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Segment Information
 6 Months Ended
Jun. 30, 2024
Segment Reporting [Abstract]  
Segment Information Segment Information
Redwood operates in three segments: Residential Consumer Mortgage Banking, Residential Investor Mortgage Banking and Investment Portfolio. The accounting policies of the reportable segments are the same as those described in Note 3 — Summary of Significant Accounting Policies. For a full description of our segments, see Part I, Item 1—Business in our Annual Report on Form 10-K for the year ended December 31, 2023. In the normal course of business, loans are originated and acquired at our mortgage banking segments and may subsequently be transferred to our investment portfolio segment either as whole loans or through the retention of securities from securitizations we sponsor and consolidate under GAAP. All of our loans are accounted for under the fair value option and amounts transferred between segments are accounted for at fair value at the time of transfer.
Segment contribution represents the measure of profit that management uses to assess the performance of our business segments and make resource allocation and operating decisions. Certain corporate expenses not directly assigned or allocated to one of our three segments are included in the Corporate/Other column as reconciling items to our consolidated financial statements. These unallocated corporate expenses primarily include interest expense for our convertible notes and trust preferred securities (and in 2024 and 2023, realized gains from the repurchase of convertible notes), indirect general and administrative expenses and other expenses.
The following tables present financial information by segment for the three and six months ended June 30, 2024 and 2023.
Table 4.1 – Business Segment Financial Information
Three Months Ended June 30, 2024
(In Thousands)Residential Consumer Mortgage BankingResidential Investor Mortgage BankingInvestment PortfolioCorporate/
Other		Total
Interest income$21,097 $7,008 $196,742 $570 $225,417 
Interest expense(9,922)(5,504)(166,812)(17,886)(200,124)
Net interest income (expense)11,175 1,504 29,930 (17,316)25,293 
Non-interest income (loss)
Mortgage banking activities, net6,245 12,679 — — 18,924 
Investment fair value changes, net— — 2,548 (1,450)1,098 
HEI income, net— — 15,839 — 15,839 
Other income, net— 1,174 5,120 (1)6,293 
Realized gains, net— — — — — 
Total non-interest income (loss), net6,245 13,853 23,507 (1,451)42,154 
General and administrative expenses(4,957)(9,677)(641)(18,009)(33,284)
Portfolio management costs— — (4,834)(30)(4,864)
Loan acquisition costs(980)(2,433)(244)(7)(3,664)
Other expenses— (2,203)(2,974)— (5,177)
(Provision for) benefit from income taxes(1,560)(449)(2,914)(1)(4,924)
Segment Contribution$9,923 $595 $41,830 $(36,814)
Net Income$15,534 
Non-cash amortization (expense), net$(313)$(2,426)$(203)$(2,881)$(5,823)
Six Months Ended June 30, 2024
(In Thousands)Residential Consumer Mortgage BankingResidential Investor Mortgage BankingInvestment PortfolioCorporate/
Other		Total
Interest income$35,409 $10,779 $381,640 $2,329 $430,157 
Interest expense(18,188)(8,381)(322,110)(31,975)(380,654)
Net interest income (expense)17,221 2,398 59,530 (29,646)49,503 
Non-interest income (loss)
Mortgage banking activities, net14,072 19,408 — — 33,480 
Investment fair value changes, net— — 23,735 (800)22,935 
HEI income, net— — 24,870 — 24,870 
Other income, net— 1,800 9,945 (946)10,799 
Realized gains, net— — 314 95 409 
Total non-interest income (loss), net14,072 21,208 58,864 (1,651)92,493 
General and administrative expenses(9,746)(21,102)(2,816)(34,189)(67,853)
Portfolio management costs— — (8,422)(39)(8,461)
Loan acquisition costs(1,551)(4,097)(244)(9)(5,901)
Other expenses— (5,008)(3,530)— (8,538)
(Provision for) benefit from income taxes(3,054)1,687 (4,060)(20)(5,447)
Segment Contribution$16,942 $(4,914)$99,322 $(65,554)
Net Income$45,796 
Non-cash amortization (expense), net$(597)$(5,499)$(3,220)$(4,821)$(14,137)
Three Months Ended June 30, 2023
(In Thousands)Residential Consumer Mortgage BankingResidential Investor Mortgage BankingInvestment PortfolioCorporate/
Other		Total
Interest income$2,434 $4,397 $169,343 $2,807 $178,981 
Interest expense(1,700)(3,673)(132,514)(14,998)(152,885)
Net interest income (expense)734 724 36,829 (12,191)26,096 
Non-interest income (loss)
Mortgage banking activities, net7,061 9,491 — — 16,552 
Investment fair value changes, net— — (10,768)(2,749)(13,517)
HEI income, net— — 8,921 — 8,921 
Other income, net— 1,076 4,013 (931)4,158 
Realized gains, net— — 949 107 1,056 
Total non-interest income (loss), net7,061 10,567 3,115 (3,573)17,170 
General and administrative expenses(3,738)(11,638)(1,241)(14,188)(30,805)
Portfolio management costs— — (3,087)(13)(3,100)
Loan acquisition costs(149)(1,295)— — (1,444)
Other expenses— (3,107)(1,868)— (4,975)
(Provision for) Benefit from income taxes(707)1,406 (1,465)697 (69)
Segment Contribution$3,201 $(3,343)$32,283 $(29,268)
Net Income$2,873 
Non-cash amortization (expense), net(292)(3,333)(1,857)(2,086)(7,568)
Six Months Ended June 30, 2023
(In Thousands)Residential Consumer Mortgage BankingResidential Investor Mortgage BankingInvestment PortfolioCorporate/
Other		Total
Interest income$7,944 $8,891 $335,546 $5,116 $357,497 
Interest expense(8,566)(7,711)(258,470)(30,217)(304,964)
Net interest income (expense)(622)1,180 77,076 (25,101)52,533 
Non-interest income (loss)
Mortgage banking activities, net10,426 22,797 — — 33,223 
Investment fair value changes, net1,076 — (16,141)(2,844)(17,909)
HEI income, net— — 13,186 — 13,186 
Other income, net— 3,484 6,181 (951)8,714 
Realized gains, net— — 832 222 1,054 
Total non-interest income (loss), net11,502 26,281 4,058 (3,573)38,268 
General and administrative expenses(8,544)(25,316)(2,650)(29,850)(66,360)
Portfolio management costs— — (6,597)(13)(6,610)
Loan acquisition costs(324)(2,409)— — (2,733)
Other expenses— (6,215)(2,444)— (8,659)
(Provision for) Benefit from income taxes(74)2,109 (1,678)697 1,054 
Segment Contribution$1,938 $(4,370)$67,765 $(57,840)
Net Income$7,493 
Non-cash amortization (expense), net(547)(7,035)(4,690)(4,193)(16,465)
The following table presents supplemental balance sheet information by segment at June 30, 2024 and December 31, 2023. Certain balance sheet accounts are not directly assigned or allocated to one of our three segments and are not reflected in the supplemental segment information provided below.
Table 4.2 – Supplemental Segment Information
(In Thousands)Residential Consumer Mortgage BankingResidential Investor Mortgage BankingInvestment Portfolio Corporate/
Other		Total
June 30, 2024
Residential consumer loans$962,548 $— $8,247,608 $— $9,210,156 
Residential investor loans— 259,483 4,620,167 — 4,879,650 
Consolidated Agency multifamily loans— — 421,794 — 421,794 
Real estate securities75,489 — 188,912 — 264,401 
Home equity investments— — 573,400 719 574,119 
Other investments— — 290,876 59,030 349,906 
Goodwill— 23,373 — — 23,373 
Intangible assets— 23,454 — — 23,454 
Total assets$1,106,416 $371,876 $14,649,885 $362,927 $16,491,104 
December 31, 2023
Residential consumer loans$911,192 $— $5,999,706 $139,739 $7,050,637 
Residential investor loans— 180,250 5,040,048 — 5,220,298 
Consolidated Agency multifamily loans— — 425,285 — 425,285 
Real estate securities4,995 — 122,802 — 127,797 
Home equity investments— — 550,323 113 550,436 
Other investments— — 287,822 56,108 343,930 
Goodwill— 23,373 — — 23,373 
Intangible assets— 28,462 — — 28,462 
Total assets$971,535 $293,225 $12,718,201 $521,366 $14,504,327