Segment Information (Tables)

9 Months Ended

Sep. 30, 2020

The following tables present financial information by segment for the three and nine months ended September 30, 2020 and 2019.

Table 23.1 – Business Segment Financial Information


	Three Months Ended September 30, 2020
(In Thousands)	Residential Lending		Business Purpose Lending		Third-Party Investments		Corporate/ Other		Total
Interest income	$	26,672	$	55,930	$	37,576	$	1,804	$	121,982
Interest expense	(22,541)		(46,027)		(27,534)		(4,309)		(100,411)
Net interest income	4,131		9,903		10,042		(2,505)		21,571
Non-interest income
Mortgage banking activities, net	11,864		47,531		—		—		59,395
Investment fair value changes, net	2,443		16,892		87,890		(178)		107,047
Other income, net	(2,011)		623		340		934		(114)
Realized gains, net	—		—		602		—		602
Total non-interest income, net	12,296		65,046		88,832		756		166,930
General and administrative expenses	(4,602)		(9,321)		(709)		(12,998)		(27,630)
Loan acquisition costs	(304)		(1,660)		(194)		—		(2,158)
Other expenses	(3,309)		(3,874)		(470)		(135)		(7,788)
(Provision for) benefit from income taxes	(826)		(8,544)		257		—		(9,113)
Segment Contribution	$	7,386	$	51,550	$	97,758	$	(14,882)
Net Income									$	141,812
Non-cash amortization (expense) income, net	$	1,785	$	(6,719)	$	117	$	(1,516)	$	(6,333)


	Nine Months Ended September 30, 2020
(In Thousands)	Residential Lending		Business Purpose Lending		Third-Party Investments		Corporate/ Other		Total
Interest income	$	123,956	$	162,732	$	155,583	$	7,738	$	450,009
Interest expense	(94,112)		(119,854)		(123,160)		(12,622)		(349,748)
Net interest income	29,844		42,878		32,423		(4,884)		100,261
Non-interest income
Mortgage banking activities, net	(19,222)		43,733		—		—		24,511
Investment fair value changes, net	(159,107)		(84,837)		(366,696)		(917)		(611,557)
Other income, net	(2,278)		3,493		1,072		1,692		3,979
Realized gains, net	2,001		—		3,236		25,182		30,419
Total non-interest income, net	(178,606)		(37,611)		(362,388)		25,957		(552,648)
General and administrative expenses	(12,901)		(29,977)		(4,230)		(37,724)		(84,832)
Loan acquisition costs	(1,512)		(5,630)		(567)		(7)		(7,716)
Other expenses	(3,309)		(100,743)		347		(581)		(104,286)
Benefit from income taxes	7,827		477		4,775		—		13,079
Segment Contribution	$	(158,657)	$	(130,606)	$	(329,640)	$	(17,239)
Net Loss									$	(636,142)
Non-cash amortization (expense) income, net	$	602	$	(18,050)	$	1,105	$	(3,035)	$	(19,378)
Other significant non-cash expense: goodwill impairment	$	—	$	(88,675)	$	—	$	—	$	(88,675)



	Three Months Ended September 30, 2019
(In Thousands)	Residential Lending		Business Purpose Lending		Third-Party Investments		Corporate/ Other		Total
Interest income	$	69,586	$	5,527	$	70,709	$	4,295	$	150,117
Interest expense	(48,798)		(2,813)		(61,541)		(3,452)		(116,604)
Net interest income	20,788		2,714		9,168		843		33,513
Non-interest income
Mortgage banking activities, net	5,016		4,499		—		—		9,515
Investment fair value changes, net	(11,088)		(1,073)		24,057		(452)		11,444
Other income, net	1,878		1,918		560		—		4,356
Realized gains, net	—		—		4,714		—		4,714
Total non-interest income, net	(4,194)		5,344		29,331		(452)		30,029
General and administrative expenses	(5,581)		(6,028)		(676)		(12,614)		(24,899)
Loan acquisition costs	(867)		(756)		(180)		(113)		(1,916)
Other expenses	—		(1,900)		(395)		(236)		(2,531)
Benefit from (provision for) income taxes	228		(8)		(106)		—		114
Segment Contribution	$	10,374	$	(634)	$	37,142	$	(12,572)
Net Income									$	34,310
Non-cash amortization income (expense), net	$	2,537	$	(2,107)	$	—	$	(1,148)	$	(718)



	Nine Months Ended September 30, 2019
(In Thousands)	Residential Lending		Business Purpose Lending		Third-Party Investments		Corporate/ Other		Total
Interest income	$	204,036	$	12,595	$	199,145	$	13,924	$	429,700
Interest expense	(145,795)		(6,590)		(168,167)		(11,548)		(332,100)
Net interest income	58,241		6,005		30,978		2,376		97,600
Non-interest income
Mortgage banking activities, net	31,202		9,782		—		—		40,984
Investment fair value changes, net	(20,910)		(1,833)		58,492		(1,008)		34,741
Other income, net	6,317		4,213		600		2,710		13,840
Realized gains, net	7,728		—		10,499		—		18,227
Total non-interest income, net	24,337		12,162		69,591		1,702		107,792
General and administrative expenses	(17,591)		(13,452)		(2,239)		(37,440)		(70,722)
Loan acquisition costs	(2,859)		(2,017)		(503)		(128)		(5,507)
Other expenses	—		(4,432)		(864)		(725)		(6,021)
(Provision for) benefit from income taxes	(1,757)		25		(1,370)		—		(3,102)
Segment Contribution	$	60,371	$	(1,709)	$	95,593	$	(34,215)
Net Income									$	120,040
Non-cash amortization income (expense), net	$	6,780	$	(4,907)	$	(824)	$	(1,939)	$	(890)

Components of Corporate and Other

The following table presents the components of Corporate/Other for the three and nine months ended September 30, 2020 and 2019.

Table 23.2 – Components of Corporate/Other


	Three Months Ended September 30,
	2020						2019
(In Thousands)	Legacy Consolidated VIEs (1)		Other		Total		Legacy Consolidated VIEs (1)		Other		Total
Interest income	$	1,795	$	9	$	1,804	$	4,295	$	—	$	4,295
Interest expense	(1,058)		(3,251)		(4,309)		(3,452)		—		(3,452)
Net interest income	737		(3,242)		(2,505)		843		—		843
Non-interest income

Investment fair value changes, net	(81)		(97)		(178)		(407)		(45)		(452)
Other income	—		934		934		—		—		—

Total non-interest income, net	(81)		837		756		(407)		(45)		(452)
General and administrative expenses	—		(12,998)		(12,998)		—		(12,614)		(12,614)
Loan acquisition costs	—		—		—		—		(113)		(113)
Other expenses	—		(135)		(135)		—		(236)		(236)

Total	$	656	$	(15,538)	$	(14,882)	$	436	$	(13,008)	$	(12,572)


	Nine Months Ended September 30,
	2020						2019
(In Thousands)	Legacy Consolidated VIEs (1)		Other		Total		Legacy Consolidated VIEs (1)		Other		Total
Interest income	$	7,675	$	63	$	7,738	$	13,924	$	—	$	13,924
Interest expense	(5,098)		(7,524)		(12,622)		(11,548)		—		(11,548)
Net interest income	2,577		(7,461)		(4,884)		2,376		—		2,376
Non-interest income

Investment fair value changes, net	(702)		(215)		(917)		(904)		(104)		(1,008)
Other income	—		1,692		1,692		—		2,710		2,710
Realized gains, net	—		25,182		25,182		—		—		—
Total non-interest income, net	(702)		26,659		25,957		(904)		2,606		1,702
General and administrative expenses	—		(37,724)		(37,724)		—		(37,440)		(37,440)
Loan acquisition costs	—		(7)		(7)		—		(128)		(128)
Other expenses	—		(581)		(581)		—		(725)		(725)

Total	$	1,875	$	(19,114)	$	(17,239)	$	1,472	$	(35,687)	$	(34,215)

(1) Legacy consolidated VIEs represent Legacy Sequoia entities that are consolidated for GAAP financial reporting purposes. See Note 4 for further discussion on VIEs.

Supplemental Information by Segment

The following table presents supplemental information by segment at September 30, 2020 and December 31, 2019.

Table 23.3 – Supplemental Segment Information


(In Thousands)	Residential Lending		Business Purpose Lending		Third-Party Investments		Corporate/ Other		Total
September 30, 2020
Residential loans	$	1,941,489	$	—	$	2,256,682	$	296,765	$	4,494,936
Business purpose residential loans	—		3,956,101		—		—		3,956,101
Multifamily loans	—		—		491,415		—		491,415
Real estate securities	146,608		—		204,727		—		351,335
Other investments	14,878		25,713		344,037		—		384,628
Goodwill and intangible assets	—		60,737		—		—		60,737
Total assets	2,148,643		4,134,913		3,315,039		803,817		10,402,412

December 31, 2019
Residential loans	$	4,939,745	$	—	$	2,367,215	$	407,890	$	7,714,850
Business purpose residential loans	—		3,506,743		—		—		3,506,743
Multifamily loans	—		—		4,408,524		—		4,408,524
Real estate securities	229,074		—		870,800		—		1,099,874
Other investments	42,224		21,002		294,904		—		358,130
Goodwill and intangible assets	—		161,464		—		—		161,464
Total assets	5,410,540		3,786,641		8,028,946		769,313		17,995,440