Company: RWT-PA
Filing Date: 2025-11-07
Form Type: 10-Q
Source: 0000930236-25-000037
Chunk: 16

Company: REDWOOD TRUST INC
Filing Date: 2025-11-07
Form: 10-Q
Item: Part I, Item 2
Chunk 16
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,551 (8.9)%(42,891)682,514 (8.4)%Total interest expense$(799,191)$18,484,158 (5.8)%$(603,799)$14,022,509 (5.7)%Net Interest Income$56,770 $75,001 

(1)Average balances for residential consumer loans, residential investor loans, and trading securities are calculated based upon carrying values, which represent fair values. Average balances for AFS securities, debt facilities, corporate debt and certain ABS issued are calculated based upon amortized historical cost. Average balances for ABS carried at fair value are calculated based upon fair value.

(2)Interest income and interest expense securitized loans reflect activity from consolidated VIEs. While we consolidate these entities for GAAP reporting purposes, economically, we earn interest income from the securities we own in these entities, which is represented by the net interest income (interest income less interest expense) from these consolidated entities presented in the table above.

(3)Real estate securities include trading securities consisting primarily of interest-only securities, which generate a higher cash interest yield. This interest income may be offset by a decline in fair value (recognized through investment fair value changes, net on our consolidated statements of income) related to the receipt of cash flows each period, resulting in a lower overall economic yield for these investments.

68

Consolidated Market Valuation Gains and Losses, Net 

The following table presents the net market valuation gains and losses recorded in each line item of our consolidated statements of income for the three and nine months ended September 30, 2025, the immediate preceding quarter ended June 30, 2025 and year-to-date period ended September 30, 2024.

Table 3 – Consolidated Market Valuation Gains and Losses, NetThree Months EndedNine Months Ended(In Thousands)September 30, 2025June 30, 2025September 30, 2025September 30, 2024Mortgage Banking Activities, NetResidential consumer loans held-for-sale$12,882 $6,460 $19,802 $20,079 Residential consumer LPCs41,990 8,635 80,764 11,331 Residential investor term loans held-for-sale3,291 4,560 13,666 11,833 Residential investor term loan IRLCs— — 1,115 —