Redwood Trust to Convert to Taxable C-Corporation

Redwood Trust, Inc. will discontinue its real estate investment trust status and convert into a taxable C-corporation effective for the calendar year ending December 31, 2027. The company's board of directors expects this conversion to increase GAAP book value per share by $0.73 to $0.77 during the fourth quarter of 2026.

To facilitate the transition, the company is realigning its quarterly dividend to $0.02 per common share and will execute a one-for-five reverse stock split on January 4, 2027. During the week of November 9, 2026, the company plans to launch a modified Dutch auction exchange offer to trade $50 million of common stock for a new 11.00% Series B Preferred Stock.

Additionally, the company adopted a Tax Benefits Preservation Rights Plan. This measure is designed to protect approximately $304 million in U.S. federal net operating loss carryforwards, which the company intends to use to offset future taxable income.