Company: RWT-PA
Filing Date: 2025-08-08
Form Type: 10-Q
Source: 0000930236-25-000029
Chunk: 333

Company: REDWOOD TRUST INC
Filing Date: 2025-08-08
Form: 10-Q
Item: Part I, Item 8
Chunk 333
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 if warranted, based on progress with the project versus the initial budget and timelines.

We typically distribute most of our term loans through our CAFL® private-label securitization program, through whole loan sales or into our joint ventures. We typically transfer our residential investor bridge loans to our Redwood Investments portfolio, where they will either be retained for investment, securitized, sold as whole loans or distributed into joint ventures.

Since mid-2023, we have established joint ventures with two separate institutional investment managers, one in the second quarter of 2023 to invest in residential investor bridge loans originated by CoreVest and another in the first quarter of 2024 to invest in residential investor bridge and term loans originated by CoreVest. We administer the joint ventures for ongoing fees and are entitled to earn additional performance fees upon realization of specified return hurdles.

This segment also includes various derivative financial instruments that we utilize to manage certain risks associated with our inventory of loans held-for-sale. This segment’s main sources of mortgage banking income are net interest income earned on loans while they are held in inventory, origination and other fees on loans, mark-to-market adjustments on loans from the time loans are originated or purchased to when they are sold, securitized or transferred into our Redwood Investments portfolio, and gains/losses from associated hedges. Fee income associated with our administration of joint ventures and other loan-related administrative functions is also included in this segment. Direct operating expenses and tax expenses associated with these activities are also included in this segment.

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The following table presents an earnings summary for our CoreVest Mortgage Banking segment for the three and six months ended June 30, 2025 to the immediate preceding quarter March 31, 2025 and year-to-date period June 30, 2024.

Table 7 – CoreVest Mortgage Banking Earnings SummaryThree Months EndedSix Months Ended(In Thousands)June 30, 2025March 31, 2025ChangeJune 30, 2025June 30, 2024ChangeMortgage banking income$21,792 $17,668 $4,124 $39,459 $23,606 $15,853 Operating expenses(15,935)(15,296)(639)(31,231)(30,207)(1,024)Benefit from income taxes278 648 (370)927 1,687 (760)Segment Contribution$6,135 $3,020 $3,