Company: RWT-PA
Filing Date: 2025-05-09
Form Type: 10-Q
Source: 0000930236-25-000020
Chunk: 258

Company: REDWOOD TRUST INC
Filing Date: 2025-05-09
Form: 10-Q
Item: Part I, Item 8
Chunk 258
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 months ended March 31, 2025 and 2024 are presented in the following table.Table 22.1 – Components of General and Administrative ExpensesThree Months Ended March 31,(In Thousands)20252024Fixed compensation expense (1)$15,989 $16,257 Long-term incentive award expense (2)5,669 6,487 Annual variable compensation expense5,936 2,917 Systems and consulting3,784 3,201 Office costs1,979 2,082 Accounting and legal1,599 1,217 Corporate costs738 872 Other1,777 1,536 Total General and Administrative Expenses$37,471 $34,569 (1)Includes $2 million of severance and transition-related expenses for the three months ended March 31, 2024.(2)For the three months ended March 31, 2025 and 2024, long-term incentive award expense included $6 million of expense, respectively, with $5 million awards settleable in shares of our common stock, and $1 million awards settleable in cash.For additional information related to cash-settled long-term incentive awards, see Note 14 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2024.

Note 23. Taxes

The Company's effective income tax rate differs from the federal corporate tax rate of 21.0%, primarily as a result of state taxes and REIT GAAP income not subject to federal income tax.The Company's effective tax rate was 27.9% and 1.7% for the three months ended March 31, 2025 and 2024.We assessed our tax positions for all open tax years (i.e., Federal, 2021 to 2025, and State, 2020 to 2025) at March 31, 2025 and December 31, 2024, and concluded that we had no uncertain tax positions that resulted in material unrecognized tax benefits. As of March 31, 2025, the Company has a valuation allowance of $118 million for certain state deferred tax assets, as it is more likely than not that those assets will not be realized. The Company considers all available evidence, both positive and negative, to analyze the realizability of deferred tax assets. After evaluating these sources of taxable income, and considering the jurisdiction and character of the