Company: RWT-PA
Filing Date: 2025-08-08
Form Type: 10-Q
Source: 0000930236-25-000029
Chunk: 106

Company: REDWOOD TRUST INC
Filing Date: 2025-08-08
Form: 10-Q
Item: Part I, Item 1
Chunk 106
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 total carrying value (fair value) and unrealized losses of residential AFS securities that were in a gross unrealized loss position at June 30, 2025 and December 31, 2024.Table 9.3 – AFS Securities in Gross Unrealized Loss Position by Holding Periods Less Than 12 Consecutive Months12 Consecutive Months or LongerFairValueUnrealizedLossesFairValueUnrealized Losses(In Thousands)June 30, 2025$2,073 $(4)$20,819 $(4,311)December 31, 202430,351 (391)19,817 (5,283)At June 30, 2025, after giving effect to purchases, sales, and extinguishment due to credit losses, our consolidated balance sheets included 64 AFS securities, of which 12 were in an unrealized loss position and 11 were in a continuous unrealized loss position for 12 consecutive months or longer. At December 31, 2024, our consolidated balance sheets included 90 AFS securities, of which 20 were in an unrealized loss position and 11 were in a continuous unrealized loss position for 12 consecutive months or longer.Allowance for Credit LossesCredit impairments on our AFS securities are recorded in earnings using an allowance for credit losses, with the allowance limited to the amount by which the security's fair value is less than its amortized cost basis. We evaluate all securities in an unrealized loss position to determine if the impairment is credit-related (resulting in an allowance for credit losses recorded in earnings) or non-credit-related (resulting in an unrealized loss through other comprehensive income). The allowance for credit losses is calculated using a discounted cash flow approach and is measured as the difference between the beneficial interest’s amortized cost and the estimate of cash flows expected to be collected, discounted at the effective interest rate used to accrete the beneficial interest. No allowance is recorded for beneficial interests in an unrealized gain position. At June 30, 2025, our allowance for credit losses related to our AFS securities was $0.8 million.The following table details the activity related to the allowance for credit losses for AFS securities for the three and six months ended June 30, 2025 and 2024.Table 9.4 – Rollforward of Allowance for Credit LossesThree Months Ended June 30,(In Thousands)20252024Beginning balance allowance for credit losses$854