Company: RWT-PA
Filing Date: 2025-08-08
Form Type: 10-Q
Source: 0000930236-25-000029
Chunk: 184

Company: REDWOOD TRUST INC
Filing Date: 2025-08-08
Form: 10-Q
Item: Part I, Item 1
Chunk 184
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 third-party securities portfolio and other non-core legacy assets. These assets were previously included within the Redwood Investments segment, and are in the active process of sale, runoff, or other disposition as part of accelerated strategic repositioning of our business model. This segment is expected to wind down over time as the assets are sold or otherwise resolved. We expect to free up $200 to $250 million in capital from these legacy investments by year-end 2025, which would be available to redeploy into our operating platforms, related investments, or other uses. All relevant prior period amounts and disclosures have been conformed to reflect the current segment structure.

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 or disposition of assets. 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 Legacy 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 13 – Legacy Investments Earnings SummaryThree Months EndedSix Months Ended(In Thousands)June 30, 2025March 31, 2025ChangeJune 30, 2025June 30, 2024ChangeNet interest income$(9,449)$1,838 $(11,287)$(7,611)$8,137 $(15,748)Investment fair value changes, net(75,574)(8,731)(66,843)(84,305)(16,902)(67,403)HEI income, net(13,025)10,111 (23,136)(2,914)24,969 (27,883)Fee income, net(985)(870)(115)(1,855)131 (1,986)Operating expenses(7,491)(4,447)(3,044)(11,938)(6,516)(5,422)Benefit from (provision for) income taxes2,535 — 2,535 2,535 — 2,535 Segment Contribution$(103,989)$(2,099)$(101,890)$(106,088)$9,819 $(115,907)

Investment fair value changes, net is primarily comprised of the change in fair value (both