Earnings Releases·Nov 3, 2026, 4:15 PM ET

Redwood Trust — Third Quarter 2026 Earnings Summary

Consolidated GAAP net loss widened to $(47.3) million ($0.39/share) from $(2.9) million in Q2 2026, driven by $(38.1) million in investment fair value losses; Non-GAAP EAD turned negative at $(1.4) million versus $20.3 million in the prior quarter, while GAAP book value declined 4.9% to $6.56.
The Company announced a strategic transition to a C-corporation in 2027, expected to boost GAAP book value by $0.73–$0.77 per share in Q4 2026, alongside a 75% reduction in Legacy Investment capital to $116 million and plans to resolve remaining legacy assets by Q1 2027.
Capital return and balance sheet management included a $34 million common stock repurchase ($0.18/share book value accretion), a $205 million convertible notes offering used to repay 40% of maturing debt, and an upsized secured financing facility with CPP Investments and Stone Point Credit extending maturity to March 2030.
Mortgage Banking platforms generated a 26% annualized non-GAAP return on capital despite production dropping to $6.6 billion from $8.0 billion, while Legacy Investments reported a segment loss of $(45.0) million and Redwood Investments reported a loss of $(4.4) million due to interest rate-driven fair value declines.