Segment Information (Tables)

9 Months Ended

Sep. 30, 2021

The following tables present financial information by segment for the three and nine months ended September 30, 2021 and 2020.

Table 23.1 – Business Segment Financial Information


	Three Months Ended September 30, 2021
(In Thousands)	Residential Lending		Business Purpose Lending		Third-Party Investments		Corporate/ Other		Total
Interest income	$	44,220	$	67,235	$	33,218	$	1,049	$	145,722
Interest expense	(25,395)		(46,834)		(21,370)		(10,155)		(103,754)
Net interest income	18,825		20,401		11,848		(9,106)		41,968
Non-interest income
Mortgage banking activities, net	32,946		30,217		—		—		63,163
Investment fair value changes, net	2,285		3,470		20,569		(247)		26,077
Other income, net	874		1,184		—		330		2,388
Realized gains, net	6,389		314		—		—		6,703
Total non-interest income (loss), net	42,494		35,185		20,569		83		98,331
General and administrative expenses	(8,989)		(13,987)		(1,415)		(23,301)		(47,692)
Loan acquisition costs	(2,395)		(2,175)		(51)		—		(4,621)
Other expenses	—		(3,873)		(150)		—		(4,023)
(Provision for) benefit from income taxes	(11,139)		(3,485)		(335)		19,282		4,323
Segment Contribution	$	38,796	$	32,066	$	30,466	$	(13,042)
Net Income									$	88,286
Non-cash amortization (expense) income, net	$	5,862	$	(4,713)	$	276	$	(1,995)	$	(570)


	Nine Months Ended September 30, 2021
(In Thousands)	Residential Lending		Business Purpose Lending		Third-Party Investments		Corporate/ Other		Total
Interest income	$	104,801	$	202,155	$	102,180	$	3,586	$	412,722
Interest expense	(65,488)		(151,351)		(66,883)		(30,649)		(314,371)
Net interest income	39,313		50,804		35,297		(27,063)		98,351
Non-interest income
Mortgage banking activities, net	115,646		84,543		—		—		200,189
Investment fair value changes, net	8,958		10,551		102,303		(1,168)		120,644
Other income, net	4,566		3,044		5		742		8,357
Realized gains, net	15,484		812		1,507		—		17,803
Total non-interest income, net	144,654		98,950		103,815		(426)		346,993
General and administrative expenses	(30,539)		(38,834)		(3,476)		(58,988)		(131,837)
Loan acquisition costs	(5,698)		(6,088)		(138)		(4)		(11,928)
Other expenses	(6)		(11,523)		(592)		17		(12,104)
(Provision for) benefit from income taxes	(25,289)		(6,988)		(912)		19,282		(13,907)
Segment Contribution	$	122,435	$	86,321	$	133,994	$	(67,182)
Net Income									$	275,568
Non-cash amortization (expense) income, net	$	8,867	$	(16,154)	$	317	$	(5,845)	$	(12,815)



	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	(21,401)		(44,159)		(24,238)		(10,613)		(100,411)
Net interest income	5,271		11,771		13,338		(8,809)		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	$	8,526	$	53,418	$	101,054	$	(21,186)
Net Income									$	141,812
Non-cash amortization income (expense), 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	(87,725)		(113,143)		(111,666)		(37,214)		(349,748)
Net interest income	36,231		49,589		43,917		(29,476)		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	$	(152,270)	$	(123,895)	$	(318,146)	$	(41,831)
Net Loss									$	(636,142)
Non-cash amortization income (expense), net	$	732	$	(18,035)	$	1,170	$	(3,244)	$	(19,377)
Other significant non-cash expense: goodwill impairment	$	—	$	(88,675)	$	—	$	—	$	(88,675)

Components of Corporate and Other

The following table presents the components of Corporate/Other for the three and nine months ended September 30, 2021 and 2020.

Table 23.2 – Components of Corporate/Other


	Three Months Ended September 30,
	2021						2020
(In Thousands)	Legacy Consolidated VIEs (1)		Other		Total		Legacy Consolidated VIEs (1)		Other		Total
Interest income	$	1,042	$	7	$	1,049	$	1,795	$	9	$	1,804
Interest expense	(641)		(9,514)		(10,155)		(1,059)		(9,554)		(10,613)
Net interest income	401		(9,507)		(9,106)		736		(9,545)		(8,809)
Non-interest income

Investment fair value changes, net	(247)		—		(247)		(81)		(97)		(178)
Other income	—		330		330		—		934		934

Total non-interest income, net	(247)		330		83		(81)		837		756
General and administrative expenses	—		(23,301)		(23,301)		—		(12,998)		(12,998)

Other expenses	—		—		—		—		(135)		(135)
Provision for income taxes	—		19,282		19,282		—		—		—
Total	$	154	$	(13,196)	$	(13,042)	$	655	$	(21,841)	$	(21,186)


	Nine Months Ended September 30,
	2021						2020
(In Thousands)	Legacy Consolidated VIEs (1)		Other		Total		Legacy Consolidated VIEs (1)		Other		Total
Interest income	$	3,559	$	27	$	3,586	$	7,674	$	64	$	7,738
Interest expense	(2,271)		(28,378)		(30,649)		(5,099)		(32,115)		(37,214)
Net interest income	1,288		(28,351)		(27,063)		2,575		(32,051)		(29,476)
Non-interest income

Investment fair value changes, net	(1,162)		(6)		(1,168)		(702)		(215)		(917)
Other income	—		742		742		—		1,692		1,692
Realized gains, net	—		—		—		—		25,182		25,182
Total non-interest income, net	(1,162)		736		(426)		(702)		26,659		25,957
General and administrative expenses	—		(58,988)		(58,988)		—		(37,724)		(37,724)
Loan acquisition costs	—		(4)		(4)		—		(7)		(7)
Other expenses	—		17		17		—		(581)		(581)
Provision for income taxes	—		19,282		19,282		—		—		—
Total	$	126	$	(67,308)	$	(67,182)	$	1,873	$	(43,704)	$	(41,831)

(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, 2021 and December 31, 2020.

Table 23.3 – Supplemental Segment Information


(In Thousands)	Residential Lending		Business Purpose Lending		Third-Party Investments		Corporate/ Other		Total
September 30, 2021
Residential loans	$	3,974,829	$	—	$	1,999,405	$	242,234	$	6,216,468
Business purpose loans	—		4,693,555		—		—		4,693,555
Multifamily loans	—		—		482,791		—		482,791
Real estate securities	150,368		—		202,918		—		353,286
Other investments	12,389		6,767		379,102		24,108		422,366
Intangible assets	—		45,246		—		—		45,246
Total assets	4,219,950		4,860,226		3,088,815		903,723		13,072,714

December 31, 2020
Residential loans	$	1,741,963	$	—	$	2,221,153	$	285,935	$	4,249,051
Business purpose loans	—		4,136,353		—		—		4,136,353
Multifamily loans	—		—		492,221		—		492,221
Real estate securities	160,780		—		183,345		—		344,125
Other investments	8,815		21,627		317,282		451		348,175
Intangible assets	—		56,865		—		—		56,865
Total assets	1,989,802		4,323,040		3,232,415		809,809		10,355,066