RWT - Earnings call transcript Q1 2024

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Operator

Good afternoon, and welcome to the Redwood Trust, Inc.

First Quarter 2024 Financial Results Conference Call. Today's conference is being recorded. I will now turn the call over to Kaitlyn Mauritz, Redwood's Senior Vice President of Investor Relations. Please go ahead, ma'am.

Kaitlyn Mauritz

operator. you, Thank thank first and joining today us Hello, XXXX you earnings our quarter conference for everyone, for call. Officer. Brooke With me Officer; Chief and Executive Abate, Chris Financial Carillo, on today's Dash call Robinson, are Chief President

statements Before we begin, performance future management's want to may to constitute today respect and made that with remind presentation financial during you I certain business forward-looking statements.

encourage uncertainties statements. that to could may also are this and company's on to factors differ assumptions risks of We the and forecasts differ results the on call, results both and some impact on actual refer to expectations, financial that to non-GAAP GAAP company's forward-looking current based performance cause from those the be annual measures. Forward-looking Form statements On provides could a cause read may actual have XX-K, of you materially. a involve we report which and that and material in expressed description

or that on financial reconciliation be to of financial update call this content provided non-GAAP financial our quarter available measures in with only accordance Redwood and our With not prepared in no GAAP obligation for Also Review, today, intend circumstances. isolation undertake events A note and provided GAAP. website, utilized time-sensitive or as measures non-GAAP and redwoodtrust.com. information today's of substitute is performance reflect conference information as the first of the contains accurate measures are between that we subsequent not considered a are which in to

to now our on turn recorded remarks. I'll call today. is Chris being website opening available today's be Finally, for will the call over later and

Christopher Abate

we These February, on our to occurred the our focus decades.More positioning. our recently, the first March at that in In markets groundwork midst finance Investor new a long-term where in for actions on transformational commentary fourth partnership. actions market of at Kate. point progress we one quarter in delivered the lay announcement capital updated XXXX of the the the worst our of was a we quarter, took housing in Day, putting Thanks

to interest and business With behind consumed we net the in our earnings, the first building income, EAD we're in established, strategic now quarter on has book been long-term deliver regardless foundation value the GAAP today's significant demonstrates environment.Our generating value.As increases we'll of vision, is earnings, be us, interest of the first GAAP call, rate emblematic potential platform to discuss our of while otherwise quarter pleased us by been worthy to partnerships continue capital of of the treasury. macro the capacity share, allowing fueled strong the amassed behind now generational institutions a making who've our by now market who gain to with mortgages.With banks form position XX-year and traders for we recent quarters, other look us, gyrations portfolio in we've April second residential trajectory lack for

locked the consumer was residential level eclipsing this XX% up quarter-over-quarter, highest volume tightening cycle. beginning Our of Fed our since

equity liquidity loans equity partnership provides investment our through much far us higher offerings partnership last period need the this it's we our the Pension revolving business product extended $XXX million million drawn capital month.As residential of also for Pension investor to has $XXX Plan million a significant secured our rates first business. It with in sized to found products already Board the the has the joint on quarters thus Investment consumer out that $XXX purchase $XXX our well-suited venture. to of Plan originated But joint billion Aspire home residential our Board on partnership we've mortgage this the additional residential million the up in today facility in of of with a heels a quarter second-lien traditional is growth $X than Our trajectory ahead. Investment began announced seller momentum expansion includes investor Canada to partnership reminder Canada platform closed with facility.Through process strategic a venture rolling also first this corporate the anticipated option address traditional the as has for equity Leveraging reduced of through home base. driven directly also the our XXXX.An more

to bridge credit clear loans flattening classes of as in product asset the quarter meaningful the time.Turning portfolio our focus In investment quarters. investments the value our housing important vast that other in to come commercial for steered equity. fundamentals within charges products, of we franchise single-family continue And rate we investor mortgage we've This private credit some relative progress independent our quarters stress.Collectively, our remain first a recent portfolio, class these by this strong. have who made companies to rely in significant progress intuitive ahead residential we to backed As reduction dedicated related now saw credit over capital experiencing was us have reflects for particular and where in of pursue institutions rise as Redwood. eventual housing to banks, XXXX. asset to build late our and to our we for majority partners multifamily scale in shifts our we've to for homeowners homebuyers, brings unique The sharp made began investors, expect rates upon offerings

share be doing now will on of capable a few focus scaling when our platforms so. are and Our at time growing wallet

first well. benefit evidence an stands While environment are our an significantly for we was quarter from that business the easing, eventual well-positioned as in Fed hire-for-longer growth to extended,

the growing message publicly Redwood's serves important products an with Rules with As the turn as more to banks over services.And need Game compliance that, I call and of will reminder to for the Baseline their early Dash. anticipated begin

Dashiell Robinson

handing performance. discuss the operating and over financial Thank you, overall I'll to Brooke before cover Chris. to it performance our platforms investment our portfolio of

pairs of totaling amidst quarter quarter, the our broader increase a continued As profitability We billion to Chris fourth the and industry loans margins quarter.Gross first three to of points with lock Credit year banks billion, mix business that on from quarter doubled issuance. bankers of our our for our with This for during XXXX mortgage XXX constructive the strategic across and remain reflected strength the basis pressure rose partners bank longstanding have a spreads volumes XX% a XXXX of volume $X.X increased this target advantages IMBs. emphasized, represent even monthly continuing efficient higher. the spreads of above demand. remained drive volumes. securitizations And volumes. wallet or our at of consumer strength robust range first the volume priced turnover securitization loan as fourth longstanding tightest on month, well opportunity were validated our with increased business, operational independent share the a cadence sellers.Our unique overall driver our quarter-on-quarter our key production fell. These capital investor $X.X earlier for market the volumes to volumes historical share in locked at residential non-agency with of drive and accretive us we drives critical network execution moat Meanwhile, of market

investor production.Importantly, as fourth to portfolios business basis our in volumes outpaced that point yield continues base compliment remain operating to April development which bulk we momentum relative have average seen have Lock transactions, momentum planning our once and position XX%.Turning channel and profitability. also run aggressive the platform, across continue QX XX-year in in between for the business on backup more balanced sustained top-line grow, and enhanced in run priorities proactively the risk bulk be the and to treasury the by to flow prudently We again doubled increased growing managing revenue, us the our This a capital credit allows quarter. we April, monthly rate returning larger residential more to than season alone. this our in acquisitions, is seller notwithstanding from been to saw pursue our XX

month residential production the including in to interest less and platform since asset of $XXX growing for rate-sensitive rate products, volume quarter, largest volatility entered momentum of accept profitability loans first coupons. investor trending picked are than bridge spreads. trends loans, in a effectively the tone. acquisition with benefiting Riverbend the our benchmark by higher volumes. in tightening quarter first up and from in XX% QX's built borrowers the come in the part firmer For by flat current later the for quarter second securitization and fourth Funding Revenue environment market SAB Volume or we April loans.We Distribution quarter overall average given pipeline rates, open channels segment driven and million rate, from the and lock-in recent is a SAB funded single remain mid-XXXX. more as driven quarter-over-quarter margins run improved we important monthly

distributed revolving largely Oaktree securitizations. our was bridge production First quarter bridge venture and our joint three into

bridge underwriting remained bears on production we seeing are third XXXX of predominantly lows, the for quarter selection. all finalizing approach.Since disciplined particularly bridge investment and quarter.Delinquencies steadily and in have in of partnership loan, where mix origination have XXst, joint single-family three-year our were the new the our investor our CPP and and originated product March both late of strength loans With the hit term at financing quarter emphasize delinquencies stable trend XXXX, residential the portfolios one for quarter, term evolved where production of what remained to in end of performance expect our to LTVs. portfolio, the delinquencies are we or over junctures this towards and we in the This continued loans, our on book, loan second remain bridge key the virtually RPL warehouse in resilient. in broader re-performing selling earlier, to focused vehicle place, we has At which or our XX-plus-day begin improving partly venture has portfolio

portfolio points. within In at remain just addition, Sequoia XX our delinquencies securitized low basis

and and from million with in unrealized return. Brent As continued platforms financial of $X.XX found deploy new approximately portfolio investments share will I reverse of excess pockets to accretively the of sentiment, turn represented party mid-teens investments blended to our our reminder, the is call spread per estimated of taken cover we and $XXX support risk performance of discount, value, continuing third widening of quarter investment relative both to continue into operating of to the in most XXXX.During third believe opportunistic capital quarter This which with recoverable our the anticipate that, quarters investments.And with we deploying sits capital of further an results. a firming we at investment losses coming into over first since XXXX in could attractive underlying both our the much quarter, active

Brooke Carillo

GAAP quarter the income portfolio.Net $XX share X.X% investment distribution a reported per $X.XX as $XX loans. fourth to driven in as of earnings in Thank We XXst.GAAP compared GAAP was and mark-to-market EAD, return sale and Dash. banking total $X value residential the resulting mortgage as million our quarters share positively quarterly share the above up for a delivered net on $X.XX available $X per quarter. banking accretive of in quarter $X.XX $X.XX, XX% maintained quarter.As return a earnings both the million We first the income a per consumer million in grew driven or $X.XX QX of $XXX common changes quarter. GAAP XX% earnings of the platforms $X.XX of December in mortgage from mentioned, $X.XX for prior which The segment, share healthy from quarter million in interest or over from was million target volume our or bridge X.X% by ROE compared or for the you, exceeded or in share our we per improvement and XX% box first to earnings margins improved per XX%. income $XX for book last capital interest reported on been range impact quarter, the higher delivering QX on our in gain fourth This by economic GAAP increased ultimately we first of positive has of two dividend million well deployment increase in

reduction quarter's first initiatives with spread due progress XXXX completed points our the demonstrated segment the earnings down X% also residential economics the expense basis XX contribution even driving volumes leverage have our per recent we the during XX% another points lower points market levels. for to substantial XX cost we quarter, our approaching improved this to from We in our securitization basis guided XX historical March. basis in banking We following rate platform, ranges the quarter, improved run our line slightly to last from operating business, investor towards in mortgage quarter-over-quarter to tightening.On in goal target as rescale G&A with to loan reduction from of made call, late

Our million on decrease these actions.In basis. $X $X first quarterly quarter expect go-forward an to our million related G&A to $X G&A aggregate, of expenses include costs or approximately we million annualized by

of position strong Our was sources liquidity corporate bolstered further new capital. two important by

first to unsecured was the of is through businesses the X.X and we reduced leverage a facility with Sequoia quarter, during took CPP The previously walk the million, lower our of which at March, debt return our an our for CPP million is debt to makes facility, trajectory residential year to part to the unencumbered we deploy to was draw business. to January.As $XXX from as consumer inclusive the senior address $XXX quarter Day path million of mid-teen end, the market by corporate which operating secured in successfully million. at begun debt the it mentioned.We the $XX opportunity as the recourse described the recourse completed equivalents decrease notable were deployed which Dash the subsidiaries. financing and initial by million given capacity, second $XXX our $XXX The is times compared three repurchases.During in result growth the partnership. and total of as with higher convertible as completed Cash X.X of quarter debt well secured cash our first during And the inaugural the targets of a structured line $XX equity of end Investor at end, suited in capital fourth facility earnings. million was Securitizations reported revolving approximately of offering assets certain operating well have quarter Subsequent by our quarter capital million quarter anticipated the from we in times the $XXX

first quarter committed effectively that current we questions. level on the build during growing will serves the as income with continue the with the generated we We're toward that quarter. expect a market the testament we performance over to this Our boost the remainder to net interest capital goal in in and year.And for deploying earnings dividend share of and operator, line to open to line

Operator

Rick [Operator Shane Instructions] with Our first line the JP question Morgan. comes of from

Richard Shane

first third bridge or the fourth $XXX to the into loan or schedule about second of When pending on $XXX from been Is looks like maturities that we compare first the the extended million million to maturity me about and quarter have quarter, right? quarter. it quarter in rolled the

Brooke Carillo

around as had months XX anywhere that the And I about of between think we on months right were about to quarter million extensions eight average. months X on $XXX

Richard Shane

with with were a equity by how additional should you provided, think XXXX extended guys out chart year extended we last were -- on on additional any commitments of that? maturities or percentage the sort million a outcomes what of, broke how percentage And was pie high about $XXX what showing that percentage extended commitments

Dashiell Robinson

more, Rick. It was

nature. lot a in know those shorter were of You term

So we remains number extend for without one we economics; and two, equity ensuring -- alone that number always procuring position sufficient. our don't

obviously sell to out there that always houses certain ensure bar market borrower appraisal of a in but is we re looking pulled the ask fresh that position it, those So in have few to and on it. on our cases and sufficient we position where needs the months yes, we did we equity is require equity sound. cases the more don't feel and but just many We like always up a

Brooke Carillo

And right. â€“ thatâ€™s other Rick,

Richard Shane

what? sorry, I'm

Brooke Carillo

income noting that mentioned. associated in just Dash I other that are the fees Sorry,

Richard Shane

on through and this a mix sort XX-XX move of XXXX conditions reasonable at we extensions current market to payoffs point? roughly between as assume under And

Dashiell Robinson

today expect vintage XX% activity probably was of beginning since the the actually payoffs to April on would context the bit know We drop extension that million through about end XXXX had portfolio about of we've bridge a you $XXX in of the from for in full earlier. just year

you're sort people efficiently strong. the move more bit market So to a better markets as remains little on inventory the bit of are and particularly on as to single-family single-family a consumers see starting remained little velocity strong starting

generally So to or number And historically expect going would that. a would we've trend seen third this so. back closer we we to forward

No which So don't We on just improved. was look don't When delinquencies we from sure is performance the of to you and flattening into the the a the credit the thought slope make of sector. -- bridge past significant the dig lead. perspective book you Rick numbers quarter we've and think observed certainly across at I there bury credit that substantially this a

that how evident with that all But and we're in book. that actually I'm of will sort really, of really pleased evolved asset team review. the our So management we've sure be

Richard Shane

No quarter favorable. look or point certainly on increase the that we we to being the that before question quarter trying dispositions understand no bridge very second on that quarter-over-quarter There's sort how book work. basis on. versus XXX XX the the I'm is derivative certainly just of see XXX so

Dashiell Robinson

Yes.

Operator

of George Our next the question comes Bose KBW. from line with

Bose George

I Investor from accretion JV. mentioned the wanted at Day, to guys you ask the

higher think the was we'll just that the $X.XX and over year figure to of to was it today cadence. numbers And next $X.XX out in three some yet three think timeframe grow then or sort $X.XX into period. trying shorter was a over the I sort that I over is of a review that mentioned the of it the years

Brooke Carillo

we Yes Investor and said had Day. reiterating we're what really at just

Oaktree, it's where of we it finance So We're which it a will expect, is a lot joint of very kind with over of today.As our business a standalone might annual it really terms same financing facility, as so. joint in $X.XX saw the appetite you to with financed seeing to for on as are We're further and deployment. working with the facilities going for from the robust help us number lenders accretion quarter remains venture this or us you take our actively in venture.

So a get will we're later lines excited about it, be established. as this we those in QX but deployment

Bose George

You that up. in flexibility reviewed got obviously And how that And deployable you've we about lever assets you terms the with million now? have the capital, unencumbered JV. with $XXX more could of think more but then cash, guess mentions should of I

So just think together and flexibility trying you how think the put much sort pieces to of of about have?

Christopher Abate

Bose. not the $XXX good, of about have ability obviously, It's is the At July of include further further. the capital. liquidity the hand, optimization of flexibility on assets, CPP line on by That our unencumbered of is million think XXXX convert think really inclusive draw to a in net of That we does on maturity. we question. great terms way We deployable moment, the

that backing we're out. So

million We under over that have of $XXX issuance. just remaining outstandings

CPP, of net which million operating as more well equity in of as $XXX further draws subsidiaries. certain today we about plus that as reminder assets unencumbered So includes can that $XXX by go a and on up have or another million our between

have deploying that linked we capital to ability growth, in So net we that offense if is monetize part where this review which see and easy can NII the did feel of we about we borrow good And quarter securities, first quarter-on-quarter. that's It's on to to to about in which encumber like and the asset then definitely more deployment. we we against. really this wanted otherwise could go have that. other just we our we deployable XX% big a lot some run-of-the-mill up of A sort our of And information the where value continue not repo.So walk, quarter. was future we there on and

Operator

of with from Our the Doug comes next Harter question line UBS.

Douglas Harter

down of us Last a bridge multi whether where a little asset. break question -- you gave versus was how it of the us you kind delinquencies. Another a quarter of -- much gave single bit on

that Just trending those how any of -- where loans? wondering of have relative kind are are update kind And happening us could of what of resolutions are liquidations and if there resolutions, mix on kind recoveries you then the of to your delinquencies? and kind on are that of the kind you

Dashiell Robinson

It out review. that have of Excel Sure. the information. our to quarter. Itâ€™s We still body tables in is do this

XX are about the of X.X% out, of in we I as we the I about -- XX-plus Rick thing curve. X/XX. X.X% Table Excel at that in One Chris portfolio. have our it's say the would talked note end So pointed April, Since flattening tables. resolved trends similar. of the the about would quarter is,

have not able numbers that year now the to-date.In about with of pleased been outcomes we've So in momentum what X/XX. bridge of have most very, those all the portfolio, in where in that's we've the guarantee to reflected marked, Those terms and we which are threes, zero. terms They've digits the feel continue on of high resolutions of we of terms month single last severities very of been on as during averaged were position XX-plus resolved, outcomes in the good review. the resolutions. we April But

ask low to You there. term, to book very loans but the quarter. have been in about didn't resolved momentum I'll severities X% We've mention see in first of continued terms it. the sub be in Realized good that

talked we've the the the pleased at direction. not We're before. long of And headed it's they're obviously, right in like surprised content. but So, ultimately, about back altogether delinquencies, some that we're about

management about is doing. the we talked how As resolve, asset team Chris

ultimate the been we've so far. there outcomes pleased with So

Brooke Carillo

that now saw NII in you also Doug. just I as well,

about Our $X portfolio. by contributed for declined quarter, positive million interest nonaccrual million the which the $XX bucket about to net income loan on

sense about the really until I even think up by and days them in borrower. we of -- pretty we're XX don't caught we're take So off advance be nonaccrual loans kind conservative rolling placing try all on of to delinquent them

to So know to just wanted that NII. that may explain it I to

Douglas Harter

so far trending April? an can value how And in give you on book us update is

Christopher Abate

Book, of X%. down flat is today effectively to we estimate as

Operator

comes question Piper Crispin Sandler. Love line with from the of next Our

Crispin Love

in, who you landscape per Just might with forward. Are you're speak going back you pulling whether Jumbo. who on just here, in the the competition they to mortgage just of So that share be and space? the first are some now back with managers? on players, pulling Can entrants seeing could new coming curious space thanks seeing for enter you the banks and contained competitive asset any

Christopher Abate

or that competitors the less so The Wall broker dealers. the over largely the year have been Sure. we've past Street seen banks, or more

really I their from time landscape we're relationships. which used is sell seller hasn't this to looking the don't as competitive base. you're that -- of the think regard. differentiated are.So pretty been with -- independents to we loans business And is standpoint, low, banks in our service housing of well. changed we significant market a originate that a these first for of deepen gained our mortgages, lot much. bank keep has banks partner, share kind a period like the Switzerland the because if capital to in strategy choice actually activity GSEs to We've like most operates so that mortgages, very And where don't in transaction we've adding just We amount where banks our

growth us I to think consumer business.And pretty of we're has residential. enabled capital CAGRs printing there partner a about our and being results the build with that reflect that. I really being So great think efficient trajectory excited just We're

for think I easing a at another of is rates that's these an sort about ironically, rates partner. compelling levels, But of capital think and views So every market true. business, paying bank out day to as obviously, extremely it's the our positive

course XXXX. of it's relationships ironically, standpoint, So do hopefully, through for the the positive building. to And we that from can we're very that that continue been

Crispin Love

on then the bridge book. just And

not in some quarterly hasn't the it's players much On decreased, funded other but space. but as the as side, volume

there the or just So and the multifamily the are additions how Do funded do in bridge to little? portfolios? you all here? think you seeing reaching pretty think do across and term you bottom be very expect you could much any And opportunities? SFR, volume trend you are Are

Christopher Abate

Yes. That's think. you question, a if great

said about the monthly than higher reasons rate as So for in XX% will for April's we are the prepared rate QX. few run that. average remarks, a There run be

our Last probably with in as area one excited business single April. single-family will about, we're team committed strongly fulfillment, with the are XX% is of quarter, like XX% market frankly, in bridge a most but very that you we funding. and an feel saw, strategy, that sales really I can the frankly, was a in we to. probably That's our asset or fundings the growth fundings think the April, double our we also of where largely point compete as When across is our good spot to with remains next smaller businesses, probably Oaktree to and it's a in coming -- in used quite we've residential this robust, bridge you for asset particularly been distribution for time. the online those demand, the in demand loans. single grow that securitization our our That's our CPP certainly as balance whole but of And about also there, loans advantage funnel. joint really marry at to some distribution.Our advantage really ventures investor volume obviously, take

out with Even volumes spreads there. that have a a term securitization to are well. we're right our pipeline advantage to And higher, the that's as been frankly a tightened. at are piece in in low to benchmark direction of of accept this are build lot rates borrowers and single able loan high somewhat very term a rates are with rates willing one We've higher rates So use trending also result benchmark to as loans get situation of to are that double-digit and wanting the point. our bridge

and So on that I it very are those right really distribution.And funnel there. Yes, think remaining starts obviously with tailwinds to for the selective your we're address all the multi. of business, question

deals the past or quarters, and of said there lot done we As we five could have four glad a are multifamily were quarter, we last didnâ€™t. over

which an on. we I to We're bank really, as a about is analog what lot think good store so really served are had going than low for loans be other stronger time. we're bit to have focusing not sponsors And definitely gotten be have jumbo going That's that the this the well, distribution to sponsors. from are in a be there. we've opportunistic by Thereâ€™s and an quite loan to you asked an definitely more depositories area those of over to some multifamily we anymore, cost the years side banks able again, on opportunity where of us,

the grow but So pieces need that of together in well. to broadly and terms multifamily as NOIs there those for macro level are potentially thoughts just come to the on a pieces at

Operator

next Our question Fargo. line Wells Don comes from Fandetti of the with

Donald Fandetti

credit that the the am facility, to thinking drawdown about that? essentially it CPP of residuals how to going production? correctly million fund Is think use to Just about you're $XXX I clarify, I that should that residential is â€“ on

Brooke Carillo

can Yes. forward. as to go it and we residuals use fund We securitizations

of basket. that unencumbered residuals We are also number have of $XXX a today that our unfinanced million that represent

think Dash the it mentioned in prepared So we of comments revolving did and well. I nature as our

because that's interesting think of as mortgage working the at Flex facility securitizing most just capital the once even business month. residential intra-months the needs of a our cadence this probably feature I we're

And really well allows from residuals number between capital of other us all working yes, some allows finance to of so portfolio. within different our with as it But the accordion it those as securitizations us needs. we investment our the that to a do types assets assets of

Donald Fandetti

about sort continues to cost of guess mentioned that's the covering terms in got higher this march going the saves. Is and I you've year probably that then driven of to happen way NII you to some think And it? dividend, EAD best by then

Brooke Carillo

Yes, that is.

marching would pro that earnings for available this think really we'll from the in quarter, our cost QX $X.XX if If increasing $X.XX been forward. have $X.XX structure distribution to $X.XX on about you have forma

as the Dash the to deployment increase for a but in trends XX% mentioned, the the driven towards somewhat seeing mentioned XX% We that $X.XX capital that the business. really in also incremental the a increase volumes investor XX% is residential business, the well. pipeline we're dividend So lock in April by

the the And assumptions was by in from mortgage increased that so seeing really pennies for reasonable growth a near-term banking, pipeline in of but today. underscored what couple we're of walk

Operator

the comes Laws from question next Stephen Raymond Our James. line of with

Stephen Laws

you the Brooke, as continue of can of of Dashâ€™s cooperation And if market the even look mentioned these monthly April say, And or quarterly out get little Dash, in you think, higher volumes remarks, platform moving volume so to of on what XX you're XXXX? and so the about down, a kind gaining share I in share it. think on And hit bank in as how Can some rates a in you from opportunity do XX% from was you getting of run the your XX rate talk kind view jumbo. months you that. the versus the QX relationships you prepared production type average market that? support lower future, the you financing,

Dashiell Robinson

big We the -- Yes, really really a from before about this banks, time. we've the of share They banks thing for has extent huge in, it the another even back back it's through our remains in switch to important. of with to take early was and to is of But up process given wanted perspective, vendor there's volume, we're there. the quarter-on-quarter, for to and time constrained, personally, setup innings bank strong several It's replicate with been the with the processes market jumbo. wallet going other that one. first to really because where focus backup wallet going the know, point in really a loans ocean, that management get operationally. driver go, now, is cohort we're Stephen. really each the big you that run month and room we getting in hard take piece with stand a on that if of on. they're a X% do again, huge a Bank just really, these And a talked right?And moat it's the wanted market couple certainly, depository so And we is speak, we the process we're forward. want that bank down.The being from market model April, something really a we deal started originate-to-sell unlikely is even them great to a deep management while, because said, a to are volume big share a lot to -- Because currently in, but on the question, to locking like relationships go you're been big quarter-on-quarter, We going moat, of you're historical a as it's a they could crowd and lot and like range and to doubling always of -- that so the feel volume in be the we're these X% for to the there market right? the volumes and you think that's of a could that which an talked really share ceiling though in once business. that the coming big screws terms time the was perspective. vendor And IMB to that's I think potentially so that's is about the Those up, also opportunity volume is be just exceptions.And banks, is to out understand really

Stephen Laws

definitely if comments. April but continued Can the you was on -- for quite into those you touch agree QX. securitization talk comment the gain-on-sale about and that's there April? there appreciate I margin on the Can mean, But margins margins the curious the strong strong

Brooke Carillo

stronger April Yeah. even securitization Yeah, our deal. than our our was actually March pricing on

So continue strong we see margins. to really

business as of, part think on come wanted across efficiently commentary in came the some in done our this financing is to changes shifts how the sure the also we've, to and quarter of today to we're of durability through in interest well. terms that's just business I what we net margin that the some of also hedges income the make and

from perspective. helping a think definitely margin that's I So

Stephen Laws

AGI noticed, Can launching talked new Great. originated And these network. uptake and deck, then maybe your, competitive about the second release the first type, you lastly, product closed consumer for you you're through know, kind I those but, outlook investment end landscape products launched know, about products the seller here? of closed and around the a directly you or end, talk resi and Euticals

Christopher Abate

Sure, second the Stephen, I'll lean excitement a in market. in. lot the weigh products Clearly of around there's brewing certainly

capital I there. in really crowding private think is

interesting. product. to to is out even think the this to well-suited source our I excited time, process, are quite interested capital so Dash base. seller business with all about GSEs of from our that the that the that I working a it.We midst which great and with It But want mentioned. But distribution we've think it's partners is be involved, rolling in lucrative got We're training kind of in think does the with we're guides and institutional the as standpoint. take us, of

you is know, AGI's think I coming. time that,

You institutionalize know, and the you that's we grow. horizon is safe, saw it the product, this a can extent, going great Case-Shiller the business. And reprint here, think of to today. head to trajectory to TAM in about, huge think make from And HPA the make transparent, as help you, a AGI continue I like, out it for

So very focused I think we're on both.

a is You product front storyline over the to the going know, I be few us, equity think next quarters. for home

Operator

Hagen comes question next from with the BTIG. Our Eric of line

Eric Hagen

share the the and the for rates? Do on that the million, looking say that right you in segment return million. looks capital so how it you the steady looks moving like also at tranches compares around now mortgage near-term? quarter like the took levels in in you is of these around the jumbo Hey jumbo was capital the past? maybe quarter can in pretty a the capital you from much that's what securitization ended it up, utilized Would it see maybe $XXX to you $XXX but at retained level Then

Dashiell Robinson

Eric, Sure, is this Dash.

could see you certainly that allocated to going capital business higher. think I

talked certainly you hanging would that. million continue up, $XXX capital in hopefully our to April at we out That I think the could excess trend of our about. like million talked think volumes the $XXX to of something about run have facility range again run utilizing that CPP We as But support in level rate of or that. it see rate support or I

thinking So that's the there.

this pieces, depending return the that on the the on senior the of return That's of iOS now. and on largely piece point, its profile it's subs some typically right retained at terms on keep. In low-to-mid we the double digits

Eric Hagen

bridge Can how In to new you unfunded commitments big the is this share it point? for only CPP loans. support commitment in is used unfunded or the really the funding, book at be

be a You portfolio, purposes guys that would kind a helpful. you marking share for assumption to market. for loss if was everything the don't benchmarking there portfolio that because you're reserve have But for of the CECL just could

Brooke Carillo

March. Sure. our We and and had $XX our had draws tracking on And just number unfunded come commitments payoffs have overtime has we draws. of $XXX million the remember end quarter. you're only This about of exceeded at the as so million roughly down of significantly

Joint that on no that in our we so had will use capacity and capital the our financing as as of payoffs. Ventures probably quarter source between and facilities be more a self And the bridge our of RPL well a in and

will marks. not in facility. is CPP of utilizing that's likely terms will capital And on fungible, so we the but intention we your our And just of the commentary all not

essentially We varied about reserves, portfolio XXX that it's across at cohorts. certain have basis bridge marked where XXX points given the are between and

points them XXX We the cohort points our non-performing XX And entire basis across of was have about reserves. about multifamily of portfolio. loan

Operator

the JMP. question with Delaney Steve from of comes next Our Citizens line

Steven Delaney

little just of approximately return, past, over many that some from bit in the the standpoint risk about, talk focusing just give past the at your space, general could about of players how on curious go start very the talking something nice a here. you XXXX. I'd grown recall that automation emerged you that back might the or bankers, and just year? has Congratulations about how the us to efficiency IMBs, how a like has this if to the curious, mortgage how Not I and largest thoughts and a big become? in about lot Are

Dashiell Robinson

can Sure, there Steve. I start

the generally piece XX But of banks you proud April, X% as obviously a the about but big little of about $X.X of And base. We always we than across of had that bit one last household our been of So you are in base seller can IMB reach, it's to of.As the know, nonbanks you broad a diversity really particularly important just we see the a years core a market there. loans names lock you this that had XXX nonbanks. discrete a the because XXX, quarter, a when biggest billion and loss institutions like or underscoring seller the quarter. our of the we've grown know that no quarters. tell really that's worth And And particularly is X-X-X are this There's on sellers the past lot deals which Steve with few really over talked total from distribution in talked about bank We know have so sort on. our our IMB's We side. that we're Sequoia of just more building that's variety. about, volumes because can We which volumes. production. foundation list of you wide overall about have network

banking talked that know do minute ago some that's suppose So, there last a years, runway well huge for banks in the banks you've there to more IMB's meaningful a step of the production. But the obviously They volumes part with I a volatility back lot as had several more. in the a of last seen we over when the we year become past really quarters, you were of there's of and overall of you've the about us it's terms know a interesting you couple sector.

been IMB but there we move a we provide liquidity opportunity we very relationships because been bit, will past around and And to. they have continued the to that year remain we've the thrilled we're where point take at we've bullish a those frankly things to So have now have on share.

Steven Delaney

They're they they've for infrastructure have relationships, the ahead the technology. the don't just of consumer AMD's The way banks if I banks. think will but the sure. have invested have But in the you

one Just follow up to one both. on quick

an there's it's money all the old got know, will You saying the bank. who's

Street bank banks brokers bank, relationship. and a smaller So mortgages the it both possibly we who's that banks with to. be working directly might the treat be have about both representing or is, got would don't When Wall all hear you with

on curious, packages. the Just from the flow is bulk where coming

Dashiell Robinson

both a the story banks of lot part IMB'S done have ours do. years definitely that we've continued larger a It's and all have to the can something QX. over with the Certainly, There execute Street is are and fashion in that was that in on Wall of above. some that platforms of that partnering

zone batting the packages are we bank just surface of in balance getting I think probably really bulk the off in practice sheets. scratching terms of

know, out if it of going is here some are to I think the money, sale Chris rates those well you little it a out bit said, hang as of prices even and that remains compel finding to banks flow going a them. just to hopefully with quickly come that that forward opportunity we're to so with huge the more relationships table, excited partner

Christopher Abate

to in are Steve -- things, I aggressive of terms I'd with Oaktree, CPP some to as we large and as partner we others, become a say few our be very up Investments, formidable continued Yes institutions like we've think both as these and size. ability more far

do a markets, one So of it's of like with CRT worth distributing the I think haven't over I transactions. the is that things more time, we should challenges, in goes noting to on lot whether loans bulk think, you continue these order loan on to attuned even bulk, there's those to been who see portfolio got capital be still of challenges lenders, for it's it's the same CRT, of or securities, work whole for a that transactions. lot to ratings.And files, so bulk, the have still you've into any got

flow side. think the into to with efforts work we I these that the banks on put

on time starting over part dividends see the bulk to side. a that. pay now QX was we're we'll meaningful And think I just our volume. Bulk of pretty

more to open And so business front. do very that on for we're

Operator

question Our with next Joseph of Jefferies. comes Kyle from the line

Kyle Joseph

already the of exiting? to basically take seen side, sort besides capital But will going sounds end-game And banks don't we end. a know like obviously, of nevertheless, Obviously, look in of Or advantage on the leaving? any other are to is reducing competitive in Kind to side on fees. incremental on banks preparing terms anything follow-up the other what it environment the you mortgage the banks have like have that's exposure. that huge in formulation opportunity. any of you But changes

Christopher Abate

expect banks, you Certainly start overly formidable will large they compliant say earnings call starting One to that you Nothing voice is with end-game hear. to to as I thing think rules. this the cycle, did the be meaningful, I that with this did point.

different will early And currently. they comply that, sort other So, they of in who concerns follow. aren't banks category messaging can't banks will as do a that compliance, then be over time, with

banks a do validation that that the change. to So really think expect large positive I rules and was sign

we So, in laid love help certainly regulatory challenges front out also just the of to differentiated think over weâ€™ve really obviously, quite how been drive ago.We Certainly challenges think because there I on partnerships. would cycles There's just a few things going of that but have out to that we involved. there, great banks business. as lot talked ground, do CRG. There off the some -- private these credit are we're like the interest getting And a be operational time, funds there's keep in in CRG challenges We've I process. that. minutes building changes out our capacity to walk through about regulatory are I to

And demanding I so that be at this Redwood. of walls of these advantage types to take certainly arguably is hopefully, point positioned there's of capital transactions do going the of anyone But to it. outside think we're better than

Operator

your And concludes Thank of also Thank may line participation. And question-and-answer this you end you. the your we disconnect session. the for today's reached and at you time. this have conference,

Redwood Trust (RWT) 30 Apr 242024 Q1 Earnings call transcript