REDWOOD TRUST INC

Business Update

Our first quarter 2026 results reflect continued execution against Redwood’s strategy to scale a capital-efficient mortgage banking platform supported by diversified distribution channels and institutional capital partnerships. During the quarter, we generated our third consecutive record level of mortgage banking production, with combined Sequoia, Aspire, and CoreVest volumes reaching approximately $8.5 billion, an increase from $7.3 billion in the fourth quarter of 2025.

The operating environment remained characterized by subdued housing activity and affordability challenges, with mortgage applications continuing to track below pre-pandemic levels. Despite this backdrop, Redwood continued to gain market share across its platforms, supported by its established origination network and ability to provide liquidity and execution solutions to both bank and non-bank counterparties.

Our financial results reflected continued strength in operating performance despite increased market volatility late in the quarter. On a consolidated basis, Redwood reported a GAAP net loss of $(0.07) per share, primarily driven by market-driven valuation changes and restructuring expenses, while our mortgage banking platforms continued to generate strong operating income. GAAP book value per share declined modestly to $7.12 at March 31, 2026, compared to $7.36 at December 31, 2025.

Our Sequoia platform delivered record quarterly lock volume of $6.5 billion, compared to $5.3 billion in the fourth quarter of 2025 and continued market share gains across both bank and independent mortgage bank counterparties. Distribution activity remained strong, with $5.5 billion of loans sold or securitized compared to $4.1 billion in the prior quarter, including a record level of securitization issuance. With respect to the types of loan products that our Sequoia platform acquires, in the first quarter of 2026 we added a program to acquire mortgage loans tailored to medical professionals and we expect to begin acquiring HELOCs in the second quarter of 2026, complementing our acquisitions of closed-end second lien mortgage loans. Operating efficiency continued to improve, with cost per loan (calculated as operating expenses divided by loan purchase commitments for the Sequoia platform) declining to 18 basis points from 26 basis points, reflecting the benefits of scale and operating leverage.

Aspire continued to scale as a standalone platform in 2026, generating $1.6 billion of lock volume and completing its inaugural securitization transaction during the quarter. Distribution remained diversified, with approximately $1.0 billion of loans sold through a combination of this inaugural securitization and whole loan sales, supported by strong demand from institutional investors. The platform’s expanding seller network and product breadth continue to support growth opportunities across the non-QM market.

CoreVest funded $432 million of loans during the quarter, reflecting a modest decline from the prior quarter as the platform took a more measured approach to originations late in the first quarter in response to increased market volatility. Despite lower overall volume, CoreVest continued to make progress in its strategic focus on smaller-balance products, including RTL and DSCR loans, while maintaining strong distribution activity of approximately $694 million across securitizations, whole loan sales, and joint venture transfers.

Across our platforms, distribution remained a key driver of capital efficiency and liquidity. Total mortgage banking distributions increased to approximately $7.2 billion during the quarter, supported by continued momentum in securitization issuance, whole loan sales, and joint venture activity. These distribution channels enabled efficient risk transfer and supported continued improvements in capital velocity and operating efficiency.

We continued to advance our capital-light strategy through the expansion of institutional partnerships. During the quarter, cumulative loan transfers to our joint venture with CPP Investments reached approximately $2 billion since inception. Subsequent to quarter-end, we announced an additional strategic joint venture designed to support continued growth across our Sequoia platform, providing dedicated capital and enhancing our ability to efficiently distribute loan production across varying market conditions. In addition, we expect to establish an additional joint venture in the second quarter of 2026 to support further growth within Aspire.

Our Legacy Investments portfolio continued to decline as a percentage of total capital, decreasing to approximately 15% at March 31, 2026, compared to 19% at year-end 2025, reflecting ongoing asset resolution activity and capital redeployment into higher-return operating platforms.

In addition, we continued to invest in technology and operational infrastructure to support scalable growth across our platforms. Through our RWT Horizons initiatives, we advanced the use of automation and data-driven processes across mortgage banking functions, contributing to improved execution speed and operational efficiency. These efforts are designed to enhance our ability to scale production while maintaining disciplined cost management.

Looking ahead, the broader housing finance market continues to be influenced by interest rate volatility, evolving monetary policy, and geopolitical uncertainty. While these factors may contribute to near-term variability in market activity, they also reinforce the importance of capital-efficient platforms capable of adapting to changing conditions.