Company: RWT-PA
Filing Date: 2025-05-09
Form Type: 10-Q
Source: 0000930236-25-000020
Chunk: 96

Company: REDWOOD TRUST INC
Filing Date: 2025-05-09
Form: 10-Q
Item: Part I, Item 1
Chunk 96
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 joint venture was $28 million. We account for our investment in the joint venture under the equity method of accounting as we have a minority non-controlling interest approximating 20% across both Redwood's direct equity capital contribution to joint venture entities and joint venture co-investments, and we are deemed to be able to exert significant influence over the affairs of the joint venture. We adjust the carrying value of our equity method investment for our share of earnings or losses, dividends or return of capital on a quarterly basis. We recognized net equity method earnings of $2 million for the three months ended March 31, 2025, through Other income, net in our Consolidated statements of income. 

See Note 8 for further information on residential bridge loans sold to these joint ventures.

32

REDWOOD TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS March 31, 2025(Unaudited) 

Note 13. Derivative Financial Instruments

To manage, to varying degrees, risks associated with certain assets and liabilities on our consolidated balance sheets, we may enter into derivative contracts. We account for our derivative contracts, including loan purchase commitments ("LPCs") and interest rate lock commitments ("IRLCs") qualifying as derivatives under GAAP, at fair value. As discussed in our Annual Report on Form 10-K for the year ended December 31, 2024, we consider counterparty risk as part of our fair value assessments of all derivative financial instruments at each quarter-end. At March 31, 2025, we assessed this risk as remote and did not record an associated specific valuation adjustment. At March 31, 2025, we were in compliance with our derivative counterparty ISDA agreements. The following table presents the fair value and notional amount of our derivatives at March 31, 2025 and December 31, 2024.Table 13.1 – Fair Value and Notional Amount of DerivativesMarch 31, 2025December 31, 2024FairValueNotionalAmountFairValueNotionalAmount(In Thousands)Assets - Risk Management DerivativesTBAs$7,488 $1,180,000 $— $— Interest rate futures3,666 324,000 16,446 712,500 Swaptions126,250 7,950,000 23,738 8,245,000 Assets - Other DerivativesLPC