Equity

12 Months Ended

Dec. 31, 2025

Equity [Abstract]

Equity

Equity

The following table provides a summary of changes to accumulated other comprehensive income by component for the years ended December 31, 2025 and 2024.

Table 20.1 – Changes in Accumulated Other Comprehensive Income by Component

	Years Ended December 31,
	2025						2024
(In Thousands)	Available-for-Sale Securities		Interest Rate Agreements Accounted for as Cash Flow Hedges		Total		Available-for-Sale Securities		Interest Rate Agreements Accounted for as Cash Flow Hedges		Total
Balance at beginning of year	$	20,967	$	(64,038)	$	(43,071)	$	10,219	$	(68,176)	$	(57,957)
Other comprehensive income before reclassifications	9,041		—		9,041		12,345		—		12,345
Amounts reclassified from other accumulated comprehensive (loss) income	(1,766)		4,127		2,361		(1,597)		4,138		2,541
Net current-period other comprehensive income	7,275		4,127		11,402		10,748		4,138		14,886
Balance at End of Year	$	28,242	$	(59,911)	$	(31,669)	$	20,967	$	(64,038)	$	(43,071)

The following table provides a summary of reclassifications out of accumulated other comprehensive income for the years ended December 31, 2025 and 2024.

Table 20.2 – Reclassifications Out of Accumulated Other Comprehensive Income

		Amount Reclassified From Accumulated Other Comprehensive Loss
	Affected Line Item in the	Year Ended December 31,
(In Thousands)	Income Statement	2025		2024
Net Realized (Gain) Loss on AFS Securities
Net increase (decrease) in allowance for credit losses on AFS securities	Investment fair value changes, net	$	145	$	(1,561)
(Gain) loss on sales of AFS securities	Realized gains, net	(1,911)		(36)
		$	(1,766)	$	(1,597)
Net Realized Loss on Interest Rate   Agreements Designated as Cash Flow Hedges
Amortization of deferred loss	Interest expense	$	4,127	$	4,138
		$	4,127	$	4,138
Total amounts reclassified from other accumulated comprehensive income		$	2,361	$	2,541

Issuance of Common Stock

We have an established program to sell common stock from time to time in at-the-market ("ATM") offerings. During the years ended December 31, 2025 and December 31, 2024, we did not issue any common shares through ATM offerings. $175 million of equity issuance capacity remained outstanding for future offerings at December 31, 2025.

Issuance of Preferred Stock

In January 2023, we issued 2.8 million shares of 10.00% Series A Fixed-Rate Reset Cumulative Redeemable Preferred Stock ("Series A Preferred Stock") for gross proceeds of $70 million and net proceeds of approximately $67 million, after deducting the underwriting discount and other estimated expenses. The Series A Preferred Stock pays quarterly cumulative cash dividends through January 15, 2028 at a fixed annual rate of 10%, based on the stated liquidation preference of $25.00 per share, in arrears, when authorized by Redwood's Board of Directors and declared by the Company. Starting April 15, 2028, the annual dividend rate will reset to the five-year U.S. Treasury Rate plus a spread of 6.278%. The Series A Preferred Stock ranks senior to Redwood's common stock with respect to rights to the payment of dividends and the distribution of assets upon any liquidation, dissolution or winding up of the Company. During the year ended December 31, 2025, the Company declared preferred stock dividends of $2.50 per share. At December 31, 2025, preferred dividends payable totaling $1 million for the fourth quarter 2025 were included in Accrued expenses and other liabilities. These dividends are payable on January 15, 2026 to preferred stockholders of record on January 1, 2026.

Direct Stock Purchase and Dividend Reinvestment Plan

During the years ended December 31, 2025 and 2024, we did not issue shares of common stock through our Direct Stock Purchase and Dividend Reinvestment Plan. At December 31, 2025, approximately 6 million shares remained outstanding for future offerings under this plan.

Common Stock Warrants

In conjunction with establishing the joint venture with an institutional investment manager in the first quarter of 2024, we issued warrants exercisable for 1,974,905 shares of our common stock (the “First Tranche Warrants”); and (ii) warrants exercisable for 4,608,112 shares of our common stock (the “Second Tranche Warrants” and together with the First Tranche Warrants, the “Warrants”). The First Tranche Warrants are exercisable from March 18, 2025 to March 18, 2029. The Second Tranche Warrants will vest upon achievement of specified deployment thresholds related to the joint venture and, if vested, will be exercisable from the date the Second Tranche Warrants vest to March 18, 2029. The initial strike price of the Warrants was $7.76. The Warrants also contain a

mandatory exercise provision, exercisable at Redwood’s option upon satisfaction of specified conditions, including the trading price of Redwood’s common stock exceeding a specified premium to the exercise price. Exercises of any Warrants will be settled on a net basis.

The Warrants met the criteria for equity classification under GAAP and are recorded as a component of Additional paid-in-capital in Equity on our Consolidated Balance Sheets. The Warrants were valued at $0.8 million on the issuance date.

In October 2025, we extended the exercise date for the Second Tranche Warrants to September 18, 2030 and revised the strike price of the Warrants to $6.96 per share. The revised warrant valuation as a result of these changes was $0.8 million and these warrants are not subject to subsequent remeasurement. See Note 21 for discussion on the impact of the Warrants on earnings per common share.

Stock Repurchases

In July 2025, our Board of Directors approved an authorization for the repurchase of up to $150 million of our common stock, and also authorized the repurchase of outstanding debt securities, including convertible and exchangeable debt. This authorization replaced our previous $125 million common stock repurchase authorization. In May 2023, our Board of Directors approved an authorization for the repurchase of up to $70 million of our preferred stock. These authorizations have no expiration dates and do not obligate us to acquire any specific number of shares or securities. During the year ended December 31, 2025, we repurchased 9.2 million shares of our common stock for a total cost of $53 million and did not repurchase any shares of our preferred stock or of our convertible and exchangeable debt. During the year ended December 31, 2024 we did not repurchase any shares of our common stock or preferred stock and repurchased $72 million of our convertible and exchangeable debt. At December 31, 2025, $111 million of the current authorization remained available for the repurchase of shares of our common stock, $70 million remained available for repurchases of shares of our preferred stock, and we also continued to be authorized to repurchase outstanding debt securities.