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Equity | 9 Months Ended
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Sep. 30, 2025
Equity [Abstract] |
Equity | Equity The following tables provides a summary of changes to accumulated other comprehensive income (loss) by component for three and nine months ended September 30, 2025 and 2024. Table 20.1 – Changes in Accumulated Other Comprehensive Income (Loss) by Component
|  | Three Months Ended September 30, 2025 |  | Three Months Ended September 30, 2024
(In Thousands) |  | AFS Securities |  | Interest Rate Agreements Accounted for as Cash Flow Hedges |  | Total |  | AFS Securities |  | Interest Rate Agreements Accounted for as Cash Flow Hedges |  | Total
Balance at beginning of period |  | $ | 22,934 |  |  | $ | (61,991) |  |  | $ | (39,057) |  |  | $ | 18,786 |  |  | $ | (66,118) |  |  | $ | (47,332) |
Other comprehensive income before reclassifications |  | 2,362 |  |  | — |  |  | 2,362 |  |  | 7,373 |  |  | — |  |  | 7,373 |
Amounts reclassified from other accumulated comprehensive income (loss) |  | (44) |  |  | 1,040 |  |  | 996 |  |  | (472) |  |  | 1,040 |  |  | 568 |
Net current-period other comprehensive income (loss) |  | 2,318 |  |  | 1,040 |  |  | 3,358 |  |  | 6,901 |  |  | 1,040 |  |  | 7,941 |
Balance at End of Period |  | $ | 25,252 |  |  | $ | (60,951) |  |  | $ | (35,699) |  |  | $ | 25,687 |  |  | $ | (65,078) |  |  | $ | (39,391) |
|  | Nine Months Ended September 30, 2025 |  | Nine Months Ended September 30, 2024
(In Thousands) |  | AFS Securities |  | Interest Rate Agreements Accounted for as Cash Flow Hedges |  | Total |  | AFS Securities |  | Interest Rate Agreements Accounted for as Cash Flow Hedges |  | Total
Balance at beginning of period |  | $ | 20,967 |  |  | $ | (64,038) |  |  | $ | (43,071) |  |  | $ | 10,219 |  |  | $ | (68,176) |  |  | $ | (57,957) |
Other comprehensive income before reclassifications |  | 6,322 |  |  | — |  |  | 6,322 |  |  | 17,083 |  |  | — |  |  | 17,083 |
Amounts reclassified from other accumulated comprehensive income (loss) |  | (2,037) |  |  | 3,087 |  |  | 1,050 |  |  | (1,615) |  |  | 3,098 |  |  | 1,483 |
Net current-period other comprehensive income (loss) |  | 4,285 |  |  | 3,087 |  |  | 7,372 |  |  | 15,468 |  |  | 3,098 |  |  | 18,566 |
Balance at End of Period |  | $ | 25,252 |  |  | $ | (60,951) |  |  | $ | (35,699) |  |  | $ | 25,687 |  |  | $ | (65,078) |  |  | $ | (39,391) |
The following tables provide a summary of reclassifications out of Accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2025 and 2024. Table 20.2 – Reclassifications Out of Accumulated Other Comprehensive Income (Loss)
|  |  |  | Amount Reclassified From Accumulated Other Comprehensive Loss
|  | Affected Line Item in the |  | Three Months Ended September 30,
(In Thousands) |  | Income Statement |  | 2025 |  | 2024
Net Realized (Gain) Loss on AFS Securities |  |  |  |  |  |
Decrease in allowance for credit losses on AFS securities |  | Investment fair value changes, net |  | $ | (44) |  |  | $ | (472) |
(Gain) on sale of AFS securities |  | Realized gains, net |  | — |  |  | — |
|  |  |  | $ | (44) |  |  | $ | (472) |
Net Realized Loss on Interest Rate Agreements Designated as Cash Flow Hedges |  |  |  |  |  |
Amortization of deferred loss |  | Interest expense |  | $ | 1,040 |  |  | $ | 1,040 |
|  |  |  | $ | 1,040 |  |  | $ | 1,040 |
|  |  |  | Amount Reclassified From Accumulated Other Comprehensive Loss
|  | Affected Line Item in the |  | Nine Months Ended September 30,
(In Thousands) |  | Income Statement |  | 2025 |  | 2024
Net Realized (Gain) Loss on AFS Securities |  |  |  |  |  |
(Decrease) increase in allowance for credit losses on AFS securities |  | Investment fair value changes, net |  | $ | (126) |  |  | $ | (1,615) |
(Gain) on sale of AFS securities |  | Realized gains, net |  | (1,911) |  |  | — |
|  |  |  | $ | (2,037) |  |  | $ | (1,615) |
Net Realized Loss on Interest Rate Agreements Designated as Cash Flow Hedges |  |  |  |  |  |
Amortization of deferred loss |  | Interest expense |  | $ | 3,087 |  |  | $ | 3,098 |
|  |  |  | $ | 3,087 |  |  | $ | 3,098 |
We have an established program to sell common stock from time to time in at-the-market ("ATM") offerings. During the nine months ended September 30, 2025, we did not issue any shares of common stock under this program. At September 30, 2025, the remaining share issuance capacity under this program was approximately $50 million. Issuance of Preferred Stock We issued 2.8 million shares of 10.00% Series A Fixed-Rate Reset Cumulative Redeemable Preferred Stock ("Series A Preferred Stock") for gross proceeds of $70 million and net proceeds of approximately $67 million, after deducting the underwriting discount and other estimated expenses. The Series A Preferred Stock pays quarterly cumulative cash dividends through January 15, 2028 at a fixed annual rate of 10%, based on the stated liquidation preference of $25.00 per share, in arrears, when authorized by Redwood's Board of Directors and declared by the Company. Starting April 15, 2028, the annual dividend rate will reset to the five-year U.S. Treasury Rate plus a spread of 6.278%. The Series A Preferred Stock ranks senior to Redwood's common stock with respect to rights to the payment of dividends and the distribution of assets upon any liquidation, dissolution or winding up of the Company. During the three and nine months ended September 30, 2025, the Company declared preferred stock dividends of $0.625 and $1.875 per preferred share, respectively. At September 30, 2025, preferred dividends payable totaling $1 million for the third quarter 2025 dividend were included in Accrued expenses and other liabilities and were payable on October 15, 2025 to preferred stockholders of record on October 1, 2025. Direct Stock Purchase and Dividend Reinvestment Plan During the three months ended September 30, 2025, we did not issue any shares of common stock through our Direct Stock Purchase and Dividend Reinvestment Plan. At September 30, 2025, approximately six million shares remained outstanding for future offerings under this plan. Common Stock Warrants In conjunction with establishing the joint venture with an institutional investment manager in March 2024, we issued warrants exercisable for 1,974,905 shares of our common stock (the “First Tranche Warrants”); and (ii) warrants exercisable for 4,608,112 shares of our common stock (the “Second Tranche Warrants” and together with the First Tranche Warrants, the “Warrants”). The First Tranche Warrants are exercisable from March 18, 2025 to March 18, 2029. The Second Tranche Warrants will vest upon achievement of specified deployment thresholds related to our one of our joint ventures with an institutional investment manager and, if vested, will be exercisable from the date the Second Tranche Warrants vest to March 18, 2029. The initial strike price of the Warrants is $7.76. The Warrants also contain a mandatory exercise provision, exercisable at Redwood’s option upon satisfaction of specified conditions, including the trading price of Redwood’s common stock exceeding a specified premium to the exercise price. Exercises of any Warrants will be settled on a net basis. The Warrants met the criteria for equity classification under GAAP and are recorded as a component of Additional paid-in-capital in Equity on our Consolidated Balance Sheets. The Warrants were valued at $0.8 million on the issuance date and are not subject to subsequent remeasurement. See Note 21 for discussion on the impact of the Warrants on earnings per common share. For additional information related to our equity, see Note 19 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2024. Stock Repurchases In July 2025, our Board of Directors approved an authorization for the repurchase of up to $150 million of our common stock, and also authorized the repurchase of outstanding debt securities, including convertible and exchangeable debt. This authorization replaced our previous $125 million common stock repurchase authorization. In May 2023, our Board of Directors approved an additional authorization for the repurchase of up to $70 million of our preferred stock. These authorizations have no expiration dates and do not obligate us to acquire any specific number of shares or securities. During the three and nine months ended September 30, 2025, we repurchased 5.0 million and 6.5 million shares of our common stock for a total cost of $29 million and $38 million, respectively. During the three and nine months ended September 30, 2025 we did not repurchase any shares of our preferred stock or of our convertible and exchangeable debt. At September 30, 2025, $126 million and $70 million of these authorizations, respectively, remained available for the repurchase of shares of our common and preferred stock, respectively, and we also continued to be authorized to repurchase outstanding debt securities.

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