Company: RWT-PA
Filing Date: 2025-08-08
Form Type: 10-Q
Source: 0000930236-25-000029
Chunk: 177

Company: REDWOOD TRUST INC
Filing Date: 2025-08-08
Form: 10-Q
Item: Part I, Item 1
Chunk 177
---
 quarter of 2025, as a part of the Company's accelerated shift towards a scalable and simplified operating model and wind-down of the legacy unsecuritized bridge and term loan portfolios, third-party securities portfolio, and other non-core legacy assets held in this segment historically were formally reclassified to the newly established Legacy Investments segment. This reclassification did not impact the consolidated financial results but served to streamline reporting and better align Redwood’s disclosure with its strategic focus. All relevant prior period amounts and disclosures have been conformed to reflect the current segment structure.

We primarily target investments that have a sensitivity to housing credit risk, typically sourced through our operating businesses where we control the underwriting and review of underlying collateral. We currently target returns related to capital deployment opportunities of between 15-20% on our Redwood Investments portfolio.

This segment’s main sources of income are net interest income and other income from investments, changes in fair value of investments and associated hedges, and realized gains and losses upon the sale of securities. Direct operating expenses and tax provisions associated with these activities are also included in this segment.

The following table presents an earnings summary for our Redwood Investments segment for the three and six months ended June 30, 2025 to the immediate preceding quarter ended March 31, 2025 and the year-to-date period ended June 30, 2024.

Table 9 – Redwood Investments Earnings SummaryThree Months EndedSix Months Ended(In Thousands)June 30, 2025March 31, 2025ChangeJune 30, 2025June 30, 2024ChangeNet interest income$22,097 $21,659 $438 $43,712 $47,769 $(4,057)Investment fair value changes, net(8,998)3,623 (12,621)(5,375)40,637 (46,012)HEI income, net126 55 71 181 — 181 Servicing income1,608 3,407 (1,799)5,015 7,774 (2,759)Fee income, net412 142 270 554 733 (179)Other income, net394 370 24 764 1,208 (444)Realized gains, net640 567 73 1,207 314 893 Operating expenses(5,954)(5,116)(838)(11,070)(9,918)(