This article first appeared on GuruFocus .
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Mortgage Banking Volume:Surpassed $8.5 billion for the first time.
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Earnings Available for Distribution (EAD):$0.21 per share, up from $0.20 per share in the previous quarter.
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GAAP Net Loss:$7 million or $0.07 per share.
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Book Value Per Share:$7.12, a 3% decline from the previous quarter.
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Sequoia Volume:$6.5 billion of locks, up 22% from the fourth quarter.
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Cost Per Loan:Improved 30% from the fourth quarter to below 20 basis points.
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Gain on Sale Margins:96 basis points.
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Aspire Lock Volume:Increased to $1.6 billion.
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CoreVest Volume:$432 million, down modestly from the fourth quarter.
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Capital Efficiency:Capital required per dollar of volume declined by approximately 10% quarter over quarter to 1.1%.
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Total G&A Expenses:$49 million, up from $41 million in the previous quarter.
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Liquidity:$202 million of unrestricted cash and approximately $3.9 billion of excess warehouse capacity as of March 31.
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Recourse Debt:Increased modestly to $4.7 billion at quarter end.
Release Date: April 29, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Redwood Trust Inc ( NYSE:RWT ) achieved a third consecutive record operating quarter with mortgage banking volume surpassing $8.5 billion.
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The company completed 11 securitizations in the first quarter, setting an in-house record.
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Redwood Trust Inc ( NYSE:RWT ) has implemented significant operational efficiencies, partly due to strong adoption of AI across the enterprise.
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The company announced a major partnership with Castle Lake, bringing approximately $8 billion of incremental purchasing power to Sequoia.
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Aspire's lock volume increased to $1.6 billion, with April lock volume ahead of that pace, indicating strong growth potential.
Negative Points
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Redwood Trust Inc ( NYSE:RWT ) reported a GAAP net loss of $7 million or $0.07 per share for the first quarter.
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Book value per share declined by 3% from Q4, driven by non-cash market-related valuation changes and certain non-recurring expense items.
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CoreVest's first-quarter volume totaled $432 million, down modestly from the fourth quarter.
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Legacy investments recorded a GAAP net loss of $13 million, although this was an improvement from the previous quarter.
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The company faced volatility in the macro economy, impacting mortgage rates and market conditions.
Q & A Highlights
Q: Can you provide a target range for the expected earnings accretion from the new joint venture announced this morning? A: Brooke Carillo, CFO, stated that the joint venture is anticipated to contribute approximately $0.12 to $0.15 of incremental earnings. This partnership will allow Redwood Trust to grow volume by an additional 30% without raising other capital, aligning with their high capital turnover model.
Q: What is the expected size of the potential Aspire joint venture? A: Dashiell Robinson, President, mentioned that the Aspire joint venture is expected to support 25% to 30% of Aspire's annualized production. The details are still being finalized, but this is the current expectation in terms of Aspire's overall production mix.
Q: Can you discuss the momentum in mortgage banking and what you're seeing in April? A: Christopher Abate, CEO, noted that while there has been some volatility in mortgage rates, Redwood Trust has continued to gain market share. They have added more regional banks and expect the Basel III endgame to strengthen their position as a partner to banks, helping manage interest rate and asset liability risks.
Q: What are the drivers behind the improved cost per loan at Sequoia, and are there additional efficiencies expected? A: Christopher Abate, CEO, highlighted the adoption of technology and AI as key factors in improving efficiency. The company has implemented 2,500 agentic workflows, eliminated certain vendor services, and created efficiencies between Sequoia and Aspire, leading to a significant reduction in cost per loan.
Q: How does the Castlelake JV compare to the CPP fee structure in terms of economics? A: Dashiell Robinson, President, explained that while the asset classes differ, the structures are conceptually similar. Both involve upfront economics at the time of transfer into the JV and ongoing asset management fees. The Castlelake JV is expected to securitize loans similarly to the CPP JV.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
