Company: RWT-PA
Filing Date: 2025-11-07
Form Type: 10-Q
Source: 0000930236-25-000037
Chunk: 30

Company: REDWOOD TRUST INC
Filing Date: 2025-11-07
Form: 10-Q
Item: Part I, Item 2
Chunk 30
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126 619 926 32 894 Servicing income1,416 1,608 (192)6,431 8,025 (1,594)Fee income, net270 412 (142)823 797 26 Other income, net392 394 (2)1,156 2,139 (983)Realized gains, net— 640 (640)1,207 525 682 Operating expenses(8,293)(5,954)(2,339)(19,364)(13,354)(6,010)(Provision for) Benefit from income taxes(30)1,567 (1,597)1,841 (3,454)5,295 Segment Contribution$10,340 $11,892 $(1,552)$47,197 $100,887 $(53,690)

Investment fair value changes, net is primarily comprised of the change in fair value (both realized and unrealized) of our portfolio investments accounted for under the fair value option and interest rate hedges associated with these investments. See Table 3 in the Consolidated Results of Operations in Part I, Item 2 of this Quarterly Report on Form 10-Q for further detail on the composition of investment fair value changes (the difference in amounts in the table above and in Table 3 relates to fair value changes for investments held at corporate/other).

 We hold certain of our investments, primarily our MSRs, at our TRS. Activity at this segment that is performed within our TRS is subject to federal and state income taxes. The benefit from income taxes was primarily due to GAAP losses generated by this segment’s operations at our TRS and our provision for income taxes at this segment is primarily driven by the amount of income earned from portfolio assets at our TRS. 

Three Months Ended September 30, 2025 Compared to Three Months Ended June 30, 2025 

The $2 million decrease in segment contribution during the three months ended September 30, 2025, as compared to the three months ended June 30, 2025, is due to a $5 million decline in Net interest income, offset by a $7 million improvement in Investment fair value losses, net. The modest net decline reflected paydowns of third-party securities, partially offset by gains on retained investments as rates declined and spreads tightened. 

Fundamental performance of assets within this segment saw consistent trends in underlying credit and