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 June 30, 2026.

Second Quarter 2026 Highlights

• On a consolidated basis, GAAP net loss was $(0.03) per basic and diluted common share. Non-GAAP Earnings Available for Distribution ("EAD") was $0.15 per share⁽¹⁾, and non-GAAP Core Segments EAD was $0.25⁽²⁾
  • Variability between consolidated GAAP and EAD results primarily reflects changes in portfolio valuations
• Mortgage Banking⁽³⁾ production exceeded $8 billion for the second consecutive quarter, the second highest quarterly volume in the Company’s history and nearly double the same period last year
  • Total Mortgage Banking⁽³⁾ GAAP net income increased 9% from the first quarter 2026; eighth consecutive quarter of 20%+ Return on Capital ("ROC") for our Mortgage Banking platforms⁽⁴⁾⁽⁶⁾
  • Adopted a deliberately more cautious operating posture during April and May amid heightened market volatility; momentum improved meaningfully in June, with over 40% of total quarterly volume locked during the final month of the quarter
  • Gross margins remained stable and within targeted ranges across platforms despite elevated market volatility
  • Priced three securitizations in a single week late in the quarter, one for each operating platform, a first in Redwood’s history, bringing total securitizations to more than 20 year-to-date
• AI-enabled automation continued to deliver tangible efficiency gains, increasing annualized time savings from 2026 initiatives to approximately 23,600 hours, up more than 50% from the first quarter baseline, with notable impacts on due diligence costs, rate sheet pricing and guideline analysis

Key Financial Second Quarter 2026 Results and Metrics

• GAAP book value per common share was $6.90 at June 30, 2026, compared to $7.12 per share at March 31, 2026
  • Economic return on book value of (0.6)% for the second quarter 2026⁽⁵⁾
• GAAP net loss of $(2.9) million or $(0.03) per basic and diluted common share
• Non-GAAP Earnings Available for Distribution ("EAD") of $20.3 million or $0.15 per basic common share⁽¹⁾
• Non-GAAP Core Segments Earnings Available for Distribution ("Core Segments EAD") of $34.0 million, or $0.25 per basic common share⁽²⁾
• Declared and paid a regular quarterly dividend of $0.18 per common share

“This quarter further reinforced our confidence in the direction of the business. We generated more than $8 billion of mortgage banking production while continuing to prioritize profitability over headline volume. Although market volatility remained elevated through much of the quarter, we adapted our operating posture as conditions evolved and finished the period with strong momentum,” said Christopher Abate, Chief Executive Officer of Redwood Trust. “The business we operate today is fundamentally different than it was only a few years ago. A growing share of our earnings is being generated by our operating platforms, reflecting the strategic investments we've made across the business. We believe continued execution against this strategy will create significant long-term value for shareholders.”

Mortgage Banking Platforms⁽³⁾

• Total Mortgage Banking platforms⁽³⁾ GAAP net income of $40.1 million, up 9% from the first quarter 2026
• Generated 33% annualized return on capital ("ROC")⁽⁴⁾⁽⁶⁾
• Purchasing power under joint venture partnerships now totals ~$18 billion across our operating platforms, advancing our efforts to reduce capital turn times and scale production volumes with growing, predictable revenue streams

Sequoia Mortgage Banking⁽⁶⁾

• Gain on sale margin of 92 basis points, at the higher end of the Company’s target range
• Locked $5.6 billion of loans in the second quarter, reflecting a more measured operating posture during April and May amid heightened market volatility and elevated interest rates⁽⁷⁾
  • New products represented 30% of quarterly lock volume, including hybrid loans, medical professional loans, and closed-end second lien loans
• Distribution activity kept pace with lock volume, with $6.5 billion of loans distributed across securitizations ($5.3 billion) and whole loan sales ($1.2 billion)
  • Investor appetite for Sequoia bonds remained robust with nine securitizations priced during the quarter
  • Began distributing Sequoia loans into our Castlelake joint venture following its launch in April
• Cost per loan of 17 basis points in the second quarter⁽⁸⁾, compared to 18 basis points in the first quarter 2026, maintaining operating scale benefits

Aspire Mortgage Banking⁽⁶⁾

• Gain on sale margins of 101 basis points, compared to 73 basis points in the first quarter 2026
• Locked a record $2.1 billion of loans in the second quarter, a 31% increase from the prior quarter⁽⁷⁾
  • At June 30, 2026, Aspire had over 150 active loan sellers, up from 136 active loan sellers at March 31, 2026
• Distributed $1.3 billion of loans through a combination of securitizations ($920 million) and whole loan sales ($393 million)
  • Securitization execution momentum continued with two SPIRE transactions completed in the quarter
  • Subsequent to quarter-end, executed definitive documentation for previously announced joint venture, with potential purchasing power of up to $8 billion of loans

CoreVest Mortgage Banking⁽⁶⁾

• Funded $410 million of loans (55% bridge and 45% term) in the second quarter, a 5% decrease from the first quarter 2026 largely due to higher rate environment impacting the term loan pipeline
• Distributed $375 million of newly-originated loans through whole loan sales, securitizations and sales to a joint venture ("JV")
  • Completed a $268 million CAFL term loan securitization, our first broadly syndicated term loan securitization since 2022, placing bonds with over 20 discrete investors
• Added a new loan servicer that is expected to reduce asset management administrative workload, enhance servicing capabilities, and lower overall servicing costs

Redwood Investments

• Generated a segment GAAP net income of $0.7 million in the second quarter, an improvement of $9 million from the first quarter
  • Results were highlighted by valuation improvements in our retained investments and strong performance from our RWT Horizons portfolio, which positively contributed to earnings for the second consecutive quarter
• Redwood Investments recourse leverage ratio of 0.9x at June 30, 2026⁽⁹⁾

Legacy Investments

• Segment GAAP net loss of $(23.3) million
  • Priced a secured financing arrangement for our remaining HEI portfolio, further enhancing balance sheet flexibility
• Adjusted for activity to date in the third quarter, segment capital allocation now estimated to represent less than 10% of total capital, down from 15% at March 31, 2026
• Legacy Investments recourse leverage ratio of 2.1x at June 30, 2026⁽¹⁰⁾

Capital and Financing

• Unrestricted cash and cash equivalents of $192 million at June 30, 2026
• Recourse debt of $4.5 billion at June 30, 2026 compared to $4.7 billion at March 31, 2026⁽¹¹⁾
  • Recourse leverage of 5.0x, relatively unchanged from the first quarter⁽¹²⁾
• Capital allocation and funding flexibility remained central priorities during the quarter
  • Completed a senior unsecured corporate debt offering
  • Closed a new $500 million warehouse facility to support our Castlelake joint venture, with an additional $1.0 billion of warehouse capacity for this joint venture being negotiated and expected to close in the near term
  • Completed additional warehouse optimization initiatives during the quarter, increasing available capacity, broadening collateral eligibility, and improving funding to support continued growth
    • Total excess warehouse financing capacity of $3.7 billion at June 30, 2026
• Enhanced financing economics across key facilities through tighter spreads and improved advance rates, while continuing to evaluate forward financing solutions to improve bulk purchase, distribution, and collateral financing efficiencies

Second Quarter 2026 Redwood Review and Supplemental Tables Available Online

A further discussion of Redwood's business and financial results is included in the second quarter 2026 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, July 28, 2026, at 8:00 a.m. Eastern Time / 5:00 a.m. Pacific Time to discuss its second quarter 2026 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 Tuesday, August 11, 2026, 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 #13761483.

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, August 10, 2026, and also make it available on Redwood’s website.

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 Earnings Available for Distribution (“EAD”), EAD Return on Equity ("EAD ROE"), Core Segments Earnings Available for Distribution (“Core Segments EAD”) and Core Segments EAD Return on Equity ("Core Segments EAD ROE") as non-GAAP measures.

Management believes these non-GAAP measures provide useful supplemental information to investors and management in evaluating the Company’s operating performance, facilitating comparisons to industry peers, and assessing the current income-generating capacity of the Company’s operating platforms as of the period presented, including the Company’s ability to pay dividends. These measures also assist in evaluating the Company’s ongoing transition to a more scalable and simplified business model, including the wind-down of legacy portfolio holdings within the 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, or other measurements of results of operations computed in accordance with GAAP or for federal income tax purposes.

Earnings Available for Distribution (“EAD”) and EAD ROE are non-GAAP financial measures that the Company has historically reported and continues to use to present management’s non-GAAP analysis of the operating performance of the Company’s different business segments. EAD is defined, as GAAP net income (loss) available (related) to common stockholders, adjusted to (i) exclude investment fair value changes, net; (ii) exclude realized gains and losses; (iii) exclude acquisition-related expenses; (iv) exclude certain organizational restructuring charges, as applicable; and (v) reflect a hypothetical income tax adjustment associated with these items. EAD ROE is defined as EAD divided by average common equity.

Core Segments EAD and Core Segments EAD ROE represent management’s non-GAAP assessment of the combined performance of the Company’s mortgage banking platforms and related investments, which include the Sequoia Mortgage Banking, Aspire Mortgage Banking, CoreVest Mortgage Banking, and Redwood Investments segments (collectively, the “Core Segments”), together with an allocated portion of the Corporate segment attributable to those operations.

Core Segments EAD excludes the Legacy Investments segment and the portion of the Corporate segment attributable to Legacy Investments. Core Segments EAD ROE is calculated as Core Segments EAD divided by the average capital utilized by the Core Segments during the period, which represents management’s internal estimate of the average economic capital allocated to support Core Segments activities.

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. Redwood Investments also includes RWT Horizons®, our unified technology platform spanning internal AI innovation and strategic investments across the ecosystem, which supports our efforts to develop an AI-first operating model that enables compounding operational leverage and scalable growth. This reflects how we manage and organize our business and may differ from the manner in which our reportable segments are presented for financial reporting purposes.

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, 2025 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.

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