Redwood Trust, Inc. | 8-K: FY2025 Q2 EPS: USD -0.76

EPS: As of FY2025 Q2, the actual value is USD -0.76.

Segment Revenue and Operational Metrics

• Sequoia Mortgage Banking: Reported a GAAP net income of $22.2 million with a 19% annualized GAAP Return on Equity (ROE). The segment locked $3.6 billion of loans, a decrease from $4.0 billion in the first quarter of 2025, but an increase from $2.7 billion in the second quarter of 2024. Distributed $2.9 billion of loans through securitizations and whole loan sales.
• CoreVest Mortgage Banking: Achieved a GAAP net income of $6.1 million, with a 27% annualized GAAP ROE and a 34% non-GAAP EAD ROE. Funded $509 million of loans, a 6% increase from the first quarter of 2025, and distributed $583 million of loans, marking the most active quarter of distributions in CoreVest’s history.
• Redwood Investments: Recorded a GAAP net income of $11.9 million, with a decrease in net income relative to the first quarter of 2025 due to muted asset valuation gains. Approximately $100 million of capital was deployed into retained operating investments with mid-teens target returns.

Cash Flow

• Unrestricted Cash: $302 million as of June 30, 2025.

Unique Metrics

• Legacy Investments: Reported a GAAP net loss of - $104.0 million, primarily driven by fair value adjustments and changes in the underlying performance of certain legacy bridge loans. Capital allocated to Legacy Investments declined by $107 million or 17% from March 31, 2025.

Outlook / Guidance

• Redwood Trust anticipates generating up to $200-$250 million of incremental capital by year-end 2025 through the wind-down of legacy portfolio holdings. The company plans to expand its share repurchase activity, reflecting confidence in its strategic direction and competitive positioning.