Wed, May 21, 3:34 PM (31 days ago)
**Summary of Redwood Mortgage Investors IX, LLC (RMI IX) Q1 2025 Financial Performance** **Financial Health and Performance Metrics:** - **Revenue:** Interest income decreased to $1,079,000 from $1,500,000 in Q1 2024, leading to a net interest income of $1,052,000. - **Profit Margins:** Net income dropped to $217,000 from $645,000 in Q1 2024, reflecting a 33.6% decrease. - **Cash Flow:** Operating cash flow was $123,000, down from $544,000 in Q1 2024. Investing activities provided $5,887,000, while financing activities used $5,550,000. - **Earnings Changes:** Net income available to members as a percent of members’ capital decreased to 1.3% from 3.7% in Q1 2024. **Quarterly Performance Discussion:** - **Revenue:** The decrease in interest income was due to a reduction in the average daily balance of secured loans. - **Expenses:** Operations expenses increased by $43,000, primarily due to higher professional services and audit fees. - **Cash Flow:** The decrease in operating cash flow was offset by positive investing activities, mainly from loan funding and principal collections. **Trends and Uncertainties:** - **Loan Portfolio:** The weighted average loan-to-value (LTV) ratio was 61.1%, indicating substantial protective equity. - **Delinquencies:** Seven loans with a total principal of $10,148,000 were past due, with two loans in second lien position. - **Redemptions:** The company redeemed $840,000 in members’ capital, with $25.3 million in redemption requests pending. **Future Operations Impact:** - **Liquidity:** The company maintains sufficient cash balances to support operations and meet obligations. - **Loan Sales:** The company may sell loans to unaffiliated third parties, which could impact future cash flows and earnings. - **Regulatory Compliance:** The company is addressing a material weakness in internal controls over financial reporting. **Ticker:** No ticker symbol provided in the text. **Conclusion:** RMI IX faced challenges in Q1 2025 with decreased revenue and net income, primarily due to a reduction in the loan portfolio and higher expenses. However, the company maintains a strong loan portfolio with substantial protective equity and sufficient liquidity to support operations. Future performance will depend on the company's ability to manage delinquencies, meet redemption requests, and address regulatory compliance issues.