’25(1) Growing Capital Allocation to Core Segments 0% - 5% Capital Allocated to 20% 28% 25% 25% Legacy Investments, down 39% 33% from 33% at June 30, 2025 Dispositions of 95% - 100% of Legacy A
Slide 9: Ongoing Balance Sheet Management
Ongoing Balance Sheet Management Recourse Debt Focused on Supporting Mortgage Activity Since Q2’25(1) Banking Growth ▪ Recourse leverage increased modestly, Recourse Debt Composition(1) attributable to record volumes in mortgage 3.8x Q2’25 Q3’25 banking 3.2x 2.3x ▪ 60% of recourse debt is tied to 1.
Slide 10: CPP Investments Partnership Expansion
CPP Investments Partnership Expansion Building on the success of our initial partnership, today we are announcing the next step to deepen and expand our collaboration to support our capital light strategy Partnership to Date Today’s Announcement ▪ Partnership launched in Q1’24, focused on supporting
Slide 11: Lower Interest Rates are Becoming a Tailwind for Our Operating Platforms
Lower Interest Rates are Becoming a Tailwind for Our Operating Platforms Freddie Mac 30-Year Mortgage Rate MBA Mortgage Refinance Index Outstanding Mortgages by Coupon Mortgage rates are down 70bps since the The Refinance Index reached a three-year A third of the mortgage market has incentive end of
Slide 12: Third Quarter 2025 Earnings & Segment Results
Third Quarter 2025 Earnings & Segment Results 12
Slide 13: Third Quarter 2025 Financial Performance
Third Quarter 2025 Financial Performance Earnings and ROEs Book Value and Common Stock Dividend $(0.08) (3.9)% $7.35 0.5% GAAP EPS GAAP ROE Book Value Per Share Total Economic Return(1) $0.20 16.8% $0.18 12.4% Non-GAAP Core Non-GAAP Core Dividend Per Share Indicative Dividend Yield(2) Segments EAD E
Slide 14: We Have Maintained Consistent Operating Profitability as We Scale
We Have Maintained Consistent Operating Profitability as We Scale Combined Mortgage Banking ROEs(1) Combined Mortgage Banking Volumes Figures $bn 32% 28% 140% $6.8 Average: 25% YoY Increase 24% $1.2 21% $0.5 21% $2.7 $0.5 $5.1 $2.2 Q3'24 Q3'25 * Q3'24 Q4'24 Q1'25 Q2'25 Q3'25 Sequoia CoreVest Aspire
Slide 15: Sequoia
Sequoia Redwood’s Prime Residential Correspondent Platform Q3’25 Performance Summary Quarterly Lock Volumes(2) $ billions • Q3’25 ROE of 29%(1) +127% YoY Increase $5.1 • Record quarter; $5.1 billion of locked loans(2) $3.9 $1.3 $3.3 $1.1 • Continued wallet share growth across seller $2.2 $2.3 $3.8 b
Slide 16: Sequoia Volume Drivers
Sequoia Volume Drivers Our core differentiators, reinforced by favorable market tailwinds, are driving meaningful volume growth Expansive Product Set Growing Market Share(2) Q3’25 Lock Volume by Product(1) 7.0% ARM CES Agency 6% 4% 1% • Origination partners are increasingly looking to 4.3% Sequoia f
Slide 17: Aspire
Aspire Redwood’s Non-QM Residential Platform Q3’25 Performance Summary Quarterly Lock Volumes(1) • $ millions $1.2 billion of locks(1) $1,245 • $550 million of locks in September ~4x QoQ • Average loan borrower profile is prime Increase quality seeking alternative underwriting • 61% Bank Statement /
Slide 18: Aspire Volume Drivers
Aspire Volume Drivers The non-QM market is growing from increased interest in non-traditional borrowing and ongoing demand for quality assets Rising Non-QM Originations Increase in Self-Employed Borrowers Improving Credit Quality of Underlying Borrowers 16.50 ’21-’25 Avg $125 FICO: 742 748 16.00 746
Slide 19: CoreVest
CoreVest Redwood’s Investor Loan Platform Q3’25 Performance Summary Quarterly Funded Volume ($mm) $ millions +14% YoY Increase • ROE of 21%(1) and non-GAAP EAD ROE of 30%* $501 $482 $509 $521 $458 • $521 million of quarterly fundings, highest volume since Q3’22 • Average bridge loan size has decreas
Slide 20: CoreVest Volume Drivers
CoreVest Volume Drivers Volume Growth Drivers Our Addressable Market is Poised to Grow CoreVest is… The small-balance loan market is estimated to grow 15% over the next two years(1)… • Expanding footprint and increasing Small Balance Total Market ($bn) $245 market share in small balance lending $213
Slide 21: Redwood Investments
Redwood Investments Housing Investments Sourced from Our Operating Platforms Q3’25 Performance Update Q3’25 Capital Allocation(2) ▪ ROE of 9%(1) and non-GAAP EAD ROE of Servicing 10%* Bridge Investments Securities 23% Retained ▪ Deployed $30 million of capital towards 35% $441 investments created fr
Slide 22: Legacy Investments
Legacy Investments Housing Investments No Longer Strategic to Our Platform Legacy Investments Activity Since Q2’25(1) October’25 Capital Allocation(2) • Transferred approximately $1 billion of legacy assets through a combination of Legacy HEI outright sales and other structured 29% solutions $407 •
Slide 23: Financial Results
REDWOOD TRUST Financial Results
Slide 24: Detailed Endnotes are included at the end of this presentation.
Detailed Endnotes are included at the end of this presentation. Note: Numbers may not foot due to rounding. 24
Slide 25: Detailed Endnotes are included at the end of this presentation.
Detailed Endnotes are included at the end of this presentation. Note: Numbers may not foot due to rounding. 25
Slide 26: Detailed Endnotes are included at the end of this presentation
Detailed Endnotes are included at the end of this presentation Note: Numbers may not foot due to rounding. 26 .
Slide 27: Detailed Endnotes are included at the end of this presentation.
Detailed Endnotes are included at the end of this presentation. 27 Note: Numbers may not foot due to rounding.
Slide 28: Detailed Endnotes are included at the end of this presentation.
Detailed Endnotes are included at the end of this presentation. 28 Note: Numbers may not foot due to rounding.
Slide 29: Recourse Debt Scheduled Maturities ($ in millions)
Recourse Debt Scheduled Maturities ($ in millions) Detailed Endnotes are included at the end of this presentation. 29 Note: Numbers may not foot due to rounding.
Slide 30: Non-GAAP Disclosures
REDWOOD TRUST Non-GAAP Disclosures
Slide 31: Non-GAAP Disclosures
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: • Core Segments Earnings Available for Distribution (“Core Se
Slide 32: Non-GAAP Disclosures (Continued)
Non-GAAP Disclosures (Continued) 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 c
Slide 33: Non-GAAP Disclosures – Core Segments EAD
Non-GAAP Disclosures – Core Segments EAD Reconciliation of GAAP to non-GAAP Core Segments Earnings Available for Distribution (“Core Segments EAD”) (1) (2) See footnotes on next page 33
Slide 34: Non-GAAP Disclosures – Core Segments EAD (Continued)
Non-GAAP Disclosures – Core Segments EAD (Continued) Footnotes: 1. Certain totals may not foot due to rounding. 2. 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 of the combined performan
Slide 35: Non-GAAP Disclosures – EAD
Non-GAAP Disclosures – EAD Reconciliation of GAAP to non-GAAP EAD – Third Quarter 2025 (1) (2) See footnotes on next page . 35
Slide 36: Non-GAAP Disclosures – EAD by Segment (Continued)
Non-GAAP Disclosures – EAD by Segment (Continued) Reconciliation of GAAP to non-GAAP EAD – Second Quarter 2025 (1) (2) Footnotes: 1. Certain totals may not foot due to rounding. 2. Consistent with prior quarter disclosures, EAD and EAD ROE are non-GAAP measures derived from GAAP net income (loss) av
Slide 37: Supplemental Table – Non-GAAP EAD with Allocated Corporate Segment
Supplemental Table – Non-GAAP EAD with Allocated Corporate Segment Supplemental Table – Non-GAAP EAD with Allocated Corporate Segment – Third Quarter 2025 (1) (2) See footnotes on next page 37
Slide 38: Supplemental Table – Non-GAAP EAD with Allocated Corporate Segment (Continued)
Supplemental Table – Non-GAAP EAD with Allocated Corporate Segment (Continued) Supplemental Table – Non-GAAP EAD with Allocated Corporate Segment – Second Quarter 2025 (1) (2) Footnotes 1. Certain totals may not foot due to rounding. 2. This supplemental measure is presented to clearly illustrate a
Slide 39: Endnotes
REDWOOD TRUST Endnotes
Slide 40: Endnotes
Endnotes Slide 3 (Redwood Trust - Business Overview) Slide 13 (Third Quarter 2025 Financial Performance) Source: Company financial data as of September 30, 2025 unless otherwise noted. Source: Company financial data as of September 30, 2025 unless otherwise noted. Market data per Bloomberg as of S
Slide 41: Endnotes
Endnotes Slide 19 (CoreVest - Redwood’s Investor Loan Platform) Slide 27 (Appendix: Mortgage Banking Key Results) Source: Company financial data as of September 30, 2025 unless otherwise noted. References to 1. EAD Net Contribution and EAD Net Contribution Return on Equity are non-GAAP measures “Qo
Slide 42: Glossary of Terms
Glossary of Terms Term Definition Term Definition ARM Adjustable-Rate Mortgage MB Mortgage banking BFR Build for rent MSR Mortgage servicing rights bps Basis points Non-QM Non-qualified mortgage CAFL® CoreVest securitization program QM Qualified mortgage CES Closed end second liens Quarter over quar