Redwood Trust, Inc. · NYSE:RWT
Redwood Trust — Q2 2025 Earnings Presentation
41 slides from Redwood Trust's earnings presentation, Jul 30, 2025
Slide 1: Q2 2025 Redwood Review
Q2 2025 Redwood Review July 30, 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's Network of Businesses
Redwood’s Network of Businesses We serve areas of the housing market not well-served by government “Agency” home loan programs Operating Platforms Consumer Home Loan Homeownership and Home Business Purpose Loans Venture Fund Manager- Products for Originators Equity Access Solutions to Housing Invest
Slide 4: Strategic Update
REDWOOD TRUST Strategic Update
Slide 5: Accelerated Transition to Core Operating Strategy
Accelerated Transition to Core Operating Strategy In the second quarter, we accelerated Redwood’s strategic transition toward a larger and simplified operating model, with a focus on our Core Segments, while winding down our Legacy Investments exposure Segments Q2’25 Capital Allocation by Segment(1)
Slide 6: Reallocation of Capital Towards Core Segments
Reallocation of Capital Towards Core Segments Reallocation of Capital…(1)(2) Core Segments (Operating Platform Legacy Investments Segments & Redwood Investments) 0% - 5% ▪ Reduction in capital allocation to Legacy 20% Investments is expected to free up 39% 33% ~$200 to $250 million in incremental ca
Slide 7: Second Quarter 2025 Earnings and Opportunity
Second Quarter 2025 Earnings and Opportunity 7
Slide 8: Second Quarter 2025 Highlights & Positioning
Second Quarter 2025 Highlights & Positioning of Sequoia On-the-Run of CoreVest Funded Further Growth and Largest Lock Volume Since 2021 Volume Since 2022 Industry Reach Quarter ($3.3bn) ($509mm) Strong Returns on Mortgage Banking Platforms 20%+ Four Consecutive Quarters of 20%+ GAAP Returns for Our
Slide 9: Second Quarter 2025 Financial Performance
Second Quarter 2025 Financial Performance $(0.76) (36.6)% Q2’25 GAAP EPS and GAAP EPS GAAP ROE ROE were impacted by ($0.79) per share in Earnings and fair value and ROEs $0.18 14.5% repositioning charges Non-GAAP Core Non-GAAP Core related to Legacy Segments EAD EPS* Segments EAD ROE* Investments $7
Slide 10: Second Quarter 2025 & Recent Business Performance
Second Quarter 2025 & Recent Business Performance ▪ GAAP segment net income of $22.2 million ▪ Segment GAAP ROE of 19% ▪ $3.6 billion of lock volume; (14)% QoQ and +30% YoY(1) ▪ Includes $3.3 billion of Sequoia jumbo loans and $330 million of Aspire expanded loans ▪ GAAP segment net income of $6.1 m
Slide 11: Key Trends in Housing Finance Drive Immediate Scale Opportunities for Our Platform
Key Trends in Housing Finance Drive Immediate Scale Opportunities for Our Platform Our businesses and products are deeply integrated with—and positioned to support—the evolving landscape of housing finance Non-Bank Opportunity Independent mortgage banks Bank Opportunity (“IMBs”) continue to gain mar
Slide 12: Banking Sector Dynamics Create Increased Volume Opportunities for Redwood
Banking Sector Dynamics Create Increased Volume Opportunities for Redwood Our bank seller expansion has created an influx of loan activity Bank Jumbo Market Share Bank M&A Activity Recent Bank Activity ▪ Banks are ceding share to IMBs but still ▪ M&A activity is increasing which could ▪ A significan
Slide 13: Segment Updates
REDWOOD TRUST Segment Updates
Slide 14: Sequoia Second Quarter 2025 Performance
Sequoia Second Quarter 2025 Performance Correspondent jumbo loan platform, serving large network of mortgage originators (bank and non-bank) Q2’25 Overview Quarterly Lock Volumes(1) $ billions • Q2’25 GAAP ROE of 19%, compared to 28% in +24% YoY Increase Q1’25 • Gain on sale margins of 131bps, compa
Slide 15: Sequoia Volume Drivers
Sequoia Volume Drivers After deepening relationships with our seller network, there are various tailwinds supporting a significant increase in volume opportunities Further Wallet Share with Existing Growing % of Market Near Hybrid ARM Activity is Increasing Network of Loan Sellers(1) Refinance(2) •
Slide 16: Redwood is the Leading Non-Bank Distributor of Jumbo Loans
Redwood is the Leading Non-Bank Distributor of Jumbo Loans Sequoia Securitization Overview We have continuously led the private sector in housing finance 2x #1 144 $70bn ~300 Faster Non-Bank Issuer of RMBS Securitizations Since Inception of Jumbo Loan Securitization Buyers Turn Times Than Jumbo Loan
Slide 17: Aspire Second Quarter 2025 Performance
Aspire Second Quarter 2025 Performance Expanded non-QM consumer correspondent business – tailored to borrowers requiring an alternative underwriting approach Q2’25 Overview Growing Non-QM Market • $330 million of lock volume(1) The non-QM origination market grew 66% in 2024 and – 197% QoQ volume inc
Slide 18: CoreVest Second Quarter 2025 Performance
CoreVest Second Quarter 2025 Performance Direct life-cycle lender to housing investors Q2’25 Overview • GAAP ROE of 27% and non-GAAP EAD ROE of • Net cost to originate of 94bps(1) remains efficient 34%* • Distributed $583 million of loans (+38% QoQ) – most • $509 million of fundings, highest volume
Slide 19: CoreVest Volume Drivers
CoreVest Volume Drivers FY’25 Growth Drivers • Deeper footprint and greater market share in Growth in Market Volumes(1) small-balance loans (RTL and DSCR $ billions represent ~$245 billion TAM(1)) The small-balance loan market is estimated to grow 15% over the next 2 years • The rise in RTL is drive
Slide 20: Redwood Investments Second Quarter 2025 Performance
Redwood Investments Second Quarter 2025 Performance Portfolio of residential housing investments sourced from our leading operating platforms Redwood Investments Q2’25 Activity Q2’25 Capital Allocation(2) ▪ GAAP ROE of 11% and non-GAAP EAD ROE Bridge of 16%* Securities Retained Third-Party ▪ Deploye
Slide 21: Legacy Investments Second Quarter 2025 Performance
Legacy Investments Second Quarter 2025 Performance Legacy investments not core to Redwood’s long-term thesis (includes legacy multifamily bridge loans and other third-party assets) Legacy Investments Q2’25 Activity Q2’25 Capital Allocation(2) ▪ Net capital allocation to Legacy Other Investments redu
Slide 22: Financial Results
REDWOOD TRUST Financial Results
Slide 23: Detailed Endnotes are included at the end of this presentation. Note: Numbers may not
Detailed Endnotes are included at the end of this presentation. Note: Numbers may not foot due to rounding. 23
Slide 24: Detailed Endnotes are included at the end of this presentation. Note: Numbers may not
Detailed Endnotes are included at the end of this presentation. Note: Numbers may not foot due to rounding. 24
Slide 25: Appendix: Capital Allocation Summary
Detailed Endnotes are included at the end of this presentation Note: Numbers may not foot due to rounding. 25 .
Slide 26: Detailed Endnotes are included at the end of this presentation. Note: Numbers may not
Detailed Endnotes are included at the end of this presentation. 26 Note: Numbers may not foot due to rounding.
Slide 27: Detailed Endnotes are included at the end of this presentation. Note: Numbers may not
Detailed Endnotes are included at the end of this presentation. 27 Note: Numbers may not foot due to rounding.
Slide 28: Recourse Debt Scheduled Maturities ($ in millions)
Recourse Debt Scheduled Maturities ($ in millions) Detailed Endnotes are included at the end of this presentation. 28 Note: Numbers may not foot due to rounding.
Slide 29: Non-GAAP Disclosures
REDWOOD TRUST Non-GAAP Disclosures
Slide 30: 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 31: 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 32: 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 32
Slide 33: 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 new non-GAAP measures established in the second quarter 2025 and are used to present management’s non-GAAP analysis of the combined perfo
Slide 34: Non-GAAP Disclosures – EAD
Non-GAAP Disclosures – EAD Reconciliation of GAAP to non-GAAP EAD – Second Quarter 2025 (1) (2) See footnotes on next page . 34
Slide 35: Non-GAAP Disclosures – EAD by Segment (Continued)
Non-GAAP Disclosures – EAD by Segment (Continued) Reconciliation of GAAP to non-GAAP EAD – First 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) ava
Slide 36: 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 – Second Quarter 2025 (1) (2) See footnotes on next page 36
Slide 37: 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 – First Quarter 2025 (1) (2) Footnotes 1. Certain totals may not foot due to rounding. 2. This supplemental measure is presented to clearly illustrate a k
Slide 38: Endnotes
REDWOOD TRUST Endnotes
Slide 39: Endnotes
Endnotes Slide 3 (Redwood’s Network of Businesses) Slide 10 (Second Quarter 2025 and Recent Business Performance) Source: Company financial data as of June 30, 2025 unless otherwise noted. Market data per Source: Company financial data as of June 30, 2025 unless otherwise noted. References to “QoQ
Slide 40: Endnotes
Endnotes Slide 19 (CoreVest Volume Drivers) Slide 23 (Appendix: Income Statement) Source: Company financial data as of June 30, 2025 unless otherwise noted. 1. Net interest expense from “Corporate (unsecured debt)” consists primarily of interest expense on 1. RTL volume based on Fannie Mae Single F
Slide 41: 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