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Redwood Trust (RWT) investor relations material
Redwood Trust Q2 2025 earnings summary
Complete event summary combining all related documents: earnings call transcript, report, and slide presentation.
Executive summary
Accelerated transition to a scalable, simplified, capital-light operating model, reducing exposure to legacy assets and focusing on core mortgage banking platforms.
Core Segments now represent 67% of capital allocation, targeting 80% by year-end 2025 and 95–100% by 2026.
Mortgage banking platforms delivered strong growth, with Sequoia and CoreVest achieving record loan volumes and robust gain-on-sale margins.
Share repurchase authorization increased to $150 million, with 2.4 million shares repurchased since June 2025.
Legacy Investments established as a new segment, with accelerated wind-down freeing up capital for redeployment.
Financial highlights
Q2 2025 GAAP net loss of $100.2 million ($0.76 per share), mainly due to fair value and repositioning charges on legacy assets.
Book value per share declined to $7.49 at June 30, 2025, from $8.39 at March 31, 2025.
Non-GAAP Core Segments EAD was $25 million ($0.18 per share), with a 14.5% annualized ROE.
Mortgage banking gain-on-sale margins exceeded targets for the fourth consecutive quarter.
Unrestricted cash and cash equivalents totaled $302 million at quarter end.
Outlook and guidance
Plan to redeploy $200–$250 million in capital from legacy investments to core platforms by year-end 2025.
Targeting reduction of legacy capital allocation to 20% by year-end 2025 and 0–5% by 2026.
Anticipate consolidated EAD returns to rise to 9–12% by year-end, supporting dividend coverage and further earnings growth into 2026.
Plan to be aggressive with share buybacks until share price reflects platform earnings power.
Expect continued growth in mortgage banking, with Sequoia, Aspire, and CoreVest platforms expanding networks and market share.
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