--- title: "Redwood Trust | 8-K: FY2026 Q2 Revenue: USD 56 M" type: "News" locale: "en" url: "https://longbridge.com/en/news/294054320.md" datetime: "2026-07-28T11:03:36.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/294054320.md) - [en](https://longbridge.com/en/news/294054320.md) - [zh-HK](https://longbridge.com/zh-HK/news/294054320.md) --- # Redwood Trust | 8-K: FY2026 Q2 Revenue: USD 56 M Revenue: As of FY2026 Q2, the actual value is USD 56 M. EPS: As of FY2026 Q2, the actual value is USD -0.03, missing the estimate of USD 0.215. EBIT: As of FY2026 Q2, the actual value is USD 1.1 M. ### Consolidated Financial Performance #### GAAP Net Loss Redwood Trust, Inc. reported a GAAP net loss of - $2.9 million for the second quarter of 2026, an improvement from a GAAP net loss of - $7.3 million in the first quarter of 2026. The GAAP net loss per basic and diluted common share was - $0.03 for Q2 2026, compared to - $0.07 for Q1 2026. #### Non-GAAP Earnings Available for Distribution (EAD) Non-GAAP EAD was $20.3 million in the second quarter of 2026, compared to $27.1 million in the first quarter of 2026. Non-GAAP EAD per basic common share was $0.15 for Q2 2026, versus $0.21 for Q1 2026. Non-GAAP Core Segments EAD was $34.0 million, or $0.25 per basic common share, for the second quarter of 2026, compared to $36.5 million, or $0.28 per basic common share, in the first quarter of 2026. Non-GAAP Legacy Investment Segments EAD was - $0.11, leading to a Non-GAAP Consolidated EAD of $0.15 for Q2 2026. #### GAAP Book Value per Common Share Book value per common share was $6.90 at June 30, 2026, a decrease from $7.12 per share at March 31, 2026. This represents a -3.0% quarter-over-quarter change. #### Economic Return on Book Value The economic return on book value was -0.6% for the second quarter of 2026, an improvement from -0.8% in the first quarter of 2026. The Total Economic Return stood at -0.6% for Q2 2026. #### Dividends per Common Share Redwood Trust, Inc. declared and paid a regular quarterly dividend of $0.18 per common share for the second quarter of 2026, consistent with the first quarter of 2026. The Indicative Dividend Yield was 15.2%. #### Net Interest Income Consolidated net interest income was $32.1 million in the second quarter of 2026, down from $34.7 million in the first quarter of 2026. #### Non-Interest Income Total non-interest income, net, was $23.9 million in the second quarter of 2026, compared to $29.2 million in the first quarter of 2026. #### Operating Expenses General and administrative expenses were - $38.2 million in the second quarter of 2026, an improvement from - $49.4 million in the first quarter of 2026. Portfolio management costs were - $7.0 million in Q2 2026, compared to - $8.7 million in Q1 2026. Loan acquisition costs were - $6.0 million in Q2 2026, compared to - $6.7 million in Q1 2026. Direct operating expenses were 64 basis points as a percentage of first-half 2026 volume, a 28% improvement from full-year 2025. Total expense as a percentage of volume improved by approximately 28%, moving from 0.88% in FY 2025 to 0.64% in H1 2026. #### Benefit from (Provision for) Income Taxes Redwood Trust, Inc. had a provision for income taxes of - $1.1 million in the second quarter of 2026, compared to a benefit from income taxes of $2.5 million in the first quarter of 2026. #### Returns on Equity GAAP ROE was -1.3% for Q2 2026, while Non-GAAP Core Segment EAD ROE was 18.5%. Every $100 million of capital unlocked from the legacy book is estimated to be 200 to 400 basis points accretive per annum to consolidated Return on Equity (ROE) when redeployed into operating businesses. Every $100 million of redeployed capital could add 200-400 basis points to company-wide ROE. ### Segment Performance (GAAP Net Income / (Loss)) #### Total Mortgage Banking Platforms GAAP net income was $40.1 million in the second quarter of 2026, up 9% from $36.7 million in the first quarter of 2026. #### Sequoia Mortgage Banking GAAP net income was $31.6 million in Q2 2026, down from $37.8 million in Q1 2026. #### Aspire Mortgage Banking GAAP net income was $7.3 million in Q2 2026, up from $2.3 million in Q1 2026. #### CoreVest Mortgage Banking GAAP net income was $1.2 million in Q2 2026, an improvement from a net loss of - $3.4 million in Q1 2026. #### Redwood Investments GAAP net income was $0.7 million in Q2 2026, an improvement of $9 million from a net loss of - $8.0 million in Q1 2026. Redwood Investments deployed $72 million of capital into retained investments from second-quarter securitization activity. #### Legacy Investments GAAP net loss was - $23.3 million in Q2 2026, compared to a net loss of - $13.1 million in Q1 2026. Capital allocated to the Legacy Investments segment was $195 million in Q2 2026, marking a 63% reduction since Q2 2025. Estimated returns for Legacy Investments range from -10% to -15%. Legacy bridge/term loans now represent approximately 6% of total capital. #### Corporate/Other GAAP net loss was - $20.4 million in Q2 2026, an improvement from a net loss of - $22.9 million in Q1 2026. ### Operational Metrics #### Mortgage Banking Production Total Mortgage Banking production exceeded $8 billion for the second consecutive quarter in Q2 2026, marking the second-highest quarterly volume in the company’s history and nearly double the volume from the same period last year. Mortgage Banking volume was $8.0 billion in Q2 2026, up from $4.5 billion in Q1 2026. Combined first-half mortgage banking volumes were nearly double the same period last year. #### Return on Capital (ROC) for Mortgage Banking Platforms The combined Mortgage Banking platforms generated a 33% annualized return on capital for the quarter, marking the eighth consecutive quarter of 20%+ ROC. The Return on Capital (ROC) for Mortgage Banking was 33% in Q2 2026, compared to 38% in Q1 2026. #### AI-enabled Automation Annualized time savings from 2026 initiatives reached approximately 23,600 hours as of June 30, 2026, an increase of over 50% from the first quarter baseline. Operational efficiencies increased by over 50% compared to the Q1 2026 baseline. Enterprise-wide AI adoption grew by 30% over Q1 2026, and individual efficiencies gained across operations teams ranged from 15-20%. #### Sequoia Mortgage Banking Gain on sale margin was 92 basis points, within the company’s target range. Sequoia’s lock volume reached $5.6 billion, representing a 70% year-over-year growth and its second-highest quarterly volume. New products accounted for 30% of the volume, including hybrid loans, medical professional loans, and closed-end second lien loans. The company distributed $6.5 billion of loans, including $5.3 billion through securitizations and $1.2 billion through whole loan sales. The cost per loan was 17 basis points, down from 18 basis points in the first quarter of 2026, an 18% improvement from 2025. #### Aspire Mortgage Banking Gain on sale margins were 101 basis points, up from 73 basis points in the first quarter of 2026. Aspire achieved over 30% sequential growth in volume in the second quarter, locking a record $2.1 billion of loans, a 31% increase from the prior quarter. Active loan sellers increased to over 150 at June 30, 2026, from 136 at March 31, 2026. The company distributed $1.3 billion of loans, including $920 million through securitizations and $393 million through whole loan sales. The cost per loan was 0.27%, showing a 10% quarter-over-quarter improvement. #### CoreVest Mortgage Banking CoreVest funded $410 million of loans (55% bridge and 45% term), representing a 5% decrease from the first quarter of 2026. It distributed $375 million of newly-originated loans through direct sales, securitizations, and joint venture transfers. CoreVest also closed CAFL 2026-1, a $268 million term loan securitization. The Net Cost to Originate for H1 2026 was 0.87%, a 6% improvement from FY 2025’s 0.92%. #### RWT Horizons Investments RWT Horizons, representing less than 2% of total capital, has an early-stage AI portfolio company poised to price a follow-on round valuing the initial seed investment at approximately 27 times its cost, representing close to 20% of Horizons’ capital as an implied gain. An early-stage AI company in the portfolio saw its initial seed investment valued at approximately 27 times cost after an oversubscribed financing round. #### Securitization Activity Redwood Trust, Inc. achieved record securitization activity in the first half of 2026, with over $10 billion in issuance, and a +112% increase in year-over-year securitization distributions. This included 20 SEMT deals totaling $11.3 billion, 3 SPIRE deals totaling $1.3 billion, and 2 CAFL deals exceeding $500 million, alongside $165 million of transfers to existing CAFL RTL deals. ### Capital and Financing #### Unrestricted Cash and Cash Equivalents Redwood Trust, Inc. held $192 million in unrestricted cash and cash equivalents at June 30, 2026. #### Recourse Debt and Leverage Recourse debt was $4.5 billion at June 30, 2026, down from $4.7 billion at March 31, 2026. The recourse leverage ratio was 5.0x, remaining relatively unchanged from the first quarter. Total recourse leverage was $4.5 billion. The segment recourse leverage composition was 24% Portfolio Debt, 20% Corporate Debt, and 56% Mortgage Banking Debt. #### Warehouse Capacity Total excess warehouse financing capacity was $3.7 billion at June 30, 2026. Warehouse capacity increased by +34% year-over-year to $7.2 billion in Q2 2026, up from $5.4 billion in Q2 2025, with a 48% utilization rate. Redwood Trust, Inc. renewed $4.4 billion of capacity since Q2 2025, with no corporate unsecured maturities for five quarters. #### Dedicated Strategic Capital Joint ventures now provide in excess of $1.2 billion of dedicated strategic capital supporting the mortgage banking businesses. #### Capital Composition and Allocation Redwood Trust, Inc. reported total capital of $1.7 billion, with Core Segments representing 89% of this total capital. The legacy portfolio is estimated to represent less than 10% of total capital, down from 15% at March 31, 2026. Up to $200 million of recoverable capital from the legacy portfolio can be reinvested into operating businesses or used for stock buybacks. ### Outlook / Guidance Redwood Trust, Inc. is negotiating an additional $1.0 billion of warehouse capacity for its Castlelake joint venture, expected to close in the near term. The company anticipates that its earnings power will be unlocked as it completes the wind-down of its legacy portfolio, freeing up capital for reinvestment or stock repurchases. 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