Redwood Trust Reports Third Quarter Financial Results and Announces Planned Transition to a C-corporation
Redwood Trust reported a Q3 2026 GAAP net loss of $(0.39) per share, with book value per share down 4.9% to $6.56, as Legacy Investment losses widened to $(45.0) million amid a challenging rate environment. Core mortgage banking remained profitable with $27.0 million of GAAP net income and a 26% annualized return on capital, though production slowed to $6.6 billion from $8.0 billion in Q2. The company announced a planned transition to a C-corporation in 2027, expected to add $0.73-$0.77 per share of GAAP book value in Q4 2026, alongside an upsized secured financing facility with CPP Investments and Stone Point Credit extended to March 2030.
Key figures
- Cash
- 201000000
- Recourse debt
- 4200000000
- Shares repurchased
- 9.2 million shares for $34 million
- Book value per share
- 6.56
- Mortgage banking roc
- 26%
- Book value change qoq
- -4.9%
- Recourse leverage ratio
- 5.2x
- C corp book value uplift
- $0.73-$0.77 per share
- Legacy capital remaining
- 116000000
- Convertible notes offering
- $205 million at 7% coupon
- Core segments ead per share
- 0.18
- Deferred tax asset estimate
- $85-$90 million
- Mortgage banking production
- $6.6 billion
- Mortgage banking gaap net income
- 27000000
AI analysis
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