Segment Information (Tables)

6 Months Ended

Jun. 30, 2022

The following tables present financial information by segment for the three and six months ended June 30, 2022 and 2021.

Table 23.1 – Business Segment Financial Information


	Three Months Ended June 30, 2022
(In Thousands)	Residential Mortgage Banking		Business Purpose Mortgage Banking		Investment Portfolio		Corporate/ Other		Total
Interest income	$	13,199	$	8,586	$	144,478	$	1,192	$	167,455
Interest expense	(8,297)		(4,258)		(102,589)		(11,823)		(126,967)
Net interest income	4,902		4,328		41,889		(10,631)		40,488
Non-interest (loss) income
Mortgage banking activities, net	(17,787)		(12,230)		—		—		(30,017)
Investment fair value changes, net	—		—		(98,111)		10,139		(87,972)
Other income, net	—		1,054		6,235		(283)		7,006
Realized gains, net	—		—		—		—		—
Total non-interest (loss) income, net	(17,787)		(11,176)		(91,876)		9,856		(110,983)
General and administrative expenses	(6,082)		(11,069)		(3,041)		(11,774)		(31,966)
Loan acquisition costs	(881)		(2,599)		—		—		(3,480)
Other expenses	74		(3,306)		(236)		—		(3,468)
Benefit from (provision for) income taxes	5,588		3,169		686		—		9,443
Segment Contribution	$	(14,186)	$	(20,653)	$	(52,578)	$	(12,549)
Net (Loss)									$	(99,966)
Non-cash amortization (expense) income, net	$	(760)	$	(3,480)	$	(1,450)	$	(2,137)	$	(7,827)


	Six Months Ended June 30, 2022
(In Thousands)	Residential Mortgage Banking		Business Purpose Mortgage Banking		Investment Portfolio		Corporate/ Other		Total
Interest income	$	26,166	$	13,427	$	315,050	$	2,212	$	356,855
Interest expense	(15,233)		(6,826)		(219,171)		(22,035)		(263,265)
Net interest income	10,933		6,601		95,879		(19,823)		93,590
Non-interest (loss) income
Mortgage banking activities, net	(9,852)		(3,850)		—		—		(13,702)
Investment fair value changes, net	—		—		(103,517)		9,425		(94,092)
Other income, net	—		1,629		11,517		(157)		12,989
Realized gains, net	—		—		2,581		—		2,581
Total non-interest (loss) income, net	(9,852)		(2,221)		(89,419)		9,268		(92,224)
General and administrative expenses	(12,183)		(21,541)		(6,174)		(26,922)		(66,820)
Loan acquisition costs	(2,298)		(5,647)		—		—		(7,945)
Other expenses	74		(6,840)		(787)		—		(7,553)
Benefit from (provision for) income taxes	6,595		6,450		(1,144)		—		11,901
Segment Contribution	$	(6,731)	$	(23,198)	$	(1,645)	$	(37,477)
Net (Loss)									$	(69,051)
Non-cash amortization (expense) income, net	$	(298)	$	(7,370)	$	(9,644)	$	(4,170)	$	(21,482)


	Three Months Ended June 30, 2021
(In Thousands)	Residential Mortgage Banking		Business Purpose Mortgage Banking		Investment Portfolio		Corporate/ Other		Total
Interest income	$	13,246	$	3,026	$	121,248	$	1,175	$	138,695
Interest expense	(7,618)		(1,521)		(88,693)		(10,233)		(108,065)
Net interest income	5,628		1,505		32,555		(9,058)		30,630
Non-interest income
Mortgage banking activities, net	21,265		33,154		—		—		54,419
Investment fair value changes, net	—		—		49,727		(247)		49,480
Other income, net	—		156		1,705		265		2,126
Realized gains, net	—		—		8,384		—		8,384
Total non-interest income, net	21,265		33,310		59,816		18		114,409
General and administrative expenses	(6,898)		(12,356)		(3,157)		(18,183)		(40,594)
Loan acquisition costs	(1,887)		(1,861)		—		—		(3,748)
Other expenses	—		(3,873)		(112)		—		(3,985)
Provision for income taxes	(3,725)		(2,182)		(780)		—		(6,687)
Segment Contribution	$	14,383	$	14,543	$	88,322	$	(27,223)
Net Income									$	90,025
Non-cash amortization (expense) income, net	$	(13)	$	(4,054)	$	7	$	(1,955)	$	(6,015)



	Six Months Ended June 30, 2021
(In Thousands)	Residential Mortgage Banking		Business Purpose Mortgage Banking		Investment Portfolio		Corporate/ Other		Total
Interest income	$	20,825	$	5,881	$	237,757	$	2,537	$	267,000
Interest expense	(12,365)		(3,120)		(174,638)		(20,494)		(210,617)
Net interest income	8,460		2,761		63,119		(17,957)		56,383
Non-interest income
Mortgage banking activities, net	82,700		54,326		—		—		137,026
Investment fair value changes, net	—		—		95,488		(921)		94,567
Other income, net	—		278		5,279		412		5,969
Realized gains, net	—		—		11,100		—		11,100
Total non-interest income (loss), net	82,700		54,604		111,867		(509)		248,662
General and administrative expenses	(19,587)		(22,550)		(6,321)		(35,687)		(84,145)
Loan acquisition costs	(3,291)		(3,353)		(659)		(4)		(7,307)
Other expenses	(6)		(7,650)		(442)		17		(8,081)
Provision for income taxes	(13,211)		(3,503)		(1,516)		—		(18,230)
Segment Contribution	$	55,065	$	20,309	$	166,048	$	(54,140)
Net Income									$	187,282
Non-cash amortization income (expense), net	$	(16)	$	(8,152)	$	(227)	$	(3,850)	$	(12,245)

Components of Corporate and Other

The following table presents the components of Corporate/Other for the three and six months ended June 30, 2022 and 2021.

Table 23.2 – Components of Corporate/Other


	Three Months Ended June 30,
	2022						2021
(In Thousands)	Legacy Consolidated VIEs (1)		Other		Total		Legacy Consolidated VIEs (1)		Other		Total
Interest income	$	1,108	$	84	$	1,192	$	1,169	$	6	$	1,175
Interest expense	(967)		(10,856)		(11,823)		(755)		(9,478)		(10,233)
Net interest income	141		(10,772)		(10,631)		414		(9,472)		(9,058)
Non-interest income

Investment fair value changes, net	(336)		10,475		10,139		(216)		(31)		(247)
Other income	—		(283)		(283)		—		265		265

Total non-interest income, net	(336)		10,192		9,856		(216)		234		18
General and administrative expenses	—		(11,774)		(11,774)		—		(18,183)		(18,183)
Loan acquisition costs	—		—		—		—		—		—
Other expenses	—		—		—		—		—		—

Total	$	(195)	$	(12,354)	$	(12,549)	$	198	$	(27,421)	$	(27,223)


	Six Months Ended June 30,
	2022						2021
(In Thousands)	Legacy Consolidated VIEs (1)		Other		Total		Legacy Consolidated VIEs (1)		Other		Total
Interest income	$	2,120	$	92	$	2,212	$	2,517	$	20	$	2,537
Interest expense	(1,668)		(20,367)		(22,035)		(1,630)		(18,864)		(20,494)
Net interest income	452		(20,275)		(19,823)		887		(18,844)		(17,957)
Non-interest income

Investment fair value changes, net	(1,050)		10,475		9,425		(915)		(6)		(921)
Other income	—		(157)		(157)		—		412		412
Realized gains, net	—		—		—		—		—		—
Total non-interest income, net	(1,050)		10,318		9,268		(915)		406		(509)
General and administrative expenses	—		(26,922)		(26,922)		—		(35,687)		(35,687)
Loan acquisition costs	—		—		—		—		(4)		(4)
Other expenses	—		—		—		—		17		17

Total	$	(598)	$	(36,879)	$	(37,477)	$	(28)	$	(54,112)	$	(54,140)

(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 June 30, 2022 and December 31, 2021.

Table 23.3 – Supplemental Segment Information


(In Thousands)	Residential Mortgage Banking		Business Purpose Lending Mortgage Banking		Investment Portfolio		Corporate/ Other		Total
June 30, 2022
Residential loans	$	990,924	$	—	$	5,378,886	$	208,789	$	6,578,599
Business purpose loans	—		503,945		4,698,992		—		5,202,937
Consolidated Agency multifamily loans	—		—		443,114		—		443,114
Real estate securities	3,994		—		280,284		—		284,278
Other investments	—		—		615,807		63,860		679,667
Intangible assets	—		34,720		—		—		34,720
Total assets	1,032,281		645,428		11,513,520		684,307		13,875,536

December 31, 2021
Residential loans	$	1,673,235	$	—	$	5,688,742	$	230,455	$	7,592,432
Business purpose loans	—		347,860		4,443,129		—		4,790,989
Consolidated Agency multifamily loans	—		—		473,514		—		473,514
Real estate securities	4,927		—		372,484		—		377,411
Other investments	—		—		606,267		35,702		641,969
Intangible assets	—		41,561		—		—		41,561
Total assets	1,716,285		464,967		11,770,486		755,206		14,706,944